I work in sales effectiveness and often look for inefficiencies or particularly lagging markets. When I think about an industry that has lacked innovation it is the tow vehicle (forklift) industry. What becomes increasingly hard when you do not innovate is to sell customers on new models or new versions of models that they already own. So, when we think about Fork Lift companies like Hyster-Yale or Crown Equipment, I can only imagine that they have a difficult time convincing manufacturers or anyone that has a warehouse to spend to upgrade with them when they already have tow vehicles and forklifts.
Let’s look at the products that these two companies are offering and ask yourself this question: If I were already to own a forklift (even an old crappy slow one), would you choose to upgrade?
Firstly, what I see is a company that prides itself on building rugged trucks for the “world’s toughest applications”. What they are trying to sell is dependability and toughness, but reflect on the fact that this will inherently mean that I should be able to keep it for years. But, when I flip toward their new products, what I find is something fascinating, a forklift that is built specifically for narrow hallways. Imagine being a store owner and the boost in productivity you could get if you owned one of these specialised, differentiated machines. I would buy, that is for sure.
What does Crown put up front and centre? Safety. And yes, security is a case for change. The reason I may decide to give up my old forklift is if I am convinced that it will injure my workers and cause me more trouble in the long run. Now, let’s get to the products. Guess what I am noticing – they all look the same. Unfortunately, when I look to my old fork-lift and what Crown describes as “new forklifts” I see nearly identical things. If it were up to me, I would look throughout the Crown catalogue and decide that my old forklift works just fine.
How the forklift companies should be selling.
When I think about the cost of doing business in a warehouse or manufacturing plant, I think about very particular inputs and outputs. In manufacturing, you input labour and materials and derive a product ready to be sold. The speed and reliability at which you can move these objects or commodities around the floor all add up to one equation: efficiency. Workplace efficiency is a key to profitability. If Hyster-Yale or Crown Equipment could lock me in on the costs of doing business with an rickety old forklift, and prove, through empirical data, that it would be cheaper for me to do business with a new forklift (cost included), I would buy. This idea of locking customers in on the expenses that are underlying in their business is what dials up the pain for the client across the table.
At the end of the day, will you decide to upgrade your forklift truck if it isn’t broken? Not unless you have a good business case to do so!