hdma business benchmarks report summer 2018 business...through strengthening of r&d budget. •...

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HDMA Business Benchmarks ReportSummer 2018

Richard AndersonMarket Research Director, HDMA

Table of ContentsSection• Overview• Sales and Marketing• Business Technology and CRM• Brand and Identity• Personnel and R&D Budgeting• Demographics• Appendix

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Overview

Notes• The HDMA Business Benchmarks Report is based on survey data collected from HDMA members during the last two weeks of July, 2018.

• 75 individuals responded in total representing 49 unique corporate entities– The large spread between individuals and corporate entities is a result of the survey structure requiring multiple areas of expertise to complete

Overall, your 2019 outlook is:4%

28%

68%

Pessimistic

Neutral

Optimistic

What are the three greatest challenges you face as you plan and prepare for 2019?

20%

13%

9%

9%

8%

7%

5%

0% 5% 10% 15% 20% 25%

HR concerns

Tariffs

Potential downturn

Customer relationships & negotiations

Capacity, inventory & order fill

Raw materials

Forecast accuracy

Categorized summary of 119 challenges submittedIndividual response text found in the Appendix


Sales and Marketing

Is fleet pull‐through an important part of your selling process?

62%

38%

Yes No

What percent of your spend is:Marketing Sales

45.88%

54.12%

Pull

Push

38.43%

61.57%

For your 2018 marketing budget, what were your selling, administrative and general expense (SG&A?) as a percent of revenue?

18.99%

9.16%

6.67%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

People Marketing communications Travel and entertainment

For your 2018 sales budget, what were your selling, administrative and general expense (SG&A?) as a percent of revenue?

21.48%

5.43%7.49%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

People Marketing communications Travel and entertainment

For 2019, which item will experience the largest increase in spending?

34%

15%13%

38%

People

Marketing communication

T&E

No increases

For 2019, which item will experience the largest decrease in spending?

2%

10% 0%

88%

People

Marketing communication

T&E

No decreases

Please select the three (3) areas of your company's 2019 marketing plan that you project will see the largest relative increase in budget (percent growth over last year):

21%

12% 11% 11%9%

8% 8%5% 5%

4% 4% 3%0%

0%

5%

10%

15%

20%

25%

What will drive your budgetary increases for 2019?• 2018 success and future growth plan.• Acquisition / merger activities.• Added staff• Continued revenue growth• Demand • Drive to technology• Efficiency• Expected ROI• Focus on improving e‐commerce capability

(being easier to do business with our customers)• Gained/acquired new business Regulations ‐

Prop 65• Greater emphasis on end user pull through.• Increase profitability on current sales. Meeting

the top line in this environment is easy, doing it profitably is the challenge.

• Introducing new technology• Launch of new product/program• Needed sales growth• New customers• new customers, increased product line• New product intros demand extra funding• New product launches and higher focus on pull • new shows and customers• Revenue Increase• Revenue, demand and competition • Sales increases (3)• SEO• Strategic initiatives towards profitable growth

Please select the three (3) areas of your company's 2019 marketing plan that you project will see the largest relative decrease in budget (percent growth over last year):

18%

12% 12% 12% 12% 11%

6% 5%3% 3% 3% 2% 2%

0%0%

5%

10%

15%

20%

25%

Other: No decrease

What will drive your budgetary decreases for 2019?• Better forecasting• Budget will float with revenue• Digital availability of materials and audiences in

lieu of in‐person and hard copy materials. • Drive to technology• Extraneous marketing programs• Fewer trade shows overall for the year‐looking

to re‐balance trade show effectiveness.• Focus on segment specific growth• Focusing on targeted customers and spending on

attracting and keeping those specific customers.• Greater focus on competitive differentiation

through strengthening of R&D budget.• Less point‐of‐sale

• Market performance.• More online marketing• Move to more digital technology• Need to digest all new business that has been

achieved.• No plan to decrease (2)• Non‐value add programs• Reduce eliminate paper literature wherever

possible. to online and print‐to‐pdf• Re‐evaluating trade show effectiveness. • Revenue decrease• Savings• Selective spending on what provides more value

for profitable sales

Do you outsource or use agencies for any of the following:

63%

53%

37% 35%28%

23%16%

2%0%

10%

20%

30%

40%

50%

60%

70%

Creative(graphic art,design, brandimaging, etc.)

