Learning Without Scars
As a third-generation educator, it is easy to say that teaching and training are in the blood for Ron Slee. From his beginnings as a coach, through his time at McGill University, Ron developed a foundation for the work he does today. From working within dealerships, to operating a consulting company, creating a training business and running twenty groups, Ron has been directly involved in this Industry since 1969. Ron has been known as the industry expert for years, and has brought this expertise to bear through his training programs. Today, Ron provides specialized, job function based internet based subject specific classes, job function skills assessments, as well virtual seminars and webinars. These courses are designed for manufacturers and their dealers, as well as independent businesses in the construction equipment, light industrial, on-highway, engine, and agricultural industries through Learning Without Scars (www.LearningWithoutScars.com). This platform is a continuation of the work begun by Quest, Learning Centers which was established in 1996. This training is aimed at improving dealer parts and service operations through qualified people that are knowledgeable in using operational metrics and current market and operational best practice methods.
Learning Without Scars
Transforming Sales with Smart Data Strategies
Join us for an engaging episode as we dive into the transformative power of data in the sales environment with Nick Mavrick from Built Data. In this conversation, we explore how a new approach to data can unlock the potential of sales teams seeking to enhance their performance. Nick shares insights on how Built Data yields actionable intelligence, allowing sales professionals to deliver exceptional customer experiences.
We discuss the common struggle of overwhelming data and how Built Data bridges this gap, ensuring that sales teams not only collect data but effectively utilize it to prioritize high-value customers. A critical discussion point is the 80-20 rule—how focusing on a small percentage of clients can significantly boost a company's revenue and why understanding customer behavior is foundational for building long-term, trust-based relationships.
Nick emphasizes the necessity of moving away from traditional sales approaches that often overlook the importance of listening. Instead, by fostering strong customer relationships, professionals can navigate new challenges and adapt to the ever-evolving equipment rental industry landscape.
This episode is filled with valuable insights and strategic advice for anyone looking to improve their sales techniques and enhance their engagement with customers. Don’t miss out on this opportunity to rethink how data can empower your sales efforts. Join us for an enlightening discussion and be sure to subscribe for future insights that can help elevate your sales game!
Visit us at LearningWithoutScars.org for more training solutions for Equipment Dealerships - Construction, Mining, Agriculture, Cranes, Trucks and Trailers.
We provide comprehensive online learning programs for employees starting with an individualized skills assessment to a personalized employee development program designed for their skill level.
Aloha and welcome to our candid conversation. Today we're joined by Nick Maverick of Built Data. Nick has a very unique view on selling that is much more professional, much more analytical, much more pointed than the good old boy driving around in a truck saying hello to people. So, with that as the introduction, I'd like to have Nick spend some time explaining to us what built data does. So, Nick, the ball's in your court, my friend.
Speaker 2:Well, ron, thank you for A the time with you, B being a blessing and your world of good and the opportunity to learn from you and your team and all the contributors. It's the single best learning mechanism, I believe, not only for the industry but even folks outside of the industry. So, thank you, you're welcome and I wish I lived in a home who is Nick Magbrick.
Speaker 2:Well, I am a student of life and the industry and, to just alter some of the narrative, I've learned so much from listening to the field and I was probably in my early thirties. I've learned so much from listening to the field and I was probably in my early 30s and I thought I was a good listener. I was certainly raised to be humble and there was a sales guy, his name's Keith, and when I worked at Volvo Rents and he said you don't listen. And he was right. It's the listening when people say nothing.
Speaker 2:And the behavioral side of most of my career has been as a generalist. But the longest length of my career was in marketing, supporting sales forces in the construction equipment rental industry and of lately dealerships, construction equipment dealerships and early in my career I learned to count to 10. And the notion is the expression of disproportionate data and, just to sum it up, would be called the 80-20 rule and it doesn't mean data 20% of the customers do 80% of your business. It means that it just means lopsided and pay attention to the proportions. So built data was formed for a few reasons. One is to serve the field, to serve sales persons as a behavioral tool to put valuable market intel, whether it's internal or external, at their fingertips in three clicks. And the second reason was to provide a direct connection to management so they could link, or they should be called field support, where field support and salespersons can speak the same language about the customer. So provide them an equal data set that can either be observed centrally and all the way at the field, where they can see, have a unified view of the customer.
Speaker 2:It's actually one of your recent blog posts I think it might have been today or yesterday talking about how to treat the customer with love, and the best dealerships and the highest performing rental operations spoil their VIP customers and dealerships have an advantage that in many instances, I think, is maybe they're not fully aware of their strengths, which is local ownership, and, yes, some dealerships are not locally owned.
