The Evolution of Used Equipment Buyers

By Bob Martin - General Manager of HDD Broker, Inc. - April 26, 2013

The word "Evolution" is one that I really like to use when describing our take on the customers that we deal with in the used equipment marketplace.

The world is obviously a very different place than it was even five years ago. Beyond the common topics of global economics, infrastructure spending and equipment development, there has also been a change in buyers themselves.

A large part of this evolution is due in no small part to the ever-increasing use of technology, probably the most pronounced of which being the smartphone. These devices are mobile phones and computing platforms that have constant access to the internet through their 3G or 4G cellular networks. Having such accessibility to the internet allows for real-time access to email and social media sites as well as any information housed on the World Wide Web. Where previously a person would need to wait for some time at home or in the office to research on a personal computer, the information portal now lies snugly in the pocket of their jeans at all times.

This fundamental shift towards the embracing of technology has actually sparked the creators of many well-established sales programs to re-evaluate their teachings in light of the role that technology has had in evolving buyers. Historically, these sales-driven processes worked well, but customers increasingly wanted to be the ones to drive the process as they became more and more aware of seller manipulation and sales practices.

Basically, customers want to control the buying process on their own terms. Salespeople are no longer the only thing driving events. Instead, they are now serving as just another resource that buyers use to work through the process. This is a big shift from the traditional sales process and, again, much of this is being driven by technology and access to information.

In the Kurryer Whitepaper entitled, "Closing deals on the spot with the right mobile tools", some interesting statistics were thrown out that certainly seem to back up this stance:

  • 71% of consumers want to shop online
  • 60% of consumers who research products online learn about brands and retailers through social networking sites
  • 36% trust family and friends for product information versus 30% who trust manufacturers and retailers
  • 12% trust product experts.

The new evolution of buyers enter a store (or equipment dealership) armed with mobile devices, their intent being to compare features and prices on the spot. Often this means that buyers are already versed in the product's features and benefits even before they engage a salesperson.

According to one study, more than 70% of consumers use at least one technology to shop digitally. That is a big percentage of the marketplace.

As this new breed of buyer works through the sales process, they are using their immediate access to information, statistics and pricing to more effectively control the entire buying process. Sellers are finding that they are now challenged to meet the expectations of an informed and empowered consumer, adapt to a much more dynamic sales cycle, and finally compete with other companies that may have already embraced the new thought processes of the marketplace.

Social Media and the Contractor

Contractors are often pegged as slow adopters of technology, however there is evidence that such a stance may not be entirely warranted. According to a recent survey conducted in the 2013 Equipment World Internet Use and Social Media Survey, there were very marked increases in many key technology uses by contractors.

About half of all of the US contractors surveyed has an internet-enabled phone, but the most interesting findings show that they're actually using that feature to help conduct their business. Over 61% of respondents said that they use their phones to look up equipment information from the field, and that's an increase of 40% over a two year period. Checking for industry news also saw a huge jump, increasing from 19% to 55%.

While the use of email seemed to stay fairly constant over that two year period, the number of contractors visiting social media sites jumped to 41%, the largest increase of which revolved around YouTube and the millions of videos in its library. 80% of contractors have actively used Facebook to post or respond to comments. 56% of those utilized Facebook for work or for company related purposes.

The demographic of contractors that responded to the survey skewed older, with over half of them being age 55 or older.

It's important to note that on a global scale, technology dependence obviously varies depending on the penetration that the internet has in a contractor's area. According to a report on cnet.com, the US has approximately 79% of the country with access to internet and of that percentage, 50% of them regularly access social media sites. Contrast that with a country such as India, one with a massive population but one that has only 6% of the population with internet access. Work opportunities certainly abound in that country, however technology is not a viable option for the vast majority of them to rely on to conduct their business.

Technology and the Machine

Beyond the scope of the obvious benefits to productivity, safety and performance that technology offers a piece of equipment, technology is also being used in a management role as well. One technology that is growing by leaps and bounds in recent years is machine telematics.

The dictionary defines telematics as being the branch of information technology that deals with the long-distance transmission of computerized information. In this case, the information is gathered at a machine and broadcasted back to either the equipment's owner or fleet manager, or to the equipment manufacturer, or both.

Telematics has numerous benefits for a contractor. Ideally, the technology can actually help to identify opportunities to make changes in staffing or production that can reduce costs. These areas involve fuel savings, maintenance scheduling, usage projections and other areas. Some of the other advantage that telematics offers are reduced overtime through timesheet verification, increased efficiency and reduced downtime.

Along with the efficiency and cost-savings that telematics offers can also come increased machine security. Many of the modern telematics units integrate GPS units that can tell a machine's location anywhere in the world with accuracy within a few feet. This allows fleet managers not only to track the locations of all of the equipment in their fleet, but also adds security to the unit in case of theft. Many insurance companies offer significant discounts to fleets with GPS tracking built in.

Telematics can help not only contractors, but the actual manufacturers of the equipment as well. Some systems can broadcast the information back to the equipment manufacturer so that the same datapoints can be analyzed from their perspective. This data can result in improved machine efficiency, greater reliability and higher performance.

Up to the point where telematics started to become more mainstream, manufacturers relied on the feedback from customers and dealers in making changes, updates or improvements to their machines. With the machines able to talk directly to the manufacturer, actual qualitative data can be collected in dozens of areas in real time, leading to better improvements in a far more timely manner.

Like the contractor, the GPS units in the telematics systems can also help the manufacturer. By following the location of equipment, manufacturers can help identify potential weaknesses in their sales system and also keep track of equipment migration around the globe.

Summary

As technology evolves, so do the people that utilize it. Their perceptions and expectations are changing at a very rapid rate. As different as they are, companies such as Amazon, Apple and Zappos are beginning to set the standard by which all other companies are measured. This applies not only to highly commoditized products such as shoes and MP3 players, but also to larger purchases such as cars and, yes... even to heavy equipment.

Manufacturers, suppliers and dealers are going to have to evolve along with their customers or else, like the dinosaurs, face extinction from the marketplace.

This commentary is presented for informational purposes only. It is not intended to be a comprehensive or detailed statement on any subject and no representations or warranties, express or implied, are made as to its accuracy, timeliness or completeness. Nothing in this commentary is intended to provide financial, legal, accounting or tax advice nor should it be relied upon. Neither HDD Broker, Inc nor the author is liable whatsoever for any loss or damage caused by, or resulting from, any use of or any inaccuracies, errors or omissions in the information provided.