Despite all the changes that have occurred in trucking in recent years, this is still an industry where “people buy trucks from people they know, like and trust,” says Scott McCandless, president of McCandless Truck Center, Aurora, Colorado, and ATD/HDT Truck Dealer of the Year.
And while the industry certainly has seen big changes to equipment, increased regulations and continued consolidation, perhaps the biggest area of change is in customer expectations.
“I don’t think there is any comparison to what customers expect today and what they expected 20 years ago,” says Brian Bruckner, president of Bruckner Truck Sales, Amarillo, Texas, and Truck Dealer of the Year finalist.
Fleets want things done “quicker, faster and at less cost,” adds nominee Robert Neitzke, president, GATR Truck Center, Sauk Rapids, Minnesota. “The reality is the cost of the equipment has gone way up, so fleets want less downtime, and they can’t understand why there can’t be uniformity across the dealer network. If they can get good service in Timbuktu, they want good service in Whatchamacallit. They want good service wherever they go, and they are not getting it.”
According to nominee James Sayre Jr., president, G.L. Sayre Inc., Conshohocken, Pennsylvania, “From the sales side, [the fleet managers] need a dependable product, but when there is an issue, they need that truck back on the road as quickly as possible.”
He adds, “It’s really all about turnaround. Just as we as consumers want shipping quicker and cheaper, they want us to do things cheaper and quicker.”
But that seems easier said than done, if you talk to fleet managers who still find long wait times for service at dealerships. These Truck Dealer of the Year candidates are well aware of the problem and have made investments to address it, but they acknowledge it’s still not resolved.
The first step many have taken to address the problem is expedited diagnosis of problems. Every truck OEM has some program for getting trucks into a bay and diagnosed within two hours. Neitzke thinks this helps with managing customer expectations. “If we can tell them it’s going to be an hour or it’s going to be two days then they can plan better.”
McCandless agrees: “The one thing fleets appreciate from [the expedited diagnosis] is that we are able to tell them, ‘Yes, you probably need to repower this load because this particular repair is going to take seven days.’ And we strive to maintain our initial commitment about how long the truck will be down.”
However, the real issue is service capacity constraints. There simply aren’t enough bays available to meet customer demand.
Nominee Kari Rihm, president and CEO of Rihm Kenworth, St. Paul, Minnesota, added a mobile service truck that operates out of one of the dealership’s branch locations. “We put our best [Paccar] MX engine tech in that truck, and he goes to one of our largest fleet customer’s location several times a week.” That has proven to be so successful that Rihm is adding another truck in the first quarter of 2015.
Since these service trucks represent less of an investment than a brick and mortar facility, Rihm says she would like to add more, “but you have to find a technician who can drive around and do the work. That is the biggest challenge for us: finding experienced talented techs.”
Rihm recently announced that the company will be opening a parts and service location to help reduce the backlog at its headquarters. She is also in the process of purchasing land to add a facility to another part of the territory that the dealership has not previously serviced.
Nominee Kevin Holmes, president and CEO of Tri State Truck Center Inc., Shrewsbury, Massachusetts, has had “mobile repair centers” on the road for 30 years. “We have a 95% roadside success rate,” he says. “The investment [in these trucks] is sizeable, however when you talk about reducing some of that fleet angst and downtime it’s worth it.”
These mobile repair trucks are equipped with in excess of $15,000 of parts inventory. The technician staffing the truck can provide full diagnostics and even reprogram ECMs. Tri State also provides on-site warranty service and recall and campaign service. “Every foot their tire turns is a liability to them. Obviously they are burning fuel and there is labor cost involved in shuttling the equipment to the dealership. Instead of making them face those expenses, we come to them and preform warranty work on site.”
Holmes also set up a separate engine facility that is dedicated to engine diagnostics and repair. “The main dealership handles those quick one- to eight-hour jobs, which increases our throughput in the main shop.” The engine facility handles all engine-related complaints, which tend to be more time-consuming.
He adds, “Every day we are becoming more specialized. You have to be specialized today because of the sophistication of the equipment.”
Neitzke says while everybody is investing more money and increasing shop capacity, “it still is not enough. The question is how do you manage it? If you can get the right people in place you can absolutely keep busy. Unfortunately some [dealers] that are in business today can make money and be a mediocre dealer” because they have service capacity. However, he thinks fleets are focusing more on dealer network performance, “and you are seeing fleets buy a brand based on how strong they think the dealer network is in the areas they travel to.”
