Product Support Selling
It is about selling not just market coverage
For the last two columns I have been focused on your need for Product Support Salesmen; establishing territories and market segmentation. In April I left a long list of “To Do’s” on the table. Establishing sales objectives for each assigned customer; creating sales tools for each parts family and service offering that your company provides in the market; and establishing market share for each of the parts products you sell and services you offer.
Establishing sales objectives for each Product Support Salesman assigned customer is a large job and has several steps that must be taken before it can be successfully completed. First of all we need to obtain some information. What is the working machine population for each customer? Who are the other suppliers that each customer currently uses to satisfy their needs? Each Product Support Salesman MUST obtain this information for each of their assigned customers if we want them to be able to do their job.
In Parts and Service I believe that we have had a pass in the performance of our jobs. We do not know our market share. In the Sales Groups, the departments that are responsible for the sales of new and used equipment, we know the market share to the 5th decimal place. And we know the market share for each size and type of equipment. But we don’t know a thing about our market share for parts and service. Isn’t it about time we paid more attention to our performance in the marketplace? I think it is long overdue.
We have been concerned about all the internal metrics that we think reflect how well we do our jobs; operating metrics such as; Inventory Service Levels; Service Quality; Departmental Expense Levels measures and many more. Yet we rarely know our customer retention and we clearly don’t know our market share for parts and labor.
One of the important things I learned a long time ago is that it is an individual who sells the first machine of your brand to the customer. It is Parts and Service that makes the customer want to purchase the next machine from you. It is the performance of the people in the Parts and Service Departments that make a difference on the next equipment sales transaction. Yet nowhere do we put the Parts and Service Departments under a microscope to measure their performance in the marketplace. I think it is time that we start.
The AED offers a manual called the Product Support Opportunities Handbook that provides a step by step method to calculate market opportunity for your assigned marketplace. It provides a tool, as a starting point, for each Product Support salesman to develop the sales potential for each of the customers in their assigned territories. How many of you use an approach similar to the one outlined in the Handbook? I think it is very important to set expectations and objectives for each job in any business. It is important that each employee know what is expected of them in their jobs. What standards in job performance are expected? After all each employee wants to do a good job don’t they? Don’t forget that it is rarely an employee that fails in their assigned tasks it is the supervisor who put the employee into a job function that they either couldn’t succeed at or weren’t trained to do.
So let’s go back to the Product Support Salesman. Each customer in each territory MUST have a complete and accurate machine population in our computer records accessible to each salesman and to the company. It is the responsibility of the salesman to get the information and to maintain it and it is the responsibility of the company to provide a system to maintain and report on it. From these records we can obtain a market potential for each assigned customer and determine how much of that potential we actually obtain. Imagine that we can calculate a market share for Parts and Service.
Next we can find out who it is that has obtained our business for each of the parts commodities and labor categories where we have less than 100% market share. Who are the competitors who have taken our business from us?
This is serious business. We are the only company in the marketplace that have the “complete responsibility” for the Parts and Labor that are used on our equipment. Everyone else in the market is picking only a portion of the business that we have created and taking it away from us. It has been in many cases that they have taken this business from us by default. We have not paid enough attention to them. We have not had a Product Support Salesman assigned to their account and unless they initiated the contact we have not even spoken to them in person. In fact many of them say that we don’t care. Or that we only pay attention to the large customers. To quote one of them who was surveyed for the Product Support Handbook “You better be a large customer if you want any attention during the busy season.”
Doesn’t that hurt? I believe it should.
Oh and by the way I don’t believe that the OEM dealer has much more than 40% of the available parts business or more than 25% of the labor business for the equipment that they represent. And I believe I am being very generous.
Are you happy with that result? Should you be? I think it is time we start to work on this. And I believe we should have started a long time ago. What do you think?
About CED Magazine
Kim Phelan, Executive Editor, CED Magazine
Construction Equipment Distribution is published by Associated Equipment Distributors, a nonprofit trade association founded in 1919, whose membership is primarily comprised of the leading equipment dealerships and rental companies in the U.S. and Canada.
With CED, content is king. No fluff, no advertorials – CED just gives AED members what they want to read: business information, industry and association news, plus fresh, original and useful feature articles that they share with their management teams. Our subjects range from rental, product support, sales strategy and customer service to technology, construction markets and legislation – and much more.