Ed Wallace and Ron talk about a fresh view on how to influence customer loyalty

I just want one of us to be there. Sure. Get my car, start running down the road as fast as I can, but not breaking any speed limits here. Halfway there, my cell phone rings and Laurie's panicked at this point. She said, Grant is not responding. Apparently, he fell off a skateboard without a helmet on. And he's going to be medevaced to the children's hospital. You need to get there. Our kid is not getting into a helicopter without one of us. So you can imagine, Ron, how heavy my foot got at that point. Now, by the way, Grant is fine. Ron knows Grant. He's all grown up today. So I don't want to create too much drama for this podcast. But I get to the... The helipad in our community college, and I noticed the helicopter there with the medical insignia and the rotor slowly turning. I noticed a bus ambulance, little kid with blonde hair, laying in a gurney with the blocks on his head. And it's Grant. And I'm like, oh, my gosh, is Grant paralyzed?

I go up, they had the sneakers off. And a lot of people are asking me to sign things. And it's just crazy. And I tickle his feet because I know his feet are ticklish. And sure enough, his legs vibrate. So I'm kind of checking rational boxes here in an irrational situation, Ron, about our son. So, OK, he's not paralyzed. That's a good step. Laurie gets there at that moment. The pilot comes over. He goes, we got to go right now. He gathers up Laurie. They gather up the gurney. I watched the helicopter fly away, Ron. I can't describe to you the feeling watching your wife and son fly off in a helicopter and her looking down at you through the bubble like, what is going on? They're going to get to the hospital in four minutes. Brett, our older son, who was with Laurie and I, it's going to take 45 minutes to an hour to get through Friday traffic to this hospital. And it's called the Children's Hospital of Philadelphia.

We call it CHOP, C-H-O-P for short. So we eventually get there. And now we go to the top of the garage. Because it's Friday afternoon. And now we have to go down an elevator. Then we got to get into this atrium. You got to get to the bottom of the atrium before you can go off into the hospital. We get to the bottom step. And as we're stepping off, a woman approaches us with a lanyard on. And she said, are you the Wallace's? I'm like, yeah. I'm like, how did she find us? She introduced herself. She said, I just want you to know, Grant is stable. And I've come to take you to where we take our helicopter kits. A panicked parent at that point should not be chuckling. But Ron, I'm like, oh, this is normal for this place. Helicopter kids, my kids, okay. Anyway, Grant had a severe concussion. And he was in the hospital for a few days, lots of MRIs. You know now he played college baseball. He's all grown up. He actually works for us here in sales now.

But I took something from the health system, sending this liaison to find us. They didn't have to do that, Ron, right? But they had the worthy intentions. And that's where worthy intent popped into my mind. The worthy intentions about this family and turmoil. I'm sure they were doing it for many other families. Quite frankly, at that moment, I didn't care. And I started thinking about, okay, what is worthy intent? It's putting the other person's needs ahead of your own. And I believe in the world today, There's a lot of conflict. There's a lot of dissidents. We're not trying to understand each other. And if we turn it down to the business world, everybody is working on Zooms. It's very difficult to build a relationship with people. So it's not about having good intentions. I call that green fees, where if you play poker.

Where the intentions are green fees, if you're in the parts, the service, the sales, any kind of business you're in that you're working with customers and other human beings. It's what behaviors are you seeing that validate your worthy intentions? Because if you think about it, Ron, does a monk have good intentions?

Oh, sure.

Right. But does anybody, does the monk know that anything that they're praying for is ever validated?

Exactly.

Unless they have a television, right? Which they probably don't. not to take any shots at monks here, I think it's noble. But if we think about it, how would the hospital have known, I'm asking you this rhetorically, that the Wallace's got their worthy intentions, other than I wrote about this in my books that I'm talking about on a podcast today. Well, the one way is we started referring other families to that health system. That's a validation of good intentions. Laurie switched both Brett and Grant to that health system. We were in a different health system at the time. And our older son, Brett, has some, he's on the spectrum. So he has all kinds of medical needs when he was younger. We donate to that health system every year. So it's not about good intentions. It's about seeing behavior, observing behavior that comes back and says, they get my good intentions. So that's where I came up with worthy intent. You asked the question.

I took 10 minutes. No, no, you're sorry.

You're good. And I think you're looking down the throat and what CHOP did, the Community Hospital of Philadelphia. We've lost something over our lifetimes. And I'm going to call it loyalty to a supplier, to a hospital, to a priest, to whatever. Loyalty is kind of very difficult today to get when you have all of the technology that is open. The barrier to entry in our businesses used to be information. We were the only ones that had the information. Now the universe has the information. So now we're really into a place that I like, which is a meritocracy. The people that know. They do the research. They find where things, I know where I can go and get. So how does somebody differentiate themselves? That hospital did it. Where the intent does it. It shows they care. It shows their empathy. Those aren't emotions that we honor or value much anymore.

