Good morning. Again, I want to welcome you to this, it's just kind of an overview of gearing up for your dealership to sell more maintenance agreements, specific service intervals, and individual inspection programs. And with that, just a little bit more about my background. I do have 25-plus years experience in the capital goods industry, both at the original equipment manufacturer level as a representative there with multiple positions in sales, finance, and parts and service, as well as dealership positions. And we are also members of the Machinery Advisors Consortium. And I live in the snowy town this morning of Denver, Colorado. So again, welcome to everybody today. So I guess I'd like to begin by talking about how we can structure and organize the dealership to sell more of these service products. And I think I want to make a point here just to kick it off. This presentation is just an overview of some things to kind of sit back and ask yourself, are we ready to do this? What do we need to do to get ready? Are we committed? And I do want to make note, too, that I think this is probably more for the construction equipment dealership audience out there than it is for the forklift dealers or lift truck dealers, because they really get this. With the margins that are as low as they are in lift truck sales, the only way those dealerships survive is their ability to sell those maintenance agreements. Now, we understand that a lift truck that's at an industrial facility doesn't move around like construction equipment does, and the hours are a little bit more consistent. So it's a bit easier to manage that. But point being is they do not miss that opportunity to capture that parts and service business, because it is so critical to their profitability and their sustainability. So let's talk a little bit about structuring and organizing your dealership. And the three main things we'll talk about are getting ready on the people side. We'll spend a brief moment about some assets and resources. And then, just some quick workflow suggestions as to how to take this program, per se, and put it into play. So, for starters, I want to use this word, commitment. I think it would be a great idea to just kind of do a town hall meeting, so to speak, with your dealership, and just communicate to the people that this is specifically something that everyone can participate in, and has the ability to affect the success of selling these maintenance programs, agreements, intervals, and inspections. For starters, we want to make sure that the dealer principal and or the branch manager delivers a message of communicating about the importance of focusing on selling filters and fluids through selling more service. Now, what we're seeing in terms of the technical piece to this is, you know, the old adage is, for every dollar of service that you sell, you sell about another dollar of parts sales. Lately, that number has come down a little bit into maybe the 85% to 90% range of what the ratio is to customer service labor, but it's still a big number. And so, a lot of times, I think many people struggle to sell filters and fluids because it is a competitive product, and one great way to take that competition out of there is to be able to control the labor piece to this by selling that labor, and then the filters, fluids, and other parts come with that. So, the branch manager or dealer principal really needs to deliver that strong message that you're committed, and we're focused on servicing our customers by selling these products. We also have to have service managers that are willing to take on more work, to hire more technicians, and manage the scheduling required to perform the programs, and that's not always the case. I guess I just want to recognize the fact that, not to call any names out, obviously, but there are some service managers out there that are so busy, and I think they would, in reality, be reluctant to take on any more responsibility because their shop is full, and they don't really see the value in this. And so, it's critical that a service manager has to be truly willing and has a strong desire to grow the revenue of that department, and recognizing that it's going to be more responsibility as well. A parts manager, a service manager isn't alone on that. The parts manager has some things to do, too. They have to do a better job of training those parts counter people on selling the value of your filters and fluids, and stocking the appropriate amount of inventory, prepare service interval kits sometimes that makes it really easy for customers or technicians. And then, again, the counter people themselves have to be willing to keep their eyes and ears open to opportunities to be able to promote these products or programs. When a customer walks in, and they ask questions like, what do I need for my 1,000-hour service interval, then that should be the light that goes off to say, well, let's talk about that a little bit. Wouldn't you prefer to have our technicians do this? Let me put you through to our service manager and get you scheduled in. You don't have to worry about waste oil. We'll have a trained technician on it. And so, that willingness to be a bit more proactive at the counter for the parts counter people is something that we're going to have to ask for a commitment from them. As well, Whole Goods Machine salespeople and parts and service sales reps, PSSRs, we'd like them to promote this both on a pre- and post-machine sale basis. So, lots