August 2014

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28 | www.cedmag.com | Construction Equipment Distribution | August 2014 Product Support Construction equipment dealers want and need to know how to improve service labor sales and profitability. Until now, nothing seems to work very well. I recently completed four consulting projects for equipment dealers and a series of five dealer workshops for an equipment manufacturer. All of these efforts were focused on improving service and parts operations. Working with all these dealers, we applied the following 16 tools with very good results. I want to share with you what worked best. 1.) Rank Aftermarket Customers by Sales Opportunity Ranking service and parts direct customers is nothing new. This is easily done to identify your largest current aftermarket accounts. The added, most useful dimension is determining "aftermarket potential" by account. Account aftermarket potential is based on the number of units he owns times an annual labor and parts "consumption factor." Your aftermarket sales opportunity is the account's total potential less your current service and parts sales to him. Rank service customers separately from parts direct customers who do their own maintenance. Which of your current accounts offer you the greatest incremental sales opportunity based on their current mix of units? This is extremely valuable information and enables a highly focused business aftermarket development effort based on just a little work in Excel. (If you don't know what your customers own, it's time for a customer census.) Some manufacturers provide unit consumption data by equipment type to their dealers. If yours can't, it's not that difficult to approximate the amount. Two quick sources include your rental fleet and large customers who keep very accurate equipment maintenance records. You want to know how many labor hours and how many parts dollars does one piece of each type of equipment consume in a typical year. Your estimate does not have to be exact. If you have many lines, first focus your efforts on your most populous units. If you sell underground tools such as directional drills and trenchers, they consume large amounts of parts and supplies annually. So, do each. If you sell everything from wheel loaders and excavators to skid- steer loaders, you can develop one consumption factor for heavy equipment and another for light. This is a great 16 Tools to Build Your Service Labor Business Dramatically improve the dealership's profitability with a new emphasis on selling customer uptime. BY WALTER J. MCDONALD

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