by David Cullen
, Contributing editor
Working with a trusted partner and knowing what information to give improves the customer experience
What’s happening at dealers and with the OEMs they represent should benefit fleet owners open to tapping into changes being made to better serve a marketplace in flux. Trucking is evolving away from the days when fleets were largely islands unto themselves. To get the most out of their business relationships with dealers, fleets are wise to grasp how these providers of everything from new trucks to vehicle parts and service are adapting to attract more business.
David Gerrard, Navistar’s senior vice president-distribution, offers a unique view of this topic, as he managed two fleets earlier in his career and was dealer principal of Chicago International for five years before joining the OEM as a dealer-channel executive. “At the end of the day,” he observes, “the fleet’s success, now more than ever, will depend on the strength of its relationship with a dealer.”
Gerrard says that’s because “there’s never been a time like this in terms of increasing demands being placed on fleet customers that are in turn driving changes at the dealer and OE levels.”
PRESSURE GROWS ON SERVICE
He says hours-of-service (HOS) rule changes are but one example. “HOS increases pressure on utilization. Just 10 years ago, it was nothing for a fleet to run with a 10% ‘spare factor.’ But with today’s demands on capital as well as the industry consolidation going on, that wiggle room is gone. And that turns up the heat on the expected level of sophistication and the service offerings provided by dealers.”
“Today’s fleet customer should expect a dealer to provide solutions that meet their challenges, not just sell them a truck,” asserts Terry Billings, Volvo Trucks’ vice president of business development. “Selling the right truck matched to the job is important. But equally important is providing an array of support offerings like financing and leasing, extended component coverage, parts programs and expanded hours of service, to name a few. ”
Billings stresses that dealers can no longer succeed on retail sales alone. “Dealers should act as long-term business advisors and not be focused on just the short-term transaction. Before the sale, dealers should gather as many details [as possible] regarding all of the fleet’s operational needs. They should develop a profile of the fleet’s business objectives and operating goals. During the sales process, dealers should offer solutions—truck and products—that meet the customer’s needs.”
In addition, he says dealers should “assess the customer’s acquisition type, like purchase vs. lease; determine the truck that’s best for the customer’s application with the strongest financial returns—both operationally and residually; and offer parts and support programs that will make the
customer’s life much easier. After the sale, dealers should be a proactive partner, not a reactive supplier.”
Jim Moeller, president of CSM Companies, the Madison, WI-based firm that operates 12 Kenworth dealerships in Wisconsin, Michigan, and Nebraska, contends fleets should consider whether the dealer “brings the relationship from a transactional one to a partnership.
“Finding a dealer partner that operates with a progressive mind-set that can fit [you] in long term is what I’d be looking for if I were a trucking company,” he continues. “Ensuring that you have someone who understands your business will really benefit the partnership for many years forward.”
“Today’s fleet is dealing with more interferences and hurdles than ever before with their own operations,” points out Allen Lane, COO of CSTK Inc., a St. Louis-based dealer of Thermo King reefer units and other truck/trailer equipment. “Whether it’s the shippers and/or receivers demanding more or dealing with state and/or federal regulations as well as driver and technician shortages, the last thing they need is for their dealer relationship to be an inconvenience.”
“For fleets,” Lane contends, “the dealer model needs to be one of convenience that offers a state-of-the-art facility, extended hours and advanced technology. Each customer’s pain points and needs are different, so the dealer’s products and/or solutions need to be designed in such a manner as to offer an open architecture to service multiple different models.”
According to Mary Aufdemberg, director of product marketing for Freightliner Trucks, “customers should expect an exceptional experience that begins at product inquiry and continues with each dealership ‘touch point’ after the sale.
“The relationship often begins before the sale, when dealers learn about their customers’ business and product need,” she continues. “Dealers and customers work closely during the purchasing process to ensure the optimal specs, powertrain and telematics packages. That relationship continues by delivering on customer expectations to keep their fleet up and running with exceptional service and available parts.”