of opportunities there throughout the sales process to do this in terms of promoting these programs. And, of course, qualified technicians to perform the work. Now, there is some schools of thought out there, too, that says that normally performing just general machine inspections or basic service intervals that usually are part of a bigger maintenance agreement is left for an entry-level technician that you're experienced guys, maybe won't even want to do that. However, again, I think that when there's some other compensation involved and some recognition involved, that any level of technician would want to either perform the work as well as, you know, when they find themselves, if they are in a conversation with the customer, steer them towards purchasing these service products as well. So, everybody on the dealership that's got contact with the customer has to be in on this meeting and rally the troops, per se, to say, all right, we're moving forward with this, we're committed as a dealership, let's establish some SMART goals, and put things in play. From that, I'm going to take a look at what the assets and resources are that are available to make this truly work and be successful. For starters, I'm sure many of you are already stocking quality filter and fluid products. You know, that speaks to the quality of the work that you do as well as the parts that you install on your customers' machines. You don't want any filter collapse or fluids that don't really protect the components and so forth, and so, I think all of the brands that are represented, as I looked on the attendee list, you've got the ability and access to some quality products there. I also think that developing sales and marketing brochures and keeping those in multiple places throughout the dealership is an important thing. All the people that we already mentioned should have them at their workstations, have them when they call on customers in the field, and you might even consider putting those in some monthly accounting statement mailers, too. Usually, with most marketing brochures and promotions, you want to have at least three particular touches to get that message. Another piece here, when we talk about line cards with the individual machine pricing, the reason that I think that is important is that when you do have some interest from a prospect or customer, the quicker you can quote them the price, the easier it is for them to say yes versus, oh, you're interested? Well, let me go back and work you up a quote, and then get back. And you lose that enthusiasm and high interest level, and I'll call it a buying signal, from your customer unless we pre-price some of these services. For sure, more and more dealers are doing a bang-up job of using their individual dealership websites to promote lots of things at the dealership, and for sure, this would be one of those that you want to put on there. I also think it's important to standardize on some machine inspection forms and have a process for that. And then also have that list of what parts are going to be needed and the quantities, as well as the specific labor instructions to perform the work. Because what I'll say at this point is that I want to gear up to provide that labor, but in the absence of a customer still giving me pushback, either in the service department or in the field, or at the parts counter, the fallback position is then, well, let me provide you with the complete kit then, if you truly want to do it yourself, or you have a technician. And this last bullet point there allows you to at least capture your parts sales. So let's take a look at some best practices. I've just got a couple examples here. There was one dealer in one of our peer groups said that their business idea was to look to implement some service agreements in their company, and it's something that they've never done before. So they developed their own specific 12-month agreements to make it more manageable in the service department and prevent it from going out of business. The process they said they'd rely on the sales department to sell it. So that's where that responsibility lied, either separately or at the time the piece of equipment was purchased. So that's where that responsibility lied. The next example I want to show you is a little bit different. The process they said they'd rely on the sales department to sell it. So that's where that responsibility lied, either separately or at the time the piece of equipment was purchased. And the contracts were implemented into their business system, and again, everything was then managed by the service department. So once they made the sale in the sales department, that was turned over to the service department to manage it and set it up and perform the services. There's another dealer that had a winter overhaul program, and that's, again, an idea to bring in more work in the off-season, if that's the part of the country that you're in where you have a slow season there for the winter. And they agreed on what the discount level and what months they're going to offer the program. Again, they made up their flyers, sent them out in their statements. They posted flyers on all the parts counters of their dealership. The sales guys were handing them out and promoting the program. Service managers were proactively calling customers and explaining the program and signing them up. And they had a very, very successful first year of doing this. And then, actually, if they did this