Speaker 2:However, the notion of, as I understand it, as the industry was born and dealers and rental companies really smothered their best customers with a better understanding of their needs so they could do their job, and when you pay attention to what you do, well, try to do more of it. As opposed to many companies that I talked to today, would say they have too much data, everything's shouting at them, their CRM, their point of sale, their ERP could be their e-commerce systems or online systems, and they have so much data. So they went from a dearth of data to now so much data that they can't distill signal from noise. So I hope that gives you a little bit of a background of what we do.
Speaker 1:I think that's really valid. I hope that gives you a little bit of a background of what we do. I think that's really valid. You know there's a series of things that are true about business to business and I guess the fundamental point is everybody looks at these labels DIY, dafy, all this stuff, diy, dafy, all this stuff. And Steve Clegg, who I know you've known and speak to, reverts everything back to two people a buyer and a seller.
Speaker 1:Right, and it's about the transaction and the perpetuation or the continuation of that transaction stream is a function of the relationship and too many salesmen, particularly in the capital goods arena, go by and you know how are things today. Rarely do they have a purpose for the call. Rarely do they send minutes back to the customer. Rarely do they make commitments with the customer at each call of what they're going to do next. It's much more a PR thing and I think you've related to that in many ways. Salesmen are very important. It's a very misunderstood job function. Everybody thinks it's PR and playing golf and going to lunch and hanging around bars at night. It's none of that. It's hard work if you're going to be successful, no doubt. How do you help salesmen become more successful?
Speaker 2:Well, I want to go back to Steve Clegg. I've had the blessing of meeting Steve through you and Steve, when you and I were speaking earlier today off the charts sort of intelligence and understanding similar to you I know you don't like hearing that and Steve, very simply, he distilled complexity to simplicity, just like you did, and what I've heard Steve say, I've heard you say on multiple occasions which is about the transaction, and the transaction is the behavior. It's just a photograph of a point in time, of the behavior, and Steve and you, who've collaborated, look at that transaction to come up with very accurate forecasts. In the industry. We don't do that, by the way, and I have enough knowledge of the space, though, to understand what it takes to do it well, and one of the challenges is the industry is undergoing a lot of change, and I shouldn't say that the water has been getting hotter over a long period of time and it's almost unnoticeable. And it's new market entrance, whether it's called overseas iron, it's the shift of rental or the profound growth of rental. The profound growth of rental.
Speaker 2:I was referencing a presentation earlier today it was a great one given by Tom Doyle and Brad Lull at ConExpo. It was actually at AEMP that preceded this recent, this couple of years ago, conexpo, and I was referencing it because I was writing some work for Built Data about the growth of rental and when you look at asset classes and earth moving in that presentation was quoted at 35% of all heavy equipment is rented For telehandlers. I want to say just from memory it was north of 65, could have been 75%. And what's missing in that conversation is the customer. And there's a ton of price wars going on. There's conflict between, call it, the OEMs overproducing or underproducing, the dealer who they're leaning on to sell specific things, the dealer who they're leaning on to sell specific things, the rental industries, which the big three have tremendous market power and their own strengths, and for my belief is that there's a simpler path. If I woke up at any one of those companies, I would be somewhat terrified because the environment is changing so quickly. I think what's really missing is a customer-centric view that understands, of course, helping that person get their job done. It's not only the margin on the rental transaction, it could be everything else that helps get the job done Parts and service, uptime, total cost of ownership, predictable costs for the contractor so they can make a profit on their job instead of this downward spiral.
Speaker 2:So if we, if we go back to Steve Clegg and forecasting, is what is the behavioral component? To link a killer forecast to the sales manager who's scripting to a goal for the enterprise and to the salesperson, who in many instances is forced to lie to their boss and lie by omission, right, that doesn't make you a fraud, it means you're sort of keeping your job and that so that we principally link, link a goal you can call that a forecast and transport that information to the salesperson so they can see the expression of the 80-20 rule in their data and giving them a direct linkage so the central office and the salesperson can operate from the same sheet of music. There's also key market intel. I don't know if you ever read tom riley's book. Value-added selling, yeah, but we should be selling value, right.
Speaker 2:I mean, we do a lot of things. Our equipment rental companies and dealers do a lot of things that are actually extremely difficult delivering uh equipment on time, billing, accuracy, you know, we can sort of dumb it down and say, well, how hard is it? It's hard. Or how hard can it be? It's extremely hard. Prompt pickup and delivery, keeping those machines at uptime and reporting back to that customer how they're serving them to increase their profitability. I don't think we do a good job of that. So being able to translate the forecast to something that the salesperson can focus on and know that they have the back of their enterprise to deliver on those promises of uptime, call it value added, we believe increases profitability.
