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A Closer Look Arm Yourself: Know Your Market Potential and Go Get Those Customers Executive Summary from AED's Product Support Opportunities Handbook BY RON SLEE The third edition of AED's Product Support Over the years, market coverage in the parts and service Opportunities Handbook (PSOH) is designed to help dealerworld has been a particular passion of mine. I don't believe ships perform a number of activities related to the parts and that we cover our markets, our customers, with any degree service business in their territory. The report is based upon a of certainty. To this end, I believe in market segmentation survey among equipment owners, which AED has conducted and that we need to "touch" our customers as often as every five years – this enables us to view trends in customer possible. Currently, most dealers leave some 50 percent preferences over a period of time. We can view buying habits of their customers without any direct, personal contact of our customers and their purchasing ratios. We can see from year to year. We will provide simple, market-proven which supply sources they use for many different categories methods to employ for covering your customers properly in of parts and labor – and why. This is powerful information your marketplace. by itself, but used in conjunction with some of the other Finally, as noted, we review market capture rates, which material in the handbook, it provides an inestimable value to is the politically correct term for market share. The survey you, the dealer. this year has delved more deeply We begin the PSOH with most into this area and there is valuable of the market survey results. (We insight to be gained by reviewing To order your PDF copy of the Product break out results about detailed the survey materials and the market Support Opportunities Handbook, visit labor and parts market share in the share sectors in this handbook. aednet.org and click on Products. For one back section of the report.) The groups traditionally served by low, member purchase price of $595 ($1,095 Also in the second section, we Associated Equipment Distributors for nonmembers) you can share this industry provide a model for you to calcuinclude heavy equipment dealers, insight with all your branches and key service late your market opportunities light industrial dealers, compact personnel – it's required reading for dealers for parts and service. This market equipment dealers and general line who are serious about capturing a bigger opportunity can be viewed as the equipment dealers. There has been share of the product support pie. overall parts and labor market much material presented to AED potential for the dealership's territory. One of the obstacles members over the years regarding the equipment area. Over to management of a parts or service business is that we the past decade or so, more material has been presented usually have no idea of the size and scope of the marketplace. regarding parts and service, as these two business sectors This challenge is overcome by applying this market potential have become and continue to be even more critical to the model. Is it perfect? No, but it is a remarkably close represen- success of the dealership. tation to the truth. I would not want to have to be perfect There are many tools available for dealers to determine and waiting for perfection rather than having a workable how they are doing relative to their competitors in the sale of model against which we can measure our performance. new and used equipment. This handbook is aimed at helping (continued on page 56) 54 | www.cedmag.com | Construction Equipment Distribution | January 2014