Sayre says dealers’ long-term survival depends on having enough service capacity. “The organizations, the manufacturers or the distributors that have that capacity are going to win in the market.”
Fleets also expect dealers to have parts on the shelves when they need them. “We try very hard to make sure we have the right part when the customer needs it,” McCandless says. To make sure he can meet customer expectations, McCandless takes advantage of truckload purchases of high-demand parts. “And we are always looking at new truck models and new engines to make sure we have maintenance parts available immediately, so we don’t hold customers up because we don’t have the part in stock. We try to be intuitive about what is going to be needed when a new product or component is coming with a truck offering.”
A new yardstick
Bruckner says the way fleets evaluate dealers has changed, too. In the past, he says, customers benchmarked his performance based on other truck dealers. “More and more, our level of service gets compared to car dealers or Starbucks or department stores,” he says. “Business-to-business customers have a level of expectation of service, the timeliness of that service and the communication of what is going on, whether it is during the sale, at the parts department or in the service department. Our customers expect a lot more instantaneous communication than they ever have before.” This puts added pressure on dealers to deliver a higher level of service.
Holmes agrees, calling today’s truck customers “the point and click generation.” He adds, “Most everybody today wants things instantaneously. But trucks still are complex pieces of equipment and it just is not point and click. That is probably one of the most difficult things that we have to deal with, but it makes us a better company because it is not just what our customers expect, it is what they demand.”
Fleets are also better educated, according to Bruckner. “They have a pretty good idea of how much that truck down situation is costing them in terms of minutes, hours and days. So whether it’s parts or service or ultimately in a new or used truck purchasing decisions, there is a huge focus on uptime and being able to maximize the amount of time that truck is in service so they are able to service their own customers,” he says.
In addition, fleets have new expectations about how far they are willing to travel for parts and service. “There is a lot of expectation of ‘I don’t want to travel more than half an hour or an hour to purchase a part or get service,’” Bruckner says. Much of Bruckner’s area of responsibility is in rural areas, and in the past, he says, those customers did not “think a whole lot about bringing the truck in to a dealership that was a couple of hours away.” Recognizing that those days are gone, Bruckner says, “we tried to identify areas where we felt there was enough of a truck base to support a facility and we built one to make it a lot more convenient for our customers to purchase parts and to have service work done on their vehicles.”
He adds, “The closer we can get to the customer, the more convenient we can make it for them. This benefits their business and is a real cost savings to them.”
The focus on cost has intensified as the buying decision at many fleets has shifted away from operations, Rihm explains. “Someone else is influencing the decision about what to purchase, often a controller, and they are looking at what minute details can be changed to help improve their bottom line,” she says. Rihm says she has seen a lengthening of the buying process as a result.
Vehicle specifications is another area where these top dealers have seen changes, not only in what’s being specified, but also in their involvement in the specification process. Fuel economy, weight savings, and a focus on life cycle costs are spec’ing trends being seen across the country.
“We’ve seen a lot of focus on fuel economy,” Bruckner says. “Even though diesel prices are a little lower today, most customers are still really focused on achieving fuel economy [improvements].” Fuel-efficient tires, aerodynamics and powertrain packages are things sales representatives at Bruckner Truck locations are talking to fleets about.
Fuel economy is so important that fleets “will pay additional money to see fuel savings earned over the life cycle of the truck,” McCandless says. “That is different than it has been in the past. They are paying attention to fuel savings and will definitely look at paying more money as long as there is a benefit of lower operating costs.”
He explains that the municipalities the dealership does business with are especially concerned about fuel costs. “If we work on developing a specification that delivers a more economic life cycle to the truck, they will definitely look at it from the chassis component side as well as the additional equipment side with things like plows.”
To help customers make smarter spec’ing decisions, McCandless says his salespeople provide information about the components “and do a life cycle analysis to show them the benefit and payback of that particular component and the operating cost of the unit.”
Weight reduction is another area fleets are talking to dealers about. Thanks to emissions regulations, “in the past eight years we have done nothing but add 800 to 900 pounds to these units,” Neitzke says. “Anything that can take weight off the truck has become important to fleets.” The GATR sales staff makes sure to discuss weight-saving options with its customers whenever possible.
According to Rihm, “We have to dig in and understand what is best for the customer’s application. What can we swap out that will give him the same performance, but will weigh 50 pounds less? Those are the kinds of things we now have to handle. It’s all part of building a solid relationship with people.”
