Oil & Fuel Another Kubota DEF/SCR Problem M6-111

[SDT]

There's a curious thing about mechanical repairs that I've watched change over the past half century. It used to be that a dealership was judged at least partly on their the professionality of their service department. Dealerships put a lot of money into their workshops partly because they saw it as being some of the best advertising they could do. It told people that this was a dealership that planned on being around for a long time. That's good for everyone.

it was pretty common sales practice to show customers around the service department. How often does that happen today? And although there are dealerships that are run on a different business model today, it is still pretty easy for a service department to make the bulk of the dealership's money. Of course for that whole business model to work it does require that the dealer invest in his service department.

But most dealerships a generation ago did invest in their service department for all the reasons above and for a few more...
One thing that is important but difficult to judge is that a dealer's service department is something completely under the owner's control - and that's important to a business owner. A dealer may not have much say in how a manufacturer is going to deal with warranty or parts replacement, but the dealer with a good service department has his choice of a lot of other ways to deal with mechanical problems. And some of those options can make money for him.

Just musing....
I wonder how many tractor owners visited the service department when thinking about what tractor to buy from which dealer? And I wonder what makes a service department impressive to this new generation of tractor buyers?
rScotty

Sadly most dealers have adopted the modern profit center business model.

The service department is now a separate and distinct profit center from the sales department. So is the parts department.

As a result, the service department must make a profit or the service manager will quickly loose his job. Hourly rates have escalated considerably and public relations work is not done except in rare circumstances. Unless Kubota or the customer pays, work will not be done. Indeed, the service department charges the sales department for work related to assembly, ordering mistakes, etc.

SDT

 

[rScotty]

Sadly most dealers have adopted the modern profit center business model.

The service department is now a separate and distinct profit center from the sales department. So is the parts department.

As a result, the service department must make a profit or the service manager will quickly loose his job. Hourly rates have escalated considerably and public relations work is not done except in rare circumstances. Unless Kubota or the customer pays, work will not be done. Indeed, the service department charges the sales department for work related to assembly, ordering mistakes, etc.

SDT

OK. A "Profit Center Business Model"...so the modern practice has a name! Thanks for that. It explains a lot. And for the small business owner of average ability (myself for example) I can see where using that business model would sure simplify a lot of the decisions that have to be made. When I was a young man we called that type of philosophy "Selling Out". It meant that one traded all the values that matter in order to simply make more profit.

In the long run I don't think that the Profit Center Business Model will last, but it's certainly here today and giving tradtional businesses some heavy competition. I find myself beginning to be willing to go out of my way to patronize businesses where profit is given equal footing with other community values, so maybe that is the business model that will ultimately prevail - but the competition is tough right now

Nothing wrong with changing how business is done, it's how progress is made. Although I can't see that a business who emphasizes it's own profit over anything else being a very good long term strategy. Of course if it doesn't work long term, it ends up creating more openings for businesses that compete by being more personable and service oriented. And so the wheel goes around again.....and that's good too.
rScotty

 

[SDT]

OK. A "Profit Center Business Model"...so the modern practice has a name! Thanks for that. It explains a lot. And for the small business owner of average ability (myself for example) I can see where using that business model would sure simplify a lot of the decisions that have to be made. When I was a young man we called that type of philosophy "Selling Out". It meant that one traded all the values that matter in order to simply make more profit.

In the long run I don't think that the Profit Center Business Model will last, but it's certainly here today and giving tradtional businesses some heavy competition. I find myself beginning to be willing to go out of my way to patronize businesses where profit is given equal footing with other community values, so maybe that is the business model that will ultimately prevail - but the competition is tough right now

Nothing wrong with changing how business is done, it's how progress is made. Although I can't see that a business who emphasizes it's own profit over anything else being a very good long term strategy. Of course if it doesn't work long term, it ends up creating more openings for businesses that compete by being more personable and service oriented. And so the wheel goes around again.....and that's good too.
rScotty

It's basically a short term vis a vis long term philosophy.

Objectives are based upon the next accounting cycle, e.g., month, quarter, year, etc. Long term results are given little or no thought.

SDT

 

[rScotty]

It's basically a short term vis a vis long term philosophy.

Objectives are based upon the next accounting cycle, e.g., month, quarter, year, etc. Long term results are given little or no thought.

SDT

Yes, I can see that. Tractors are designed as long term investments, but that is being countered by consumers with short term objectives.
It's good that there are still enough dealers that we have both business philosophies available to us; and worthwhile to think through the implications of each.
rScotty