the history | equipmentfx
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EquipmentFX… On Target Marketing Solutions
Who I Am
Steve Smith, Managing Partner, EquipmentFXFormer VP/GM of Johnson Machinery, a
CAT dealer located on the West Coast
Experience at all levels, including: Equipment sales, operations management (parts, service, rentals), finance management
Who I Am cont…
2 Term Chairman of Hyster Dealer Marketing Council
Dealership studied as example of “What it’s like when it’s right”… NMHG Theme
Committed to research, application and elimination of wasted marketing spend and measuring returns
What I Do Focus on practical marketing solutions
using YOUR internal resources, outsourced vendors when necessary
Design Fortune 500 level sales and marketing systems without the cost or complexity, generate leads from every possible angle
Constantly ask “WHAT IF” questions
What I Do cont…
Research the competition
Help build a better service organization
Look at trends that affect us from a different perspective
Apply what makes sense in the most cost effective manner possible
Have You Ever…
Had month end panic attacks because orders weren’t predictable?
Had the “pit in the stomach” feeling of things being out of control?
Felt overwhelmed because change happens so fast we can’t keep up?
Me Too…
Here’s the brief story of my struggle:
Promoted to VP/GM at the age of 36
Trained under an industry veteran that had spearheaded a large acquisition of product and territory (doubled our territory, and had two databases of customers we could pull from… for awhile)
I Was Presented with a Formative Situation by the Owner…
“Steve, we’re losing customers, and I’m not sure why”
To which I responded… “What is our customer acquisition strategy?”
The response…”That’s a good question… you’ll have to figure that one out.”
An Early Term AHA! Moment Early research showed high
dependence on two large accounts, both of which we were losing for reasons beyond our control
We had no long term strategy to get new customers and preserve the ones we had.
More Research Revealed… Other large customer defections to the
product supplier we had just changed from due to price
An over dependence on too many other large accounts
No systematic sales and marketing program
So… I dove in and asked more hard questions… Where does new business come from
and why?
What marketing and promotion mediums do we use and why? Do they work?
How do we use our existing database, and how to we augment it?
What is the Salespersons Role?
Hard realization #1: They were tasked with doing battle for us, plan and all.
Hard realization #2: They had no clue about MOST of the opportunity.
Hard realization #3: We didn’t talk about progressive sales and marketing “strategy”
The Big “U OH” Moment… This was happening on my watch…
We’re losing business…
We need a plan NOW…
What do I do NOW?
The Lockdown Month…
What I hoped to find ASAP was…
Sources of data and how to use itWhat expenses to eliminate and where to
channel future investment that we could measure
How to keep from throwing bodies at the problem until I understood the problem!
What I hoped to Emerge With…
A business plan that took into consideration current and future trends
A way to gauge Return on Investment
A plan that was predictable and reliable
The Story of My Findings… A comprehensive “plan” was possible,
but would require patience
Other industries have been using some tools and technologies for years that we could benefit from
It would take a full commitment to pull it off
A Ratio No One Wants To Talk About Our industry has a low “Asset to Aptitude”
Ratio
Translation: Huge investments in capital, low application of strategy to create, communicate with and manage customers
Other industries that are more competitive than ours routinely use better strategy… WHY?
Trends That Affected Us Then… And Still Do Now…
Year 2000: Huge shift from “outbound marketing” to “inbound marketing”
Translation: Customers now could find you when and how THEY wanted, and ignored most of the other efforts.
Stats and Trends That WE MUST ACT ON 88% of capital equipment buyers go
online first, regardless of the relationship they have with you
4 in 10 sales originate from a web based inquiry
The totals are climbing higher every SINGLE DAY!
What I Identified as Components of a true “System”
Website Design: How to plan for the future and not reinvent your site every two years
SEO: How to make your site found
Lead Generation & Management: What happens when someone contacts us?
The “System” continued… CRM: We need a foundation from which
to manage sales and marketing campaigns
Database Management: We need to stop using bad data, use better data, and routinely make this a part of how we run our businesses. IT IS AN ASSET!
