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Acquire new customers and grow!

By Jenna Morton

One of the basic challenges for any dealership is how to simultaneously retain customers in order to make a profit, while at the same time actively engage in adding new customers in order to grow the business. In the heavy equipment arena, most dealerships meet this challenge by focusing on two things:

• Increasing the profitability of their existing customer base through product
  support and new equipment sales; and
  
  
• Converting prospective customers into new customers who are purchasing products or services from the dealership for the first time.

In this article, we’ll focus on this second crucial business activity, and examine some ways in which dealerships can create opportunities to acquire new customers.

Aquire Customers Who Own Equipment That is Not From a Brand That You Sell
Consider catering to the parts and service needs of customers who own equipment that isn’t from the mainline you sell at your dealership. Use UCC Filings (which records every machine that gets sold) to find out what other machines have been sold in your dealership’s sales territory. Then, set up and offer simple service agreements or preventative maintenance contracts for general, routine maintenance that could apply to any type of equipment – for example: fluid changes, winter inspections, etc.

These types of non-specific service contracts open the door for you to generate business by servicing brands of machinery you don’t sell but can still maintain. Furthermore, they are also a great way to tie business (and recurring revenue) to your dealership for a specific contracted period of time, as well as an easy opportunity to create a lasting customer relationship, starting with one piece of equipment at a time.

For example, you might consider offering service to prospective customers who have purchased equipment that has engines you’re familiar with, even though the brand of the equipment is different.

Sell Common Consumables
The PFW Interchange/Parts Cross-Reference interface can be a great tool to help you expand your parts business. This interface shows the equivalent part number for each OEM, which can help you stock consumables (belts, hoses, filters, O-rings, etc.) that are common to different brands and machinery. With these frequently-ordered generic parts on hand, you can then turn around and sell them into other markets.

Similarly, if you have obsolete parts on hand taking up space in your parts inventory, consider listing them on the PFW PartFinder web site (partfinder.pfw.com). This will broaden your audience when advertising these parts, and you may make contact with a potential new customer who is looking for a specific part, while reducing your obsolete inventory and generating revenue at the same time.

Expand into Adjacent Markets
On the web, anyone can be your customer! If you haven’t already done so, think about all the ways in which an online store might help you sell some of the items that don’t require any effort or intervention from one of your dealership’s staff members – for example: consumables like safety equipment, pylons, hardhats, toys, T-shirts or OEM-branded items.

An online store can help you reach out to a completely new set of customers – or even build a completely new business. In some cases, dealerships have been successful at moving into a new market that compliments their existing business, while at the same time leverages their organization’s existing infrastructure, systems, and personnel.

Market conditions can also create new opportunities for dealerships to expand into new markets. For example, if your dealership currently doesn’t offer a rental fleet, you might consider the possibility, taking into account current economic trends. When the economy is weaker, there is more of a trend towards contractors seeking to rent equipment instead of purchasing new machines, yet the need to keep an updated fleet of machinery on the job site (both from an uptime perspective as well as the need to attract the best operators) never goes away.

Alternatively, if you’re an agricultural equipment dealer, you may wish to think about offering a small, seasonal rental fleet (or even a loaner fleet, if you can handle the costs) to help address customer concerns about equipment downtime during planting or harvest times.

Other Ideas
Before starting any new customer acquisition activity, it’s important to first identify your target customer, and then choose the best method to deliver your targeted message. For example, your CRM software can help you choose a target market based on an analysis of the customers you already have; then, there are a number of different ways in which you can reach out to your prospects – ranging in cost from zero to very expensive. Some ideas to consider include:

• Offer new equipment demonstrations and/or operator training.
  Demonstrations and operator training allow your prospective customers to see your equipment, learn about what’s new, and have an opportunity to try out the equipment for themselves. Invite a prospect to your dealership, and have them bring along their operators as well, since operators will give feedback to the customer and may even influence their purchase decision. You could invite OEM specialists to be on hand during the event, make it an exclusive “invitation-only” presentation, or invite some of your existing customers to participate in a group setting. Many equipment purchasers still view the dealer as their number one resource for information, so an operator training class is also a perfect way for you to showcase your dealership’s expertise and strengths as well as your ability to provide product support throughout the life of the equipment.
  
  
• Motivate customers to make their first purchase.
  Gift cards – or other cash incentives – can help bring new business in the door. According to Givex.com, “41% of consumers have visited a retail store, hotel or restaurant that they have never been to before because they received a gift card for it.” They go on to say that, “72% of those first-time customers went back to the business at least once afterward,” and, “48% of the gift card recipients spent more than the amount of the card.” If you’re not into gift cards, then you might think about simply opening a new account for a prospect you’d like to acquire, and starting them off with a $500 credit. Send the prospect a letter and let them know that the credit is there – and available for use at any time during the year.
  
  
• Use your networking skills to find more customers.
  Do you support your local 4-H Club? Are you a member of your community’s Chamber of Commerce? Do you volunteer your time as an advisory board member at a local technical school? It’s possible that these networks can provide you with new customers, link you to businesses that need the services of your dealership, or even provide a source of affiliates that could offer partnership or wholesale opportunities. And don’t forget, a major benefit of networking is that you’re also increasing your dealership’s brand visibility at the same time – and that brand visibility is key to the success of your dealership’s growth.