for three years, and after that three-year period of promoting this, they noticed that their customers actually were starting to come to them to say, are you going to have that program again? Are you going to have that inspection program again that I can take advantage of? After you've got that customer train, per se, that these are available, then there's going to be a groundswell there, and we won't have to do so much proactive promoting, but they'll come to us as well. Here's an example of a brochure. This is from McCann Industries, the case construction dealership in northern Illinois and northern Indiana. And they like selling intervals. So, if you see there on the right-hand side, they're promoting this throughout their locations, and they've pre-priced these different service intervals. And they've got a really nice tri-fold brochure here, and it talks about what is included. And they tell me that the way that they have flat-rated this, of course, travel time and mileage is on top of this, but they really didn't have to treat this as a loss leader. They're still making money on the basic service. And then, I think there is about a 50-50, 50% hit rate of when they perform that maintenance interval, there's some other either part or service labor work that is generated as a result of having the technician with their trained eyes and hands and ears on that machine to be able to determine other things that are wrong with the piece of equipment. So again, they had their marketing company put this together, but there's lots of talented people at dealerships where you wouldn't have to go to an outside firm to put it together. You can put your brochure together, or you can take a more professional approach, whatever you prefer. But this collateral piece right here has really gone a long way towards getting everybody involved within the dealership to promote this service. So, if I ask you this question, what's the main point that drives this strategy and makes it work for these dealers? I'd ask you to just ask that question of yourself, and here's what I think the answer is. The message that we're trying to impart here is simply this. For the strategy to truly work, you have to get all departments involved, and even beyond that, committed to provide these services. It's got to be what I call top-of-mind awareness for this. And this takes us to the importance of establishing the dealership's workflow rights or work responsibilities. So, you have to ask this question, who's going to prepare those promotional pieces? So, that's a fair amount of effort right there. Who's going to build up the parts kits? One thing that I would suggest at this point, too, is you don't have to build up service interval kits and multiple ones for every single model of equipment and brand that you represent at your dealership. Just take a look at the most popular machines that your whole goods and sales department has sold, and just start with that. Anything that speeds up the transaction, I think parts kits really helps that in the process. In terms of who's going to develop the list of prospects for these services, that's the prospecting piece, and we'll talk a little bit about that a little bit later in the webinar, but somebody's got to develop a list of prospects for us to be proactive. And so, again, there's just got to be some responsibility assigned for that portion of the marketing piece of who are our best prospects for this. Who's going to be responsible for doing the approach or the asking and ask for the business, and who's going to track the next service interval due date, whether it's a full maintenance agreement itself or an individual machine inspection or an individual service interval that we did perform. So, making sure that this works, we've got to get everybody on board and have clear responsibility as well as accountability. In terms of structuring the dealership for success, we've got to make sure that we sell more filters and fluids by offering these maintenance agreements, and we've got to get organized to perform this, right? We've got to make that people assessment. We have to develop the assets and resources and establish accountability through clearly defined work processes. And so, let's talk just a moment about selling these programs. I want to focus on, because we coach a seven-step sales process, as you see here. It really starts with product knowledge. Maybe it's not a step in the process, but you example your product knowledge throughout the other six. So, we're going to focus just on steps two of prospecting. That's generating people who might be in the market. And then five, how are we going to approach them with a proposal to present to them what it is, and then closing the sale. So, let's talk, for starters, about prospecting. If there are some best times to prospect for more filter and fluid business along with these service products, I think at the time the machine is sold is a great, great time. That's probably the best way to sell a maintenance agreement when it's included in that whole goods machine financing agreement as well. It's an easy way for the customer to just pay for it a portion of the time, within each monthly or quarterly, however they're set up, payment for the machine itself. It's a great way to cash flow, and it really is just kind of a no-brainer. But it is a big responsibility then on the dealership to make sure that you're tracking and performing when those are due. Because, again, the