CEDJanuary2017TerramacTough by Associated Equipment Distributors

January 2017

CED

Construction Equipment Distribution Published by AED: Business Fuel for a More Profitable Dealership

Terramac Tough Unique rubber track crawler carriers available through the full-line Terramac dealer network

n People Management Has your organization

slipped out of alignment? If so, bet your results have, too, Here's what to do!

n Regional Report A roundup of Western and Rocky Mountain regions members' achievements in 2016

n Dealer Learning Center

The AED Foundation introduces revamped and rebranded dealer learning center

We Help Equipment Move. And, weâ&#x20AC;&#x2122;re flexible when it comes to structuring a loan that fits. Our unique combination of industry and equipment knowledge allows us to structure transactions that can meet your customersâ&#x20AC;&#x2122; needs today, and as they change.

See us at CONDEX--Booth No. 1227 or by appointment at the CCG Hospitality Suite 1627 t An independent equipment finance company founded in 2004, serving the construction,

fleet transportation and waste industries t Over $2.5 billion of finance receivables originated t Typical transaction size ranging from $75,000 to $3,000,000 t Sales force located throughout North America t Headquartered in Charlotte, NC with full service offices in Buffalo, NY, Naperville, IL, and Hamilton, ON

www.commercialcreditgroup.com Commercial Credit Group 227 W. Trade Street, Suite 1450 Charlotte, NC 28202 704-731-0031

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PREPARE

ADAPT

The next generation ARDCO AMT: One machine, countless applications. From construction projects to extreme off-road sites, this power-packed unit can adapt to nearly any task. Change is coming. And change is good. See the AMT at the AED Summit in Chicago. ARDCOMFG.COM

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contents CED Magazine | January 2017

vol. 83 no.1

www.cedmag.com

>> FEATURES

Dealer Learning Center The AED Foundation offers a number of excellent industry- and position-specific learning opportunities that members can access via the Foundation’s website. Previously known as AED University, this robust educational resource is now called the AED Dealer Learning Center.

Regional Report

People Management

AED Regional Manager Phil Riggs recaps members' 2016 successes in the Western and Rocky Mountain region.

Dealerships spend significant time developing new strategies to enhance business performance and success.

Donor Profile

“As a member of AED, KirbySmith Machinery realized the benefits of the professional training offered by the AED Foundation,” says Hoyt Edgar “Ed” Kirby Jr., president of Kirby-Smith Machinery Inc.

On the Cover:

Mike Crimaldi, Founder of Terramac, was inspired by the versatility that rubber track carriers provide.

January 2017 | Construction Equipment Distribution | www.cedmag.com | 3

>> EDITORIAL TEAM Editor SARA SMITH ssmith@aednet.org Design and Layout KRIS JENSEN-VAN HESTE kjvanheste@gmail.com

>> FEATURED COLUMNISTS Eric Stiles Sentry Insurance Troy Ottmer Doggett Heavy Machinery Services LLC Steve Johnson Vice President, Foundation Operations Rex A. Collins Principal at HBK CPAs

EDITOR'S DESK Happy New Year! With each new year, there come changes big and small. I am excited to share with you the new and improved CED Magazine! Our goal is to continuously make these improvements to provide a resource that is designed to enhance your day-to-day activities within the dealership. This year the magazine will be filled with a variety of education topics ranging from telematics, workforce development, human resource, and everything in between. As you flip through the pages, I encourage you to provide feedback. Your opinions and observations are a key component to the success of CED Magazine. If you or your company is interested in contributing content, please take a look at our Inside CED story on page 68. As we look toward the next 11 months, I can’t wait to share the exciting journey that CED will travel with you. I wish you and your company another successful and happy year!

Sara Smith

Editor, Construction Equipment Distribution ssmith@aednet.org

contents

Christian Klein AED Vice President of Government Affairs Brian Gareau Brian Gareau, Inc.

CED Magazine | January 2017

Accruit AED Preferred Provider John Chapin Sales Encyclopedia Heidi Bitsoli Freelance writer Aaron Curtis Freelance writer

>> ADVERTISING CONTACTS Vice President of Sales JON CRUTHERS 800-388-0650 ext. 5127 jcruthers@aednet.org

7 >> From The President Rolling out the red carpet for Summit

19 >> Washington Insider:

Partnering for dealer advocacy.

Growing your business by having a plan.

If you can’t measure it, you can’t manage it!

Sales facts that will never change

Part-one — dealers can use captive insurance companies to manage risk, reduce taxes and create income

40 >> Problem Solved 42 >> Tips for Lowering TCO 46 >> Sales Force

Advertising Sales Manager ALBERT J. RAMIREZ 800-388-0650 ext. 5117 aramirez@aednet.org

48 >> Captive Insurance

Production Manager MARTIN CABRAL 800-388-0650 ext. 5118 mcabral@aednet.org

50 >> Customer Success

650 E. Algonquin Road, Suite 305 Schaumburg, IL 60173 630-574-0650 fax 630-457-0132

Opportunity lurks where technology does not fear to tread

52 >> Like-Kind Exchange

Since 1920 Official Publication of

vol. 83 no. 1

1031 like-kind exchange basics for equipment owners

72 >> Risk Management One innocent banana peel can lead to a mountain of troubles As the official magazine of Associated Equipment Distributors, this publication carries authoritative notices and articles in regard to the activities of the association. In all other respects, the association cannot be responsible for the contents thereof or the opinions of contributors. Copyright © 2016 by Associated Equipment Distributors. Construction Equipment Distribution (ISSN0010-6755) is published monthly as the official journal of Associated Equipment Distributors. Subscription rate – $39 per year for members; $79 per year for nonmembers. Office of publication: 650 E. Algonquin Road, Suite 305, Schaumburg, Ill. 60173 Phone: 630-574-0650. Periodicals postage at Schaumburg, Ill. 60173 and other post offices. Additional entry, Pontiac, Ill. POSTMASTER: Send address changes to Construction Equipment Distribution, 650 E. Algonquin Road, Suite 305, Schaumburg, Ill. 60173.

4 | www.cedmag.com | Construction Equipment Distribution | January 2017

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business services your aed membership provides solutions and options AED’s membership services and benefits are designed to enhance and develop the profitability and continuity of construction equipment dealers by providing tools and resources.

aed legal call counsel AED’s call counsel is a FREE legal hotline for AED members provided by Kopon Airdo, LLC — AED’s general counsel. Take advantage of this member benefit today, call 312-506-4480 or visit www.koponairdo.com.

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aed hr help desk AED’s HR Help Desk allows AED members to get answers to simple questions or many employment-related issues free of charge. Call about any HR compliance or procedural issue, even sensitive personnel situations. Contact Karla Dobbeck at (888) 412-8079 or Kdobbeck@askhrt.com.

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>> FROM THE PRESIDENT

BRIAN P. McGUIRE

We're Rolling Out the Red Carpet Chicago-Style for Summit 2017

Welcome to 2017 Summit & CONDEX, and welcome to my hometown of Chicago! We are looking forward to seeing everyone there for what I know will be an exciting event. Providing continuous education is not only one of our goals for this event, but a goal we strive for in everything we do. AED will be launching its new, updated Dealer Learning Center, formerly the LMS system, at the 2017 Summit. Our Dealer Learning Center houses live and on-demand webinars, self-study courses and certification programs. The new, easy-to-use format shows all of the upcoming webinars with dates and times so you can plan ahead for them. We also wanted to make it simpler for you to find exactly what category you’re looking for. Easy-to-navigate drop-down options and keywords will help you find the content that fits your needs the best, whether it’s for operations, finance, leadership, marketing, or others. You will also find options for self-study courses and certifications all in one location. These convenient tools make it practical for anyone in a dealership to learn and grow at their own pace. You can find out more on Page 30. To enhance these educational options, as well as the other work the Foundation is doing, The AED Foundation Annual Campaign has been asking for investments toward the future of dealerships. Your donation to the Annual Campaign will help to support The AED Foundation’s goals of improving the quality and success of dealerships through professional development, school

accreditation and research. Dealerships that meet our specific donation incentives will have their business co-branded on our Dealer Learning Center site. Dealers who donated by December 1 will be included on Summit signage, so make sure to keep an eye out for them. We want them to know that their donation is appreciated, and this is one way we can show it. Education is an important part of our industry and vital to growth in our field. Supporting educational growth and using the tools we provide will help to grow your dealership’s and employees’ success to new heights.

BRIAN P. McGUIRE is president and CEO of Associated Equipment Distributors. He can be reached at bmcguire@aednet.org. BRIAN P. MCGUIRE AED President & CEO

ROBERT K. HENDERSON AED Executive Vice President & COO

JASON K. BLAKE AED Senior Vice President & CFO

>> OFFICERS

>> AT-LARGE DIRECTORS

>> REGIONAL DIRECTORS

WHIT PERRYMAN Chairman Vermeer Texas-Louisiana

TODD BACHMAN

WES STOWERS Vice Chairman Stowers Machinery Corp.

Florida Coast Equipment, Inc.

DIANE BENCK Senior Vice President West Side Tractor Sales Co.

Cowin Equipment Co., Inc.

RON BARLET West Reg. Bejac Corp. CRAIG DRURY Eastern Canada Reg. Vermeer Canada Inc. RYAN GREENAWALT Midwest Reg. Alta Equipment Co. TODD HYSTAD Western Canada Reg. Vimar Equipment Ltd. GILES POULSON Rocky Mountain Reg. Faris Machinery Co. JOHN RIGGS IV South Central Reg. J A Riggs Tractor Co. JAY RODES Southeast Reg. Wilson Equipment Co., LLC KAREN ZAJICK Northeast Reg. Norris Sales Co.

TODD HYSTAD Vice President Vimar Equipment Ltd. MICHAEL D. BRENNAN Vice President Bramco, LLC JOHN C. KIMBALL VP of Finance Kimball Equipment Company DON SHILLING Immediate Past Chairman General Equipment & Supplies, Inc. DENNIS VANDER MOLEN Foundation Chairman Vermeer MidSouth Inc.

JAMES P. COWIN GAYLE HUMPHRIES JCB of Georgia LARRY R. MILLER Kelbe Bros. Equipment Co. Inc. JOHN SHEARER 4 Rivers Equipment, LLC KENNETH E. TAYLOR Ohio CAT

January 2017 | Construction Equipment Distribution | www.cedmag.com | 7

>> AED INSIDER Enhance your AED Membership Experience With Our Resource Guide

FINANCIAL/HR SYMPOSIUM

MIAMI

2017

April 26–28 | Miami, FL Register at bit.ly/2017symposium The 2017 Financial/HR Symposium is the leading seminar for industry experts to discuss the latest challenges and solutions impacting equipment distributors. Session tracks will feature options for both HR and financial executives, providing sessions that pertain to both fields, such as leadership, employee hiring, HR for the CFO, employee compensation, security and much more. Also, take this opportunity to meet and network with other executives during our cocktail receptions, boat tour and dinner. For more information, visit bit.ly/2017symposium.

Take advantage of our early bird discounted price and save $100 on the 2017 Financial/HR Symposium registration fee. Register online at bit. ly/2017symposium or by calling your regional manager at 800-388-0650.

Leadership When It Matters

Commander Kirk Lippold, USN (Ret.), author of “Front Burner: The Attack on the USS Cole,” knows what it takes to create the foundation for successful leadership that prepares teams to rise to any challenge they may face! Please join AED in welcoming keynote presenter Commander Lippold at the 2017 Financial/HR Symposium on Thursday, April 27, at 8:15 a.m.

If you haven’t already heard, AED enhances the ongoing success and profitability of members through public policy and advocacy, industry education, business news, networking events and benchmarking resources. We want to make it easy to find exactly what you need in one convenient location with our 2017 Resource Guide! Show your team that you’re serious about their professional growth by registering for one or more of these industry-specific educational sessions or networking events. Simply call your regional manager or visit www.aednet.org to register. To enhance the future success of your business, purchase one of our benchmarking reports at www.aednet.org.

What you will find within the Resource Guide

We want you to use our Resource Guide as a one-stop shop for all of your AED educational, conference and benchmarking needs. The guide is divided into sections for each area of dealership operations, including people management, branch operations, sales, customer management, parts, service, rental, product support, and finance. In each section you will find all the flexible learning options corresponding to that particular operation: webinars, self-study courses, seminars, events and benchmarking reports.

AED Announces New Joint Legislative Fly-In with EDA

SAVE THE DATE

Washington Fly-In: Be Heard in 2017

AED and EDA are pleased to invite all of their members to participate in the Washington Fly-In in Washington, D.C., on April 4–6, 2017. With a new administration taking office in 2017, it is important for equipment industry players to speak with a united voice on industry issues. Together, AED and EDA members can work to share a unified, impactful message with legislators on the Hill. A tentative agenda for the event is at right – mark your calendars!

8 | www.cedmag.com | Construction Equipment Distribution | January 2017

April 4 3-5 p.m. Grassroots 101 - Understanding Why We Are Here and Why It Matters 5-7 p.m. Dealer Welcome Reception April 5 8 a.m.-noon Break-Out Tours 1 to 5 p.m. Panel Discussions: Transportation, agriculture, tax Reform, trade, Regulatory Reform and Energy, April 6 8 a.m.-5 p.m. Hill Visits 5:30-9:30 p.m. Optional Dealer Networking Events

>> AED INSIDER REBUILDING Our Industry’s WORKFORCE The U.S. heavy equipment distribution industry loses at least $2.4 billion in revenue and economic activity annually as a result of dealers’ inability to find and retain skilled technical workers.

How can you help fix this problem? The first step is investing in The AED Foundation. When you invest in The AED Foundation’s Annual Campaign, you are supporting the goal of improving the quality and success of your dealership through professional development, school accreditation and research. Your donation to The AED Foundation Annual Campaign is greatly appreciated and we want to make sure you know that.

Give Where It Is Needed Most:

This funding will ensure a more predictable and stable future for industry technicians and enhance the success of dealerships for years to come. Your donation fuels the work that allows The AED Foundation to develop a dealer model for success by developing industry-specific and on-demand education, creating opportunities for diesel technicians, providing national standards for equipment technician programs and awarding affiliated technical school scholarships.

Want to help make a difference? Get involved!

Are you wanting to help the future of construction equipment technicians but do not know how to get involved? No worries – The AED Foundation has created special incentives for AED member companies who are working toward establishing a bold plan for the new era of engaged dealers: $2,000 .......... Receive access to The AED Foundation’s 2016 webinars for your main location for all of 2017. $3,000 .......... Receive access to The AED Foundation’s 2015 and 2016 webinars for your main location for all of 2017. $8,000 .......... Receive co-branding on our Dealer Learning Center with your logo as well as receiving access to all 2015 and 2016 webinars for your main location for all of 2017.

Ways to Donate to the 2017 Annual Campaign:

To make your donation online, please visit bit.ly/2017aedfcampaign. If you would prefer to fill out a donation form, click here to download the form. This form can be sent to Rebecca Lintow at rlintow@aednet.org. Contributions to The AED Foundation Annual Campaign are tax deductible to the extent of the law. The AED Foundation is a 501 (c)(3) educational foundation.

Frank Martin Sons’ Ouellette Repeats as AED Pundit of the Year AED is pleased to announce that Steve Ouellette, president of Frank Martin Sons, Inc. in Ft. Kent Mills, Maine is the winner of AED’s 2016 Pundit of the Year contest. Ouellette remained cool headed through October’s campaign tumult and correctly predicted the outcome of seven of the ten races

highlighted in this year’s challenge. The repeat victory – Ouellette also earned the top spot for the previous national election in 2014 – is his third overall. Along with the bragging rights that come along with this prestigious achievement, Ouellette will receive a plaque evidencing his punditry at the 2017 AED Summit in Chicago in January. January 2017 | Construction Equipment Distribution | www.cedmag.com | 9

>> AED INSIDER Election Year Dealer Activism Positions Equipment Industry for Success On Nov. 8, businessman Donald Trump pulled off one of the most improbable victories in modern U.S. political history by winning the electoral college votes needed to become the nation's 45th president. Meanwhile, the GOP held the House and Senate, securing Republican control of both congressional chambers and the White House beginning in 2017. In an alert to all AED members sent the morning after the election, 2016 AED Chairman Whit Perryman (Vermeer Texas-Louisiana), highlighted the unprecedented success of the 2015-2016 election cycle for the association's political program. AED members broke all previous records, contributing will over $100,000 to AED PAC in 2016. As of election day, AED PAC had contributed a record $170,000 to more than 70 House and Senate candidates. More than 50 congressional candidates received their AED PAC checks personally from equipment industry leaders at ImPACt 2016 meetings that took place around the country over the past two years. Only five candidates AED PAC supported lost. The election results create many opportunities and some risks for the construction equipment industry. AED President & CEO Brian McGuire said, "There's an immediate opportunity to rebuild our crumbling infrastructure, reform the nation's tax code, develop the next generation of skilled workers and lower the cost of doing business for

small companies. The voters have spoken and AED is standing by to work with members of both parties to create an economic environment that encourages job creation, growth, investment and entrepreneurship." "AED will actively engage the new administration to make sure dealer interests are taken into account. We will work together at every opportunity, but we won't hesitate to object and challenge policy decisions when the interests of our members demand it," Perryman said. That engagement has already begun. AED is communicating with transition team members and candidates for Trump administration positions in an effort to make sure the industry's priorities remain in the forefront. The election results make tax reform significantly more likely. With that in mind, AED members who have not done so are strongly urged to complete our 2016 tax survey, which will close in early December. The data dealers provide will serve as the basis for AED's advocacy on tax issues on the Hill for years to come and help guide our work with the IRS to create a better tax environment for dealers. While most Beltway insiders, polls, and prognosticators predicted a different election result, AED member Steve Ouellette, president of Frank Martin Sons, Inc., remained cool-headed through October's campaign tumult and won AED's 2016 Pun-

Judge Halts New Overtime Rules On Nov. 22, a federal judge in Texas issued a preliminary injunction blocking implementation of the Obama administration’s controversial overtime rules, which would have imposed a significant burden on commercial enterprise, particularly small businesses. The court determined the Department of Labor (DOL) exceeded its authority in the final regulation. The onerous requirements were set to take effect on Dec. 1 and would have doubled the Fair Labor Standards Act’s (FLSA’s) salary threshold for overtime pay exemption. Under existing regulations, employees earning an annual salary in excess of $23,660, and who perform qualified administrative, managerial or professional duties, are not entitled to overtime compensation. The new regulation would have required salaried workers earning less than $47,476 to receive additional pay if they work more than 40 hours in a week. In addition, the salary threshold would automatically update every three years to match the 40th percentile of full-time salaried employees in the lowest-wage census region in the U.S. On Sept. 28, the House approved the Regulatory Relief for Small Businesses, Schools & Nonprofits Act (H.R. 6094), which would have 10 | www.cedmag.com | Construction Equipment Distribution | January 2017

dit of the Year contest. The repeat victory - Ouellette also earned the top spot for the previous national election in 2014 - is his third overall. As focus turns toward 2017, remember that Congress still needs to finish its work in 2016. Among must-pass items are a continuing resolution (CR) funding the federal government into next spring. AED continues to urge final action on legislative proposals to address the nation's skilled worker shortage (Perkins Act reauthorization) and invest in Army Corps of Engineers projects (WRDA), such as building, maintaining and improving harbors, dams, locks and navigation channels, before year's end. Also, as further evidence of the volatile nature of the policy environment as we change administrations, on Nov. 23 a federal judge in Texas issued a preliminary injunction blocking implementation of the Obama administration's new overtime rules, which were set to take effect on Dec. 1. Judge Amos Mazzant said that the rules exceeded the Labor Department's authority and were contrary to congressional intent, which suggests the rules will likely ultimately be invalidated by the court. Stay tuned to AED as this story develops. AED's Washington office looks forward to working in a bipartisan manner with all lawmakers and the administration, including the association's congressional champions, to further the industry's policy agenda.