The “System” continued… Customer Surveys: We need to ask,
constantly, “how are we doing” and work the findings into our business”
Sales Force Automation: What are the processes that can be automated without removing the personal “closing” aspect of our business?
The “System” continued… Graphic Design: We’re still tactile, but
we created crappy material and it left a bad impression.
Direct Response Marketing: How do we actually compel someone to act, and not throw our stuff in the garbage
The “System” continued… Research: How can we do the research,
work the findings in to our material, and create good, compelling copy that increases our response rate?
What is the “science and art” of good copy?
We Created the “System” We surveyed and did the research
We mixed up our efforts and tracked the results
We TESTED everything
We COMMITTED!!!
Here’s An Overview of The Results Once the “System” was reasonably
installed (meaning, you never finish, but it was built)
We clearly established metrics and measurements that mattered the most
This is what we found…
Website Summary- Example #1- Annualized totals
Pageview Totals: 224,796 Contact Form Page Visits: 32,400 New Product Inquiries: 41,220 Used Products Inquiries: 26,978 Rental Inquiries: 8,848 Parts Inquiries: 26,995 Service: 10,135 Employment: 10,711
Lead Summary: Example #2 Year 1, 2002: 432 Leads Year 5, 2006: 4,836 Leads
An Increase of 1200%... Market trends were not increasing at those levels
Did NOT include internal and a variety of other lead creating programs
Sales Increase: Example #3 Outside Branch Locations Underperforming Departments
We identified what we perceived to be areas that were “low hanging fruit”, and focused our efforts where our sales to opportunity were the lowest
Sales Increase: Example #3 Total Company: Increase of 54% Time period: 2002-2006 No acquisitions, no new products Lost approximately 20% of business
from large accounts that we lost for reasons beyond our control
Sales Increase: Example #3 Outside Branch Locations:
El Centro: Took over branch from another dealer, 5 year increase of 516%
San Diego: 3 year increase of 80%
Oxnard: 3 year increase of 98%
Department Sales Increase Rentals: 4 year increase of 79% Used: 2 year increase of 226%
Other Key Metrics Credit Applications: Increase of 100% Awareness: Increase of 78% Share: Increase of 2 basis points without
major accounts
Metrics That Matter
Customer Increase of 27%2,837 to 3,602 using rolling 2 year AR
averageAnnual increase of 5%... Unheard of!
Customer Spend increase of 21%From annual spend of $16,919 per customer
to $20,544
More Metrics That Matter
Marketing Expense Decrease of 100%
Ad/Promo Expense still below .03% of total sales
New Sales GP still averaged 9.5%
Highly focused on marketing to the right group of prospects
So… What’d I Learn?
The “old world” vs the “new world”Relationship selling still mattersHow those relationships are being created is
changingHow those relationships are managed is
changingThere can be a good mix of new and old;
and you can do this without adding bodies and expense
Myths & Trends Debunked… They said we were making a mistake
when we got rid of the Yellow Pages
They said our industry was about “relationships”
They said “no one is going to order anything online”
What They Asked… 5 Years Later How long did it take you to “build this
system?”
What steps do you take to get started?
How much does this cost to do right?
Here’s The Solution
Start slowly, assess where you are
Look at internal resources… do you have what it takes to develop and apply the right strategy for the next 5-10 years?
Understand the elements of a plan, talk internally, commit!
Each Step Has a Lesson
It’s OK to make mistakes, just try and limit them
Create forward momentum
Involve others, constantly seek feedback
Set up metrics that matter
Common Mistakes
We don’t have the time…
We don’t have the money…
We don’t have a plan…
We don’t have the people…
Common Mistakes…
Waiting for the “perfect moment”
Not understanding “expense” vs “investment”
Remember:
Companies that fail to plan, plan to fail!
The First Step to Getting Started Ask the hard questions, assess your
readiness Take an Online Heath Check Take some video tours, understand the
concept. Visualize a plan, cost out the key
components Commit!
