Service Excellence is a Strategic Differentiator that
enhances Profitability of Equipment Dealerships
Abstract
Equipment dealerships are presented with service
opportunities. At the same time, they are facing
challenges in providing Service and Product Support.
Service-related opportunities and challenges invite
dealership executives to scrutinize their current
operating practices.
This White Paper presents a series of best practices.
It also highlights the role, a modern business system,
and mobile field service application plays, in optimizing
your service processes and profitability.
A best-practices guide
for forward-thinking
Equipment Dealerships,
looking to provide
optimized Customer
Service
White PaperService Excellence
e-Emphasys Technologies Inc. 2501 Weston Parkway
Suite 101, Cary, NC 27513
T: 919 657 6565 F: 919 657 0773 E: [email protected]
www.e-emphasys.com
On the one hand, equipment dealerships are presented with several opportunities in the Service
area. Service is oftentimes looked upon as the tail-end of the business. Many service departments
are excellent at fixing broken equipment. Yet, in the larger scheme of the dealership business, the
service department has a more strategic role to play. Dealerships have the opportunity of
transforming their service department from a cost center into a profit center. They also have the
opportunity of elevating their customer service into a strategic and competitive differentiator.
On the other hand, dealerships are also facing service-related challenges. Customers are
increasingly demanding. Fleet owners expect maximum equipment availability and utilization.
Large fleet owners exert downward price pressure. Meanwhile, equipment has become highly
sophisticated, requiring specialized technical skills for operations and service. For certain
competence areas, qualified staff is hard to find and attract, resulting in premium labor rates.
The service-related opportunities and challenges invite dealership executives to scrutinize their
current operating practices.
In this White Paper, we present a series of best practices. We also highlight the role, a modern
business system and mobile field service application plays, in optimizing your service processes
and profitability.
Opportunities & Challenges in Service
The Service Opportunity
Most equipment today is versatile, sturdy, and of excellent quality. Product differentiation has
become increasingly challenging, and price wars, commonplace. Fierce competition between
brands is putting sales margins under pressure. And large fleet owners dealing directly with OEMs,
are eating into new equipment sales opportunities for dealerships.
Your Service department represents a powerful weapon for turning these challenges into
opportunities. What customers will best remember you for, is the service level of your
organization. Quick and adequate repair of their equipment, consistent high-quality service, and
reliable operation of their fleet are your best differentiators. Satisfied customers tend to be loyal,
and repeat business generates higher margins. Moreover, your technicians operate in the front-
line; they are your eyes and ears in the market. They can spot opportunities before your
competitors can.
White PaperService Excellence
e-Emphasys Technologies Inc. 2501 Weston Parkway
Suite 101, Cary, NC 27513
T: 919 657 6565 F: 919 657 0773 E: [email protected]
www.e-emphasys.com
With an efficient and high-quality service organization, you are in a good position to contract
major service and maintenance work for large (rental) fleet owners. Most of them are ready to sub-
contract or out-source service and maintenance to a specialist.
The following simple statistic, demonstrates the importance of service, and the size of the
opportunity it represents. For every new unit being sold, a multiple of 20 or 30 units are in
operation at any point in time, requiring service, maintenance, parts and upgrades.
Installed-base-to-new-unit ratio:
- Average: 13:1
- Locomotives: 22:1
- Tractors: 30:1
- Civil Aircraft: 150:1(Source: Harvard Business Review, October 1999)
When looking at the initial acquisition cost of equipment as a percentage, the overall life-cycle cost
it represents is only a 10% portion; 90% of the life-cycle costs are service-related. (Source: Accenture, 2005)
These figures when combined, illustrate the importance of equipment service. Capturing a larger
share of this overall revenue opportunity, and managing it more profitably, makes both top-line
and bottom-line impact to your dealership.
The Service Dilemma
Your Service department, including your technicians, dispatchers and service managers, probably
represents one of the hardest-working teams within your organization. They are always on call,
rushing against time, and dealing with customers who can’t wait for their machines to get back into
production.
Whilst they are probably your best customer advocates, customer satisfaction ratings for your
company’s service may still leave room for improvement. Though nobody would argue their hard-
working nature, you may still find the Service department’s profitability to be a challenge.
