Good morning, everybody. This is Bill Mays, and I am pleased to be here with you on this Are You Ready for a PSSR webinar brought to you by AED and the AED Foundation. I see we have some people on here with us. That's really good to have a live audience, and so I appreciate you showing up. If you have any questions, feel free to just pop them in in the chat box, and I will see them. And so I've got me, and I've got my technical advisor here, not here with me but remotely. Katie is online to make sure that everything stays working, functioning as we need it to do. So what we're going to do today, I've got one hour here to be with you, and we're going to talk about PSSRs, parts and service sales representatives. And I've worked with dealers for many years on this, and I've seen a lot of programs, and there are programs that succeed, and there are programs that don't succeed. And there are reasons that this happens that we have defined, and we can talk about this, and that's what I want to talk about today. Maybe you're ready for a PSSR. Maybe you're not. Maybe you're thinking about one. Maybe you have one right now, and you're trying to see if you can make it better. So what we're going to do today is we're going to talk about if a PSSR is right for your dealership. I'm going to share some success stories with you because it's important to know that this does work and has worked for other dealers. I'm going to share a potential return on investment that we've had out of a study that we did, and I'm going to talk to you about how you track and measure the success of your program, and finally give you a game plan for hiring, onboarding, training, and managing your PSSR for success. The bottom line of why would you want to have a PSSR is because it's going to increase your parts sales and your service sales. If you want a customer service job, a customer service representative, if you want something to help you with your overall customer satisfaction, a PSSR can do that. But essentially the bottom line of the job is to make it pay for itself by increasing parts and service sales. Historically, about 50% of the parts and service sales goes to other than the selling dealer of the product, of the new product, after the warranty expires. The customer obviously stays very low during the warranty period, but after the warranty is over, they go elsewhere for their parts and service. Maybe they have someone else they do it with, maybe they have their own technicians, and this is both the ag and the construction industry I've found, so it works in both ways. Parts and service carry the highest margins. This is a no-brainer, but when you look at it, parts should be pulling about a 30% to 35% gross margin for you. Service on the labor side should be getting between a 65% and 70% gross margin. Well, what do your whole goods get? Probably about a 10%, anywhere from 6% to 12%, 13%, depending on the product, the size, the competitiveness, depending on your trades, depending on what the washout is, and unless you're doing a washout and most dealers take three or four deals before a machine washes out completely, you really don't know what your margin on the whole goods was anyway. So it's very important that you control and manage and grow your parts and service sales so that you generate as much gross margin as you can out of that, and then that will drive your absorption. We've talked a lot about absorption over the years. You've heard it a lot. I am surprised to hear that still in a lot of my seminars, dealers don't know how to calculate absorption, so I'm going to real quickly grab your pencil and write this down. This is the generic calculation for absorption. Absorption is gross margin from your parts sales plus the gross margin from your service sales divided by the total expenses for the entire dealership, including the interest expense. Why do I bother to tell you this? Because we talk about it a lot, and that's one of the key benefits of having a PSSR, is to help you cover your absorption. Then, of course, is the margin you get from parts and service, and in a downturn, it can help you survive the downturn. In a strong economy, it can give you additional profit so that you can be more aggressive and go after some of the dealers that you might otherwise not have attacked, especially if you're going after conquest customers, those people that go somewhere else. In the end, better parts and service sales, better parts and service support drives customer loyalty and increases whole goods sales. So, an indirect benefit of having a PSSR is additional whole goods sales. I am not including those in this test that we did, and I'm going to start with the end in mind. Stephen R. Covey says that, and it's important to know where we're going, and I want to show you in this program what we did to prove the concept again and see what factors drove the success or hindered the success. So, I worked with some dealers over the last 18 months, and it was just three dealers, but worked with these dealers closely. They wanted to have a viable PSSR program. Some of them had tried PSSRs in the past, but were not what they'd call wildly successful with them. So, what we did is we structured a program, and the way I like to work with PSSRs is I think you need to be working with the PSSR not to just generically go after parts and service business, but trying to grow the business from a group of customers. This is a relationship sales business that we're in. We're in a relationship sales industry. Construction is relationships. So, what we did is we worked on 50 key customers. These are customers that the majority of them already had some of the equipment from the selling dealer, and they wanted to grow the business from these customers. These were customers that they knew they were not getting enough of their business from parts and service, and so they wanted to grow that business, take it back from wherever the customer is doing it. So, when we did that, and focusing on these key customers, there's things that we wanted. We wanted daily call reports, activity reports. I know this is a problem when you have a salesperson, but this is part of the discipline that you have to put. It's not so much that you can look over their shoulder, it's that what I found in my experience is salespeople tend not to have the discipline that it takes to be as successful as they can be. They've got social skills, they've got closing skills, they've got certain skill sets that allows them to be successful, but not in the manner they could be. So, we expected, in fact, we demanded daily call reports. Now, this call report, we'll talk about it in a minute, is not onerous. It is simple. It is basic. It