Customer Story

Ahearn Equipment

Service Agreements Creating Long-Term Maintenance Revenue Stream for Ahearn Equipment

Ahearn Equipment, Inc. is a 35-year-old, family-owned business near Boston, Massachusetts. Originally an agricultural equipment dealer, it has grown into a light construction Kubota dealer that also sells lawn and garden equipment and offers parts and service.

The dealership operates from a 26,000 square-foot facility in Spencer, MA with 25 employees. Its market is 60 percent light construction equipment, with the balance home lawn and garden.

Jeremy Ahearn, President and son of the founder, says the CDK Service Agreements module integrated with CDK IntelliDealer enables his company to generate repeatable service business, particularly from light construction equipment buyers.

Service Agreements helps sales and service staff maintain regular communication with customers through the scheduling and performance of equipment maintenance.

We've now gone 10 months from a position of weak service sales to having more service work in queue than ever. We now have a pipeline of forward-looking work ahead of us.”Jeremy Ahearn, President, Ahearn Equipment

The system automatically calculates future scheduled job dates, based on in-service dates and run hours, to help the dealership arrange and coordinate customer maintenance needs.

"We've now gone 10 months from a position of weak service sales to having more service work in queue than ever," Ahearn says. "We now have a pipeline of forward-looking work ahead of us."

Change, at the right time

A lawn mower dealer for decades, Ahearn Equipment has evolved into a dealer of small construction machinery and lawn and garden machines and tools. The complexity of inventorying and managing this wider and more complex variety of material required a more robust business system. Ahearn migrated to the IntelliDealer DMS in 2015.

He notes that as a sales-focused company with less emphasis on service, the dealership entered 2015 lacking much-needed customer retention to ensure future service maintenance income. Then the industry peaked in 2016 and then fell by 25 percent.

Fortuitously, management had already focused on rebalancing the business's sales-to-service ratio. The rebalance would help build a future pipeline of service revenue. "We always get the call to perform heavier repairs, but because we never stressed our preventive maintenance services to buyers, that routine business went elsewhere. We were going to reverse that," Ahearn says.

He says management's new focus is on building service into the crown jewel of the organization. The rebalance will better align the dealership's revenue streams to industry benchmarks, a healthier 70/30 ratio, from the previous 80/20.

Growing, Retaining Service Business

The company is leveraging Service Agreements to promote maintenance, any dealership's economic bread and butter. Because service maintenance is less skills-intensive work and repetitive, it should be a profit generator for the dealership.

A preliminary step, Ahearn shares, was to establish a service-focused culture. "We set the expectation, and, with the new mindset, everyone focused on making customers aware of the dealership's ability to meet their immediate and ongoing service, maintenance, and parts needs. The best solution we found to help us remind customers to bring their equipment to us was the Service Agreements solution," Ahearn says.

Now, one in three equipment purchasers also buys a service agreement at the time of purchase. Service Agreements allows Ahearn Equipment to:

"Service Agreements and IntelliDealer are a competitive advantage for our dealership because they help us organize customer service information and execute service reminders and update outreach to customers that help build up a stronger service business foundation," Ahearn notes.

"In a little under 12 months of selling service agreements, penetration is 33 percent, a healthy number. Recently I put a customer who had purchased many units here but never maintained that equipment with us into a service agreement. Now he wants us to maintain all of his equipment. That proves this test for us," Ahearn says.