Issue link: http://read.dmtmag.com/i/107829
Aftermarket Have You Abandoned Product Support Selling? With customer defection still high, sales and marketing mustn't be restricted to machinery. By Ron Slee Perhaps I should be less Think about how you set up sensitive. I continue to be struck by territories. Is it based on marketing the absence of a real sales effort in theory? Or is it geography? Do you the product support world. Of course segment your customers into groups some of you have product support with similar needs and wants from you salesmen, although many of you have or is that left to the salesman? Do you become politically correct and call pay commissions even though every them "customer support reps." But study conducted over the last decade everyone in your company should be has shown them to be outdated and a customer support representative, dysfunctional? Dan Ariely exposes shouldn't they? So why not have a some of this in his book, "The Upside "parts and service sales" job function? of Irrationality." Many of you try to I've been pondering the concept of make a "team" of equipment salesmen market coverage. We talked about that and product support salesmen in the last month at Summit. How well do manner that IBM used in the 1970s. (It you cover your market? Do you have has since been replaced.) positive contact, in person, with half The trouble I have is not with how of your customers? This is a problem you conduct your equipment sales worth exploring. Back in the early business, although I do have questions; '80s, market coverage went through rather, it is how you conduct your parts a radical change. The cost of money and service sales business. It just plain was obscenely high and we became does not work. obsessed with expense management. Parts and service sales started in Of course with good reason as interest the 1970s at equipment dealers. It rates exceeded 20 percent. The trouble was driven by the manufacturer and with some of the actions we took was it focused on parts. Specifically, it that we put ourselves on a financial focused on parts commodities such as path that we became quite comfortundercarriage and ground engaging able with, but which had unintended tools, batteries, and hoses and fittings. consequences – and the worst of them There was no effort in the early days to was that customer defection increased. sell labor at all. The people selected to We have gone from the traditional "sell" were from the parts department. market condition where 80 percent of They were individuals who came from the business comes from 20 percent the parts counter. Looking back at that of the customers to one where most model, what do you think? It didn't dealers are approaching 5 percent of have much chance for success. Dealer the customers providing 95 percent executives were constantly trying of the business, and that is a very to determine which came first, the dangerous place to reside. salesman or the shingle. And normally You see, the smaller customers the shingle, of course, won. I don't have been defecting and nobody is believe we have given parts and service noticing. Nobody is noticing as a result sales their due. of no one having responsibility for the I believe – and say this with coverage of this customer segment. complete conviction – that we That's right – no one. should be selling labor programs. Every iteration and option you can think about. Maintenance Programs, Extended Warranty Programs, Inspection Programs, Guaranteed Cost Per Hour Programs, Repair and Maintenance Programs, and on and on. When we are successful at selling labor we will get the parts business too, right? There is only one problem with that approach. Nobody is advocating for your service department in your dealership or at your manufacturer. Your service manager is too busy as it stands now. He needs more technicians to keep up with the demand from the territory. He turns down work almost every week because he cannot meet the customer demand. Why would I want you to sell more labor at this time? Because your customer defection in the Service Department is running at a 15 percent rate annually. That means that in five years you lose 50 percent of your service customers. That is what the last AED Product Support survey told us. We have a lot of problems that need to be addressed. Market coverage and service capacity are two of the most critical areas. We need solutions now – not a continuation of what we have always been doing. The time is now. Ron Slee (ron@rjslee.com) is the founder of R.J. Slee & Associates, Rancho Mirage, Calif., celebrating more than 30 years in business in the United States, a consulting firm that specializes in dealership operations. Ron also operates Quest Learning Centers, a company that provides training services specializing in product support, and Insight (M&R) Institute, a company that operates and facilitates "Dealer Twenty" Groups. Follow Ron on Twitter: @RonSlee; and read his blog at learningwithoutscars.com. February 2013 | Construction Equipment Distribution | www.cedmag.com | 49 49_aftermarket_KP.indd 49 1/30/13 3:20 PM