Companywebsite

Tradeshows/events

Search engineoptimization

(SEO)

Public relations Media planning Social media Other ‐ Write In

In 2018, what was the average bonus base level for members of your sales force?

12%

16%

26%23%

9%

14%

0%

5%

10%

15%

20%

25%

30%

0% ‐ 4.9% 5 % ‐ 9.9% 10% ‐ 14.9% 15% ‐ 19.9% 20% ‐ 24.9% 25% or more

In 2018, did your sales force have the opportunity to earn a super bonus for other levels of performance?

48%

52%Yes No

What is the single most significant driver of the changes you are making to your sales and marketing plan for 2019?

• Boost organic growth• Canceling outside pre‐marketing agency contract.• Changing from a shotgun approach to a more specific targeted

approach. Driven by limited resources and a challenge to increase profitability.

• Consolidation of tool & equipment distribution channel• Developing products/programs where "one size" does not fit all.• Diversification of customer base. • Driving price increases due to higher labor and material costs.• Focus on SEO• Focus on significant growth within 2 product lines• Global growth initiatives• Greater focus on inside sales.• Greater focus on new sales and Asia• Growth plan• Increased focus on technology• Increased internal communication between sales and marketing • Increased revenue to build in‐house marketing department• Increasing Distribution Opportunities and channel• Largest sales trainee class in several years

• Leveraging service, support and segment specific solutions. More career path levels Higher salaries for sales force

• More customer face time and more point of sale marketing materials

• Moving away from traditional media and associated agency fees• Need to be easy to do business with. Need to support customers

after the sale.• New business/customer incentives• New products driving additional sales & marketing expenses (3)• Our evolving product line needs to be promoted in different

ways.• People (2)• Profitable growth• Sales revenue target• Targeting of fleets• Tariff and general economy environment• Training on new products gained as the result of acquisitions.


Business Technology and CRM

Compared to 2018, what do you anticipate your spending on business technology both internal (CRM, EMS, etc.) and customer facing (website, social media, etc.) will be in 2019?

3%0%

3%

27%30%

23%

13%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

Significantdecrease

Moderatedecrease

Smalldecrease

No change Smallincrease

Moderateincrease

Significantincrease

What CRM software does your company use?• ACT (but changing in 2019)• CampFire• ICSI• Lotus Notes• MAS/SAGE (2)• Microsoft Dynamics (4)• None (4)

• Oracle Sales Cloud (2)• SalesForce (6)• SAP• Siebel• Zoho

Which departments are currently utilizing your corporate CRM system?

92%

62%

35%27%

19% 19%15%

12%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Sales Marketing Warranty Finance Applicationengineering

Operations Quality Other ‐ Write In

Other: Legal

What information does your company track? Please select those your company tracks, not those that your software is capable of tracking.

63% 63%

44% 41% 37% 37%

22% 19% 19%

7% 7%

0%

10%

20%

30%

40%

50%

60%

70%

Other: Sales vs. Quota Customer performance information

Does your company utilize CRM to administer the following?

53%

42%

26% 26%21% 21% 21%

16% 16%

0%

10%

20%

30%

40%

50%

60%

New accountset‐uprequests

Warrantyprocess and

credit

Stringconversations

(CRMFacebook)

NPI (NewProductInitiation)

Samplerequests

Orderplacement

Other ‐ WriteIn

Vacationscheduling

Changeoverprocessing

Other: Customer interactionQuotations (2)

How would you rate the impact of CRM during your most recent budget planning process?

27%30%

40%

3%0%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

40.00%

45.00%

No significance Minimalsignificance

Some significance Major significance Utmostsignificance

Is your company actively involved in monetizing data your CRM captures?

Yes, program in place

No, but investigating possibilities

No, no plans to monetize data

Please add comments on how you are integrating CRM into your budget process or any challenges you face in that regard.