customer has prepaid you up front. Or, another time is after the machine is sold. And so, whatever your delivery process looks like at your dealership, some kind of follow-up call made by either a salesperson, a parts and service sales rep PSSR, a field technician, maybe it's a parts counter person making a call from the dealership, is another way to reach out and ask for this business. Some of our best and favorite sources for prospects, I think my favorite would probably be something like this. And again, this is just a general best practice regardless of what you're doing, but we like to see dealerships run what we call a high-to-low report every single month. That's the term that we use, but you may call it something else. It's basically just a report that lists out from the highest to the lowest customer in terms of how much business they do with your dealership. And you can set that up to match it up against who are the highest to lowest in terms of revenue or sales volume of whole goods, or do it for parts or service, and then maybe do it in a rolling 36-month, you need three years of data there to just take a look at it to see who's your best customers, who's buying machines from you, but not buying a lot of parts and service. And so some of those inconsistencies there in terms of who's buying a lot of machines, but not a lot of parts and service business later, those are great people to reach out to and treat as a prospect for maintenance agreements, inspections, and service intervals. Warranty expiration lists. I think from the expectation of a customer, when they trust us to give us their business, part of that responsibility means that they have trusted us to look after them on an after-sales service basis. So as a prospecting source, I think part of the way to fulfill that responsibility to look after is to give them some kind of notice about when their warranty is expiring. So whether you get this from your manufacturer or you have the ability to run this yourself on your business operating system, I think it's important to have a prospect to run and give them an advanced warning, whether that's 90 days, 60 days, whatever you think is appropriate for your own territory and your customers and your process, to give them that heads up that the warranty is expiring, and it's a perfect time to also include that pitch or invitation to perform some inspections, some service intervals, and so forth, so that anything that may also be wrong with the machine that maybe isn't pulling it down into a machine-down situation that is captured under warranty expense of the manufacturer and not a responsibility after the fact with the dealership. I think we've all been in situations, if you have anything to do with service or sales, some tough conversations with customers when maybe the machine had expired, say, two days, two months, and there's a significant breakdown there, and they're saying, well, gee, you know, I mean, it's just barely out of warranty. Can't you cover that? And some of the manufacturers have really gotten extremely strict in the last few years in terms of when that warranty expiration date is over, warranty coverage is over as well. So, there's not a lot of policies being written, per se, to cover on those extenuating circumstances. So, make sure that you exceed your customer's expectation by giving them a heads-up on the warranty and use it as a prospect list to sell these customer labor tools as well. Again, anybody buying filters and fluids over the parts counter, that's a super big sign that they might just be interested in having your tech do the labor. So, let's just go ahead and do that. You have to proactively ask that question and have those folks trained, as we've talked about. And then, any machine coming through the service department, that should have the inspection on it as well to point out any additional items beyond what the customer originally brought the machine in to be worked on for. And also, making sure that we're coaching our technicians to, you know, check that marker that's written on the oil filter of the engine and when that date is, and match that up with the hour meter. You know, I've always said this, I don't have any data for this, but if there's one survey, product support related, that I would love to see, is if we could somehow determine what number of machines are out there working in the field that have gone well beyond that next service interval due date. The customer has just continued to work the machine, not dropped oils, not spun and changed filters, not hit grease zerks, and all those other things. Maybe done oil samples and all that other stuff that we do at the dealership when we touch machines. And so, any machine coming through the service department is a prospect to just proactively ask the question if they're providing that or not. Let's go to step five. Now, we've got the presentation, right? So, you represent quality lines. You're all quality people at a quality dealership out there. I think a quality and a professional looking document is what's required as a sales tool to engage in the conversation and explain the offerings and the specifics of what your programs are that you decide to drum up for whether it be maintenance contracts or whatever, the service intervals. So, it's got to be professional looking and a quote. And again, I like those pre-priced line cards just so that we can quote the number right away. It just helps that dealership team quote the number