CONSULTANTS TO THE AFTERMARKET

Bill Wade

 

Affordable Education For Front-Line Employees of Heavy-Duty Distributors

Aside from supplier-subsidized product training for the sales staff, most heavy-duty distributors “can’t afford” systematic education for their employees. Or at least, that’s what they believe. Why? Consider this composite quote from some of our recent field research:

“Because the heavy-duty parts business is so cost-conscious and our profits are so weak, we can’t afford higher initial wages to get better people who will stay long enough to allow us to get any return on an educational investment … which we also can’t afford.”

This thinking leads, of course, to undifferentiated service. And that makes the heavy-duty specialist a mere price taker. In turn, that insures poor profits. It’s called a doom loop. And here’s what it looks like:

DOOM LOOP

Paradoxically, most doom loopers would agree with the following statements:

  • If competitors (OEM or aftermarket) have equal, if not the same product lines, then service quality must be the edge.
  • Consistently excellent service can only come from the best, long-term, committed and educated employees.
  • Finding and keeping the best employees has been a huge on-going problem for a long time, especially in light of pressure from truck dealers.
  • The number one reason that better employees don’t choose to work in the heavy-duty aftermarket is because they see limited prospects for personal development and improving their income.
  • Achieving perfect service with “zero-error” economics would increase sales growth, profits and gross margin per employee. But few employees know how to define, measure, achieve, sell, get paid for and leverage “perfect service”… one-niche and customer strata at a time.
  • Employees are either an educated part of the high performance service solution or they are an uneducated, unaware part of the low performance problem.

From Doom Loop to Virtuous Cycle

How can heavy-duty distributors close the gap between their pennywise, personnel practices and these simple service beliefs? Is there a distribution-specific, cost-efficient training methodology for switching from the doom loop to a virtuous cycle?

VIRTUOUS CYCLE

Investing in systematic education for all front-line employees will result in better employees. Contrary to popular notions, trained employees tend to stay around longer. Rather than becoming anxious to take their newfound skills and run, as a group their loyalty increases. Their attitude changes from that of an employee to that of a stakeholder.

When Is A Good Time To Educate All Employees?

If most heavy-duty specialists couldn’t afford to educate all employees in good times, how can they consider starting now in the grip of a tough recession? Here are a few quick reasons.

  • Across the board hiring and wage freezes, followed by cuts will do nothing to unlock the hidden profit and human potential within your businesses. Instead, companies need to strategically focus on profitable and profit-growing customers while shaping up or out the losing ones.
  • A strategic turnaround, not a financial one, emphasizes the winning elements while revitalizing profit-growth and personnel motivation.
  • If you don’t start wiring your employees’ hearts, minds and wallets into the general economic productivity and prosperity of the company, then they will leave for better companies when they start hiring during the next economic upturn.
  • The virtuous cycle of best-service economics will actually grow profits in bad times. But of greater significance, when an economic upturn takes place, virtuous cycle companies will benefit earlier and to a greater degree. So why not invest in long-term improvements sooner rather than later?
  • Other, more open-minded competitors will get a head start on turning the negative problem of educating all employees into a strategic advantage.

Affordable Training for Front-Line Employees

Is there a way for some of the bottom 90% of all distributor executives (who make only one-quarter of the return on investment that the top 10% make) to decide that it is time to stop working harder for less? Yes there is, but it took two 25+-year journeys by Merrifield and Wade to discover and develop. 

In the ‘70’s, Bruce Merrifield was turning around paper distribution companies for a growth-by-acquisition chain. As he discovered productivity insights through experiments at different branches, he would summarize them in problem/solution memo-format and collect copies in binders at each branch.

Using this training system, he could get new managers at both old and new branches up to speed for understanding and using a growing number of “productivity tactics.” The system worked well enough to out-perform the competition and achieve sustainable, superior economic results for all of the company’s stakeholders.

The memo system did have some shortcomings. We were surprised to discover that some managers, while effective in their occupational niche, were also functionally illiterate. They read so slowly that they couldn’t remember what they read. They preferred audiotapes to listen to during their drive time.

Few of the managers were good trainers when productivity tactics needed to be shared with others at the branch level. They would dilute and/or pollute the educational story and they rarely reviewed the educational material often enough (5 - 15 times) so that even the slowest learners could really “get it.”

With the popularity of VHS and its growing availability at branch locations, educational stories on productivity tactics can be told, solving the functional illiteracy problem… especially for operational people who didn’t speak English as a first language. The tapes also allow a low-cost way to get a pure message to all employees at all locations with as many repetitions as necessary.

“High Performance Distribution Ideas for All” a new videotape product from Wade&Partners and Merrifield Consulting. It has 53, 10-minute segments totaling over 11 hours of programming with a 285 page “Implementation Guide."

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