All Together NowWritten By Mary Sedor
Article Date: 10-01-2007
Copyright (C) 2007 Associated Equipment Distributors. All Rights Reserved.
Building teamwork among your departments means tearing down all barriers to collaboration.
Consider your parts, sales and service departments. On a scale of 1 to 3, which would you rank the most important? And the least?
Each of these three departments should be equally ranked No. 1. If they weren’t, then your dealership must work on building teamwork and collaboration among its departments.
This same exercise recently took place at AED’s Future Leaders Conference Aug. 16 in Chicago. Among the 60 dealers in attendance, the majority had a different rank for each department.
“That’s the problem,” said Mark Harbaugh, vice president of Ditch Witch Midwest in Carol Stream, Ill. “No one part of the organization is a more important part of the business.”
Dealers are being challenged to think outside the box, especially in today’s competitive atmosphere. However, it’s difficult to build teamwork when many dealers have the mindset that one department is more important than another.
“Picture a three-legged stool,” said Harbaugh. “The customer is the seat, the sales department is one leg, service is the second leg and parts is the third leg. If any of the legs are out of balance, you create an unstable platform for the customer. As soon as the customer feels out of balance they will look for comfort, which might be your competitor down the road. Challenge yourself to think equality throughout parts, service and sales, otherwise teambuilding will not happen.”
Building teamwork and collaboration among departments is important to increase profits, build customer loyalty and create an ideal workplace environment.
“The most successful and profitable dealers in the industry have learned the value of teamwork and collaboration,” said Walter McDonald, moderator of AED’s Future Leaders Conference and founder of The McDonald Group Inc., a private consulting firm focusing on marketing and business strategies, executive education and development.
“The whole theme running through this is communication. If you’re involved and have more touch points, there are more opportunities to sell.”
Four problems permeate dealerships that are unable to foster teamwork, says McDonald, and one of the chief causes is when compensation plans conflict with teamwork. At least 30 percent of the individual employee’s pay incentive should be based on achievement of the entire company’s goals; however, a major stumbling block crops up when employees are steered toward just achieving their own profit center’s objectives.
“This is particularly true of sales reps who operate as ‘lone wolves,’” says McDonald. “The ‘lone wolves’ have no vested interest in the success of the rest of the organization.”
Another problem often found in teamwork-deficient dealerships is an internal cost-structuring problem. For instance, McDonald says internal discounts are the leading culprit. If parts and service must provide significant discounts to the dealership’s rentals, new or used equipment for maintenance, reconditioning or make-ready, the product support team leaders are in effect subsidizing rentals and sales.
If your parts manager sells a part for $100 to an outside customer, but has to sell that same part at a 40 percent discount internally, costs are artificially reduced in other departments while their profits are artificially inflated.
“What ends up happening is the parts department is subsidizing rental for its maintenance – the same labor service that costs $80 an hour outside is cut to $50 internally,” said McDonald. “The parts and service managers are artificially penalized and the new equipment and rental managers are artificially raised up. It’s really an evil situation but it’s quite common.”
Bad feelings ensue and unfortunately any real camaraderie is near impossible, he says.
A third reason why dealers struggle to build teamwork is a bottom up instead of a top down mentality.
“Some dealer principals thrive on employee conflict, thinking incorrectly that strife will toughen the dealership,” said McDonald. “They expect peace in the valley to evolve bottom up in the organization.”
In reality, dealer principals must demonstrate top-down leadership and ensure that every member of the dealership team is a “wrecking ball” for barriers to interdepartmental communications, says McDonald.
Finally, a fourth reason dealers have a difficult time building teamwork is that manufacturers don’t offer much help when it comes to holding conferences for dealer managers to attend as a team.
“Silos at the manufacturer foster silos at the dealership,” said McDonald.
It Takes a Wrecking Ball
And silos can be deadly.
For example, McDonald tells the story of a dealer in Ohio that had a very successful parts merchandising program. Never did he mention any of the company’s other departments in his flyer that advertised the program. McDonald asked when he and the service manager had last sat down to brainstorm ideas. This parts manager and service manager hadn’t spoken in years. Unfortunately a year later the dealership was out of business.
“You could see the internal strife and bad feelings,” said McDonald. “Those guys were not long for this world. It had a serious effect on financials, the customers and employees. If you have serious strife nothing good happens. You can’t do your very best and the workplace gets really ugly.”
Customers immediately sense when an organization is suffering internal bickering, says McDonald. For example, the field service technicians complain, the field sales rep calls his managers a bunch of jerks, the telephone responses to customer inquiries are plagued with bad attitudes and there are huge snafus between departments that cause customers increased downtime, cost and lost revenue.
Another dealer, just a few miles down the road from the first dealer, made it his primary goal to be a wrecking ball to communication barriers rather than a brick mason, says McDonald.
“He built a strong team and became a very successful dealer in his market area,” said McDonald. “The most important thing he did was emphasize the value of team play in the business. It’s quite uncommon for a dealer to recognize the importance of service, parts and sales all getting along.”
A dealer at AED’s Future Leaders conference agreed that it’s important for each and every member of the management team to be a wrecking ball to barriers to interdepartmental communications. Dealers must foster friendly, helpful communications between revenue centers, he said.
“You have to have people internally who are willing to go through every barrier, anything that stops you from meeting customer needs,” he said. “There are people who will literally shop around to find a part and get a need met. That has to be embedded in every department from management down.”
A concurrent marketing strategy, which involves the representation of all of the dealership’s resources and capabilities by every employee with customer contact, is one easy way dealers can build teamwork.
“It means that everyone who has customer contact should be talking to the customers about new equipment or product support, and everything else the dealership has to offer,” said McDonald.
