Welcome to the New World - 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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Welcome to the New World

By Ron Slee

Article Date: 01-01-2010
Copyright(C) 2010 Associated Equipment Distributors. All Rights Reserved.

It is time for action – time to develop the strategy to thrive not just survive.

Time and wishful thinking are the mortal enemies of intelligence. So said George Friedman in his book from the late ’90s, “The Intelligence Edge, How to Profit in the Information Age.” I think it very apropos to the recent year and a half.

The worldwide industrial sector had a negative growth in 2009 and is expected to have a negative growth again in 2010. There is no more time for waiting. There is no more time for hoping that this is just another cycle. We need to take action; a serious look at modernizing our businesses and a complete re-evaluation of our core assets, both personnel and hard assets in all categories. What must we have in order to maintain customer service?

The Product Support Opportunities Handbooks in 2001 and 2007 indicated our customers are interested in Responsiveness, Price, Consistency and Quality for the service department and Availability, Price and Responsiveness for the parts department. Why don’t we give it to them?

Responsiveness in both parts and service can be as simple as telephony. Your telephone system needs to be reviewed and VoIP must be used not just to reduce long distance charges internally but to enhance the customer experience. It is far past time to implement VoIP technology. It is also time to demand that our business system providers deliver all “dealer selected” customer information to the employee screens at the time the telephone is ringing. This is true for everyone in the company, not just parts and service. We need to know how long it has been since the customer had a transaction with us; we need to know current order status – shipped, in process, and backordered. We need to deliver critical customer information to our customer contact personnel, our heroes, so that we can be more responsive to the customer needs.

Price is a critical element today, more than ever before. In service we cannot continue with our “peanut butter” pricing. We must price according to the degree of difficulty of the task, the skills required and the tooling required. This means our pricing will no longer over-price low skill work and under-price high skill work. It also might mean the end of what has become more commonly used over the past 40 years: matrix pricing. The Internet has invaded our space and we are missing in action. Hardly any of you offer the complete range of finding the necessary parts on line and the determination of price and availability. Yet many of your competitors do.

Availability in the parts department is quite simple. We either supply it out of our inventory or we find it the same day the customer orders it, or we will lose the business. I know many of you will take a different position, say that is not possible and continue to do what you have always done. That doesn’t mean it is right. Look at it, study it and work within your supply chain to achieve it. That is what will win business and earn your continued success with your customers. Availability in the service department is no more complicated. Each week, we turn away work in the service department because we do not have any excess capacity – we are not allowed to have any idle time, unbilled labor or unapplied time, which means we cannot be responsive enough to our customer needs. AED’s survey data showed that customers believe they are more capable than we are. We ignore this at our own peril.

Consistency means simply providing the same level of service from every employee all the time. In service that means providing a completion date and meeting it. In parts, it is finding every part every day before going home. Neither are “world hunger” issues, both are within our capabilities to solve.

Quality in service should no longer be the “tail light” warranty – when I can no longer see your tail lights the warranty expires! It should be at least six months, and in reality much of our work should carry a 12-month customer satisfaction guarantee. In parts, although it is controversial to say, I ask: Why not provide a lifetime warranty against defects in workmanship and materials? This is something to discuss with your suppliers. In both cases I am trying to set up another competitive advantage for you.

This is the New Reality, and it requires a modification to our business model. Care to join me in this new world? I promise you will like it.

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Article Categories:  Product Support