Let’s Take A Do-Over - aftermarket
Construction Equipment Distribution magazine is published by the 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. AED membership also includes equipment manufacturers and industry-service firms. CED magazine has been published continuously since 1920. Associated Equipment Distributors
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Let’s Take A Do-Over

Written By: Ron Slee

Article Date: 01-03-2005
Copyright(C) 2008 Associated Equipment Distributors. All Rights Reserved.

We had a good year - what shall we do for an encore?

With 2004 behind us - and it was a much better year - it's clear that we have to turn up the heat. It's time to commit ourselves to some good work this year. This year I'm into making lists. This isn't a Christmas list, it's a check list and a "to do" list.

  • Asset Turnover - Parts should have a true turnover of more than 4. Service should have a turnover of more than 26.
  • Customer Retention - The Parts Department should have retained 80 percent of parts customers who purchased in 2003. The Service Department should have retained 75 percent of service customers from 2003.
  • Maintenance Agreements - The dealership should have sold more than 500 maintenance agreements in 2004. Did you? What are your plans for 2005?
  • Training - The dealership should have trained employees for more than 40 hours each last year. Did you? Do you have a plan for each employee for 2005?
  • Customer Contact - Someone from parts or service should be "touching" - either a product support sales rep or a telephone sales rep - customers that represent at least 50 percent of the parts or service purchase volume. If you don't, what are you waiting for?
  • Parts Fill Levels - Have you satisfied your parts fill level goals? Do you have goals? Do your goals satisfy your customer needs? Have you asked them?
  • Staffing - Have you staffed up on technicians so your backlog is less than two days in the shop and one in the field? Did you meet those goals? Anything that requires the customer to wait is not responsive to their needs.
  • Quality - Have you maintained your quality of work? Is your "redo" and service warranty less than 1 percent? Less than 0.5 percent? What do you need to do to get to zero?
  • Free Advice - Have you reviewed the amount of free technical advice your service management provides?
  • Followup - Do you call all service customers within five days of their work being completed in your shop?
  • Shop Expenses - Do you recover all of the shop supply expenses you incur? If you don't, why not?
  • Returns - Have you taken advantage of all of your suppliers' annual return opportunities?
  • Growth - Did you meet your sales growth numbers? Have you made an ambitious plan for 2005?
  • Salaries - Have you adjusted salaries to attract the mechanics you need? What are you waiting for? It's not about gross profit percentages; it's about dollars. If you don't have sufficient mechanics, your customers will find alternatives - and there are plenty of people out there after that business.
  • Penetration - Have you increased your penetration of the parts market?
  • Improving Performance - Have you purchased the materials available from AED to improve the performance and profitability of your Parts and Service Departments?
To satisfy customers, you must provide service value. If you want satisfied and motivated employees, you need to challenge their talents and skills. The list above is short but significant. You might want more things on the list and you might want more challenging goals. That's up to you. But make a list and check it regularly. The success you have in meeting the new challenges will be appreciated by your customers and your employees. I wish you all a safe, happy and prosperous 2005.


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