Marketing Missiles v1.9

Marketing is a broad topic covering a lot of different sins.  It is mass mailings, it is seasonal cards, it is monthly or bimonthly newsletters, or quarterly specials. It is promotional materials and handouts. It is sales catalogues. It is also CRM (customer relationship management) systems and sophisticated information reporting. It is a bunch of stuff.

In columns I write and other documentation I have been stressing the new forms of marketing being taught at schools of higher learning, in marketing undergraduate and master level degrees. It is called “relationship marketing.” The educators and schools are acknowledging that marketing is about building and nurturing relationships not just all of the stuff listed above. Week I don’t think that is going to come as any surprise to any of you in the business. We all know that business is people to people. So our marketing efforts need to take on a much more serious tone.

We need to “touch” our customers more frequently and with a higher level of skills and quality.

The first order of business is to have a specific purpose for the “touch”, the call. Each and every time you “touch” the customer you have to have a reason that the customer will understand is aimed at reducing their owning and operating costs. The call should be about them – not you. You are providing a service to the customer. You are looking out for their best interest. What do they use of your services? What parts aren’t they buying from you? Who are they using if they don’t use your services? Are you monitoring the operating cost per machine hour? Are you advising the customer to trade in the machine when the costs are too high on a monthly basis? These are all part and parcel of marketing – the new marketing; Relationship Marketing. We will deal with this in much more depth in the weeks ahead. The time is now.

Marketing Missiles v1.8

In another post nearby I talk about the internet as a mode of contact with the customers.  I get a lot of push back on this from distributors and dealers. They say that they will lose control of the customer. I couldn’t disagree more.

In the equipment world let’s suppose we have a market capture rate close to 30%, which for many of you is very generous. The fact that you are worried about losing control of your customer now after having lost 70% of them is rather odd isn’t it? But let’s explore the mystical world of the internet.

With the XML protocol you can now track the cursor as it moves around the screen. So here we have a customer browsing in the evening, when you are closed, looking at your website. They are looking for a part for one of their machines. They go to your parts menu and find that there is access to electronic catalogues. They enter the model and serial number of the machine for which they want or need parts. That takes them to the table of contents. They select a section of the machine, for instance the engine, and a schematic of the engine appears on the screen asking what they are looking for in the engine. They can take the cursor to a section of the engine and enlarge the schematic so that they can see the specific part numbers. They can then select a part number and have it go into a shopping cart. Once they are finished they can go to their shipping cart and obtain price and availability information. They can place an order or they can leave the process.

The next morning with good analytics you will know who looked, what they looked at, for how long they looked, did they check prices, did they check availability and did they place an order or not. If there was no order placed then you call then and offer to help or ask what they wanted. This is much more and much better quality customer contact. Don’t you think? The time is now.

Marketing Missiles v1.7

My good friend Jay Roszell just posted to his blog – Growth without Pain – “What is the True Cost of Sales Training.” In it he lists off the costs of the training which includes the usual suspects but he goes further and touches on “opportunity costs.” The cost of any activity cannot be measured in a vacuum. You have to recognize that there is a opportunity that will be lost when the employee is not out on the job while they are at training.

This is the same as a “redo” work order. We charge the time of the technician to the job a second time which is applied to an internal expense account. But do you charge that at the man’s wage? The Man’s rolled up personnel cost? or to the customer retail price? or to the retail price and the rolled up employee cost. There is an argument here to be made isn’t there?

Of course this is true about training in general. How much it costs to send employees to outside training events. Whether they be Industry supported such as the AED Foundation classes and webinars and special meetings or to University or Community College extension classes, or a technical or vocational school. I want to go to Jay’s point that without ongoing training and coaching all training will fail.

Too many people graduate from school and decide that – “phew that is over with.” I am sorry to be the one to burst their bubble. I am afraid that is where learning truly begins. As you know I taught “Education” to prospective teachers at McGill University in Montreal – a long, long time ago. The object was to teach techniques to be used in the teaching of a skill or a subject. BUT the most important skill that I thought should be taught was the skill that would enable each student to be able to teach themselves. That would be a life skill that would be theirs forever. It worked with many but not all. That is my failure as a teacher.

