Hey everyone, welcome back to field force Friday.

I’m Adam Bartos and today I’ll be talking

about how to create a better dealer network.

Last week, Joanna Rotter talked about Saas, or Software as a Service. That was our first edition of
field force Friday, and this is our episode II, so be sure to tune in every Friday for these industry
leading, technology whiteboard Fridays that we do as related to the field service industry.

So as I said, today we’ll be talking about managing dealer networks. This is going to be a topic
that’s interesting to both OEM’s, or original equipment manufacturers, and dealers. Part of
why we’re doing this today, two weeks ago we were at AED Summit in Orlando. What AED
Summit is, is it’s an industry leading trade show where both manufactures and dealers come
together to discuss best practices, priorities, trying to build their dealer networks … there’s a lot
of great thought leadership going on down there, and we had a lot of great conversations with both
dealers and manufacturers about what is it they’re looking to do, what are their to-dos for 2015,
what are some of their priorities. We took away a lot of great conversations, and this is what
we’re going to be covering today. Some of what we took away from that show, some about how
you can do that better, both as a dealer and a manufacturer.

Okay, so what’s the big deal? It’s no secret that manufactures of heavy or complex equipment
have super robust processes, technical products, very unique aspects of their business that they
need to manage. And those dealers need to manager those for the manufacturer as well. They ’re
representing the manufacturer at the consumer level, and they’re doing inspections, repair,
installations… all sorts of different service processes at the customer level, that is of interest to the
original equipment manufacturer. When you have the manufacturer creating the equipment,
manufacturing the equipment, and those dealers are selling that to your end users, there’s a gap
here in the service process. So you have your manufacturer who’s selling the product to the
dealers, but then the dealers are selling it to those end users, and they’re managing the service
contracts, warranties, parts, installations, preventive maintenance… and so between the end user at
the bottom and the manufacturer at the top, there’s a gap. That gap is the dealer network. In our
opinion, the manufacturer and the dealer need to be perfectly in sync. They need to be on the same
page, and they need to be working together on how to establish those processes, because service is
a major part of business for manufacturers, and for dealers. It’s a major revenue generator, not
just sales, but preventive maintenance and future service contracts. When it’s such a big
component of the bottom line, these two need to be in sync. We’ll talk about why.

Now, think of that in maybe a more simplistic business model: professional sports. If you have a
major league baseball team, and for this example we’ll say the Milwaukee Brewers, there’s
minor league teams that filter below them. Obviously much different than a manufacturer/dealer
relationship. But, we have the Milwaukee Brewers here at the top… and that’s a baseball… and
they have their AAA / AA, teams below them. Essentially, those teams are building processes to
get to the major leagues. So, coaching, training, rehabilitation, how they handle injuries … you
could even argue it’s a service-based model. They’re working with the players to coach them
up to the major league level. If our AA team is teaching players to swing at the first pitch every
time, or be aggressive on the base paths, and then our AAA team is doing the exact opposite …
watch the first pitch every time, take a couple balls, be careful and cautious on the base paths.
Then we get up to the major league level and they’re coaching in an entirely different way. They
want to be aggressive on the base paths, but they want to be smart at the plate. All of a sudden,
you’re filling your pipeline and your talent with disjointed processes, with disjointed coaching.
Again, very different business model than heavy equipment obviously, but the point is the same.
You have your customers who all have a similar need. They have service, repair, installations, and
you’re selling the same equipment so why should those processes be different? If all of your
dealers are on the same page down here, and reporting that up to the manufacturer, you can
streamline processes, you can do things a lot better, and that creates a better experience for the
consumer at the bottom.

So, I’m talking about baseball, I’m talking about sports… you’re probably wondering if
there’s a point to all of this? Yes, there’s a point. What we want to arrive at is the key to
building an efficient dealer network is consistency. The synchronization across the manufactures
and the dealers. You’re probably asking yourself, “Okay, well I’m a dealer and my business is
much different than the manufacturer… I’m actually selling to the end user.” And if you’re a
manufacturer you’re probably thinking to yourself, “Yeah that’s easy to say, but my business
is way different than the dealer level, so how can we work hand in hand?”

That’s a good point; you guys have different processes and different needs. But, the beauty of
that is synchronizing those systems and processes can solve problems for both organizations, and
that’s what we’re going to talk about now.

What I wan to review is the top 5 benefits from our perspective of creating consistency within
your dealer network. To managing those dealer networks, and the benefits that could help both the
manufacturer and the dealer.

Number 1, increased visibility and reporting. Now, at the dealer level, you want to know
information about your service process, about lead time, about pipeline of service orders. When
are we scheduling our preventive maintenance calls? All of that information, all of that data as it
relates to your customer and your equipment in the field is very valuable. You want to know what
you have in the pipeline, what you have to do, when you have to send your people out, and all of
those true “service based” processes are something that would really benefit the dealer, not
necessarily the manufacturer.