OVERTIME $$$$$$$$

delayed the rules effective date for six months. The bipartisan legislation wasn’t taken up by the Senate and likely won’t see further action this Congress given the court’s decision. With the Obama administration winding down, the rules’ future is in jeopardy as President-Elect Trump’s support is unlikely and further court proceedings are months away. While the ruling brings welcome relief, it does not eliminate all uncertainty for businesses, particularly those employers who had already planned to comply with the mandate only to have it reversed in the final two weeks before implementation.

>> NEW MEMBER SPOTLIGHT The Association would like to welcome our newest members. We are pleased that you have chosen to join our organization and look forward to getting to know you! Vermeer Mexico International Distributor

Pumping Services Distributor

Meade Tractor Distributor

Shanahan Design Specialized Service

SpecSys, Inc Specialized Service

Cross-Tech Manufacturing Manufacturer

Business Credit Reports Specialized Service

UTI Specialized Service

Machinio Corp Specialized Service

K Coe Specialized Service

CJD Equipment International Distributor

BekaWorld Specialized Service

Arrowhead Insurance Specialized Service

GGR Specialized Service

Commercial Credit Group Specialized Service

Trekker Tractor Distributor

Dromone Engineering Manufacturer Hi-Vac Corp Manufacturer Everdigm America Manufacturer Lawrence Equipment Distributor K-Tec Earthmovers Canadian Manufacturer Bravo Capital, LLC Financial Lansdowne-Moody Distributor Swanson Industries Specialized Service Mini Trencher Manufacturer Ransome CAT Distributor Rototilt Canadian Manufacturer Rotar NA Manufacturer Leaf Commercial Capital Financial Trojan Tracks Manufacturer

Arctic Snow & Ice Products Manufacturer Hamsar Diversco, Inc Canadian Manufacturer Morooka USA Manufacturer Synergy Equipment Distributor The Richmond Group Specialized Service Vermeer Northwest Distributor Vermeer Great Plains Distributor Northland JCB Distributor Flaska JCB Distributor Runzheimer Specialized Service Owner Resource Group Specialized Service Utility One Source Distributor Construction Equipment Sales & Rental Distributor

FTG Equipment Solutions Manufacturer Compact Construction Equipment Distributor Division

Falcon Equipment Canadian Distributor Sterling B2B Group Specialized Service My Dealer Service Specialized Service

Robinson Waters & O'Dorisio Specialized Service

Shafer Equipment Co. Distributor

Textron Aviation Specialized Service

Spartan Motors Manufacturer

Re-Rentals.com, LLC Specialized Service

Central Equipment Co. Distributor

Baseplan Software Specialized Service

Ditch Witch of Georgia Distributor

Atlas Machinery Distributor

Five Star Equipment Distributor

Joe Johnson Equipment Canadian Distributor

January 2017 | Construction Equipment Distribution | www.cedmag.com | 11

>> AED INSIDER TM

CRUSH EVERY JOB

#AEDGetSocial ECA@EquipCorp “There is always going to be a need for technicians.” How true it is. #heavyequipment #constructionequipment #heavyiron Retweet of: AED‫@‏‬AEDSocial

SEE US AT CONDEX 2017! BOOTH #1100

NEW!

4043TR Recirculating Impact Crusher

NEW!

Brett Levanto @LevantoAir Great visit to @AEDSocial member James River Equipment. Outstanding camerawork by @caaklein. Ben Yates @AED_East Enjoyed discussing election impact, GA-7 economic development & technical careers w @RepRobWoodall during our tour of @ ASC_Volvo_CE

514TS3 Triple Screen Spyder

Ben Yates @AED_East Impressed by the growing auto & diesel technician programs at @GwinnettTech. Their partnership w @ DEUTZAmericas is a blueprint for success. JXT Jaw Crusher

American-Made Innovation Since 1966 740-927-3464 EMAIL@SCREENMACHINE.COM

l l

800-837-3344 WWW.SCREENMACHINE.COM

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Would you like to see your company featured in our next issue of CED Magazine? Simply tweet us @AEDSocial and we’ll pick our favorites each month and publish them!

>> AED INSIDER AED Welcomes Thomas Lunney as the New South Central Regional Manager AED is pleased to announce and welcome Thomas Lunney to the Association as our new Regional Manager for the South Central Region. Thomasâ&#x20AC;&#x2122;s first day with AED was Monday, November 28th. He Thomas Lunney will be responsible for the South Central region which includes Arkansas, Kansas, Kentucky, Missouri, Mississippi, Nebraska, Oklahoma, Louisiana and Texas. Thomas has a Bachelor of Science in Communications from Southern Illinois University and has a background in new business development, sales, and marketing which will be beneficial in the engagement activities in the region.

MEMBERSHIP MILESTONES AED would like to recognize our longtime members for their milestone achievement and contributions to the profession to encourage future progress in the construction equipment industry. Thank you for your membership! 25 Years

Triad Machinery, Inc

MacAllister Machinery

Anderson Machinery

Distributor

Co., Inc.

Company

50 Years

Distributor

GOMACO Corporation

Malvese Equipment Co.,

Manufacturer

Inc.

Sullair, LLC

Distributor

Manufacturer

Milton CAT

Distributor B-C Equipment Sales, Inc. Distributor Beard Equipment Company Distributor

Distributor

Empire Southwest LLC

75 Years

Distributor

Aring Equipment

FRD.USA,

Company, Inc.

Rock Drill Division

Distributor

Manufacturer

Cate Equipment Company

Garden State Bobcat, Inc.

Distributor

Chadwick-BaRoss Inc.

Holt CAT

Distributor

Volvo Construction

Distributor

Equipment Corporation of

Equipment North Ameri-

MAQRO, S.A. de C.V.

America

ca, Inc.

International Distributor

Distributor

Manufacturer

Mississippi Valley Equipment Company Distributor The W.W. Williams Company Distributor

AEDâ&#x20AC;&#x2122;s 2017 Membership Directory is Right Around the Corner! Has your company moved or experienced change? Let your regional manager know today, so we have the most accurate information on file! Phil Riggs, Western Region Ben Yates, Eastern Region and Manager of Membership Services Senior Director Canadian Engagement/ Alaska Midwest Regional Manager Arizona Alabama California Alberta Colorado Connecticut Iowa Hawaii Deleware Idaho Indiana Montana Florida Illinois New Mexico Utah Georgia Washington Nevada New Brunswick Wyoming Oregon Rhode Island Minnesota Massachusetts North Dakota Maryland Thomas Lunney Ohio South Carolina South Central Region Newfoundland Maine Ontario Arkansas Tennessee Nova Scotia North Carolina Prince Edward Island Kansas Kentucky NT New Hampshire Quebec Missouri Virginia Mississippi NU New JerseJ South Dakota Nebraska Vermont Oklahoma Manitoba New York Saskatchewan Louisiana West Virginia Pennsylvania Wisconsin Michigan Texas

Michael Dexter

January 2017 | Construction Equipment Distribution | www.cedmag.com | 13

>> INDUSTRY NEWS Terramac® Appoints Kirby-Smith Machinery as Authorized Dealer Terramac, a leading manufacturer of innovative rubber track crawler carriers, expands its representation in the North American market to include Kirby-Smith as part of its dealer network. Kirby-Smith will represent the versatile Terramac product line in Oklahoma. “Terramac is the ultimate Swiss army knife of the pipeline industry,” says Joe Trapani, director of Pipeline Services Division at Kirby-Smith. “All pipeline customers have a need for rubber track carriers and Terramac’s are well-known for reliability and extreme diversity. Including Terramac as part of our machinery tool kit will allow us to grow our customer base in the industry.” Kirby-Smith will offer Terramac crawler carriers to serve the pipeline industry with customizable equipment that accommodates various pipeline applications. In addition to Terramac’s three standard options – convertible dump-to-flat beds, rock dump beds and flat beds – Kirby-Smith will offer Terramac units customized with support attachments such as hydroseeders, vacuum excavators and tack rigs. With the addition of the versatile Terramac product line, Kirby-Smith also plans to identify and expand into other markets. The team at Kirby-Smith will provide professional sales, rental and aftermarket support for Terramac products. Kirby-Smith’s knowledgeable staff has been fully trained in the application, sales, parts and service side of the Terramac product line and stands ready

to offer prompt and professional customer support. “Kirby-Smith Machinery maintains a strong commitment to exceed customer expectations, and their dedicated team consistently delivers superior service and product support,” says Andrew Konopka, president of Terramac. “We are pleased to welcome Kirby-Smith to our growing dealer network and we look forward to a lasting partnership.” Kirby-Smith Machinery Inc. is a leading distributor of heavy construction equipment, industrial equipment and cranes. Kirby-Smith serves the construction, paving, industrial, aggregate, pipeline/oilfield service, and various

other industries with 10 full-service locations. For more information on Kirby-Smith or to view branch locations please visit www. Kirby-Smith.com. Terramac® LLC, based in Elburn, Ill., was established to produce the world’s leading crawler carriers. Units are sold through a full dealer network which offers customers easy-to-locate parts and service throughout the world. The units can be customized with support equipment to serve many industries such as pipeline, utility, mining, environmental, general construction and more. To learn more, please visit www.terramac.com or call 630-365-4800.

KOBELCO USA Wins AEM’s Prestigious Pillar of the Industry Award KOBELCO Construction Machinery USA, a world class crawler excavator manufacturer, was recently honored with the Association of Equipment Manufacturers’ (AEM) prestigious Pillar of the Industry award. This award reflects the hard work and dedication KOBELCO put forth to improve the business environment for the equipment manufacturing industry. At the annual AEM conference, held Nov. 16-18 in Santa Barbara, California, KOBELCO was applauded for its efforts in advocating pro-manufacturing solutions to elected leaders and

voters, as well as its participation in AEM’s I Make America program. “AEM is proud to recognize KOBELCO for its efforts this year to champion equipment manufacturing issues during a contentious election season,” said AEM President Dennis Slater. “The Pillar of the Industry award is a fitting way to honor KOBELCO for serving as a foundation of our industry.” To be eligible for AEM’s Pillar of the Industry award, KOBELCO was required to meet a series of qualifications that captured the many ways in which manufacturers could advocate for industry issues. KOBELCO

14 | www.cedmag.com | Construction Equipment Distribution | January 2017

achieved this status by hosting an elected AEM official during the Grand Opening ceremony of its US excavator production facility, meeting with a congressional representative in Washington, D.C., and holding an I Make America sign-up event at its North American headquarters, among other criteria. “KOBELCO takes great pride

in being an influence that shapes the manufacturing industry of America,” says Pete Morita, president and CEO of KOBELCO USA. “Our commitment to educating the industry’s men and women on current manufacturing events helps support US infrastructure and foster growth and development. We’re proud to partner with AEM and campaign for the policies that will strengthen our industry.” For more information on KOBELCO Construction Machinery USA or KOBELCO products, please visit www. KOBELCO-USA.com or call 281-888-8430.

u d mmy

Don’t be a

At a glance, snow pushers look a lot alike. Don’t be snowed. If it’s not the original Arctic Sectional Sno-PusherTM, you risk damage and injury. Arctic’s combination of components — the patented Slip-HitchTM and moldboard design, the spring-loaded trip edges, steel cutting edges, mechanical side panels and polyurethane mounting blocks — aggressively play it safe. The Sectional Sno-PusherTM easily moves over hard objects under the snow, keeping your plow intact and your operator inside the cab.

Don’t be a crash test dummy. Choose smart. Choose Arctic.

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>> PRODUCT PREVIEW Arctic Snow & Ice Products Provides Precise Performance With Sectional Sno-Pushers Arctic Snow & Ice Products is the manufacturing division of Arctic Snow and Ice Control Inc., a reputable provider of snow and ice management services since 1978. Arctic’s owner, Randy Strait, developed the Sectional Sno-Pusher, which revolutionized the snow removal industry by increasing driving safety, improving snow removal efficiency, and reducing curb damage and salt use. The patented steel moldboard design is made up of 24-, 30- or 32-inch-wide moldboard sections (depending on model), each featuring spring-loaded trip edges. The exclusive moldboard design combines the precision of a small plow with the capacity of a large pusher. The separate sections move independently of one another, allowing the unit to contour to the surface and scrape snow and ice out of dips and recessions, all while moving up and over raised objects. For example, one section may lower to reach a pothole while, simultaneously, another section slides over a raised manhole cover. Not only does this enhance plowing efficiency, it protects operators from dangerous impact injuries and minimizes property damage. Each Sectional Sno-Pusher comes with a patented Slip-Hitchä system, providing faster, easier and more efficient operation. The system allows the pusher to automatically adjust and continuously readjust to the pavement grade, resulting in fewer missed areas and less follow-up plowing. Because the SlipHitchä ensures proper placement, less time and effort is required to position the pusher, making it ideal for inexperienced operators. It also enables the pusher to operate independently from the equipment, ensuring all four tires remain on the pavement at all times. This provides full traction and eliminates drag and loss of horsepower. Bolt-on mechanical side panels protect the equipment, pusher and operator. Compared to pushers with rigid fixed panels that could be severely damaged if an obstacle were encountered, the Sectional Sno-Pusher’s side panels rotate up and over small obstructions. The panels also feature durable AR-400 hardened-steel shoes. Combined with the Slip-Hitchä system, the shoes are able to ride flat along the pavement, allowing for even wear and prolonged life. Arctic manufactures three lines of Sectional Sno-Pushers: CD for compact-duty applications, LD for light duty and HD for heavy-duty jobs. It also recently introduced the Raptor, an entry-level box plow. Arctic plows efficiently remove snow in small parking lots and driveways as well as large parking lot areas handled by facility managers and snow removal contractors. CD Sectional Sno-Pushers come in 6.5 and 8.5 foot widths and are compatible with equipment weighing up to 5,000 pounds, such as small skidsteers, compact tractors and micro wheel loaders. LD Sectional Sno-Pushers are designed for equipment weighing up to 18,000 pounds and come in four sizes: 8, 10.5, 13 and 15.5 foot lengths. HD Sectional Sno-Pushers are compatible with a variety of large equipment, including wheel loaders, backhoes, skidsteers and tractors. Reserved for equipment weighing more than 18,000 pounds, the HD pushers are available in six sizes, from 11.5 feet to 27.5 feet long. The Raptor series, Arctic’s latest introduction to the market, is a low16 | www.cedmag.com | Construction Equipment Distribution | January 2017

Arctic designed its Sectional Sno-Pushers with individual, moveable moldboards that maximize the amount of snow that can be removed and minimize damage to the equipment and the curb. Designed for larger projects, Arctic Snow & Ice Product’s Heavy-Duty Series Sectional Sno-Pushers can easily be attached to heavy equipment. The sectional moldboard design helps to reduce salt usage by contouring to uneven pavement.

cost, entry-level box plow designed to simplify maintenance. Most traditional box plows need complete replacement after damage from intense use. Arctic’s unique bolt-on replaceable side plates allow customers to easily replace a damaged plate. It comes in 8-foot through 14-foot lengths and the steel trip edge Raptor Plus comes in the same sizes as the Sectional Sno-Pusher. For more information: Arctic Snow & Ice Products, 101 Euclid Avenue, Bradley, IL 60915; 888-242-3766; pusherpro@yahoo.com; www.sectionalsnopusher.com; Facebook or YouTube. Each moldboard in the Sectional Sno-Pusher is designed with a trip edge that will fold back, lifting the moldboard over objects in the way.

