If the maxim is true that “an educated man is one who has learned to learn and never stops learning,” then it’s safe to believe that Brian Carpenter is bringing an example of educated leadership to his dealer group.
Centralized Warranty Clerk
Years with Organization: 3.5 —after graduating with an associate’s degree in dairy management from Vermont Technical College, Marcellus Cubit spent 5 years as an artificial inseminator of dairy cattle at a local co-op. He then spent 3 years with Vermont’s Agency of Agriculture as an animal health specialist before joining Champlain Valley Equipment at its Derby location in June, 2010. In April 2012, he began handling the majority of warranty claim work for all 4 of CVE’s locations.
“The bulk of my job is dealing with the warranty claims. I get a completed work order from the service manager and my next step is getting the flat rate times from the manufacturer, which is never what it actually takes to fix the problem.”
Professionals often use the phrase, “hole in the wall” as a figurative description for a cramped workspace.
But for Marcellus Cubit, centralized warranty clerk, his office inside the Derby, Vt., store was literally carved into the wall to accommodate recent growth of the dealership.
Located directly across from the parts counter just off the show floor, Cubit’s accommodations are accessible and functional, if not spacious. But Cubit has all the room he needs to do what he does best on a daily basis — negotiate, or sometimes fight, with suppliers to resolve service warranty claims and recoup as much as possible for the dealership.
“Somebody is going to pay for the repairs that are done in the shop because we have to pay the mechanics and we have to keep the lights on,” he says. “On a warranty, the customer’s not paying for it, that’s strictly forbidden, so that just leaves the dealership or the manufacturer. The more I can get back from the manufacturer, the less comes out of the dealership’s bottom line.”
Cubit started at the dealership 3 years ago, splitting time as the warranty clerk in the morning and then working the parts counter in the afternoon. He shared an office with the service manager and at the time, warranty work was spread throughout CVE’s 3 locations in Derby, St. Albans and Middlebury.
But all that changed when the dealership acquired 2 additional stores in the past 18 months, one in Berlin and a Kubota dealership in Orleans, which merged with the CVE store in Derby.
Having shown an aptitude for warranty work, Cubit began handling the vast majority of service claims for all 4 stores starting in April 2012. The St. Albans store still handles warranty claims for Polaris, Stihl chainsaws and Fisher snowplows and the Middlebury location handles Stihl chainsaw claims in house.
The move increased Cubit’s workload almost three-fold, from handling about 400 claims per year to more than 1,000 in 2013, and dealing with a diverse cast of manufacturer representatives.
In addition to major suppliers New Holland, Case IH and Kubota, Cubit handles claims from more than a dozen shortline companies that service a wide customer base of dairy, hobby and recreational farmers.
“When you carry more stuff, you sell more stuff, so the workload has gone up and it’s spread out across more manufacturers,” he says. “It’s interesting though, because my job starts when the work on the equipment is done, and if it’s under warranty, I try to get the manufacturer to pay the bill for what was done.
“Sometimes that isn’t so hard and sometimes it’s a long, drawn out fight.”
Time is Money
A level head and a patient demeanor are critical assets that Cubit relies on to navigate the workload. When he receives a completed work order from a service manager, he compares the manufacturer’s flat rate time to the amount of time it actually took the dealership’s service tech.
Seldom do the recommended rate and the actual time spent on the job match. This is where negotiations begin for Cubit to recover the difference.
“I’ve got one repair claim on a 75 horsepower tractor that New Holland says takes 5 hours to split the unit between the engine and transmission, take the clutch out, put a new clutch in and put it all back together,” Cubit says. “It actually takes closer to 12, even though it’s a little quicker putting everything back together than taking it apart.
“That’s a claim I have an issue with. There are 16 hours on this particular work order that I’ve got to try and get paid for and New Holland says the job should have been able to be done in 8.”
In some cases, Cubit and the manufacturer will split the difference, which is an amicable resolution and most suppliers are receptive to negotiation. On a couple of occasions he has recorded the time it took a service tech to complete a repair job multiple times and leveraged the results to reach an agreement.
Cubit aims to recover 100% of warranty claim money, but he understands the give-and-take that comes with minimizing the impact on the dealership’s bottom line and maintaining a positive relationship with manufacturers.
“Realistically, I try and recoup about 85-90% across all brands. Some brands I get a lot closer to 95% and some brands I’m closer to 60% because of the way that brand pays its claims,” he says. “A lot of it is the bottom line loss vs. gain on the accounts, but the other way I look at it is how many claims get paid right off and how many have to be reworked.”
This can vary greatly, depending on the complexity of the claim, the company involved and the dollar amount. Most claims are $100-200 and can be settled in a matter of days.
But time-consuming jobs, including replacement of a transmission on a New Holland self-propelled harvester, may take weeks or even months to resolve the warranty claim.
As of November 2013, Cubit had recovered more than $750,000 for CVE’s 4 stores for the year, including $300,000 at the Derby location.
