Marketing 101 - The Overall Plan

Okay, the database program is in place. Let's begin an overall strategic marketing plan. There are so many ways to market your products and services and we want to cover as many as possible. Here is a list that is prioritized as I would list them. You might find the order interesting:
  • Purchase & Expand the Database - The most critical expense.
  • Word-of-Mouth - Get people talking to people in a positive way
  • Referral - Customer referrals, friends, etc.
  • Website, Blogs - A real site that is a good working tool--a separate site.
  • Newsletter via Email - Very inexpensive an powerful way to communicate
  • Direct Mail - Targeted audience is cost effective.
  • Give Aways - To be used in prospecting, off site events, etc.
  • Prospecting - No substitute for seeing their business with your own eyes.
  • Networking - Chamber of Commerce, other associations
  • Your Service Department - Works to both advantages
  • Off site Events and Displays - Everywhere you can, often
  • Brochures - About your operation, your store
  • Association Advertising - Contractor Associations, etc.
  • Media Advertising - Print, Radio, TV
Now, the ideal situation is that there is a sufficient budget to do all of them in the minimum acceptable amount. Notice that I have Media Advertising at the bottom of the list. At most auto dealerships, it is at the top of the list. In commercial, it can be important, but the other items on the list are far more important. The database is the most critical of all. More marketing installments coming.

Marketing 101 - The Database

If you build it, they will come. . . I've heard that works in certain economies, but I never had the pleasure of experiencing one of those economies. We had to work at it to keep the inventory moving. In the Marketing series of articles, I'll deal with ways to help create business and prosperity.

My first tool as a marketeer, is a good database. I need a good computer program, to manage my prospects and customers so I can keep track of everything. There are a number on the market, but the most popular seems to be ACT by Sage. Another program I have used with success is called Maximizer. My original database, long since gone, was DOS based PfS Professional File which was a simple blank database and they had a spreadsheet program as well to help with reports. Whatever tool you choose, it will be effective for you and you will find out how it will be even more effective and valuable over time.

Commercial upfitted trucks is a relatively narrow market compared to regular cars and trucks. I want to know who all my prospects are. I already know what they do. They build things. Carry things from one place to another. They fix things. They tear things down. They are in the construction trades, the service trades, delivery. There are a lot of prospects in every town and city and they are easy to find. But, I want to know who they are, what their business is, how they use their trucks, how many, how often, how many people they know who do similar things. That's just the start of it. So, you can see there is a lot to keep track of, especially since I am building this department for long term success.

I want to keep track of people, companies, each time they were contacted, when they will be contacted next and how and on and on. I will buy names and information to import and save time. I will make sure and update each record adding more information as I learn it. My team will do this on paper and I will have one person entering the data into the computer program. I need the program to help me get it all done and keep it all straight.

Start by thinking of all the information you will want to keep track of from prospect to owner to repeat customer and so on. Getting this part done at the beginning will save so much grief down the road, so take the time and think it through. Once that task is done, enter the fields in your program so that you can then begin entering data.

Now, you're ready to input prospects and build on a solid foundation.


How Many Lines Should I Carry In Inventory?

In my first commercial truck operation, I found a great body company who gave me excellent service and their pricing was extremely fair and they were just nice to deal with. They were perfect. I ended up giving them virtually 100% of my business with great success. And then they decided to quit their business to do something else. Wow. A wake up call.

I had to scramble to begin some new relationships with other body companies very quickly. But, I had grown picky, so I called some up and went to interview them. I wanted to make sure that we could work together well. I found a few and was back in business without a skip. This was before a lot of body companies had bailment pools of trucks. Now there are so many that have pools.

Putting all my eggs in one basket proved to be a poor strategy no matter how good the company was. But, I didn't react to the point that I just took them all on. Here's what I think is an excellent strategy and some good reasons for doing so. I can also state that this strategy worked very well for the remainder of my career at the the dealer level.

Here's the strategy: Develop surface relationships with all suppliers so that you know what they do and how they do it, levels of inventory they carry and so on. Buy one every now and then to maintain a basic relationship.

