Dealer Development

Why I Wrote This Book
By Walter J. McDonald

Over the past four decades, the battle for the minds and hearts of end users has shifted dramatically from machinery product to the arena of after sales product support. Drawing on my 40 years of experience in this Industry, I documented and created this OEM text as a "how to" guide to help navigate this transition.

Unless a mutually beneficial "partnership" with your Dealer principals can be established, progress in market share gains, or improved end user customer satisfaction with your product lines can be difficult to achieve.

The OEM-dealer team that delivers the most aftermarket value, helping customers reduce operating cost, increase productivity and increase their end user revenue wins. Neither the OEM nor the dealer can achieve this on their own. The major differentiator in the industrial equipment market today becomes the responsiveness of the manufacturer-dealer partnership in the delivery of premiere aftermarket customer product support. This is now the primary determinant of competitive advantage and market success.

In my 40 years' industry experience, I see that the OEM-dealer partnership that delivers high performance products with the very best product support will almost always win in the competition for end user market share. Neither can do it on their own. Both must collaborate to create positive solutions to meet and exceed customer expectations.

This collaboration must be built on mutual trust, open communications, accurate knowledge and competent pursuit of world class critical success factors.

Successful performance of product support functions meets customer expectations and effectively raises the barrier to competition in the dealer trading area. The stronger the dealer product support, the higher the barrier against competitors. However, each partner in the distribution channel must excel in their own area of responsibility.

On the front line of this challenge is the responsibility of the OEM Regional Sales and Product Support Manager.

To really be successful in machinery Dealer Development, you must know the Dealer owner and top executives, their team, structure and history. You must know the regional economy, the local market situation and external factors like dependences on other industries, regulations and customer applications. You must know performance factors of other highly successful Dealers, and how well your dealer is performing in their area of responsibility considering the level of local opportunity.

You must thoroughly understand critical profit variables, those dealer Performance Benchmark Measurements in each dealer revenue center that drive profitability, market share, cash flow and customer retention.

You must also be aware of world-class Best Practices your dealers can adopt to improve their sales and operations performance.

You must know how to cost justify and employ applicable advances in information technology that will provide even your smaller dealer strong competitive advantages.

Moreover, the OEM field manager recognizes that the dealer's success in improved Profitability, Cash Flow, Market Share and Customer Service and Retention is only good news for their OEM.

A profitable dealer is a strong dealer and able to invest in market share gains on your behalf.

This means that the more you can assist your dealer in becoming more profitable, the more they will respond to your needs for market share gains. In this context, market share includes not only new machinery but also aftermarket parts and service labor sales.

As we move through this book you will see that dealer aftermarket success is the key to machinery sales success. We will examine essential tools and processes you must have to optimize the performance of your machinery dealers.

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