Tractor Monitor 2011. Consulting

Transcription

Consulting
Tractor Monitor 2011.
Sales excellence in farm machinery sales using the example of tractors.
A study by MBtech Consulting GmbH.
Preface
Management Summary
3
Objective and design of the Tractor Monitor 2011 study
4
Overall conditions:
Developments in agriculture
6
Overall conditions: The tractor market
7
Sales success
8
Customer relationship management
9
Customer relationship management:
Dealer performance
10
Pre-purchase-phase
11
Sales advisory and purchase
decision
12
Order and delivery
13
Summary and recommended actions
14
Contact, Disclaimer
15
Dear readers, dear customers,
In spite of the continuous decline in employment and the number of companies
in the agricultural sector, the total cultivated area in Germany remains nearly
constant. As a result, there is a ongoing trend towards increasing company sizes, leading to a rising degree of professionalization of the end customer. In addition, technological trends force the manufacturers and their dealer-networks
to face changed needs of their customer base and therefore to adapt their sales
processes. In doing so, it is important to identify key areas for action from the
customers perspective and to take the right measures for the future. Beside the
product itself, the quality and efficiency of the distribution system is of essential
significance for the purchase decision.
The study “Tractor Monitor 2011 – Sales excellence in farm machinery sales
using the example of tractors” faces this challenge and illustrates specific levers
for optimization. Similar to the previous study of 2009, we have analyzed the
tractor market in Germany, as a representative core segment and one of the
world’s major markets. The aim of the study in 2011 was the detailed analysis
of the sales processes of the six largest tractor manufacturers in Germany, as
well as the identification of success factors and areas for action from the dealer
and customer perspective. So-called “Best in Class” examples show already
existing industry-approaches. The study focuses on “customer relationship
management”, as well as on the sales phases “pre-purchase”, “sales advisory
and purchase decision” and “order and delivery”.
This summary gives an impression of the methods used for the approach and
the levers on the way to excellence in agricultural equipment sales. The findings
and measures are also applicable to other segments.
In case of any questions and detailed discussions about the study you are most
welcome to contact us directly and we look forward to an active exchange of
ideas.
With best wishes from Sindelfingen
Dr. Michael Müller,
CEO MBtech Consulting GmbH
Management Summary
1. Introduction
After the crisis in 2009 the agricultural machinery sector
returned to positive growth in 2010. The change of the
customer structure and the increasing cut-throat competition continued. This and more industry trends have a
significant influence on sales and after sales of tractors.
A further development of sales processes is requested
due to complex products and a changing demand. In
image barometers and dealer satisfaction studies, the
performance of manufacturers in sales and after sales
is judged differently and questions regarding concrete
optimization approaches remain open.
2. Object of investigation and design
To judge the sales performance of the agricultural machinery manufacturers, surveys have been carried out
with end customers, to identify and prioritize the critical success factors in the sales process. Based on this,
expert interviews with dealers of the six largest tractor
manufacturers have been accomplished to capture their
level of satisfaction. Major elements were selected and
analyzed.
3. Study results
In context of the survey results, considering “customer relationship management”, dealers have identified a need for action across all brands in the areas
of customer data management and customer contact
management. Furthermore, there is great potential in
the use of marketing tools to influence customer behavior.
In the “pre-purchase-phase”, there are significant differences between the quality of the producer websites and in the regulations of demonstration tractors.
The topic “sales advisory and purchase decision”
shows the high relevance of the salesman qualification from the customer perspective, as well as potentials in the control of the salesmen from the dealers
perspective.
In the phase “order and delivery” it becomes apparent that delivery times show variations and that the
delivery reliability is of major importance for the customers.
Summarized, there are different fields of action, from
dealer and customer perspective, with direct influence on the sales success. The potential fields are
either relevant for all manufacturers, or manufacturer-specific. This potential should be addressed and
measures should be taken sustainable.
|
2 3
Objective and design
of the Tractor Monitor 2011 study
Objectives of the study
Before the detailed results of this study are being discussed, the latest industry developments, which have an
impact on the area of tension between the manufacturers, dealers and customers, are considered.
