How to Improve Customer Retention

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How to Improve Customer Retention

Guest writers Debbie Frakes and Stephen Clegg analyze the key measure of business success in this week’s blog post, “How to Improve Customer Retention.”

Customer retention is crucial for the success of every company. It describes the percentage of customers who purchased within the last 12 months who also purchased within the prior 12 months—13 to 24 months ago. Poor customer retention means that you aren’t keeping customers over the long term and people are not committed to working with you. The result is that you must devote resources continually toward acquiring new customers, taking up valuable time and money. 

Maintaining strong customer retention is important for two primary reasons. The first is that it’s significantly more expensive to sell to a new customer than to an existing one. The second is that the longer a customer works with you, the more they buy from you and the more valuable they become to you. 

The question is, how can you improve your customer retention? 

Understand why customers leave you. 

The primary reasons that customer will leave you are these:

  • You’re mismanaging their expectations and not keeping them informed on the status of their orders. 
  • There is a change in contacts for either the customer or for you. 
  • Your employees aren’t adequately trained or knowledgeable about your products and services or they lack the information system support and tools required to be responsive.

Despite what you may think, price is not at the top of the list when it comes to reasons that customers leave your company to purchase from a competitor. Once you understand why people may stop working with you, you can take steps to prevent them from leaving to buy from competitors. 

How Zintoro helps you retain more customers. 

Zintoro provides the data and insights to recognize at risk customers, while our partner Winsby gives you the tools to significantly improve your customer retention. 

Offer great customer service – In order to deliver top notch customer service, you must understand expectations and be responsive to questions and concerns. Zintoro uses Winsby Inc.’s customer satisfaction and benchmark survey programs to find out what your customers’ expectations are and to determine if there are any issues they are having. Your team can then act on this information and keep at risk customers from leaving you. 

Provide a personalized customer experience – Our AI system tracks each of your customers to identify their next purchase, what industry, and market they are in, and whether they are at risk of being lost. Armed with that information, your sales team can personalize customer interactions and tailor offers and recommendations to meet their specific needs. Our partner Winsby will keep your master lists up to date with the correct contacts, phone numbers, and email addresses. 

Develop strong relationships through consistent communication – Zintoro helps you contact and communicate with customers in several ways. First, you can use purchase history data to identify people who have not purchased in their usual time period, then reach out to ask about their needs. Second, you can distribute highly effective emails through Winsby. Customers who receive Winsby emails typically purchase two to three times more often than those who don’t. Third, Zintoro works with most CRM systems to integrate analytics data with your sales and marketing data, helping streamline customer communication. 

Use customer feedback to take action – Implementing Winsby’s customer satisfaction surveys is a great first step, but you must actually act on the information and feedback you receive. Utilize the insights from the surveys to improve your sales process, products, and other aspects of your business before at-risk customers leave you. 

Recognize the signs of at-risk customers – Zintoro tracks the frequency, consistency, and types of purchases, so you can know who your at-risk customers are. Your sales team can then use that information and reach out to those customers, ask about their needs, and even provide a special offer or other incentive to encourage them to stay with you.

Take steps now to improve your customer retention. 

Increasing your retention rate is an ongoing process that should be started as soon as possible. Building lasting relationships with customers is crucial for the long-term viability of your company because it makes them more valuable to you and it takes fewer resources to sell to them. Zintoro gives you the information and tools required to retain customers and boost your sales. 

Schedule a Zintoro demo to find out how to boost your customer retention, track, and accurately forecast business performance, and to determine the ROI for your marketing and customer satisfaction efforts.

 

Warranty as a Cost Center?

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Warranty as a Cost Center?

Guest writer Chris Kohart takes a look at the warranty department in “Warranty as a Cost Center?”

Many equipment dealers view warranties as a goodwill cost center; why don’t we view this highly visible service we provide as not only a goodwill builder but also as a source of revenue or at least a break-even? Our OEMs have set us up to take warranty on the chin, but does it have to be this way? There are plenty of reasons to say no – read on.

