Wade white paper examines heavy duty distributor service

According to a white paper released by Wade & Partners, distributors’ service (especially those in the fleet parts, trailer leasing and construction / farming equipment areas) is a vital source of revenue, customer satisfaction and competitive differentiation.

“Finally heavy truck parts distributors are recognizing the value of becoming service-led organizations”, said author Bill Wade during a presentation at the recent HDAW “and are re-aligning their service operations with their overall business strategies”.

“While presenting existing product to existing customers is by far the best profit builder for distributors, HD distributor managers are looking to new customers for growth,” Wade continued,  “surprisingly, an increasing proportion of the general managers we’ve recently contacted view new customers as their most important source of revenue growth”.

New service strategies

Aligning service initiatives with product distribution strategy is becoming core to heavy duty success. The top three strategies are:

• Increasing the proportion of service revenue in the service/product mix;
  • Increasing preventive maintenance services
  • Growing the sales role of service technicians
  • Increasing fee-for-diagnostics
• Increasing revenue from preventive maintenance;
• Using information technology to help analyze the common needs of customers.

An often cited strategy for revenue growth can be summarized as, “Taking the services we have and selling them aggressively.”

Several distributors reported they are hoping to increase revenue from services they already offer rather than expanding new services or packaging them in customer dictated bundles. In this scenario, opening new accounts takes on a new urgency.

Adding new services as a price-fighting alternative should be carefully considered. Fleet supply differentiation can center on carefully designed service menu additions and alterations, with an analysis of levels of service being the key planning component:

• Bench Service... especially hydraulics, driveline, u-bolt bending, friction (clutch or brake) and other machine shop specialties.
• 40 / 80 / 120 Shop Hours…weekly schedule may be determined by available workforce as much as by customer preference.  
• 24-7… Weekend Hours... great for overhead absorption, but may not be in demand in certain areas.
• Mobile / Tow-Recovery... mobile service is a domiciled fleet favorite, but tow/recovery may be better suited for a partnership with existing specialists.
• On-Vehicle Service... This is ‘big boy territory’, since getting in to this could easily be a $1 million/bay investment.

An important growth tactic here is increasing the role of service technicians in the sales process. Service technicians are the eyes and ears of the marketplace, yet increasing their sales role has become a lost opportunity for decades.

The complete paper is available at no charge at www.wade-partners.com.

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