The study is mainly focused on the German market and
its current conditions. If there are significant trends,
developments outside this core market are considered
aswell.
On this basis, success-relevant characteristics in the sales process are defined for the following topics:
1. Identification of success factors and areas of action from the customer and dealer perspective
2. Assessing the performance of the leading tractor manufacturers and mapping of “Best in Class” examples
3. Derivation of recommended actions for achieving sales excellence
Systematic approach of the Tractor Monitor 2011 study
MBtech Tractor Monitor 2011
Fendt
John Deere
Customer Perspective
Claas
Dealer Perspective
Excitement
Manufacturer A
Manufacturer B
Performance
Manufacturer C
Basic
Manufacturer D
+
Importance
-
Manufacturer E
Manufacturer F
Recommended Actions
|
MBtech Consulting Tractor Monitor 2011
Customer relationship
management
7,0
Sales network
7,5
Online presence
5,0
Manufact
turer A
Study design
To identify the customer and dealer perspective, more
than 100 qualitative interviews with contractors and farmers as well as qualitative interviews with 25 dealers of
the leading tractor manufacturers were conducted. The
study was carried out in the period between June to September 2011.
Customter data management
Contact management
Marketing operations
Sales advisory and
purchase decision
Pre-purchase-phase
Focus of the study
Based on previous conversations with dealers, selective criteria in four core areas were analyzed (illustrated
right).
Order and
delivery
Sales network
Salesmen qualification
Delivery times
Online presence
Sales training
Delivery reliability
Availability of demonstra-
Product configuration
tion tractors
The focus was specifically chosen for tractors as core
business of agricultural machinery dealers. The survey is
focused on the six leading tractor-brands in Germany. In
addition to the qualitative answers consumers and dealers had the opportunity to evaluate their satisfaction on
a scale from 1 (low satisfaction) to 10 (high satisfaction).
New Holland
Case-IH
OEM Performance
Assessment
Deutz-Fahr
Dealer
Frequency
(year)
Brand A
XX
Brand B
XX
Brand C
XX
Brand D
XX
Brand E
XX
Telemarketing
Direct mail
customer
visit
Best in Class
Source: MBtech Consulting GmbH
|
4 5
Overall conditions:
Developments in agriculture
Development of the farm sizes
The number of farms in Germany decreased sharply
since 1999. Within the last 10 years, there was a decline of about 30%. Looking at the farm size structure of
agricultural companies, it is established that in particular small businesses with up to 60 ha are becoming
less important. On the other hand, farms with a size of
100-1000 ha are increasing. This means that there is
a clearly identified trend towards larger farms, which
indicates that farms with smaller land are difficult to
operate with profit. The average farm size is still at
about 56 ha, with two tractors in use. As a result, the
customers decide in favor of agricultural concepts that
offer an optimized cost/benefit ratio.
Employment in the industry
Due to the concentration process which is actually taking
place in the agricultural sector, the number of employees
and the structure of the workforce have also changed.
While the number of family workers is declining, the
amount of temporary contract workers increases. However, the overall number of employees in this sector is decreasing. In 2010 approximately 1.1 million workers were
employed. Thus, the number of employees decreased by
about 180,000 since 2005.
Development of the number of farms
Agricultural subsidies from the EU
Subsidies play a key role in customer decisions whether
or not to purchase new agricultural machinery. There are
several distinctions between various public aid programs
operated by the EU, all of which are aimed at a common
agricultural policy. The goal of this policy is to establish
and maintain stable, sustainable and competitive agriculture within the EU. Environmentally friendly measures are
particularly supported by these programs. In 2013 there
will be changes of agricultural support conditions, which
could include a reduction of the EU budget.