Next, develop deep relationships with about three suppliers. I chose these companies based on the quality of their product, their service, levels and mix of available chassis, promotional thinking and so on. You will need at least one company that sells Dry Van Bodies since only some body companies sell those and then two others that sell everything else in the common lines like Service Bodies, Contractors, Flatbeds, Dumps, etc. I recommend that you give most of your business to this elite group and they become your team.

There is a number of reasons for this approach. One, you want to deal with good quality companies that will provide great service that you can count on to help you care for your valuable customers. Two, get them ordering things that you want or need that helps to set you apart. Three, due to the volume you will be able to give them with your narrow range of suppliers, you should be able to work out maximum discounts and other financial strategies that support both your interests. Four--and this one is a big one in my mind--work with these companies to assist you in your marketing efforts through advertising support, special promotions of selected products, co-op advertising, special billing arrangements, etc. This last reason can be a very powerful tool for you and the body company is more likely to assist you with these kind of things based on your volume with them and your relationship. There are many more reasons you will find over time.

If you are just spreading your business around, like you're trying to be fair with everyone, you will not be able to take full advantage of the ways you can have a body company help you grow your business. And growing your business is what it is all about. Give this strategy a try and I am confident that you will find it very rewarding.


Body Swaps and Other Creative Strategies

Problem: Your customer wants this body, but he wants it on that truck. Solution: Swap the bodies from one truck to the other.

That is one way to solve the problem and I have done it many times myself. I do recommend that you do everything you can to keep that to a minimum. When it is done, it is a good and fair thing to make sure that all expenses of the swap get charged against the sold unit so that you do not record a false gross profit and raise the cost of the stock unit falsely. Another thing is to make sure that all the details are followed up on like changing body stickers, inventory records, flooring records, etc. In addition, the swap should be done by a reputable body company so that the units are properly certified and you have their insurance policy in the liability loop.

Another way is to find a unit through your dealer body that fits the need of the client. This is a better way for all concerned if it is available.

You might want to swap the unit because the chassis the customer wants is an old stock unit and you want it to go away. Swapping the body then will solve two issues.

I think that generally speaking, the body swap is a thing to do rarely, but make sure it is in your toolbox to use as needed. It can be a huge benefit from time to time. Here's one of those times: You have a previous year unit that is just getting older. Let's say you have an 84" CA with an 11' Service body on it. I would recommend swapping that Service body with a plain flatbed so you can put a very inexpensive body on the old unit and cheap sell it to get it on its way out of your inventory. This strategy has paid huge dividends to me over the years and the the dealers I have suggested it to along the way.

The great news about this kind of operation is that the truck may go down in value, but the body doesn't. The body is also not a permanent fixture. It can be changed. Used sparingly, but fruitfully, the body swap is a great tool.

More Commercial Inventory Strategies

If you are limited to 40 units or less of upfitted ready-to-go trucks, I think you can make more sales if you will think of selection of variety rather than a numerical selection of fewer types.

Here's what I mean. The typical dealer is stocking Contractor, Service and Van bodies with a few Dumps, Combo bodies for good measure. Out of the 8 Contractor bodies, they might stock all 12' length bodies on a few various chassis, such as crew cab, super cab, regular cab, 4500 and 3500. There would be a little more variation in Service bodies because of the wide variety that are popular, so they might have 8', 9', 11' service bodies on various style chassis. Van bodies are typically 14' on a Cutaway chassis unless the dealer has a medium duty line. I see this strategy at most dealerships I have visited over the years.

This could be a more fruitful way: Instead of stocking all 12' model Contractor bodies, mix them up. You will find if you watch the traffic on the road, that there are a lot of 9' and 10' Contractor bodies. Many of them were done by the end user through a local body company. Why? Few dealers stock them is one reason. The advantage? Many. Turning radius, shorter overall length. These trucks do work at job sites and space is often at a premium.

There is a market for the single rear wheel 8' or 9' Contractor as well. So, out of 8 Contractors, I can now cover a huge variety to show my potential customers. If you have thought of developing your network, you will find it easy to get all the 12' units you need by the end of the day. I'm suggesting that you think more of the different things you can offer your customer so that you can sell more customers. Everyone wants solutions. I heard a long time ago that people don't want 1/4" drills, they want 1/4" holes. How true. The more different solutions you can offer, the better.