Training, training and more training
Fleets are increasingly relying on dealers to keep their technicians trained.
“I see increased focus on training, whether it is brake certification training or A/C repair type training,” Bruckner says. “As the products have become more sophisticated, fleets realize they have got to have training to be able to work on those systems. This is an area that will continue to grow, as there are more and more systems on the truck that require a greater skill to be able to diagnose and repair then they did in the past.”
McCandless relies on his suppliers to help train fleet customers. The dealership holds vendor training nights that focus on skills such as how to install a clutch properly or how to best install brakes. “We make these available to our customers’ mechanics and they appreciate the training. We think it is important to educate our customer base, but we also use these [training nights] as an opportunity to let them know about the services we offer and the kinds of parts that are on our shelves.”
He adds that the dealership is constantly looking to improve its capabilities “and to be the expert on the most difficult repairs. Whether it is an over-the-road truck, a medium-duty truck, a school bus or a snow plow truck, they have all become more reliant on the truck dealer.”
Sayre says the amount of training his dealership has done in the past five years is equal to the amount it did the previous 15. “Training is expensive and it never ends. We offer training to fleets because it is more difficult for them to get the same quality of training as dealers get. There is so much new technology out there that they need to understand and product improvements are happening more quickly so it is hard to keep up.”
Sayre used engines as an example, noting that the basic platform for a 3406B Caterpillar engine stayed the same for about 10 years. But today’s engines are seeing significant changes every two or three years. “Fleets have no choice but to rely on dealers.” In addition, Sayre says, he is an expert on the brands he sells, but a fleet may run four different brands of trucks, making it difficult for them to have expertise in all four.
Rihm tackled the engine issue head on by recruiting and training someone to act like an engine representative. “He is focused on how to help upfront with selling but also then training fleets on how to operate the new engines and how to fix them.”
Holmes says training is just part of the package of services fleets expect from dealers. “They are looking for their people to be trained by us. They are looking for their parts department to be cycled, inventoried and monitored by us. They are looking for us to be their mentors.”
He says he was speaking to a customer recently who said he wanted to his shop to be nothing more than a maintenance facility that replaced wear and tear items. “He wants everything else handled by the dealership. He wants his dealer working with him much more closely than he did in the past. He wants the dealer to be his business partner.”
A new role
McCandless sees dealers taking on a new role as a result of engines, transmissions and other components becoming more complicated. “Fleets have become more of a maintenance shop and now are relying on the truck dealer and the dealer network to be able to handle the more technical issues that arise on the truck.”
Sayre says he is seeing fleets operating with no shops are all. “That is their business model and it makes sense for them because it is expensive to get technicians and train them. If they can put that expense on the dealer and use us when they need us, I am happy to do it. They are good at delivering stuff, and we are good at fixing trucks, so hopefully we can work together.”
During the repair process itself, fleets today expect more information about the progress of the repair. “We are pushing to have technology that allows us to better interface with out customers,” Bruckner says. “The way people expect to interface with the parts and service department has changed tremendously, and we have to be able to provide fleet managers the information they need to make decisions.”
He says more of his fleet customers want to be able to look into the dealership’s parts inventory online to check availability without having to talk to a parts counterman. “The guy who is having his truck repaired wants to get a visual on what is going on with his truck and where it is. As an industry, as dealers we are working hard to be able to provide that.”
McCandless says, “There is always a challenge to meet customers’ needs, but when we are able to satisfy the customer whether it is in Denver, Los Angeles, Omaha, Nebraska, or anywhere in the nation by our people getting involved to expedite the repair, then the customer is happy and we have done our job.”
Neitzke says while dealers are getting better, especially when it comes to communicating with fleets, “we are by no means where we need to be for the future. A big part of being a truck dealer is realizing you can’t do everything perfect, and when you screw up, you tell the customer you made a mistake. It is not a matter of never making a mistake, it’s how you fix it that breeds long-term relationships.”
Sayre adds, “Our job as dealers is to allow the fleets to be successful. We are part of their business planning. Maybe we are a necessary evil, but we have to be there and we have to do what we can to let them satisfy their customers.
“We are not there yet, but it is better. Before you can solve a problem, you have to recognize it. I believe this industry is recognizing it and is spending the money and the resources to improve. Without successful trucking companies, there isn’t much use for dealers.”