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August 2017
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Continuing the tradition
Dave Baiocchi
Dave Baiocchi

NOTE FROM THE EDITOR: Today we say good-bye to a long-time friend and welcome a new Wholesaler columnist. As much as we have enjoyed reading John Walker’s columns over the years, and will certainly miss chatting with him each month, we have to celebrate along with him that he has reached that milestone we all envy – retirement.

In the few shorts years that I’ve been editor for Wholesaler, I’ve quickly learned that John Walker is a very well-respected icon in the aftermarket sector of the material handling industry. We know that readers looked forward to his column each month and were happy for a chance to meet him at the industry shows.

We’ve known for a few months that this may be John’s last year writing for our magazine and along with that the monumental task of deciding what to do with the column. We share John’s believe that there is opportunity for our readers in the aftermarket sales and service. And because of that, felt we needed to find someone to continue the role of Aftermarket author. I think you’ll agree with our choice. Congratulations John, on your new role! And, welcome to the Wholesaler team Dave! Be sure to read John’s farewell article in this issue’s cover story.

Enjoy Dave’s first Aftermarket article……

Our industry is creeping up on its 100th birthday.   My research tells me that the first true “vertical” forklift ever built, entered service in 1923.  What Yale & Towne Manufacturing Company started in the early 1920’s, has grown into a multi-billion dollar industry, with dozens of OEM’s and thousands of dealer organizations worldwide. 

The innovation, and technology applied to these machines over the years has been impressive.  For the better part of the 20th century, the best and brightest minds in the engineering world developed equipment that forever changed the landscape of materials handling.   Dealer organizations were developed and grew into a collective of distribution brands and channels that sold and supported the very machines that (quite literally) carried the weight of the industrial capabilities that made our country efficient, productive and wealthy.

As our industry has matured however, the performance differentiation between brands has narrowed.  Profitability is no longer tied to market leaders having vastly superior technology, or significantly better equipment productivity.  OEM’s are going through a process of merging, acquiring and absorbing in order to now generate “economies of scale” that will give them an edge in offering superior value, for the lowest price.

These shifts have been especially difficult for dealer organizations, who by many accounts are following the pattern of the OEM in attempting to widen their market areas by merger and acquisition.  The pressure on customer prices has been intense, as dealers try to innovate using new and different financial tools, and rental strategies to try and retain their position in both profitability and market share.

These forces of change have motivated dealers to revise their market plans, and re-think the way they approach their marketplace.  Any critical analysis of our industry over the past 15 years would reveal that dealer success and longevity, which for decades depended on the “better mousetrap”, must now evolve to include new and previously untapped sources of income.  Differentiation that builds value is now much less tied to the “equipment” and more realistically tethered to the support capabilities of the dealership.

As late as the mid 1980’s, the thought of having a “second” sales crew to “sell” parts and service seemed like a ludicrous waste of money.  Dealers bristled at the notion that this function of the dealership would have to be managed and cultivated.  “Doesn’t this happen on its own?  If they buy our truck, don’t they have to buy our parts?”  The answers seem self-evident today.  Few if any dealers in today’s marketplace don’t have some form of aftermarket sales effort at work inside their company.

There are still many dealers however who still consider an aftermarket sales force an unnecessary adjunct to an already expensive marketing effort.  We are in the age of the “combo-rep” where the idea is to kill two birds with one stone.  The logic behind the combo rep is simple.  Why should a dealer put two sets of boots on the street, walking into the same door, talking to the same people, and securing the same business that ONE of them could do (as long as they were fairly compensated for it.)? 

I don’t disagree that in some cases the combo-rep has its place.  Especially in smaller rural territories where logistically, single points of contact are actually preferable for both the customer and the dealership.  

The biggest issue with the combo-rep however is how difficult it is to find salespeople that have the skills to sell BOTH equipment, AND parts & service.  The skill set of most salespeople will lean decidedly toward either one or the other, but seldom BOTH.

In our industry I believe that if you are in sales, you are either a hunter or a farmer.   The hunter is usually very good at what he does.  He knows his job, and he focuses on a singular goal.  Get the prey!   His job is to scout the area, track the prey, load the gun, scope it, shoot it and retrieve it.  This is usually where the fun ends for the hunter.  All of the tasks that follow only frustrate him.  His entire thought process is only focused on one thing.  RELOADING the gun, and getting back into the woods!

Farmers by contrast are a completely different breed.  Most of them don’t have hunting skills, and feel ill at ease stomping through the brush.  They do have their own set of definable skills however.  Farmers prepare the ground.  Then they plant, irrigate, fertilize, cultivate, protect and harvest crop after crop from the same piece of ground.

What I have observed over the years is that hunters don’t farm very well, and farmers don’t hunt very well.  Hunters are equipment salesmen.  Farmers are customer service salesmen.  Few if any do BOTH with equal vigor and excitement.  We do however need BOTH hunters AND farmers on the team in order to demonstrate appropriate value to our customers. 

Our customers in many ways are just like us.  They are also trying to create “economies of scale”, and doing all they can to widen their footprint by merger and acquisition.   More than ever, they need dealers to expand their capabilities, improve their support offerings and guarantee their uptime.  Fewer and fewer customers are taking care of their own fleets, or even hiring those who have too little infrastructure to truly service them adequately.

Investment in the aftermarket business will be a REQUIREMENT for all dealers who want to survive in order to meet these growing needs in the coming years.  And I’m not just talking about having a dedicated CSS sales team.  These investments will have to be made on all levels.  Parts inventory, consignments, increased van stock, telematics, training, tools and transportation will all have to be reconsidered in light of the value that dealers must demonstrate to meet the demands of the customer.

Some people saw this trend before it ever became a shock to the bottom line.  John Walker was one of the first.  John’s contribution to our industry is unequalled.  I consider John a “pioneer” of sorts; certainly a man ahead of his time in many respects.  John’s vision and his life’s work was to highlight the importance and the necessity of robust aftermarket sales in a dealer’s value proposition to his clients.  This was not an easy or popular road to take, but John understood the power of aftermarket sales, and he was able to portend the ramifications of not having these resources under development.

Like John, I also have dedicated my career to aftermarket sales and building best practices inside the support functions of a dealership.   I have worked as a commission salesman (yes I was a hunter at one time), a rental manager, a used equipment manager, a general sales manager, an aftermarket director and a dealer principal.   I have had a 360 degree view of this business over the past 33 years.  Of all the challenges inside the dealership, shifting the culture and the perspective of ownership groups toward the importance of their aftermarket business is by far the most difficult task I have encountered.  We are still very “equipment-centric” in this industry.  But we are making progress.

MHW magazine has asked me to share with you some of the programs and policies that I have developed over the years to assist other dealers in making these important transitions.  I look forward to having this opportunity to offer ideas that will help our industry move forward. 

In regard to John Walker, I can only say that those shoes will feel mighty sloppy on my feet.  I will do my best however to add to the legacy of aftermarket excellence that he has so capably built over the years.  Enjoy retirement John…yes I am envious….and yes, you certainly have earned it! 

Dave Baiocchi is the president of Resonant Dealer Services LLC.  He has spent 33 years in the equipment business as a sales manager, aftermarket director and dealer principal.  Dave now consults with dealerships nationwide to establish and enhance best practices, especially in the area of aftermarket development and performance.  E-mail editorial@mhwmag.com to contact Dave.

 

 

 

 

 
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