on the spot. And then, what I mean by this last bullet item here, it says, dealer associates and customers respond better to shelf products. So, what I mean by that is, if you have a shelf product that's right there on the shelf, sure, you've got a part that's on the shelf that you know that you have and you know what the price is. So, the same thing holds true in concept for these service products. Let's treat them as shelf products and pre-price that basic maintenance agreement, or inspection program, or individual service intervals, so that when asked, you can quote the number right then and there, and you can close. Which takes us to the next slide of closing the sale, step six. A lot of people operate in this realm under verbal orders from customers to do that, so I think it can work, verbal or written, but we think that a true written or authorized agreement from your customers is the best way to do this. But we work on verbal confirmations every day in the service department, right? So it's just part of what we do. For any longer term agreements, inspections, or for sure those maintenance agreements with 12 months or longer, we really suggest having a specific document or agreement prepared, and have that customer authorize that, and make sure that you've got that paper flow back up. And then again, the key component, once we see these prospects, and maybe they show any kind of an interest, or give us a buying signal, we want to make sure that we proactively just ask them for the business. Simple closing questions like, would you like to go ahead and get this scheduled, and let us do this work for you, and take that off your plate. Or maybe it's, well as soon as you finish up this big job, let's stay in contact, and then when you got a little bit of downtime, let's get those machines in, let's get them inspected, make sure that they're up to snuff for the next job that you've got coming up. Because I know downtime is really critical for you. A lot of the contractors are also working under some kind of extra incentive if they get the job done early, and so downtime for machines is important to them. So make sure we ask for the business. In terms of compensations, our position is that we should get everyone at the dealership involved. So here are some examples of compensation plans to reward for selling these programs. If it's the whole good salesperson, let's just say as an example, they sell a one-year minimum contract at time of the machine sale, or maybe shortly thereafter that the machine has been put in service. And you have to take a look to see if these dollars fit the particular machines that you're doing them in, because a 100,000-pound excavator is a heck of a lot bigger contract than a skid-steer loader as an example. So just some ballpark numbers here to start off with. That might be a $250 SPIF, or if it's just an individual service interval or machine inspection, maybe that's a $50 SPIF. And I'm a big believer, if they're doing the same thing, then the parts and service sales rep should have the same opportunity for the same money to do the same work. So those same dollar amounts would apply, whether it's the contract itself, or an individual interval or inspection. And here's an area where I don't really think it's that important to say only one of those two people can sell that. Anybody that's got that relationship with the customer that can get them to say the yes, and the customer shows up with their dollars, per se, I think that's appropriate. So boxing one of these two positions out of the ability to sell that is not a good idea to be able to capture all the business that you possibly can. Moving along, for some of the support folks, and again, I'll flip back a slide real quick. So these are the SPIFs that we're suggesting, just as a starting point for reference, when actually selling. And to me, to sell means you get the answer, you complete the paperwork, and you truly close on that transaction. The term we'll use here on this next slide for parts counter people, as well as probably field service technicians, or maybe even shop guys as well, is a lead. So the difference between that is just they turned over this lead to someone else who then executed the contract. So that's the key difference there in terms of the sell and lead, and hence the lower SPIF amount. So again, maybe $50 for that full-blown contract, individual services is $25, and that goes a long way for some of those folks in terms of additional pay. If you like to have two of those extra in your paycheck every time, it's pretty significant. Same thing goes true for the service technician, same amounts would apply. So making sure that everybody's got the ability to enjoy in the rewards of this is really important. And making sure that that person that supplies the lead, whoever then got the lead, and then executed and closed on it, there should be a mechanism to come back to that parts counter person or service technician and say, hey, thanks for that lead, we're putting in for that SPIF, this is what happened. So giving them feedback is really critical to make sure that they'll continue to perform that best practice of turning in the leads. You know, there's other ways to recognize and incent folks. And so maybe if there's some kind of a program set up at your dealership where you have a number of intervals that performed or number of contracts that we wrote, there's other ways to do this other than just the cash of the SPIF. Plaques, award