Contact Strategy: Optimizing Market Share

How to Successfully Service All Machinery Customers

By Steve Ross and Walter McDonald

Structuring the Account Development Team

The machinery dealer’s end-user customer is their most valuable asset. Yet, there is often minimal company-wide attention/coordination to maintain and develop this incredibly important relationship. Traditionally, the sole responsibility fell to the territory sales rep. However, today, the forces of intense competition and customer communications technology are demanding a more robust and comprehensive account growth strategy. Leading edge dealers today are fielding a much stronger relationship development team to build and retain customers:

• Machinery Sales Rep (Account Manager)
• Product Support Sales Rep
• Field Service Technician
• Parts Counter Personnel
• Service Manager (Making Key Account Visits)
• Parts Manager (Making Key Account Visits)
• Sales Manager (Making Key Account Visits)
• Dealer Owner/Principal (Making Key Account Visits)

Structuring the Account Growth Strategy

Account Growth Strategy is the Master Plan actually employed  recently by a machinery dealer to Improve Market Share. Using this strategy, they increased their market share by 50% in slightly less than 3 years.  It is important to note that the very first step is to identify and categorize by unit size every account in the Dealer’s Area of Responsibility.

Establishing A/B/C/D/E customer categories based on the number of units in their fleet is essential.  Shown below are categories often used by forklift dealers. Construction equipment could be similar in your market area. You should determine your own category ranges. Customers in the top two categories should equal about 80% of your total business.

Strategic Account Categories

The actual impact of an effective A/B Account Growth Strategy is up to a 50% increase in unit market share in about three years by participating machinery dealers!

Updating Account Intelligence

The next step is to profile the A/B accounts, your top two most important categories.  You must get the name of the equipment manager, his cell phone, his email address, and his mailing address. Then start working on expanding and building relationships with other influencers in the account: identify their needs, their problems, their expectations, their potential for operations improvement, and their performance metrics. It is essential to discover who else you need to build a relationship with within the account, then do it.

Some of this information may be in the truck of your territory manager’s car, but it is useless there for the Account Development Team. (See our recommended Key Account Profile in Strategies, Tactics, Operations for achieving Dealer Excellence,

Pages 441 -445.

The big, important, absolutely mandatory, do-or-die step is to build and maintain an accurate email contact list for every account, especially A/Bs. You must start monthly email promotions with various interesting content, seasonal specials, new attachments, product support coupons, accessories and supplies, applications reports, success stories, new product information, and product support specials. The very best dealers send these out every 1 to 2 weeks, but this takes a lot of work.  But, if you can build the resources, perhaps with a part-time student, it is worth the investment.

Structuring Contact Frequency

It is essential to establish an effective account contact strategy. What is the optimum call frequency based on the number of contacts, size of potential, and level of competition?

Face time with your A/B accounts is a very powerful tool, but your Account Development Team should be careful about not over-contacting and neglecting other business development responsibilities.

Understanding the methods of contact preferred by a customer and the nature of communication they deem valuable is very important.

You must utilize your CRM software to monitor account activity, plan calls by various dealer personnel, document important issues, expectations, problems, and opportunities.  The Account Development Team reviews A/B accounts monthly by territory.  

Establishing Coverage Strategy by Account Category

1. CURRENT CUSTOMERS: A/B Account Focus (Account Focused Tools)
   1. Every A/B Account is Identified in each Sales Territory. These accounts often contribute 80% of the dealership’s revenue and profit.
   2. An Account Manager is assigned to each A/B account. Each is responsible for growing a relationship, solving problems, and helping them improve their processes.
   3. The dealership creates a process to retain and defend the account through monitoring satisfaction and meeting expectations. Weekly customer service follow-up calls (7-9/week) based on Repair Orders is proving to be very effective. All dealer employees are part of the retention process.  The email promotions maintain constant contact.
2. Prospective CUSTOMERS: A/B Accounts (A Dealer Team Effort)
   1. Dealership Strategy: Identify and profile target A/B Prospective Accounts.
   2. Transact Business and grow the target accounts in any department possible (parts, service, rentals, used machinery, new machinery).
   3. The Account Development Team holds regular strategy sessions, reviews progress, finds ways to add value.
   4. Build Key Information in profiles (Know their key metrics).
   5. Know them better than they know themselves. Find ways to add value (Learn what is important to them.) Bring New Ideas – Focus on process improvement.
3. CURRENT CustomerS: C/D/E Accounts – Retain and Grow
   