500.000
472.000
447.000
421.000
397.000
400.000
375.000
329.000
284.000
300.000
200.000
100.000
1999
2001
2003
2005
2007
2009
Profit situation and origin
The large increase of profit in agricultural companies during the years 2008 and 2009 could not be maintained.
The companies had to accept a decrease of the average
profit to about 35,000 Euro per farm. Currently they are
increasing again. Nearly 60% of the revenue has still its
origin in products of animal husbandry.
2011
forecast
Source: Federal Bureau of Statistics and MBtech Consulting GmbH
Summary:
The size of farms is growing and there is a smaller amount
of farms, which creates demand for larger and more machinery. Another development is the increasing demand
of environmentally friendly tractors, partially due to the
Tier-4 emission standard.
|
Overall conditions:
The tractor market
Process of concentration in
AGCO
the farm machinery segment
Fendt | Massey Ferguson | Challenger | Valtra
CNH
SAME DEUTZ-FAHR
Case IH | Steyr | New Holland Agriculture
Lamborghini | Deutz-Fahr | Hürlimann | Same
CLAAS
JOHN DEERE
ARGO
McCormick | Landini
The tractor market in Europe
The agricultural machinery industry is characterized by
a strong concentration process. The tractor market is
dominated by six major companies, each with different
brands. Regarding market share, John Deere is market
leader, followed by the companies CNH and AGCO.
In Europe, the German market is placed second for tractors in quantity with 28,600 new registrations in 2010,
after France (about 31,300) and ahead of Italy (approx.
23,300). Regarding the offered product portfolio or the
manufacturers strategies, there are definitely differences
between the brands. New Holland for example is characterized by a wide product range, in contrast to Claas,
which offers the smallest portfolio.
The tractor market in Germany
Since the outstanding results of 2008, the tractor market
in Germany has faced a decline. For 2011, however, the
market is again expected to grow by 14%.
Selected purchase criteria:
low
Importance
high
Reliability
Looking at the engine-power of new tractors, a rising
level of customer requirements can be noticed. For example, one third of the new models have more than 110
kW engine-power. This development descends from the
need of more productivity, in order to manage the increasing field size more efficiently. It can also be observed,
that vehicle-stocks are getting older, although they have
almost decreased by 50% since 1985.
Technological requirements
Increasing requirements also exist regarding technology of the vehicles. Keywords are “precision farming”
and “tightening of emissions standards”, which require
further development of the vehicles. In this context, alternative propulsion technologies (e.g. biogas, fuel cells,
etc.) and the electrification and networking of vehicles
are gaining in importance.
Purchase criteria
The adjacent figure shows an extract which purchase criteria have the highest or lowest importance for the end
user. In this illustration you can see that not only product
features affect the purchase decision, but also the focus
is on the distribution systems.
Salesman qualification
Durability
33 parameter
Fuel consumption
Cost of repair
Summary:
Vehicle delivery
In addition to product features, aspects of the distribution system increasingly have significant impact on the
purchasing decision. As only a few companies, mostly
multi-brand companies, dominate the tractor market, differentiation through the distribution system is becoming
more and more important.
Driving systems (GPS)
Offerings for leasing
Online presence
Product
Distribution system
|
6 7
Sales success
Measuring success in the sales process
Before starting with the detailed analysis of the sales process, it is necessary to understand, in which sales phases the customer’s interest stops. The following figure
shows a cross-brand survey of the “sales funnel“ based
on dealer information to the respective success rates for
each phase.
Overview of the sales
funnel
100 %
Over all brands, an average of
78% of all the interested are
willing to do a test drive.
After that, 68% of the potential
customers request an offer and
27% sign the purchase contract.
78 %
68 %
27 %
100
75
50
Best
25
Average
Worst
Within a cross-brand analysis, most of the deals are lost
in the timeline between the offer and the contract. More
detailed analysis of the manufacturer level shows that
there is a significant difference in success rate between
the individual process steps.
|
Co
nt
ra
ct
Of
fe
r
Te
st
dr
ive
In
te
re
st
The illustration shows the potential between the best and
the worst performance. Duo to the present results, the
reasons for these deviations are mainly in the organization and implementation of sales processes. Based on this
background the “Tractor Monitor 2011” focuses on the
performance of the leading tractor manufacturers.