is just to mainly help the PSSR plan their next calls. What did I talk about on my last call? I don't want to forget the discussions that we were having, because when I show up and they say they talk about what we talked about last time and I don't remember it, that will not be good. We also wanted to know about that each key account was visited at least monthly. This is difficult to do. You think 50 customers a month, that's not a big deal, right? Well, think about how many calls you've got. You only have 1,200 calls you can make in a year. Most people don't bother to calculate that. If you take five face-to-face calls, which is what I'm talking about, a day, which is about average, that's 25 a week, that's 100 a month, that's 1,200 a year. If it's 100 a month and I'm going to call on 50 key customers, I'm going to lose half of my calls. It's important that you monitor and manage these customers and these calls. We specifically wanted to make sure they were working to grow the parts and service sales. Yes, they do need to help out on customer satisfaction issues, problems, and the like, but they're not there to run paperwork for the sales department. They're there to grow parts and service sales. When we wanted to manage this, the measure of success, we would compare this group of customers to the sales activity to the non-target customers. That means every other customer that the dealership was selling to. Along with that, we said, okay, we need to train these people. Let's make sure that they're not just calling on people. Let's make sure that they're calling and providing value. So we defined a clearly defined training plan. This included both soft and product skills. We included monthly reporting, which I just talked about on the daily side, but for sales and activities. We wanted to have a monthly report. This helps you be accountable, accountable to your specific activities and accountable to your goals. This documented plan for each month that we would have is not just telling what we did. We wanted a documented plan for the coming month. We would build this on the customer profile with model serial number, the number of hours on each machine. You should have this already in your dealer database. Most dealers don't. Most dealers have it for some customers but not for others. Some dealers are looking at a CLM, customer relationship management system. Other dealers are not. It's important as you monitor and manage a customer base that you know at least what they own and at least the serial number and hours on the machine. This helps you drive the calls for the future, not just for hold goods, when do they need to trade something in, but especially for parts and service, when do they likely need maintenance or when are they approaching a point in the machine's technology that is going to need a repair. We wanted them to perform machine inspections. Machine inspections drive sales. You'll find that in the PSSR, parts and service sales representative programs, you should be working through the sales department, driving sales growth in the service department. That will help your hold goods sales department but driving it through the service department creates sales. It's easier to sell service jobs than it is to sell parts. The easiest way to sell service jobs is to touch the machines, perform inspections, provide reports. So this was a big part of the program. Then we had all the dealers wanting to grow their bulk fluid sales and get their bulk oil programs going, so obviously we were having them talk about this too. It was an actively managed program, so we had weekly meetings with monthly reviews and reports on the performance. I'll talk about this in a little bit, but that turned out to be the most important factor in determining the success of the program. You need to be ready to coach your PSSR and travel with the PSSR regularly. This is going to help you as a manager in understanding the customers, understanding what the PSSR is up against, understanding the needs of your dealer, that the customers have in your dealership. That is just going to help the PSSR develop the discipline for calling on the customers like you're supposed to for adding value. What you don't want to have happen is the PSSR show up and say, do you need anything? In my seminars, that's the first thing we do. We put a do you need anything on the wall and then put a big X to it. Never say that. It's I'm here to provide value, I'm here to talk about this. Obviously, you can close with, is there anything else I can help you with? But to show up and your lead is to do you need anything, the answer for that is no, see you next time. Let's look at the results. What you're seeing here is you're seeing the sales for part sales to this group of customers. Now, the blue customers, the blue line are the 50 target customers. The red line are the non-target customers for the three dealerships. The level line is the average sales for the past three years to define a baseline for how successful were we. You can see that the blue line, sales to the target customers, typically land above the average sales for the three-year period. Only one month in June did it drop below. At the end of the year, they were up 33% overall. The other customers for these same dealers were up only 1% overall at the end of the year. Looking at service sales, again, comparing it to the average sales for the three dealers, comparing the 50 target customers to the non-target customers. We see that the target customers, the sales, service sales to the target customers, at the end of the year increased 12%. But the non-target customers decreased 21% over the same period. Very interesting. So let's look at this, just looking at the numbers, and at the percentage point difference. Not what the percentage difference was, but the points. On the parts sales, the parts target customers grew 33%. The parts to the non-target customers grew 1%. That's a 32 point difference. On service, the target customers grew 12%. The non-target customers actually fell off 21%. That is a 33 point difference. So it turns out that the difference in points was essentially the same for both parts and for service. Here, some people see graphically better than they see in numbers, and so I simply graphed this. The left graph is the graph of the parts sales. The right two are the service sales. You see that the target customers' parts sales grew 33%. The non-target parts sales only grew 1%. That's a 32 point difference. On the right side, the service sales to the target customers grew 12%. The non-target customers fell off 21%. That's a 33 point difference. So it's essentially the same difference in both of them. Just so you can see