Speaker 1:It's a pretty straightforward world if you really get down to it world if you really get down to it. What's problematic from my perspective is the world around us. The commercial world around us is so far ahead of us it is embarrassing. You go into a drugstore. Have you been a customer?
Speaker 1:Put your phone number in yeah, so I know everything about you. I know also what credit card you use. I have signature pads all over the place. I have chip payment with a credit card, and how many dealers do that? How many dealers have a signature pad?
Speaker 1:Whether it's rental or sale, I don't care, the customer sees things spectrum, elon Musk's world of telematics and low-grade or low-level satellites all of these things and we don't do any of that. What Steve is a maniac about, as am I. Harvard wrote a definitive book, probably 20, 30 years ago now, called the Service Profit Chain. That definitively proved that the single most important metric for any business that wants to be successful is customer retention. And Steve's a maniac about that. He measures customer retention, but he doesn't look at financial data, he just looks at transactions. Yeah, super smart world that we're struggling, transitioning to a stakeholder world from a shareholder world.
Speaker 1:What I've been calling for 20 years that we put profits over people, customer services has gone down, and I had a great chat yesterday with another of our contributors, david Griffith, who's the chairman of Modern Equipment, and he gave me one that I've stolen from him. We put in greed over our grandchildren. In other words, everything we do is short term. So the OEM, as you said, overproduces or underproduces but they have a buffer at the dealer level. If they overproduce they give special flooring so the OEM dealer buys the equipment.
Speaker 1:Rental is burst overflow business and it's been a geographic limit in North America versus Europe and Asia. The European percentage of machine hours in rental is close to double what it is in the United States and Japan's in the same category and we really haven't adapted the number of OEM dealers that are good at rental. You did that with Volvo, caterpillar did it with Cat Rents. There's struggles to do that but the big three, like you say, united and Sunbelt et cetera, those folks have it down to an art form and they don't have the same cost structure, they don't have the same overhead structure that an OEM dealer does.
Speaker 1:Yeah they have market power? They clearly do, and the market power allows them to be very powerful. When it's purchasing time, huge Yep. But they don't provide any customer service. They just provide a machine Yep. When the machine goes out, it works. If it doesn't, they replace it real quick. Some of the old-fashioned rental houses used to put an operator in the chair, but most of those have gone. Now it's typically small firms that do that as a means of getting market share. But go back to that salesman again. He's driving around in his vehicle. Who does he go see? Why does he go see them? How do they manage their time? Because that's the killer for a salesman, isn't it? How do they make their time most cost effective? How do they get the most sales dollars per minute that they can possibly do it? And I think that built data gives them tools. That allows them. They don't necessarily do it, but it allows them to make very powerful decisions and effective decisions on who they go see next and what they do with them.
Speaker 2:Yeah, and it's so fun to learn. I keep thinking at some point, oh, I feel like I'm back in my freshman year. I don't know if it's high school or college, but behavior is one of the hardest things to do. Or culture, right, pick your word is one of the hardest things to pull off in business. And I find that getting, if I can say, best customer, and what does that mean? Well, let's look at the segment that does 10. Let's look at deciles, let's look at the top 10% of your customers and see their contribution, cool.
Speaker 2:Just having that common language between if I'm the salesperson, you're my sales manager or you're the CEO, and then you're talking to your OEM, just having that common linkage removes layers of sort of mistrust, antagonism et cetera. That breaks companies in half. And you've talked about the slow bleed before. I've had a small purview into that world, which is? You talked about parts coverage at one point, at one point, and you would quote a statistic, if I remember it was one OEM had its part spent, business had declined from 50% to 25. And I want to say to 18, you know the number's better than I do. And there's a lot of slow bleeding. And I recently worked with a dealer, with meeting, and I recently worked with a dealer with I'm going to round the numbers 10% of their customers did about 80% of their business and 100% of their marketing capital went to the 80% of the customers doing 20% of the business. And it gets better um 60 or about 50, 60 percent of the entirety mark marketing budget went to sgna to spend the other 50. It's nuts. And so if you're in a company, um, I'm gonna say it's, it was, it's lost and it's lost by um. It forgot what it was good at, it fought, forgot what it was focused, you know, focused on which is serving a small group of customers and spoiling the heck out of them. And they're just. It's a land of confusion and it has a real human expense and it's not only leads to lower margins and you know I'm going to say it breaks families in half. You know, at the end of the day, a lack of prosperity has huge downstream, negative you know negative implications for society. And it just starts with a company they can't get their bonus, they don't get a raise. It just starts with a company they can't get their bonus, they don't get a raise.
Speaker 2:If I can shift into the positive, we have a client where we, by the way, we're not magicians I don't want to oversell anything. We do dirty work, we dig for data. Right, you can call it what you want. I've done my fair share of it. It is not fancy. Sometimes it means Ron Slee with one E, ron Slee with two E's, r Slee, and it means finding those Ron Slee's in the three different data sets. It sucks, but it gives the company a unified view of what you're doing.