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>> PRODUCT PREVIEW JDLink™ Telematics Added as an Option for John Deere Large-Frame Skid Steer Loaders and Compact Track Loaders Every day, construction professionals use insights from John Deere WorkSight™ technology solutions to help them optimize machines, uptime, job sites and, ultimately, their bottom line. At its heart is JDLink™, John Deere’s telematics system. For the first time, JDLink is available as a factory-installed option on all new large-frame G-Series Skid Steers (330G, 332G) and Compact Track Loaders (331G, 333G). JDLink remotely connects owners and managers to their equipment, providing valuable insight needed to increase profit on every job site. “John Deere has invested heavily over the last decade to become a leading technology solutions provider, not just a manufacturer that produces world-class machines,” said Paul Garcia, John Deere WorkSight product manager. “Our goal is to provide solutions, not just data, and our exclusive JDLink offering is the gateway to increased productivity, helping customers centrally and smartly manage their entire fleet and grow their business. Our customers asked for telematics capabilities on compact equipment, and we’re now delivering it as a factory option with a competitive, three-year subscription on our new large-frame skid steers and compact track loaders.” The telematics solution is installed as the machine is being built in Dubuque, Iowa, and is an alternative solution to the commonly known aftermarket “slap and track” method. Increased vehicle security is the top benefit from JDLink for compact equipment. Smaller machines have some of the highest theft rates for construction machines. JDLink enables geofencing (virtual boundaries) and curfews (time frames) that provide an instant alert if the machine is out of customer-defined bounds. Customers also like to remotely monitor fuel and DEF to know when a machine needs refueling. Customers can use hours and location to track and manage preventative maintenance in the in-base Maintenance Manager application that includes a single click for online parts ordering from their local John Deere dealer. The factory option on the large-frame G-Series models empowers customers to optimize their machines, uptime and job site.

Machine Optimization

JDLink allows customers to see machines that are idling excessively, inactive, running at very high loads for long periods of time or moving when they shouldn't be. Specific to the large-frame G-Series machines, it offers: ▶ Increased security from virtual geofencing and curfew ▶ The ability to compare multiple machine utilizations and fuel burn rates to share best operational practices ▶ Enhanced reporting for on-screen visualization or exporting of data for additional analysis

Uptime Optimization

These solutions can also serve as helpful maintenance assistants whether a customer is responsible for a large fleet spread across many locations or a single machine within sight. JD Link provides: ▶ Insights to identify when a machine needs attention ▶ Diagnostic trouble code alerts that are easy to understand and are actionable ▶ Improved uptime with a robust maintenance planning tool called Maintenance Manager ▶ Efficient and accurate parts ordering through integration with online parts store

18 | www.cedmag.com | Construction Equipment Distribution | January 2017

Job Site Optimization

Once the information from a large-frame G-Series machine reaches the JDLink Dashboard, customers and dealer personnel have an easy way to manage machine location, alerts, engine hours, maintenance and JDLink Ultimate data, which includes productivity and efficiency utilization. This enables: ▶ Integrated planning for job site operations and project management ▶ Valuable insights into operator performance to identify training gaps ▶ Increased machine availability through

improved maintenance planning and tracking To learn more, visit www.johndeere.com or contact your local John Deere dealer. Deere & Company (NYSE: DE) is a world leader in providing advanced products and services and is committed to the success of customers whose work is linked to the land - those who cultivate, harvest, transform, enrich and build upon the land to meet the world's dramatically increasing need for food, fuel, shelter and infrastructure. Since 1837, John Deere has delivered innovative products of superior quality built on a tradition of integrity. For more information, visit John Deere at its worldwide website at www. JohnDeere.com.

>> WASHINGTON INSIDER

CHRISTIAN A. KLEIN

Partnering for Dealer Advocacy

Distributors are AED’s core, but manufacturer and service provider members are also important advocacy partners.

Dealers are why we do what we do, but they’re also critical to how we do it. Dealer engagement is vital to our success on Capitol Hill.

Dealers are at the core of AED’s government affairs program, which seeks to create better business conditions for equipment distributors. We do that by advocating for federal policies designed to strengthen equipment markets and reduce dealer costs of doing business. On the market side of the equation are issues like the federal highway program (which generates more than $2.4 billion in dealer revenues each year), as well as sewer, drinking water, airport, dam, and other types of federal construction programs. To reduce our members’ costs of doing business, we advocate a host of industry-specific tax issues, more transparent and effective federal regulation, and workforce development policies to improve the availability of technicians. Some issues – like bonus depreciation, which helps dealers build rental fleets and encourages customer purchasing – have both a market and cost of doing business impact. Dealers are why we do what we do, but they’re also critical to how we do it. Dealer engagement is vital to our success on Capitol Hill. It’s long been said that there’s no stronger advocate for the equipment industry than a well-informed owner or employee who can explain to lawmakers how policy decisions affect their company. But dealers are most than just messengers. By hosting lawmakers at their facilities, dealers provide a firsthand look at the wide range of policy issues that affect the industry. By supporting AED’s political program, dealers help the association elect members of Congress who share our policy goals. By responding to AED surveys, dealers help us prioritize and give us data to strengthen our advocacy. By coming to the nation’s capital for our annual Washington Fly-In (this coming year on April 4, 5, and 6), dealers make the industry’s presence felt in the halls of power. While we’re fortunate to have a growing base of dealer activists around the country to drive our advocacy program forward, our manufacturer and industry service provider members are also critical players in our advocacy program. Our lobbying team has long worked closely with representatives from AED manufacturer member companies that have government affairs offices. Washington, D.C., may be a small town, but when it comes to 535 House and Senate offices, countless committees, caucuses, party officials, and the entire executive

branch, there’s a lot of ground to cover. By communicating regularly with our manufacturer counterparts, we can share political intelligence and alert each other to emerging issues. Manufacturers have also traditionally been helpful getting the word out to their dealer networks about hot issues and encouraging participation in AED activities (e.g., FlyIn or surveys). Several AED manufacturer members also have their own political action committees, and when possible, we look for opportunities to coordinate our political strategies to target maximum support to friendly House and Senate candidates. Companies that provide services to dealers – particularly our preferred providers – are also increasingly important partners for our advocacy. For example, Sentry Insurance recently established a permanent presence in the nation’s capital, and the company’s lobbyist is helping to advance policies that benefit equipment dealers and other industries Sentry serves. Sentry’s PAC and AED’s PAC also collaborated on several high-profile political events in the past election cycle. PricewaterhouseCoopers LLP (PwC US) and Accruit, AED’s preferred providers of like-kind exchange services, are another example. AED, PwC and Accruit have been working together for several years to encourage the U.S. Treasury Department to issue safe harbor guidance related to equipment depreciation and LKE. AED and PwC also partner closely through a lobbying coalition to protect LKE; PwC provides considerable subject matter expertise and AED brings political muscle and boots on the ground. Several other service provider members support AED’s government affairs program through our Advocacy Action Group (AAG), a cadre of industry leaders who have volunteered to be AED’s grassroots vanguard and encourage others to participate. The new Congress and new administration mean enormous opportunity for the equipment industry. We have the opportunity to grow and stabilize infrastructure programs, improve the tax code, bring sanity to federal regulation, and improve career technical education. Progress in these areas will benefit dealers, manufacturers, and service providers alike. We look forward to continuing our collaboration with our existing partners and welcome the opportunity to work with others to build a stronger equipment industry and more robust U.S. economy.

CHRISTIAN KLEIN is AED’s vice president of Government Affairs. He can be reached at caklein@aednet.org and 703739-9513. Note: This article is for informational purposes only and does not constitute legal advice. January 2017 | Construction Equipment Distribution | www.cedmag.com | 19

>> REGIONAL REPORT

PHIL RIGGS

AED Western Regional Report: A Year in Review

Collectively, this constituency of the AED membership is beginning to build and strengthen the infrastructure needed to provide the highest caliber of technical education for the technician workforce of today and tomorrow.

f you asked, most people would likely tell you that 2016 has been an interesting rollercoaster of positives and negatives. When you take into account the election and also the loss of so many master craftsmen such as Arnold Palmer, Muhammad Ali, Gene Wilder and David Bowie, it begins to sound like an understatement. These aforementioned individuals were instrumental in strengthening, inspiring and raising the bar for those who would follow in their footsteps for generations to come; and I believe their mentality and attitudes are shared by the majority of AED members in the western United States. This year I have had the distinct honor to meet with nearly every AED member in the Western and Rocky Mountain regions, either one-on-one or as part of a larger group focused on strengthening the equipment industry through political advocacy and workforce development initiatives. Collectively, this constituency of the AED membership is beginning to build and strengthen the infrastructure needed to provide the highest caliber of technical education for the technician workforce of today and tomorrow. Competitors are coming together on noncompetitive issues to build awareness about the highly rewarding and stable careers in equipment dealerships, in order to increase the depth of our industry’s talent pool. Additionally, dealers of all product lines, structures and sizes have been proven champions of political advocacy by educating lawmakers on the impact their decisions in D.C. have on small businesses. It’s always valuable to look back on

where we have come from and where we are going. With that in mind, I have provided several examples of the accomplishments of AED members in 2016 who chose to stay engaged with their Association for the benefit of the business, the employees and the industry:

Utah

▶ The AED Dealer 20 Group met in Salt Lake City, bringing together top-level management to work and share ideas as well as benchmark financially with each other. ▶ With the continuous help of nearly every AED member in Utah, Salt Lake Community College’s Diesel Systems Technology program earned AED accreditation, ensuring equipment technicians are receiving the highest quality of technical education. ▶ Support of industry, education and government secured the development of a new $43 million Career and Technical Education Center at Salt Lake Community College – the new home for the Diesel Systems Technology program. ▶ AED dealers, local education leaders and the Governor’s Office of Economic Development created the Utah Diesel Technician Pathway Program, beginning the journey for high school students to be involved in the rewarding career of diesel technician. ▶ AED dealer visits with Rep. Mia Love and Rep. Chris Stewart offered renewed perspectives on key issues for members of Congress to take back to D.C. ▶ What’s next? Working to ensure high school diesel programs in the greater Salt Lake City area are aligning with AED standards while strengthening the visibility of AED dealer employment opportunities.

Colorado

▶ AED dealers formalized a sponsorship agreement and made a commitment to improve Community College of Aurora’s Diesel Power Mechanics program, offering a local program to recruit from and build upon. ▶ AED dealers began to standardize relationships with high school students and educators by offering job shadow20 | www.cedmag.com | Construction Equipment Distribution | January 2017

ing, internships and open house opportunities to generate awareness of careers in the industry and offer opportunities for students to explore their interests. ▶ Bobcat of the Rockies celebrated 50 years of AED membership. ▶ 4 Rivers Equipment celebrated 25 years of membership. ▶ Rep. Mike Coffman, Rep. Scott Tipton, and Rep. Doug Lamborn all visited a total of three AED dealerships throughout the state of Colorado for discussions of key federal issues. ▶ What’s next? As the AED dealers continue to support the local Diesel Power Mechanics program, a strategy and timeline will begin to take shape for achieving AED accreditation.

California

▶ Rio Hondo College’s Heavy Equipment Technology program gained support from the majority of AED dealers in the Greater Los Angeles area, in preparation to aggressively pursue AED accreditation by mid-2017. ▶ Artesia High School met with an AED representative to discuss becoming an AED-recognized high school. ▶ State Sen. Isadore Hall, staff from Rep. Linda Sanchez’ office, and Rep. Doug LaMalfa met with AED members to discuss key issues impacting equipment dealers. ▶ Coastline Equipment and Compass Equipment each celebrated 25 years of AED membership. ▶ What’s next? Continuing to build the infrastructure necessary for dealers to thrive in regard to hiring qualified technicians and providing educational opportunities for the existing workforce. Continuous political advocacy.

Nevada

▶ The AED Foundation hosted the first-ever Rental Seminar in Las Vegas.

▶ The AED Leadership Conference was held in Las Vegas, bringing more opportunities for AED dealer professionals closer to the West. ▶ Rep. Cresent Hardy met with attendees of the AED Leadership Conference. ▶ What’s next? Exploring options for an improved local diesel program for AED members to support and hire from.

Oregon

▶ Portland Community College’s Diesel Service Technology program achieved AED accreditation. ▶ Linn-Benton Community College, an AED-accredited college, expanded its diesel program. ▶ What’s next? Exploring opportunities for pathway program development throughout the state. These are just some of the examples of AED members doing what they have been doing best for decades – coming together on common issues to solve problems and create ideas for moving the industry forward for the betterment of everyone’s business. The list is by no means exhaustive, but makes the case that there are many different ways to be involved with your Association while benefiting your business and setting the bar for those who will someday hold the keys to the dealership. Here’s to a smarter, stronger and more unified 2017. See you all at Summit!

PHIL RIGGS is AED’s Western regional manager. He can be reached at priggs @aednet.org. January 2017 | Construction Equipment Distribution | www.cedmag.com | 21

>> EQUIPMENTWATCH INTELLIGENCE

Rental Decision Point™: Wheel Loaders

he Rental Decision Point™ is a proprietary metric from EquipmentWatch combining ownership/operating cost rates with retail rental rates to answer the question often asked by equipment managers, “When should I use an owned asset versus a rented asset?” For the average wheel loader (150-174 HP) we recommend an equipment manager use a rented asset, instead of an owned asset, if they use a machine less By Garrett Schemmel than 390 hours per year. EquipmentWatch Vice President What’s in this analysis? and Market Leader Below, you’ll see a visualization of the Rental Decision Point™ for wheel loaders, 150-174HP, specifiAn analysis to cally the Deere 544K. To build this graph, we’ve put determine the point ownership costs on the Y-axis and meter reads per on the X-axis. The curve is the ownership costs at which it makes year per hour of an average crawler excavator with the sense to use owned assigned meter reads per year. versus rented The min and max of the X-axis represent the disof actual machine usage, coming from our equipment. tribution proprietary Utilization Database, a custom database available through EquipmentWatch Consulting. This database was built for both nationwide and 11 regions (increased specificity) and was derived by leveraging the meter reads of machines at the point

22 | www.cedmag.com | Construction Equipment Distribution | January 2017

of transactions. For any model in our database, we show a distribution of machine usage per year (in hours), in 5 percent increments. In terms of data behind the calculations, for wheel loaders for example, we have tens of thousands of machines in our benchmark. The blue bar in the middle is the “Rental Rate Zone,” the min and max average hourly rate to rent a piece of equipment, depending on rate type selected. The top bound is the EquipmentWatch Retail Rental Rate, Daily, divided by eight. The lower bound is the EquipmentWatch Retail Rental Rate, Monthly, divided by 176 (our standard for assumed machine use per month). Where do we get our rental data? Through our

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>> EQUIPMENTWATCH INTELLIGENCE

Retail Rental Partnership Program, we have the most extensive rental data in existence (400+ rental houses in the United States and Canada), updated quarterly. How can an EquipmentWatch user replicate this analysis using their subscription? To adjust the hourly ownership costs: Use the Internal Charge Rate, Deere 544K (or any model in size class). Once there, go to “Adjust Costs,” modify the “Annual Use Hours,” and click “View Adjusted Hourly Cost” to see how the Ownership Rate has changed. Plug this into your graph. To determine the monthly and daily retail rental rates: Use the Retail Rental

Rate, Deere 544K (or any model in the same size class). Once there, look for the respective Monthly and Daily rental rates. By default, the National Rental Rate is displayed. For increased precision, if the location of the rented asset is clear, you can modify the “Region.” Additionally, many equipment managers have contractual discounts with rental partners. Using the manual adjustment feature, you can modify the rental rate to reflect any discounting you may receive. Don’t have access to EquipmentWatch? With our Equipment Manager Package,

24 | www.cedmag.com | Construction Equipment Distribution | January 2017

you can replicate the analysis above yourself. If you are interested in doing this for a large number of machines, contact us at EquipmentWatch Consulting to find out how we can help do this for you.

OCTOBER 25, 2016 >> EQUIPMENTWATCH REGIONAL SNAPSHOT VERSION: FREE | UPDATED MONTHLY SUMMARY

CONSTRUCTION

LIFT/ACCESS

RESALE

MARKET DATA: SEPTEMBER 2016

$31,796,669,820

EquipmentWatch remains the largest sales database on the planet with 20x the sales data of any other source.

400,021 Assets

AUCTION

$32,065,192,041

$268,522,221

AGRICULTURE

COMMERCIAL TRUCK

The EquipmentWatch Market Report™ is a monthly resource for the construction, lift/access, agriculture and commercial truck industries to make better-informed decisions by leveraging key equipment values, market activity, age and usage metrics.

8,977 Assets

How is the Price Stability INDEX calculated?

MARKET SUMMARY

For more detailed articles, visit EquipmentWatch Intelligence online.