the numbers that are behind these, now I know it's almost impossible to read these. They're very small. But on the left side, we've got this is the parts slide. We've got the target customers, and on the right side, the non-target customers. So let me hit these two buttons here, and you'll see what that bottom right number shows, and that is the numbers that we came up with on those other two slides, the 1% growth versus the 33% growth. This just shows the month-to-month-to-month sales, so you can see the numbers behind it. This is where the numbers came from. The graph in the middle is actually against the goal, not the average. So you can see that we actually had goals here as well. And on the service side, you see that the non-target fell off 21%. That's my 79%, and the target customers grew the 12%. So it obviously was very successful, meaning we grew – we had a 33% pitch point difference in both parts and service sales on those customers where we were calling on them with PSSRs. Would this have been the same for the other customers? Obviously we don't know that. We won't know that until next year because my punchline at the end is that these dealers are expanding their programs, so adding PSSRs to start calling on some of these other customers, the next tier of 50 customers, to see if they can get the same kind of success out of those customers. This is a graph of the return on investment. Now I just wanted to show you here essentially what I'd have you do to justify this financially to see if this growth in sales was enough to justify the cost because this is an investment. Now as you're adding a person, you're adding expense, right? On the left side here, this column, it talks about the costs, which would be expenses, and I see at the top in the yellow, that is the salary expense for the PSSRs, for the three PSSRs. You come below that and you see that we had a training expense, we had the base payroll, we had the benefits, which did not include any bonuses. I've got commissions in here for as they grow sales more, we would put commissions in. I've got total costs, your vehicle allowance, your phone, the other things that you would have in your computer, your other tools. You want to do this so that you have your total budgeted investment for the program. What this does is it comes up with a total investment. Now I have a pilot contribution. What we did is we had the dealers put a reserve from the sales department and the IT departments actually into a reserve that they would use to fund the program just because it was a pilot program that we wanted to see how it worked out so they did not expect the program to stand on its own in year one. At the end of the day, we had a total salary commission of $124,000 and these other costs, which came to $167,000. On the right side, you see we had part sales last year, current year, and the growth, service sales last and current and the growth, and then the gross margin from each of those. At the top, we have the margin only on the growth. We can compare the margin on the growth to the cost, and this was from the 50 customers, and then you see when you compare that, what was our return on investment? Our return on investment was 64% after all was said and done. That is a good vote, or that's a very good return on investment. Now, one of the reasons it was 64% in the first year was because we had a funding pool. Take away the funding pool, and we still had a 6% net return on investment in the program on year one. What I've seen is year two typically is more successful than year one, and so I'm expecting that to become more like the 64% in year two. So this is how you would do it, so you can manage the growth, manage the return on investment, and justify the program, because otherwise, when it comes time to cut expenses, if you can't show that this PSSR is making you money and covering all their costs, this can become one of the places that you lose the program. Other indicators of success are that the test dealers are expanding their PSSR programs. At the end of the day, after all is said and done, they're adding PSSRs to the other stores within their ownership groups, because these are multi-store dealerships, and so they only did this at one store, so they actually have a top tier of 50 customers for their other stores that they want to take this to. They're confident in the ability to drive sales growth with PSSRs in their other stores as well. These are specific quotes from the dealers, we're excited with the parts sales results we're getting, and the service sales are accelerating as well. Another quote, we believe in this program and will continue to add more PSSRs to drive parts and service growth. This is the kind of benefit that these dealers are seeing and the kind of excitement that we look for in these programs. So what did we learn out of this program? I learned that you need to set strict deadlines to achieve your incentives. Now, this is, what I call this a vow. Now, who wouldn't think this? But what I find is when you get into the business of doing business, the day-to-day activities get in the way. When I teach time management, this is always the thing that gets in the way is, yeah, Bill, that all sounds good, but I've got customers, but I've got a boss, but I've got a sales department, but I've got all these demands on my time. Yeah, that's the reality of it. The fact is that if you don't spend time doing the job that you're hired to do, that job won't get done and you don't justify your position. Therefore, it's important that you set these strict deadlines to achieve your incentives and your goals and your plans. And you have to have consequences for missing them. It's not excuses that, well, I had to run out and take care of this customer. Yeah. But let's find out, was that your job? And if you did do that, then now we've got to reset your priorities so that you can do both and do it adequately for the number of customers that we're going to assign to you. Lesson one, number two, PSSR turnover is going to happen. I hate to say it, but it's going to happen. Many PSSRs want to become whole goods salespeople, and sadly enough, we typically rob from this position to allow them to become whole goods salespeople as they become successful salespersons. You have to treat this as a temporary setback and don't let it derail your program. We'll talk about this in a little bit. You want to learn more about what's desired in a candidate before you go hire the candidate. Figure out what you want them to do in this program at your dealership before you go hire this person. Otherwise, you're going to have the turnover. And then make sure you hire the right candidate. We'll talk about that