Teleconversation: "Marketing to the Heavy Duty Aftermarket – What Works and What Doesn’t"

Thursday, Jan. 14, 2010, 2 p.m. EST

Mark Iasiello, HDMA, moderated the teleconversation, and began by explaining that the heavy duty market is strikingly different from the automotive aftermarket. After his introduction, a discussion ensued between the moderator and callers. Notes of this interaction between participants are below. Names of speakers are not specified.

Iasiello said there are many regulatory issues in the way of energy, safety and emissions. As far as marketing and relationships in the heavy-duty sector, he said that organizations will look for pull-through, if a fleet has a preference for an OE fit or if a substitute will work, and that different product lines fall between different “sweet spots” of preference of replacement.

In marketing to the HD market, it’s important to emphasize a product’s specific “characteristics” based on fleet sales forces, level of complexity, etc. In the HD world, everything is done by serial number. The local market is very important, and there are state and federal impacts also (for example, stopping distance/panic stop legislation).

Are mileage replacement rate surveys available?

It’s all over the board (brakes done by location). Lining for a tractor shoes/linings, that’s a totally different replacement rate for somebody that’s doing day cab over the highway. You have replacement rates for some vocations at 100,000 vs. heavy-use (garbage trucks, etc.), once, twice, three times a year for transit buses… So many attributes within the individual fleet, within the cross-section of trucks.

In the light vehicle aftermarket site, you see a lot of the good, better, best lines – same in heavy duty?

The purchases are generally based on the age of vehicle or economic condition of purchaser. Years one through three, warranty work mostly (Bruce Plaxton, BGP Marketing – 67% are under warranty). Second user buying truck around year three (may be changing because cost has gone up) – fleets looking. Year 2007ish, average age of commercial vehicle, six-plus years, that has spiked due to lower utilization, lower replacement rates, more toward eight years now. In 1978, 70,000 miles per year was the average, then it spiked because of the consumer purchases to around 125,000 miles per year – now it’s back down to less than 100,000. So many variables, you have to get down to the fleet, customer that distributor is servicing, understanding their attributes. Good better best equation – really so much driven by the age of the vehicle.

Are dealers being as aggressive to capture piece of pie of parts sales?

Doing about 40-45% in that channel (year-old survey data), rest is done by specialists. Dealers more and more are looking at “all makes” repairs. Some dealers speak about troubles they have facing the same “all makes” difficulties.

Parts replacement drove up cannibalism – tires, batteries, drums and alternators/starters. Spike in demand. Crazy time in terms of parts sales/parts supply.

From a manufacturers’ standpoint, what marketing techniques are working in the HD market?

We have overall seen a reduction in number of printed pieces, but some key pieces more training-related, very popular. From promotional standpoint, we’ve had more success with running regional instead of national programs targeting specific products. Our heavy-duty pit crew, we communicate to a community of technicians, all by e-blast, sending out product information and tech tips, value that information very much. The last survey of the pit crew rated highest was technical information, followed by product information (regional, not national information).

What about on the light vehicle side, the Internet has become such an important factor with online cataloging, same as heavy duty?

On the HD side, more usage of print catalogs, trying to drive our information onto Web site and we did do a CD ROM also. We’ve tried to do more electronic, but it seems like a heavier reliance on printed catalogs in HD market.

We see companies that are tying back very effectively to VIN number – don’t deal with one specific product line – the reliance on being able to easily identify, found easier in a catalog – some parts you have a little bit out of tolerance. There are things that you can have slack with, and things that, if you are slightly out of tolerance (alignment), truck will shut down. Current generation trucks are so complex. A few years ago, cab fires were a significant issue because you had people installing aftermarket electrical demands on a truck, now with what’s become OE with anti-idling and emissions and power generation, one emerging market is going to be rotating electrical. There will be an increasing use of remanufactured products. Are friendly are your products going to be to be remanufactured? Green is becoming increasingly important in the fleets. All sorts of product attributes by type, style and demand. One of the most highly-specked products are wheel-end and tires in agricultural; in rough use field like garbage trucks, it’s brakes, wheel-end and electrical.

