OEM Gains $2.4 Million in Revenue by Providing IMPACT Training for Dealer Network
The subject of this case study, an Original Equipment Manufacturer (OEM) of compact equipment, has quality products and a strong brand. Faced with an increasingly competitive market, this OEM decided to offer sales training and support to distributors to help them “outsell” the competition.
About this OEM
A leading designer, manufacturer and marketer of compact equipment, this OEM is best known for its skid-steer loaders. This company also manufactures utility vehicles, mini-track loaders, compact excavators and heavy equipment and accessories.
The Driving Need for the OEM
Like many industrial OEMs, this company relied on distribution networks to sell its products and was facing an ever-changing, increasingly competitive marketplace with serious challenges, including:
- More demanding distributors
- Strained relationships with their distribution networks
- Emerging and growing competition in the market
- Price-slashing trends
- Threat of lost market share
- The need to forge a customer-focused network of regional and local distributors
- Difficulty compelling distributors to sell more strategically and change old habits
- Initiating business growth strategies with existing dealer principals
The company excelled in product training, but lacked a cohesive sales training program. Getting its distributors to successfully and consistently sell its products at high volume and high margin was a struggle. As a leader in its industry, this OEM was looking for a way to respond to its distribution network’s demand for sales training. Successfully meeting this challenge would result in a win-win situation in which the manufacturer maintains market share while its dealers increase revenue and cash flow.
The Driving Need for the OEM
This OEM explored several options for sales and sales management training. After reviewing several options, they chose The Brooks Group based on their capabilities in five key areas:
- Specialization and Expertise in dealership distribution
- Customization and integration to the dealership’s world
- Relevance and real-world application to dealer challenges
- Proactive approach focusing on prospecting in addition to selling
- Reinforcement and the capacity for ongoing coaching and support
Dealerships from across North America participated in 14 two-day training programs with The Brooks Group.
Implementation went quickly and smoothly because:
- The training program was designed with manufacturer and dealer input.
- The training was tested with a group of “bell-ringer” dealers (well-respected and successful dealers audited the program before it was officially released to the entire network).
- The program had ongoing marketing and field support from the manufacturer.
The OEM rebated a percentage of each dealer’s investment in the training after they participated in a three-month reinforcement program to demonstrate their use of the new strategies out in the field.
Four months after the training program, 60% of the dealer salespeople were selling 1-3 additional units per month. 24% of the salespeople saw a gross margin increase of 1-6% per unit sold. Increases in volume and margin throughout the distributor network resulted in an estimated $2,470,000 in additional revenue.
The Bottom Line for the OEM and its Dealer Network
Four months after the training program, a detailed analysis indicated: 60% of the dealer salespeople were selling 1-3 additional units per month. 24% of the salespeople saw a gross margin increase of 1-6% per unit sold.
This OEM estimates the training program will bring $2,470,000 in additional revenue from three sources:
- Increase in volume of skid-steer loader sales
- Increase in volume of additional equipment and accessory sales
- Increase in gross margin per sale
Overall, this is great news for both the OEM and its dealers; these increases show that the training is helping improve bottom-line results both in terms of market share and dealership cash-flow.