The analysis of the sales funnel shows that the performance of the sales processes and systems of tractor manufacturers differs widely.
Customer data management
Contact management
Marketing operations
A key area is the comprehensive customer relationship
management of the manufacturer or dealer. Across manufacturers only a moderate satisfaction was expressed
by the dealers. The largest areas of activity are seen in the
contact and customer data management. Manufacturers
are particular challenged to provide IT systems for effective and efficient support of customer communication.
From a customer point of view,
the issue of dealer or manufacturer support is a “one-dimensional
requirement”, where competitors can clearly be differentiated.
In addition to the sale of new
tractors, there is also the sale of
services which is of concern in
this criterion.
Pre-purchasephase
Order and
delivery
Sales advisory and
purchase decision
Customer relationship management of the dealers
Customer
perspective
Dealer satisfaction
Ø 6,2
Excitement
Manufacturer A
Performance
Manufacturer B
Basic
Manufacturer C
+
Importance
6,5
7,0
5,3
Manufacturer D
5,8
Manufacturer E
6,5
Manufacturer F
3
4
Zone of
dissatisfaction
6,0
5
6
7
Zone of
indifference
8
9
10
Zone of
satisfaction
Classification of importance for the customer
The customer statements consist of two dimensions:
Importance of the purchasing decision criteria and
Requirement of the purchase decision criterion: it
is divided in basic requirements (these attributes
are taken for granted when fulfilled but the result
is dissatisfaction when not fulfilled), performance
requirements (these attributes result in satisfaction when fulfilled, but dissatisfaction when not
fulfilled) and excitement requirements (these attributes provide satisfaction when achieved completely, but do not cause dissatisfaction when not
fulfilled)
|
89
Customer relationship management:
dealer performance
Dealer performance comparison: Contact management
Many dealers do not contact their customers and potential customers regularly. This is often due to a lack of
sales personnel and insufficient support of IT-systems.
Across all brands, dealers of different size differ greatly in
their frequency and type of media used to contact their
customers. In this area, it is often due to a lack of standards that dealers don’t work on the market at an optimum cost-benefit ratio.
A connected customer management system between
producers and dealers would help to handle customers
systematically and more efficiently. In addition, this ITsystem can be used indirectly to control the seller and to
verify and document customer contacting.
In initiating and implementing customer loyalty programs,
the dealers are usually left alone. That is the reason for
transfering ideas and solutions from the automotive industry to the agricultural machinery trade.
Schematic illustration of the implantation of the contact management
Percentage of customers who are
regularly contacted by their dealer
(average over all asked dealers)
100
90
80
61 %
70
60
52 %
50
20
Dealer
Brand A
10
Brand B
0
“The manufacturer doesn’t provide us with an
IT-system to sale tractors. In this area there is a
considerable demand.”
Quotation by a general manager of a distribution company
|
Current customers
30
Potential customers
40
Frequency
(year)
Telemarketing
Direct mail
Customer
visit
XX
XX
Brand C
XX
Brand D
XX
Brand E
XX
Pre-purchase-phase
In the “pre-purchase-phase“ of the purchase-decisionprocess customers make important preliminary decisions
for the following process steps.
A selected aspect of the „pre-purchase-phase“ is the online presence:
This issue shows a very heterogeneous picture among
the manufacturers. Particularly noticeable is the negative
assessment of two brands. From the customer point of
view, the online presence is taken as self-evident, which
can result in large dissatisfaction for poor implementation.