Indeed, the type of service support dealers offer is critical, says Stephen Roy, president of North American sales & marketing for Mack Trucks. To ensure vehicle uptime, Mack dealers have invested $300 million collectively in their facilities since 2010. With 428 full-line and “secondary” dealership locations, service is available across the country with many dealers adding second and third locations.
BUILDING A CONNECTION
Roy notes that the number of available service bays has climbed 40% and the number of technicians 50% since 2010. He adds that some 25% of Mack dealership techs now hold the “Master Technician” title and so have specialized skill sets in diagnostics and Mack driveline components.
“Dealers, as you know, are all independently owned,” says Roy, “so what we’ve done as an OEM over the last three or four years is design systems such as ASIST and Mack Preferred to help better connect not only customers and dealers, but also dealers to other dealers and dealers with OE personnel. This provides better consistency from dealer to dealer and thus allows us to improve the Mack customer experience.”
Navistar’s Gerrard contends that dealerships that make full-service leases available have a leg up on their competition. “I’d argue that International dealers that offer full-service leasing through Idealease tend to develop business relationships with fleets that are more long term and less transaction-based.”
Whether it will be leased or not, he says that when considering a new truck, the fleet should expect the dealer to come to the table with “comprehensive product knowledge that matches up to the specifics of the customer’s applications. This should be the case whether it is a small fleet or a national account to ensure that the trucks are correctly spec’d.
CUSTOMER CENTRIC OPTIONS
“The dealer should also demonstrate a fundamental understanding of the customer’s business cycle,” Gerrard continues. “It’s key to have dealer personnel who are able to relate to day-to-day concerns, such as driver comfort, transmission choice, tire selection, etc., as well as lifecycle cost concerns. Above all, you don’t want to trip over dollars looking for pennies in savings.”
CSM Companies’ Moeller says his firm thinks in terms of providing “concierge service—we will add resources that address a customer’s pain points. Philosophically, customers should be treated the same whether trucks are purchased locally from dealers or not.
“In our case,” he continues, “we work very well with a strong Kenworth dealer network to ensure that the customer service feel is seamless. CSM has a team of service-support specialists that work around the clock to help reduce downtime around mission-disabling events and through our national network of dealers. As we say in our business, truck sales sell the first units while service sells the rest.”
The experts agree that communication must be a two-way street between fleets and dealers for the optimum outcome. “Customers should share information that will ultimately impact a truck’s ability to make them more money,” says Freightliner’s Aufdemberg.
“Dealers are product experts and excellent partners to optimize specs to meet the needs of different customers,” she continues. “Just to name a few, customers may want to share with dealers the specs of their current fleet, range, annual miles, capacity, weight, shipping lanes, overnights and terrain.”
DEVELOPING A PARTNERSHIP
Moeller says the dealer needs to “understand the customer well enough to know what is important to them and their success. To be exceptional, we need to provide our products in such a way that it helps them close the gap between where they are and their goals.”
As for what happens after the sale, Moeller contends that a dealership must keep customers’ operating costs in mind. “What we call ‘product support’ is what helps to mitigate the learning curve with new equipment and technology,” he remarks.
“At CSM Companies, we have a product-support team that trains our customers on our vehicles and ‘white gloves’ their service experiences inside and outside our network of dealerships,” relates Moeller.
“And lastly,” he adds, “as our customers get larger, trading in equipment becomes a much larger transaction. Fleets should seek a [dealer] partner that has scale to absorb and maximize residual values and demonstrate lifecycle cost advantages.”
Moeller points out as well that “once trust is established, the dealer can add more value if the customer is open with information and data. Our dealership teams are often brought into the customer sales process to ensure we are advising customers on the right kinds of equipment even before the fleet acquires a new piece of business.”
CSTK’s Lane suggests that “a fleet should be open to sharing with dealers from the start. What are their current pain points? What is more important, product availability or cost? The more we understand their needs, the more likely we are to become a business partner that works side by side with them.”