Speaker 2:So we had one one of our dealer clients recently used this consolidated data set that their people can get two and three clicks and their salespeople they're planning the year and they set sales goal and they use built data to retrieve the information. That's not that big of a deal in itself. Now they have a behavioral component where they can track their progress against the coal. Even better. They can actually have the market intel so they can do value-added selling to their customers and prospects and do territory management more effectively. It just strips out a lot of the brain damage from running around to grift for business. So we are not magicians. It's pretty simple. It's linking the behavior with a unified data set.
Speaker 1:One of the things that's problematic is the quality of the data. There's many system providers, erps, or whatever we want to call them, and use Salesforce as an example. They have a profile for a customer Salesforce I'm going to call it an add-on piece of software to a business system. The business system also has a profile. Those profiles are not the same. The two systems, salesforce's and whoever the dealer management system is, let me call those DMSs they don't talk to each other, or if they do, it's one way. So now I've got two different profiles and I want to get a report. So here comes built data.
Speaker 1:Okay, nick, where do I go? Do I go to Salesforce? Do I go to my DMS, or do I have to do both and consolidate them? And what are you going to do to help me with that? That's part of the dirty work that you have to do. Correct, yeah, and on top of that, I always said whoever's closest to the customer wins.
Speaker 1:I've also said that as a salesperson, depending on my geography, I can only deal with a finite number of customers. Let me just say, arbitrarily, 100. Because I have to drive and one of the things that we have in sales management is a misunderstanding of drive time. I had a fellow up in Ottawa a whole Ottawa, it's across the Ottawa River up in Quebec, canada, and he did 5,000 miles a year in his truck. At 50 miles an hour that's 1,000 hours. So you want to work through 2,000 hours in a year. 50% of the time you're sitting in your and this is before cell phones A, b, it was in an area that there wasn't cell phone service. There will be today with Starlink and things like that, but this is a while back. I don't know how many people think that way. You mentioned I've got an executive. They drive and create a strategy for the company. The strategy is passed down and translated to a bunch of different departments and those departments make a strategy for the department and those departments make a strategy for the department.
Speaker 1:No-transcript. And the illustration you used was Caterpillar's parts market share when I started was 83% in 1970, actually 1965. And I'm talking at a conference in Mississippi in the early 2000s and the gentleman in charge of and say I know this isn't a popular question, but would you mind telling me what your parts market share is? And without a hesitation he said 38.3% and I thanked him and let's just arbitrarily say that was the year 2000. So in the 35 years 1965 to 2000, they went from 83% to 38%. Okay, there's a chapter. Next chapter is consolidation of dealers. There's fewer of them today, less of them. They're bigger by nature. A bigger organization loses a personal touch.
Speaker 1:Culture, like you indicated, is extremely important. I always ask groups what do you do? And most people can tell you how do you do it. Not everybody they want to talk about poorly or excellent or whatever the hell. The real question is why do you do it? And I want people to want to do it because they care for and want to serve other people and a servant's heart is an important characteristic. But a lot of people would not even want to go there. But that's what it's about. I need to make you feel good about the relationship you have with me, not what you're buying from me, but me, that I look after all your needs and wants. Whenever there's a problem, I'm here. It doesn't matter what it is, I'm there, I fix it, and tools like built data allow me to maximize that thousand hours if I'm up in the whole Ottawa area in front of the customer.
Speaker 2:Yeah, do you mind if I build on one of your points? Sure, certainly you mentioned a customer and the customer has a name, right? So when you talk market share right, that's a bunch of names added up to market share and it's not that hard. And that's what's so screwy about this is, when I look at a salesperson with a $25 to $50 million business, they have a hundred customers that will do 80% of their business. And well, you could say, well, it's a hundred. Well, can I partner with you if I'm in marketing and you're the salesperson? Can we figure out what it takes to serve Ron? Right, and it's one customer?
Speaker 2:If I deal with this, even in my own company and how we go to market, which is, if we don't really know your name, we shouldn't be talking, we shouldn't be marketing to you, we really shouldn't. If we can't do our homework before we come in, um, we, we shouldn't be doing right at all. And so market share has a name. It's the law. I call it the law of small numbers, right, and it's the law of small numbers in three clicks, and if you don't know those 100 names, then any road will get you there, as the saying goes.
Speaker 2:And I don't know if you, I know you're like a student of Charlie Munger, but he gave a killer speech.
Speaker 2:A lot of it it's about life, but the speech was he was asked to speak, I believe, to Harvard college, and I believe his son was graduating, and the speech was how to live a life of misery, and he goes through a few things, and if you can't plan market share by the law of small numbers, by the law of names, you're highly likely to live a life of misery, and a lot of companies are in this shape today.