Pre-purchasephase
Sales advisory and
purchase decision
Order and
delivery
Sales network
Online presence
Availability of demonstration tractors
Online presence of the manufacturers
There is potential for improvement for the manufacturers to
support their dealers with online
presence. In this section there
are only a few satisfactory solutions.
customer
perspective
Dealer satisfaction
Ø 8,0
Excitement
Manufacturer A
Performance
Manufacturer B
9,0
8,5
Manufacturer C
Basic
+
Importance
6,8
Manufacturer D
5,8
9,8
Manufacturer E
Manufacturer F
3
4
8,0
5
Zone of
dissatisfaction
6
7
8
Zone of
indifference
9
10
Zone of
satisfaction
„We would welcome more support regarding our website.
But the solutions must be flexible, because in addition to the
tractors, we also sell other machines – in that case we don’t
want to be too restricted from our tractor manufacturers.“”
Quotation by a general manager of a distribution company
|
10 11
Sales advisory and purchase decision
The pre-purchase-phase is followed by the “sales advice
and purchase decision“. During this phase the main focus is on the sales people, who have an essential influence on the purchase decision of the customer.
Pre-purchasephase
Sales advisory and
purchase decision
Highly qualified salesmen regarding product knowledge
are a critical success factor in the business field of new
tractors. This issue has a strong influence on the buying
behavior of the customers, hence highly qualified salesmen are a basic requirement for them.
Order and
delivery
Salesmen qualification
Sales training
In general, the dealers show a high satisfaction with the
qualification of their salesmen. Nevertheless, the dealers
see further potential for improvements regarding training programs.
Salesmen qualification – product knowledge
Customer
perspective
Dealer satisfaction
Ø 8,4
Excitement
Manufacturer A
Performance
Manufacturer B
Basic
Manufacturer C
+
Importance
8,5
9,0
8,8
Manufacturer D
8,3
Manufacturer E
8,3
Manufacturer F
3
4
7,3
5
6
Zone of
dissatisfaction
7
8
Zone of
indifference
9
10
Zone of
satisfaction
“If the seller can’t convince me personally and professionally, then I will not buy the machine.”
Quotation by a farmer
|
Order and delivery
The phase of “order and delivery“ is situated at the end of
the sales process. The performance in this phase shows a
high importance for the preliminary purchase decision as
well as for subsequent transactions in the future.
The delivery times and especially the delivery reliability
are fundamental aspects in the ordering and delivery process.
Sales advisory and
purchase decision
Pre-purchasephase
Order and
delivery
Herein, only two manufacturers got satisfying results and
thus are able to differentiate from their competitors. The
adherence of delivery dates is a very important basic criterion that influences the purchase decisions of customers in a significant way.
Delivery times
In this context the supply of information and reliable production
planning by the manufacturers
are key fields of action.
Customer
perspective
Dealer satisfaction
Ø 7,4
Excitement
Hersteller A
Performance
Hersteller B
Basic
Hersteller C
+
Importance
9,0
9,3
6,0
Hersteller D
6,5
Hersteller E
6,8
Hersteller F
3
4
Zone of
dissatisfaction
6,5
5
6
7
8
Zone of
indifference
9
10
Zone of
satisfaction
Overview: Adherence of the agreed delivery dates
The good economic situation provides a maximum order amount for the manufacturers, what causes not only
longer delivery times but also larger variations in delivery reliability.
Across all manufacturers, only 76% of the promised delivery dates can be fulfilled.
Failings in the delivery process are often compensated
by the dealers by maintaining a high inventory of machines.
Fundamental process improvements can avoid costs
and dissatisfaction for dealers and customers.
Adherence of the agreed delivery dates
Ø 76 %
Manufacturer A
88 %
93 %
Manufacturer B
Manufacturer C
Manufacturer D
Manufacturer E
Manufacturer F
60 %
70 %
75 %
72 %
|
12 13
Summary and recommended actions
As results of this study, suggestions for improvement
can be deduced for distribution systems and for the sales success. These can be relevant for the whole industry
or for specific manufacturers. To identify the most important fields of action, in-depth analyses were made on
brand-levels.
This figure indicates all areas, in which comparisons
between the customer and the dealer perspective were
made. On the left hand side the customer expectations
for each area are shown and on the right hand side the
satisfaction of the dealer with the manufacturer is presented.
