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The key to dealerships increasing their sales numbers is knowing who they’re selling to. New equipment buyers and used equipment buyers are looking for different things and find different things important. If you ignore this or just don’t know what they find valuable you will always find yourself missing out on what could have been.
The moral of this story? Know your audience! If you know what a prospect is looking for, it helps you eliminate wasted time and get right down to brass tacks. Continually trying to up sell new equipment on a perpetual used equipment buyer could lead to them simply walking away and going down the road to your competitor. Not to mention that the longer used equipment sits on your lot the more it costs you.
I know new equipment sales are attractive because they bring in more money per sale, but isn’t creating a satisfied used equipment buyer who is likely to continue doing business with you for years into the future more valuable than losing that same buyer because you constantly pushed new equipment?
So, what differentiates the new equipment buyer from the used buyer?
Give the People What They Want
The first step of this process is figuring out which type of buyer a customer or prospect is. If someone calls you up or just walks into your dealership that can sometimes just take care of itself. Today’s buyers do an extraordinary amount of research online. And as we’ve talked about before, much of their purchasing decision process is already complete when they reach out to you.
So, if someone comes to you, try to understand their needs and do all you can to find something that works for them. Many of these types of prospects will tell you what they’re looking for right away. But what about the other prospective buyers? The ones who don’t come to you. The ones you and your sales team are reaching out to.
Is there a way to know whether you’d be better off pushing new or used? Or if there is a certain brand in particular they favor? After all if they buy exclusively new Kubota and you don’t carry new or used Kubota equipment at all, they’re likely not going to change their ways. It may be best to cut your losses and spend your time pursuing a prospect more likely to buy from you.
How can you find out this sort information? You likely have a wealth of 1st party data that you’ve built up over the years. Start by taking a look there first. This is a great way to point you in the right direction when working with current or previous customers. But for those you’ve never worked with? Try using a 3rd party database like EDA. The data available can tell you everything you need to know. From credit risk, brand affinity, buying cycles, even annual sales. It’s all there.
Use this information to find and target used or new equipment buyers specifically. Once you know which way a prospect is likely to lean you have a better opportunity to steer the conversation and build your approach around what they find attractive.
The New Equipment Buyer
What does the new buyer find attractive? There are many advantages to buying new, you just need to figure out what it is your prospect is looking for. Talk to them and feel them out. Find out what’s important to them. Your goal should always be giving them exactly what they need.
Advantages to Buying New Equipment
New Equipment is More Efficient
Breakdowns and Maintenance are Less Likely/Frequent
New Equipment Looks Better to Their Customers
Being environmentally friendly is becoming increasingly important. The advantage of owning and operating “green” equipment only helps to build a positive perception of their company in today’s environmentally conscious climate.
New equipment has all the bells and whistles. Each new iteration of a piece of machinery improves in efficiency and effectiveness from the last.
As technology improves, so do the safety standards. From automatic shut-offs to safer cabs, new equipment has the edge when it comes down to safety.
Put simply new equipment is far less likely to breakdown. This is something that buyers value and can be a major reason for them to opt new over used.
Even though older equipment can still get the job done, many customers and clients judge a company by the machinery they run. They’re likely to view a company with brand new equipment with higher regard and perceive them as more successful than a company with older equipment.
The Used Equipment Buyer
Used equipment buyers have a different mindset than those purchasing new equipment. They often buy the same brand or multiple pieces of the same model over and over for as long as they can because it’s what they like and are comfortable with. Knowing some of the reasons they lean toward used equipment can help you to have better informed sales conversations and get the used inventory off your lot and put to work for your customer.
Advantages to Buying Used Equipment
Used Equipment is More Affordable
Buyers Have More Options
Used Equipment Holds Value Longer
Used Equipment Buyers Know Exactly What They’re Getting
Used equipment is cheaper to buy than new equipment. Plain and simple.
Since many dealerships carry used equipment of many different brands and styles, there can be more varied options available by going with used.
New equipment will depreciate and lose value the moment it leaves the lot. When buying used that depreciation has largely already occurred and been factored in. If maintained used equipment can hold the value at or near the price paid for far longer than new equipment.
This comes back to buyers sticking with a particular model or brand. Many find themselves attached to a particular model or style of equipment because they’ve found success with it or just become used to it. When they buy used they’re able to know exactly what they’re getting.
Many buy used equipment based off the reliability and relationship they have with the equipment dealership. Knowing a dealership will back-up used equipment sometimes even after a warranty expires (something far less likely to happen with new equipment) gives used buyers peace of mind and assurance.
Sometimes it’s hard to really get in the head space of buyers. Especially when you’re talking about two separate groups like new equipment buyers vs. used equipment buyers. But taking the time to get to know what makes each option attractive and how your sales reps can use that moving forward could set you apart from the rest of the pack.
Taking the extra step of targeting and nurturing buyers with new or used specific messaging or information based off of in-house 1st party data or data from a 3rd party like EDA will help you take the unknown out of the equation and reach out to exactly who you’re after and give those buyers exactly what they want.