Young’s Equipment has boosted the participation and profitability of its winter service program with a unique, customer-centered approach.
Even before the harvest ends, dealer-principals across North American turn their attention to their dealership’s upcoming winter service program, with another chance to boost parts and service revenues out of the “back rooms.”
Some dealerships do this well and some don’t. If the goal is to improve, consider what Young’s Equipment has done at its Regina, Saskatchewan, location in recent years, with very little money spent on promotion.
Young’s is a full-line Case IH dealer with 5 locations in the province of Saskatchewan. The network was honored as Farm Equipment’s Dealership of the Year in 2009 for dealers with $50 million or more in sale revenues.
With a unique, intense focus on recruiting and retaining customers for its winter program, Young’s customer and warranty service labor sales have increased 57% between 2006-2009, and the Regina store has been “over-booked” for winter inspections the last 2 years.
“This started years ago, when we had to work hard at getting customers to bring in equipment during the winter months. The efforts since that time have educated our customers and are paying off years after,” says Brent Bazin, service manager since November 2003.
“It takes a while for the customers to see the real value of less down time when they’re busy. We know, by the types of failures that we deal with on ‘in-season’ service calls, that a lot of items are being caught and dealt with during the inspection.”
The heart of Young’s winter program consists of:
• Personal, hand-signed letters to certain customers before the winter service season arrives;
• Direct-mail flyers ready to go when harvest begins;
• Detailed inspections of combines, tractors and self-propelled sprayers, above and beyond what the manufacturer recommends;
• Discounted rates for trucking and labor
Young’s Equipment makes sure flyers promoting its winter service program are ready to go before the harvest begins to aid in the selling effort. The dealership has also sent out signed letters to targeted customers to drive up participation.
A Personal Touch
One of the most effective methods to recruit customers, Bazin says, is sending out a personal, hand-signed letter to targeted customers explaining the need and benefits to having equipment brought in during the winter.
The letter is followed up by a personal phone call from a service advisor or manager so they can answer questions and get a ‘yes’ or ‘no’ to the inspection.
“This call is a very powerful tool, as the customer knows that if he declines and has problems next year, the dealership is aware of the declined offer,” Bazin says.
It’s in the Mail
Young’s has always produced a direct-mail flyer for the winter service program and continues to do so. The flyer may be mailed to customers if the dealership sees the need to increase the number of units booked.
But there are other reasons to have the flyers around.
“One of the keys to success is to have the program and flyer ready at harvest so that the technicians can ‘soft sell’ the inspection when they’re out on service calls and leave a flyer with customers, or in the cab if no one is around,” Bazin says.
“The parts department can also have the flyer left with the customers throughout the harvest season when we see most of them.”
Young’s does advertise its winter inspection program on its web site, but doesn’t use television, radio or newspaper ads.
“If we were to spend more I think it would be with direct calls to the customers,” Bazin says. “The ag customer is a very small percentage of the television or newspaper viewers and targeting the farm customer directly is more effective.
“We have the capability to e-mail most of our top customers, but haven’t had to do so to obtain our results.”
The Battle for Good People
One reason that Young’s felt improving the winter service program was crucial was recruiting and retaining qualified service technicians.
The dealership has 15 technicians that work on equipment, and several other employees who wash and detail equipment or drive delivery trucks.
Brent Bazin, service manager for Young’s Equipment in Regina, Saskatchewan, says the area’s labor market is very tight, with unemployment rates less than 5%.
The dealership hasn’t felt the same effects from the recession that many others have because of the region’s rich mineral and oil resources.
“We compete with these other industries for talented technicians and that makes staffing a challenge — and one of the most important reasons for both the farm customer and dealer to keep our shops full in the winter,” he says.
“We couldn’t afford to have as many technicians, and the ‘in-season’ failure rates would be higher with fewer techs available. This would make it nearly impossible to provide good service to the farmer when they need it most.
“If you can’t provide a job that’s year round, you can’t get trained techs. So the winter service program is a ‘win-win’ for both the dealer and their customers.”
Details & Detailing
Another key for Young’s is the method used to perform inspections and go over the results with customers.
Young’s provides personalized, detailed inspections for tractors, combines and self-propelled sprayers. Bazin says the dealership took the suggested inspection forms supplied by Case IH and identified ways to expand the offerings.