Speaker 2:It's tough. I mean, you're looking at 10% EBIT margins, you're looking at supermarket type net income margins, and that's with price increases and layoffs, and it's a shame. Good news is, though, it can be reversed, and it can be reversed if you take a special forces approach right. Maybe that's what it's about. I defer to you and your knowledge, which is when the industry was less competitive. Maybe a hierarchical approach gave you scale. Today, if you're seeing your margins decline, maybe it's time to reorganize and do special forces, where a small team can collaborate, to use special forces. Where a small team can collaborate, it can certainly collaborate on a name right, a name times 100.
Speaker 1:Well, in effect, you're right. I like the special forces analogy. The rangers go into a community and live there. They fix a specific problem. I don't know that we have fix-it sales support.
Speaker 1:I often talk about compensation programs with equipment salesmen anybody who sells saying I'm going to give you a number of customers and I expect 100% retention. So, everybody, I give you January 1st. I want to have as a customer, january 1st of next year, and if any of you lose a customer I'm going to hurt you. It'll be noticeable financially. If you lose too many, you don't have a job. Very simple there was a gentleman up in Canada, in Vancouver, one of the largest car dealerships, and he had a standard rule the lowest performing salesman every month lost their job. Very simple, that was how he lit a fire under everybody's bottom, under everybody's bottom. I don't want to have to have people working with me that need a fire under their bottom to get motivated. I want them to come to me motivated. I want them to come to me with some goal, curiosity, performance, excellence of their own. If you don't come to me motivated, I can't give it to you. I can sure as hell demotivate you, but I cannot motivate you.
Speaker 1:Culture at Finning a Caterpillar dealer I guess they're the largest in the world now. That I worked with for a while back in the 70s we had 12 to 18 people that we would have come in over the summer before they graduated undergraduate or master's, postgraduate, and the youngest manager, which I was at that time, was the one that had to lead them. And the first month that they came I would put them in the warehouse in the most manual, grunchy job you could imagine putting parts away, picking parts, packing parts, unloading trucks and I'd lose about a third of them. It's hard work, it's sweaty work. It's not what they wanted. The ones that stayed, we rotated them through different functions in product support. We offered them a job when they graduated. And those that came back, we put them on an 18-month training program. So, like you're seeing, with the current situation with the national transportation structure in America, faa, we don't have enough air traffic controllers, we didn't have enough salesmen, market coverage, so there's a lead time. There's a period in time before this creates and gets traction. So the company was smart enough. They were prepared to wait three to five years. Nothing short term, it's a long term gig this. But after three to five years we had 53 stores.
Speaker 1:When I was there, every branch manager, every parts manager, every service manager, most salesmen, most of the executives, all came into the company that way. Talk about culture, you can't break that one up. It's a band of brothers. It's who you're going to go in the boat with. You know and that also was in a gap. We didn't have the data that we've got today. That also was in a gap. We didn't have the data that we've got today. We had to rely on people and the little black book that is in my back pocket and it's not shareable. Today, I can share everything and data is fluid. It's all over the place.
Speaker 2:So your three clicks world? How does that work? Great question. So I want to just transition off one of your points and then answer your question. If you go.
Speaker 2:I I can't say I read a lot of Munger because he's you know, I see clips here and there and it just resonates with me is sort of very distilled wisdom, or Buffett, and so, as I understand it, munger and Buffett would talk a lot about incentives. You know, follow the incentives. And I think you know Munger would say it's like the strongest law of business. And they spoke of. Munger spoke of a company called Les Schwab Tire right. Yep, of Munger spoke of a company called Les Schwab Tire right.
Speaker 2:It used to be closer to you than me and as I understand in so many words, the tire business is just a ruthless, largely OEM controlled business. And somehow Les Schwab eked out a really profitable, handsome business and it was a big business, I'm guessing north of a billion dollars at the time, and the notion was incentives. So the management called special forces was at the branch that was quote, unquote, the profit center and there was a lot of because of the team participated in profits. It weeded out a lot of sort of processes and controls so they didn't have to gum them up with advanced risk management, because if I stole then I was dipping into your bonus, and so there was a lot of very simplistic approaches to life that were arguably better than fancy systems that controlled it, and I think it's worth considering for companies to go back to a branch level view. You can only consolidate, merge, integrate so much and take costs out. By the way, that's extremely hard and risky. It's simplistic in a presentation, very, very hard to do. So three clicks.
