How Well Do You Know Your Customer?Written By Joanne Costin
Article Date: 09-01-2007
Copyright (C) 2007 Associated Equipment Distributors. All Rights Reserved.
Anyone can know equipment specs, and relationship isn't all it takes either - but consulting and strategizing for job efficiency clinches deals and builds loyalty.
Salespeople are the dealership’s competitive edge.
In today’s competitive market, dealers struggle to differentiate themselves through their products and services. Your customers expect quality products and good service, without which the dealership cannot survive. What you are left with is your ability to create a perceived value among your customers.
“Your competitive advantage is how your customer perceives you and how well you service that account,” says Jack Childs, vice president and sales manager for Pippin Tractor, based in Fort Pierce, Fla. Pippin Tractor’s primary lines are JCB, Kubota and Bush Hog.
So how do you create a perceived value? For Childs, it’s through the daily habit of consultative selling.
“The best way to move this equipment is to be in that position where they are going to call you for your advice on everything they need – even the specific way that they approach a job and award a contract,” Childs said.
For Childs that includes asking, “What can I do to make this a more efficient process?”
Childs believes that knowing the equipment is not nearly as important as the knowledge of what your clients are doing, as well as their position in a business.
“You have to know what he does for a living and how to approach it from an equipment standpoint,” said Childs. “The worst mistake you can make with customers is to sell them something they don’t need.”
This consultative sales process is something Todd Youngblood, managing partner of The YPS Group, believes few in the industry are doing well. The YPS Group works with construction equipment and industrial distributors to improve their sales process.
“There are very few distributor sales reps that I talk to who have studied how to get beyond competing on price,” said Youngblood.
“Anybody can read product specifications and then go make a sales call informing a customer that my machine has XY&Z and this many horsepower,” he added. “Buyers can go to the Web site to find that. On the other hand, it is a whole other level of knowledge that a salesman can bring to the table if he focuses on the construction process and what it means to balance sheets and income statements.”
Show Your Clients How To Make Money
Youngblood presents a compelling example of how the consultative sales process worked for one AED dealer who sells rock crushing equipment. The dealer proposed to a contractor customer that instead of paying someone else to remove large boulders from the construction site, they could purchase a crusher to crush the rock, use it as fill and sell any rock they didn’t need. It was a large investment but one that could positively impact the bottom line.
“It’s not about how well you know the equipment,” said Youngblood. “It’s about improving the financial performance of your customer’s business.”
Youngblood recognizes it is a lot easier said than done. He recommends dealers begin by building case studies and focusing on their top-tier customers. Case studies present a before-and-after analysis of a specific construction process – who does it, the resources it requires and the cost.
“Often we find that the customer decision-maker isn’t really all that savvy about figuring out process,” said Youngblood.
That’s where opportunities arise. The result is a different kind of conversation with customers, where the competition is often not part of the picture.
“If you are waiting for a customer to call you and tell you what he needs, in many cases you are already too late to initiate a consultative sale,” said Youngblood.
Being proactive helped Bridgeville, Pa.-based Anderson Equipment Co. sell Komatsu PC200 excavators to Pittsburgh-based P.J. Dick, Trumbull Corp. It was the machine’s wireless equipment monitoring system and Web-based application for reviewing data that led Bob Decker, equipment manager at P.J. Dick, Trumbull Corp., to make the purchase. Called KOMTRAX, the system uses GPS to relay basic and critical performance data from the machine to the customer’s computer.
Decker said he learned the details of the KOMTRAX system from his sales rep at Anderson, Lee Miller.
“They keep me aware of the new equipment they have coming out,” said Decker. “Technology changes so quickly, I can’t keep ahead of it all the time. It’s great for us to know what’s new to keep us more productive.’’
The ability to send messages directly to the operator via email and access diagnostic information on his desktop for no additional cost was of great interest to Decker, who manages a very large fleet. Miller sees it as “a tool for customers to make more money.”
Information available from the GPS system also has the potential to help Miller in the consultative sales process. As a salesperson, he can access information on rented machines.
