Now Parts And Service Can Shine - 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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Now Parts And Service Can Shine

Written By: Ron Slee

Article Date: 12-01-2006
Copyright(C) 2008 Associated Equipment Distributors. All Rights Reserved.

2007 is the year I've been waiting for.

We're hearing the U.S. economy will slow next year. The GDP will grow at a rate of 2 percent to 4 percent. And while it is significantly slower than the last three years, imagine complaining about an economy growing at that rate. Already Caterpillar and Ingersoll Rand have issued warnings regarding 2007 and many smaller manufacturers are saying similar things.

So why have I been waiting for this year? Because we won't be able to use the excuses we've been using for the past few years: "We're too busy keeping up with business to do that" or "I can't
find any people to hire and that's why I don't have enough staff." When the market slows, those lame excuses will no longer work.

In 2007, we need to recapture market share and regain control of our dealerships.

How? It's pretty straightforward:

  • Sell more maintenance agreements.
    Sell maintenance agreements when you sell machines - new and used. There is no excuse for not including a maintenance agreement when you sell a machine. And don't forget the labor rate for maintenance should be significantly lower than the labor rate for repairs.
  • Decrease non-productive inventory.
    You shouldn't have more than 10 percent of your productive inventory in parts for which you have a quantity on hand and the part has not met the stocking criteria.
  • Train more parts and service people in customer service and sales skills.
    The AED Foundation recommends everyone in a dealership be given 40 hours of training a year. I think most parts and service employees need 80 hours.
  • Find out why your customers are defecting and what it will take to stop it.
    There are still way too many dealers that don't measure customer defection. And if you know
    your rate of defection, what are you doing to lower it? This industry has a 20 percent annual
    defection rate in parts and service. That means in five years we're losing nearly 60 percent of our
    customer base. Not a pretty picture.
  • Stratify your customer base and cover more of your customers.
    Treating each customer as they want to be treated is a great goal, but one that is not
    achievable. To cover your market better requires grouping customers that have similar needs
    and developing a plan to satisfy those needs.
  • Become a parts and service selling organization.
    To have everyone in parts and service assigned customers for whom they have contact
    and service responsibility would be a wonderful thing. Having those people able to sell parts and services to those customers would be fantastic. How many of your parts and service staffs can actually sell? How many have been to a sales training class?
  • Upgrade computer systems to take advantage of technology.
    If your systems don't support the goals and strategies of the dealership, employees become cynical. A customer service employee in parts or service should have the name, address and credit position for every customer that calls or comes in.
  • Help everyone become better at what they do.
    You didn't get where you are by yourself; someone helped you. Are you helping others
    develop the way you were helped? This is a serious issue. Our generation doesn't trust
    the younger generation, because they don't work like we do. In reality, the younger generation
    of workers coming into our industry is much better than we were at that age.
Help them by sharing your experiences. And try and do it in a manner that suggests that you care about their success.

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