MONTH OVER MONTH

YEAR OVER YEAR

MARKET ACTIVITY CONSTRUCTION

VALUES

$16,240,027,221

184,247

MARKET VALUE

ASSETS

LIFT/ACCESS

VOLUME

39,443

MARKET VALUE

ASSETS

AGRICULTURE $12,251,693,060

136,086

MARKET VALUE

ASSETS

COMMERCIAL TRUCK $2,326,476,600

49,222

MARKET VALUE

ASSETS

▼ 1.9%

VALUES

▲ 12.1%

▲ 19.9%

VOLUME

▼ 1.2%

RESALE

VALUES

$1,246,995,160

▲ 0.5% FMV

0.0% FMV

FLV

▼ 0.9%

▼ 0.3%

▲ 11.2%

▲ 137.3 %

VALUES

▼ 0.6%

▼ 0.5%

▲ 1.5%

AUCTION

FLV

▼ 9.3%

VOLUME

VALUES

▼ 7.1%

▼ 7.5%

VALUES

VOLUME

▲ 22.8%

▼ 49.7%

VOLUME

▼ 6.5%

▲ 1.6%

▲ 18.6%

▼ 13.2%

RESALE

FMV

RESALE

VALUES

FMV

VOLUME

RESALE

AUCTION

FLV

AUCTION

FMV

RESALE

0.0% FMV

FLV

0.0% FLV

▼ 8.6%

▼ 1.6%

VOLUME

▲ 32.0%

▲ 185.8%

RESALE

DEFLATED

STABLE

DEFLATED

INFLATED

105 INFLATED

99.96 ▼

AUCTION

FLV

STABLE

105

99.52 ▼

AUCTION

VALUES

FMV

DEFLATED

▲ 95.9%

▼ 6.8%

RESALE

99.50 ▼

AUCTION

▲ 18.0%

AUCTION

FLV

FMV

RESALE

▼ 2.9%

VOLUME

PRICE STABILITY INDEX ™

MARKET METRICS

STABLE

105 INFLATED

95.79 ▼

AUCTION

105

DEFLATED

STABLE

INFLATED

Regional Snapshot: Iowa, Nebraska, Kansas, Missouri CONSTRUCTION

Interested in connecting? Visit us at www.equipmentwatch.com/consulting

For our Midwest regional snapshot, we look west to Region E, traditionally known as the American Midwest. The four states of this region are agricultural powerhouses situated at the heart of the United States. The four states comprising the American Midwest, which we group together as Region E, are an integral part of the American agricultural economy. As such, it comes as no surprise that most of the used equipment activity in this area revolves around the agricultural production cycle. Since August 2015, EquipmentWatch has collected approximately 490,888 observations from the resale channels for the states in Region E (listed below at the bottom of this article). Given the high emphasis on agriculture in Region E, it’s no surprise that agricultural equipment takes four of the top six positions in terms of activity. Wheel tractors top the charts, followed by combines and corn headers. Even skid steer loaders, which rank fourth on the list, see a great amount of work as utility loaders in agricultural settings. The only major equipment type to break into the top six rankings outside of agriculture were crawler mounted hydraulic excavators, which held about 3.9 percent of total market activity. The top six equipment types in Region E combined to account for approximately 51 percent of all activity over the last 13 months. When the top equipment types are analyzed by brand, the strength of the agricultural brands is easy to see. Deere holds the majority of market share in all of the equipment types used primarily for agriculture. Caterpillar holds the top spot for excavators, and Bobcat holds the highest proportion of market share among skid steer loaders. Interestingly, Case IH

OVERALL

and New Holland exhibited very different market activity. While New Holland was the FOR DECISION MAKERS second most popular brand among balers in this time period, Case IH held that spot FINANCE: The resale channel for used heavy equipment in the for wheel tractors, combines American Midwest continues and corn headers. to hold steady, dominated by When we examine average agricultural equipment. asking prices on the resale channel over the last 13 months, the top equipment types fall into two distinct groupings. On one end, the combines, excavators, and wheel tractors have fairly similar price trends. These three tend to have average asking prices above $100,000 and each have a major trough of seasonal low prices. For combines, the lowest point occurred in January 2016, while wheel tractors experienced a similar valley in December 2015. For the other three equipment types, there were much less pronounced peaks and valleys over the same time span. Balers, in fact, appear to be in the midst of a long-term price improvement, growing over 6 percent from September 2015 to September 2016.Even as many in the agricultural world worry about softness in the market, used equipment trends in Region E indicate a large degree of stability. Buying and selling decisions in preparation for the next season may exert some pressure on this region’s resale markets. © 2016 EquipmentWatch, a Penton brand. All rights reserved.

KEY TAKEAWAYS

January 2017 | Construction Equipment Distribution | www.cedmag.com | 25

Kirby-Smith Machinery’s leader values education for betterment of employees and business By Heidi Bitsoli

Hoyt Edgar “Ed” Kirby Jr., president of Kirby-Smith Machinery Inc., will be the inaugural recipient of the Lester J. Heath, III Award on Jan. 10 at the 2017 AED Foundation Fundraising Gala at the AED Summit in Chicago.

ducation is a vital tool, and Kirby-Smith Machinery Inc. has long made use of it. “As a member of AED, Kirby-Smith Machinery realized the benefits of the professional training offered by The AED Foundation,” says Hoyt Edgar “Ed” Kirby Jr., president of Kirby-Smith Machinery Inc. The AED Foundation Kirby has more than 45 years in the construction equipment industry, working in sales, operations, customer relations and business Donor Spotlight management. In 1983 he put himself behind the wheel and founded his Your donation fuels the own company. work that allows The AED Today, Kirby-Smith Machinery is a top distributor of heavy equipment and cranes in the central United States as Foundation to develop a dealer model for success. The well as a full-service dealer for construction, mining, and industrial markets. Over the last three decades the compa- future of dealerships depend ny, headquartered in Oklahoma City, has grown to employ on how we come together to build our industry's workforce. approximately 400 and has nine full-service branches Thank you, Kirby-Smith in Kansas, Missouri, Oklahoma and Texas. Kirby-Smith Machinery, for investing in the works with more than 30 manufacturers to offer a wide future of our industry! variety of equipment and is an authorized Komatsu dealer To contribute to The AED for Oklahoma, North Texas and West Texas. Foundation annual campaign, Kirby has served in numerous construction equipment visit bit.ly/2017aedfcampaign. industry associations and has been active with the Association of Equipment Dealers since 1987. For his dedication and long relationship with the foundation, Kirby will be the inaugural recipient of the Lester J. Heath, III Award, to be presented Jan. 10 at the 2017 AED Foundation Fundraising Gala at the AED Summit in Chicago. Lester was a visionary leader who served as the first AED Foundation president in 1991. As The AED Foundation celebrates its 25th anniversary, the award honors Heath and his role in founding and shaping the foundation. The award recognizes individuals who have provided continuous dedication, support and commitment to The AED Foundation and the construction equipment industry. “(Kirby) has been a longtime supporter of the foundation,” says Rebecca Lintow, director of sales for The AED Foundation. “He uses the foundation as an educational arm of the company. He makes sure his people have skills and knowledge to be efficient managers and the tools and skills to succeed.” “At all levels of the company, from our service technicians to our managers, employees take advantage of available AED Foundation training,” Kirby says. “(We continue) to put into place processes that provide our employees with many opportunities to increase their knowledge and expertise in their specific professional field.” Kirby-Smith has worked with The AED Foundation and training programs to build a better workforce. “Our company has been involved with the OSU Institute of Technology at Okmulgee since 1998,” Kirby says, “and (we) are continuing to expand our presence by extending relationships to additional technical schools in Texas. We place great emphasis on the quality of skills brought into Kirby-Smith, and offering continuous training opportunities for our 400 employees is very important to both their personal and professional success and the growth and evolution of Kirby-Smith Machinery. “A great example of (our involvement) is our on-the-job training programs for new employees. We are committed to providing the best service in the industry, and with our growth comes the need for even more high-quality, skilled employees. Better trained employees equate to additional sales and rentals, as well as better customer service.” Being involved in the foundation’s annual campaign is a no-brainer for Kirby. “For the past 33 years, Kirby-Smith has prided itself on upholding our mission of professionally serving and personally caring about our customers. In order to meet our standards of providing an exceptional customer experience, we realize that professional training is essential to our team and our customers. Through The AED Foundation training our employees have received, they have acquired new skills, learned best practices, and gathered insight from other AED member attendees. This has allowed us to better serve the needs of our customers.” Working with the foundation’s educational arm, the goal is to meet qualified staffing challenges. “Today’s equipment industry requires very skilled technicians, and finding and keeping highly qualified and trained personnel with the skills needed to be successful is a very difficult challenge today,” Kirby says. “From the first day I opened the doors of Kirby-Smith in 1983, I understood that our employees were the lifeblood of our company. The foundational training they have received through The AED Foundation is unmatched, and it is one of the primary reasons we continue to support the annual campaign each year.”

26 | www.cedmag.com | Construction Equipment Distribution | January 2017

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The AED Foundation Re-Accredits Heavy Equipment Technician Program at College of Western Idaho

he AED Foundation congratulates faculty and staff upon re-accreditation of the Heavy Equipment Technician A.A.S. degree program at College of Western Idaho (CWI). This program provides students with an excellent opportunity to learn how to diagnose, maintain and repair construction, agricultural and other diesel-powered equipment. Completing the twoyear program provides students with opportunities to secure jobs that pay well and provide excellent benefits, working for local and major national companies in the construction, agricultural, mining, marine, power generation and various other diesel-related fields. The AED Foundation’s rigorous national technical standards, updated regularly and the bedrock of Foundation accreditation, are defined and updated regularly by the equipment industry with representation from dealers, manufacturers and technical colleges. This results in real-world standards that are fully aligned with industry-expressed needs, current with rapidly changing technology, and comprehensive in scope. Accreditation by the Foundation is truly “of the industry, for the industry.” Alex Beal, CWI Heavy Equipment Technician Program Chair, commented on the value of The AED Foundation accreditation: “The value far exceeds the recognition alone by the Foundation and its industry partners. Our students are the benefactors. The technical standards that come with an accredited program provide our students with the most recent and advanced skills to meet the high expectations for a career in the construction equipment technology industry. It’s a privilege to align our program’s skill standards in a manner that provides our students with the greatest advantage for beginning their long and rewarding careers. Our re-accreditation exemplifies our renewed commitment toward this highly technical and demanding field. Our program has benefited greatly from being part of such a wonderful foundation. I expect great things in our future for our students and for the dealers and industry partners that work with us.” In addition to their associate degree program in Heavy Equipment Technology, CWI offers a Bachelor of Applied Science degree in construction equipment management through a partnership with Boise State University. Again, our congratulations to Alex Beal and his team at CWI. The AED Foundation is proud of its affiliation with this outstanding diesel-equipment technology program at College of Western Idaho and many other career and technical colleges via The AED Accreditation program. If you are wondering where your next generation of qualified equipment technicians will come from, and are interested in working with your local technical college, contact Steve Johnson at The AED Foundation for more information.

28 | www.cedmag.com | Construction Equipment Distribution | January 2017

Department Faculty

Alex Beal Program Chair

Andrew Kendall Instructor

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To learn more about Heavy Equipment Technology programs at College of Western Idaho, contact: Alex Beal, Program Chair Heavy Equipment Technician Program P.O. Box 3010 Nampa, ID 83653 208-562.2413 alexbeal@cwidaho.cc STEVE JOHNSON is the Vice President of The AED Foundation. He can be reached at sjohnson@aednet.org.

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DEALER LEARNING CENTER The AED Foundation introduces revamped and rebranded Dealer Learning Center By Megan Mattingly-Arthur n keeping with its commitment to the promotion of professional education and workforce development, The AED Foundation offers a number of excellent industry- and position-specific learning opportunities that members can access via the Foundation’s website. Previously known as AED University, this robust educational resource is now called the Dealer Learning Center. The name isn’t the only thing that’s changed – the Dealer Learning Center has been revamped, expanded and updated to provide construction equipment industry dealers and their employees with an even better learning experience. “The AED Foundation’s industry-specific educational materials and programs have been around for years and a lot of our member dealers know that we offer these educational programs,” said Rebecca Lintow, director of sales and development for The AED Foundation. “We decided to rebrand because now we offer even more flexible learning options, including updated web-based self-study courses.” The new-and-improved Dealer Learning Center still houses the Foundation’s professional certification programs, as well as webinars and self-study courses designed for those in all areas of dealership operations, including rental and sales, personnel management, marketing, finance, service, branch operations, parts and customer service. Through the Dealer Learning Center, Foundation members can take advantage of recorded, on-demand webinars or register for upcoming live webinar events. In its revamped Dealer Learning Center, the AED Foundation has also introduced new self-study courses that allow dealers and employees to work at their own pace. In the past, the Foundation’s self-study courses were mail-based and, when a member wanted to take a course, they had to order it, wait for their books or DVDs to arrive in the mail, and complete the course before mailing everything back. The AED Foundation has eliminated these issues by making the new self-study courses entirely web-based. Thanks to that major change, it’s never been easier for dealers to continue their industry education or strengthen their workforce. “The best thing about the Dealer Learning Center and its educational materials is how easy they are for dealers and their employees to use,” Lintow said. “They can do their education whenever they want, whether it’s during their break or on their own time. “We have a lot of dealerships that use the self-learning cours-

30 | www.cedmag.com | Construction Equipment Distribution | January 2017

es for general employee development or to groom employees to become managers. For example, if you have a new employee and you want them to learn how to better manage their time, you could have them watch one of our webinars on time management.” In addition to making the switch to a web-based system for selfstudy courses, The AED Foundation has also updated the content of those courses to ensure that they reflect the construction equipment industry’s current standards on everything from parts and service to rentals. The original self-study courses were developed in the early 2000s.

Foundation members can access the educational materials in the Dealer Learning Center for a fee. For example, 30-day access to one of the self-study courses costs $295. However, members who make a substantial investment in the 2017 AED Foundation Annual Campaign can access webinars from 2015, 2016, or both, for free at their main location for the duration of 2017. Members who contribute more than $8,000 have the option of receiving their own dealer-branded learning center that bears their company logo. “One of the main reasons that the Foundation decided to revamp AED University and rebrand it as the Dealer Learning Center is because we wanted to remind people that there’s this whole library of great on-demand webinars that they should be accessing and using,” Lintow said. “Dealers have this amazing resource right at their fingertips and we want to make it as convenient as possible for them to use it.” To learn more about The AED Foundation’s Dealer Learning Center, call 800-388-0650 or visit lms.aedu.org.

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Has Your OrganizationSlipped Out of Alignment? If So, Bet Your Results Have Too!

By Brian Gareau ealerships spend significant time developing new strategies to enhance business performance and success. Then communication rolls out. Training takes place. New processes and technology are launched. Lots of activity and “good intentions” happen. But all too often, results fall short of expectations. Why does execution falter? Many times it’s because of the following: ▶ Time, energy, money, and talent are used in excess instead of conserved ▶ Questions, concerns, and ideas are consistently focused on different goals ▶ Processes and procedures are skipped, ignored, or modified ▶ Human behaviors and actions are inconsistent ▶ When mistakes or errors occur the tendency is to avoid accountability Bottom line – there is a lack of synchronization in the same direction toward the same goals. There’s an alignment issue! Research has found that alignment is a common issue in business execution. Consider the following: ▶ 37 percent of revenue targets are lost due to misalignment (Harvard Business Review). ▶ 70 percent of all employees are unknowingly misaligned with your company’s strategy (Harvard Business Review). ▶ Projects and programs that are aligned with an organization’s strategy are completed successfully 48 percent more often than projects that are misaligned (Project Management Institute).

4 Rights

Ultimately, the challenge can be summarized by the “4 Rights.” Can a dealership’s leaders get employees to consistently do these four things: ▶ The RIGHT THING? (aligned to dealership goals and values) ▶ At the RIGHT TIME? (timeliness) ▶ The RIGHT WAY? (following processes, procedures, policies) ▶ For the RIGHT REASON? (compliance or commitment) Here’s a high performance model I designed to help clients better understand some critical success factors for alignment and high performance. In this model the “S” factor (strategy) and the “OCP” factor (processes) each have a value from 1 to 10, where 1 = poor and 10 = excellent. They are multiplied together. Next, their product is taken to a power of individual accountability, or “IA.” The value of IA can be 1 = compliance, 2 = commitment, or 3 = normal/consistent behavior. There is no way that results (R) can be maximized unless organizational processes (OCPs) and individual behavior (IA) are consistently aligned with strategy. Let’s look at each factor in a little more detail: 1. Strategy. Each day employees must prioritize and make choices as to what to do and what not to do. Sometimes tough choices and tradeoffs have to be made. Clarity and confidence in understanding dealership strategy provides valuable direction and guidance. The key is generating understanding. So remember these tips: ▶ Use common language. Make sure your audience has the same understanding of key terms, acronyms, abbreviations, and metrics as leaders do. ▶ Share context, not just data and tasks. Context helps employees correctly and more consistently interpret information. ▶ Be listenable. Great messages that are delivered ineffectively are filtered and tuned out. ▶ Avoid data dumps. Human short-term memory can only hold seven basic ideas, plus or minus two. Communication on strategy should be prioritized and meted out. ▶ Repeat key messages. Research has found the average person must hear/see key messages at least seven times, through different communication techniques and media, to retain them. ▶ Address start/stop/continue. Ultimately, employees need to understand what they specifically need to start doing, stop doing, and continue or do more of. Research indicates that a business with 100 employees spends an average downtime of 17 hours per week, or $500,000 32 | www.cedmag.com | Construction Equipment Distribution | January 2017

annually, clarifying communication. A solid strategy can’t be effectively aligned to without clarity and understanding. 2. Organizational Cultural Processes (OCPs) are a series of actions specifically designed to inform, teach, or reinforce desired behaviors and outcomes. They are like an assembly line. At the beginning of the line are the current human behaviors taking place in your dealership. Some are already aligned with your strategic goals and objectives. Some are not. There is some compliance and some commitment happening. But there are frequent inconsistencies. At the end of the line are your dealership’s desired behaviors (your finished product). These desired behaviors should ideally become the norm – what most people do, most of the time, without even thinking about it. Three key principles apply to OCPs: A. Sequenced. Processes that inform should be done before those that reinforce. Just like on an auto assembly line, tires arriving before the axles are installed creates confusion and waste. B. All critical. Too often organizations skip, short-cut, substitute, or simply treat OCPs as transactions and not important interactions. C. Discipline sensitive. Most, if not all, OCPs reside in an organization’s HR functional area. HR is responsible for creating effective and efficient processes and providing ongoing support. But each leader must be disciplined and capable of executing the processes – even if they are not perfect. Changing and aligning behavior is hard work. Research indicates that a behavior has to be reinforced a minimum of 17 to 21 times before it becomes a new habit. Reinforcement takes time and direct leadership involvement. Here is a breakdown of the three major functions of OCPs: ▶ Inform. Key processes include communication, policies and procedures, standard processes, and measurement. ▶ Teach. Key processes include onboarding and orientation, formal learning and development, leadership, and decision-making. ▶ Reinforce. Key processes include selection, performance management, non-financial recognition, and financial rewards. When there is inadequate or incomplete cultural process alignment, then there become multiple ways to do things. This results in confusion, redundancy, and difficulty in sustaining any gains. This is waste and creates underperformance. 3. Individual Accountability. In high performance organizations, there is much less time and energy spent on punitive threats, warnings or blame by those in authority to hold someone lower in the organization accountable. Those just create fear, resistance, push-back and strained relationships. Instead, in high performance organizations each individual focuses on the following: ▶ Proactively influencing outcomes. It’s all about making things happen or change instead of reacting or overreacting after the fact. And everyone can influence ideas and actions if they are assertive, consistent, show instead of tell, and build trust. ▶ Taking ownership. Simply put, it’s taking responsibility for action. It’s about behaviors that show initiative, pushing forward, and overcoming obstacles. It’s more “I will” and less “I’ll wait for someone else to.”▶ Admitting mistakes. When mistakes happen, we can learn, grow, change and start making better choices. But this can only happen if failing is not perceived to be fatal (emotionally or career-wise). ▶ Delivering desired results. The focus is on the end game – customer service and organizational performance. Employees are recognized and rewarded for results, not activity. Accountability goes through a normal development cycle – compliance, commitment, and ultimately a norm. In the compliance stage, an employee does it because it is mandatory. Sometimes they do it because there is perceived punitive action if it is not done. But the actions/behaviors are

inconsistent and may only be done when someone is watching or monitoring. In the commitment stage, an employee’s head (intellectual), heart (emotional), and hands (physical work) are more consistently aligned with the dealership’s course of action. Finally, in the normative stage, employees naturally execute the dealership’s desired actions and behaviors without even thinking about it. It becomes “just the way we do things around here.” There are two additional important points on accountability. First, avoiding accountability must be quickly identified and addressed. Unaccountability breeds more unaccountability. Second, accountability must be used holistically to identify, reinforce, and coach both positive and negative situations. Now it’s your turn. 1. Calculate your current results (R) using the High Performance Model above. What are the consequences for performance in the future? 2. How frequently do employees do the “4 Rights”? 3. How often do you see signs of avoiding accountability – and nothing is done? Author Patrick Lencioni said, “If you could get all the people in an organization rowing in the same direction, you could dominate any industry, in any market, against any competition, at any time.” Maximize your dealership’s results through clarity and understanding of strategy, alignment of organizational processes, and igniting a higher degree of individual accountability. Consultant and author BRIAN GAREAU specializes in strategic, tactical, and practical solutions to engage and accelerate high performance. To learn about Brian’s services and find more articles and resources visit: www.BrianGareauInc.com.