• All quoting is in CRM and used to develop sales routes and staffing• Consistent use by the sales team is the single largest impediment to using CRM as a true

planning tool• Just getting started. CRM is invaluable and must be part of 2019 in every way.• Looking to add new ERP system with integrated CRM package. • To have an effective CRM, you must have dedicated people to administer it.• Understanding the opportunities in our pipeline help us build our plan and budget• We are in the process of evaluating CRM solutions. We are questioning if a stand‐alone CRM

system addresses our needs; most of our effort is on front‐end processing (quotes, NBO management, ship & debit as well as CRM‐type applications).

• We are using the Opportunity pipeline and proven success ratio to build the future budgets.• We have budgeted significant expense dollars towards CRM tool upgrades and integration

to our ERP.


Brand and Identity

What are the three (3) primary branding campaign elements your team is focusing on in 2018?

23%

19%

13% 12%10%

7% 6%4% 4% 2%

0%

5%

10%

15%

20%

25%

Who are the three (3) primary targets of your 2018 marketing activities?

26%

22%

10% 10% 10%8%

6% 6%

2%

0%

5%

10%

15%

20%

25%

30%

Fleet owners/maintenance

execs

OEMengineering

Dealers salespeople

Installers &technicians

OEMpurchasing

Owneroperators

Drivers OEM sales &marketing

Other ‐ WriteIn

Other: OEM C level

Do you have set metrics in place that are used to measure branding ROI on:

40%

50%

21%

53%

42%

60%

50%

79%

47%

58%

0% 20% 40% 60% 80% 100%

Advertising & marketing campaigns

Social media efforts

Image & brand management costs

Bonus, commission & incentive programs

Trade showsYes No

If yes, what specific metrics do you use?• Dollars sold at trade show Web data ‐ clicks and pages visited, leads generated Sales vs. goal• Increase in following audience• Response and click• Revenue growth and sales lead conversion rate• Sales change within targeted segments• Sales leads and conversion of opportunities• Sales revenue, top line only• Track branded keywords versus generic key words and competitor key words in search engine organic search. • Track page likes and follows on FB, Twitter, LI, and Instagram • Track sales tied back to specific incentive programs by using a campaign code on the order • Track sales tied back to tradeshows by using a campaign code on the order• Track website traffic and leads generated by online traffic source (i.e. organic search, paid search, social media,

banner ads, etc.) • Trade shows‐ # of leads/sale Bonus, Commission‐ YOY sales vs. budget • Traditional marketing metrics; impressions, open rate, followers, attendees. Sales bonus program; revenue,

forecast accuracy, accounts receivable % past due, fleet growth wins, fleet retention wins, fleet mix wins• Web analytics

Overall, how effective are your current metrics measuring the ROI of your marketing efforts?

10%

52%

26%

13%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

Effective Marginally effective Not effective Do not use metrics


Personnel and R&D Budgeting

Compared to the past three years, please rate your anticipated spending for 2019 in the area of: In‐house inventory

0% 0%

8%

33%38%

13%8%

0%

5%

10%

15%

20%

25%

30%

35%

40%

Significantlybelowaverage

Moderatelybelowaverage

Slightly belowaverage

Average Slightly aboveaverage

Moderatelyaboveaverage

Significantlyaboveaverage

Compared to the past three years, please rate your anticipated spending for 2019 in the area of: Customer inventories

0% 0%4%

57%

26%

13%

0%0%

10%

20%

30%

40%

50%

60%







Compared to the past three years, please rate your anticipated spending for 2019 in the area of: Product research and development

0% 0% 0%

26%

43%

26%

4%

0%5%

10%15%20%25%30%35%40%45%50%







Compared to the past three years, please rate your anticipated spending for 2019 in the area of: Customer training and information programs

0% 0% 0%

52%

39%

9%

0%0%

10%

20%

30%

40%

50%

60%







Compared to the past three years, please rate your anticipated spending for 2019 in the area of: Staff training and information programs

0% 0% 0%

46%50%

4%0%

0%

10%

20%

30%

40%

50%

60%







Compared to the past three years, please rate your anticipated spending for 2019 in the area of: Market intelligence

0% 0% 0%

52%

39%

9%

0%0%

10%

20%

30%

40%

50%

60%







Compared to the past three years, please rate your anticipated spending for 2019 in the following areas:

Summary of previous spending slidesSignificantly below average = 1

Average = 4Significantly above average = 7

4.79

4.48

5.09

4.57

4.58

4.57

1.00 2.00 3.00 4.00 5.00 6.00 7.00

In‐house inventory

Customer inventories

Product research and development

Customer training and information programs

Staff training and information programs

Market intelligence

Compared to the past three years, please rate your anticipated spending for 2019 in the area of: Engineering

0% 0% 0%

43%39%

13%

4%

0%5%

10%15%20%25%30%35%40%45%50%







Compared to the past three years, please rate your anticipated spending for 2019 in the area of: Sales

0% 0% 0%

35%

65%

0% 0%0%

10%

20%

30%

40%

50%

60%

70%







Compared to the past three years, please rate your anticipated spending for 2019 in the area of: Marketing

0% 0%4%

70%

26%

0% 0%0%

10%

20%

30%

40%

50%

60%

70%

80%







Compared to the past three years, please rate your anticipated spending for 2019 in the area of: Production

0% 0%

4%

30% 30% 30%

4%

0%

5%

10%

15%

20%

25%

30%

35%







Compared to the past three years, please rate your anticipated spending for 2019 in the area of: Overall NAFTA hiring

4%0%

4%

52%

22%

13%

4%

0%

10%

20%

30%

40%

50%

60%







Compared to the past three years, please rate your anticipated spending for 2019 in the area of: Overall non‐NAFTA hiring

5%0% 0%

70%

15%10%

0%0%

10%

20%

30%

40%

50%

60%

70%

80%







Compared to the past three years, please rate your anticipated spending for 2019 in the following areas:

4.78

4.65

4.22

5.00

4.43

4.20

1.00 2.00 3.00 4.00 5.00 6.00 7.00

Engineering

Sales

Marketing

Production

Overall NAFTA hiring

Overall non‐NAFTA hiring

Summary of previous spending slidesSignificantly below average = 1

Average = 4Significantly above average = 7

What is the greatest driver of your anticipated spending in 2019?

• Accessing fleet executives and maintenance personnel

• Aligning our talent deployment with the targeted growth opportunities we see.

• Anticipated sales increase• Availability of qualified people• Customer demand• Engineering/design• Expanding into new (non‐NAFTA) markets (Asia,

Eastern Europe)• General economy environment• Growth• Hiring to meet customer demand.• Increased customer demand for products

• Increased customers, need to market more effectively to shops and end users

• Increases revenue, need to expand product line and grow sales

• Inventory due to sales growth.• Likelihood to recommend• New customers and new products• New product development• People and training, travel is also up• Production and Sales Growth• Profitable market share growth• R&D• Sales growth• Supplier turnaround


20%

13%

9%

9%

8%

7%

5%

0% 5% 10% 15% 20% 25%

HR concerns

Tariffs

Potential downturn

Customer relationships & negotiations

Capacity, inventory & order fill

Raw materials

Forecast accuracy

Categorized summary of 119 challenges submitted


Demographics

What is your annual revenue?

37%

25%

5%

27%

6%

Under $100 million

$100 million to $500 million

$500 million to $1 billion

Over $1 billion

Do not wish to answer

Please input percent of your direct sales (OE and aftermarket) from the following market segments

29%

9%

18%

3%

11%

21%

6%

2% 0%0%

5%

10%

15%

20%

25%

30%

35%

OEM Truck OEM Trailer OEM Off‐Highway

Tier 2 Supply OES IndependentDistribution

Dealers Fleets Online(unknown

final)

Average distribution of all submissions – not representative of any individual submission


Appendix


• Accurate forecast ‐especially timing of next downturn• Anticipating tariff / trade effects on raw materials and import

brands• Attracting, retaining and growing hourly labor outweighs

anything else.• Autonomous vehicles• Balancing Independent Aftermarket business versus OES• Better forecasting• Building brand awareness and exposure through non‐traditional

initiatives as to not blend in and get lost in the crowd of parts.• Capacity• Capacity given current pace of business (good problem to have) • Cash consumption from growth• Changing sales environment for tools & equipment• China knockoff's• Collecting for product value from OEM's.• Communicating quality• Competing with mega parts companies and their offered rebates

and the uncertainty of aftermarket parts benefits‐to‐cost/value vs competitors with larger budgets, bigger shares.