“I’m down about $60,000, but some of that are claims that haven’t been paid yet. I’ve got a forage harvester transmission claim that’s over $15,000, so a quarter of that total is all in one claim,” he says. “The goal is to get paid back as much as possible from the manufacturer, and some of that is knowing how to word a claim, some of it’s in just plain arguing with them very politely. They don’t tend to like it when you say ‘You’re wrong, I’m right, pay me.’”
Greasing the Wheels
Crafting a persuasive claim is more an art form than a routine task. Cubit relies on his background working in the parts department to effectively communicate a service technician’s repair “story” to a manufacturer representative, who often doesn’t have much of a mechanical background.
“They haven’t worked on the units, so they have to go by the policy book they have, the flat rate codes that they have for labor, and then I have to explain what was done in English that anybody can understand,” he says. “I look at my job as a translator because when the service manager reports that the technician changed the hydrostatic transmission, I have to explain all the work that went into doing that, in the simplest way possible.”
Cubit also has to make sure the dealership’s service managers and mechanics understand the different policies that manufacturers have when it comes to warranty repairs. This includes being upfront with them about the financial implications of using new vs. rebuilt parts.
For New Holland and Case IH, if an alternator goes bad on a tractor with 50 hours, they require that dealers replace it with a rebuilt alternator.
“If our service manager decides to put a new one on, he’s going to know ahead of time they’re going to lose money on that part and there’s nothing I can do about it,” Cubit says. “If the customer is adamant that he’s got to have a new one, it falls on the service manager to make the decision of do you charge the customer the difference or does the company absorb the cost?”
Keeping Customers Happy
Cubit tends to endorse the decision that will have the least negative impact on the dealership’s bottom line, but he also understands the importance of giving customers what they want, especially if they’ve been loyal to the dealership.
Sometimes he’ll receive work orders from service managers with the understanding that the dealership will lose money on the job, but the customer just bought 3 new tractors.
“As long as they get their tractor back in the field and don’t get a huge bill, they’re happy,” Cubit says.
Very rarely does the dealership have to go back to a customer and say “It wasn’t under warranty.” More often than not, an arrangement is facilitated by Cubit among the customer, dealership and manufacturer.
For example, on a piece of equipment a month out of warranty, a manufacturer may pay half the repair costs and then let the dealership decide whether to charge the other half to the customer, or absorb the cost.
“We just had one claim where a unit was literally a day out of warranty, but the manufacturer covered most of the repair,” Cubit says. “They weren’t legally required to because it was out of warranty, but they want to maintain goodwill between them as the big company, us as the dealership and the customer.
“If we go back to the customer and say, ‘It was a day out and the manufacturer won’t work with us,’ the customer is going to buy that equipment somewhere else the next time.”
While the warranty process allows for some flexibility, Cubit likes the fact that manufacturers supply the same warranty code book to every one of their dealers, regardless of size.
“The book is cut and dry. We have 4 stores and the book says this is the way it works, so we get treated the same way as a company that might have 40 stores and sells 10 combines a year,” he says. “Warranty wise we’re all on the same page.”
Making the Rounds
Once a week, Cubit takes a day to visit each of the service managers at the other CVE locations. He’ll typically spend 1-2 hours at each store answering questions or meeting face to face with mechanics to iron out details of a complicated work order.
“Trying to do that over the phone doesn’t necessarily work. If I have the hard copy with the mechanic’s written description with me, seeing that will refresh their memory,” Cubit says. “I can pull a work order from any of the stores, but being there and explaining it makes it easier, because they say, ‘Oh, yeah, the flat rate is an hour, but it actually takes 5 because the supplier didn’t take into account that I have to remove a certain part and the tech can show me on the unit.”
Even though he logs about 300 miles every week visiting the stores, the in-person visits lead to better ammunition when negotiating with a manufacturer.
Behind the Scenes
Much of the time, Cubit can be found in his modest office space, poring over spreadsheets or logging warranty codes. He admits that at times, it can be a frustrating and tedious job.
“On big repair that has a lot of codes and a lot of parts, just entering them in the system can drag when you’ve been sitting there for 20 minutes entering O-rings and washers and bolts,” he says. “You might enter a part that’s $600 and the next 15 parts you enter are $0.25 apiece, but those quarter parts add up so I’ve got to enter every one of them if we expect to get paid.”
Cubit says most people probably don’t think much about his job until something breaks on a piece of equipment. Even then, he works mostly behind the scenes, tracking down work orders and deciphering service managers’ shorthand to build a compelling case for the dealership’s warranty claim.
“When the boss was figuring out where to put my office, the thought was, that while I don’t need to interact with customers, I do need to interact with the service department and the parts department,” Cubit says. “I’m in a pretty convenient location to do that.”
But Cubit is also often within earshot of customers who talk with a service manager on the show floor or technician in the shop about their warranty coverage.
Hearing the satisfaction in a customer’s voice when they are reunited with their equipment after a repair reinforces the value of the work Cubit does for the dealership.
“At the end of the day, it’s about the customers and their concern is getting back in the field — because their equipment isn’t making them any money sitting in the shop,” Cubit says. “If the customer brings in the unit and it’s under warranty, generally the service manager gets it fixed and then we worry about getting paid for it.”