In Service bodies, I would have a lot of options that the prospect will never find anywhere else. Truly I am offering solutions that the prospect might not have thought existed. I would have units with Cargo Bed Enclosures, drawers, transverse compartments, horizontal series compartments. I want a sample of a bit of everything.

What does all this thinking do for you? One, it will help you close sales you never would have otherwise closed. Two, options are gross profit. You will earn more money. Three, your display is not going to look like the one across town. You will be unique. That's a good thing! Four, you will have a lot more fun. Get creative. Don't be safe--be successful!


Used Commercial Truck Opportunities

Rarely do I see a dealer that will stock used upfitted trucks as a regular stocking strategy. I can tell you that from my experience, whatever effort I went through to get good used commercial trucks was worth it. I typically averaged 50+ used upfit trucks a year and the gross profits were much stronger than on new trucks.

For this market, you have to have a bit more courage and autonomy. The used car manager is not a fan of paying anything close to book value typically, but you will not buy much in the way of commercial trucks that way. I've paid as much as $3,000 over book value and still made over $3,000 gross. It just depends on the truck. The closer it is to new, the more you have to see the difference in used cost versus new vehicle invoice so you don't get too close. Two to five year old units are probably the best. Commercial trucks as a general rule tend to acquire more mileage more quickly, so you will find a lot of high milers, but you will find plenty with acceptable mileage levels.

I generally looked through the Truck Trader and similar magazines myself for opportunities. I would find them sometimes from other dealers who did not want to stock them or that were looking for a bid on a trade in. I also had 3-4 wholesalers looking for me as well. Many times they might call me from an auction in LA or someplace to see if I was interested. I would buy van bodies on Isuzu chassis and others from Budget Rent-a-Truck and other such firms. They usually sell them for themselves, but sometimes you can pick up a few here and there. Sometimes I would apply dollar cost averaging strategies to get a number of buys and then average out the costs. You have to get creative to find them.

One of the largest fears is reconditioning. If you're in the commercial market for a while, you will be able to look a truck over pretty well and be a good guesser. If there is doubt and you have the time, the best scenario is to run a quick check in the shop. Brakes can be pretty expensive on commercial sometimes, so that can save you some money. I recommend that you do the reconditioning needed to make it look good. If the bed needs a repaint from a lot of scratches, etc., you will get a great deal more for it by cleaning it up fully. If the rear bumper has been hit a few times, get it straightened or replaced. Make it something you are proud to offer and stand behind.

Of course, the largest fear is the wholesale value versus what you are in the truck. Frankly, this you will have to get past if you are to be really successful in the commercial market with used trucks. Instead, make sure to use your experience and have a strategy and a plan A, plan B and even Plan C on how you are going to move the truck. I rarely wholesaled a used commercial truck. I wanted to retail them. The first day you see the truck you are thinking about buying, you should have a plan developed or developing quickly in your head. Used commercial trucks are generally easy to market to a wide audience.

Don't be foolish. Be business like. See the opportunities. Pay attention to detail. Be aware of reconditioning needs to make the truck right. Buy it with reality in mind and still have flexibility. You have to have your shop participating with your thinking so you can keep things in line. Do not step up to make the deal by overvaluing the trade. That creates a false gross. Step up if the vehicle warrants it and it is necessary to buy it as if you were going to buy it anyway. Don't let the deal you're on dictate your thinking. That will keep you on a good path.

All in all, this can be an awesome market. If you are serious about growing your department, you can't do well without it.