But the point I want to arrive at in this blog is that LEARNING is a differentiator for your business. There are customer service measures everywhere that talk to different measures ofr customer satisfaction. Such as “how many different equipment salesman in a year covering your customer caused the customer to be dissatisfied with that company?” Why can’t you keep a salesman in your company? The same is true for instore personnel and Field Service Technicians. In fact it is true for all customer contact personnel.

So why do employees leave? Usually it is dissatisfaction with their boss, or the Company, rarely about money. But I want to suggest there is something else at work here. The employees will leave if they do not feel that the Company is giving them an opportunity to grow. That’s right – the opportunity to grow. How does an employee get ready to take on a more challenging job? Is it all learning as you go or is there some training involved. I know you know that training is involved, and training is expensive. But just think how much more expensive it is to have dumb employees doing the jobs at hand.

So make the investment in training your employees. The AED Foundation used to ask for 40 hours a year. I now want 80 hours each year for each employee. That is right nearly 5% of the employee paid year. But I want more. I want the involvement in the management to ensure that the training “took” and not just blame it on the employee if they revert to old ways a couple of weeks after the training has been completed. That is a cop out. It is MANAGEMENT that must ensure the proper behavior from the employees and learning is just one more of those responsibilities. The time is now.

Marketing Missiles v1.6

Why do your employees work for you? Three Harvard professors, Hesketh, Sasser and Schlesinger wrote a very definitive book called “The Service Profit Chain.” In it they posited that Employee Satisfaction and Loyalty delivered Service Value. That is the “thing” that customers “feel” when they do business with you. It is not about you or your business it is about the employees. This Service Value is what drives Customer Satisfaction and Loyalty and keeps them coming back. That is all you need to drive profit and growth. Have you got it?

Why don’t you ask the employees how they feel? It doesn’t take much to ask and you will be amazed what you can find out if only you listen. After all if your employees are not satsified and loyal then all the marketing in the world will not correct it. The time is now.

Marketing Missiles v1.5

Why do your customers buy from you? What makes your customers loyal to you? Without the answers to these two simple questions you really don’t know how to either grow your business or protect it.

What is it that makes your customers buy from you?

Everything you sell in your parts business is available from someone else and in all likelihood at a lower price. Of course you will say it isn’t the same quality but who are you kidding. Not the customers. They know that everything is made by someone and that those somebodies will sell through other channels.

Is it your special sales campaigns? You know the buy a dozen get one free deals? Or is it because your parts people or your service management gives them discounts? Discounts are like cocaine – it might be a good high but coming down is terrible. Try cutting a customer off from the discounts that have become used to and watch them buy somewhere else.

You need to pay serious attention to this question. Why do your customers buy from you? You might want to ask because until you know you will be subject to the whims of your customers for your business success. Don‘t forget you have to do more of what it is they like and less of what they don’t like. The time is now.

Marketing Missiles v1.4

So we won’t concentrate on what we do or how we do it. We will concentrate on WHY. The starting point here to me is that we will focus on the fact that we are in business to reduce the owning and operating costs of capital equipment for the equipment owner and operator.  We are in business – WHY – to provide the lowest operating cost machine which translates into the highest value proposition for the customer.

In the context of Service-Dominant marketing this means that we should have a complete, current and accurate machine ownership list. This also would be helpful if we had electronic control units on each machine to track equipment and component operating conditions – things such as clogged air filters or overheated engines. This will allow us to assist the customer in their equipment management – after all that is what we are supposed to be good at isn‘t it? The time is now.

Marketing Missiles v1.3

Well we have segmented the market and established territories for salesmen. And we have determined through Simon Sinek that “Why” is the key question in sales so what happens to all our conventional selling techniques?

The usual features and benefits and the call to close ratios and all rest of that ‘stuff. What about all of that you say. Well perhaps it is passe and we just don’t know it. Perhaps our customers are expecting something else altogether from us. I have written about the coming VRM – Vendor Relationship Management that is in the process of replacing CRM – Customer Relationship Management elsewhere.