certificates go a long way, gift cards to the person's favorite store are really nice, maybe a special gift of specific interest to that particular person. If they like to fish, maybe some fishing tackle, if they're a golfer, whatever that might be, maybe a nice putter, a bunch of golf balls or a cool clubhead cover, something like that. Maybe even just something as simple as a special recognition parking place for one month for the top associate selling customer service labor or something like that. Or another great way to kind of do this is to have that dealer principal or branch manager take that associate out for lunch or for dinner with their spouse and just make it a bit more of a personal touch there by spending some quality time and having a nice conversation over a meal and just giving them that verbal thanks and recognition for a job well done. Many dealerships nowadays are also using award patches for the uniform or for the technicians for sure. I call it, as a former service manager, I call them the pesky tool guys from Snap-on, Mac, and so forth. Getting some tool credits for those technicians as another way to incent or recognize good performance. Or maybe even just tickets to a ballgame or a concert or some kind of a favorite event too. So again, sometimes cash is soon spent and soon forgotten, and sometimes these other specialty things that we're talking about here have a great way to cement someone's willingness to continue to do well with this and get customers involved and sell them maintenance agreements, inspection programs, and intervals. So in terms of executing the strategy, there's just kind of a quick heads up here. When you guys download this PowerPoint presentation, you can kind of determine who does what and when on this. But here's just a quick checklist in terms of executing the strategy of providing these service intervals, maintenance programs, and agreements once they're already sold to the customer. So most of us nowadays, in the equipment that we sell, we have some kind of telematics where we have the ability to, and here's the word I use, access or ping the machine to determine the hour meter reading. So that's the main piece of information that we need to determine when the next services are due, and we also can ping that machine and determine what the location is. So once that's done, then a quick confirmation to the customer in terms of, yes, that is the next service due, you haven't already performed it, and is the machine going to be in that location at the particular time when you want to send a tech out there to perform that work? Or again, maybe it's going to be scheduled to bring it in, but determining that hour meter reading, the next service is due, and the machine location is something that we can usually do remotely. Or you could just, again, if it's in the shop, just check it out while it's there, or ask someone when they're talking to them on the phone or at the parts counter. Once that's determined and we know what service is due, we order the parts and provide the service labor instructions, and pull those parts or make up parts kits for, again, either the customer, if they're going to do the labor themselves, or preferably when we're going to do the labor, it's so much easier for the technician to be able to do this effectively and efficiently when they've got those kits made up. Then we want to assign the specific technician who's going to perform the work and open that work order. We perform the specific service. We also remember any time we look and touch at a machine, we're going to do that inspection 101 form, so we'll review that for any additional parts and service sales opportunities. And then once that's the case, we're going to ask that technician to contact the service manager for a quote on those additional opportunities. And then again, however your system is set up, someone contacts the customer to make them aware of those additional opportunities and either gain their approval or acknowledgement that they want to wait on that work. And once that's done, the work is completed, and we close the work order. So that's a pretty, I guess maybe overstated, obvious step-by-step execution strategy. So let's round it out today by kind of doing the what's in it for the customer, as well as the dealership discussion. There's some really key customer takeaways. By doing this, they receive a copy of the work performed for their maintenance records. The more we can do maintenance on that customer's machines and supply them with those records, and they have a nice solid list of things that are performed on the machine, that machine already is worth more money on a resale perspective. Anytime you have great maintenance records that you could show the next potential buyer, whether you're trading it in or selling it at an auction, selling it on your own, that machine is going to be worth more when the customer has a copy of those maintenance records that the potential new buyer can look over and answer some of those questions about whether these intervals have or have not been performed on the machine. So that's a real key value there in terms of having those maintenance records. Copies of the oil sample reports is important to watch that trend analysis and try and do some predictive failure on key components, and that'll hold down maintenance costs as well. They'll also receive a copy of the inspection form that will detail anything that's recommended as, hey, this is