A few eons ago, when I became the dealership’s product support manager, one of the first significant financial sinkholes I wanted to solve was curing the dealership’s annual six-figure warranty write-off (loss). The belief within the dealership was that it was a cost of doing business. In addition to staunching this loss, I wanted our dealership to highlight the significant value-add we provided to our customers that was not being positioned in our favor.

  • First question:  How many customers know the value add your warranty service provides? (at my dealership, the internal management’s consensus was, “It doesn’t matter, they expect it to be fixed for free under warranty”). If you’re not maximizing this extraordinarily costly and valuable benefit you offer your customers, it’s time to rethink your strategy. 
  • Second question:  Do you invoice every warranty repair to the customer at prevailing retail charge out rates showing a warranty discount at the end, bringing their cost to $0.00? That’s an impactful selling tool; once we started sending these no-charge invoices to our customers (I could write another article or three on the gyrations we went through to make our business system support that), we began to get feedback from customers as they had no idea of the additional value our dealership offered.  

Here’s an example of an invoice for a minor repair on a leaking hydraulic line:

 

DESCRIPTION QTY UNIT EXTENSION
Tube, hydraulic feed 1.00  $685.98  $685.98 
O Ring 4.00  $16.20  $64.80 
Hydraulic oil per gallon 4.00  $5.00  $20.00 
Inbound air freight 1.00  $218.90  $218.90 
Parts Total $989.68 
Field Labor per hour 3.00  $180.00  $540.00 
Travel Labor per hour 5.00  $180.00  $900.00 
Labor Total $1,440.00 
Mileage charge per mile 50.00  $1.75  $87.50 
Tolls 1.00  $45.00  $45.00 
Supplies & Materials $115.20 
Invoice Sub – Total $2,677.38 
Less OEM warranty coverage ($934.11)
Dealer Courtesy credit     ($1,743.27)
NET DUE FROM CUSTOMER $0.00 

It is pretty interesting when this is presented to a customer. They see a net total of $2,677.38 and owe the dealer $0.00. It’s a powerful selling tool for whole goods and your dealership’s product support operations. So, we’ve shown our good customers that as a dealership, we absorb 66% of this fully covered warranty repair while the OEM only covers 34%. Start reinforcing this huge dealership advantage before your OEMs encroach directly in your trading area as we get deeper into the “no-maintenance” electric construction equipment era (more to come later).

Now, let’s go a little deeper into this work order and review our actual P&L:

 

DESCRIPTION RETAIL

EXTENSION

   Actual Dealer Cost OEM Allowance Profit (Loss) Comments
Tube, hydraulic feed $685.98    $583.08  $437.31  ($145.77) Stock order discount is listed less 25% & 15%
O Ring $64.80    $41.31  $41.31  $0.00 
Hydraulic oil per gallon $20.00    $16.00  $0.00  ($16.00) OEM does not pay for fluids
Inbound air freight $218.90    $218.90  $0.00  ($218.90) OEM does not pay for freight
Parts Total $989.68    $859.29  $478.62  ($380.67)
 
Field Labor per hour $540.00    $324.00  $432.00  $108.00  OEM reimbursement rate is 80% of charge-out
Travel Labor per hour $900.00    $540.00  $0.00  ($540.00) OEM doesn’t pay travel time
Labor Total $1,440.00    $864.00  $432.00  ($432.00)
 
Mileage charge per mile $87.50    $87.50  $0.00  ($87.50)
Tolls $45.00    $45.00  $0.00  ($45.00)
Supplies & Materials $115.20    $115.20  $0.00  ($115.20)
 
Invoice Sub – Total $2,677.38    $1,970.99  $910.62  ($1,060.37)

In our example, this basic, simple warranty repair cost our dealership $1,060.37, and we lost $700 in profit opportunity. Where does your dealership book this cost today? (our dealership booked it as a new “OEM” expense). It’s not hard to see how this balloons over a fiscal year to be a six-figure write-off for many dealers.  How do we solve this dilemma? More thoughts to come in a subsequent article.