Speaker 2:A lot of fancy reports are very difficult for people in the field to access. By example, they're told to drive their market share up, but they're not giving the list of names that sum up to a market share percentage. If they get market share, it's across their territory. It may not be down at the salesperson level or the store level or county level. So one view is we provide a geographic view of where your customers reside and within it, who's your best, your next best, et cetera, in three clicks. We're also linking what we call playbooks. It's the first, second and third action to save them time.
Speaker 2:Another view would be an interactive market share report. So I'm a salesperson, I'm the CEO of my territory. Let's say it's Oahu and my territory is Oahu. I'm the CEO of the Oahu territory I'm sure the CEO would appreciate that and I can actually click on the Caterpillar line and see who bought Caterpillar. And click at the number the Komatsu line and see who bought it. I can look at maybe there's an underperforming dealer and I can look at their best customers. So I can do a high value. You know sales proposition.
Speaker 2:So we present maps, graphs, tables, all where it's with dimensionality you can click, click, click. Now this technology exists, right, again, we're not magicians. What we're doing is applying a point of view on the data. I believe in the proportionality of the data. Not all data is equal. Look at the 10%, look at the 20%. That does 80. And we're giving them an accessible view to the data. Some would argue biased. Good luck.
Speaker 2:One of our clients has 32,000 customers. What are you going to do? Talk about all 32,000? A lot easier to talk about 3,200. And by salesperson it's 100. And that's the great unifier. So we provide multiple visual cues, or we call it visual filtering. So you can say I want to click on my best customer, who's an excavation contractor, who bought a wheel loader, and I want to look at where they also own cat as well as Komatsu right, and you can zero in where that market intelligence is in the salesperson's hand Today. It's not, they can't get it. It's in a point of sale system. It will spit out transactions. It's not in the CRM, because the management has gummed up CRM to the point that I can't write your birthday in there, ron, which is the black book.
Speaker 1:Right away. You have created a differential. Almost every salesman in the equipment world is only talking to people that have brands that their company represents. If the company, the customer, does not have a machine in a brand that I represent, it's not in my list. So I drive by all of these customers and I'm dependent on my equipment salesman to give me enough machines for my parts and service business to make me money. And that's the road. It's become very expensive to be in the capital goods business mining, forestry. Look at the blasted price of equipment. It's just to give you a bit of an idea of the dinosaur, and when I started it, a D8 was under 100,000 bucks. I mean, my Lord, lord, things have changed, so I have a territory. Are you assigning customers to a salesman, or do you recommend doing that? Or do you give them a geography and say here's a customer customers, or here's customers in that geography, go find the ones that will make up the 8020?
Speaker 2:ones that'll make up the 80-20? It's a good question. I have to think it through. We principally follow. We try to be the weighing machine right. So as I've gotten older, I've certainly gotten less opinionated, because I know there's more ways to fail. Right, and I'm not seeking to be right, I'm seeking to help you today and it's like exercise, right, if you, I remember, you know I ran one marathon. I will not run another one. But if you said to me great, you run in 10 minute miles, okay, let's get to nine, okay, you're not trying to turn me into an Olympic runner overnight.
Speaker 2:So we graft, we bolt onto their existing behaviors and try to level set with a data set that the salesperson can share with their sales manager, call it the boss and agree on the state of the market. Now when we fuse in other data. So generally my experience is it's customers by territory. But we bring in construction spending data, we bring in other external data. So now there is some connection, which is if a salesperson has his territory has a dearth of construction spending, it's abundant.
Speaker 2:When you can see the layers and say bad market, good customers, this other territory is growing and from the customer's point of view salesperson go talk to Ron, the GC, on a job, right at the bidding stage and say what are your needs, what payment terms, what kind of uptime, what's the schedule of the project. You know I'll script for you probably what you want to hear. I'll script for you to helping you deliver your project on time and on budget so you can make money right and you can pay me based on performance, whether I'm selling you equipment or running you equipment or keeping it. You know up and running. So when we link together the customer with the jobs that they're on, with the geographies, with the competitive marketplace, you can now have a more robust, you can design the customer experience truly around them. It's not that hard.
Speaker 1:I suspect one of the obstacles that you have is you're bringing fresh thinking to a marketplace that is used to old-fashioned thinking, and I don't mean to insult anybody with that, but that's kind of the way it is. You must receive unbelievable resistance from people oh, that'll never work here. I don't have that data, my people don't. That's not the kind of folks that I have working with me. Am I getting it right?
Speaker 2:You are. I'll break it down, though, because you just brought back something fresh for me. There is a company it's actually not in this industry. They rent and buy equipment, and the CEO was probably a lot like the younger version of me. He wanted to do above and beyond, and he thinks it's his job to provide this solution. He's got business intelligence, he's got the data warehouse, he's got the CRM, and he is blocking the head of sales from getting the data he needs to do what the CEO wants. The CEO wants to. He's got people doing four quotes and people doing 15s. He knows if he can print the quotes of the fours to the 15th, ebitda will increase from I'm going to make up a number 50 to 60 million. I'm changing those numbers a little bit, but just that increment. If he gets his fours to 15s, per month, ebitda jumps by 20%. It's not trivial, and so it's internal fighting amongst themselves.
