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December 2017
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Create a “Customer for Life” culture
John Walker
John Walker

Over the past four months we have seen two important quotations by senior executives in the equipment business. They state that the equipment dealer’s loyalty is earned by the dealer and not necessarily by the brand name. It was Bill Ratliff who first proclaimed this, followed recently by Gene Embury of Kubota who commented, “Dealership brand will take on greater importance than the manufacturer’s brand.” Embury went on to say, “Customers are sophisticated enough to differentiate between a dealership that just happens to be close by and one that has superior knowledge and skills, and provides the equipment and services he needs.”

Are manufacturers softening their thinking that the best and only way to measure their dealers is via market share performance? It was Herb Kelleher of Southwest Airlines, a business founder, who seeks increased customer service and customer satisfaction who says, “Market share has nothing to do with profitability. Market share says we just want to be big and that we don’t care whether we make money doing it!” It is a shame that American Airlines took too long to discover this fact. It was recently published that last year South West Airlines had the lowest number of customer complaints of any US airline and they still maintain a high level of profitability.

As we have told so many equipment dealers over these many years, market share is earned over a period of time and it cannot be earned by consistently being the low priced bidder. Market share can be earned by providing the customer with service before, during and after the sale of the equipment at a fair and reasonable price.

As long as I have been in the consulting business I have read, talked and listened to the experts tell the business world how much it costs to lose a customer who has been with the dealership for years because of indifference or a non-caring attitude. It is amazing after all these years how very few equipment dealers listen to these basic facts, and the many that do, go to the bank with a smile on their faces.

Customer satisfaction is an absolute necessity in any and all equipment dealerships. Customer satisfaction is what draws the customer back time and time again to buy from a particular dealership. Customer satisfaction should not be confused with customer good will. It is important to note that there is a fine line between good will and customer satisfaction. Good will does not always provide customer satisfaction. When you undervalue what you charge your customers (cut your price) you also undervalue what you do for your customers. When you overvalue what you pay your customer for a trade-in in order to hold market share, you reduce your business profitability. If you believe your price is right, sell it. If you believe your price is right, stick to it. It is difficult, if not impossible to remain in business if you cannot remain profitable.

The term, customer satisfaction, has been talked about for years. According to Tom Peters, it is an over worked term that should be replaced by the phrase “Customer Delight!” I just might agree with Peter’s description. I might go a step further and state that we really want to “WOW” a customer with our full line of service and caring personnel.

Many times we believe that equipment dealers and their personnel confuse the term customer satisfaction with customer good will. Once customer good will or giveaways begin it is difficult to stop and the customer begins to take good will for granted. The dealers lose out financially in the long run.

Customer satisfaction is how the customers view their relationship with the equipment dealer. It is what makes the customer come back time and time again for the dealer’s services. Customer satisfaction is a genuine feeling that the dealer cares after the sale has been made. Customer satisfaction is a caring attitude expressed by the dealership and all the dealership’s personnel towards the customer.

Customer retention is earned through customer satisfaction. It has been said that equipment dealers spend six times the amount of money to capture a new customer versus what they spend in keeping that same customer. Is the equipment dealer’s emphasis misplaced? In today’s marketplace customer retention means financial success for the equipment dealer. Losing a customer costs five times the annual value of that customer’s account to the equipment dealer. Customer retention is greatly determined by how you satisfy the customer’s needs after the sale.

Every year, without question, some manufacturer or some association goes into the market to survey why customers buy from one supplier versus another. Every year the answer for the equipment dealer comes back the same. Despite all the monies spent on these surveys, manufacturers and dealers alike pay little attention to the results. Results indicate that the customer comes back to the dealership because of: parts availability and good service response time; the end result being a limited amount of unscheduled down-time for customers!

Encourage customers to return to your dealership by treating them the way they like to be treated and by providing the services you would expect as a customer

As we have written several times during the past several months, full service is the real product a dealer has to sell to his customers. A customer can ill afford down time when his product line is running off the product line waiting for a failed lift truck to move his product to the waiting trucks for "just in time delivery" to his customer. A farmer cannot wait for his tractor to be fixed when it is time to plow the field for spring planting. A street cleaner cannot wait for the sweeper to be fixed when he has streets to sweep. A greens keeper cannot wait to have his mower repaired because the tournament starts tomorrow . . . customers loose time and money when their equipment fails to operate and perform the function for which it was purchased.

World class dealers are always there for their customers when they require service. Fortunately, we are seeing numerous manufacturers beginning to recognize this fact and encouraging their dealer body to pay particular attention to their customers’ product support requirements.

Here is yet another piece of sage advice made years ago by a gentleman extremely familiar with equipment dealerships - Stewart MacKay of MacKay, Inc. It states, “The dealership that markets its’ service business is the dealership that is guaranteed the parts business, many times with uncontested pricing.” This point alone should make many manufacturers happy, because the numbers we are hearing from our clients and many dealers are that parts sales increase from 20% to 25% when the customer uses the dealerships’ services.

Customer satisfaction eliminates, or at best lessens buyer’s remorse. As we wrote in an article two months ago, buyer’s remorse is when customers who have recently purchased equipment from your dealership begin to question whether or not they made the right decision in purchasing from your dealership. They begin to wonder whether or not you will be there for them after the sale when they truly require your service. This requires the dealership’s development of a truly strong “Customer for Life Culture” and is discussed in many of our previous articles under the title: ENHANCING THE CUSTOMER’S BUYING EXPERIENCE!

Our readers’ requests for our “Specials” on specific manuals continue to be high, particularly when the concern for customer satisfaction is high on their list of priorities. We therefore continue offering our manual entitled: CUSTOMER SATISFACTION for the special price of $16.99. This manual will be emailed and invoiced to you via email and there will be no handling charges or mailing charges. You only pay the invoice after you are satisfied with the product. If you are not satisfied, toss the manual and the invoice, no explanation is necessary. Please include in your email: 1) your mailing address and 2) major product lines handled by your dealership.

REMEMBER: View the way your customers would like to be treated by the way you expect to be treated when you are a customer!

John R. Walker is president of Aftermarket Services Consulting Co. Inc. E-mail to contact John.