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Moving beyond the lies built into hiring

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Moving beyond the lies built into hiring

A recent article from the Economist.

Our guest writer, John Carlson, shared a recent article published in “The Economist.” He felt the content of “Moving beyond the lies built into hiring” would be of value to readers here at Learning Without Scars.

In “How to get the lying out of hiring,” The Economist makes a strong statement about lying on both sides of the hiring process: “You might imagine this is a simple fight between truth-seeking firms and self-promoting candidates, and to a certain extent it is. But companies themselves are prone to bend reality out of shape in ways that are self-defeating.”

I can’t help but think about the more fundamental issue at the heart of hiring: does the employer just want to fill the position or to obtain someone who best fits the role and who has the greatest potential to perform well and stay? Our team at Reflective Performance, Inc. have been working to offer this better way based on the latest in cognitive science applied to the workforce.

Lies are only possible in a subjective world. Instead, employers and employees can benefit through objective measurement of how people process information, make informed decisions, and deal with fast-changing environments. We do this by determining the fit for a position and organization based on direct measurement of Executive Function skills and Cognitive Reflection abilities to determine human potential in all kinds of corporate environments.

These performance factors are nothing you can lie about or fudge when you are engaged by a software app that puts you through questions and situations that determine the accuracy and speed of response, simulating how your brain responds. Are you impulsive and don’t take valuable time to reflect? Certainly, our social media onslaught can be encouraging of such a response. Wouldn’t it be beneficial for employers to know how human performance factors are addressed based on real data, not subjective evaluations and impressions and past positions?

Able to customize our insights around an organization’s goals, Reflective Performance develops datasets for the performance of current successful employees, plus norms for functional areas to identify Fit Markers and KPI correlations related to the work that a potential hire will be doing. 

It’s time to move past subjective and untruthful information in the hiring process and to take the analysis of human factors out of research labs to apply in workforce optimization, ultimately able to eliminate so much embedded waste in terms of costs and lost productivity. Too much money remains on the line for organizations making bad and marginal hires as well as in so much employee turnover. Advanced brain science applied through data-driven systems analysis is where progressive employers are focusing, not in fooling applicants to join their organizations.

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Resource Revolution: Optimizing Your Workforce

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Resource Revolution: Optimizing Your Workforce

Guest writer Dale Hanna takes a look at the year ahead and all of its challenges in “Resource Revolution: Optimizing Your Workforce.”

As the calendar turns to 2024, the landscape of the construction industry reflects an ongoing challenge — a significant labor shortage. In an era where leaders face the daily job of doing more with less, embracing technology to help efficiently manage business has become essential. This pivot is not a fad but an important adaptation for the progress of this industry.

Doing More with Less

Imagine a world where the scope of technology ignores traditional boundaries! In this digitally transformed landscape, software applications take control of scheduling service work orders and analyzing digital inspections. Simultaneously, IoT-enabled devices provide real-time insights on equipment idle time, utilization, and maintenance alerts. This integration of technology automates the repetitive tasks — freeing up human skills to make a bigger impact by building customer relationships and taking on strategic initiatives. In the face of labor shortages, digital transformation creates an environment of higher efficiency beyond just filling the gaps — it enhances the productivity of the whole team. As we stride into the next phase, artificial intelligence is making vital information more accessible, transcending language, and erasing geographical and environmental limitations. 

Talent of Tomorrow

Now imagine a world with fluid interactions between personnel and their digital counterparts. A world where your team can communicate directly with machines in the field – in their language of choice. It’s as simple as pushing a button and asking for the information they need about their bulldozers, excavators, truckstrucks, and other equipment. With the integration of advanced AI in daily operations, the heavy equipment industry is not just solving today’s challenges — it’s preparing for the future. By showcasing a commitment to tech-driven growth, companies are positioning themselves as attractive workplaces for a new generation of skilled workers.