On Case IH sprayers, technicians open up the planetary gearboxes, change the oil and inspect the gears themselves. On the 88 Series combines, the sieves and chaffers are taken out so a customer can take a look inside, Bazin says.
After inspections are completed, Young’s books an appointment for the customer to come in. They’re introduced to the technician doing the work, who has already prepared a quote. The technician goes over the entire inspection with the customer — answering any questions, offering advice and taking the order for any additional work to be done, Bazin says.
Young’s finds that once a customer has gone through this process, it’s easy to sell them another inspection next winter, especially since they’ve spoken with the person doing the actual work.
“I know it takes a lot of effort to do that. A lot of shops have technicians that just don’t feel comfortable interacting with a customer on that level, but in today’s world, things are changing and we must expect technicians to be professionals,” Bazin says.
“If the service manager or service advisor becomes directly involved at this point, the customer may feel that the work is being pushed upon them by someone whose job is to sell.”
The service advisor’s role in the sales process, he adds, is to make sure customers are contacted and all leads pursued. They also promote any financing, trucking and discounts that Young’s may be offering.
Another area Young’s pushes is the value of its inspection programs during the winter months.
Warranty service labor sales have increased 57% since 2006 at Young’s Equipment’s Regina, Saskatchewan, location because of targeted, customer-focused promotional efforts, says service manager Brent Bazin. “It takes a while for the customers to see the real value of less down time when they’re busy.”
The inspection pricing is discounted to the regular service labor rate, and trucking is reduced to a flat rate that is deeply discounted — and supported by the parts department not offering any discount on the parts that are sold.
“And we do a very extensive cleaning of the unit, including the cab. These two items are perceived to be a huge value. Outside cleaning companies will charge $800-$1,200 for a comparable cleaning,” Bazin says.
Young’s has been asked before why it’s ‘giving away’ labor. The rule of thumb at Young’s is that the inspections are recovering 50% of the retail labor rate.
“Once we get in the field we’re dealing with fewer issues than we were dealing with before,” Bazin answers. “This frees the mechanics in-season to go out and deal with the unknown problems.
“Customers are starting to see that when they bring the machine in every year, it will cost them a certain amount of money, but they don’t get smacked with big bills every 3 years, or a lot of down time.”
Comparing the Numbers
Bazin says it’s not possible to determine the year-over-year increase in revenues in the winter months alone, since many inspections carry on into the rest of the year.
But warranty labor sales increase because many failures determined at the time of inspection are still covered under warranty.
In 2009, Young’s started to track equipment individually and break down the dollars spent on the different product lines for parts and labor. In 2009, Young’s inspection breakdown was 55% sprayers, 33% combines and 12% tractors.
The average work order for sprayers was $8,727, $8,404 for combines and $3,239 for tractors. Retail customer and warranty labor sales derived from customer inspections now represent 39% of Young’s total labor sales for those categories.
Self-propelled sprayer inspections have seen the largest increase in inspections in recent years, with combines remaining about the same and a drop seen with tractors.
“With larger tractors and equipment, and direct-seeding technology, this line of equipment is seeing the least amount of hours of use,” Bazin says, adding that the downturn in the livestock industry since Mad Cow disease was reported in 2003 has also negatively affected the number of tractor inspections.
Another thing that’s difficult to manage in the service department is the real estate, Bazin says, and that led to some changes.
When Bazin started at Young’s 7 years ago, inspections and winter work was being done for multiple brands of equipment, “which tied us up for parts or technical information,” he recalls.
“We don’t do that anymore. It’s just Case IH. We do not solicit those other makes. We do a little bit for some key customers, but it’s very minor. We’ve just grown to the point where we can’t have it.
“If the shop was bigger and it wasn’t 100% booked, and we had to go looking for more work, we would chase it down. But it doesn’t make the same money as working on your own brand.”
Dealing with Over-Bookings
Bazin says the Regina store has been “over-booked” for winter inspections for the last 2 years, and the dealership is 95% booked again for 2010-11, with room for only a few tractors.
The dealership maintains a waiting list and tries to get to the units on that list later in the season, often between seeding and harvest. It may depend on how much additional work is being done, and how long the unit may be in the shop, Bazin says.
“If we can’t get to them right away, we make sure that they’re personally called prior to the next year’s program and given first chance to book,” he says. “It’s pretty easy to get a commitment when the customer could not get it done the year before.”