How serious do you consider your aftermarket competition?
For years I have asked hundreds of equipment dealers, their department managers and many times individuals involved with the parts, service and rental departments this question: If your customers asked: “How will I be better off if I buy from your dealership rather than from your competition?” We further asked whether or not the dealership could be absolutely certain that everyone in the dealership would answer the question in the exact same manner?
The follow-up question to the original comment for this article is: How much do we actually know and truly understand about our aftermarket competition?
Over the years I have told thousands in the equipment business that everyone within the dealership must recognize that every customer who buys equipment from the dealership has a CHOICE. This choice occurs when it comes to where your customer will go for their parts, service and rentals or for the product support requirements they will be faced with over the years of maintaining their equipment. That is a basic which all successful world-class equipment dealers totally understand.
One of the frustrating points of view that constantly plays out in the equipment industry is how little time aftermarket managers spend in the field with customers to determine the strengths and weakness of their aftermarket competition. Too many aftermarket managers get tied down in their comfort zone, either behind the counter or out in the shop turning wrenches. There is a tendency to forget that marketing/selling parts and service is absolutely no different than marketing/selling complete goods. You need to know what your product support competition is doing in your market, how they are doing it and most importantly, why they are successful. Please understand that your competition is not necessarily the dealer selling a like piece of equipment. It could be a local independent, a specialty shop, an independent parts warehouse, etc. What are their strong points and where are they vulnerable? How can your dealership compete? What are the facts and what are the assumptions?
A professional sales person would never consider entering the market place without a thorough knowledge and understanding of their competition. Should it be anything less for the professional parts manager, service manager or aftermarket service sales representative?
Your customers all have a choice, a choice as to where they purchase their parts and the service to keep their equipment operating. In the aftermarket if you do not know and understand the facts surrounding your competition you will never be in a position to sell the customer on the features, advantages and benefits of doing business with your dealership.
In the aftermarket, perception is everything! If your customers believe your labor rate is high in comparison to the independent, then that perception will continue until you, by stating the facts, convince your customers otherwise.
Value-added is as important to the marketing of your aftermarket as it is to complete goods. You don’t necessarily have to match your competitions parts pricing or the competitions’ labor rates. However, you must be sure that for your additional price the customer is getting something in addition to what they receive from your competition.
It is a known fact that as an OEM dealer your customer’s perception is that your operation is high priced. To overcome this perception you will need to sell your dealership’s uniqueness, as far as the aftermarket is concerned. For example: If your dealership’s parts warranty is 30, 60, 90 or even 180 days versus your competition’s non-existence parts warranty, then you have a value added situation. If your service warranty is guaranteed and your competitions is not you have a value-added service. Following is a listing of some value-added parts and service items that have become so basic that many times you neglect to mention them to your customers to make a big issue of certain items you cover that your competition does not.
Value-added factors found in your service department: Guaranteed work, quality service, genuine or alternative sourcing of parts, factory trained technicians, orderly and well equipped shop, proper tools for working on customer equipment, budgeted maintenance costs, ability to service a broad base of equipment, experienced and helpful personnel.
Value-added factors found in your parts department: One stop shopping, competitive parts pricing, financing, overnight delivery of emergency parts, convenient dealership hours, parts for all makes, experienced and involved personnel, significant parts in inventory, highest quality exchange and re-built components.
These are basic items that add value to your dealership, your product support departments and certainly to the customer. Check your competition out as to their ability to provide these services. Then develop your own customer prospective and department sales presentation. However, before you do, make sure you do your own research and development. Check out, not only your customers but your competition. Find out exactly what your customers are looking for and only then be positioned to sell your dealership’s added-value. It will most certainly pay off in additional sales for your parts and service departments.
Ask and answer these questions concerning your aftermarket competition:
- What is the competition’s true pricing structure. In parts, all too often when we hear that the customer receives a discount from the competition, we back away from the sale. We need to determine immediately what the customer actually paid for the part and in what quantities did he have to buy to receive the discount? Many times you will be surprised to find that your actual price is lower than the discounted price.
In service, you may learn that your labor rate is double that of your competition. Hard to explain, unless your market research discovers that your competition requires three hours to do a job that only requires one hour in your shop or, that the independent bills for two people working on the job.
- What is your competition’s overall marketing philosophy? Customers are concerned with availability of parts. Competitors in parts marketing are basically interested in fast, high turn parts. Your dealership is in a position to supply all of the parts for the equipment you sell, you are the one-stop, single source supplier for your customers.
In service, we have seldom met a dealer who did not guarantee his shop’s work. So why not market this guarantee? You might well find in your market research that your competition does not offer the same guarantee.
- What is the quality of your competition’s parts and service? It is imperative that you develop a marketing strategy devoted to backing up your dealership’s and your manufacturer’s sale of quality aftermarket services. Overemphasize your quality parts and service at every opportunity, don’t let it be only a perspective, make it a fact of life at your dealership!
- What is the integrity and reputation of your dealership versus your competition? Sometimes we find talking about our reputation and integrity so basic that we neglect to develop a marketing strategy around these important factors that make our dealership and our aftermarket services so outstanding in the eyes of our customers. As an example, the following dealer comment: “When you buy from our dealership, you don’t just buy the sales department, you buy the whole dealership!”
Marketing your integrity and reputation begins with the development of a Mission Statement and/or A Statement of Purpose. A document memorized by employees and made visible to all your customers.
Your dealership’s integrity and reputation is developed by informing the customer about some very basic facts: How long your dealership has been in business. Representing a manufacturer or manufacturers who have been in business for so many years. A dealership with sales of so many millions of dollars. A dealership selling to some of the finest companies or consumers in the area (references.) A dealership with so many dollars in shelf inventory and overnight delivery from your suppliers. You are a one stop shopping center for parts. A parts department staffed by experienced, friendly, cooperative and involved individuals. A competitive parts department established to service the needs of the customer. A service department offering guaranteed work and quality service, staffed by professional, experienced and involved individuals, with over 50 combined years of experience. Factory-trained, experienced technicians. An orderly and well equipped shop, with tools designed for doing the job right, the first time and on time! A shop with the ability to service a broad base of equipment. Fully equipped road service trucks and trucks for transporting the customer’s equipment.
Look at what your dealership has to offer your customers and develop a marketing strategy to sell the advantages of using your aftermarket services versus using the competition.
When is the best opportunity to market your aftermarket? We believe it is part of the entire selling process and should happen immediately after or even during the sale of the equipment. We encourage the equipment salesperson to bring in and allow the customer to meet the parts, service and aftermarket service rep as part of the selling process. Sell your entire dealership at the time of the sale and you will keep your customer from considering those others in the competitive market place. The dealer who provides superior product support services to their customers will in turn receive more for their products!
If you are interested in developing this sales culture even further within your dealership email us at [email protected], and ask us to email you our manual entitled “Back-ground for Developing Value Added Selling.” You will be invoiced for this document a total of $14.99 and payment will be made when you have determined you are satisfied with your purchase . . . look for this manual to: 1) increase your product support sales, 2) increase your product support profitability and, 3) to greatly improve your customer satisfaction, while last but not least, 4) reducing the customer’s ailment called Buyer’s Remorse.
John R. Walker is president of Aftermarket Services Consulting Co. Inc. E-mail [email protected] to contact John.