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Mission Possible:

Make More Time By Amy Parrish hat if there was a single question you could ask yourself that would create more time and help you get more done? Do I sound like a late-night infomercial? It seems we are all seeking a magic potion to make more time, lose more weight without a lot of effort, remove years from our faces by using a special serum, and have more energy – magic pills, lotions and potions, and for three easy payments of just $29.95, we can have it all. I’m going to share a question with you, which, if you answer it each morning, will help you to get more done. And just like those insane late-night commercials, I’m going to make you wait just a little longer before I give it to you. Time is so hard to describe. There seems to be so much of it when we are young or waiting for something wonderful to happen, and yet it speeds by when we are older and we get this heavy feeling that we are running out of it! It seems that the new way to greet each other in our culture looks a bit like this: “Hi! How are you?” “Hey. So busy. How about you?” We seem to wear our “busy-ness” like a badge of work-ethic honor. I have a friend who loves to respond to this answer with, “Busy with what?” And that is where time management gets interesting. President Dwight D. Eisenhower is credited with saying, “What is important is seldom urgent, and what is urgent is seldom important.” Busy with what? Could it be that managing our time is more about getting clear on what’s important than just moving from task to task? Susan Scott wrote a great book called “Fierce Conversations.” In it, she talks about how having real conversations that get to the heart of an issue actually saves us time – time we were wasting on misunderstandings, misperceptions, misinterpretations, missed deadlines, wrong outcomes, etc., etc. So what’s that single question you could ask yourself and then answer every morning before you start your workday that would create more time and help you get more done? It is simply, “What is the number one driving vision that I need to be communicating about my company’s goals to my team, our customers and everyone in the company?” Are you kidding me? That’s the question? That’s what you wanted $29.95 for in three easy payments? Yep. There’s not a pill. You have to skip dessert and start exercising if you want results. You have to get clear on what you are about, what you are trying to achieve and how you are going to achieve it in order to fight off the time wasters – the urgent and not always important stuff that bombards your daily life and is the number one reason people are running around greeting each other with phrases about how busy they are. So how do we get clear? The first questions to ask yourself are: ▶ Where am I going? ▶ Why am I going there?

34 | www.cedmag.com | Construction Equipment Distribution | January 2017

▶ Who is going with me? ▶ How am I going to get there? Susan Scott calls this interrogating reality. We have to know what we are really aiming to do – not just today but over the long haul. What are the main goals that are going to get our company where we want it to be? Yes, there are surprises we can’t plan for, but if everyone in our company is not clear on what the goals are, how are they going to help meet them? Do they understand how their roles and their work performance in the company impact our goals? As a leader, you must seek to create clarity at all times. Clarity will enable you to set clear goals, prioritize, manage distractions and stick to your priorities. Clarity will help you say “no” to activities that do not lead you to your desired outcome. So let’s look at a way to examine how you are spending your time. This Eisenhower Matrix has been around for years, and it has stuck because it works. Stephen Covey used it, too. You have probably seen it. Everything you do is on a continuum somewhere between urgent and not-so-urgent and important and not-so-important.

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Productive Proactive

▲ IMPORTANCE ▲ URGENCY

Productive Reactive

IMPORTANCE

▼ IMPORTANCE ▼ URGENCY

Unproductive Inactive

▼ IMPORTANCE ▲ URGENCY

Unproductive Reactive

URGENCY Not Urgent And Not Important

Wasting time where you don’t really rest and you don’t really achieve anything of consequence is a good place to start looking at your time. Sometimes I come home from work feeling tired, and I decide to just sit and chill for 30 minutes in front of the television. Then I’ll get busy getting dinner, maybe working on an art project or something that would make me happy. But I end up in this altered reality where I can’t get up off the couch. I zone out, not really watching anything, and watching everything. My limbs weigh 500 pounds each, and I simply can’t move. Or I get a prompt from Facebook that I am tagged in a post. I go there. I promise myself I’m not going to spend time on Facebook tonight, but I get hooked. I watch a video about a funny dog that got rescued by a sweet homeless man. Then I move to an article about the election results and the angry posts that follow it. Then I scroll to see what Halloween photos folks from my hometown are posting. An hour has passed, and this is not how I wanted to spend my eve-

ning. I feel like a Social Media Zombie. This is the famous and deadly Not Urgent And Not Important quadrant, where good intentions pave the road…you know the saying.

Urgent And Not Important

Ringing phone – I don’t recognize the number. But I must answer. The dinging sound on my phone or laptop that tells me I have an email, a text, a notification from Instagram. The little red dot on my email or voicemail icon forces me to open it, delete the spam email or telemarketer voicemail, so I can remove that little red dot. Being interrupted constantly so I don’t finish writing that letter to my best customer or that proposal for a new project – these interruptions are meant to feel urgent, but they are not important to the goal at hand. Cleaning off my to-do list isn’t getting me to my goals if I haven’t crafted that to-do list based on my goals. I arrive home from work exhausted and wonder what I did all day. That’s the ole Urgent But Not Important quadrant. It’s a tricky one.

Urgent And Important

Putting out fires, responding to a crisis, meeting a looming deadline – all these push our activities into the urgent and important quadrant. Nothing else can be attended to because we are up against a deadline or something critical and we must respond right then, right there. This is where most of us live most of the time at work (and let’s face it, at home, too). Being in the customer service business, we have to respond to our customers’ needs. Just like a hospital emergency room, we have to respond to what comes in our doors that day. But if we aren’t proactive in how we manage our reacting – by creating systems for response that are efficient and complete – then we continue to live in Urgent And Important, and this is a great place for stress-related diseases to thrive and gives us no time for working on the long-term important goals.

Not Urgent And Important

Want to write a book? Want to lose 20 pounds? Want to create a system for respond-

January 2017 | Construction Equipment Distribution | www.cedmag.com | 35

ing to customer issues more efficiently? Want to beat your sales projections by 12 percent? Want to learn to knit, fly fish, or understand why your customers are shopping the competition? How about learning a new language, how to build a log cabin at the lake, how to generate more revenue in a lagging area of your business? None of this happens anywhere but in the Not Urgent But Important quadrant. This is the place where you work on things that move you forward over the long haul. This is the place where you do those little daily things that get you to your goal. This is the place where no one threatens to fire you if you don’t do it. No gun to your head to get it done. So the big enemy of this quadrant becomes your own procrastination. Procrastination moves you from not urgent to urgent and from proactive to reactive. How do we live more life in the Not Urgent And Important quadrant? Build time into your mornings to work on the important tasks. There are too many

If you are clear, and I mean crystal clear, about what you need to be achieving in your work and in your life – over time – then every decision you make about how you spend time is governed by that clarity. distractions and crises that hit during the day – good reasons to put off working on the important long-term goals. If you do it early, you will build it in and actually do it. And you will still have time for Facebook, an argument with your teenager, and a lengthy phone call with an extra-happy customer. The urgent tasks will propel you. The important tasks will wait patiently. So the only way to get it into your day is to schedule it

into your day. Protect it. Make it your number one priority to figure out your priorities and protect them daily. A great place to start? Do this exercise now. Simply ask yourself: What is the number one driving vision that I need to be communicating about my company’s goals to my team, our customers and everyone in the company? Now, with that vision in mind, answer the following: What should I stop doing? What should I keep doing? What should I start doing? If you are clear, and I mean crystal clear, about what you need to be achieving in your work and in your life – over time – then every decision you make about how you spend time is governed by that clarity. And you will actually get more done and reach that goal faster than if you spend your days always reacting to fires that need putting out. Spend time in the Not Urgent And Important quadrant. Go there. Start now. Model it for your team. Get the right things done.

AMY PARRISH, trainer and consultant specializes in helping dealerships develop mission, vision and values that inspire and produce results. Along with topics centered on leadership development, communication and management for the heavy equipment industry, Learn more about Amy’s training programs, services and resources at her website, www.amy.training or contact her at 404-805-1334.

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12/12/2016 12:05:22 PM 12/5/2016 2:44:47 PM

Terramac Tough Unique rubber track crawler carriers available through the full-line Terramac dealer network

By Aaron Curtis ike Crimaldi, founder of Terramac, was inspired by the versatility that rubber track crawler carriers provide. Crimaldi established his up-and-coming company once he saw that crawler carriers could be used in a variety of markets, including pipeline, environmental, utility, forestry, general construction and mining. In 2011, Terramac released its first design, the RT9 crawler carrier. The unit features an 18,000-pound carrying capacity, fully-loaded ground pressure of 5.1 psi and easy front and rear bolt-on attachments, which enable an array of equipment to be mounted. According to Andy Konopka, president of Terramac, 2013 was the first year authorized dealerships were appointed. Terramac has experienced exponential growth since then – including doubling its output from 2015 to 2016 – while continuing to display innovation in the field. Currently, Terramac offers three crawler carrier units that are built entirely of premium components and manufactured in North America. Terramac is represented by 12 authorized dealerships throughout North America. Similar to the RT9, Terramac’s larger RT14 model delivers a 28,000-pound carrying capacity and showcases the company’s innovative rubber track

38 | www.cedmag.com | Construction Equipment Distribution | January 2017

technology and customization options. The Terramac unit that is garnering ample attention is the RT14R. This model features a unique 360-degree rotating upper frame, which allows it to haul up to 28,000 pounds of material and dump at any position – even while driving. Low ground pressure and rotating functionality make the RT14R ideal for work in confined spaces and environmentally sensitive areas, such as railroad track right-of-way access, rivers and levees, general earthmoving, site prep and mining. In early 2017, Terramac will unveil its latest model to round out the product family. And according to Konopka, additional designs are both on the horizon and currently on the drawing board. Safety is a top priority for Terramac, and the units are designed with that in mind. Every machine comes standard with a rollover protection system and falling object protective system certification. Wide access doors are provided for easy access, and windows on all sides and large mirrors are included for increased visibility. A tilt hood for engine access and a dog house for fluid/filter checks are also provided for hassle-free maintenance. And the RT14R features a walking platform area for easy access to the engine to keep the operator or service technician safe. Terramac sets itself apart from competitors by

offering the opportunity to mount units with alternate attachments in lieu of the standard dump bed, rock bed, or ﬂat bed. The hydraulic system incorporated into each Terramac straight frame model is designed to accommodate attachments, whereas competing units require a hydraulic conversion to take place. The exclusive design allows for customization with an array of specialized support equipment, such as hydroseeders, cranes, drills, generators and tanks, and provides further versatility for users’ needs within different markets. “The versatility of our units is something we are very proud of,” Konopka said. “There aren’t many competitors that can easily customize units. Terramac has certainly proven that this capability is one of our greatest strengths.” As Terramac further delivers a more robust product line and supports superior parts availability, its dealer network continues to grow. The company’s goal, according to Konopka, is to reach 18 dealers in the near future and eventually have complete coverage across North America. With this expansion comes international interest. Terramac is beginning to look for dealers outside of North America and has received inquiries from Europe and South America.

“What makes Terramac different is that we align ourselves with dealerships that offer aftermarket support and readily available parts, as well as highly qualiﬁed and trained service technicians, to meet the customers’ needs,” Konopka said. “Our authorized dealer network is an extension of the sales, service, parts and rentals on Terramac products. We want to consistently provide the end user with quality products and services, and our dedicated dealer network helps us achieve that goal.” As the former senior executive for an equipment dealership, Konopka discussed his knowledge of and passion for the industry. “Coming to the manufacturing side allowed

me to bring 22 years of dealership experience to Terramac and help align all of our processes, procedures, products and visions to supplement what a dealer is trying to accomplish in the marketplace,” Konopka said. “We align manufacturing more toward a dealer’s needs as opposed to being that separate entity that says ‘We build it, you sell it.’ Terramac aims to be dealer friendly, and it’s exciting to help shape the organization to achieve that in the marketplace and differentiate Terramac from the competition. “The company’s foundation is built like a three-legged stool,” he added. “It’s a combination of our products, dealers and employees that is driving Terramac’s growth. All three are critical to our future success.” Terramac, LLC is based in Elburn, Ill. To learn more about Terramac, visit www. terramac.com.

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January 2017 | Construction Equipment Distribution | www.cedmag.com | 39

2016-11-22 9:23 AM

>> PROBLEM SOLVED

TROY OTTMER

Recruiting – Growing Your Business By Having a Plan Recruiting takes thought, and it takes all your department managers to buy in and support the initiative.

We all are faced with the same challenges when it comes to an aging workforce. So what is our plan and where do we start? Our plan should include job-specific recruiting, and we should start by taking a hard look at our workforce. Recruiting is not as simple as going to a college or university, or posting an ad on an internet job board. Recruiting takes thought, and it takes all your department managers to buy in and support the initiative. Recruiting can be generic. For example, a company can recruit based on hiring candidates for management or sales training roles. In some cases this will certainly get them headed down the right path, especially if they take the approach of working these candidates through each department over the course of 12 to 18 months. I’ve witnessed this approach work very well, but I’ve also seen it not work well. In the latter case, the candidates often found themselves feeling like they never really fit into any of the departments. Now, I’m not saying that this approach always ends badly; I’m saying that for this broad-based approach to yield real results, your program must be structured so that the new recruit and the company both share in the experience. More on structure later. Because each dealership has basically the same needs, we can break down our recruiting efforts into a few simple categories. There would be Sales, Service, Parts and Operations. Sales would include someone having a role defined as outside sales, and this would encompass new product, rental or product support sales. Parts would include someone who interfaces with customers at the parts counter or from a phone center, or it could include someone who has an interest in process management or inventory control. Service would include service writers or administrative team members. Service would also include technicians, which is one of the hardest positions to find quality replacements for. Then we have Operations, otherwise known as Management. As you have probably gathered, there is a natural overlap in all these departments. By overlap, I mean that when you are recruiting for these

positions, you can approach the process with a broad-based program or with a more departmental approach. Departmentally, you can recruit based on a specific skill set needed by one or more departments. With the broad-based approach, your program would be, for example, 12 months in length, and there would be a specific structure to the training plan. In a 12-month training plan, you can have your new recruits working two-and-a-half months in each department or part of your operation. For this to work there must be a structured plan for the new recruit to follow. Additionally, management from within their currently assigned department must engage the recruit and be certain that they follow this plan. Simply placing a candidate into this program or department and not using them or teaching them the inner workings of the department will lead to the candidate’s failure. Senior leadership has to monitor the progress of the recruits, as well as the progress of the department leadership who is managing them. If the recruit fails or loses interest, then you have failed as an organization. We must keep in mind that not all recruits will make the cut, and this too is part of the process. The washout rate will vary from industry to industry. So how do we maintain an acceptable or low washout rate? First we must come up with a plan, one that has a structured path, and one that forces the recruit to work within each unique aspect of each department. Second, we must choose where we are going to recruit from. As mentioned earlier, we can do this at college or university career fairs, and at vocational or technical colleges. Some programs on the vocational front are starting as early as the junior year of high school. These programs are obviously directed at recruiting future technicians, and for them to be successful there must be a structured plan in place or they will never go anywhere. In the end, for any business to grow and prosper, it must recruit!

TROY OTTMER is vice president of Fixed Operations at Doggett Heavy Machinery Services LLC in Houston. Ottmer has worked in the equipment and automotive industry for 24 years. He can be reached at troy.ottmer@ doggettmachinery.com. 40 | www.cedmag.com | Construction Equipment Distribution | January 2017

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At Rotar we believe that people and machines can operate more efficiently. From this philosophy, we develop state-of-the-art attachments for excavators and wheeled loaders. Our main objective? To make products that guarantee operational continuity, minimal operational costs and optimal availability. We go about this in our own unique way. With enthusiastic professionals, short lines of communication and proven quality. This is how we go about making your daily demolition and recycling jobs a lot easier. Once your attachment leaves the Rotar Factory, it bears our name. A name that represents a product with unique performance, produced by a unique team. Uniquely for you. Rotar North America Inc. is based in Cleveland, Ohio and offers heavy duty demolition attachments. The range includes mobile hydraulic shears, pulverizers, demolition shears and material handling grapples to serve both American and Canadian demolition, scrap metal and recycling industries.