Speaker 1:Yeah, but what you do there, I agree with the premise completely. Well, once I get everybody at 15, once I get everybody at 15, I've run into the ceiling. There's a capacity issue, that's fair, yeah. And you know, in the old days what we used to do is you get a salesman, he starts getting successful, and you take some customers away, give it to somebody else, and now you've taken your good guy and you've hurt him, demotivated him and you've given the customers the names a rookie where they were really comfortable with George, with no thinking about or no respect for what the customer wants. And that's a common occurrence in every damn market. So let's shift gears a little bit and talk about data and specifically talk about the model that Amazon uses where they identified a niche books that didn't satisfy big readers, satisfied casual readers. The casual reader is going to read the stuff that bestsellers, that's it. The real reader wants a broader view.
Speaker 1:So I read three, four or five depending, used to be more a month books. I'd go to a bookstore, I'd want to buy the book. They never had it. I had to wait. So I had to pay for the book and I had to pay for the freight to bring it in and I had to wait. Here comes Amazon, here comes Bezos, and he says you know, I'm going to get the fast moving books and I'm going to offer them at a lower price. I'm going to get the fast-moving books and I'm going to offer them at a lower price and I'm going to get in on a price point. And my argument in selling is that price is only important when every other element of the transaction is the same. And because you're on the deal, nick, it's never the same. Nobody else is Nick.
Speaker 1:But Amazon went forward, got successful, and then all of a sudden they said well, we're going to start a club. Going back to the American Airlines, crandall, when he was chairman, got a frequent flyer program going. So Bezos said well, see, that's a good idea. And there's many other examples. And he said I'm going to have a prime membership, I'm going to charge you something annually and because of that I'm not going to charge you for books, for freight. So you had to do a little calculation in your head and said OK, it's 90 bucks a year. I buy 100 bucks a year. If it's a book on freight, I'm making money. Making money, I'll pay the 90 bucks. And that's what he did, and that thing's up to about 150, 160, but what he did at the same time was broaden the offering. Yep, why don't we do that with equipment salesmen, with parts salesmen, with service salesmen?
Speaker 2:we should first but what do you think?
Speaker 1:standing in the way well, I'm piecing together.
Speaker 2:I, by the way, I love I'm going to say following you because your mind is is advanced and I'm bright, so I'm going to replay some things that was going through my head as you were talking. So I remember at one point in my career, finally understanding, quote unquote, the long tail and meaning what's not in the bell curve Right and the bus on curve Correct.
Speaker 2:And I also remember hearing an episode on Bezos where Saul Price tell you, proving I'm a village idiot. Bezos or Saul Price to tell you proving I'm a village idiot. I went to a school that was endowed by Saul Price, but I didn't know that he was at Price, costco or Price forget the name of his original company, the predated Costco Yep, he was a big believer in sharing his knowledge. As I understand it, um, and he had shared with brought with Bezos I might be skipping one person, so forgive me, but he had shared with Bezos is the notion of always low prices but sell a membership and capture the, you know, raise your gross margin dollars and don't worry. You know, worry less about the gross margin on transactions. So, to my knowledge, costco today is 12% markup, as I understand it, give or take. I think your idea is brilliant and I think it's.
Speaker 2:I don't know why somebody wouldn't do it. They're actually doing it wrong, but they're not. That's perfect, thank you. They're not getting the credit for it and they're leaking money all over with not having a team that operates as one. So they overspend on marketing. You go back to that example where 100% of the marketing capital was spent on call it the long tail, and where they spent 50 in sgna every. They had a tax and every dollar spent on marketing to pay the marketing department. None of that marketing went to help the sales people.
Speaker 2:So break, that's one like huge turd of trust, you know, or broken trust, sitting in the room. They have salespeople under supported by marketing dollars, right, relationship marketing dollars. You have departments with call it animosity. You have the stupidity of handing out promotional products, right, because that's what ever I'm going to call it, me too thinking so. They could easily save those nickels and dimes everywhere by having a sort of a. You know, bezos had a long tail plan Save those nickels and dimes that they're hemorrhaging, consolidate thatidate that, take a unified view of the customer. It means sales is not fighting with marketing, and that's probably a terrible word.