Picture the scenario: (1.) the machinery sales rep proudly presents product support capabilities and rental availability, (2.) the product support sales rep keeps an eye open for new machinery deals, (3.) the field service technician talks enthusiastically about the technical miracles of the new products, and so on. If the opposite is occurring in the dealership, you can see how teamwork and collaboration could not flourish in that business.
Brandon Klein, sales manager for Valley Supply & Equipment, says it’s important to his dealership to develop employees who take personal responsibility for meeting customer needs and exceeding customer expectations.
He also pointed out that having sales reps who “walk the talk” is important so they promote the product support capabilities and achieve specific product support revenue goals in their territories.
“It’s important in order to be effective across every department in your dealership,” he said. “Unfortunately [sales reps] are sometimes the main contact with the customer and they need to be able to speak intelligently about product support. As the market slows, and competition increases, this is something they will have to realize. If they don’t talk about it they wont’ sell equipment.”
McDonald says it’s a simple fix.
“Your sales reps know how to make a features and benefits presentation. All you have to do is have the sales rep prepare a five-point features and benefits presentation on your parts, service and field service capabilities.”
Another important point to foster teamwork and communication is for dealers to develop a premier service program specifically for the top 20 to 25 percent of accounts that provide 80 percent of the revenue – do this, says McDonald, using a total concurrent marketing approach by a new equipment sales and product support team.
“It’s something we should be focused on,” said a dealer at the Future Leaders conference. “I don’t know what the rest of you are doing, but we should spend a lot of time on our top 20 percent of accounts and I don’t think that happens. We just expect it to.”
Bob McNutt, a past AED President, observed that the general consensus of the group was that no one is putting a focused effort on the top 25 accounts to retain business.
McDonald noted that often the sales manager is the point man who fields the calls, but he can often become a barrier to communication, too.
In terms of concurrent marketing fundamentals, Devaughn Pettit, regional sales manager for Tractor & Equipment Co. says it’s important in sales presentations for machinery sales reps to create a realistic value picture of the total support package available from the dealership.
“A lot of times the sales guy is the point man in all aspects,” he said.
But that can be a mistake, says McDonald. Sales reps should hand carry a customer to introduce them to sales, parts and financial managers, he says. Customers should receive cards from everyone with their numbers and these managers should say, “I’m your guy; please call me 24/7. We’ll take good care of you.”
What happens is the sales rep constantly fields calls and becomes a barrier to communication.
The same goes for dealer executives.
“We don’t have enough contact at the executive level,” said McDonald. “I would encourage the president of the dealership to make personal phone calls to the company owner and say, ‘We really appreciate your business. Please call me if I can help you at any time.’ ”
And while multiple connections with customers are good, it is nevertheless vital for everyone in the dealership to be on the same page.
McDonald shared this anecdote about three calls to the same customer in one day: A dealer principal and a sales manager were working on a 35-unit deal from an existing account. The first call to the customer in the morning was from the sales manager to the customer to ask if a decision had been made. The second call was the customer returning the call to the dealer principal, notifying him the dealership had received the deal. The third call that day was from the parts manager to the customer, chewing him out for a $17.26 past due notice.
“In these account relationships, we need to have everyone on the same team and need everyone to communicate,” said McDonald.
Sell the Whole Company, Together
Another great tool for teamwork is team selling. In highly effective dealerships, major customer sales presentations are being made with machinery sales and product support staff as a team.
“Over and over again, I hear stories of customers telling the successful winner of the contract that he was most impressed with the skills, capabilities and resources of the product support folks who participated in the presentations,” said McDonald. “Today, customers are looking for service and parts expertise to minimize down time, maximize revenue and “fix before fail” by means of aggressive PM programs.”
McDonald recommends dealers structure machinery sales and product support sales territories for the same geographic area. The ratio of machinery sales to product support sales should be 1 to 1. Next, field service technicians should be assigned to that geographic zone as much as possible, which enables the dealership to have a field team of sales, product support and field service technicians all focusing on the same accounts.
The team should meet every two or three months to discuss account development strategies, issues and opportunities. Dealers can also offer these team incentives for special programs on machinery sales, undercarriage sales and new preventive maintenance contracts. Service technicians and product support sales reps should be the primary beneficiaries of these financial incentives.
Chris Felosky, product support manager for Monroe Tractor & Implement in Henrietta, N.Y., says his dealership departments work together, but they have a lot of room for improvement.
“One of the things we do fairly well is we try to get everyone’s input,” said Felosky. “One of the sales managers and I recently had a meeting to talk about teamwork and communication, especially how we all represent the company even if we’re not in front of the customer.”
Recently Monroe Tractor sold a machine to a customer and everyone was involved in the dealership including parts and service.
“In our monthly meetings we bring up these kinds of stories and give credit to people who make it successful,” said Felosky. “We try to get everyone involved so they have some sort of ownership. You have to be able to communicate openly from one department to the next or you will have an uphill battle.”
Kevin Knuckley, sales manager for Witch Equipment in Fort Worth, Texas, says his dealership is firmly established as a team because every dollar from parts, service and sales all go into the same pool.
Points are allocated to salesmen, parts managers and service managers. More points are allocated to top producers, tenured employees and the ones helping convert business. Each point has a dollar value attached, and bonuses are paid out of the pool.
“What it does is foster teamwork and communication,” says Knuckley.
The group sets team goals and if there is a core market or segment they work together to come up with ideas everyone can buy into.
“It’s a collaborative effort,” he said. “Our salesmen go into the service department and give them credit but also criticize them. We all understand that we’re all intertwined and rely on them the way they rely on us.”
All in all, no one can do it alone, he says.
“We do push each other, but we encourage each other to perform,” he said. “We’re compensated for being team players.”
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