White PaperService Excellence
e-Emphasys Technologies Inc. 2501 Weston Parkway
Suite 101, Cary, NC 27513
T: 919 657 6565 F: 919 657 0773 E: [email protected]
www.e-emphasys.com
The difference between profit and loss can be as simple as missing a manufacturer’s warranty for a
replaced component, or dispatching an overqualified person for a particular job. From working
closely with many equipment dealers, e-Emphasys learned that the key to unlocking this dilemma
is not working HARDER, but operating SMARTER. Being smart about service is the difference
between a satisfied and a grumbling customer, between long-term loyalty and luring attrition,
between profit and loss. With today’s insight and technology, service excellence is within reach for
your organization.
The Service Productivity Game
The winners in the service arena will be the companies focusing on service productivity. This means
working smarter rather than harder, and operational excellence beyond diligent ‘fire-fighting’.
The question that each dealer executive and service manager should ask himself is: whether their
service department possesses the infrastructure for efficient and effective job execution.
Most technicians carry an expensive tool kit, but are deprived of essential information on the job.
Most dispatchers are very proficient with telephone, fax, and service board, but lack real-time
interaction with the field. Most executives have an excellent feel for performance of their business,
but have limited management information for analysis and decision making. Superior service
productivity starts with a system, which pulls it all together, addresses the tactical issues, and
disconnects any inefficiencies within the business process.
Best Practices
~ Integrated Customer Interaction
With today’s communication technology, customer interactions happen through a variety of
channels, including telephone calls, reports from an onsite technician, submissions from the web,
e-mail, fax, automatic updates or calls from equipment with on-board monitoring and satellite
communication capability. Every interaction is an opportunity to increase customer satisfaction,
and possibly get an order. However, for most dealers keeping track of these interactions, and
creating a 360-degree customer view, provides a challenge. Dealers can therefore gain value by
integrating their customer touch-points, and providing their employees with visibility of customer
contacts, fleet details and history, to get a complete picture of the customer’s activity and potential
needs.
White PaperService Excellence
e-Emphasys Technologies Inc. 2501 Weston Parkway
Suite 101, Cary, NC 27513
T: 919 657 6565 F: 919 657 0773 E: [email protected]
www.e-emphasys.com
Being able to anticipate needs, and predict or prevent problems, upgrades the customer service
relationship from pure fire-fighting, to a more pro-active partnership. At the same time, it helps
dealers to decrease the need for expensive and disruptive emergency service calls. By automating
the capture and response to requests through tools such as remote access, workflow, automated
escalation and integrated email, companies are ensuring that customer calls are captured and
addressed in a timely and adequate manner.
~ Call Efficiency
Margins on services business are highly dependent on keeping costs in check. Dealerships that
build a knowledge-base of problems, causes, resolutions and occurrence rates, combined with
OEM service bulletins, and share this information with their service representatives, are able to
support their customers more effectively, whilst improving call efficiency. By providing
information that can be quickly searched for relevant answers, the time spent with customers is
more productive, and provides more value. If a customer can find the answer to a problem, or
question through self-service, customer satisfaction can come at a significantly reduced cost. By
providing customers and customer service representatives, with broad access to product and
service-related knowledge, on site service visits can be reduced, and the cost of the technician and
related overhead expenses saved.
~ Intelligent Scheduling & Task Combination
A dealer executive recently stated: “Skilled technicians are becoming a scarce commodity, and you
certainly want to make best use of their time.” Intelligent scheduling, skill matching, parts availability
verification, route optimization, and combining of tasks provides great opportunity for optimized
utilization of technician’s time and capability. Furthermore, emergency calls and equipment swaps
always have a disruptive effect on dealers’ and customers’ operations, and come at a high cost.
Reducing those through planned maintenance or repair, and moving load from peak to off-peak
times, contributes to customer satisfaction and improved efficiency. By providing the technician
with the right information about the customer and upcoming service, technicians can often
combine tasks, and save on the total number of trips required. Intelligent scheduling tools are a
great aid for service desks also. Moving from an on-the-wall service board, to an electronic
scheduling solution helps improve service desk productivity and effectiveness, whilst maximizing
productive time spent in advising customers.
