Can a single piece of computer software transform the sales and marketing operation of a plant dealer? David Taylor meets two people who believe it can
IN THE competitive world of plant sales, the task of distinguishing yourself from your rivals is seldom easy.As in the automotive industry, construction plant is becoming increasingly standardised; small variations in performance and specification are often not enough to influence a buying decision.After sales service and an attractive overall package are now decisive factors. But the biggest factor, not surprisingly, is price. Keeping prices keen and viable means running a very tight ship.
Robert Wilson, company accountant with Alfreton-based JCB dealer TC Harrison, is all too aware of this.'It's very difficult for anybody in retailing to get more for their product these days, ' he says.
A couple of years ago, TC Harrison was approached by Geoff McClure, managing director of specialist IT consultant Tahola.Mr McClure was offering a 'business intelligence' system that he promised would unlock the potential of TC Harrison's existing business software.
When, like TC Harrison, you already have a powerful IT system managing almost every aspect of your business, you might look askance at somebody who tries to sell you yet more software.
'People often say, 'I have all the reporting systems I need', ' admits Mr McClure.'They've got accounting software, stock control software, invoicing software and they don't even want to look at what we're offering.' But if they were to look deeper, he says, they might notice that their existing business systems gather masses of information that just lies dormant.
The purpose of Tahola is to allow the client's software packages to 'talk' to each other.At TC Harrison, parts, service, new and used machinery sales, and all sales force activities were recorded by dedicated Kerridge modules that all feed into a central server. Critically, each module was a closed system: there was no cross-referencing of, say, invoice data with stock movements.
Both Mr Wilson and his managing director Bill Sutton knew they had masses of information tucked away and that they should be using this to make their sales and marketing operations more efficient.
Tahola delivered a system that addresses two key areas of TC Harrison's operation: sales and marketing. It looks at the number of calls, proposals and equipment demonstrations made by sales staff every day.
From the marketing point of view, the system identifies the type of customer, whether it is an existing customer or a new prospect, and it identifies the type of machine they are interested in buying.
In sales, the Tahola system looks at all sales of new and used machines, parts and service. It can track each customer's progress, identifying whether they use TC Harrison for servicing and parts - even which day they buy on and the parts they most frequently purchase.This sort of information is shared with the stock control systems to ensure opening times, staffing levels and stock ordering are tailored to projected demand.Mr Wilson says this alone has improved cashflow.
Each manager has access to the relevant 'cubes' (the blocks of data - typically comprising cost, calendar, product and sales information - that are central to the Tahola system) when that data is needed.They therefore do not have to wait for monthly reports.'Some information is sent out daily and is available instantly, ' says Mr Wilson.'But you have to be careful that the system does not flood people with information.'
Mr McClure stresses that each installation of the Tahola system needs to be tailored to clients and that information is relevant - there would be no point, for example, in being told that 12 per cent of your telehandler clients in Derbyshire are called John.'It takes about four weeks to complete the installation and fine-tune it with the client, ' says Mr McClure.
Once the system is installed, clients can start digging through the mass of information on their server.
'We can look at each of our customers from any angle.We can compare net profits with salesmen's commission.We look at all these things by sector or geographically.We can analyse market trends by postcode if necessary and we can react very quickly.This information is helping us to get the last drop of blood out of the market, ' says Mr Wilson.
Such a powerful tool does not come cheap, though.Mr McClure says a client can expect to pay in excess of £30,000, but adds that every one of Tahola's clients has recouped its investment within the first year.
TC Harrison is no exception.Mr Wilson says the system has helped the dealership increase net profits and that sales staff earn more commission.
Presumably, it is the Tahola software that enables Mr Wilson to attribute these improvements to the business intelligence system.
He is certainly in no doubt that TC Harrison is in possession of a powerful tool.Other JCB dealers are in talks with Tahola, hoping to share in the success.And although Mr McClure says that JCB itself not the sort of business to benefit from the Tahola system directly, Mr Wilson insists that the manufacturer is well aware of its dealer's enhanced capabilities.'JCB tends to come to us these days and say, 'I was just wondering. . .'' Although only now addressing the plant retail sector, Tahola has a second tier of potential customers - the plant hirers.
'Such a solution could provide knowledge on which industries are hiring equipment and could identify further opportunities, ' says Mr McClure.'It could be used to analyse repair costs and give an overview of which machines are most popular and which give the best returns.The hirers will often have all this stored on systems but problems arise when it comes to accessing it.This is where business intelligence helps.'