Commercial Inventory Mix

Over the years I had developed a stocking mix theory that worked very well and I've shared it with a number of dealers to use a guideline of what a good mix would be. It is broken down by body type and here it is:

  • Contractor Body (Flatbed with tool boxes on top, package of options) 10%-15%
  • USC Combo Body (Generally fits in service body category but sells in sufficient quantities to warrant its own category) 5%-10%
  • Flatbed (Flatbed, Stakebed [flatbed dumps go in dump category])20%-30%
  • Service Body (Service, Welder, Crane body, etc) 30%-45%
  • WorkMaster Type (Plumbers Body--Service Body w/Roof) 5%-10%
  • Dry Van (Cutaway, Conventional Cab, Tilt-Cab by not Cargo Vans) 15%-25%
  • Dump Bodies (Steel dump, Flatbed Dump, etc.) 5%-10%
  • Other Bodies (Specialty bodies) 5%-10%
The variance between the two numbers would be the variance of each market. Some markets sell more flatbeds and less service bodies, so they would be at the high end of the flatbed and the low end of the service body and so on. I have found that this strategy has proven with a number of dealers to be very effective and helpful. It has taken a lot of years of experience to develop this mix strategy and you may be able to benefit from it.
If you were just starting out, or you wanted to see how close this theory is, here is a way to do that. For one week, wherever you go (and get your team involved too), record the kind of bodies you see on the road, on the job site or parked somewhere. Take it even further by recording the length of the body or any other unusual things that you might see. This is a good way to see what I have said about color. I am sure you will find a lot of colored trucks. You might even record what colors they are. Of course, this is a great time to record who owns the trucks! After one week, compile the results and see what the real-life mix is in that area. Now, that is a small segment of time, but I think you will find that it is very enlightening to you.


Merchandising 102

My Macy's window. Back in the early 90's I started creating what I called my Macy's window display vehicles. This is not for the faint of heart, so if you are feeling faint, move to the next topic.

These trucks were outlandish. They were bold and different and at the same time exciting (at least to me!). Here are just a few examples of some of my Macy's window display vehicles from the past:

  • I would get a 4500/5500 84" CA in bright red and upfit it with a great service body like a Harbor Body. I would add all kinds of options and trick features, like drawers, treadbrite lids, MasterLock system. I made sure it had a BLACK straight leg narrow forklift loadable rack. I would put Alcoa aluminum wheels that I sent out had had polished for an extra $200. The truck had all the luxury equipment package like Lariet, SLT, etc. This truck I would call my Fire Engine truck. Every male kid loves a fire engine! Even when they grow up! After it is all decked out, I stick it out on a very prominent point and I don't think it ever lasted longer than 3 weeks! As soon as it sold, there was one to replace it. It has to be a bright, jump in your face color! I never got around to it back then, but if I were doing it today, I would try a bright yellow one! Red is a pretty safe color believe it or not. Great piece.
  • I would always have the prettiest aluminum flatbed on my lot: the ProTech Aluminum Flatbed. I would have the outside edges polished and make it look sweet! It always went on an 84" CA 3500 with the Alcoa polished wheels with the Alcoa center cap kit. The truck was the top of the line cab with any color other than white! This is especially good with a metallic color and we don't need to worry about the extra cost of painting the body. On one occasion I stocked a flatbed and a flatbed dump at the same time! I advertised them and the flatbed dump was sold into a different state and shipped by transport. This is a great piece.
  • Speaking of Alcoa Wheels, I became one of the larger sellers of 8 and 10 lug Alcoa Wheels in the country. We were buying so many we had to search warehouses all over the country to find enough--especially the 19.5" wheels. It is just amazing how much a nice set of Alcoa's will do for the sale itself and especially the gross profit. Of course, colored trucks scream for that treatment, but white looks great as well. Consider dressing a few trucks up and see what I mean. I had a special arrangement with a local supplier and after proving what we could do, we worked a deal where all the wheels were on consignment until sold so that the dealer didn't use it's cash for this. Sweet!
  • I used to sell Isuzu trucks. I took an 84" CA Isuzu truck and put a 12' Black van body on it and sent the factory wheels out to have them chrome plated. I had the cab and mirrors painted black to match the body. The body wasn't painted black, it used aluminum that was pre-colored black so the color would last and all the stainless steel rivets added character to it. I used this truck to my billboard and would put signs on it and it was on "the point" so everyone driving by couldn't miss it. It was very effective.
  • Here's another Isuzu story. Since Isuzu is a tilt-cab product, the overall length is 4' shorter than a conventional cab truck with the same size body. The turning radius is far shorter (because the wheelbase is 4' shorter and the wheels turn sharper). So, most dealers who were bold enough to put a service body on the Isuzu instead of the typical van body or stakebed, they would usually put an 11' service body because that's what they do for their conventional cab. I looked at it a bit differently. I put a 13' service body on the Isuzu and have way more storage space and still have a 2' shorter overall length tighter turning radius! Now I have something to really talk about with a prospect. The first time I tried this, I bought two. I sold them both to one customer right off the lot. There probably was not another in the entire state of California. Different has its dividends.

