The MHEDA Journal - Third Quarter, 2014 - (Page 60)

SALES & SERVICE 16 MARKETING Tools to Build Your Service Labor Business The sweet 16 that will make you dramatically more profitable. BY WALTER J. MCDONALD, PRESIDENT, THE MCDONALD GROUP, INC. M aterial handling dealers want and need to know how to improve service labor sales and profitability. To them, until now, nothing seemed to work very well. I have just 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 these many dealers, we applied these 16 tools with very good results. I thought you might be interested in 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 the customer 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 them. Rank service customers separately 60 MHEDA | 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 on 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 part-time assignment for a young business admin student intern. In the chart on page 61, the dealer adjusted his consumption factors based on the type of units in each account. He worked through his customer base in batches of 50. The batch categories were roughly sorted by number of units. Once the spread sheet was completed, the dealer sorted customers by P&S $ Sales Opportunity, descending from largest to smallest. The resulting ranking report of aftermarket customer sales opportunity is amazing because most likely no one in your service and parts operations ever considered a focused sales

Table of Contents for the Digital Edition of The MHEDA Journal - Third Quarter, 2014

President’s Perspective
From the Desk of Liz Richards
Editor’s Note
Ask Your Board
A Seat at the Table
Women in Business Trends
Happy Anniversary!
MHEDA at 60
A Powerful Marketing Advantage
MHEDA University Calendar
Best of the Best
An Untapped Resource
16 Tools to Build Your Service Labor Business
Personal/professional Relationships With Customers
Calling All Emerging Leaders
Omni-Channel Retailing
Design of the Mheda Disc Report
Convention 2014 Recap
New Members
Spotlight on Association News
MHEDA Milestones
Index of Advertisers by Product Category

The MHEDA Journal - Third Quarter, 2014