in a minute. And the program requires active monitoring and management. I'm going to spend some time on this in a minute because this turns out to be the most critical part. If you don't actively monitor and manage this program, it will derail itself because the person will tend to run toward the path of least resistance and not go duck hunting where the ducks are. It's important that you automate as much as possible on the reporting. Make it easy. Let them dictate reports. Make them short. Let them feed into a CRM system. What we can do to automate the reporting will make it easier to get the reporting. If it's hard to do, it won't get done. And detailed reporting is a necessity. Monthly data is going to drive the success of the program. It's going to let you know if you need to tweak it. It's going to let you know if you've got customers that are not responding. And maybe you need to reevaluate the group of customers that you started with. You need to reevaluate whether these programs that you're putting in place are being successful or not. So you need the monthly data. And you need to travel with a PSSR. It's important to coach them. It's important to monitor their activities, to see how they're going about their activities, to see if they're planning their week, if they're planning their day, if they're knowing who they're going to be calling on. If you don't ride with them, they can spin a yarn that sounds really good. But as you're riding with them, you're seeing how they are preparing. You're seeing how they're thinking about the next call. You're seeing how they're bringing up what they did the last time to refresh themselves. You're seeing how they set their call schedule. And you can coach them. You can mentor them. If they get stuck on how to make a presentation or how to discuss something or if something comes up in front of the customer, you can step in and you can take over the call. And you can show them how to question a customer, how to close a customer, how to find out the hot buttons of the customer. You can show them, lead by example. It's one thing to do dry runs in a dealership, but to do it in front of the customer, show them that it's not scary. Show them how to do it is the best way to train. And then let them do it themselves. Start with the right candidate. These are some of the items that you need to be looking for in a PSSR. They have a legal interest. They don't need to be technicians. If they are a technician or were a technician, it will help them with their credibility. But it might get in the way because they don't want to put down their toolkit. And I've seen too many PSSRs jump in in the name of customer service and do a repair that should have come into the shop. Yes. If it's a five-minute question or 15 or 20 or even 30 minutes and they can build in there, they should be doing the inspections anyway which may involve getting a little bit dirty. But they don't need to be technicians. But if they don't understand the technical parts of the machine, they will not have the credibility that they need to make the recommendations for what the customer needs to do to keep that machine running. It's not just to bring the machine in. It's what the customer needs to do to the machine at that point in its life when the customer does it themselves or lets you do it. If the customer does it themselves, then the PSSR can sell them the parts. But they can help the customer identify those failure points and those critical decision times when they need to do something. Product knowledge is essential. Of the overall product, it's very difficult to know everything, almost impossible, but life is an open book test. If they have a good product background, a working internet, and a good knowledge of how to navigate it, they can get answers quickly to most things that a customer is going to want to know. It's important that they understand the product. It's important that they have selling skills. Selling is a science and an art. There are ways to go about selling. There's ways to ask questions. There's ways to find out what the customer needs. They need to understand these. There's ways to build relationships. They need to understand this. People skills are very important. People skills are right there with selling skills, and it's probably the most important selling skill. It's empathy for people. It's emotional intelligence, as they call it today, which is just old-fashioned people skills. They need to have these. You can test for these. You can have questions for these as you interview them. You can talk to other people. They need to be organized. They need to have time management skills. It's important. If they don't, the territory will run them. They will spend their time with only a few customers and not be working with the customer base they need to be working with to get the sales. They need to have a sense of urgency. Urgency. I've got to get it done. I've got to get it done now. Tomorrow's not good enough. If a customer asks them a question that they don't know, they need to investigate it. They say, I'll get back to you. Get back to you when? Give me 24 hours, and then call back in two. The customer's expecting a call by sometime the next day, and you get back to them the same day. It makes a difference. Have that sense of urgency. They've got to be competitive. Yes, this is a customer service type of job and a relationship-building job, but there's a competitiveness to it. If they're not selling this, someone else is. We're not selling things the customer doesn't need. We're selling things the customer needs and is going to buy somewhere, so you've got to want the deal. You've got to want to have that control over the customer's fleet so that you can help them manage the cost of that fleet. That keeps them coming back to you. They need to be a self-starter. If you have to get them out of bed in the morning or push them out the door of the dealership to get them to go call on customers, they're not right for the job. They've got to start themselves. They've got to have common sense. Now, everybody makes mistakes, but you don't want to be making the same mistake over and over again. They've got to be able to think. They've got to have a positive attitude. This is one of the most important things. As they go into the day, they've got to know that the day holds benefits for them, that this is going to be a good day. This next call is going to be a good call. I'm happy with my job. I'm happy to be helping my customers. I am pleased to be here. I'm happy with my company I work for. I'm happy to be working in this industry where we're actually building this infrastructure and making the world a better place. I know that