There are hundreds more of these kind of stories. I never ask for permission, but I always have a plan on how I will market and sell them. Eat your spinach and go for it!

Merchandising Your Lot 101

One of my favorite topics: Lot merchandising. I have seen hundreds of dealerships and there is very little merchandising going on. Dealers have a stock of cars and trucks and they just can't help themselves from creating a parking lot. There is nothing about a parking lot that speaks merchandising to me, unless you were very creative with color mixing or something like that. I've even seen dealers who use snap lines to line their cars and trucks up so that they are just right in the line. But, it is still a line and it is still a parking lot. There's only two things the parking lot says to the people driving by: 1) We have a lot of them, and 2) We know how to park them in a line.

Think about some other businesses and how they merchandise effectively. How about IKEA. If you've been to an IKEA, you see that what they sell is carefully displayed so you see the potential of it being in your own home. You get to see how it is used--or even, how you never thought it could be used! It's a trip through a maze of awesome displays that gets your own creative instincts moving. Now, think about the parking lot again.

Now, since I am focused on Commercial Trucks, there are huge opportunities to make great displays of these vehicles. I recommend that you take a 15 unit space out of the row and put 6 or 7 units in there and have them all parked in odd ways with the best display focused on the closest traffic past the store. You might even partner with an equipment company and get one of their skip loaders and a yard or two of gravel and put that next to your steel dump body as if the skip loader is about to load the dump. Make your display tell a story in 5 seconds or less. You have to have "white space" between your displays or they will blend together into a parking lot again. Park the rest out back somewhere. Better to have fewer units in a great display than a parking lot that no one pays any attention to except you.

Next, change it often. I know it is work. Get your lot team helping you to create interesting and effective displays. You will see the results in your bottom line!

More About Partnerships . . .

Sharing each others inventory availability is a great idea and is worth whatever effort it takes to create the partnerships and keep them effective. Let's take that concept just a bit further.

Every dealer ends up with aging units. That is part of the inventory game. How you deal with that is everything. I recommend creating these partnerships to help you and all your partner team keep your inventory fresh. As a unit becomes about 90 days old, it is time to get serious about finding a home for it and replacing that unit with something fresh. Here's the plan: Call one of your partners and trade 1-3 of your 90+ day units for an equal amount of their 90+ day old units.

Don't be all concerned about what you are getting back from them because it is easy to get stuck in your own thinking. Let it flow. You will be amazed at what this strategy will do for you. I have done it myself and have advised many to do this with wonderful results.

When the new (their old ones) units arrive, get them ready and get them on the lot. Make sure your team is fully aware of them. Chances are you will sell them quickly. Worst case scenario is you started the clock over again.

You will find that this strategy will work very profitably for you and your partners. It requires just a bit of courage, but worth any effort.


How does that Inventory Partner thing work?

One dealer can only stock so much inventory. The factory provides a locator service to help you find vehicles you don't have in your car and truck lines, but in commercial upfitted trucks, the factory doesn't know what you have on the back of the truck, so the locator is of little or no use. Certainly, you would spend a lot of time on the phone. So, the next best thing is to create a network of dealers where you can share your inventories with each other on paper and create instant availability.

Sometimes it seems that no matter what you have in stock, a customer wants something else, so getting it quickly and efficiently is critical to your making a sale. The network will solve this problem and the greater the size of the network, the easier the problem is solved--for all of you.

We need each other. A long time ago, there was a dealer who stocked about 500 units on the ground. They had the space and the financial prowess to get that done. A typical dealer in a good sized city back then might have had 150 units. So, this dealer that had 500 units decided they didn't need anyone else, so they stopped doing trades with other dealers. Within a year they were back dealer trading. No matter how many you stock, you cannot stock every model in every combination of equipment.