Well, the health system thinks about their patients' needs. I don't think they're looking for payback in extrinsic ways, right? I think they're looking for intrinsic payback if they're looking for payback at all. And it's about the experience. So when we think about, you know, we think about the heavy equipment industry, you know, I'm sure that a buyer is going to look at the different manufacturers and say, well, you know. There's a compromise here, but this does that. And you can almost throw a blanket over them. What makes the difference? And let's assume we get the pricing within a tolerable range for everybody. Why do I pick Komatsu over Deer or over Caterpillar or something like that? I'm just making up a scenario. Well, there's something about the way that that sales rep, or there's something about the experience I have with that parts person. from a different lifetime of mine years ago. I want more of that experience.

And I can't describe what that experience is, but it feels like I want to be a part of it. I want to be engaged with them. And I think the winners going forward, especially in a virtual world, are going to need to create these good intentions virtually. Proximate is being reduced. I have an interesting stat for you. Florida State did a study. I'm just going to talk about sales now because that's my sweet spot. I know you have all that stuff. Florida State did a study and they asked decision makers. So we can call them buyers, whoever you want to call them, right? Owners. The question was, how much do you expect your vendor to understand your business and how their product, solution, equipment impacts? the performance of their business. 85% said that is my expectation.

Yeah, I agree with that.

Now, take a guess, Ron. What percentage of sales reps across the board in business-to-business sales actually take the time to try to understand and really see how what they're offering is going to impact the fortunes of the company they're trying to sell to? Just take a number. Zero to 100.

Less than 20.14%.

You're very perceptive. And we didn't practice that, right? No, no. So think about this. The expectation, so when we think about, okay, how do we win? How do we make a difference? It's certainly our warm demeanor and the way we greet people and all that stuff. Table stakes, okay? Reins fees, good intentions. It's, you know what? That sales rep understands that this excavator is going to make this much money for me every day. It's going to save this. It's going to do that. It's going to roll. In fact, they know more about my business than most of my employees because they asked me a lot of great questions about it. That's where we get to this whole idea of a winning, a winning, I call it a competitor proof experience.

Yeah.

You know, the, the, the.

Your differentiation comment is valid. We can take all of the equipment makers of a particular kind of machine. We can paint everything white, have no decals anywhere in sight, and have people lined up to look at them. And they're going to have a hard time determining which one's the best. So cars, everybody has, or televisions, or telephones, or... You know, as time has passed, the compression of the number of suppliers has become extreme. So example, on mining, you have Caterpillar, Kamatsu, and Hitachi. Essentially, that's it. As you come down inside, there's more. So it's the old economics that there's a fixed amount of money in a supply chain. and you have too many suppliers in the supply chain, you're heading for a consolidation and bankruptcy, and here we go, and that's going on. And we're not doing anything to protect ourselves.

So in our industry, I don't want to take too much time away from you, but from 1970 to 2020, parts market share at the OEM dealer level, the guy who sold a Caterpillar machine, That dealer gets what percentage of the parts business on that Catechlor machine? In 1970, it was around 82%. In 2020, it's around 38%. Really? In 50 years. Labor is the same story. The share of market on equipment is pretty static. You've got Caterpillar, Deer, Komatsu, and Volvo as the four main players. And I'm not excluding the Chinese or anybody deliberately, but those are the four main players. Their ratio hasn't really changed much. But the parts and service side has. What's provoked that? Well, in 1980, when inflation was so serious, dealerships had to cut back on something to pay for the higher interest that they had to absorb to get rid of inflation, Volcker and Reagan, right? What did they have to reduce? Headcount.

So our standards of productivity, sales per employee kind of thing, are all done on a model based in 1980. That model has caused that precipitous decline. in market share because we haven't been touching the customers as much. Wouldn't it be nice to call a customer after the machine's done? Did everything work out to your satisfaction? We don't do that anymore. How do we do it?

We don't do that. You know, what's really interesting and this worthy intent idea. So one of our, one of my customers. has in their values. In fact, at Achieve Next, we have it in our values, approach every interaction with worthy intentions. It's one of our seven values. But one of our customers, their first two values approach every person with worthy intent. Presume, number two, they have good intentions towards you as well. Now, wouldn't things work a little better if we just kept those two simple things in mind? I mean, this is not... psychological stuff, right? This is just, you know what? I know this is going to be a customer who's upset with us, but I'm still going to approach it that they've got good intentions towards me. They're just frustrated. It's not me personally. If you think about it, if we stop balancing our books by reducing people, then maybe now when we can't find people, we'd have a lot more retention.

Yeah. It cascades in every direction, Ed, and it drives me much. We're the intent from what we do at Learning Without Scars. The purpose that we have is I want to help people identify their personal and professional potential. Everybody has potential. Everybody can do more than what they think they can do. It's a fundamental truth. We somehow have lost sight of that. We've gotten into this. Short-term stuff, quarterly reports, stock market, blah, blah, blah. Here we go. What happened to being people first? Helping you even, you know, Ed, I see what you need and you know you're better to get it from George, not me. I sell it to you, but it's not the right answer for your business.

