In 1921, a Toro tractor towing five reel mowers began trimming the fairways at Minikahda Club in Minneapolis. Toro has been the leading brand in turf care ever since.
Its extensive line of professional products, including turf maintenance equipment and irrigation systems, now account for nearly two-thirds of The Toro Company’s annual sales of $1.8 billion. In fiscal 1990, that figure was roughly 37 percent.
That statistic may come as a surprise to those who think of Toro primarily as a company that sells lawnmowers and snowthrowers to homeowners. In the early ’90s, this Fortune 500 company made a conscious decision to grow the professional side of its business.
The professional market has several important advantages, explained Jack Hensley, Manager of Distributor Service Development at Toro. It’s more profitable and predictable than the residential market, which is susceptible to sudden changes in the economy, consumer confidence, even weather. While the professional side of the market is also somewhat prone to these factors, the effects are muted and delayed.
Toro’s professional customers include golf course superintendents, grounds and sports field managers, landscape and irrigation contractors, and fruit and vegetable growers. While the explosive growth of new golf courses leveled off in the late 1990’s, a steady stream of replacement business remains. A longtime leader in the $1 billion golf market, Toro dominates in the high-end golf course market and sees growth opportunities among all golf course customers.
Toro’s steady growth was bolstered by acquisitions of several companies serving the professional side, including landscape equipment manufacturer Exmark, as well as Hardie and Drip-In Irrigation products.
As always, Toro’s strategic focus is on innovative solutions, strong relationships and leading brands.
Its broad array of innovative products, value-added business solutions and customer service are delivered through a network of 27 U.S. distributors. All but two are independently owned businesses, but Hensley stressed that the company and its distributors are heavily interdependent and function more like partners. "In the eyes of the customer, our distributors are Toro."
Repair quality drives decisions to repurchase, recommend
Distributors play a critical role in service and satisfaction of Toro’s professional customers. While price is certainly a consideration for these customers, surveys show that quality is even more important.
"We know the next sale depends on the service the customer gets today," Hensley said.
The single most important quality attribute cited by professional customers was Distributor Service and Support, ahead of Equipment Performance and Equipment Reliability. In fact, two-thirds of a customer's overall satisfaction is driven by Repair and Parts Quality. Service quality also has a major influence on future repurchases, and on how likely the customer is to recommend Toro to others. There's also a compelling linkage between differentiated customer satisfaction and market share.
"The professional market customer is interested in service in the introductory stage. It becomes even more important in the growth stage, and is the critical factor in the mature stage," Hensley explained. "By then the real market differentiator is the support service provided by the seller."
With service quality playing such a crucial role, Toro places a premium on customer feedback as a means of determining how satisfied customers are with its distributors’ service delivery, as well as gauging the strength of the customer relationship. "Relationships are extremely important in this business," Hensley explained. "Good or bad, word travels very fast."
Distributors avoid hazards by hearing the Voice of the Customer
Three years ago, Toro abandoned its do-it-yourself approach to measuring customer feedback, a program that was implemented by the distributors themselves. For a variety of reasons, results were considered sub-par. The surveys lacked focus, and were considered a low priority by distributors themselves. Self-surveys provided little actionable data or accountability, and when action was taken, there was an unacceptably long lull between implementation and validation of improvement initiatives. In addition, results could not be compared to any company-wide benchmarks, nor were they useful for strategic planning.
In 2004, Toro adopted CustomerSat Enterprise™ to measure the repair service performance of participating distributors. This solution not only freed up distributors’ in-house resources, it provided the objectivity of a third-party and the expertise of a specialist. CustomerSat Enterprise’s configurable analytics help uncover issues and discover opportunities by letting users sort and dissect customer intelligence by product, region — virtually any way they like. Results are then distributed using push reports.
Toro’s repair service survey measures distributors’ performance against specific key service attributes, including:
- Repair turnaround time,
- Repaired when promised, and
- Fixed right the first time.
The customer’s repair experience, loyalty and re-purchase intent are also tracked. Feedback enables distributors and the parent company to understand the real strengths and weakness of their service operations, then identify and launch process change initiatives that lead to sustainable, measurable improvements.
Strong follow-through means winbacks and saves
Action alerts are automatically generated and sent to key personnel whenever a customer’s overall satisfaction scores falls below eight on a 10-point scale, or whenever a customer asks to be contacted. Prompt follow-up has helped distributors retain several important at-risk customers, as well as win back former customers who had defected to competitors.
"Even though it’s a Repair Service Transaction Survey, it yields a wealth of in-depth information and customer comments that turn into recovery or sales opportunities," Hensley explained, adding that CustomerSat Enterprise makes it easy to drill down and access all that data.
"It gives us a lot of opportunities we wouldn’t otherwise have, and really helps strengthen the relationship."
For example, one Toro distributor paid for an entire year of CustomerSat participation by retaining a single customer who was at risk of defecting to a competitor. Another distributor won back a former customer — and a $250,000 purchase order — by following up on a single action alert that stemmed directly from survey feedback.
Bottom-line benefits like those explain why each year more and more independent Toro distributors opt into the CustomerSat solution. When you compare the cost of CustomerSat with the value received, Hensley said, it’s clear the investment is worthwhile. Actually, he continued, the return is in the form of retaining at-risk customers and winning back defectors who have gone to a competitor, which ultimately leads to dollars on the bottom line.
"CustomerSat delivers critical customer insights that we use to grow and improve our business, so we think it’s a great investment." Even in situations where the exact ROI is a little difficult to calculate, Hensley continued, the results clearly justify the investment. "We know it benefits not just our distributor service operation but the entire company."
Hearing the Voice of the Customer has not only increased awareness of the importance of a strong service operation, it points out specific areas where a particular distributor may need to improve. Toro’s Field Operations Managers use CustomerSat feedback data to help distributors guide their business in a more strategic direction.
For example, instead of simply responding to alerts when they are received, these customer-facing organizations are able to step back and analyze why a particular problem or situation arose in the first place. Then they can pinpoint what they need to do to prevent it from happening again, and how they will monitor the situation in the future.
A Win for Toro
Hensley said CustomerSat surveys are a valuable component of Toro’s Customer Satisfaction Measurement Model, and drive support initiatives to improve distributor service performance. Candid customer feedback helps managers understand key drivers of customer satisfaction and loyalty. Survey questions can easily be refined, and results can be sorted to compare results by distributor, territory, geographic region or size. The program also facilitates the creation and sharing of best practices.
Personnel skills and training opportunities are identified and customer feedback is included in the company’s annual distributor training event, called Toro U. This is also an opportunity to demonstrate the value customer intelligence has to the entire organization.
More surveys, more data, more value
Toro is leveraging all this momentum as it faces the future. It has already expanded its use of CustomerSat for two additional surveys in touchpoints outside the service experience.
Six weeks after an equipment purchase, an End User Customer Satisfaction Survey invites customers to share their perceptions of the Toro purchasing experience. This feedback identifies process improvement opportunities in early buying stages. In the case of defections, this data can also be useful for customer recovery.
Six months after a purchase, end users are again invited to share their thoughts in a survey that primarily focuses on product quality. Customer responses and verbatim comments help identify potential product issues, and can zero in on needed features and functionality requirements.
We are only as good as our distributors, Hensley explained. By expanding and leveraging its customer feedback program, Toro drives farther along the fairway of brand preferences. Like a top golfer on the professional tour, Toro is constantly refining its game in order to excel, win the trophy and delight its cheering fans. That’s what keeps Toro on the "cutting edge" of the professional turf care market.
