How to build your parts business in 2017
The parts business at too many dealerships has become an order-processing business. To build your parts business in the coming year, turn your parts operation into an efficient, effective sales team.
Teach the parts department to sell
“The parts department has to pick up the telephone and call customers,” says Ron Slee, president of R.J. Slee & Associates, a management consulting firm specializing in the operations of heavy equipment and material handling businesses.
“I use to pick up the phone at a parts counter and hold the phone up to the person’s ear and ask ‘What’s that noise?’ and of course I was referring to the dial tone,” he says. “Because every time that parts person picked up the phone it was because someone was calling in. The phone works both ways. The parts department should be calling the customers because they know what they’re going to need.”
Obtain market data
To do that, you need to know more about your customers need.
“You need good marketing research on your customers and that means knowing their buying habits,” says Slee. “You’ve got to know who's buying and who isn’t. That’s fundamental to the success of every parts and service business. You have to know where the machines are, what they’re doing and how many hours they’re working. If you don’t know the machine population, you can’t know your business.”
Calculate the parts potential
With a good idea of your machine population, you can calculate the potential business every customer should or could represent for you.
“Say your customer has a machine that’s working 2,000 hours,” says Slee. “With that information, you can calculate what the parts consumption will be. Now do that for all of the machines your customers have. That’s the parts potential. Hardly anyone does that anymore.”
Calculate market capture
“Compare the parts potential to what you getting in parts sales, and you can calculate your market share,” says Slee. “Now develop a parts sales plan to increase the share for each customer.”
Deliver what your customers need
The number one thing customers want from your parts department is availability of the parts they need.
“If you want to increase parts sales, you have to prove to your customers that you’re a reliable, dependable and predictable parts supplier,” says Slee. “That brings us full circle to turning parts from an order-processing operation to a sales operation.
“Too many parts departments take an order, run it through a standardized series of steps – pull it from the warehouse or locate the part at the vendor. The process comes grinding to a halt when the vendor says they don’t have the part. Then they wait.
“If the vendor says they don’t have the part, that’s when your parts sales department gets to work expediting that sale. That means finding every part every customer is looking for every day before they go home.
“It’s not acceptable to just wait. That customer is going to go someplace else if you can’t supply the parts. And it’s going to be tough to get that customer back.”
Coming soon to a dealer near you
Better yet, make it possible for your customers to check parts availability and prices, and then order parts online.
“I should be able to look on my computer or phone and see if my dealer has a part,” says Slee. “I should be able to see how much it is and order it. And while we’re at it I should be able to check machine availability, check on a back order, pay my bills, check accounts receivables, place an order and make an appointment for service – all of that’s available and all of it lowers the dealer’s costs.
“Dealers haven’t adopted that technology yet, but it’s coming. It’s an exciting time.”
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