Data at the Forefront

The success of any business hinges on the quality of data that drives decision-making. As leaders look towards a future shaped by efficiency, ensuring the integrity of this data is critical. Clean, precise data helps optimize fleet efficiency and asset management, becoming the bedrock of strategic planning. In the quest for operational excellence, accurate data — when made easy to use and access  —access — eliminates inefficiencies and waste, ensuring that resources are deployed effectively. Companies at the industry’s leading edge understand that robust data analysis is key to staying ahead. In the current climate of labor shortages and economic pressure, AI and technology stand as pillars of innovation and adaptability. These tools empower the equipment industry to overcome today’s trials and march confidently into a future of sustainable growth and innovation.

The race is on. Is your business equipped with the right tools for tomorrow?

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Types of Purchases: Understand What Your Customers Are Buying

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Types of Purchases: Understand What Your Customers Are Buying

Guest writers Debbie Frakes and Steve Clegg take a look at customer behavior in this week’s blog post, “Types of Purchases: Understand What Your Customers Are Buying.”

To market your business effectively, it’s important to understand which products and services your customers buy most often and what causes someone to purchase from you. By identifying common buying patterns and the factors that influence purchase decisions, equipment dealers can tailor their strategies to appeal to their target industries and markets. The result is more transactions, improved customer retention, and increased profits.

Why do the types of purchases matter? 

By identifying what triggers a purchase for equipment, rentals, service, or parts, and what is bought most often in each category, you’ll determine what is important to your customer base. Armed with that information, you will know which strategies and messaging for offers, pricing, marketing, and advertising will produce the most significant ROI for your business. Excellent customer service with frequent and consistent customer transactions drive customer retention. Revenue and profits are the result, not the driver.

Understanding what customers purchase most often and why allows you to avoid wasting time and resources featuring products and services with nominal engagement and ROI. 

Capture more sales opportunities. 

The local NAPA, Grainger, and other general supply houses are selling the filters, fluids, and parts to your customers that are required for your equipment. Grainger and Genuine NAPA have an average gross margin above 40%. Most types of equipment require two to six filter changes a year as well as numerous fluid changes. The question is, are you capturing those sales opportunities, or are you allowing someone else to take the order? Recognizing types of purchases will increase transactions, help you engage and retain customers and capitalize on the needs of your customer base. 

Know your trigger products. 

Triggers are items or situations that drive customers to a store or dealer. For example, grocery store trigger products are milk, eggs, and bread, because these items are the reason someone goes to the store in the first place. However, these products represent less than 10% of the dollars spent. They serve to get people in the door, so they can be sold other products sold in the store. 

Examples of equipment dealer triggers for machines, rentals, parts, and service:

  • Emergency machine repairs can trigger equipment purchases when the repair cost doesn’t justify the expense versus renting or replacing the machine.
  • Machine breakdowns or a specific type of project will trigger renting equipment that is not in the customer’s fleet. 
  • Breakdowns or equipment crises will trigger repair or maintenance parts. 
  • Offering a free inspection or a season change can trigger service. 

Crises maintenance represents over 25% of a dealer’s customer interactions for parts, service, and rentals. These transactions require same day or next day service and delivery to meet customer expectations. Equipment represents only 1% to 2% of a dealer’s total transactions, whereas parts and services are 88% and rental is 10%. As a result, your parts and service departments create your customer experience and are ultimately responsible for overall customer satisfaction and retention.

Understanding what purchases bring customers through the door tells you where your main focus should be. 

 Place your resources where they make the most difference. 

Every business only has a limited number of sales, marketing, and financial resources they can utilize at any time. The reason why types of purchases is one of the most critical business metrics is that it will show you which products and services to run promos on, which ones to highlight in your emails and on your website, and what to run paid advertising on. In addition, it will determine pricing offers and your inventory requirements. 

You need to know what people are buying and what triggers those purchases. Businesses should carefully consider their target audience and tailor their marketing strategies to appeal to triggers that resonate with specific types of customers. 

Knowing types of purchases helps you introduce people to additional products. 