VRM is about what the customer will ALLOW the vendor to know about them and how they can use it. It is like how most of us use the internet. Some have gotten wise and have an “ersatz” email address to which they ALLOW internet sites to send email. They never access the email it is just there to get the Vendor off their back. The CUSTOMER – you and I – want to be left alone to shop and disappear, we want to control the relationship not the other way around. You see the customer is starting to understand that they are the ones with the power and they are starting to learn how to use that power. Those of us who sell or are involved in marketing who don’t pay attention will be left out. This is the coming of the new world and it is all about “Service-Dominant” marketing. The time is now.

Marketing Missiles v1.2

Service-Dominant Marketing has a series of interesting position papers in it each of which poses thought provoking concepts both past and present. Let’s look at market coverage.

We started in the equipment world with salesmen; there were rarely any women, each of whom was given a geographic territory – “These are your counties.” The salesmen then went dutifully about their work and called on customers and sold machines. The problem with this method of market coverage is that it is the salesman that determines who will be covered and who won’t. The employer doesn’t even factor into it. I know many of you will be saying that the sales manager will have something to say about that but you also know that I am right.

Pioneer Hybrid Seeds, before they were sold, radically altered the market coverage approach when they went to a customer list for market coverage. This was covered in a Harvard Business School case study in the 1990’s. They found terrific success when they focused on relationships of the salesmen and the farmers. Sales increased dramatically and the company ultimately was sold for a hefty premium as a result of their market penetration and sales results.

For some time now we have had product support salesmen as well; people selling parts and service programs and supporting the customer in their needs and wants. Unfortunately the same pattern was followed as with equipment salesmen with a small kink in the approach. The salesman was required to bring back a quotation to prove to the Company that in fact they had influenced the purchase. As you can imagine this led to all manner of tricky behavior to get paid, rewarding the Company with exactly what they were trying to avoid.

Over time the market was segmented, more on that in a future blog, and the salesmen were given specifically named customer accounts to cover. Finally we got to the point where the salesmen could concentrate on developing a relationship with their customers. The number of customers assigned was rarely more than 150 although there are exceptions with a smaller urban territory. The other factor that was taken into consideration was the number of machines. The number of machines was limited to 500 but this too had to be made smaller depending on the type of machine and the application. After all in the parts and service world the machine is the customer. Many dealers who have followed this approach, assigning customers to salesmen with limits placed on the numbers of accounts and machines are reaping terrific results. Market capture rates are higher as is customer retention. We will continue this dialogue in the next blog. The time is now.

Marketing Missiles v1.1

Last year I was introduced to a book on marketing “The Service-Dominant Logic of Marketing” by a friend in Asia. This book is a compilation of a series of papers in academia on marketing both from a historical perspective and currently. This evolution has gone from marketing commodities to now we are in the age of marketing services and relationship are prominent as is quality. This should be right up the alley of thinking operations people.

Marketing is not some flashy sales process ort advertisement. It is not a spiffy campaign. It is about the development and maintenance of relationships in the supply chain and with the ultimate customers.

Those of us in the Product Support arena live this every day. We are trying to satisfy customers. Or delight depending on your mood. This is about the magic of the duties that our “heroes” perform every day – the people with whom the customer interacts. This is the drudge of the day to day operation. It is not sexy and at times it is hard to stay motivated. But it is akin to being married for three or four decades. You now know what love is on a very personal level. The parts and service operational personnel have to perform each and every day – with a smile in their voice and on their face and sometimes having serious difficulties; the backlog of your service work or the backorder of a critical part.

That is what Service-Dominant Marketing is all about. We will explore this together in more detail in missiles to come. The time is now.

Marketing Missiles v1.0

I wonder how many people understand marketing in the Product Support world; what is that? Is it advertising or sales campaigns? What is it? Well my hope is that through this blog we can have more people think about the marketing of parts and service.

I will start with a definition of marketing as “the selling of products or services – the business activity of presenting services in such a way as to make them desirable.” In the case of parts and service I question the word desirable don’t you? But it is basically the sales of products or services.

I will pursue the basics of marketing – the 4 P’s. The “market” coverage subject as it relates to Product Support Salesmen and all that entails. I will address market share which is the ultimate measure of success in the marketing world. We will discuss customer retention and how we can influence that in our operating world. In other words this blog is intended to cover everything and anything about marketing parts and service. I hope you will join me on this voyage. The time is now.