What Makes a Great Equipment Sales System?

In a previous lifetime, I was a high school football coach where I learned that you only win if you take a systematic approach to training, coaching, and playing. Those early experiences led me to a mantra that I still live by today, “In a bad system, even a talented individual is likely to fail. In a great system, even an average person is likely to succeed.” It’s true in sports and it’s true in sales. I have seen exceptionally talented salespeople fail, because they were in a bad system or had no system at all. I have also seen relatively average salespeople succeed beyond their talent level, because they had adopted a strategic and systematic approach to their work.

Because sales systems can have a major impact on your dealership’s success, it’s important to understand the main components of an effective system. So what makes a great equipment sales system?

Here’s the short version: Great systems are organized around specific activities that accomplish strategic goals. That may seem like an obvious statement, like saying football teams run plays in order to win the game. However – just like coaches and players can spend years perfecting their schemes and routes – it takes focused, intentional effort for salespeople to plan and execute a great equipment sales system. That being said, here are specific goals and activities that make up a great system:

Goals of a Great System: When establishing a great equipment sales system, you want to set very specific goals, starting with broad expectations and then moving to more narrow objectives:

  • Profit Goals: It’s not enough to simply say you want your dealership to make money. Failing to set specific profit goals means that you won’t be able to accurately determine what steps will optimize your efforts and maximize your profits. Review your profit statements from the past five years, then set an appropriate growth goal for the upcoming year. The exact expectation will vary based on multiple factors specific to your dealership, but a year-over-year revenue increase of at least 5% is a reasonable goal for most businesses (if not closer to 10% for smaller business that have room to grow more aggressively).
    • Sales & Service Goals: Once you know how much overall profit growth your dealership is aiming for, you are then able to broadly determine how many sales and services it will take to meet those expectations. To help identify areas where your business can elevate its performance, take another look at those statements from previous years to get an idea of how your business is trending over time and brainstorm with other dealership employees. You may find that while new customer sales have been strong, retention is ignored, or parts and services have been stagnant. That in-depth review would let you know that new sales may only need a moderate increase in performance, while retention or parts and services may require much higher expectations going forward. When you know your broader sales goals, you should then set specific goals for each dealership department.
      • New Customer Sales: To keep with the football analogy, new customer sales is the offense of your business, meaning that it is a necessary part of your game-plan for moving your dealership forward. Based on your broad sales goals, put an exact number down as a new customer sales goal that gives your dealership’s salespeople a specific target they can strive to achieve (ideally, one that is both bold and realistic).
      • Retention Sales: If new customer sales is offense, then retention is the defensive side of your business, in which you keep your competitors at bay by preserving the loyalty of your current customers. After reviewing your broad sales goals, determine how much your dealership should strive to increase your retention and decrease your customer churn (the number of current customers who stop using your dealership for products or services in a given year). Again, set a goal that is both bold and realistic – a churn-rate of 0% may be bold, but is likely impossible.
      • Parts & Services Sales: Your supplemental departments are your “special teams” that don’t always get the recognition they deserve, but that are often the key to finding success. Once you’ve got your broad sales goals, set specific dealership goals for parts and services, including goals for upselling.

Activities of a Great System: If you want to meet these goals within a great equipment sales system, you have to undertake intentional and strategic activities that get the job done.

  • New Customer Sales: Here are some of the primary activities that you should incorporate into your sales system that can help you gain exposure, nurture leads, and ultimately sell more inventory to new customers:
    • Traditional Marketing: There is a broad arsenal of marketing tools at your disposal that you are likely already aware of, including paid advertising, SEO, SEM, email marketing, and social media, as well as listing your inventory on third party marketplaces like Equipment Trader. A dynamic strategy that incorporates multiple digital strategies is typically most effective, enabling you to capture a variety of leads at different stages of the research and buying cycle. If you need help establishing a broader web presence, our friends at Commercial Web Services are always ready to help.
    • Referrals: Apart from traditional marketing, gaining personal referrals is the primary activity of proactive and successful salespeople. Those most likely to give you referrals are those who know, like, and trust you – aka, your current customers who have already decided you are someone worth buying from. Gaining referrals requires active planning, including keeping up-to-date on your products and your competitors, researching the prospect, and familiarizing yourself with your gaining-referrals word-track and your calling-referrals word-track.
    • Organizational Networking: The more successful equipment salespeople I know – those who have been in the business for at least 15 years and who average over 20 units per month – can trace as much as 60% of their current business back to their active membership in one or more professional groups or trade associations. Joining groups like AGC (Associated General Contractors) or HBA (Home Builders Association) gives you the opportunity to meet prospects or people who can provide referrals, but the key is to actively participate in the organization, make a great impression, and build productive relationships.
    • Cold Calls: For too many salespeople, cold calling is their main activity, when really it should be more of a supplemental activity. But there is a role for cold calling, if it is done correctly. Instead of just dropping in on local businesses, warm up those cold calls by researching the prospect ahead of time, developing a plan for conversation, and making an ally out of the gatekeeper who greets you at the front desk or answers your phone-call with genuine and friendly engagement in order to learn more about the business and how to gain a future appointment with the decision-maker.
  • Retention Sales and Parts & Services: Meeting your profit goals is not only about selling key pieces of inventory to new customers, but is also about retaining customers for subsequent purchases, as well as bringing in new and current customers for parts and services. Here are some of the primary activities that help you generate additional revenue streams:
    • Traditional Marketing: Advertising strategies like SEO, SEM, email marketing, social media, and listing your inventory on third party marketplaces are also great ways for retaining ongoing business and advertising for parts and services.
    • Remaining Top-of-Mind: If you want past customers to return to you for new machinery, or for parts and services, it’s important that you remain at the forefront of their thoughts so that returning to you seems like the natural and obvious choice. Traditional advertising can generally help accomplish this, but you should also develop a content marketing plan that helps you create ongoing connections with customers while also providing them with insights that help you continue to manage your reputation as a valuable partner.
    • Relationship Building: Every customer cannot be your best friend, yet you should strive to not only remain top-of-mind, but also cultivate relationships with your customers – especially your top clients. Customers you want to retain should periodically receive personalized messages and friendly drop-in visits, if not invitations to a paid-for meal from time to time. Invest in a CRM system to help you keep up with their personal and professional information and more effectively manage those relationships.

Remember, even a talented individual is likely to fail in a bad system, but even an average person is likely to succeed in a great system. Successful equipment sales systems are organized around specific activities that accomplish strategic goals, and I hope we’ve provided a helpful guideline for those goals and activities, whether you sell mini-excavators or mowers. And we want to hear from you – does your dealership have a sales system? What goals and activities make up that system? Let us know in the comments below.

 

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About the Authors

Ethan Smith

Ethan is a Content Curator for Trader Interactive, serving the brands Commercial Truck Trader, Commercial Web Services, and Equipment Trader. Ethan believes in using accessible language to elevate conversations about industry topics relevant to commercial dealers and their buyers.

 

 

Ken TaylorKen Taylor

As the Founder and President of Commercial Truck Training, Ken has consulted, coached, and trained commercial dealers on individual, regional, and national business levels. Known as an industry leader, Ken has worked with companies like General Electric, General Motors, FCA, Ford, Commercial Truck Trader, and Equipment Trader.

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