When you talk about the large fleet, what is a successful way to market aftermarket parts to a large fleet?

Identify themselves by truck manufacturer name, go into product attributes. Try to put a heavy-duty and automotive catalog in one book. It is good to be stand-alone. This industry is justifiably unique.

When you talk about the larger truck fleets, class 7-8 vehicles, how many steps are there between the manufacturer and the fleet service garage?

There are some that can drop-ship from a distributor right to a fleet, typically from manufacturer to local distribution point (two-steppers), local-market focused – on HD site, tend to stay very localized.

It is safe to say that they’re going to vehicle dealer?

Trucks reach an age where independents take over, depends on warranty implications – and whether the truck is leased (agreement may dictate where it is repaired) – years 1-3, 3-6, 6+ (categories).

Heavy vehicle vs. light vehicle (brand loyalty more important in HD side?)

Yes, brand preference is very high in HD market (mirrors have very little preference, but wheel seals, tires, electrical, grows significantly) – filtration 85% brand specified in some vocations/styles (like motor operators)

HDAW, advertising, trade books, is it possible to go through program groups to get products recognized, or bigger, private fleets?

The program groups are trying to find a national footprint to keep their units up, opportunity, trying to find a national identity as you would a NAPA car care, or a Federated Car Care Center. Trying to find an identity with the family of brands… Trusted coast to coast. Definitely an opportunity.

From the outside of HD, looking in, it doesn’t seem to be the evolution of the marketplace nationally – obviously relationship-based. Consolidation, compression of how many parts are in the marketplace, efficiency of delivery. Seems like relationships are more important than efficiency. Fleets are cost per mile, utilization, etc. Truck has got to be running to make money.

*The next ACC Teleconversation is scheduled for Thursday, Jan. 14 at 2 p.m. EST, "Marketing to the Heavy Duty Aftermarket – What Works and What Doesn’t"

Teleconversation: “Post-AAPEX Wrap-Up”
Wednesday, Nov. 18, 2009, 2 p.m. EST

ACC President Neal Zipser, NZ Marketing & Communications welcomed attendees to the second ACC teleconversation and gave a brief summary about the council. He then introduced Tom Marx, The Marx Group, as moderator. Results of post-AAPEX Experience surveys completed by ACC members were discussed.

Survey results:

Do you consider the 2009 AAPEX a success for your company?

How much did you spend on AAPEX this year?

Did your company have a pre-AAPEX marketing strategy?

If yes, do you believe that strategy was successful?

How do you measure your AAPEX marketing efforts? (check all that apply)

How will your company follow up with leads?

What was the one lesson learned from this year’s AAPEX?

• It's good to affiliate with bigger brands
• Those who were interested in being there were there. Meetings were much more productive this year than past years.
• Premarketing to the RIGHT audience, so the RIGHT meetings happen.
• The automotive aftermarket is a good industry to be associated with.
• There were more international attendees.

How can ACC help you execute a better AAPEX experience?

• Speed Networking event ala what SBN does at SEMA
• More webinars and teleconversations



Topic: AAPEX Experience Overall and Observations
Key points:


• Floor traffic was much better than anticipated
• positive results
• productive meetings
• great contacts and leads generated
• AWDA programs at separate time made for a busier show floor
• actual orders placed on show floor, especially with international customers
• exhibitors generally happy with location on show floor
• more positive and productive mood as compared to 2008 event

Topic: Taking Advantage of AAPEX Opportunities
Key points:

• some used AAIA Business Center to hold meetings
• Search-autoparts.com theater not utilized enough, could be valuable for getting footage and marketing a company’s own initiatives
• Theater needs to stay busier when interviews are nto occurring
• Search-autoparts.com needs to do a better job communicating with exhibitors prior to show

Topic: Tips for Exhibitors
Key points:

• for any violations of product infringement, contact AAPEX Show Office to handle and enforce
• bring legal team to file necessary reports
• booth staff to regulate photography (cameras on the show floor were bad this year)
• bring multilingual sales staff
• downsizing booth may be more costly as readjustments may cost more
• two callers needed conference room space within their exhibit and preferred their own space than utilize community conference rooms located elsewhere on the show floor