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If you can’t measure it, you can’t manage it

Tips for lowering the TCO of your materials handling equipment

By Theo Rennenberg ust about every company that finances its materials handling equipment has, at one time or another, been charged overtime at the end of a lease or been forced to keep equipment with escalating maintenance costs due to improperly structured finance contracts. If your organization has been immune to these aggravations, consider yourself lucky. Why is this such a common occurrence? Often, it’s because the Operations and Finance teams are not working together to effectively manage their fleet. It is no secret that these two departments have different perspectives and priorities, but the Total Cost of Operation (TCO) of your fleet is dependent upon a continuous dialogue between them. They need to communicate regularly regarding the “health” of the fleet, which can only be determined by combining financial information with usage data and maintenance records. By analyzing this information together, organizations are better equipped to maximize their TCO.

Get rid of the guesswork

The foundation of TCO/Fleet Management is the structuring of a lease by estimating the expected annual usage of the asset. Unfortunately, this process has always been a guessing game. At DLL, our independent analysis of meter reads at end of term revealed that usage estimations are wrong 89% of the time. That means that nine times out of ten, materials handling equipment is either over- or underutilized compared to the lease allowances. When equipment is underutilized, it means the monthly payment is higher than it needs to be. And when it is overutilized, it means hefty overtime charges at the end of the contract. It’s easy to understand how this happens when you 42 | www.cedmag.com | Construction Equipment Distribution | January 2017

consider the conflicting motivations of the stakeholders involved in structuring a lease contract. Operations teams typically dislike overtime and request more contract hours than they need in order to avoid surprises at the end of term. Finance teams, on the other hand, are often focused on negotiating the lowest monthly payment and are later shielded from the mid- and end-of-term results of their choices (i.e., little or no in-term flexibility, restrictive and costly return conditions, high overtime fees, little or no end-of-term flexibility for extensions). What does this mean for your business as a whole? Ultimately, it means a more expensive fleet to operate when you consider the “Total” Cost of Operation. In order to guard your organization against the pitfalls of this guessing game, ask yourself the following questions: 1. Do you pull quarterly or annual meter reads to monitor the utilization of your fleet? 2. Do you regularly compare actual utilization data with lease contract allowances? 3. Do you base your decisions to return equipment on the condition of the asset rather than the expiration date of the lease? If you responded “no” to any of these questions, your organization may have lost sight of one of the most important and impactful aspects of fleet management – leveraging data to maximize utilization.

Leverage data for smarter decisions

A collaborative relationship between Operations and Finance is not only important upfront when lease contracts are being structured, but throughout the entire life cycle of the assets as well. By monitoring actual usage data and regularly comparing it to the lease contract data, organizations are able to make critical decisions that can help lower the TCO of their fleet. Take, for example, a fleet of forklifts that is leased for five years based on an estimated usage of 2,000 hours per year (10,000 contract hours). Halfway through the contract, data analysis reveals that some of the forklifts have been used 4,000 hours per year, while others have only been used 1,000 hours. Armed with this knowledge, you can now work with your financing partner to shorten the term of the

overutilized assets in order to avoid overtime charges and escalating maintenance costs. You might also decide to extend the term of the underutilized equipment at a lower monthly payment that matches your actual usage. Steps like these, if taken on a regular basis, can save organizations hundreds of thousands of dollars in overtime, maintenance and overpayment costs. One common challenge is that it can be extremely difficult to gather meter reads on a regular basis, and the larger the fleet, the more complex this task can be. If your fleet professionals have access to the data, the task is fairly simple. But surprisingly, many large organizations resort to having someone manually pull meter reads on a quarterly or annual basis. Others never do it at all. Unfortunately, that means Finance teams never have access to the data they need in order to restructure out-of-balance contracts or effectively structure new ones. If you are concerned that your Finance and Operations teams are not on the same

page with regard to your fleet, here are a few tips that can help bridge the gap: 1. Host an offsite workshop with your Operations, Finance and Fleet groups to dig into the TCO model, and schedule quarterly health checks to discuss the status of your fleet. Invite your finance partner and maintenance suppliers to the meetings so they can share best practices as well. 2. If your organization does not have a web application or platform to house all TCO information, create a spreadsheet that includes the operational, finance and maintenance data related to each asset in the fleet. Update the data at your quarterly meetings in order to identify issues and manage them as soon as they become evident. 3. If you do not have access to this data, or if your fleet is too large for programs such as Excel to effectively handle, look for Software as a Service (SaaS) solutions that can house this information, or find a

fleet-centric financing partner that provides these tools as a value-add for your entire fleet (not just the equipment you are leasing with them). Effective fleet management is an ongoing process that relies on regular analysis of data, including usage, maintenance costs, contract allowed hours, contract terms and conditions. Far too many companies have eyes wide open at the beginning of the contract, only to ignore their assets until the time of return. As we wait for innovations such as usage-based leasing and fleet-centric leasing methodologies to become more accepted and prevalent, the importance of the ability of your finance and operations executives to speak the same language when it comes to fleet management cannot be overemphasized. Continuous communication between the two departments and the data-driven decisions it drives will afford your organization years of successful TCO management.

THEO RENNENBERG is the global fleet asset manager in the Construction, Transportation and Industrial Business Unit of DLL, a provider of equipment financing and fleet management solutions in more than 35 countries. He is a 36-year veteran of the equipment distribution industry and has specialized in fleet management throughout his career.

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January 2017 | Construction Equipment Distribution | www.cedmag.com | 43

'ADD VALUE'

What It Really Means: 9 Expert Insights By Matt Greener t seems that everywhere I turn, the message and advice being proliferated is the same: “Just add value” or “Provide more value.”Wondering how to increase your profits? Well, just add value! Would you like happier clients? Provide them with value! Want to grow a larger social media following? Simple, add more value! But what does that mean? How do you add value? This is a generic answer that without context lacks anything tangible that can immediately be put to use. However, I believe that the advice stems from a true desire to help. This bothered me, so I decided to define what “adding value” means in real ways that people can put into action, rather than leaving them sitting in confusion with a general concept. In order to accomplish this, I wanted a wide range of opinion and reached out to several friends and others with influence to get their take on the subject – a collective brainstorm of sorts. The results are, dare I say, valuable! So what does it mean to provide value?

1st Value Insight

Stephen Shapiro, best-selling author and one of the foremost authorities on innovation culture, collaboration, and open innovation, shares an interesting opinion: “The challenge is, value is so context sensitive. There is no generic answer for it. I agree that if people say ‘add more value,’ they are not really saying much. But to define value is impossible, as it is so

dependent of the situation. Even in the area of sales, you can’t generically define value, as it will depend on your industry, your customer base, etc. Therefore, from my perspective, adding value is important but I can’t give you a onesize-fits-all definition. I guess I agree with your position…and yet I can’t give you a definition, as there isn’t 'one'."

2nd Value Insight

“Hi Matt, I define value as ‘the relative worth or desirability of a thing to the end user or beholder.’ In other words, what is it about this “thing” (product, service, idea, etc.) that provides so much worth (value) that the other person not only trades their money for it, but is ecstatic that they did? The key to remember is that ‘value is always in the eye of the beholder.’ To ‘add value,’ then, is to add that which makes the original “thing” even more desirable in the mind of the other person.”– Bob Burg, international speaker and best-selling author of “Endless Referrals” and “The Go-Giver”.

3rd Value Insight

Amish Shah, Inc. 500 entrepreneur, adventurer and “reality hacker” explains it this way: “One simple rule to increase your ‘value’ and provide ‘value’ to others: Give without expecting anything in return.”

4th Value Insight

“Adding value means being an advocate for the true needs and best interests of your client. It means making recommendations or providing service that allows them to become better, stronger and more capable.”– Pamela Slim, seasoned coach and writer who helps frustrated employees in corporate jobs break out and start their own businesses.

5th Value Insight

Dan Sullivan, founder and president of The Strategic Coach Inc. says: “Value creation in the 21st century means providing direction, confidence, and capability where people are feeling isolated, confused,

and frustrated.”

6th Value Insight

Mark Schaefer is a college educator, blogger, speaker and consultant who specializes in corporate social media marketing workshops. He is the author of three best-selling books, including “Return On Influence.” His take on providing value: “I think it is unrealistic for a company to try to ‘be amazing’ but I do think it is possible to stand out by knowing your customers well and responding better, and faster, than the competition … whether that means through content or something else. I also think there is an imperative to be interesting. Everyone is trying to cut through the increasing fog of information density. There are many strategies, many ideas, but if you are not interesting, you will certainly lose.”

7th Value Insight

Tom Trush helps business owners and entrepreneurs develop lead-capturing marketing materials. His definition is short and sweet: “Adding value means you give priority to your prospects’ needs before you put profit in your pocket.”

8th Value Insight

Jeffrey Gitomer, the “King of Sales,” says: “Value is what you do up front, before the sale, and what you do during the relationship. You don’t add value – you give value.”

9th Value Insight

To me it comes down to goals; does what I am providing help move the audience closer to their objectives or does it move them further away? Don’t waste their time. Now, I want to hear from you. What’s your value insight? What does providing value mean to you and how have you used this strategy in your business or life in general? Being such a general concept, it could be that your contribution helps to shed light on a different angle of value that has not been considered here.

MATT GREENER is a leading expert in online strategy for businesses and entrepreneurs. Matt also writes frequently for several internationally acclaimed websites, including his own blog. Follow @RealMattGreener 44 | www.cedmag.com | Construction Equipment Distribution | January 2017

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12/12/2016 10:02:07 AM

>> SALES FORCE

JOHN CHAPIN

Sales Facts That Will Never Change The bottom line: the only way sales has changed is for those doing it the wrong way.

Fact 1: Sales is still a numbers game. Failure in sales, 99.9 percent of the time, is due to a lack of activity – in other words, not making enough calls. Things have changed since we’ve had the internet; I know sales reps who spend hours looking up background information on prospects before they call them. This is a mistake. Look up the information a prospect would reasonably expect you to have, but don’t spend hours being perfect. Just get some quick information and make the call. Another way technology can work against us is that some people believe they have to be technical experts before they call anyone. An insurance agent I know spent a full six months in the office studying cyber liability because he had to know everything before he would speak to anyone. The insurance agent is a producer (salesperson) first, not an underwriter (technician). The reality is, you will never know everything, and this is usually just an excuse to avoid doing the hard work of making lots of calls. Also, just because you now have the internet to look up information doesn’t mean you should be spending hours “preparing” at the expense of making calls. Just get some basics and make the call. Learn what you need to learn so you don’t make any careless or stupid mistakes, but focus more on activity than on being technically proficient. Fact 2: You’re still the expert. While it’s true that today’s consumer is, generally speaking, better informed than in years past, you’re still the expert who has probably forgotten more than they will ever know. The famous author Malcolm Gladwell once said that it takes roughly 10,000 hours of study to master one’s craft. While you may not be at the 10,000-hour mark yet, you are still far better off than someone who has spent 5, 10, or even 40 hours on the internet studying your industry and products. You live in your business every day; the prospect doesn’t. People still need an honest, straightforward salesperson who understands the subtleties and idiosyncrasies and can educate them on what’s best for them. Fact 3: Face-to-face and phone are still the most effective ways to sell. Have you ever not received an email that someone swore they sent to you? It just happened to me again

two weeks ago. In addition to the fact that you can’t always rely on an email, LinkedIn in-mail, or other internet communication to reach the person, with those methods you also lose the most important parts of communication, such as tone of voice and body language. Couple that with the fact that electronic communication distances you and dehumanizes the experience. In-person communication is always the most effective, followed by Skype and other face-toface apps, and then phone communication. Electronic communication serves its purpose, which is short and sweet, noncritical communication in which you are simply conveying information. What kills me is when I see salespeople using an email for initial communication or during an important part of the selling process. In this case they are simply hiding behind technology because they are afraid to make a call. Also keep in mind that even noncritical electronic communication has to be backed up with a phone call or in-person contact to ensure it was received. You have much more impact when people can see and/or hear you. Don’t hide behind technology and spam people on the initial and other important communications. Fact 4: It is still all about relationships and doing what’s best for the other person. There is no “new relationship selling” or “solution selling.” The best have always focused on the longterm relationship and the best possible solution for the prospect, even if it involved sending someone to the competition. The best have always been seen as a peer and business partner looking out for the best interests of the prospect. The bottom line: the only way sales has changed is for those doing it the wrong way. Years ago you could pull the wool over someone’s eyes, get away with not knowing as much, have subpar sales and people skills, and not work as hard. The people who have always done it right have found that little has changed over the years. For them, being great at sales still requires that they work hard and make the calls, communicate effectively, build the personal relationships, be professional and knowledgeable, put the other person first, and embody the character traits of honesty and integrity.

JOHN CHAPIN is a sales and motivational speaker and trainer. For his free newsletter, or if you would like him to speak at your next event, go to: www.completeselling.com. 46 | www.cedmag.com | Construction Equipment Distribution | January 2017

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12/12/2016 10:08:35 AM

CAPTIVE INSURANCE: PROTECTION AND PROFIT A two-part series on captive insurance By Rex A. Collins, CPA, CVA HBK Dealership Industry Group hat would happen to you, your family and your employees if you lost your franchise? What would be the impact on your business of a devastating hurricane or other major event? Depending on your location, hurricane insurance might be too expensive. And no commercial insurance carrier will underwrite protection against losing a franchise. Still, those are real risks. And you need protection against such potentially tragic occurrences. There is a way. It’s called “captive” insurance. Captive insurance is commonly employed by large U.S. corporations, typically to cover risks that are low in frequency but high in severity. They establish their own captive insurance companies to manage risk where commercial insurance is unavailable or too expensive. A captive can provide any type of insurance allowed by the jurisdiction in which it is registered: property, inventory, business interruption, director and officer liability, errors and omissions, workers’ compensation, workplace violence, embezzlement, pollution, reputation risk, employment practices, general liability, garage liability, legal costs – and some you can’t get from a commercial insurer, like costs associated with losing a franchise or a supplier relationship.

48 | www.cedmag.com | Construction Equipment Distribution | January 2017

Dealerships establish captive insurance companies to provide stable and cost-effective insurance. Their captives protect them from risks against which they are underinsured or for which they cannot get coverage from a commercial insurer – and to control costs, protecting against unpredictable, wild premium swings. The most likely candidates to set up their own captive insurance companies are typically multi-entity dealers, those with half a million dollars or more in sustainable profit. Their businesses have uninsured or underinsured risks, and they are concerned with wealth accumulation and asset protection. Smaller dealership operations typically maintain commercial policies to cover catastrophic losses, or use the reinsurance market to get better rates, then use their captive to assume liability relative to more manageable risks. There are several types of captive insurance firms. Large dealerships often can afford the premiums to create their own captive firm, a “pure” captive, or collaborate with other dealers in a multi-member pure captive. The amount of initial capitalization depends on the risks to be transferred; you must have a capital position sufficient to cover claims. However, dealers ordinarily don’t have to be concerned about coming up with significant cash for this initially because most captives are established with letters of credit from financial institutions. Capital requirements are also set by the location where the captive is to be domiciled. With regard to this requirement many states are captive friendly, such as Delaware, Vermont, Nevada and South Carolina; and some captives opt to domicile off shore. (It is

Dealers can use captive insurance companies to manage risk, reduce taxes and create income important to note that although the captive may be domiciled in an off-shore jurisdiction, all of the captive’s funds are maintained in the U.S.) Dealership associations have been known to set up captive firms for the benefit of their members. Alternatively, some insurance agencies set up captives and sell participation to dealers. And other captives often market theirs to dealers as “rent-a-captives.” In all cases, the concept is much the same. A properly structured and managed captive insurance company can provide a variety of benefits: ▶ Insuring business risks not addressed by commercially available insurance ▶ Having lower overall premiums ▶ Covering undisclosed self-insurance risks; that is, filling in the gaps in commercial coverage ▶ Allowing reserves to be set aside in a tax-advantaged manner ▶ Providing significant income tax savings ▶ Providing underwriting and investment profits ▶ Permitting use as an estate planning tool, or in succession planning to retain key employees Most important to setting up your captive properly is working with an experienced captive management firm. Forming a captive can be a lengthy process involving feasibility studies, financial projections,

domicile studies, license applications, risk transfer determinations, and actuarial computations. Be sure to ask anyone pitching a captive what structure they recommend and why. Too often, an insurance seller eyeing the potential profits for himself in the form of commissions lacks knowledge of important aspects of the proper captive structure. You need a qualified individual quarterbacking the process to capitalize on the full range of captive benefits. Your captive is truly a separate business, so you’ll need to operate it as a company independent of your dealership. An experienced captive management advisor will ensure that shareholder and board meetings are scheduled, that actuarial reviews and tax returns are completed. They will address key formation issues including identifying the risks to be insured, analyzing risks and related premiums, and comparing costs to coverage in the commercial market. Captive insurance companies are not a new phenomenon. They are used broadly by large companies to protect against risk, lower insurance costs and reduce taxable income. But small, closely held dealers can also enjoy the tax, cash flow and risk management benefits. In Part II of “Captive Insurance: Protection and Profit,” we’ll address the financial benefits and the tax advantages of captive insurance companies.

