Industrial Truck distributors have faced a lack of new-equipment customers for so long that they are ready to move forward in the new year. The sale of used trucks and rental equipment has sustained many, but that equipment is now getting older. For whatever reason, customers are ready to buy again. Most Industrial Truck distributors, 73%, are forecasting sales to be up at a 10.2% average rate of growth. Compared to other lines, this group has downsized the most during the downturn and plans to hire employees for the anticipated uptick. A large portion of this group will be investing in capital improvements by updating or constructing new facilities.
|“Customers’ move from IC to electric trucks will drive sales.”
|“Everybody still thinks their business is worth what it was five years ago.”
|“For every dollar customers spend, they’re going to get a dollar of value they expect and deserve.”
|“We want to know what the customer feels about the level of service we’re providing so we can find ways to be better at what we do.”
|“We’ve been playing defense. Now we are going to start playing offense.”
|“We have to train and motivate employees on every level to go the extra step for customers.”
John Waugh Jr.,
|“It’s important to keep up with changes in regulations and tax laws.”
“Most of the time, customers don’t tell you what is wrong. They just go elsewhere,” says Nick Murgo, general manager, Tri-Lift NJ (North Brunswick, NJ). He is making sure every department is communicating as much as possible and doing what they can to retain customers. Murgo points to the challenge of having to repeat again and again project status and updates not only to the customer, but to different salespeople and departments. To alleviate this, customers are emailed the status of an open job at the end of the day, and every department is copied. Says Murgo, “Customers are happy with this, as they don’t have to initiate communication. It removes their worry and allows them to focus on their job. It also builds loyalty, and it’s an easy thing to do.” To help with branding, the company has a full-time graphic designer on staff who, among other things, has created custom stamps for envelopes. Says Murgo, “We are trying to get our name and our logo into the head of everybody in New Jersey, and if we can get a fraction of them, it will be good.” Murgo expects sales to remain steady, and in the 3rd Quarter will purchase new forklifts for his rental fleet.
“Buyers are squeezing and manufacturers are pushing from the other direction. I’m paying more and making less.” This will be the biggest challenge in the new year for Audie Burgan, president, J. M. Equipment Co. (Manteca, CA), who is forecasting sales to stay level. Rental is doing well based on the seasonality of the nearby agricultural businesses. In fact, in 2011, rental was the biggest profit center, growing by 20%. Burgan says he’s in a buyer’s mood when it comes to expansion. The Sacramento facility will be updated, and he is looking at opportunities to acquire some smaller independents with non-competing lines. Burgan will place more emphasis on parts and service and will work to create opportunities for leasing and rentals.
Bob Levin, president, Material Handling Supply (Brooklawn, NJ), is cautiously optimistic that sales will remain steady. The rising costs of steel and fuel, squeezed margins and expanding operating costs have forced Levin to hold off on capital expenditures. Rental business is improving. “We prefer to give customers the best products and programs. Most times, price is one of their primary concerns; our goal is to provide our customers with the most value they can get. Material handling is purchased for the long term and customers understand that value is of utmost importance.”
After losing a building to a tornado last April, Jefferds Corporation (St. Albans, WV) is renovating. Richard Sinclair, president & CEO, is making significant revisions to the interior of the building where the company is now located. Energy business has grown dramatically in the region as a result of the Marcellus Shale, and Sinclair anticipates a 5-9% sales growth. He will focus on superior quality in terms of response time and the quality of repairs.
At NMC Material Handling (Omaha, NE), Tim Heesacker, general manager for the Nebraska region, is concentrating on improving market share in Classes 2 and 3 by adding a specialist dedicated to those markets. As a result, he anticipates sales to increase by 10%. “We’ve really shot ourselves in the foot the last couple of years by trying to run lean. Trying to do more with less is not necessarily beneficial when it comes to services.” He’s refocusing on customer service and is targeting six technician hires. “When customers run lean and we run lean, scheduled maintenance gets dropped, as does the opportunity for follow-up work and incremental sales.” A new employee review process, measured by job performance indicators, is being rolled out.
“Considering the tough business climate in California with taxes and environmental regulations, it’s no wonder manufacturers are leaving the state,” says John Waugh Jr., president, Gray Lift Inc. (Fresno, CA), who hopes for a slight increase of about 1.5 percent. The drought’s end is a welcome sight for this agricultural region. Waugh will purchase five service vehicles in 2012 and is in the process of hiring a corporate service manager. After having downsized over the past few years, keeping up with business will be a challenge, albeit a good one to have.