Speaker 2:What I've seen mostly is apathy. I'm not going to help you. Go, screw yourself. Salesperson or a salesperson, they can't talk to marketing because they've been shut down for so long. Not my job, they could do it. It's just they got a rifle through the brain. Damage In marketing. If I could take it one step further, marketing should really serve the salesperson right In B2B sales, if 80% of the sales come from 20% of the salespeople. Marketing should work for sales. Go serve them.
Speaker 1:What's interesting is the statement there's no new business. Everything you sell today is new business, to whomever it is, and marketing is misunderstood. And your comment about marketing dollars and where they're going. Marketing is everything and anything that influences a customer to buy. The most important piece of that puzzle is the person, the sales person whether it's on the phone or face-to-face or on the internet, that gets the sale.
Speaker 1:One of the things that was really interesting about 15, 20 years ago, when XML came in and replaced HTML, I knew how long everybody was on the screen where the cursor went, how long it stuck in every place, I knew whether they looked at the price, I knew whether they checked availability and I knew whether they placed an order. What blew people's minds was the next morning I would call you up and say hey, nick, I noticed last night you were looking to get a maintenance done on that such and such machine a 500-hour service. Did you find somebody to do it for you? And now the customer on the other end is saying son of a gun, what the heck does he know about me? But that's the beginning of how can I help you?
Speaker 1:Yeah well said, I don't know that you have heard me do it necessarily, but for the last several years, anytime anybody asks me for something, I say yes.
Speaker 2:I've heard you. You said yes to me and you're a gift.
Speaker 1:Yeah, and it confuses the hell out of people. Now, that's not saying I'm going to say yes to what you asked for. I might change the context. I might make it something that I can say yes for. I might change the context, I might make it something that I can say yes for. But the next one that's absolutely more important from my perspective every client I've had is is there anything else I can do for you? Or I'd go into clients and I'd say what product are you having the most difficulty with these days?
Speaker 1:And oh, 20, 30 years ago, there was a real shortage of mining truck tires. You couldn't get a tire for a year or two. Trucks were being sold and the tires are expensive. The trucks are anywhere from 30 million to 100 million and you couldn't get tires. And that's how you move product out of a mine. How the hell do you deal with that?
Speaker 1:So there's so many avenues in this where data is critical, where bringing the data to the people who need it is absolutely necessary. It's not happening. Having strategic thinking that positions a company to achieve specific goals, having a purpose, is missing. Business schools in the last 15, 20 years are regurgitating the same thing Harvard, yale and Dartmouth and the big schools that for years drove the rankings aren't even in the top 10 anymore because they've been continuing to put out the same problem, which everybody now understands doesn't fit this world anymore. The world is changing so rapidly Telematics, sensors, computers, minis, cell phones, all this stuff and here comes artificial intelligence. We are not ready for this. Even younger people aren't up to speed with it. Nick, I don't want to beat this thing up, but I think we've given it a bit of a shot. I'd like to do another chapter on this in the next couple of three weeks. I would be thrilled, and if you ever want to.
Speaker 2:I would love your feedback, right, I mean? We're we're not seeking to be right, we're. We're truly seeking to help people make money and if they make money, they will live better lives. It's not about greed what I make, I plan on giving away. I'm not looking for a bigger house, I don't own a boat. You know blah, blah, blah but would love to show it to you and get your feedback and adapt, and I said it to you earlier today. There's a few people and I'm sure there's more. It's just who's on my mind you, steve Clegg, there's others that I believe we can help people make money. Get frankly, have more fun, get out of the brain damage, get out of hating each other and whose fault and, frankly, getting surprised is no fun.
Speaker 2:Oh don't, don't surprise me, babe and there's a lot of you know, I bet was in an in when, when I was at volvo rents, we we franchised in north america, in europe we didn't, it was through dealer distribution and I don't know if you're how, if you, franchising attracts a fair amount of scoundrels, sort of get rich quick concepts.
Speaker 2:You know, buy my franchise because you know and you'll make a zillion dollars. There's a lot of vendors preying on dealers and rental companies with what I call hopes and dreams and like any hope or dream, there's usually like nine truths and one lie. But good luck figuring out which one's the lie, because it's like a drop, it's going to make you sick, it's the shell game.
Speaker 2:It's aftop, it's the show game, it's, it's f-ed up and so you got power, bi data warehouses, rental analysis system, dealer business systems, you know crm, erp, nps, subscription data, octowazoo, and it's like, let me just, let me just just grab onto you like a parasite and get my bite Right, let me. I'm going to say they don't really have a lot of reverence for the host, right?
Speaker 1:I think that's probably a perfect place to stop Pick it up as the next chapter. So, Nick, thank you so much. Thank you Everybody listening. Thank you for hanging around and listening to what Nick has to say. There's a lot of gold in there for those of you that are prepared to look for it. So, thank you, and I'll look forward to seeing you on our next Candid Conversation. Mahalo.