White PaperService Excellence
e-Emphasys Technologies Inc. 2501 Weston Parkway
Suite 101, Cary, NC 27513
T: 919 657 6565 F: 919 657 0773 E: [email protected]
www.e-emphasys.com
~ Service Order Prioritization
Service orders should be prioritized, not only based on customer need, but also on the value of the
customer, and the service level that he has paid for. Nobody wants to leave a customer in need, but
knowledge of the contracted service agreement can allow company representatives to properly
prioritize limited resources to the appropriate customer. Customers that continually request
urgent responses outside of their service levels can be targeted for an upgrade to their service
plan, to generate more income for the company. Any service calls that are trending towards an SLA
violation or customer service failure should be alerted in advance, and the appropriate person
notified while there is still time to address the problem.
~ First Time Resolution Rate
By closing the call the first time, the number of service calls can be reduced, customer satisfaction
increased, and the call-to-cash cycle shortened. Fixing the problem, the first time requires the right
technician, with the right knowledge, the right parts, the right tools, the right customer data, and
the right equipment information in hand. By having pre-defined job templates for problems,
outlining the appropriate actions, tools and parts required to make the correction, service
technicians can show up prepared to get the job done right. Online visibility to the equipment, the
service history, and the call history, enables the technician to accurately and quickly diagnose, and
resolve the issue. Closing the call means customer sign-off, invoice release and expedited cash
collection.
~ Technician Productivity
The service technician is critical not only to resolving customer problems, but also to maintaining
service history, and reporting time and material information for billing. Reducing the amount of
time spent on paperwork through automation, enables the technician to spend more time on the
job, reducing employee expenses from overtime, and hiring additional technicians. Mobile
technology and self-service capabilities can significantly reduce the air time technicians spend
with the service desk, thus freeing up time on both sides. Keeping technicians updated of schedule
changes in real-time, helps develop and maintain a responsive, productive and nimble service
organization.
White PaperService Excellence
e-Emphasys Technologies Inc. 2501 Weston Parkway
Suite 101, Cary, NC 27513
T: 919 657 6565 F: 919 657 0773 E: [email protected]
www.e-emphasys.com
~ Source of Opportunities
Companies with service personnel trained and equipped to spot sales opportunities can add a
significant new source of revenue. Service desks and field technicians having visibility to contract
expirations, upgrade availability, promotions, and complementary attachments or supplies, can
increase customer satisfaction as well as sales revenue. Up-front notification of potential
opportunities will enable service personnel to look beyond the mere servicing of equipment.
Modern business systems can further optimize the capturing and timely follow-up of
opportunities by the sales department. The most expensive part of service may be sending a
technician; any additional work will come as profit.
~ Call-to-Cash
Perhaps one of the best ways to increase the profitability of services work, is to enable the service
technician to create an invoice on the spot, starting the payment cycle immediately. Equipment
dealers tend to sit on large numbers of open service orders. Invoice cycles of 30-60 days after
service order completion are fairly common, with obvious cash flow effect. In addition to being
paid earlier, the service technician can get approval at the time of the service. Part numbers, time
and expenses are much more accurately reported when captured quickly. To generate an accurate
invoice in the field requires online access to contract, warranty, service history, call history, and
customer information. Leaving customer premises with an approved invoice prevents errors,
disputes and credits, and impacts cash flow positively. Creating an inaccurate invoice, however,
may be worse than delaying the invoice. Modern service applications fully automate this process,
expediting the process and minimizing efforts required by technicians.
~ Revenue Leaks
Revenue leaks occur when customers are not billed for services they should pay for. The goal is to
give the customer everything he is entitled to, at the same time invoicing everything the dealer is
eligible for, thus leaving money on the table. Due to fragmentation of information, paper-based
processes, and time delays, many dealers face revenue leaks for expenses which go unreported
and / or are not billed for. Revenue leakage is difficult to identify after the fact that it usually arises
in small but frequent occurrences, and requires access to detailed history and account knowledge.
Similarly, supplier warranty information must be readily accessible, integrated and easy to
understand, in order to track returns and refunds. A systematic approach and supporting business
solution can provide significant benefit in recouping out-of-pocket expenses, and lost revenues by
providing visibility, and eliminating guess work.
White PaperService Excellence
e-Emphasys Technologies Inc. 2501 Weston Parkway
Suite 101, Cary, NC 27513
T: 919 657 6565 F: 919 657 0773 E: [email protected]
www.e-emphasys.com
~ Customer Relationship
Customer satisfaction is extremely important to building long-term relationships. Moreover,
repeat business usually generates greater profitability, due to the cost involved in acquiring a new
customer. By enhancing the service offering with preventive maintenance, remote equipment
monitoring, and failure analysis, dealerships can do more to provide customers with superior
equipment availability, reliability and performance. Moving from a break / fix relationship to the
earned status of trusted advisor, and value-added service provider, oftentimes represents a ticket
to future business.