The manufacturer on the other hand is interested in reporting. Where are our best processes, where
is our best opportunity to improve, where are we getting the most revenue. Reporting from the
dealer level is of great interest to the manufacturer because they know where that revenue is
coming from. On the dealer level, it’s that visibility to managing the service process so you can
streamline and do that more efficiently, and use the system to create those benefits. One system
across both can align those two interests and report to both the dealer and manufacturer.

Point number 2, building strong dealer networks. Two weeks ago as I mentioned, we were at AED
Summit, and one thing that stood above all that we found manufacturers were doing there was
building dealer networks. Why? Because they’re trying to increase sales. More dealers, more
feet on the ground, more sales, more revenue. This is a way that you can do that, very cleanly and
very efficiently. If you’re streamlining your systems at the manufacturer level, and you’re
trying to build a dealer network, what sounds better? I meet a distributor and dealer at this trade
show, and we’ll take two years to get them up and running on our systems. Or, how about we
just give them our pre-integrated, already set up service system and they can manage that process
from the get-go. It’s much cleaner, much more agile, and allows you to grow at a much quicker
pace. Think of that in terms of McDonald’s. You might be wondering why McDonald’s
restaurants are sprouting up on every street corner every two weeks? That’s why. They can just
grow with set processes and it works for them.

Number 3, intellectual resources. You have a dealer network, I’m sure you attend different dealer
summits and different networking programs with your fellow dealers. As a dealer, that network is
one of your biggest assets. You know what areas your product sells best into, you can co-market
on things, you really can share thought leadership across your dealers. Same principle can be
applied to software you’re using. If everyone is on the same service software, and you’re
mirroring each other’s service processes, you can create that consistency of an experience to the
customer/end user, and make it a much cleaner process for you and other peers as dealers. If
you’re talking about the same system and know what each other is using, you’re able to discuss
best practices… maybe find ways to even better improve your service process. Sharing that
common ground would benefit you as a network, and so that’ s of interest to the dealers and not
just the manufacturers.

Another big one, our number 4 point, is system integration. If you have an accounting system or a
CRM system, you have likely spent some time putting data in, integrating with other systems,
matching it with your manufacturer. If you’re the manufacturer, it’s more than likely you have
some type of dealer management system. Those are already up and running and you’re
committed to those and you’ve spent a lot of capital on those. There’s a lot of training, there
are a lot of things where you have no interest in mixing that up or changing that up. Consistency
of systems at the dealer and manufacturer level makes sure that those integration really only need
to be done once. If you have a common system in your network, for example an accounting
system, and you have a service partner come on and integrate with that one system, all of your
dealers benefit from that one integration. You don’t have to recreate the wheel every time a new
dealer comes on. It’s simple. The work is already done… all you need to do is customize to their
location and their dealership, and you’re up and running.

Fifth, a best in breed partner. If you are, as a dealer and manufacturer, partnering with a software
provider, this gives you an opportunity to really partner with someone who will develop and
understanding for your business. Think of this in terms of this map that we’re showing. You have
the manufacturer, who will be looking for a service software that they can implement across their
entire dealer network. The process flow will be dealer number one adopts it, and your software
with ask what your business is, who are your customers, give us some custom forms and
inspection processes we can map, and they develop a competency for that first dealer. Number two
hops on and they’re getting pretty good at this. They’re rolling it out, dealer two has a couple
of unique processes to their location, but a lot of the work was already done with dealer number
one. They can build on that with dealer two, implement quickly, and by the time dealers three and
four hop on, that software provider has really become and expert on your business model. They
can just roll it out without asking the same questions, without too many extra pain points. Three
and four are benefiting from the original roll out and the manufacturer explaining that business
model. So, having that one partner that truly understands your business rather than having four
different partners, all who are trying to learn your business, maybe not as well as they should. That
can save you a lot of heartburn down the road just by having everyone on the page, and making
sure you have one, strong, best-in-breed service partner who truly understands your complex
business.

So where are we going with all of this? I mentioned before, you’ve probably heard the term,
“recreating the wheel.” I know you have. If you’re doing that, which you probably are as a
manufacturer or dealer network… stop. Don’t do it. It’s causing you more problems than it’s
worth. Have one of those best in breed partners work with you, streamline your dealer network,
get everyone on the same page so your consumer experience is the same across the business. That
will work its way up to the manufacturer, increase sales, revenue, service revenue, and all of these
things benefit the entire organization.

Consistency is the key word for today. You want to make sure everyone is on the same page, you
have a network of strong dealers you work with already. Why not enhance that with your service
software and your service processes?

That’s all I have for today. Thanks for joining us this Friday. Next week, we’ll be meeting with
Josh Kasombo, and he’ll be doing our third edition of field force Friday. Once again thanks for
being here, we look forward to talking to you again, and have a great weekend!

How to Build an Effective Dealer Service Network - Field Force Friday by Adam Bartos