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Creating Value While Controlling Costs

We are a small service department consisting of eight people. Our organization primarily repairs dock leveling equipment, trailer restraints and dock seals. How can we best create value for our customers, control company costs and impact business growth?
David Skrypez, Service Manager, Star Equipment, Inc.

Loren Swakow: Our businesses are not that dissimilar. We service lift trucks and you service dock equipment. Both are generally accounting assets to the customer. Both products last many years. Our mistake is in thinking that once the service is completed, our work is done until it breaks down again. Then the customer only sees you when his product is not working. We need to stay involved with the customer and partner with him so that every time anything related to his docks comes up, you’re the person he calls.

Periodic checks or preventative maintenance are providing partnering opportunities for lift truck companies. Would your equipment benefit from periodic checks? Periodic checks keep your company in front of the customer. They are not profit makers, but help insure that your name is on the list when additional or different, related products and services are needed. Periodic checks also provide a value-added benefit to the customer—hopefully his equipment works better and lasts longer. Worn parts can be replaced before the product fails. Periodic inspections are a good means of educating the customer about additional services offered. These provide a benefit to you in increased sales and a benefit to the customer by making you easy to find and do business with.

Make sure your company’s name and phone number are on everything you service. Do your customers know the full width of your product offerings? This can be done with simple and inexpensive mailings. Communication will always be the key to adding value. Stay in touch, follow up, and make sure the customer is more than satisfied. This allows you to expand your sales within your own customer base.

I’ll wager that 80 to 90 percent of today’s quality lift truck houses started out as small service shops in someone’s garage. Their businesses grew with service and then expanded as they became trusted by their customers to supply the equipment they were servicing.

Ken MacDonald: To control your cost, try meeting with your service department to explain the realities of the current economic climate. Ask for their suggestions on how you can improve. Award a small prize for the greatest-savings-potential suggestion. Your own employees often are your greatest consultants.

To grow in this market, all you can do is under-commit and over-deliver. In doing so, you will create a market recognition as a great supplier and that will lead to success. Keep in mind that the weaker distributors are giving you the opportunity to grow. And by taking advantage of MHEDA’s educational programs, your employees will be better equipped to achieve your goals.

Larry Abernathy: Back to basics. The best way to create value for the customer in a service organization is to provide quality service and quick, dependable response times, and have professional service people. The respect gained by excellent service will help your sales efforts as new opportunities come up. Your service professional can be your best salesperson and lead source. Good communication between service and sales can be one of your most valuable assets.

Michael Dubbs: Compare the financial operation of your company to other MHEDA member companies using the DiSC Report, which is an annual survey of the financial results of MHEDA members. Using the report allows you to benchmark your company’s financial results against similar MHEDA companies. The report should help you to identify your financial strengths and weaknesses and help your organization develop a financial plan to better serve your customers. In his article on Page 58 of this issue, Al Bates discusses some of the results of the DiSC Report. More information about the DiSC Report can be found on MHEDA’s website or by contacting the MHEDA office.

Material Handling Equipment Distributors Association

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