FREDERICK, MD. The economic downturn is exacting a price on truck dealers, but at least one is adjusting his tactics to make it through these tough times.
Selling and servicing trucks is nothing new to Jack Saum Sr. A veteran salesman for the International Harvester, the predecessor of today’s Navistar, Saum joined truck dealership Beltway International in Baltimore in 1983 as sales manager. In 1997, he purchased Beltway from then-owner Jack Murray and set about expanding the enterprise, adding seven other dealership locations from Western Maryland and West Virginia to Delaware. He now sells selling Navistar International trucks as well as Kalmar-Ottawa and Jerr-Dan equipment.
Saum views today’s truck market as the toughest he’s ever seen, and it’s forcing dealers like himself to try different approaches. “If you keep doing the same things you’ve done the last two years, you simply won’t survive,” he told FleetOwner. “Now is the time when good managers and new tactics are coming into play. It just can’t be business as usual anymore.”
FREDERICK, MD. The economic downturn is exacting a price on truck dealers, but at least one is adjusting his tactics to make it through these tough times.
Selling and servicing trucks is nothing new to Jack Saum Sr. A veteran salesman for the International Harvester, the predecessor of today’s Navistar, Saum joined truck dealership Beltway International in Baltimore in 1983 as sales manager. In 1997, he purchased Beltway from then-owner Jack Murray and set about expanding the enterprise, adding seven other dealership locations from Western Maryland and West Virginia to Delaware. He now sells selling Navistar International trucks as well as Kalmar-Ottawa and Jerr-Dan equipment.
Saum views today’s truck market as the toughest he’s ever seen, and it’s forcing dealers like himself to try different approaches. “If you keep doing the same things you’ve done the last two years, you simply won’t survive,” he told FleetOwner. “Now is the time when good managers and new tactics are coming into play. It just can’t be business as usual anymore.”
Challenges are nothing new to Saum, as he managed to grow the Beltway Companies from 70 to 210 employees, generating $130 million in annual revenues through fuel price spikes and abnormal cyclical truck sales peaks and valleys brought on by emission rules.
To counter the current economic downturn and credit crunch, Saum is embarking on several new initiatives, such as selling cheaper reconditioned used trucks to fleets, “greening” his dealership facilities to save money, and offering service guarantees to win more maintenance business.
Selling “new-used” trucks, though, is the major cornerstone of his tactical plan. “We know fleets are trying to reduce spending, yet they are also running older and older equipment,” Saum said. “So what we’re trying to do is offer them reconditioned trucks that bridge that gap – good quality used trucks that are completely redone, inside and out, with one-year warranties on major components.”
He pointed to a late model International 9900 fleet truck with 400,000 miles on the odometer that’s getting a complete overhaul, including all-new paint. At a third of the cost of a new truck, with monthly payments averaging $822, the trucks so far are selling well, with 11 sold in the last four weeks, Saum said. A similar effort is underway for medium-duty truck models, with a one-year chassis and two-year body warranty that cost about half the price of a new truck.
“We’re trying to give the customer more options,” Mel Fair, vp of fleet sales at Beltway’s Central Maryland International dealership here in Frederick, told FleetOwner. “I’ve got one customer with about 90 trucks that’s doing really well – but 10 of his trucks have over 900,000 miles on them. He’s worried about the cost of buying new trucks. This gives him another option.”
Saum is also trying to step up things on the service side by adding a four-hour guarantee, promising that his dealerships will get back to a customer in four hours with the repairs needed to a truck, a repair cost estimate, estimated time of pickup, and a rental unit offer. If they don’t respond in four hours, the customer gets $100.
“The biggest concerns customers shared with us about repairs were that their trucks fell into a ‘black hole’ and that the final bill was far more than the estimate,” Saum said. “That’s why we’re taking this new approach, and so far, we haven’t had to pay out $100. We’re also getting higher ratings on our customer service surveys as a result.”
Another tactic Saum is deploying is the “greening” of his dealerships, in terms of both being a better environmental steward while saving money. The Central Maryland International dealership, for example, recently relocated to a new building in January this year that features a 17-bay main maintenance area heated with waste oil and sporting better insulated walls, doors, and ceiling. Combined with an air-lock style entrance, tinted exterior glass, and high-efficiency gas heating for the rest of the building, the facility saves $76,818 annually in energy costs.
From Saum’s perspective, dealers need look at trying out different tactics like these, combining them into a larger strategy to help both themselves and their customers survive the current economic crisis. “Our absorption rate right now is 114%, so we know what we’re doing is working,” he said. “As long as the truck sales market doesn’t get any worse, we’ll be fine.”
