First in a three-part series:
By Jeff Sheets
Sales is the engine that drives your business. You sell your equipment to generate as much income as possible at point of sale, but also to give the parts and service departments future business too.
One equipment sale can be like a fruit tree that bears future fruit (parts and service) for several years until the next piece of equipment is purchased by the customer. Your service sales also support the parts department, and making sure you maximize service sales is important to the long-term health of your business. Your parts department employees need to know the equipment well enough, so they can sell the proper parts and suggest additional parts that will make it easier for your customers.
All dealerships need to dedicate themselves to making sure that they are doing everything possible to capture sales in every department, not just equipment sales. For ease of remembering, I will use SELL as an acronym to make my point.
By definition, “satisfaction” means: Assurance beyond doubt or question; complete conviction. When you look to your customers’ satisfaction first, the result will be to have customers that fulfill this definition. By setting this as your goal, you set your dealership up for repeat business. Your business, along with all businesses, need repeat customers and the profit that is created by them.
A study by Infoquest, a marketing research company, found that a “totally satisfied customer” contributes 2.6 times more revenue than a “somewhat satisfied customer.” Furthermore, the same study found that a “totally satisfied customer” contributes 14 times more revenue than a “somewhat dissatisfied customer.”
How do you set up this type of scenario? One way is that when you sell equipment, parts or service, you need to know how the equipment is going to be used, how often it is going to be operated, and what type of conditions it is going to be used in. If you have that information before you recommend the proper item, then your customers feel comfortable that you are partnering with them rather than just telling them what to do.
Satisfaction does not end with the sale though. It is keeping customers updated with warranty repairs when manufacturers issue them, as well as various specials that would help them in maintaining their equipment throughout the year. I am in favor of using any means necessary to make sure that you are connecting with your customers regularly. I suggest having your customers tell you which is their preferred method (e.g. phone calls, texting, e-mailing). This regular contact will ensure they know you care about their future business, too.
Your employees need to know what you believe in and how they should interact with customers.
You need to train your employees on what to do with regard to your customers. I favor group trainings where you give the expectations of your sales process and customer service. What margins are you looking for from the sales floor, parts department, and service department? What discounts can be given? What is your trade-in policy? Everyone who is selling needs to know these things so that they can make sure they are doing what the dealership needs to maintain appropriate profit margins. I definitely favor making sure you share as much information with sales managers and parts managers, so that they know where the month-end percentages are versus the profit margin goals and be able to justify why they gave discounts or trade-ins to specific customers.
Education of your staff is a cornerstone of being a successful business in all sorts of ways. Don’t keep them in the dark. The more information, the better, so your staff knows the direction they need to go.
A question you always need to ask yourself at this time of year is: “What am I going to do this year that I didn’t do last year?” Don’t use the weather or the economy as an excuse or easy out for not trying to do more.
Could it be time to hire an outside salesperson? As the owner, do you have to get out of the dealership more often and develop relationships with landscape contractors or municipalities?
I like this simple quote from Donald McGannon, former Westinghouse chairman: “Leadership is action, not position.” To increase your sales and/or profit margins, you need to take action and show your staff where they need to go by also showing them the way.
Once overall goals have been established, then set individual goals for each of the salespeople. Every month, go over the goals and reward the people who have met or exceeded the goals.
If there is one thing that I see in most dealerships, it is that they really have no goals and just hope that by doing the same thing they did the previous year, it will translate into a better year. Albert Einstein had a word for this, and that was “insanity.” To improve your sales, it takes great leadership and vision, not complacency. A one-percent change is better than no change at all!
As I previously wrote about in the “satisfaction” section of this article, you need to know if you have totally satisfied your customers.
Have you ever sent out a customer service survey or even asked one of your customers what he or she likes about your dealership? You know that satisfied customers come back more often and spend more with you at the same time, but how do you detect those customers as early as possible? On the flip side, what could you learn from your dissatisfied customers? Do you contact those who have had problems with you, so you can find out where you might make some changes? After you talk to dissatisfied customers, do you ever apply the lessons learned for yourselves and your employees?
Second, are you listening to your customers when you are selling equipment, parts or service? One owner told me that his goal was that he wanted to sell customers what they needed, not what they always came in for. He asked the right questions to determine the best thing to fulfill their needs and was looking for the good long-term solution, not just a sale. If you just sell customers what they want, you don’t always get the chance to give them that “wow” moment. That is what you are looking for, and that is the thing that will set your dealership apart from the competition.
In this article, I could have taken the easy route and told you how to increase margins on equipment and parts, but to me, if you aren’t doing the things I discussed, those other things don’t really matter much. You may need to do something different this year and push the envelope on how you relate to your customers, so that they want to come back again and again.
I like the following quote from Patricia Fripp, sales trainer and lecturer, about sales: “You don’t close a sale, you open a relationship if you want to build a long-term, successful enterprise.”
This is the kind of attitude that you want to create in your dealership. You not only need to care about customers today when selling them your product, but you also want to be there for your customers for their future needs, too. That is a foundation to build a great business on. You should make “totally satisfied customers” your goal and realize the advantages in being a dealership built that way. So, just SELL!
Jeff Sheets is the founder and owner of OPE Consulting Services. Whether a business is thriving or struggling to survive, Sheets’ rich experience in both the corporate and not-for-profit sectors allows him to partner with business owners to customize unique strategies for their needs. For the past nine years, he has worked extensively with hundreds of outdoor power equipment dealers to create best practices in business structure, personnel management and financial profitability. For more information, he may be contacted at firstname.lastname@example.org or (816) 260-5430. You can also follow him on Twitter @opeconsult, connect with him on LinkedIn, and visit his website at www.opeconsultingservices.com.