Topic: What Worked
Key points:

• pre-show e-mail blasts to existing and potential customers
• sending information through media about events
• involvement in New Product Showcase
• integrating social media to promote events
• having key industry contacts in one place
• looking into the future, networking may play a more major role in the value of AAPEX

Topic: Improvements for Next Year
Key points:

• increase footprint, especially if downsized this year
• add office space in booth to hold meetings
• look more into AAPEX promotional opportunities
• cocktail hours in booths starting at 4 p.m. to attract traffic
• speed networking events (perhaps a service provided by ACC)

Topic: New Format of AAPEX Today
Key points:

• more effective, balanced
• easier to read, less cluttered with advertisements
• more pertinent, newsworthy articles about important events
• highlighted education opportunities
• Babcox Publications would like to have more communication with exhibitors and drive readers to their respective booths
• focus on the events of the day
• more photos – photos are most popular part of publication (on-line and print)

Topic: Following Up with Leads
Key points:

• will send flyer to contacts
• have sales team contact individually by phone and/or e-mail
• will track in Salesforce or other CRM system

Teleconversation: “Trade Show Marketing”
Wednesday, Aug. 26, 2009, 2 p.m. EST

ACC President Neal Zipser, NZ Marketing & Communications welcomed attendees to the first-ever ACC teleconversation and gave a brief summary about the council. He then introduced Tom Marx, The Marx Group, as moderator.

• being very aggressive with contacting customers in advance
• using lighter weight material to save on shipping, drayage and labor costs
• staggering dates of staff members’ attendance
• drive to Las Vegas, Nev. instead of flying
• changed vendor of booth materials to local vendor in Las Vegas, Nev. to save on shipping costs
• set up meetings with clients beforehand to utilize time – had almost 100 percent of pre-scheduled appointments kept on-site
• leverage post-show interaction with “virtual booth”
  • virtual walls exact replica of information in show booth, available post show for reviewing
• closely examine efforts at AWDA show so as not to duplicate information
• post-show digital communications, less printed hand-outs at show

 
Topic: Trends examined from last year’s show
Key points:

• more interest from international buyers (particularly Latin American)
• more walk-in appointments than expected
• closed many deals on-site, reinforced importance of being at show
• should have marketing materials in multiple languages

Topic: New opportunities this year at AAPEX
Key points:

• AAPEX/SearchAutoParts.com Demo Theater
  • Manufacturers are able to demonstrate new products/services to audience in centralized location on show floor
  • Presentations will be recorded and hosted on searchautoparts.com for later reference
• Car Care Fair
  • Will highlight the “Be Car Care Aware” consumer education campaign
  • Will have information on-hand on how to participate
• “You are here” boards
  • Easy to use, interactive map and directory system
  • Search by company name or category

Topic: Gathering leads for database and determining what information to disseminate
Key points:

• gather contact information by collecting business cards
• important to create really good, comprehensive database of contacts made at show
• distribute information via social networking tools
  • must be constantly monitored and updated
  • must keep all interaction (Tweets, etc.) authentic and not advertising-based to maintain integrity
  • respond to all feedback
  • probably need full-time person to monitor release of misinformation
  • have contingency plan in place in case something negative occurs
  • be careful, but don’t be a censor

Topic: International buyers
Key points:

• some exhibitors have bilingual staff in booths
• translators available in Center of International Commerce
  • must schedule appointments beforehand to guarantee time

Topic: Reducing waste and cost on show floor
Key points:

• electronic scheduling boards
• smaller Show Daily
• fewer lighted graphics
• working on getting recycling bins on show floor
• badges will have barcodes with contact information so business cards will not be necessary
• less catalogs being produced

Topic: Following through with leads
Key points:

• have staff person on hand whose only responsibility is to follow-up with leads
• be rigorous with follow-ups of contacts from show

 
The ACC Board is open to ideas for future ACC Teleconversations, so email your suggestions to ACC 2nd Vice President Tony Molla at tmolla@ase.com.