Well, we've talked in the past, Ron, about having a strong enough relationship. and enough trust in the relationship that you're willing to refer business that you just can't quite serve as well to someone else. Because you know the relationship with the person who you're referencing away from you is still going to work with you. They're still going to come back and they're not going to just switch. Think about the risk today because of technology. In the past, let's say, let's go back to your industry. And let's say you're providing all the Komatsu equipment to a particular municipality. Listen to me. Like, I know your business, right? And all of a sudden, and you're spending time with them as municipalities allow these days. Everything's changed. But you're getting a lot of their time proximate with that person. They don't have enough time for a competitor. Oh, but guess what? Now we have a pandemic.

And a competitor shoots a little email over to that person saying, great pricing today, great pricing this year. Well, guess what? They're going to click that link and they're going to take that Zoom meeting. And now all of a sudden your competitor has 30 minutes of their time in this rectangle. And guess what? Maybe they like the person. Maybe you haven't been following up. Who knows? All of a sudden it's like, you know. you know, it's a different type of equipment. We need different type of training and all that other kind of stuff that goes when you switch. But, you know, I kind of like the way this person's presenting this to me. You don't even know you're at risk and you're at risk. Yeah. So that's the insidiousness of technology from a sales and a customer retention perspective.

So, and I know we'll talk about this down the road, but the whole idea of keeping our virtual muscles, and displaying our worthy intent virtually, it's not going to go away. It's not going away.

No, not at all. You know, it's funny. One of the things that I used to do, everybody used to laugh at me. There's software companies that provide reporting of any transaction on equipment, capital goods, that was financed. They take UCC files. So we would get those. And, you know, you see every brand. One year after that, every month, I used to pull last year's report and I sent birthday cards to significant companies who had bought competitive machines. And the reason I did that was because 99 times out of 100, the guy that sold the machine, the customer complains because they never see him again. So my going back with a card saying, happy birthday. I hope you've enjoyed the last year with that machine. It just trades them all, you know, geez, that George over there, I haven't seen him since.

The other thing that's weird, just one more statistic, the OEMs, all of the majors, in the first year after a machine is sold,50% of the buyers of those machines spend not a penny at the dealership from which they bought that machine other than warranty. That's obscene to me.

Why is that?

Because nobody's getting in touch with them. You know, the old days, you know, you buy a machine and here comes the service manager and he's going to walk you through the things you should be doing. He wants to talk to the operators so that they know how things work. We don't do that anymore.

We have a local painter here. You know, I'm in the Philly area. And, you know, I went to Villanova. This guy went to Villanova. We were about a year apart, but I knew him. He started putting flyers in mailboxes for his painting business. It was just him. And what he would do is he'd get the owner at the door and he'd say, I'm starting my business. It's very authentic. I'm going to paint your house. If you don't like it, I'm going to repaint it. If you don't like it, I'll repaint it again. Maybe it's a room, maybe it's a bathroom, maybe it's whatever it is. Well, he's now one of the largest independent painters in the country. You see his trucks everywhere. And guess what? He's the highest price. Yep. Everybody knows. But Sherwin-Williams, he's the poster child for a Sherwin-Williams, you know, for painters who Sherwin-Williams uses him as their poster child of. because he uses Sherwin-Williams Paints. He must have 25 trucks driving around.

Every time I go out, I'll see, I don't want to, it's Nolan painting. I might as well promote it. Nobody's going to buy Nolan painting around the country. But Kevin Nolan went door to door and he kept the same guarantee. So if the homemaker or the couple don't like the color that they picked that he did, he'll do it again. If you don't like the way I did the wood shrimp, I'll do it again.

It's simple things, isn't it, Ed? Yep. But worthy intent is a good label for all of it. It is. And it changes the way, again, perception becomes reality. And we've lost perspective on value. So if we can get people to consider, and I hope they do from this podcast, the term worthy intent, everything that we should do. should have that as the foundation underneath it. How about we close it there? Have you got any final thoughts that you might want to use to wrap this up?

Well, you know, if I think about everything we talked about today, it doesn't matter what industry we're in. I think it also applies to our personal lives. You know, we all have our own authentic way of being. I believe most people are inherently good. I think my takeaway would be, are you seeing behaviors from the people closest to you? Are you seeing behaviors from customers? Are you seeing behaviors from other relatives and friends that validate those good intentions? Are they responsive? Do they engage with you? Do they buy from you? Do they refer you? Those are the behaviors I look for. Think about how, I'll close with, think about how we displayed worthy intent back to the hospital. Back to the children's hospital.

Yes.

You know, we switched our kids to the health system. We referred them all the time and we contributed. I'm sure they have no idea that we're the family that happened to, but it came back to them in ways they could never have found.

That's terrific. Thank you, Ed. And I'd like to thank everybody who's been listening to this podcast. And I look forward to having another candid conversation and having you join us then. Mahalo. Thank you for listening to our podcast. We appreciate your support. Should you have any thoughts or comments, please don't hesitate to contact us at www. learningwithoutscars. com. The time is now. Mahalo.