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The Sales Value of Information

Unlock the Potential of Your Customer and Equipment Data
with PFW’s Sales Tools

PFW Password - Summer 2005 Today’s equipment-selling landscape is a tough one. While a lot of time and energy is spent on selling the equipment that lead to aftermarket revenues, the actual equipment margins are—in many categories—quite slim. Although there have been occasional and fleeting upturns in the size of the equipment margins available, the forecast is for status quo. Most manufacturers are reporting 2005 margin levels that are similar to, or lower than, those of 2004. Chris Palmer, VP Sales and Marketing at Wood’s CRW, in Williston, Vermont, says that, “For most of us, margins are better right now, but I think it is a matter of time before they return to previous levels.”

Consequently, the successful dealership—the one looking for a competitive edge—needs to generate the “entry point” that an equipment sale creates, and leverage as much of that thin margin as possible. Given that forecast, what are the keys to maximizing equipment margins? The answer, in a word, is “information”.

The Information You Need
According to St. Thomas Store Manager Darryl Speers of Huron Tractor, based in Exeter, Ontario, “We compete on value more than price. We sell value through knowing the history of a unit, with respect to usage, reconditioning, service records, etc. The implicit question for the customer is ‘how do you want to buy the unit’ and the value is added through warranty diligence, reconditioning, and shop work done. We ask ourselves ‘how does it look to the buyer?’”

The trick is to sell the right equipment to the right customers the right way—and you can assist that with knowledge. It’s been said that “information is power”, and equipment distributorships need sharp tools in order to take raw data and qualify it, with the result being relevant, immediate, and usable information that the sales department can take and use to its advantage. Frank Winters, General Manager – Sales at Huron Tractor, says that the company uses sales information to “make a connection between value and the customer.”

For example, the database needs to be able to:

• power a reliable, integrated and accurate quoting system;
• provide detailed, integrated customer and equipment profile information;
• store inventory aging data;
• enable market segmentation; and
• facilitate territory management.

Extracting Key Information
To drive their reporting, Huron Tractor has created customer coding by manufacturer, and type of customer, such as “competitive owner”. This helps them identify key accounts and dictates the frequency of calls made to the respective groups. It also helps Sales gauge the viability of accounts.

Steve Clark, Store Manager at Cook Equipment, in Fullerton, California, says, “I use the PFW software to take a glance at what the salespeople have been up to. I work at three of our locations and I like to track our customer calls from anywhere. I can just jump on any PC and click on IntelliDealer’s Call Scheduling in order to see if the salespeople are doing their job.”

As well, Russell DeGagne of Guertin Equipment in Winnipeg, Manitoba, reports that, “When staff need more information I build a query that fits their needs. For that, I use Financial Reporting in IntelliDealer and Query 400.”

Huron Tractor uses IntelliDealer’s “Days in Inventory” report and runs it “By Used” or “By Store”. This may then change the processes associated with the service, reconditioning and upkeep on the machine, which adds to the price and can create a suitable margin.

Here is just a sample of other PFW products and functionalities that can boost your sales reporting initiative:

• PFW Dealership Management System’s Salesman Commission Module, Margin Analysis, and Query 400
• PFW IntelliDealer’s Geographic and Business Analysis, Call Analysis, Group Unit Analysis, Equipment Reports, Area Sales, Financial Reporting and Lost Sales Report
• Crystal Reports Online Repository at www.pfw.com/members

Keep Your Top Customers
How do you measure your best accounts, and then maintain those good customers? How does a dealership create “partnerships” that are rewarding for them and the customer? The easy answers include focusing on product support, quality service, and integrated customer tools. PFW software can help this effort along.

Dan Norris, Service Manager at Newman Equipment in Indianapolis, Indiana, has found that, “The IntelliDealer system is an excellent tool for compiling budgetary information and being able to format it in a way in which tracking sales and expenses is made easy.”

Sales Analysis
Another integral part of the solution to the “sales challenge” is sales analysis. Sales managers require tools that measure the effectiveness of the sales and marketing effort in its total impact. From these determinations, sales managers can then act accordingly: inspect and change the things that are not succeeding and maintain those aspects that are effective.

At Huron Tractor, salesperson compensation is gauged on a monthly basis, where commissions are tied to gross margins. A salesperson’s commission is relative to their “wash out” (the total margin associated with the lifecycle of a sold unit) or, on the negative side, how much they "owe."

Know Your Customers
Through PFW IntelliDealer’s CRM and its contribution to business intelligence, dealers can consequently revisit their marketing initiatives in order to target the appropriate segments. To assist with this effort, PFW IntelliDealer contains a comprehensive CRM tool, designed to help improve a customer contact program, market segmentation and coverage.