Armed with the knowledge of which types of purchases are most common, you can familiarize customers with what you offer. They will come to your website or view your email based on the products they typically buy or because of a specific trigger, but then they’ll see other things that you carry. Use your most popular offerings as a hook to get them in the door, where they can see everything that your dealership provides. 

Zintoro provides equipment dealers and other businesses with monthly business analytics reporting to recognize, measure, and take advantage of key business metrics like purchases, purchase frequency, customer retention, at-risk customers, and more. 

Schedule a Zintoro demo to understand your most common types of purchases and start receiving business analytics reporting today! 

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He Who Stops to Ponder…

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He Who Stops to Ponder…

In this week’s bonus blog, a friend of Ron’s in Hawaii sent him the text below. Please read on for “He Who Stops to Ponder…”

He who stops to ponder and think will generally come out ahead.

When Gandhi was studying law at University College, London, a Caucasian professor, whose last name was Peters, disliked him intensely and always displayed prejudice and animosity towards him. Also, because Gandhi never lowered his head when addressing him, as he expected, there were always arguments and confrontations.

One day, Mr. Peters was having lunch at the dining room of the University, and Gandhi came along with his tray and sat next to the professor. The professor said, “Mr. Gandhi, you do not understand. A pig and a bird do not sit together to eat.”  Gandhi looked at him as a parent would a rude child and calmly replied, “You do not worry professor. I will fly away,” and he went and sat at another table. 

Mr. Peters, reddened with rage, decided to take revenge on the next test paper, but Gandhi responded brilliantly to all questions. 

Mr. Peters, unhappy and frustrated, asked him the following question. “Mr. Gandhi, if you were walking down the street and found a package, and within was a bag of wisdom and another bag with a lot of money, which one would you take?”  Without hesitating, Gandhi responded, “The one with the money, of course.”  Mr. Peters, smiling sarcastically, said, “I, in your place, would have taken wisdom, don’t you think? Gandhi shrugged indifferently and responded, “Each one takes what he doesn’t have.”

Mr. Peters, by this time was beside himself and so great was his anger that he wrote on Gandhi’s exam sheet the word “idiot” and gave it to Gandhi. Gandhi took the exam sheet and sat down at his desk trying very hard to remain calm while he contemplated his next move.  A few minutes later, Gandhi got up, went to the professor, and said to him in a dignified but sarcastically polite tone, “Mr. Peters, you signed the sheet, but you did not give me the grade.”

Wit always wins over anger.

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Equipment Labor Shortage Challenges and Solutions for 2024

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Equipment Labor Shortage Challenges and Solutions for 2024

Guest writer Greg Grady writes today about the new year just around the corner in “Equipment Labor Shortage Challenges and Solutions for 2024.”

Finding out how technology, including automation, can help address heavy equipment workforce shortages in 2024 and beyond.

In 2024, the heavy equipment rental and dealership industry will face an unprecedented challenge in sourcing, hiring, and retaining qualified personnel. For the past few years, businesses across the sector have been grappling with an alarming workforce shortage, and as part of the equipment business industry, we have witnessed firsthand the impact this shortage has on the market. 

This shortage of skilled labor has far-reaching implications, affecting everything from equipment servicing to customer satisfaction. However, amidst these challenges, there is a beacon of hope in technology.

A Labor Crisis in the Heavy Equipment Industry

To understand the gravity of the situation, it’s critical to consider some recent statistics. According to the U.S. Department of Labor’s JOLTS report, nearly 4.3 million people quit their jobs in January 2022. The shockwaves from this massive voluntary turnover still reverberate in 2024, as the U.S. Chamber of Commerce reports that workforce participation remains below pre-pandemic levels. In fact, we are currently 1.5 million Americans short of the workforce that existed pre-Covid back in February 2020.

Scarcity Impacts Equipment Businesses

The shortage of qualified workers has significantly impacted equipment businesses. The demand for construction and infrastructure projects has surged, but the workforce needed to support these initiatives is simply not keeping pace. Equipment service technicians, in particular, have become exceedingly challenging to source. This specialized role requires a unique skill set that combines mechanical knowledge with executive function, creativity, customer service, and physical agility.