John Scheunemann, general manager, Toyota Lift of Minnesota (Brooklyn Park, MN), expects an increase of 5% as pent-up demand releases. There is movement in used and rental, but people seem to be holding off as long as they can to purchase new trucks. Scheunemann wants to fill two positions in sales and service.
Lift Parts Service (Wichita, KS) took on the Clark line in late 2011, and Kyle Free, COO, notes that companies are now budgeting for new equipment. He anticipates a rise in sales of 15-20%. A new 13,000 sq. ft. headquarters facility is being built in Wichita with a targeted move-in date at the end of 2012. “The new facility will be three times larger than the current one and will allow us to better service our customers with room for additional employees, more storage for new trucks and more parking spaces.” Free wants to hire two or three service techs by the end of the 2nd Quarter and, like others, cites a lack of skilled workers. He believes, however, that over the course of the next decade, “supply and demand will come into play, and the trend will flip. Wages will go back to the skilled worker and will be cut away from the executive positions.”
With little used inventory available, diminished quality and prices bumping up against new, Don Carlson, owner of Reliable Forklift Sales (Phoenix, AZ), anticipates that new equipment will be purchased and hopes for a 20% increase. Pointing to accounts receivables, Carlson says, “Because we are a small company, I know there are times when we get put way down the line of those needing to be paid. Since the squeaky wheel gets the grease, our personnel spend time contacting customers for payment.”
A combination of low interest rates and tax incentives is pushing more companies to purchase new trucks, and Hank Ogden, president, Ogden Forklifts (Atlanta, GA), is seeing a trend toward electrics. Ogden expects sales to remain on an even keel with last year’s numbers. He would like to add two or three service techs in the 1st Quarter and is working to improve company efficiencies.
|“It’s all in the small things we do for customers, like getting back to them on a timely basis and trying to solve a problem for them that might not bring any immediate compensation.”
|“The quality of what we do is very good, but it also has to be efficient.”
|“Training is skills. Education is teaching someone how to connect the dots.”
|“A judgment has to be made: Is the customer worthy of our investment?”
“There’s been a paradigm shift not only with hydrogen fuel cells, but with the data collection tools used to help extend the life of the product,” says Darrin Rolfe, owner/manager, DC Power Solutions (Salt Lake City, UT). Rolfe and his team work hard to keep up with these trends and believe that, with newer technology, the life of the battery can be extended. By the end of the 2nd Quarter, a new data collection tool will be set up online for customers to receive feedback. Rolfe explains, “Based on the data, we can design what the client needs, for example, a safety program.” He forecasts sales to increase by 20% and will hire an additional six people for service and clerical positions.
According to Jeff McIver, president, Sooner Battery (Oklahoma City, OK), ITA numbers for the area are up about 70%. “The energy industry has affected pretty much everything in the region, and I believe that this business will not falter during this election year.” McIver forecasts sales to increase by 5-10%. With energy markets burgeoning, there is a downside: It’s taking away technicians. “Our goal,” says McIver, “is to add value to what we bring to customers.” Sales presentations are being tailored to identify those things that add value, i.e., fuel economy; electricity vs. carbon fuels, and things that will catch the customer’s notice. He’s also investing in battery wash equipment that will enable batteries to be washed right at the customer’s location.
As the economy improves, Bill Bolin, president, Lift Truck Center Incorporated (Wichita, KS), anticipates an increase of 5-8%. To find new customers, Bolin is stepping up cold calls as well as direct mail and email, and is looking under every rock. He’s also making sure his staff has the skills to find substantial new contacts.
Everyone who answers the phones, people who work the parts counters, service technicians, salespeople—in short, everyone—will be benefactors of the training investment made by Bill Ryan, vice president/general manager, LiftOne (Charlotte, NC). “Phone skills, technical skills and marketing skills will be highlighted,” says Ryan, “how to communicate with customers and how to bring critical concerns back to the business.” Change management is one of the company’s six critical success factors. “The most important issue facing LiftOne today is our people being able to communicate our value proposition to customers. Two sales positions have been open for a while, and Ryan says he could fill them with a warm body, but he is looking for “someone special, someone extraordinary.” He adds, “There are a lot of people available for work, but not a lot with the right skills set and go-to-market attitude.” He will add new services in the 1st and 3rd Quarters and anticipates a sales increase of 6-8%.
Bob Kehley, general manager, Key Material Handling Equipment Co. (Brooklyn, NY), is hoping for a 10% increase, based on new and used truck sales; rental, he says, is not as active. In the New York City area, electric trucks predominate, and Kehley believes electrics will eventually overtake IC. “We are doing a lot of face time and personal attention with customers to make sure we stay in their vision.”
|INDUSTRY FORECAST Distributors|