Entering a Brave New World Where Market Knowledge and Marketing UniteBy Joanne Costin
Article Date: 12-01-2010
Copyright(C) 2010 Associated Equipment Distributors. All Rights Reserved.
Equipment Data Associates prepares dealers with UCC-filing data, and more.
Equipment Data Associates (EDA), owned by Randall-Reilly, uncovered a gold mine when they learned how to capture UCC-filing data and turn it into market intelligence for equipment-base industries like construction, lift trucks, logging, agriculture, trucking, machine tools and wood working. Since 1988, hundreds of dealers and manufacturers have signed on to receive EDA data to help them find new customers, track market share and identify buyers of particular brands. According to EDA President Bill Ault, AED members account for the largest piece of the company's business. But Ault isn't content. He believes dealers are ready for more, and EDA will soon undergo substantial improvements to deliver what they're looking for as it prepares for an overhaul of its online product, Catapult.
By tracking new and used financed purchases, EDA has its pulse on market activity. In October 2009 EDA recorded the largest year-over-year percentage drop in the dollar value of construction equipment sales. Sales fell 65.7 percent versus the same month the year prior. Year-over-year sales activity finally hit positive territory in June (1.9%) and August 2010 (4.0%).
What's a UCC-Filing and What Does EDA Provide?
UCC-filings are created when a machine purchase is financed. A financial institution will file a UCC financing statement or lien within the state, which lists the purchaser as the debtor and the machine as collateral. Before the purchaser can sell the machine, or use it as collateral on another purchase, the UCC-filing will show the prospective purchaser that the bank has the first right to recover its loan from the sale. When the loan is paid off, the lender files a release and the property is free and clear.
The percent of machine sales, (both new and used) captured in UCC-filings varies according to the machine type. According to Ault, about 50 percent of new skidsteer loader purchases are financed, compared to 80 percent for hydraulic excavators. After more than 10 years, EDA now has detailed purchasing histories for 1.3 million-plus buyers nationwide who have financed more than 5.7 million units of construction equipment since 1990. The top five categories of construction equipment include skid-steer loaders, backhoe loaders, excavators, crawler dozers and wheel loaders.
In general, the greater the cost of the machine, the more likely there will be UCC-filing data available. And while EDA has tried to capture data from Canada and Mexico, they have been unable to attain the necessary governmental permissions.
UCC-filing data provides information about the purchasing company as well as details about the equipment purchase that reveal brand loyalty, buying cycles, type of equipment and age of equipment, as well as Standard Industrial Classification (SIC) data.
While knowing about historical purchases provides valuable market share data and helps dealers identify equipment buyers in their market, it's the use of historical data, combined with data on a machine's lifecycle to predict future sale activity that translates into an even greater opportunity.
For George Robertson, vice president of business development for H&E Equipment Services, with 68 locations nationwide, EDA data has changed the way they approach the sales process. For the past two years, the company has been using historical data from EDA, along with what they know about the longevity of the equipment, to feed prospective buyers to their sales staff using their company's customer relationship management (CRM) system.
"Before we had the EDA data, we were really shooting at the hip, chasing contractors we knew," said Robertson. "This opens up a lot more opportunities for us."
As one of the nation's largest rental dealers, H&E sells a substantial amount of used equipment out of their rental fleet, and the EDA data has helped them find buyers for this equipment.
"If we have a used excavator to sell, we will go in and see who has bought used excavators," said Robertson. "It has been very successful."
Robertson believes that when salespeople go into a call already knowing a lot about a customer's existing fleet, customers are more receptive. "The less time they have to spend with a salesman, the easier their lives are," said Robertson.
Additionally, the company has generated custom reports to evaluate the potential opportunity when it is considering taking on a new line.
"It has been a great return on investment," said Robertson.
Future Enhancements Will Increase the Value for Dealers
As useful as the data currently is, Ault believes the market is ready for even richer data. Historically, the company did not partner with any third party data providers to get more information on the purchasing companies, such as additional contacts and e-mail addresses. That will change in the future.
"The world has changed, and in order to give our customer base a better experience and a better product, we need to partner with a variety of other information providers that can allow us to have a richer offering," explained Ault. Rather than putting EDA resources into collecting that data, within the next year EDA will partner with third party data providers to deliver additional contact information to dealers.
Another enhancement will be an automatic interface with dealer CRM programs. "A lot of our customers use CRM systems, and they are asking for CRM integration," said Ault. "We are going to build the bridges and platforms that enable that to happen."
The third major change EDA is considering would provide some automated marketing opportunities to dealers. "E-mail marketing, direct mail and telemarketing would be a few clicks away, built right into the system," said Ault.
Ault says the No. 1 problem his customers face is with the execution related to the data. With the EDA Catapult system, dealers have the opportunity to engage in any number of marketing and sales activities that could propel their business, but most dealers stick to the basics. The two most common uses for the data include obtaining market share data and identifying top buyers. EDA provides rankings of the top equipment buyers within the territory.
"The marketing piece is where a lot of it breaks down," said Ault. Integrating e-mail marketing, direct mail and telemarketing built directly into the Catapult system would provide an easy and efficient marketing solution for dealers. "If we can take that barrier away, customers will get more value from our data," said Ault.
Getting More Out of EDA Data
Ault believes that something as simple as disseminating the data within the organization would help generate more value to the data. "The more people that see it and have access to it, the more you are going to be able to profit from it," said Ault.
H&E took this approach by pulling branch managers into the process and making them accountable. "We actually trained our branch managers on using the data and providing information to the outside salesman," said Robertson. "It is not a cheap program," added Robertson, "but one we have pushed into our everyday lives. EDA provides us with a lot of information that we didn't realize was out there."
In exchange for the data, dealers pay a monthly subscription fee for the service, based on the size of the territory. Data is updated daily and users can access it 24/7 online.
EDA will be working on these improvements in 2011 with an expected launch into the brave new world of dealer marketing in early 2012. But dealers don't need to wait to find useful information, as even without those improvements EDA offers a more efficient way to market and sell construction equipment at the local level. There is gold to be found in UCC data and EDA can help you find it.
10 Ways to Use EDA Market Intelligence
- Reach out to buyers of all brands whose machines are reaching the end of their useful life.
- Reach out to buyers of all brands whose machines may be ready for service.
- Have a used backhoe to sell? Reach into the database to find people who purchased that model before but may be looking for newer model.
- Considering adding a new branch? Verify what the market opportunity is with the help of EDA data.
- Considering adding a new line? Find out how many financed units have been sold in your territory over the past several years.
- Promote a new line to a list of buyers of that machine going back several years.
- Do you sell attachments in a strategic marketing alliance with a particular brand? Reach buyers who own that host machine.
- Create market share data by comparing what you sold to what was sold in your territory.
- A new purchase may mean that customer is now in buying mode. Even if you weren't on the first deal, make sure you are in on the next.
- Looking to reduce unwanted parts from your inventory? Identify buyers who could use those parts and sell them at a discount.
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