The Quest for Tomorrow’s Workers

Organizations like the American Rental Association have taken steps to address this issue, developing certifications, events, and educational initiatives to cultivate the workforce of tomorrow. While these efforts are commendable, there still exists a shortfall of skilled personnel in the industry today that must be managed. 

Embracing Technology to Bridge the Gap

The answer to the equipment business labor shortage lies in technology, specifically automation. Many businesses are now deploying technology solutions to digitize their paper-based processes. This digital transformation is helping to streamline operations, reduce errors, and improve overall efficiency, all while requiring fewer full-time equivalent (FTE) hours. 

Automation to the Rescue

One significant advantage of technology adoption is process improvement and automation, which allows equipment businesses to reduce the human FTE hours required for specific tasks. For example, automating the sales activity in the quote-to-order process can significantly streamline the quote-to-cash timeline while eliminating data entry errors. Ultimately, digital transformation creates “sticky” customers and reduces churn which industry analysts, including Associated Equipment Distributors (AED), estimate to be roughly 60 percent on average for equipment dealers and rental companies each year. 

The Synergy of Education and Technology

By combining workforce education efforts with technology integration, equipment organizations can refine their business processes to weather the labor shortage storm. Skilled technicians, even if scarce, can become exponentially more productive when armed with the right digital tools. These tools not only help them perform their roles more efficiently but also make the work environment more attractive to potential employees.

Going Forward with the Right Solutions

The heavy equipment industry’s workforce shortage is a challenge that cannot be underestimated. However, by leveraging technology and a commitment to ongoing workforce education, businesses in this sector can address the crisis head-on. The synergy of these two elements can bridge the gap between the demand for skilled labor and its availability, ultimately propelling the industry forward into a more prosperous and sustainable future.

About Greg Grady

Greg Grady is the Chief Revenue Officer (CRO) at Texada Software, a leader in equipment business management, delivering SaaS and mobile applications for equipment dealerships and rental companies. Learn more about Texada Software at http://www.texadasoftware.com. 

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More, Better, and Creative

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More, Better, and Creative

Courtesy of the Water Well Journal, Editor Thad Plumley provides this week’s guest blog post in “More, Better, and Creative.”

I spoke years ago with the manager of a book warehouse whose workforce mostly consisted of temporary employees.

I asked why he didn’t have more full-timers and was told the workers didn’t want it. He had permission to promote several of them but got turned down nearly every time. 

The main reason he pointed out was: “They wouldn’t be able to not come in when they didn’t feel like it.”

Why do I feel like that story doesn’t surprise you like it did me at the time?

I’ve been thinking about that a lot since I read the results of the Associated General Contractors of America (AGC) 2023 workforce survey.

A staggering 85% of respondents reported they have open positions to fill, and 88% said they are having trouble filling at least some of them. Why? Largely because 68% said applicants lack the skills needed to work in construction.

The AGC noted that nearly every community around the country had open construction positions that pay better than the average job and would be vital to that area’s local growth. And yet the jobs remain open.

Why is for an article another day. Today we need to tackle how you can find a workforce to service your customers of tomorrow. 

Three words: More, better, and creative.

Simply put: It is going to take more money. Eight out of ten (81%) of companies answering the survey said they have raised their rates in the last year. You need to do the same. 

Sure, I may not know what you pay, but I feel confident in saying there is a good chance you need to raise your rates. 

After all, know this: You’re not competing with the local water well contractor down the street anymore. You’re competing with the electrician, the plumber, truck driving company, and other blue-collars careers. Yes, I said careers, not jobs. 

It’s also going to take offering a better benefits package. We’re a long way from a couple of weeks of vacation, insurance, and a holiday dinner. Think of benefits as compensation without the wages. They need to truly be of value.