REX COLLINS is a Principal at HBK CPAs and Consultants. He directs HBK’s National Dealership Industry Group, which provides tax, accounting, transaction and operational consulting exclusively to dealers. Rex can be reached at 317-504-7900 or at rcollins@hbkcpa.com. January 2017 | Construction Equipment Distribution | www.cedmag.com | 49

Opportunity Lurks Where Technology Does Not Fear to Tread I

By Dennis Dow, Customer Success Manager Black Ink ROI

How data, insights and technological platforms lead equipment distributors to have the right people pushing the right product to the right places at the right time for the right customers. 50 | www.cedmag.com | Construction Equipment Distribution | January 2017

tâ&#x20AC;&#x2122;s no secret that the most desirable attributes of good businesses are often the least understood. That may allow the savviest strategists and salespeople to rise to the top, but it also leaves a lot of untapped opportunity for success waiting to be found. To use a schoolyard example, the most difficult math problem on a final exam may have an answer that totally bewilders the test-taker, but that does not mean the answer is nonexistent! Study, analysis and the ability to problem-solve lead the best students to a desirable outcome, but that answer remains no less real for those who leave the question blank. The avenues to success exist; itâ&#x20AC;&#x2122;s just up to the student to embark. Similarly, opportunity abounds in equipment purchase and rental spheres, but it will elude those who do not know where to look. Creating awareness of that opportunity where it may not exist is the mark of the truly dedicated salesperson, and driving action where the current unexploited opportunity lies is the key to growth. In reality, equipment rental and sales are much more complicated than your average math test. The amount and breadth of study required is similarly much more robust. However, what to specifically study in order to gain a strategic advantage and activate structural and professional changes may be a less-than-clear picture without the right technology to help. With the right technology platform, someone could productize and amplify the gut

feelings of the best sales guru by grounding them in the wealth of data and analysis afforded to us in this day and age. Under that heading, I have noticed a few things in my time at an OPE customer analytics firm. First and foremost, there are two main things to remember when implementing or adopting a technology solution: Understand quickly how it can affect your bottom line positively from C-suite down to boots on the ground, and make sure the product and insights are presented in a manner that everyone can understand and use. These two things are the products of a good working relationship between distribution and technology companies, and they are the basis of a successful enhancement of professional and product development. Let me explain the first part of that. For us to build a robust technological platform showing sales opportunities based upon the careful compilation, cleansing, and analysis of data from multiple sources, we needed an expert data team, a crack crew of programmers, a wealth of public and private data at our disposal, statistical analysts bent on finding answers to complex questions, and the ability to understand another industry enough to know what a salesperson or strategist would want to see and do. The wealth of opportunity we found, the deep dives into data to understand trends in a customer base, product category sales by region and time, high-performing dealers vs. low and ways in which to make the latter more like the former, and defined dollar lifetime value for the best customers in each zip code was built into a one-stop platform for our clients. However, the average user is within sales, from the C-suite down to individual boots on the ground. They are not in any way data scientists. Therefore, the personality and communication styles of those in the industry have to be taken into account when designing how we present data and insights, or you will have as much success as you would studying for that math test using a book in a foreign language. Pair the users with the right platform, written with a narrative they can easily understand and filled with insights they can very easily get to and use, and you have the backbone for an unstoppable tool to increase awareness of opportunity and efficiency of execution.

What would be in that platform? Well, we started talking about opportunity that is, as yet, untapped and perhaps unknown. The right platform would have the right insights, allowing the users to see opportunity to sell more or rent more through their existing dealer or rental network, and also identify opportunities to open new points of trade. It would also have the ability to make sure the right product mix is at the right point of trade at the right time to capitalize upon areas where the most valuable customers do business. Data, trend analysis, comparisons of historical sales with regional economic forces, NAICS codes for target customers, and the geo-location of current high- and low-performing dealers all would couple together to show a “heat map” of opportunity that could be quickly understood and exploited. Not only can we vastly increase the efficiency and effectiveness of a sales force or strategist by cutting down the time spent building these reports and outputs, but we can provide strategic analysis of market potential to allow users to make the best decisions possible in reaction to questions like these: When is the best time to switch our dealer product mix from summer equipment to winter equipment based upon when our buyers or renters do so? When do the highest-value customers rent or buy a certain product line? Who drives the most recurring lifetime revenue when comparing half-year renters with owners? Which of my high-performing dealers or renters hit these key demographics most often and what can I do to replicate that elsewhere? How does weather affect regional sales and rentals of particular product lines and how can I make sure the right product mix is available? A user may be very surprised to know how much goes into the construction of an opportunity, how complex the answer may be, and how easy it can be to visualize when you have technology that marries all the relevant data together in an easy-to-see way. All that’s left is action. Let’s take a step back and look at some things that trouble strategists at equipment distributors. Finding opportunity in the marketplace is a large part of being successful, but there is also an internal battle that must be fought. Having the right organizational structure, with the right talent

aligned to your overall strategy, is vital to acting on and executing those newfound opportunities. The ability to adapt and be in the right place at the right time in the market is just as important as the ability to internally have the right people in the right place aligned to the right mission. Just as a technology platform can have the right information in the wrong format, an equipment distributor can have the right ideas but be in the wrong places for execution. Within a distribution network there can exist a plethora of high and low performers of all shapes and sizes: wholly-owned branches and independent distributors in a constant flux of merging and acquisition, multiple channels for dealers and rental companies all targeting customers who purchase or rent at any given time of the year. With all that in play, the question remains – how can a company organize itself internally around these many moving parts, personalities, and strengths to most efficiently act upon these opportunities? The good news here is that the same analytics technology, which allows users and strategists to see outward opportunity also by nature, shows where the highest performing sectors of the company truly excel and where there is need for improvement. It fosters conversations between high and low performers, thanks to empirical data and analysis that sets the table for learning opportunities and the ability to confidently reorganize to build efficiency. By benchmarking different branches, distributors, and dealer networks and comparing them with geo-regional trends and history, decisions can be made to bolster low performers with high-performer strategies and experience. In this way we can truly exploit the best attributes of the best people, the cleanest insights in the most efficient way, all to make sure the right customers have access to the right products at the right time through the right networks of distribution and dealers, regionally and nationally.

It’s hard to argue with solid factual insight into opportunities presented in the right way, and it’s hard to fail with the right organizational structure and talent internally to act upon them. The right technology partner makes getting there easy.

DENNIS DOW is the Customer Success Manager at Black Ink ROI, a customer analytics technology platform provider in Boston, MA. His background includes graduate-level work in economics, and he is experienced in systems, business operations, internal marketing, and client relations. He is an aspiring surfer who is currently an expert at sinking. January 2017 | Construction Equipment Distribution | www.cedmag.com | 51

>> LIKE-KIND EXCHANGE

STEVE CHACON

1031 Like-Kind Exchange Basics for Equipment Owners The proper application of Section 1031 effectively converts a taxable sale and future purchase of equipment into a tax-free exchange of property.

Like-kind exchanges are found within Internal Revenue Code Section 1031 and are referred to by various names, including the following: ▶ Section 1031 exchange ▶ Starker exchange ▶ Tax-deferred or tax-free exchange No matter what they’re called, the value like-kind exchanges represent to equipment owners is the same. The proper application of Section 1031 effectively converts a taxable sale and future purchase of equipment into a tax-free exchange of property.

more time to search for and acquire their replacement equipment. In this format, the sale of the relinquished equipment occurs first, with the acquisition of any replacements to be completed within the earlier of 180 days of the sale or the tax filing due date (which may be extended). Just like simultaneous exchanges, careful planning will help asset owners conduct the transaction within the Internal Revenue Service’s strict requirements.

Why Like-Kind Exchanges Matter

In cases where the replacement equipment must be acquired prior to the sale of the old equipment, reverse exchanges are an option for asset owners seeking Section 1031’s benefits. Reverse exchanges are unique in their planning considerations, and it’s critical that equipment owners, prior to any purchases, begin the planning process with a qualified intermediary and an experienced tax advisor. Any outright purchases, before proper planning, are often fatal to the exchange.

For owners of equipment, like-kind exchanges are focused on the deferral of income tax related to their dispositions, and the benefits of a like-kind exchange require adherence to a strict set of rules. Properly structured like-kind exchanges present a powerful proposition – allowing asset owners to keep cash that would normally be lost to federal and state taxing authorities in their businesses. What Are the Types of Like-Kind Exchanges? With the help of an experienced qualified intermediary, the proper like-kind exchange structure can safely be found. Those structures include the following: ▶ Simultaneous exchanges ▶ Delayed/forward exchanges ▶ Reverse exchange ▶ Program exchanges

Simultaneous Exchanges

Simultaneous exchanges require the ownership transfers to occur at the same time, with care taken to account for the equipment’s respective values. Furthermore, since the equipment doesn’t usually share the same fair market value, cash or other equipment used as part of the purchase/sale price must be carefully delivered directly to the other party. Simultaneous like-kind exchanges can be a great way to keep an LKE simple and cost-effective. However, what may begin as a simple swap can quickly evolve to suit the circumstances of the seller and/or buyer. It’s these variables that require careful planning.

Delayed/Forward Exchanges

Delayed/forward exchanges allow asset owners

Reverse Exchanges

Program Exchanges

Program exchanges allow owners of large fleets of equipment to award like-kind exchange treatment to their asset management process. These exchanges are particularly powerful and somewhat complex, awarding millions of dollars of tax deferral benefits to the fleet owner’s disposition and acquisition process.

Get Started with Like-Kind Exchanges

Regardless of the structure, all like-kind exchanges require thoughtful planning – planning that begins with an experienced qualified intermediary and a tax advisor. By law, like-kind exchanges are a deadlineand document-driven process. Generally speaking, if an equipment owner has sold or purchased equipment without the correct exchange documents in place or without the use of a qualified intermediary, it is likely too late to obtain LKE treatment. The importance of early planning cannot be stressed enough. Equipment owners curious about like-kind exchanges should contact a qualified intermediary and their tax advisor right away.

STEVE CHACON, CPA, CES, is Director of Exchange Operations at Accruit. For over 15 years, Steve has provided skilled and practical guidance as a financial statement auditor, tax advisor, entrepreneur and educator on Section 1031 like-kind exchanges (LKEs). 52 | www.cedmag.com | Construction Equipment Distribution | January 2017

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What Do My Customers Want?

By Riaz Raihan SVP Digital & Value Engineering nless you have serious political campaign fatigue and have blocked out every media message, it’s likely you’ve been exposed to the sweeping changes that digital innovation and technology are bringing to the business world. In fact, a few pundits have noted that the expectation for digital innovation and technology may surpass the business impact of the internet. The question is not a handwringing “what to do?” but rather “how can our organization take advantage?” Then, as quickly as possible, leap ahead of competition, grab market space and market share, garner a higher portion of wallet from customers, and make progress toward your goals. In our experience, organizations typically grapple with three main goals: 1. Connecting to their customers in a meaningful way – For example, an Australian customer we worked with saw the impact of moving from a manual paper-based sales order system to a digital-based system that is fast and accurate. And it saw a typical two-week contract renewal cycle reduced to just one hour. The Infor Digital Engineering team provided a way to evaluate existing processes, and they proposed the optimal mix of software solutions to help make this change happen. 2. Improving employee engagement – With today’s multigenerational workforce and the ease of technologies like smart phones, iPads, apps, streaming and such, many workers expect the work systems they use to operate in much the same way as those in their personal life. When working with several retail customers on work scheduling, we found it was typically incumbent on employees to go to the store to get their schedule. By examining the process, Infor digital engineers were able to understand the current operations and integrate a digital system whereby employees are notified about their work schedule via text, email, or even their wearable technology. 3. Creating greater operating efficiencies – That’s expected if you improve the connection to your customers and employees. But there is more opportunity here in the realm of data analytics. When it comes to digital innovation, this area is very important. Analytics used to with predictive and mean a view of what was done yesterday, last week, or last month. But now, we can look forward prescriptive analytic capabilities. The Infor Digital Engineering team has just launched a new project, called Reveal, with manufacturing and healthcare companies. And we’re looking for volunteers who are interested in building world-class predictive and prescriptive analytic capabilities with us. If that’s you, contact the Infor Digital Engineering team. There is solid research available discussing the impact of digital on growth. According to Dell Technologies, 34 percent of businesses are evaluating what to do, and only 15 percent of companies are doing nothing. Don’t let that be you.

Not just another tech buzzword: Digital innovation is a “thing” for organizations of all sizes 54 | www.cedmag.com | Construction Equipment Distribution | January 2017

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Three Forces That Will Be a Drag on Your Revenues

By Tom Morrison n today’s economy, emerging technology developments, changing consumer buying habits, and demographic shifts are all working in unison to change how consumers and customers are purchasing products and doing business. It is vital to any industry to enhance its operations in order to maximize productivity and throughput in production, allowing it to take advantage of the growth opportunities in the future. It is projected that people will be a drag on company growth in production over the next seven to ten years – or the lack of qualified people, to be more specific. Three forces will drive forward-thinking companies and industries to innovate in the area of automation and robotics. Those who start now will win as future growth builds momentum. Here are the three forces that will drive automation and robotics:

Force #1: Lack Of People

Over the past 18 months, more and more association members I’ve spoken to in many industries have stated that it has been months since a potential employee, who was trainable, had a good work ethic, and wanted to work, has come through their doors looking for a job. If you look at the demographic numbers, the reason is that everyone who fits those criteria is already working. With a 4.5% unemployment rate and 9,000,000 fewer people between the primary working ages of 31 and 52 than the generation before, many industries have a serious dilemma on their hands: a future full of growth opportunities, yet not enough qualified employees to push the product out the door over the next 10 years. As Baby Boomers retire, we have 13 percent fewer people in the next generation bracket with experience, to fill the many jobs of those retiring. This has caused some companies to try to figure out a way to keep Baby Boomers working past retirement, or to fill the gap with Millennials, who are not far removed from college. They have a lot of knowledge and are the most tech-savvy generation in history but lack the deep wisdom and experience that the Boomers have provided to these companies for decades. With the Millennials being between 13 and 32 years of age, we are still a decade away from all of them being in the workforce, able to make up the difference.

Force #2: Uberization Of The Workforce

Ridesharing services like Uber and Lyft are starting to become the norm in the world of transportation. Uber alone is in 70 countries, gives over 1,000,000 rides per day and, get this: is now signing on 50,000 drivers a month. Yes, 50,000 new drivers a month! Drivers work for Uber part-time and full-time. Many doing it full-time earn between $1,000 and $1,400 a week. This presents a problem for many industries. We already have a low unemployment rate, and now the ridesharing industry is taking upwards of 50,000 people per month out of the hiring pool of potential workers and into an arena where they drive people around in an air-conditioned car, own their time, and have a pretty stress-free day. How do you compete with that?

Force #3: $15 Per Hour Minimum Wage Potential

Two U.S. states so far have passed $15 minimum wage laws. A bill in New Jersey was just vetoed by Governor Chris Christie. There is yet no clear direction as to where the $15-an-hour movement will end up, but the question for any company is, if it passed in your state, could you afford a minimum of $15 for every hour of labor? This is a real movement that cannot be ignored by the business community. You will most likely have to come to terms with it at some point. If it passes, your two options will be to pay people $15 per hour, plus all the benefits and taxes that come with it, or automate. The question your members and association will want to sit and discuss with your teams is, “How could we grow our business 30 to 40 percent in the next 10 years without hiring another person?” Whether company or association, part of the answer is to be looking for “smart technology” and robotics that can help perform “predictive manufacturing/production” and connect your industry supply chain, both upstream and downstream, to maximize production and throughput. The companies who figure it out will find solutions for the problems they face given the three forces discussed in this article. Don’t say it can’t be done. Have the discussion and watch the innovation begin to flow in your plant. Your employees have a vested interest in seeing innovation happen in your plant to keep it thriving and growing into the future. One thing is for sure: the “lack of people” dilemma is not going away. The question is, what is your industry going to do about it, and who is helping expose this problem to your members so they can plan and prepare? TOM MORRISON is CEO of MTI Management, MTI, a nonprofit trade association with the largest network of commercial heat treaters in the world. 56 | www.cedmag.com | Construction Equipment Distribution | January 2017

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Putting the Customer First

is a Winning Proposition for Heavy Equipment Dealers Courteesy of CDK Global ealers who sell and service agricultural and construction machinery are seeing change in the way their customers want to be served. It’s a competitive market, but a focus on the customer will help today’s dealer stand out in the crowd. Research has shown that typical heavy equipment customers hold on to their construction or agricultural equipment longer than ever before. This means that equipment needs to be serviced more frequently, which in-turn increases the importance of dealers’ parts and service department. In a recent survey by CRMPlus Consulting, businesses attribute 21 percent of customer churn to poor customer service, when in fact, it is actually 73 percent. Customers are looking for a simplified process to access detailed account information, manage their own and rented equipment, view invoices, statements and prior orders, browse available equipment for sale or rent, request service appointments, shop for parts, review news and alerts — and all from any device. Dealers can’t just deliver on one or two of these expectations, they need to deliver on them all. “In today’s modern world, people are connected 24/7. Mobile devices have become our communication hubs delivering real-time information tailored to our needs any time we need it, where ever we need it. If a business solution does not include mobile, then the solution is not finished and does not meet the growing demand for real-time information access,” said Darrel Stogsdill, CDK Global Heavy Equipment Software Engineer. A dealership’s customers demand quicker resolutions to their equipment’s issue so it can be back out in the field as quickly as possible. A dealer demands that its service technicians service their customers as efficiently as possible. Typically, service technicians weren’t able to search parts and equipment inventory onsite. It was also difficult to track their location and the time it took them to get to a job site. Now, service technicians are always on the go with a constant need for information – anytime, anywhere. They need to be mobile and responsive to the customers growing expectations. CDK Global recently introduced CDK MyDealer Access to enable heavy equipment dealers to offer 24/7 customer access to the information they need to keep up and running.