critical, we need to address it right away, or this is something that you can wait a while on, and maybe how long should we wait in terms of hours of operation and so forth. So that machine inspection form, along with the sample reports of the oil and the maintenance records, is a nice package to provide that customer and shows true value for that service labor performed by the dealership. So your customer wins by a lot of different ways. They have less hassle and grief of doing the work themselves. It is completed by a factory-certified technician. That trained eye of that technician is on the machine to catch any other additional items that are needed for repair or replacement. And then, anytime that machine is in a better condition to perform on the job, they're going to experience that additional uptime and productivity that makes for greater profits and happier customers on their end as well. So a lot of key both takeaways and wins by doing this for the customer. What's in it for your dealership? Well, definitely, we're now in the upselling business for more service labor and parts sales. It will definitely help drive both absorption rates in parts and service departments. I also think it's key as an upsell opportunity when selling machines as well as rentals. One of the big hassles that's out there right now is getting customers to perform machine service intervals while the machine is on rent. I can't think of a bigger hassle and conversation sometimes between sales department and customer that doesn't do those. And so, if you can include that in your rental rate and get that in the rental rate there and kind of pre-sold, that's another great way to make sure that your rental equipment is being serviced and you have a dealership employee looking at that machine pretty close to about on a monthly basis. I think it's also a great way, and a lot of times in our programs we talk about this concept of departmental silos, where service kind of operates in their own little realm. They don't interact too much with parts or maybe they're fighting back and forth there between parts and service or sales and service. And so, I think once everybody at the dealership gets on board with these programs, it helps them work efficiently and effectively together and goes a long way towards minimizing those departmental silos. You're going to have a happier, more satisfied customer base, and in time that happens, you're going to truly grow the basic asset value of your dealership. So, in summary, let's just make sure that the whole dealership team is on board and is aware of the strategy and has a strong desire to promote these services. Make sure you've got some top-notch marketing material to be able to have that conversation and talk off that collateral and literature. Anyone that's involved in that and has a role in bringing that business in should be compensated appropriately for that, and then we've got to have some solid processes in play, not only just to sell it and to keep everybody in the loop, but for sure on the performance side of it too. There's nothing worse than selling these services and then either forgetting or just somehow it slips through the cracks, and we didn't perform the service, and the customer comes to us and says, Hey, what's the deal? I thought you were going to take care of me and my machine, and you fell down. So, that's the last conversation that any of us want to have with the customer. So make sure that those processes are in place and review them on a regular basis. With that, we want to say thanks very much. This is the last of our webinars for this calendar year. This is our sixth of six. It's been a pleasure to serve everyone. We want to say great selling in 2016, and also just to say thank you very much for your signing up and monitoring this webinar today, and Rebecca, I'll turn it back over to you. Rob, I do have some questions, so I'm going to just throw those at you. So, first one is, how do you convince a customer that has their own service team to take a dealer service agreement? Well, I think I have a basic philosophy that the only reason that a customer even has a technician on their staff is because we at the dealership can't get to them quick enough when they need us. So, we have kind of created this situation for ourselves. Sure, they may have some technicians there, but what I'd be more than happy to provide everyone with, the best sales tool that I've had to have a conversation to overcome that objection from a customer is an Excel spreadsheet where I'll sit down with the customer and go through what the actual cost of a dealer technician is. Because usually they say, why should I pay you $100 an hour to do this when I'm paying my tech $25? And they compare our shop rate or field rate with a basic labor rate of their employee. That's not the true cost of that technician. So, once we sit down and use their numbers, usually they actually see that it's so close, or even less money to have the technician do that. So, that would be a starting point of mine is to overcome that objection of price from the customer with that tool. So, I'll send that spreadsheet to you, Rebecca. Okay, thank you. And then, let's see, next question. How do you manage parts involved in service agreements as parts price vary with time period? Does that make sense to you? It does. So, you're going to have parts price increases. If you write a three-year agreement, you're going to have some escalating parts prices in there. And