sounds kind of ridiculous to say, but this is kind of where you have to build yourself up and have this attitude. Have this attitude. Empathy for other people. Not sympathy. Empathy. Be able to put yourself in their shoes and then understand their issues from their point of view. That allows you to decide if you've got something that you can help them with or not. And at the end, passion. They've got to have passion for the business. They've got to have passion for helping people. They've got to have passion for life. If they don't have passion, they're in the wrong place. You may not be able to read this, but this slide deck is online, and so you can download this and look at it offline. But have a job description. Here's the basic line one of a PSSR job description, and it says the primary purpose is to sell service labor and grow part sales for the dealership. That is line one. If that's not the case in your dealership, this isn't a PSSR. It's a customer service representative, and you need to have a different job description. So I'm talking about a selling position here. Also, to build customer relationships by traveling to customer locations, job sites, perform product activities on complete parts and service sales calls, address customer concerns, perform aftermarket product sales, promote them, furnish technical support. These are the kind of things, and customer profiling. These are the kind of things you want to have in the job description so that as the PSSR is defining their action plan, these are all things that you talk about. Below that, then you have the responsibilities specifically. Selling parts and service. What kind of parts and service? Perform the follow-up calls. This is how you want them to get with the whole goods sales department and make sure they go out and meet the customers after every new major whole goods delivery, making sure the machine performs properly, making sure the customer understands how to run the machine. They all say, oh, yeah, I've run these for years. If you've run the machine for years, you haven't run this one because they're all different now than they used to be. They're computer-controlled, and if you don't know how to start them, you may not even be able to start the machine anymore. Address customer concerns. Profile your customers. Participate in presentations, clinics, open houses. Work with the whole after-sales department in service calls. These are the kind of things that you want to add to this job description so that PSSR understands this is part of their job. On page two, you're going to have and everything else that we want you to do anyway, which means follow-up on problems. But lead with these sales because this is not a resolving problems job, okay? Yes, that's part of it, but if you've got them chasing too many problems and it's burning up too much of their time, then you've got other issues in your dealership that need to be addressed, not trying to put the horse back in the barn, okay? You need to do it before the horse escapes, before the horse gets out. You need to take care of the problems, scheduling the service department, bad scheduling of the technicians, reviews, warranty questions, parts not delivered on time, whatever. Those are other issues. They need to be fixed at the root source, not by a PSSR. And if a PSSR comes in complaining about one of those or explaining about one of those, don't just shut the door on them and say, ah, you're just whining. You need to pay attention and say, okay, what's the root cause? Let's solve it. Okay, let's jump into recruiting a little bit. Where is your candidate then? Probably within your organization. I like promoting from within. I like showing people that there's a career path. And that's something especially for millennials and the new generationers that you're going to be Gen Zers, you're going to have to show them a career path or they're not going to stay. And then I have to understand how long it's going to take me. So what's the career path? Let's look within. If not, if you don't have someone that you think is ready to have the skills I just talked about, do you have someone that calls on you? Maybe it's a competitor and they're not calling on you and you want to see if you can coax someone away from one of your competitors that's doing a good job. But maybe it's from a similar industry. There's someone calling on a fashion company or a lubricants company or one of the rental companies that's calling on customers and knows your customer base that is dealing with another product line and doesn't have the opportunity long term that you can offer them. So you want to make sure that you look for the right candidate before you go start interviewing and taking your time. And then who's responsible for this? Do you have someone in your dealership that should be always looking for the right kind of candidate? You should always be interviewing. You should always be networking. You should always be looking for candidates because turnover happens, not just in this job, during your dealership. Review the candidates. So when you start to get candidates and you start to do some interviews, make sure that you really get into reviewing who they are and reviewing them against that list I had. Put a check box, low, medium, high, against each one of those criteria that I wanted you to look at. Does this person exemplify this? Do they seem to have an idea or is this something they need to work on? So that you have a valid checklist to come back to because it becomes very difficult after you've talked to three, four, five people to start remembering exactly who was strong in what area. So as you do your interviews, have that checklist and make notes next to each one. Have a box next to each one. Check the resume facts and references. They're going to give you a resume. Check it out. Do your due diligence. Call the people. Ask questions. Now, with the hiring labs that there are today, it's very limited what people can tell you, but it's not limited. I mean, you've got to be careful what you ask. Obviously, in an interview, and this is not an interviewing session, there's things that you cannot ask. Learn what those are. Make sure you don't walk down that path because those are things that don't make a difference anyway. But make sure that you understand what you can ask and at least call people and say, was it someone you would hire back? Why did they leave? Would you hire them back? Conduct situational interviews. What's a situational interview? Have a test case of someone that you're working with right now or something that the PSSI that you've got brought in. I've got a customer that I'm wanting to set a maintenance contract to. I've