For starters, pay for training and professional development, pay for gym memberships, set up discounts with area businesses, and have a retirement plan. Heck, even free snacks in the breakroom is a nice perk. When employees see all of that grouped with a strong array of insurance programs and competitive pay, your company will start to stand out.

Finally, be creative. Sixty-three respondents of the AGC survey said they revamped their recruiting methods by adding online strategies and digital advertising. That is mission critical. 

Don’t give up on visiting high schools and technical education programs, but you must go where the next workforce is—and it’s online.

There is no doubt the workforce shortage is a problem that isn’t going to be solved overnight. But the start must happen today.

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Top Three Reasons to Skip the University System

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Top Three Reasons to Skip the University System

Guest writer Isaac Rollor shares some different options in 2023 for high school graduates in “Top Three Reasons to Skip the University System.”

Top three reasons to skip the university system and pursue a heavy equipment career in 2023.

Imagine yourself as an 18-year-old high school graduate today. Now imagine that you must decide whether to attend a university or find a job and start a career. In years past this decision was simple for most of our culture. Just a few years ago college was almost a non-negotiable experience in the eyes of mainstream parents and teachers. For an 18-year-old today there is a new grassroots message regarding university attendance and careers that is gaining momentum. This new message lowers the importance of attending a university and raises the importance of developing a skill within a career area. A growing number of parents are embracing this new message mainly because the cost of college is out of control, and parents see clear evidence that many positions requiring technical skill are currently not filled.

An 18-year-old today must be very courageous to embrace the new message and start a career without attending a university. Choosing a profession can be overwhelming so I have outlined the Top 3 reasons to skip university and pursue a heavy equipment career in 2023.

#1 Stability 

The market for construction equipment is expected to continue growth despite signs that other areas of the economy may contract in the coming years. Regardless of economic factors there are certain skilled positions at manufacturers and dealers are already facing labor shortages. Job areas such as repair technicians and technical support are constantly in demand. Most of the manufacturers of heavy equipment have very recognizable brands and products. Plus, most manufacturers and dealers have made huge investments in fixed operations which means there is a very slim chance that your career with a dealer or manufacturer will be outsourced or quickly replaced by technology like AI. Need more evidence that this industry will survive economic uncertainty? Look at any reputable market research report. Currently the U.S. construction equipment market alone is valued at approximately 149 billion, and the market is expected to grow to approximately 194 billion by 2030. 

#2 Career Development

One of the best benefits about pursuing a heavy equipment career is that starting at an entry level position can quickly lead to more responsibilities and a high paying job title. Proving to management that you are a safe and responsible team member will be like rocket fuel for your career within the organization. Negligence of employees can cost a dealer or manufacturer a great deal of time and money. Proving to management that you can work safely around machines and that you value the safety of your coworkers and customers is critical. Another benefit of working in the heavy equipment business is that training opportunities are readily available. Whether this is on the job training or formal classroom style training, most manufacturers and dealers place high importance on training their teams. Typically, a culture of training exists in this industry. You can easily take advantage of training to advance your career. Tuition assistance is also common at manufacturers. If you feel that you need to pursue a degree from a university the tuition assistance program from your employer can be a great way to get started. 

#3 Job Satisfaction

There is something very special about working with heavy equipment. Many industries professionals recall having been interested in big yellow machines at a very young age. There is something captivating about watching an excavator load trucks at sunrise or seeing the loader that you repaired go back to work in the gravel pit. Aside from the machines the people who work within the industry are interesting and usually very enjoyable to work with. If you love the outdoors, you will feel right at home with heavy equipment professionals. Developing longstanding relationships with coworkers in this industry is very common. Hunting and fishing with your coworkers are common in this industry, so if you are an outdoors person this is a great career area to consider. Another great benefit to working within the heavy equipment industry is that you get to be outdoors regularly while on the job. There are many professionals that spend almost their entire working lives inside an office building. Working outdoors and getting your hands dirty is a key element that makes this career a satisfying choice for many people.

