The heavy equipment industry is not escaping the explosion of data now available. With updated machines hitting the market with Internet of Things (IoT) capabilities and more platforms than ever before that make capturing customer data a part of the everyday process, many companies are struggling to capture and understand what all of this data means and how it could improve their business.
Industry leadership is embracing the importance of business intelligence (BI) and analytics for heavy equipment for insight into ways to streamline processes throughout the company and improve bottom-line results. One department particularly poised to ride the wave of insight from data is Sales.
Sales insight
Tracking key metrics in the sales department will reveal better insight into their performance and areas that could use improvement. Creating a strategy that leverages the growing influx of data and examines the most important KPIs is critical for increased growth and continued success.
Best KPIs for heavy equipment sales
1. Return on average assets: net income/average total assets.
Return on Average Assets (ROAA) measures how efficiently assets are utilized. This metric highlights the return on the assets purchased using invested or retained dollars. This is an important KPI for dealers with large value assets across their fleet and sales lot.
Since most dealers also take on the role of a bank, offering financing to customers, it’s important to consistently monitor the return on these machines when sold. This is especially true for dealers who shift equipment from the rental fleet to the sales fleet.
2. Percentage of industry sales: dealer sales/industry sales.
Percentage of Industry Sales, also known as PINS to Caterpillar dealers, is used to measure improvements in the company’s competitive position in the market by comparing dealer sales or equipment to industry sales.
This metric should be monitored regularly to benchmark a company’s performance versus other manufacturers in the industry that represent the same class of equipment. From a BI perspective, the BI and Analytics tool of choice will be able to combine internal sales data with third-party sales data, often provided by the manufacturer.
3. Market market analysis.
A key to improving the sales process lies in the Market Basket Analysis. This KPI helps you understand what products customers routinely buy together. The Market Basket Analysis arms sales representatives at dealerships with the data they need to recommend add-ons to customers at the time of sale.
This type of analysis is a common tool for many retail ecommerce sites, such as Amazon. Consider Amazon’s “frequently purchased together” combinations below every product description. This can be incredibly useful for heavy equipment dealerships as well.
If a customer is renting an excavator, the Market Basket Analysis may show that most customers who have rented excavators also purchase safety equipment such as hardhats, earplugs, and goggles over the course of the job. The sales rep could then offer a discount to buy those at the time of rental sale.
Another application of Market Basket Analysis lies within the Marketing Department. This metric mines data on customer needs, including those who have not been heard from in a while. With a better understanding of customer needs, customers can be enticed back to the business.
But don't stop at Sales.
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