I think for most manufacturers, they're fairly consistent with what those parts price increases are, especially on the filters and fluid products. We send anywhere from 3% to sometimes 6% a year. So, I think that that's something you can just effectively put in there. And remember, you're going to capture all the money for this up front when you get it either funded up front in a contract with the machine sale. And so, there's a lot of extra money in there just from the time value of money. But when I've done this in the past, I've always put an escalator in there for my parts. And I usually use about 4% to 5%. Okay, are there different service agreement types based on service provided, like a service agreement for only oil change and filters, as an example? Well, okay, we've pretty much talked about three main things, right? The maintenance agreement, per se, usually says that I'm going to do all the service intervals for a particular time frame or number of hours. Okay, so that's the whole enchilada. If you take that into individual pieces, that's these other two products that we talked about today. One is the individual service interval itself, or just the machine inspection. So, again, you've got specific bits of the interval. You've got specific labor things that you'll do that come right out of the operator's manual, as well as a list of parts in those quantities. So, that's the driver to show the customer what's going to be performed. And the same thing goes true for an individual machine inspection. Just take a look at that inspection, and that complete operational checkout is what we're talking about. Not just a quick visual. So, I hope I'm answering that question. It sounds like you did, yeah. You've got specific forms that are in play to show the customer what they're getting for that. Yeah, you did. How do you continue or complete a service agreement if a machine stopped for a long or short period of time in the middle of a service agreement? What's the stopped part? If a machine stops working, I guess, for a period of time in the middle of a service agreement. So that it's taken out of service? Correct. I'm trying to think of some reasons for that. Whether they just parked it because they had no work. I mean, that might be one, right? Yeah. Actually, I've never come across that. I've never come across it. It's usually for the machines that are mainline kind of machines that are getting a lot of use. But I guess if workload dictates that they're down, I think those one-offs like that, you just have an opportunity to sit down with the customer and have a conversation and determine what's equitable for both parties. Okay, one additional question. How do you calculate the absorption rate and what factors are involved? Calculating absorption rate is simply the gross margin from whether you're calculating parts and service combined or individually. You just take the gross margin divided by your fixed expenses, and that's usually represented as a percentage. And I guess another way to look at it is whatever percent you come up with. So as an example, if you have a 75% absorption, like most people always look at a goal of 100%, which then 100% would mean that you would be able to cover all of your operating and fixed expenses for a full year without selling anything on the whole goods or rental side. So if it's 75%, that means you can cover three-quarters of the year. So it's the best financial barometer of a dealership that we look at is absorption rate. And it's calculated by the gross margin of your service department, parts department, divided by your complete fixed and operating expenses. Thanks, Rob. That makes sense. I have another form that I'd be more than happy to share that's a list of multiple key ratios at a dealership, and absorption is just one of those. So it'd be multiple key performance indicators, how those are calculated, why you would look at those. And I'd be more than happy to include that as another handout from today. Okay. Thanks, Rob. So Rob's mentioned a couple documents that he'll send to me, and I'll forward those on to anyone that's participated in the webinar today, along with the PowerPoint slides that everyone should have received already. So I think that at this point, that's all the questions I have, Rob. I think... Thanks for taking the time to answer those. And certainly, if anyone thinks of me as they're looking at these documents that we're going to send out afterwards, feel free to follow up with Rob or us at AED. So thanks, Rob, for a great presentation. And I just want to tell everyone to have a great day. Thank you, Rebecca. Again, there's my email address as well as my phone number there. Feel free to contact us anytime. Rebecca, thanks for all your support at AED this year. And again, we want to wish everyone a very happy and safe holiday. Close out the year strong. We saw from AED today where their great efforts have come through with continuation of Section 179. So we'll see a little boost to machine sales at the end of the year. And let's write those machine sales up with more maintenance agreements, service intervals, and machines inspections. Thanks, everybody. Take care. We'll talk to you next year.

strategies for dealerships

selling maintenance agreements

selling service intervals

selling individual inspection programs

structuring dealership

organizing dealership

incentivizing employees

training and resources for employees

benefits of selling service products