Final thoughts

I started my career during the great recession. There weren’t a lot of opportunities for college graduates at that time. There were many college graduates who couldn’t get a job and those college graduates who had jobs were regularly being laid off due to economic conditions. During this time, I was working as a heavy equipment mechanic. Not only did I have a secure job, but I was also making more money than college graduates could expect to make in the first several years of their career in a healthy economy. The best part was that I had zero college debt. I took advantage of a grant provided by my state and attended a two-year diesel equipment technology program. Before I finished the program there were major brands offering me and my fellow classmates’ jobs with great pay that included a solid benefits package. 

This experience allowed me to see that there was another path available to me outside of the typical university system and I saw that certain career areas such as heavy equipment was in desperate need of dependable talent. I started working in the heavy equipment industry with zero experience, the industry was so desperate for skilled labor that a grant paid for my education, and I was consistently employed and promoted during one of the worst recessions in our countries history. During my career I have held positions as a maintenance mechanic, diesel technician, technical trainer, content developer/instructor and various sales positions. The heavy equipment industry allowed me to reach my full potential within each job area and build long standing relationships with truly great leaders. If you are interested in starting a career in the heavy equipment industry or you need some guidance regarding career development, you can reach out to me anytime isaac.rollor@gmail.com. I always respond.

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Can’t Find Technicians?

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Can’t Find Technicians?

Guest writer Alex Kraft challenges the pattern of blaming entire generations of people for labor shortages in his blog post “Can’t Find Technicians?”

I get a chuckle when I hear the narrative around “can’t find people who want to be a diesel technician.” I’ve heard it since the day I started my career in 2004. The same message persists today. Nothing has changed. I find it counterproductive to try and blame individuals by questioning work ethic and calling generations lazy. Many topics aren’t that complicated, people respond to incentive structures. The main reason the technician labor pool has been lagging is purely economic.

Anyone who’s worked in the equipment industry would agree that diesel technicians are a highly skilled labor force. Many say they are the “lifeblood” of the dealership. Throw in some cliches, like “customer support sells the next machine” or “we’re a service company that sells machines,” and you start believing that service is the most important department within an equipment dealer. I’ll cut to the chase: so why aren’t technicians paid more? If they’re highly skilled (and in high demand!), are relied upon to fix $400,000+ machines, and preventing customer downtime is so important, why aren’t technicians paid more? The wage scale hasn’t changed much since I began in 2004. Depending on geography, top tier technicians today earn around $40-$45 per hour. Do the math, that’s $85k-$95k per year. That’s a fraction of what sales reps earn per year. There’s no shortage of equipment/rental sales reps, but there’s a shortage of diesel technicians. Yet the industry leadership continues to ask aloud, ‘why can’t we find more technicians?’

There’s been a huge uptick in the younger generation pursuing software engineering careers. Why? Two key factors: there’s a growing demand for the role and it pays extremely well. Our company employs software engineers. The market rate for software engineers is $85-$120 per hour. I’d bet the “teach your kids to code” movement wouldn’t be nearly as popular if $30-$40 per hour was the going rate for those jobs. I haven’t even begun to delve into the job environment! Diesel technicians work in harsh conditions (extreme temperatures), it’s physically demanding, and high stress. Hey, it’s mid-July in Arizona/Florida/Texas/Louisiana, we need you under this wheel loader for 8 hours today getting filthy, and we’ll pay you $27 per hour. Repeat the same thing tomorrow, and the day after…Maybe two years from now, we’ll bump you to $32 per hour. And we wonder why more people aren’t signing up for this. It’s now well documented that UPS drivers earn up to $49 per hour!

The market demand is clearly there. The overall equipment market continues to grow YOY, creating an even larger supply of machinery that will break down. Do we collectively believe that there’d be a shortage of diesel technicians if there was a path to earning $200,000 per year? Imagine that marketing campaign. Here’s a career path that doesn’t require boatloads of college debt AND the ability to earn $200k+ annually. Or we can continue regurgitating the same talking points for another 20 years and just wish things would be different. I know what path we’re taking at Heave.

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