got a customer that's got a bulldozer that's got 12,000 hours on it and it's got some, you know, what are you going to do to that and identify the issues here. Just set up some situations and see how they would deal with it. Or I've got a customer that's upset. This happened. How would you deal with this? Make them show you in front of you in real time how they would go about it. It's not going to be smooth and they're going to stumble a little bit but you can see how quickly they think, what kind of process they've got for putting their thoughts in a logical manner. It's going to really help. You don't have to be the best friend in an interview. To make it a little bit uncomfortable is a good thing because selling isn't always comfortable. Make a short list of candidates. Narrow it down. Once you see that someone's not going to make the cut, don't spend all that time with them. You'll need to get that short list. Conduct a formal behavioral profile assessment. What's that? That's any one of these tests that are available that identify the characteristics, the basic behavioral characteristics of a client, of a person, of you, of me, of whomever. A lot of the basic characteristics in our profile that allows us to work with people or how do we handle authority, how do we handle giving authority, how do we handle working with people, how do we handle giving instructions, taking instructions. This will help you identify if this person really is cut out for the job or not. If not, you can at least ask better questions in the follow-up interview. And then check with others in the dealership. Make sure that they feel the same way that you do. Compare the notes. Have a formal meeting to review the candidates and let people vote and then go with someone that's going to be able to work with all of the departments. Only after you do all that do you finally make the offer. Onboarding is extremely important. What is onboarding? Onboarding is that process that you should have for everybody in your dealership, every new hire. And that is how you bring them onboard. How do you teach them about the company? You've had the interview. You've talked to them about your vision statement and the kind of personality that you're looking for and the personality and culture of your company, but you really haven't gotten into where's the lockers and here's your vehicle and what's your responsibilities for your vehicle and when does your work start and end? There's a lot of things that they need to know about how to work for you. But the first thing is, would I want to work for me? If I were my candidate, would I want to work for me? And so this is something that you want to make sure you look at yourself as you bring them on so that you become a good leader because what we find out in the work and as you start reading wherever you're reading your articles, you find out that people don't lose bad jobs. They lose bad bosses. I've seen this over and over and over again. The jobs are difficult anyway. There are good points. There are bad points, but it's how the boss treats the employee that tends to drive the loyalty, the desire to go above and beyond, or the desire to just leave and say, I'm not going to be here. So you look at yourself through the candidate's eyes, make sure that you are the kind of boss that you want to work for. It doesn't mean that they are always right and you have to run over. A good boss sets limits. A good boss lets them know where they need to be and holds them accountable. It's just a good boss is fair. A good boss communicates. A good boss doesn't chew out. A good boss teaches. So it's important. I'm not talking about babysitting. I'm talking about being a legitimate leader. Good people have options. And if you don't start them right, they're going to bail quickly or they're going to start looking to leave. First impressions are extremely powerful. Extremely powerful. They're going to look at your dealership before you hire them. They're going to look at how clean it is. They're going to look at how organized it is. They're going to look at it from outside, how successful it looks. They're going to look at the display pads. What kind of machines are on them? Does it look like you're open for business? Does it look like you're there to sell? Yeah, you may be on the machinery road and all of the businesses may be somewhat run down, but you don't have to be run down too. You can still be the shiniest apple on the machinery road. You can still look like you're a successful business. It's important to do that. And you want to look at your dealership with their eyes. This also works for your customers too. Make sure you're walking into your dealership every day looking at it through your customer's eyes as though you've never seen your dealership before. You're pulling up at it for the very first time. Do you know where to go? If you're a parts customer, do you know where to find the parts department? If you're a service customer, do you know where to find the service department? Don't make the customers learn how to do business with you. Make it easy for them. Make it look inviting. That's what you want your clients to see. That's what you want your new customers and your new employees to see. We can grow a customer with clutter. I teach service and I constantly have this discussion with service managers when I'm doing on-site interviews. And there's typically one component lying in the middle of an aisle somewhere that you've gotten so accustomed to stepping over or around, you do it automatically without even thinking about it. We're going to send that back. Oh, that's that. That's a recall. We're going to send that back. Why is it lying here? Why is it in the recall return area? Well, we don't have one. Okay. Unacceptable answer. Find a way. Don't get a customer cut to your clutter. Do something about it. Start right. Stay right. It's important to make your new employee, now they've hired on, make them feel comfortable. Make them glad. Don't make them have buyer's remorse and say, oh, I don't know about this. They don't know if they can do the job. Yeah, they've had a lot of luster and they talk about how good they are, but they really don't know if they can do the job. They really don't know if they can do it. They really don't know if they're going to get a loan. They really don't know. Make them feel comfortable. Make them feel important. Can they do the job? Will they fit in? These are questions that they're going to have on day one. So it's important that you make them know that you are glad that they're there. It begins before they even start. Have them where you're ready for them. Okay, this is an outside salesperson. Do they have a desk? Do