60 | www.cedmag.com | Construction Equipment Distribution | January 2017

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Reasons for Generating Leads… Beyond the Obvious

Brands with their own internal sales organization must generate leads in order to start the sales process and keep the prospect pipeline filled. The same is true for brands that rely on external sales channels, such as dealers or distributors. But beyond these obvious reasons, companies that produce high consideration products and services reap many other benefits from generating leads.

Partnership Satisfaction

Whether there’s an implicit or explicit agreement with the external sales channel to generate leads, it’s in the brand’s best interest to keep the sales funnel full. This is especially true when customers are likely to visit the brand’s website to gain more information before visiting the store or contacting the retailer directly. As the internet has become a primary source of information for consumers searching for high consideration goods/services, brand websites now play an even larger role in generating leads for the sales channel. And a steady flow of leads will not only keep the sales channel happy and engaged with the brand, but it could also help prevent the “brand switch.”

Countering the Brand Switch

Brands can spend thousands if not millions of dollars on lead generation efforts, but once a prospect comes in contact with a sales associate, particularly those who work for retailers that carry competitive brands, there’s no guarantee the sales associate will sell a product produced by the brand that furnished the lead. Retailers and sales associates are sometimes more motivated to sell a brand that’s offering a sales spiff, or is of the sales associate’s own personal preference. The brand has a better chance of preventing this if they capture the lead’s contact information using a web form integrated with marketing automation technology, allowing the brand to nurture the prospect with content designed to sway the purchase decision, before, during, and after the prospect engages with the dealer. Contact information can also be used later to determine how the customer was treated during the sales process, including a confirmation of the brand the customer ultimately purchased.

Message Consistency and Accuracy

Some retailers do a poor job of communicating brand messages or even communicating product features and benefits accurately. By collecting the prospect’s contact information, brands can assure these messages are communicated in nurture communications while the prospect is still in the consideration phase. 62 | www.cedmag.com | Construction Equipment Distribution | January 2017

Data Collection

Lead generation and data collection go hand in hand. When a prospect makes an inquiry and generates a lead, the information collected can be used to determine the best-performing lead sources, the product(s) the customer is interested in, and other information that can be used in subsequent marketing efforts. Every prospect who submits a lead inquiry becomes part of your customer database. If the prospect makes a purchase, this information can be used to gauge customer satisfaction, or used in subsequent marketing efforts when the purchase cycle is anticipated to start anew.

Why Companies that Sell High Consideration Products/Services Need to Generate Leads

Retailers have their own unique reasons for generating leads beyond those provided by the brand of products or services they sell. Brands don’t always provide as many leads as the retailer can handle, and by generating their own leads, retailers can be more confident their sales funnel won’t run dry. Retailers are better connected to local events, local PR, and local advertising opportunities than some brands. Each of these offer additional opportunities to generate leads – leads the brand would find much more challenging to generate. Many customers prefer to submit an inquiry on a retailer’s site or via phone, particularly if they’re ready to negotiate price or discuss financing. Brands are not necessarily positioned to generate these leads. In-store visits frequently generate inquiries that can be considered sales leads. Every new lead a retailer generates results in a new contact or a new prospect activity. This data should be entered into a CRM to help facilitate the sales process, or used in subsequent marketing initiatives. Brands and retailers should look beyond the obvious, shortterm benefits of generating leads. Leads provide valuable data about your customers, and can be used to influence consideration and drive long-term marketing and sales efforts. AVALA Marketing Group helps brands selling high-consideration goods and services drive more revenue throughout the entire customer lifecycle. We combine data, intelligent digital strategies, and technology to increase visibility, deliver leads, close more sales, increase customer lifetime value, and maximize your marketing ROI. Our talented team of experts use Aimbase®, our automated intelligent marketing platform to implement successful digital marketing strategies based on processes and best practices that have been refined over thousands of campaigns.

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5 Common SEO Mistakes to Avoid By Lindsey Wreggelsworth Product Marketing Manager, Commercial Web Services o you find your business’s website is struggling to gain exposure online? If so, it may not be optimized for searching. One of the best ways to ensure your website is properly optimized is through your website content. Writing content can seem overwhelming when you are unsure about what things search engines take into place for rankings. However, it should still be a top priority because 75% of users never scroll past the first page of search results. If Google can’t find you, neither will anyone else. Avoid these common SEO mistakes to increase your chances of being found by prospective buyers.

Broken links:

A broken link is a hyperlink that limits the user from going to its intended page. If your link is broken on the page, it will cause you to have a bad reputation with search engines. A damaged hyperlink will deem your website unreliable. This causes search engines to lower your ranking when potential customers are searching for you. Make it a weekly task to visit your website to make sure everything is operating smoothly on it, and pay special attention to your links to ensure they are working properly.

Copied content:

Just like cheating in school, copying content from another site will award you a bad grade with Google. Creating unique content for your website can seem scary, but stealing it from a competitor is not only illegal, but it will also put you at the bottom of rankings. There are many resources out there that can provide content suggestions and helpful information. However, the best advantage you have over your competitors is what you do differently as a business. Highlighting these things on your website ensures your content is unique, so don’t be afraid to talk about yourself and your distinctive attributes.

Avoiding Analytics:

If you are not measuring your website’s data then it is very unlikely that you are achieving any of your business’s goals online. Using Google Analytics will show you how visitors interact with your website. For example, you can see where your visitors are located, what people are searching for, where they are clicking most often, and which campaign brings the most traffic. You can also check out how long customers are staying on your page and which pages are performing the worst. Google Analytics is definitely an investment that pays for itself in gained insight.

Keyword stuffing:

Including the keywords that your customers will search for is crucial for your content. However, you have to be careful of how many times you write those keywords on your website. Stuffing as many SEO keywords on every single page will cause Google to penalize your website. Everything is better in moderation. Instead of using the common keywords for your business, try using synonyms instead. Remember though, long term it’s better to create real value to your customers by providing them with useful information rather than providing meaningless information designed to trick search engines. If you’re stuck, a recommended word count for a single page on your website should include a minimum of 500 words and 5-10 keywords.

Poor Content Quality:

Did you know that 59% of consumers say they won’t buy from companies if they find bad grammar and spelling mistakes in their website content? Your content is an opportunity to make a good first impression on prospective buyers. Be sure to pick information that is interesting to your target market, yet simple to understand. Regularly double check your website manually for any spelling or grammar mistakes, or download the Google Chrome widget, Grammarly, which makes correcting mistakes on any platform seamless. Remember, quality is better than quantity and will give your customer the best experience on your site. Don’t get frustrated if you don’t see results immediately. Much like your customer relationships, a relationship with search engines won’t happen overnight. So be patient!

LINDSEY WREGGELSWORTH is the Marketing Manager at Commercial Web Services, a division of Dominion Enterprises which specializes in providing commercial dealers and manufacturers with products and services to establish and grow their online presence in today's market. 64 | www.cedmag.com | Construction Equipment Distribution | January 2017

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The Key to Success with

DRONES The organizations that are most successful are those that start with the most basic objectives, and put in place the minimum viable drone program that will accomplish that objective.

In our work helping businesses integrate drones into their operations, we have learned a great deal about how to ensure that a drone is a profitable and effective business tool. The Aerotas Mapping System is a turnkey solution including everything an organization needs to start mapping by drone, and it leverages many lessons that the Aerotas team has learned in our consulting practice. It leverages the technology that we have vetted and found to be most reliable. It leverages our hard-learned best practices in the form of operational procedures and training. It leverages thorough study of efficient insurance coverage and regulatory compliance. But the one lesson that it leverages more than any other is this: start simply.

The Best Way To Succeed With UAVs Is To Start Easy

Drone technology has progressed at incredible speed, and every component of the drone ecosystem has become significantly more user-friendly. However, this does not change the fact that for almost any organization, integrating a drone into its workflow involves a lot of change, and a lot to learn. A crucial lesson we have learned is that a company starting a drone program is most likely to succeed if it focuses on minimizing the amount of change and learning that has to happen at once. The many opportunities and promises of drone technology make it tempting to chase every idea simultaneously, or to try the most cutting edge idea or technology first. However, the organizations that are most successful are those that start with the most basic objectives, and put in place the minimum viable drone program that will accomplish that objective. They only expand once they have proven their proficiency with that one objective, and proven the return on their investment.

A Minimum Viable Approach To Mapping By Uav

The Aerotas Mapping System is designed to allow surveyors, civil engineers, and any other organizations that can benefit from mapping, to take this â&#x20AC;&#x153;minimum viableâ&#x20AC;? approach to mapping by drone. Focusing on a minimum viability led us to creating a comprehensive system of compliant technology, operations, training, and insurance that is optimized across four variables: 66 | www.cedmag.com | Construction Equipment Distribution | January 2017

1) Low cost 2) Minimal learning curve 3) Creates high-value deliverables 4) Scalable to more units or advanced capabilities Optimizing for these variables ensured that we would create the most efficient and effective solution to start mapping by drone. The Easiest Valuable Job A Uav Can Do The easiest deliverables that a drone can produce that offers value to mappers is an orthophoto and surface model. Using this 3D surface model, surveyors can complete topographic and planimetric mapping jobs digitally, and thus far more efficiently than prior -- our clients report 60% time savings. Simply clicking points and drawing lines on the model in order to produce a CAD-importable surface replaces the time-intensive process of walking a grid on a project site and occupying points with GPS. Further, this workflow means that companies can complete aerial mapping jobs in-house, eliminating the need to pay for expensive aerial contractors. Finally -- and crucially -- this model and orthophoto serve as a verifiable record of a job site, and minimize the chances of a field crew missing a shot.

Start Easy, Then Upgrade With Proficiency

At Aerotas, we tend to refer to the Aerotas Mapping System as “Level 1.” While this system is highly capable, enabling accuracy to 0.2’ vertical, it is likely that many companies will want to advance their capabilities once they have become proficient and proven the ROI. We have designed this system to be as scalable as possible -- it will set the foundation to be able to efficiently grow as soon as the organization as ready. This is the best way to begin mapping

by drone: the most cost-effective, efficient, and scalable way to prove the value of mapping by drone. Once your organization has become proficient at “level 1,” we will be ready to level you up. Learn more about the Aerotas Mapping System at aerotas.com/ map, or contact us at info@aerotas.com. AEROTAS provides complete turn-key solutions that include everything a business needs to start mapping by drone. The Aerotas Mapping System is designed for minimal learning curve and rapid ROI by including all of the equipment needed for a drone mapping operation, as well as training, insurance, regulatory compliance, data processing and support.

Whether you’re drilling in quarries, breaking rock on the jobsite or backfilling deep lifts, Furukawa Rock Drill USA (formerly Kent Demolition Tools and Furukawa Rock Drill) provides a reliable, cost-effective equipment solution. To learn more, visit us online at www.FRDUSA.com or call 800.527.2282

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January 2017 | Construction Equipment Distribution | www.cedmag.com | 67

Inside

CED

As the monthly publication of AED, we take pride in covering the industry in a unique and insightful way! CED gives our membership what they want to read; business information, statistics and industry-related news, plus fresh, original content that fuels a more profitable dealership. Over the past year or so, you might have noticed a few changes that began to take place within the magazine. First, with a color update here and there, to a complete revamp of content within each issue. Our goal is to continuously make these improvements to provide a resource that is designed to enhance dayto-day activities within the dealership and that begins with you, our reader. CED welcomes letters on any subjects that are raised within the magazine. Your opinion and observations matter. If you have a story or topic that you think should be covered within an upcoming issue, we encourage you to send a short summary to CED Editor Sara Smith at ssmith@aednet.org.

What we publish Our construction equipment magazine is typically divided into a number of columns and featured stories. If your company is interested in submitting content for the magazine, we certainly want to hear your pitch, but first we’d like for you to get a feel for our magazine style and focus. There are three common stories that the magazine publishes and include, press releases/statements, previews, and industry related columns. Most articles are expected to be between 650 and 1300 words, unless specified. See below for detailed information: ▶ Industry News: Is your company a member of The Association and have exciting news to share, then let us know! As a member benefit, we will publish updates ranging from new employees, anniversaries,

new openings, to everything in between. Product Preview: Any submission that introduces readers on new features or launches of equipment, buckets and/or attachments. Industry Columns: Articles that include specific content related to the monthly theme that provides advice and informs construction equipment dealers on ideas and tips of a particular subject.

How to Submit to CED Magazine Submitting your story to CED is easy! Let us walk you through some necessary steps. First, it is best if you submit your fully-completed story for our publishing team to review. You should include any high-resolution photos that are 150 dpi or higher, a brief bio that consist of 1-3 sentences and any necessary contact information. If you are pitching an unwritten story idea, simply submit it as a formal email that includes your story outline, proposed length and direction. Please note that it is the contributor's responsibility to provide accurate, factual and correct information, this includes spelling of proper names, places, address and foreign spelling, including accents.

CED Magazine reprint services Now is the time to capitalize on the publicity with a reprint of your article. Whether your company was spotlighted in CED’s industry news, product preview or an industry column, a high-quality, custom reprint can be purchased as a promotional tool for your sales team. All CED reprints are produced in full-color on 100lb gloss paper for a sophisticated handout for your customers and prospects. For more information and pricing, please contact Jon Cruthers, jcruthers@aednet. org.

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advertisersâ&#x20AC;&#x2122; index AMAM...............................................................5 Arctic Snow & Ice Control, Inc.........................17 Association of Equipment Manufacturers.......65 BekaWorld LP..................................................39 Bell Trucks of America.....................................45 Bidspotter.com................................................69 BOKF Equipment Finance Inc...........................47 Breaker Technology, Inc. (BTI).........................53 Briggs & Stratton Corporation.........................71 CDK Global...........................................BellyBand CDK Global......................................... Back cover Commercial Credit Group........ Inside front cover Construction Equipment Guide.......................63 eBS Mechdata, Inc...........................................23 e-Emphasys Technologies Inc............................1 EPG Insurance, Inc...........................................24 Equip IQ by CD Group, Inc..............................31 FRD.USA, Rock Drill Division............................67

Glynn General Corporation.............................43 Gorman-Rupp Co............................................27 HKX, Inc..........................................................55 JT Bates Insurance Group................................59 Kobelco Construction Machinery USA.............57 Leading Edge Attachments, Inc.......................33 LiuGong Construction Machinery N.A. LLC......15 Pettibone..........................................................2 Prinoth............................................................36 PwC/Accruit.....................................................70 Rotar North America Inc..................................41 Rototilt Inc......................................................61 Screen Machine Industries LLC........................12 Sentry Insurance Company....... Inside back cover Terramac.........................................................37 Toku America, Inc............................................34 XAPT Corporation............................................29

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>> RISK MANAGEMENT

ERIC STILES

One Innocent Banana Peel Can Lead to a Mountain of Troubles Dealerships can help control losses by proactively defining the investigation, reporting, and implementing ongoing case management guidelines.

Q: Why do some seemingly small losses become so large? A: Let’s set the scene. A dealership salesperson is conducting monthly inventory across the lot when he twists his ankle on a crack in the asphalt, causing him to fall on his hip. The incident is reported to the sales manager, but the employee indicates he’s fine. Nothing further is said or done. Two weeks later, the general manager learns the employee has been diagnosed with pelvic and ankle fractures, which eventually leads to sedentary restrictions. The dealership does not accommodate the restrictions, eventually resulting in a legal settlement with the employee, with losses totaling $290,000. A small incident turned into something large because a formal reporting and investigative procedure was not in place. Also, dealership management didn’t view risk management as anything more than an administrative task for support staff. The result was a much costlier resolution to the dealership than it could have been. Preventing losses is the ideal situation, but it’s not always possible. However, dealerships can help control losses by proactively defining the investigation, reporting, and implementing ongoing case management guidelines. This applies to all types of losses, including—but not limited to— employee accidents, equipment damage, theft,

and vehicle accidents. The following is recommended: ▶ Evaluate claim reporting/investigation guidelines: Ensure written procedures include a comprehensive form to report incidents and requirements outlining timeliness, investigation, hazard reduction, and notice to claims for handling. ▶ Enforce a duty program: Documentation and enforcement of the program should go through the dealership’s management staff and be an annual performance goal for all management levels. ▶ Implement an action plan: This will help manage loss prevention initiatives requiring cap-

ital investment, broad participation, or extended timeframes to implement. ▶ Hold all accountable: All employees need to report accidents in a timely manner. No dealership wants to experience a loss. With a plan and investigative guidelines in place, along with strong managerial support and supervision, losses can be controlled. Make sure your dealership is ahead of the curve when it comes to proactively managing claim cases.

As the endorsed P&C carrier for AED, Sentry Insurance offers great coverage options and services to meet your dealership needs. ERIC STILES is Sentry’s lead Account Executive responsible for maintaining the AED/Sentry relationship. 72 | www.cedmag.com | Construction Equipment Distribution | January 2017

Have a seat—we’ll steer you right Your insurance company should understand your risks—and your goals. With Sentry, great things happen when we learn what makes your dealership unique. That’s because we offer you custom insurance and related services—like smart risk management—to help you succeed now and over the long haul. Rely on us to dig in and do the heavy lifting, so you can invest more time bolstering your bottom line. Right By You

Let’s get the conversation started. Learn more about how we can help you manage costs and take advantage of opportunities at Sentry.com

Property and casualty coverages and safety services are underwritten and provided by a member of the Sentry Insurance Group, Stevens Point, WI. Individual life insurance, group and individual annuities and group products are issued and administered by Sentry Life Insurance Company, Stevens Point, WI. In New York, individual life insurance, group and individual annuities and group products are issued and administered by Sentry Life Insurance Company of New York, Syracuse, NY. For a complete listing of companies, visit sentry.com. Policies, coverages, benefits and discounts are not available in all states. See policy for complete coverage details. In New York coverage provided through policy form numbers: (Life insurance) 585-3000-01, 390-1000 (SLONY), 390-2003-SLONY; (Disability) 685-9000-31; (Dental) 785-7000; (Group Annuity) 840-300(NY); (Individual Annuity) 380-440. Short-term disability insurance is not available in New York. 73-710

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