Here's a key thought: Stop thinking of competing with each other and concentrate on just being the best you can be. I guarantee that you will find that by opening up your inventory to sharing with other dealers, you will benefit at least as much as any other dealer will.

So, how do you do this? Call a dealer, talk about the concept, get agreements and begin the process. Commit to sticking with it for all concerned. It will be a very successful venture!

Perhaps I can help you.

I have developed a plan and spreadsheets with specific formatting that you can get for free. That's right, free. It is being used by a number of dealers for this same situation. In addition, the program has a huge list of benefits that far exceed just locating units you don't have. I would be happy to send it to you. Just send me an email with your request, dealership name and address, your name, and phone number to Tminion@commercialtrucksuccess.com.


To Go Boldly. . . Risk vs Reward

When it comes to Commercial Truck inventory, I go boldly where very few go and that has made a huge difference to my past operations. There are now a lot of Commercial Truck dealers that stock upfitted trucks and most of them stock the same things. You would typically find Contractor bodies, Service bodies, Flatbeds, Dry Van bodies, and an occasional Dump body. A dealer who stocks about 25 upfitted trucks would normally have a selection of these type of bodies in various lengths and with various options. Great. That's a wonderful start, but almost every dealer has a mix of those bodies. They are very easy to come by and the law of supply and demand, automatically reduces the gross profit.

Many times a prospect really doesn't know what they want and need, and if you were stocking some unique and different items, the prospect would be introduced to other options that the prospect would not find anywhere else. In my experience, this has created long-time repeat customers by being able to help them solve their business problems with the right vehicle.

If I were again running a dealership Commercial Truck department and was limited to 25 upfitted trucks for inventory, I would only stock a maximum of 15 of the common bodies everyone else is stocking so that I have a representative sample (and I have my network partners. . .) and the other 10, or about 40% of my inventory would be unique upfits. In my consulting with dealers, I always recommend that 25% of their inventory be unique because they have to start and gain more confidence in time and experience.

What is unique? I used to go to truck shows always on the lookout for something interesting and effective. I would keep my eyes open on the road and a camera nearby. Ideas are everywhere when you are looking for them. Here's another advantage of unique: Gross profit! Remember, supply and demand. With unique, the supply is low and you can create the demand by having it to show. Chances are the prospect didn't know such things were available.

Here are some unique ideas to think about:

  • Welder body (empty and also ready to go to work with welding machines, etc.)
  • Add unique options like Transverse compartments, rear work platforms, raised cargo bed enclosures, side steps, HD drawers, horizontal compartments, etc. This easily sets you apart.
  • Color! 40% of my inventory was colored. The typical dealer: 100% white. White is a safe bet. I'm looking for excitement. . . and gross profit!
  • More dumps!
  • Unique storage boxes such as I-pack, L-pack, and others.
  • If you have a medium duty line, stock a number of bodies other than the typical Dry Van and Flatbed. Try Service Bodies, Crane Bodies, Walk-In Bodies, Plumber Bodies, etc.
  • Cranes!! Very rare to find a dealer bold enough to stock a Crane body.
  • Refrigerated Van Bodies
  • The list is endless, but here are a few to consider.

The fear. The fear is that if it doesn't sell, what will I do with it? Boldness doesn't worry about fear, it confronts it. In all of my experience, I truly had trouble moving one body only. I transferred it from one truck to another three times and finally sold it. It is rare. Concentrate on marketing your trucks, displaying them well, having off site displays, letting people know what you have. You will be pleasantly surprised at how easy it is once you get past the fear of the concept of stocking unique items. And, you will love the increased gross profit!


Ground rule for maximum success

In all of my experience, I have found that the ground rule for maximum success starts with the right frame of mind. In my opinion, that frame should be creative thinking versus competitive thinking. One need not worry about competition. There is enough. Start here. Get creative.

I would take this a huge step further and even encourage partnering with other dealers to help each other be more successful. I am confident from experience that you will find it a rewarding move.

I've seen many dealers in the past who think they are an island; who think that just because you have a particular truck that the customer will have to come to you. That is very old thinking and the chances are good that you will have that truck a long time. Find a partner or several partners and share your inventory in a format that makes sense. You will all sell more trucks more easily.