A new car dealership is an interesting business venture. Most consumers actually think the dealer makes big money selling those bright and shiny new machines. In reality it just ain’t so. The company lives or dies depending on their service department. As a wholesaler, especially if you’re dealing in capital equipment or machinery of some type, you might find yourself in a very similar situation.
A successful automobile dealership will likely pull half or better of its revenue from the service department. All of the profit may well come from that half. The sales portion of the business might even be running at a loss and be kept afloat by service department profits. Without a successful service business the entire firm will go under.
Every product is made up partially of a good and partially of a service. As service becomes a more important aspect of products, managers often find themselves in a quandary as to how to compete with other service providers. They may under-price other dealers on product, not making the money they need in the process, only to lose the connected service contracts to someone else. Why does it happen? How can firms differentiate themselves from others in the often times nebulous arena of services?
An important question to ask yourself; are the customer services you are currently providing the only services you should be concerned with? Or does service start well before the sale takes place? If the answers are respectively “no” then “yes” it means we have a “service mix.” So how should you differentiate each of the services in this mix so your customers will both appreciate the entire package and continue to be willing to pay for it?
To help you assess your own enterprise it’s necessary first to define the different service functions your firm might supply. There are some services that are nearly universal; most every firm must worry about them. There are others that are specific to certain types of firms.
Let’s review the universal services beginning with the one we call “Contact and Ordering Ease,” which may also be referred to as “Transaction Ease.” This service function is supplied to some degree by just about every firm that exists. Often times the success of the firm has to do with how well they handle this first basic function.
To test your “Transaction Ease” ask yourself some questions about your own firm. Can customers find your contact information (phone number, web address, fax number) easily? Can they call you at convenient hours and does someone pick up the phone within a few rings? Do they get connected immediately to a salesperson or wait, on hold, for a couple of minutes or even tens of minutes? Can they order online on your web site? Can they reach the order section of your site easily or do they have to wade through half a dozen pages of ads before they get there?
Now how about the transaction itself? Do they have open accounts that are quickly accessed and approved? Can they use purchase orders, credit cards, COD, or other means of payment and how easy do you make it for them to give you their money? Do your order takers help them through the rough spots with a smile and some patience?
Believe it or not, this first service function, “Contact and Ordering Ease” is sometimes not thought of as a service at all. It’s an easy step to overlook in differentiating yourself through the provision of services, but it’s a far too important one to do so.
The next service function in the universal category is “Delivery.” This is an extremely vital service from the customer’s viewpoint. Particularly in the parts supply industry, delivery might be the one thing the firm does that places them above, or below, the competition. Is your delivery dependable? Accurate? Timely? Safe? Have you developed a reputation for reliability?
There are firms that have carved their market niches simply by supplying this one service and supplying it well. They don’t have to under-price the competition or advertise hot deals. They retain their customers because reliable delivery is the foremost service the customer wants to buy.
Sometimes equipment dealers also offer to install their products. This brings us to “Installation” as a service. It might actually be thought of as the final stage of “Delivery” as the product may be in place physically, but is not really “there” until it is up and running. It’s good to remember that the customer will not feel they have been delivered to until the installation is complete.
Do your installers start work when the equipment reaches the site? Do they work within the customer’s schedule? Do they work efficiently and get the job done? Do they clean up the job site when they are finished? Do they look professional? Is their attitude business like, yet pleasant and positive?
Do your installers teach the customer anything about the new product? If so, this leads us logically to the next service function, which is “Training.” Reliable delivery and installation, followed by hands-on training, can be the decisive factor in a buyer choosing your firm over a competitor who sells the same equipment for a lower price.
You might have follow-up training as time goes on, or give seminars or workshops, and you may have an expert go to the customer’s place of business on a regular basis and make certain employees are actually using the equipment effectively. This type of customer care service can be used to help your firm really stand out from the crowd.
To extend the training concept, you might offer the service of “Consulting.” Instead of just training employees on use and maintenance, your experts are made available to make certain the equipment is used effectively within the overall context of the business. Do their business processes coordinate well with the equipment they are using? Can you suggest additions or changes that will make things work more smoothly? Many suppliers are making such service available these days. It results in increased good will and greater sales in the long run.
Lastly we have the service of “Maintenance and Repair.” Remember the new car dealership? It’s in maintenance and repair that such a business puts forth its greatest effort. It’s an area where business-to-business sellers are putting more and more effort into as well. As margins on sales become tighter because of increased competition, firms need to make up the difference in service, and this function is the most visible.
Once we realize we have a mix of services, however, we know that after-market maintenance and repair is not the only area of service we need to be concerned with. In fact, without solid service skills in the remainder of the service mix, we may not reach the point of making the equipment sale that will enable us to sell the maintenance contract.
So take a good look at the services your firm provides the customer. Do they all work? Do they all work together as part of a total customer care package? It’s by weighing all the services you make available that the customer judges your firm. Be sure the decision is in your favor by making certain your services are up to snuff. That will make it easy for your customer to make the decision to buy.