~ Lead Generation
Many dealerships have professionalized to the point where they are running, or have the desire to
run target market campaigns for lead generation. The critical element for successful marketing
campaigns – which tends to be missing at most dealerships – is a customer database with
structured and quality information. Leveraging your service organization by having it collected,
and report fleet related information (size, mix, brands, age, life-cycle cost, maintenance history) as
part of your regular duties, helps your organization build the customer intelligence necessary for
running highly effective and targeted campaigns.
~ Proactive Management
Through increased visibility into the service business, dealerships can gain better control, find
bottle-necks, and make better management decisions. Today, most dealer organizations rely on
reports that show history after the fact. With better information and business intelligence tools,
your management team becomes more proactive through alerts, real-time information visibility,
trend analysis, and key performance indicators. With better grip on your business, your
management team is in a better position to control costs, and improve top-line performance,
whilst making a bottom-line difference.
White PaperService Excellence
e-Emphasys Technologies Inc. 2501 Weston Parkway
Suite 101, Cary, NC 27513
T: 919 657 6565 F: 919 657 0773 E: [email protected]
www.e-emphasys.com
For many dealership organizations, the above best practices represent an excellent way of
evaluating and improving the existing service processes. Successful implementation of these best
practices may require adoption of modern business software, tailored to the needs of the service
business and equipment industry.
e-Emphasys is the most comprehensive and modern Dealership Business System (DBS) in the
market today, with extensive equipment service management capabilities. e-Emphasys enables
forward-looking dealerships to re-invent their service organization, and transform it into a
strategic element of their business.
e-Emphasys provides your service organization with a powerful infrastructure, to position well for
the future, and drive bottom-line results:
n Lower service costs and increase service-driven sales
n Improve first-time fix rates and increase customer satisfaction
n Enhance field service visibility and reduce unnecessary inventory
n Improve business processes and enable better decision-making
n Improve employee satisfaction and retain critical service knowledge
For more information on the e-Emphasys DMS, please visit: www.e-Emphasys.com
Bottom-line
White PaperService Excellence
e-Emphasys Technologies Inc. 2501 Weston Parkway
Suite 101, Cary, NC 27513
T: 919 657 6565 F: 919 657 0773 E: [email protected]
www.e-emphasys.com
e-Emphasys is the first, comprehensive Dealership Business System for modern and professional
Equipment Distributors and rental companies. It is based on a proven and flexible Enterprise
Resource Planning foundation.
Modern and professional Equipment Dealerships have outgrown the capabilities of COBOL-
based, green-screen systems. Today’s business requires nimble, integrated and intelligent
Dealership Business Systems. Customers are demanding, and competition is tough. Dealer
organizations are as flexible and intelligent as their systems enable them to be.
In e-Emphasys, dealerships model their organizations and business processes, unique to their
situation–without force-fitting. The dealership employees collaborate by sharing activities and
information. e-Emphasys obliterates islands of information, unnecessary paperwork and
redundant data entry through automation. It provides seamless integration with the OEM, and an
accessible portal for instant and round-the-clock ordering and inquiring. e-Emphasys enables
informed decisions that can be taken faster, and with more impact. In today’s equipment industry,
the fittest survive, but the smartest thrive!
e-Emphasys Technologies Inc. is a global provider of enterprise solutions, serving customers
worldwide, ranging from 25 to 2000 users. Strategic focus at e-Emphasys is on its industry-specific
ERP System, developed exclusively for Equipment Dealers.
e-Emphasys has spent more than 3000 man-years in research and development. The company
employs more than 250 highly-qualified professionals, and has a close partnership with Infor
Global. e-Emphasys offices are located in Cary NC (USA), Tokyo (Japan), Mumbai & Bangalore
(India), and Apeldoorn (The Netherlands).
About e-Emphasys Technologies
White PaperService Excellence
e-Emphasys Technologies Inc. 2501 Weston Parkway
Suite 101, Cary, NC 27513
T: 919 657 6565 F: 919 657 0773 E: [email protected]
www.e-emphasys.com