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December 2017
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Analyzing profit centers

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Another reader wrote, “You are right on with your comments that customers do want and will pay more for product if they recognize they will receive superior service after the sale. I also agree with the percentage you say they will normally pay (1 percent to 1.5 percent).” He stated their dealership had just sold a large order to a customer who in the past they had always provided superior service to after the sale. The customer told the dealer he would pay $1,000 per unit because of the technician and yet another $1,000 per unit because of the back up support the dealer always provided. The writer further emphasized this does not happen unless a positive relationship with the customer and the dealer’s total support team exists.

In summary, if you think and act positive, and provide superior service, your dealership will be both successful and profitable!

Gather your dealers and managers, and tell them to bring an open mind and high positive attitude. Study together the margins you produce in service, parts and short term rental. Determine what an increase in sales in these areas will do to your total gross profit dollars. Understand that this increase is what has to come if you are going to achieve a 100 percent or greater absorption rate.

Work together at composing a written, comprehensive plan for marketing those three profit centers. Make sure you thoroughly consider putting boots on the ground, dedicated professionals out there in your market place, face to face with the customer asking for your aftermarket opportunities. Unless you all work together and try it you will never know whether or not it will profit your dealership.

Many have said to me, marketing service can be done by stepping up technology. We need “blackberries, blueberries, or even strawberries,” something high tech to get our service business at a low cost. What I will continue to say and write is that you need professionals out there marketing your service after the sale to your customers and prospective customers.

Stop listening to all those naysayers who believe it can be done by simply hoping the customer will eventually change their attitude and come back automatically to your dealership because you sold them their equipment. Remember all your customers have a choice and that choice is they can always go elsewhere to shop for their aftermarket services.

Customers don’t necessarily need your dealership, as someone else will always be willing to provide them the service they want at a lower price. But is that what your customers want? Customers want desperately to avoid any unscheduled downtime. The truth be known, they want this service to be done by the dealer who provided them the equipment.

Special Offer to our Readers: After Market Services has published a 63 page marketing document on how to market your dealership’s service to your customers who have purchased their equipment from you, but do not rely on you for after market services. This manual retails for $49.95. There are now three additional manuals entitled: “Creating a Marketing Plan,” “The Aftermarket Sales Call,” and “Sales Psychology,” which each retail for $19.99. All four manuals can be yours for $19.99. Simply email us at: amsconco@aol.com and we will in turn e-mail you the manuals with an invoice which you will pay only after you find you are satisfied with the material. Please when emailing us let us know your name, title, company address and phone number, and line of equipment your dealership handles.

 John R. Walker is president of After Market Services Consulting Co. Inc. You may contact him by e-mailing editorial@mhwmag.com.

 
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