2014 Ended With Construction Equipment Business on the Rise According To the Equipment Leasing and Finance Association
Everyone throughout the construction equipment industry is breathing a collective sigh of relief as economic conditions continue to improve and 2015 is projected to be a good year. Finally.
William G. Sutton, CAE, President and CEO of the Equipment Leasing and Finance Association (ELFA), put it this way: “Despite a very volatile Q4 equities market, the U.S. economy ended the year in a strong position, evidenced by lower unemployment, continued healing in the housing market, gas prices that seem to be declining almost daily and robust consumer investments in plant and equipment.”
Sutton is in a good position to see the trends, because one key indicator of the construction equipment sector’s health is leasing and purchasing data. His organization compiles a Monthly Leasing and Finance Index, known as MLFI-25 because it reports economic activity from a representative sampling of 25 companies. The year-end report showed:
2014’s cumulative new business volume increased by 8% compared to 2013.- Overall new business volume for the month of December was $12.9 billion, an increase of 20% compared to December 2013 and an increase of 90% compared to November 2014. That huge spike is considered normal due to traditionally heavy year-end transactions.
- Receivables over 30 days continue to remain at very low levels, and for the ninth month in a row, charge-offs remain at an all-time low.
The good news just keeps on coming.
The Equipment Leasing and Finance Association also reports their Monthly Confidence Index for January was 66.1, the highest it’s been in three years. The Confidence Index in December was 63.4. So despite the fact that fuel costs appear to be rising again, at least in some parts of the country, the outlook is remains very positive for the construction equipment industry.
Is your dealership adequately prepared to benefit from new opportunities?
With your customers and prospective customers looking forward to a big boost in activity this year, your dealership might grow on its own. But why risk your future on a passive wait-and-hope-for-the-best plan?
Customers looking to buy new construction equipment, take advantage of rentals to increase their business flexibility, and keep machines on the job need a comprehensive, reliable support system. That should be your dealership. You can take positive steps to ensure maximum growth and profitability by doing these two things:
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Give your marketing strategy a tune-up.
Review your current activities and analytics to make sure you’re focusing on the tactics that work best for you. Is your website mobile-friendly, easy to navigate and filled with fresh, informative content? Are you using your blog and social media to best advantage? Now is the time to sit down with your marketing experts and make needed changes, so your lead generation is firing on all cylinders and your sales team can convert more leads into sales.
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Make sure your customer service is “full service.”
The most successful dealerships are those that offer meaningful loyalty rewards programs and tailored warranty programs and software for their customers. These things establish your dealership as a more valuable working partner for customers, and well-crafted loyalty programs and extended warranty offerings also serve as additional revenue centers for your dealership.
Both rewards programs and customized warranty programs are proven winners when it comes to retaining customers. But they can be significant assets when it comes to selling new equipment, too, making you the dealership of choice over others who don’t offer these forward-looking extras.
Looking out for your customers’ best interests demonstrates your commitment to them long-term. With a comprehensive program in place to do that and a strategically smart marketing plan that tells the world what makes you different, your dealership will be poised to profit from this year’s expected construction equipment business boom.