• Competition• Competitive response to impact of tariffs• Consolidation• Cost position of one of our facilities• Developing in‐house expertise for processes previously

outsourced• Developing our people's effectivity and developing succession.• Difficulty finding good sales people• Discipline to develop actions and execute on our plans• Distinguishing the difference between value‐add and low price• Distributor Consolidation• Distributor consolidations• Dramatically scaling production to keep up with growing

customer base and expected product line vs maintaining current customers existing part numbers.

• Economic uncertainty of tariffs and resulting impacts on business• Electric vehicles• Employee satisfaction/career development


• Engineering expediency• Expanding Investment• Finding qualified people• Finding Sales personnel dedicated to HD Market• Finding test vehicles and shops for engineering• Flexibility in contracts ‐ Pull back in advertising if revenue isn't

met OR change advertising methods based on performance without annual contracts in place

• Forecast accuracy• Forecast inaccuracy from customers• Forecast of truck build• Growing complexity and breadth of product line and maintaining

proper inventories for high customer order fill• Hiring• Hiring• Hiring people• Hiring qualified people• Hiring skilled, motivated staff• Hiring, training and retaining top talent.

• Human resources• Impact of tariffs on aftermarket• Impact of Tariffs on costs and pricing• Imports• Increase tariffs• Increasing capacity judiciously.• Investing in growth while preserving scalability for the next

downturn (timing unknown)• Keeping new product pipeline on time/budget• Keeping pace with marketing communication trends• Keeping pricing in line with escalating costs• Labor issues• Low cost imports• Low‐cost competition• Macro Economics (Trump Effects ‐ Tariffs, NAFTA, China trade

war)


• Maintain sales growth• Manage global tariffs • Managing capacity• Managing corporate expectations• Managing pricing in this inflationary environment.• Manpower• Manufacturing to keep pace with strong market with 100% on

time deliveries.• Margin expansion• Market direction• Market forecast• Market Uncertainty• Market Uncertainty• Market uncertainty‐ how quickly are we approaching a

downward cycle?• Material Cost Uncertainty• Material Inflation• Materials Availability• Meeting the ever increasing demands of the OEMs

• Minimum wage • New product releases / communication • OEMs' vertical integration• People• People ‐‐ Need to keep a full team. Hiring is difficult to fill spots

without outsourcing• People (overall resources and prioritization)• People‐ finding talent for open positions• Potential Economy Decrease• Price Pressure• Price pressure from major customers and competitors (including

in the aftermarket with Private Label)• Private label products• Product extension to new markets. • Product opportunities


• Production capacity• Raw material availability• Raw material shortages• Raw Material Supply• Reading the market to plan correctly. (market strength and

weakness is hard to decipher) • Regulations, tariff's, prop 65, etc..• Resources• Retirement• Salary growth.• Service Level/Order Fill issues• Slowing economic conditions• Spike in demand• Successful Price Negotiations • Supplier and Material Costs• Suppliers

• Supply and material costs• Supply Chain continuity in the face of maintained high industry

demand • Tariff• Tariff uncertainty• Tariffs• Tariffs• Tariffs• Technological shifts, electrified, connected, automated.• Technology integration• The market slowing down• Tight labor market and overtime cost controls• Turnover at OE Purchasing• Uncertain material prices• Uncertainty about tariffs and raw material input price

Thank YouKatelyn LitalienSenior Manager, Marketing Operations & Member Services [email protected]

Richard AndersonDirector, Market [email protected]

Steve HandschuhMEMA President & Chief Executive [email protected]

Ann WilsonMEMA Senior V.P., Government [email protected]

Timothy KrausPresident, Chief Operating [email protected]

Jennifer HjalmquistExecutive Director, Marketing & Member [email protected]

Beth Walters BarkovichSenior Director, Membership [email protected]

hdma business benchmarks report summer 2018 business...through strengthening of r&d budget. •...

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