Wednesday, October 7, 2009

From Chainsaws to Implements and Accessories: Maybe There Is Something We Can Learn From Selling Chainsaws?

Buyers want to know what something costs before they buy it. I think this is understandable and reasonable.

One problem with selling implements and accessories, and this spans across all sectors, is that you generally don’t find out the cost until you are in the whole goods buying process – sitting down with a salesperson and buying a car, truck, or tractor.

One of the drivers of this problem is that our “common knowledge” may be “common”, but is often not knowledge. We assume you have to show the client the real thing in action – not just a picture – so we (and our dealers) focus on showroom displays. Further, dealers believe we should avoid all forms of one-price selling, so they try to bundle these costs into the whole goods and/or financing picture. Unfortunately, actual consumer research we have conducted shows that of all sales tools, customers find “installed price sheets” to be the single most helpful item! Hang that accessory on the wall, tell the customer what it costs to install it, and you’re that much closer to sale. Unless of course, you don’t even ask for the sale….which our NASPC research shows happens far more than anyone would imagine.

Note that the above charts are lifts from this year’s NASPC Crystal Ball. Mainstream is a label for mainsteam OEMs, Longest-in represents an OEM that has been in the market for a long time, and Last-in is for a very recent OEM.

It is very difficult for the OEM to get over this hurdle – they really can’t force their dealers to use a price sheet, to make available to customers a suggested retail price, or to market a fully installed price. To the extent that price is a critical part of the shopping process, it is reasonable for OEMs to expect that price be on the table. The problem is with the Robinson-Patman Act (Anti-Price Discrimination Act, 1936).

Stihl has an interesting approach on this issue that is elegant and simple. They understand how both chainsaws and underpants are shopped and bought – on the internet with sellers who merchandize their products and tell you what they will cost. So, rather than start an 18-month debate that they will lose with their dealers and distributors, they finesse it. Stihl has two dealer locators on their website. They use fancy graphics and larger typefaces for locating dealers with online pricing …or you can choose to simply view all local dealers, if you read the small type at the bottom of the locator.

Both Ford and Honda approach this same goal with more complexity and infrastructure. Basically, they accomplish the mission with e-stores that allow customers to pick, choose, and pretty-much buy on line. Installation is directed to cooperating dealers. When this approach works, it is better than Stihl’s. However, it might represent more brute force and intricacy (and cost) than what some OEMs might be willing to bear. Rather than an e-store, Stihl points shoppers to the closest dealers who subscribe to a shop, price, buy sales model. Then they let nature take its course.

Bottom line. Imagine an OEM website or set of web pages dedicated to farm implements or automotive accessories. We lure customers into these sites. They see that high capacity bucket or floor mat, rotate it 360 degrees and get excited. They want to know how much it costs. The web site provides a locator to local dealers who advertise prices on their website and you seamlessly make the transition to the closest dealer. Simple. Elegant. Cheap. Hey, it works for chainsaws.

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