they have a truck? What is their area? Make sure it's ready for them with their computer, with their phone, with their truck, with whatever it is that you're going to provide for them. Have it ready. Don't have them walk in and go, oh, yeah, your computer. Get with IT over here. They'll get you your computer. Why don't you sit with the service department? I'm doing my best because I've had that happen too many times because the new employee shows up and the manager isn't ready for them. They haven't thought about it. They're so busy doing everything else. They don't realize this is the most important day in the new life of your new employee. They're starting a new job. You've got to be as professional as you want them to be. Make sure that all the employees in the leadership know that they're coming and make sure they're ready to welcome them. Most of our dealerships don't have 200 employees. We've got 10. We've got 15. We've got 50. Maybe we've got 100. But if you've got 20 or 50, let them know. Have a way to know that there's someone coming in. At least your receptionist says, okay, yeah, Ben, glad to have you here. We're ready for you. You need to come over here. John's going to come out and we'll take care of you. Not, okay, who are you and why are you here? Oh, okay, let me ring up somebody and see if I can get somebody. You sit over there and wait. If you have a leader board, and you should have for your part specials, put them on the leader board. Welcome them. Glad to have you. Welcome them to the dealership. And assign a mentor. What is a mentor? A mentor is someone who is going to help them make sure they get along and get comfortable. Answer the questions for them. They don't want to ask anybody else, meaning their boss. How do I do this? Who do I go to for this? Who handles this inside the dealership? A mentor is someone that's going to get with them regularly. On day one, cover all their essential forms in the paperwork. Get that out of the way so you will take them immediately to the HR department. Make sure the HR department is ready for them. Give them the manual. Don't say, oh, here's the manual. They'll start reading this. No. You want to sit down and have essentially a post-hiring interview with them to explain some things. Here's the employee manual. Here's what's in the employee manual. Here's what my expectations are for the day. When do you come in? When do you go out? Do you leave from your house? Do I want you to come in here? There's a lot to cover, so you don't want to cram it all in one day. But you want to have a checklist of the things that you want them to know. My training program. Here's a checklist of your training program. Now, we're going to dial it in. As we get to know you a little better, we're going to decide which courses you need, and we're going to add to it. But have a checklist. And then invite them to lunch. Make sure that someone takes them to lunch on that first day. Makes them feel comfortable, makes them feel welcome, and makes them know that you appreciate them being there. Hey, it's only one day. Second day, you may throw them into the fire, right? I know some of you are thinking, well, I never got that my first day. I didn't either, okay? I didn't either. But it works, and it helps. Create a training plan for both product and soft skills. Make sure that they understand their responsibility in performing that training plan. We're not going to give them all their time on the job to do the reading, to do the courses, to do whatever it takes. You're going to define product classes you're going to send them to, but you're also going to give them manuals, you're going to give them different things from your manufacturers, and you're going to set an expectation that I want these courses done by this date and these courses done by this date. And for soft skills, this is the how to sell, how to close, how to do whatever. We're going to put you in these training classes. I've got these online courses I want you to take. Make sure you define that for them. Have scheduled meetings with a mentor, and this should be weekly, at least once a week. Typically, I like to do it Fridays. I like Friday afternoons because that's when it's hard to call on customers anyway. Get your plan together, what I do this week, what am I going to do next week. Spend 30 minutes to an hour with your mentor going over it, making sure that as you onboard them, you describe their overall career path. What could the future hold for them, and what do they have to do to earn that next job? They don't get this at the end of six months. They don't get this at the end of the year. They earn this career path. Show them the compensation, what it is now. Show them how they earn their incentive compensation, what it's based on, and show them what the progression is. But show them how they get it. Have an incentive plan. I know that people do this with just salary, but have an incentive plan. It works better. If you want to say, no, it doesn't work for us in our culture here, okay. But what I've seen is in these kind of sales positions, having a bit of a carrot that they earn more if they do more pays their dividends. Make sure that you communicate the vision of the corporation. Who are we? What are we trying to do here? Make sure they can articulate this to the customers. Make them articulate it back to you. Train them in this. Drill them in this. The best companies have their sales people and everybody else in their company can talk about who we are, why we are who we are, and why you want to do business with us. They want to be articulating the same vision that you do. Have a vision of your corporate social responsibility and ethics. This is more and more important today than it ever has been. And they need to understand that social responsibility is a big deal to you. What do you do to give back to the community? What are you doing to help the industry? What are you doing to help families in need? What are you doing to help grow technicians? What are you doing to help the education system? They need to understand that this is an important part of the culture of your company and that you're an ethical company. That the one way you can get fired here faster than anything else is to be unethical. If you're unethical, you're gone. Full stop. There's no ifs, ands, and buts about it. You want to see their progress. You want them to see their path for progress. And you want to be a part of their progress. This program requires active management and monitoring. You want to choose the right manager. Make sure that the reporting to someone that wants to be responsible for this situation. So many say, well, work for the parts department. Well, that