“Customers might think they know what’s going on with a machine, but in reality, many don’t,” said Miller. With reports on working hours, operation in each work mode, fuel consumption and maintenance, Miller has information that can help him suggest changes to boost a customer’s bottom line.
Decker also holds quarterly or half-year meetings with his key dealers as a way to improve communications, iron out any issues, and keep both parties informed about future jobs and needs.
“The more communication there is,” said Decker, “things go much easier. We all have to work together – for my company to stay in business, and for them to stay in business.”
Knowledge Brings a Machine’s Benefits into Focus
Knowing the customer’s business is obviously key to staying in business, too, and there’s a good reason why Bill Skinner, president of WB Equipment, knows his customers’ businesses about as well as they know it themselves. He has more than 20-years experience as a contractor. His experience with soil conditions and different methods of digging ditches and directional drilling are undoubtedly part of the reason for the success with which he has built two profitable dealerships – most recently, WB Equipment based in Livermore, Calif. WB represents Gehl, Trench-Tech and Pacific Tek.
Skinner’s knowledge was strategically applied in selling a Trench Tech 2300C and 2500C to Dusty Monks, vice president of Tracy Monks Construction in Myton, Utah.
“It is all in sitting down with the customer and explaining the advantage,” said Skinner. And as Youngblood suggests, Skinner immediately puts the advantage into the form of a financial benefit.
“The huge advantage [of the Trench Tech machine] is you can get more torque to your digging chains through a mechanical drive than you can through a hydrostatic drive. In a typical month you will save $10,000 in teeth,” said Skinner.
“I was unfamiliar with their machine until [Skinner] called and had me take a look at it,” said Monks.
A demonstration proved to him that the machine could improve the profitability of his business. Of course asking questions is part of the process. Skinner says you have to ask: “Where are you working? What are you digging in? Are you digging in solid rock? Are you digging in caliche? Are you digging in clay? Are there cobbles? How much is there to dig? Can you justify the cost?” The questions are essential to determining the right solution for the customer.
“We have to go out there and be an educated consultant,” said Warren Hampton, sales manager for WB Equipment. “That means understanding their job and their work by asking questions and then being a good listener. Most salespeople don’t do that. They have a tendency to take you where they want to go, not where the customer wants to go.”
Going Beyond Relationship Selling
Building relationships is certainly a big part of the sales process.
“The bottom line is it comes down to the people,” said Decker. “A machine is a machine and all manufacturers pretty much build everything about the same. The bottom line is, who is going to be there for me and support it?”
But can relationship selling leave you in a vulnerable position?
“I don’t care if your mother is the decision maker,” cautioned Youngblood. “If you are in there based on your relationship – and your competitor comes in and says, ‘I can add a half million dollars to your bottom line based on total cost of ownership,’ Mother is going to say, ‘I love you, but you are not winning this one.’”
Consultative Selling in a Competitive Bid Situation
So what does consultative selling do for you when you are faced with an extremely competitive situation? Skinner suggests looking for something unique. For example, on Gehl compact excavators he points out that Gehl is the only one on the market with a cab that tilts. For a contractor working on the side of a hill, that translates to greater operator comfort and productivity.
There are 27 manufacturers of compact excavators,” said Skinner, “so you have to come up with a reason to buy ours.”
Youngblood argues that there is not much you can do in the way of consultative selling once the customer has decided on the specifications for the bid. He suggests a follow-up call, in which you plant the idea in the customer’s mind that he should change his decision process to include criteria such as business process, fuel costs, and downtime needed.
“So that the next time that same customer needs a piece of equipment, he will be thinking about the guy who was talking about the total cost of ownership,” said Youngblood.
Consultative Selling Takes Time
Most consultative sellers will tell you that there’s no quick path to success. It takes time to know your customers and how they work. It takes time to learn how they make their money. It takes time to learn how you can help them. And you probably don’t have enough hours in the day to do it for everyone.
“It is hard, painful effort to build up a series of case study scenarios,” said Youngblood. “But once you have a half dozen of them, you can recycle them in similar situations.”
And when your customers start calling you for advice on what they should do to make things cost-effective, that’s when you’ll know – you’ve got the edge.
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