   A/B Strategy does not mean we neglect smaller customers. Many dealerships are built on C/D/E Account Sizes. So, C/D/E Accounts Need a development strategy as well.
   
   Recommendations:
   1. The challenge is determining how to retain C/D/E customers given the account manager’s time and territory coverage limitations.
   2. In C/D/E accounts, field service technician becomes our relationship management eyes, and ears. However there needs to be a good communications loop to discuss opportunities and issues and, most importantly, recognition for the technicians who make important contributions.
   3. Using CRM, the dealership can spread out and coordinate personal calls by the Territory Manager, Service Manager, and others.
   4. Monthly email promotions are essential. Frequent emails provide low-cost, highly effective customer contacts and are proven to be highly effective in maintaining relationships and increasing sales by 25% or more.
   5. Capturing Web Site visitors is also very powerful. As many as 90% potential machinery purchasers will visit dealer websites before initiating contact.
   6. Dealer Operations Efficiency and Performance Excellence help retain and grow C/D/E accounts. Meeting and exceeding customer expectations through achieving World Class performance metrics.  These include off-shelf parts fill rate, first trip job completion rate, jobs completed on time as promised, plus, friendly/knowledgeable people, responsiveness and sense of urgency. These all contribute to increased customer satisfaction.
4. PROSPECTIVE CustomerS: C/D/E Accounts – Offer Viable Alternative Sources
   
   Recommendations:
5. The overwhelming importance of semi-monthly email promotions is demonstrated in this account category.
6.  These accounts are pulled in based on their need for an alternate product support resource.
7. Emails promoting tech service capabilities are a powerful incentive for this account category.
8. Capturing Website visitors is again, very powerful.
9. Satisfied customer testimonials, installation reports in email/newsletters builds confidence in the dealer as a viable alternate source. These should be published in the monthly email promos,

Product Support Sales Development Strategy

We are now recognizing the importance of monitoring purchase frequency. Dealer sales transactions and revenues are 8 to 10 times more from accounts with service and parts purchase frequency over 6 times a year. At this point, the dealer achieves “preferred vendor status.” Any account who has not made a purchase in six to eight weeks should be contacted. (See “Data Analytics for Sales and Marketing Strategy” in my Service Management: The Machinery Dealer Manager’s Handbook.)

Account Development Strategy Summary

This A/B marketing system for your largest accounts is not designed for the quick hit and run sale. It is designed for dealerships desiring to build their business for the long term.

Often the dealership gains status with C/D/E accounts when they learn the dealer is doing business with bigger, well-respected companies. These can be identified in successful case studies and problem-solving installation reports.

Segmenting by size does not make anyone more important.  This categorization helps the dealer invest the right amount of time with each account. 

In retaining customers, knowing size becomes more important in how to best deploy dealer resources correctly to ensure high customer satisfaction levels.

The A/B Account Development Strategy helps ensure optimum contact and successful relationship management for every current and prospective account in the dealership’s Area of Responsibility. Please contact me if you would like to discuss any aspect of this article: walt@mcdonaldgroupinc.com.

NOTE: Our Guest Contributor, Steve Ross, has spent 38 years in most roles in a machinery dealership, from sales and sales management to operations, senior leadership to director of a multi-location factory-owned dealership. Steve has spent the last 13 years in consulting roles for small and larger dealerships, focused on enhancing the customer experience. Most recently, Steve and his team have developed a highly successful technician dispatching technology. Details are on HIVEQR.COM. You can reach Steve at steve.ross@hiveqr.com or 407/234-4150.