person really doesn't know how to manage a salesperson. Or work for the service manager, and that service manager really doesn't need the extra headache, doesn't know. Make sure you choose the right manager. Typically, they work best working for a service manager that wants to sell service, that the service manager needs to be able to give them time. So make sure it's someone that is going to devote time for them. Develop a call and territory management discipline. That means help them divide up their territory, help them understand how to set their calls, and make sure they have a discipline for that and a plan for that weekly and daily. And then work with them on that. Make them show you their plan. Show me your calls for the day. Show me your calls for the week, for the coming week, not for the past week. I'm not talking about call reports. Show me where you're going to go. Make them submit their daily call reports every day, every day. If you don't, it gets ahead of you. If you wait and say, I'll get it done tomorrow, then you've got two days worth of it. You've got to do it in one day. It'll get ahead of you. And I'm going to talk about the 20-point sales system. Have them use that, especially to start to make sure they're on the right track. I'll talk about it in a second. What I found is that the lack of active leadership is the number one cause of program failures. It's that they give the PSSL all these tools, a good program, a good onboarding process, but then they say, go get them tired, and they don't really actively manage and monitor the progress. It whittles away and dies or takes off in another direction. You've got to actively manage the program. Let's talk just a little bit. We're coming up on the last five minutes, and I'm winding down. It doesn't sound like it, but I am, about the compensation system. This is a spreadsheet that I can provide you through AED, and it shows a basic plan that says, okay, we're going to base it on parts and service sales, and we're going to have a commission structure, and we're going to have a base salary, but we're also going to pay them for individual sales, for individual items. So here at the top, what I've done is essentially set a tier that says base salary in the green, and depending on what you want the base to be, and then I've got my customer parts sales and my customer service sales, and then I say if less than $10,000, it's at 3%. If greater than $10,000 a month, it's at 4%. And then service sales, if it's less than $12,000, it's 6%. And if greater than $12,000, it's 5%. This is because I did this in one deal, and they actually wanted to give less. I switch it, and I say 5% and go to 6%. I want to get more. I want to give them 6% for doing more in the month. But the thing is, you can make it what you want to make it. And then I suggest that you have extended warranty sales, and give them 25% gross profit on selling an extended warranty, or whatever you call it. Give them 25% of attachment sales. I like to have them sell attachments because Whole Goods typically doesn't do a good job of it. So if there's an attachment, this is one of the value adds they can do for customers is we've got an attachment that will help that machine not only tear it up, but, you know, you really need to put a handle on either of that. Give them 25% of the gross margin of the attachments, and we'll pay them for individual plans, 25 bucks, for instance, for an inspection plan they sell, 25 bucks for a maintenance plan they sell, or 10 bucks for every time services perform on a maintenance plan. This is a way to allow them to make as much money as a Whole Goods salesperson will make while contributing far more in return on investment than a Whole Goods salesman returns. They should make, at the end of the day, as much money as a Whole Goods salesperson makes. Here's the 20-point sales scorecard. This is just something that we at Machining Advisors have created, and it just says you get points for doing things that actually drive sales, not for preparing, not for creating my customer files, but for doing things that drive sales. I should get 20 points a day if I'm doing my job, 100 points a week. If I'm doing that, which shouldn't be that hard to do, I'm doing enough selling activities to achieve sales. Make a phone call to a customer or client is worth a point. Make a follow-up call or ask for a referral is two points. Give a proposal is three points. I mean, make a sales call, a personal sales call, three points. Prepare a quote, do an inspection, three points. Present the proposal or make a presentation, four points. Close a sale, five points. If you're getting 20 points a day, you're getting enough points to be selling. What I found is typically the salespeople that are having a slump are not generating 100 points a week. Do it for three months, you will see your sales change. Take this away from this one-hour seminar and implement this with your whole good salespeople, you will see a change in their sales. You will find that most of them are not generating 20 points worth of selling activity per day. So in summary, a PSSR can and does grow parts and service sales. But you have to manage the PSSR position. The things that I talked about here are things that are important in the job. They add value to the dealership and they add value to the customer. It had to be treated that way. It will provide return on investment within the first year. You will get a payback in the first year of your program including full end costs, the fully loaded truck, depreciation on the truck, the tools, the phone, the lunches, the gasoline, and the base salary. If you are doing it the way we defined it here, you will get your payback in the first year and you will be making significant payback on return on investment in years two and beyond. But it must be actively managed for success. I'm going to say that again. If you don't actively manage it, it will wander off into some other trail and it will dwindle and die. You've got to stay on it. You've got to manage it. And it has to be paid competitively. And you have to reward success. With that, we've hit the hour. My time is up. I want to thank you from AED and the AED Foundation. My name is Bill Mays. Again, my number is on the screen here. You can call me or you can write me through Bill Mays, bill.mays at machineryadvisor.org, or call your AED representative and talk about how can you get this download or listen to the webinar again. Thank you very much. And this is the end. This is Bill Mays signing off.

webinar

PSSRs

sales representatives

parts sales

service sales

target customers

return on investment

candidate selection

onboarding process

sales scorecard