In the following figure, the performance of one manufacturer is shown as an example:
The illustration shows areas in which the manufacturer
has potential for improvement.
Example: GAP-analysis manufacturer A in comparison with the branch
dealer satisfaction
low
1
Customer relationship
management
7,0
Sales network
7,5
Online presence
5,0
Rule of demonstration
tractors
7,8
Salesman qualification
9,5
Training offerings
9,5
8,5
Delivery times
7,5
9,3
Importance (customer perspective):
2
3
4
5
6
7
Manufacturer A
high
8
9
10
Best in Class
Fields of action
In addition to brand-specific fields of action there are
potentials for improvement, which could be identified
over all manufacturers for the following topics:
Professionalization of customer data- and costumer contact management by the use of lead manage
ment and CRM
Support of the dealers with online presence by the manufacturer
Alignment of the training program to the needs of the dealers
Mandatory supply of the dealers with information and adherence of the delivery dates in the ordering- and delivery process
XX
Requirements:
Basic
Performance
Excitement
|
Within this example it is apparent, that there is, among
others, an urgent need of action for training offers. As
mentioned in the chapter “sales advisory and purchase
decision”, a well-qualified vendor is a prerequisite for
the customer. Furthermore customers rank this area as
one of the most important purchase criteria. In contrast,
dealers evaluate the offer of trainings only with an average satisfaction. An in-depth analysis shows concretely
which options for improvement the respective manufacturer has.
Regarding these topics, MBtech can offer implementation-oriented solutions, due to its extensive
experiences in the automotive industry.
Contact
Disclaimer:
MBtech Consulting GmbH has compiled the contents of
this trend analysis with the greatest possible diligence,
to the best of its knowledge and with the assistance of
established scientific methods. All of the information
which is not based on historical facts or quoted sources
consists of statements or prognoses which, with regard
to their correctness, are subject to influences which
lie outside the control of MBtech Consulting GmbH.
MBtech Consulting GmbH does not assume any responsibility for any damages which occur as a result of decisions which are made on the basis of the contents of
this paper.
MBtech Consulting Profile:
Frank Schlipf
Principal Engineered Products
MBtech Consulting GmbH
Telephone: +49 160 8687030
E-Mail: [email protected]
Martin Schwarz
Project Manager Customer System
Telephone: +49 160 8681064
E-Mail: [email protected]
This study was developed in cooperation with:
Markus Wiest
Lukas Fontani
Maximilian Schupeck
Julian Statt
Who we are | MBtech Consulting is a member of the
MBtech Group. We are a consulting firm that operates
internationally, in Germany, Austria, the United States,
China and at other project sites worldwide. We combine
lean consulting know-how and global practical experience into valuable specialized knowledge.
What we stand for | MBtech Consulting stands first and
foremost for business strategies that deliver measurable
results, are implementation-oriented, and achieve lasting
impact – strategies made possible by close dovetailing in
terms of strategy and operations. All of our business strategies are based on the lean enterprise approach, which
is used along the entire value chain, enabling longterm
global competitiveness.
Our clients benefit from leveraging the synergies created
in the engineering environment of the MBtech Group.
Our consulting teams are specifically composed to guarantee the ideal combination of consulting expertise and
extensive mobility know-how. When it comes to processrelated research topics, we also work closely with leading academic and scientific partner institutions.
What we offer | There’s no substitute for experience
and professional expertise. That’s why our consultants
come from well-known corporate consulting firms or
have already held management positions in the automotive industry. They know exactly what counts: feasible,
effective concepts and concrete results.
MBtech Consulting:
The best consulting address on the way to lean enterprise
|
14 15
Posener Straße 1
71065 Sindelfingen
Germany
Tel. +49 7031 686 - 4780
Fax +49 7031 686 - 4644
[email protected]
www.mbtech-group.com

Tractor Monitor 2011. Consulting

Transcription

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