To accomplish that, he says dealers “need to invest in a robust customer relationship management system [CRM] for tracking of account calls tied to an account marketing plan. Dealer websites should have a lead-generation feature, through a product like Hub Spot, that feeds to the CRM system so the information generated can be facilitated by the marketing/sales department.
“Fleets need information that is a seamless resource with content [that reaches them] through [such avenues] as email campaigns and blogs on social media sites,” says Lane. “And on the dealer’s website, fleets need access to information portals that provide access to parts and service flyers, equipment and maintenance bulletins, industry calendars and newsletters.”
“It’s important for a dealer to know as much as possible about the customer up front,” says Volvo’s Billings. “What are the customer’s biggest challenges as they relate to their trucking needs? What is their financial position and how is their company structured? Do they purchase their parts reactively or planned? What driver features are most important? How important are various product features? Who makes the purchase decision?
“If all this is known up front,” he continues, “truck salespersons and their finance and aftermarket support teams can then structure the best package to support a fleet’s needs. Then, the sale is no longer about the lowest price, but instead about the most cost-effective solution over the life of the asset.”
Billings recommends keeping in mind that “a truck is a tool, a depreciating asset. Fleets should really consider the total cost of ownership of that asset and the support mechanisms that keep it running smoothly. They should consider the value of the dealership and the salesperson to their operation.
THE RIGHT PARTS
Certainly, no dealer can overlook the importance of parts. “Parts are all about having the right part at the right place at the right time and at the right—that is, competitive—price, and it includes how fast the part can be obtained if not on hand,” says Navistar’s Gerrard. He says dealers should be expected to serve as reliable sources of both proprietary and all-makes parts and to bear in mind that “even in today’s service-oriented realm, price will always be a factor” for fleets.
Gerrard notes that International dealers benefit from an “inventory alliance” parts ordering and management system. He explains that this generates a “predictive analysis of parts that each dealership should have in their rolling inventory determined by their customers’ VINs and part orders specific to their trucks.”
“Freightliner uses cutting-edge technology that delivers dealer up-to-date and interactive product information at the touch of their fingertips,” Aufdemberg says. “This ‘virtual showroom’ allows dealer sales reps to provide an interactive product walkaround to a customer at any location.”
CSM Companies’ Moeller points out that the “fast pace of technology” is affecting how dealers operate as well as fleets. “Phoning, texting, email are all ways that have created immediate and 24/7 access. An example of the new uses of technology is the way we equip our parts salespeople with iPads that allow for looking up, ordering and having delivery of parts while they are at customer sites.
“Our growth in communication is also evident with social media, such as Facebook, and, of course, through the direct interlinking of our customers’ business systems to ours that enables a quick way to process data,” he adds.
Moeller stresses that “the interpersonal connection remains critical. At the end of the day, every dealership employee needs to act as if their livelihood depends on their business—because it does.
“I appreciate that our business goes beyond transactional,” he continues. “Partnerships are hard to develop without interaction on a personal nature. Customers need to feel like they can have confidence in our people technically, have an absolute sense of our integrity, and feel that we do what we say we’re going to do. Bridging that relationship to include the factory support personnel is also key to [enabling customers to] buy into the folks that provide value upstream.”
Yet, fleets will see ever more technology deployed by dealers. Mack’s Roy notes that the OEM is rolling out geofences around its dealership locations. In combination with Mack’s GuardDog Connect telematics service, these geofences allow the company to see, for instance, if a truck has been sitting on a dealership’s lot for an extended period of time waiting for service. If so, Roy says, Mack can get in touch with the dealer and assist in expediting the repair or providing technical assistance as warranted.
Navistar’s Gerrard points out that “it hasn’t been all that long since fleets have gone from running fully warranty-capable, in-house shops to where they are now sending most work to truck dealers and engine distributors. Doing so, of course, lets fleets concentrate on their core competency.”
“Most fleets are in the business to haul freight and not deal with trucks,” sums up Volvo’s Billings. “Fleets should not purchase solely on price, but recognize which OEM and dealer provide the best total solution to support the fleet’s business.”