Issue link: http://read.dmtmag.com/i/236097
Aftermarket Let's Make This Year About Growth Four steps to recapture product support business, and three keys to employee buy-in. BY RON SLEE Since the financial disruption of 2008, we have been in a hunkered down mode. Equipment sales have not recovered to their previous levels and as a result we continue to fall short of our goals. However, the success of equipment dealerships does not rest alone on equipment sales and rentals. It is dependent on customer satisfaction, reducing the owning and operating costs for the equipment owner, and protecting the residual value of the machine. These factors are at the heart of the product support world. If we are to succeed going forward we must regain our confidence and our ambition to grow the business again. The recent release of the Product Support Opportunities Handbook, produced every five years, provides fresh evidence of the needs and wants of our customers. It provides us with insight into our market share in various labor categories and parts families. In other words, it gives us insight into where we can grow our businesses and what the customers want from us in order for that to happen. Ignore this at your own peril. We have to do some basic things that are fundamental to customer service and are a prerequisite to growth. Market Segmentation. In the marketing world segmentation is about selecting customers that have similar needs and wants. Then we have to create a strategy of satisfying those needs and wants. Then we need to act on that strategy and implement it. Market Coverage. We need to determine which of the market segments warrant a field sales coverage model. We then need to create the telephone coverage model for the remainder of the customers. Targeted Selling. With the segmentation completed and the coverage assignments in place we need to create a plan for each customer. What are we going to sell to them? What don't they buy from us? Customer Retention. With segmentation and coverage in place I subscribe to a simple truth: If I have assigned a customer to a salesman I expect that customer to continue to be a customer of ours for their lifetime. I believe that retention is improved dramatically when we have a sales person contacting the customer on a regular basis. These four steps are rather selfevident; it is the details that are problematic. A session at Summit this month will go over these elements in detail – a "how to" seminar to help execute each of these four elements. Of course that is not the end of it at all, is it? We need to have skilled and able people executing the strategy. This is a dangerous area for most American businesses. The statistics are very compelling: 90 percent of U.S. companies fail to implement their strategy. The thing that is so disturbing to me is that 95 percent of the employees of business in America cannot tell us what the strategy of their company might be. That is the primary cause for the failure in implementing strategy. It is all about communication. I always fall back on a simple, threestep approach on communications. Understanding Acceptance Commitment (1.) You have to ensure that everyone understands what it is we are trying to do. (2.) Then I want to open that understanding up for debate so that everyone accepts that what we are trying to do is the right thing to do. If they don't accept it then we must have open debate and seriously explore the goals. Everyone can understand what we are trying to do but if they don't agree that it is the right thing you're never going to succeed in implementing it. (3.) When we have both understanding and acceptance then, and only then, will you be able to get everyone to commit to accomplishing it. So let's start with understanding what we are going to do in 2014. We are going to grow the parts and service business, in real terms, in excess of 10 percent. How? By completing the four points above. We are going to assign customers to an individual who will have responsibility to "look after" the needs and wants of each of their customers. We are going to identify what parts families and labor categories each of those customers does not buy from us and we are going to find out what we have to do to get the business back. And then we are going to just do it. Let's make 2014 a return to serious growth in parts and service. 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. January 2014 | Construction Equipment Distribution | www.cedmag.com | 67