Selling Precision Ag Demands Focus
With electronic functionality more prevalent in farm machinery, dealers are finding selling and supporting it requires a dedicated team.
A decade ago, many farmers were just warming up to the idea that they needed electronic systems to guide their tractors and implements in a straight line. Back then, farm equipment dealers who added precision farming components to their product offering found they could support their customers in the course of normal business, with the machinery sales team also handling systems for auto-steering or yield monitoring.
As the technology rapidly moves forward, dealers are finding they require precision ag specialists to keep up with the new developments and best serve their customers.
Mike Ver Steeg and his father raise corn and soybeans on 1,600 acres in northwest Iowa, and 7 years ago were among the first in their area to install an aftermarket auto-guidance system on their tractor. “Dad had seen the system at shows and talked with reps,” he says, “but they were bragging it up more than they should have. We were disappointed with how it worked and the support when we had problems.”
But Ver Steeg could see the value in applying precision farming technology to how they farmed, and he didn’t let those initial experiences turn him off to its potential. When Farm Equipment interviewed Ver Steeg for this article, he was driving to Racine, Wis., to watch his new tractor roll off the Case IH production line. It will be one of two tractors on their farm that is equipped with a factory-installed auto-guidance system.
“Because auto-steering increases our efficiency and saves on our input costs, we wouldn’t be without it now,” he says. “We don’t have the stress of driving straight and are not as tired at the end of the day.”
Ver Steeg recently bought a new planter so he could benefit from the new technology, such as automatic row shut off, variable rate seeding, and other features.
“Keeping up with the technology is tough, and we pay dearly for it. It has been about 5 years since I bought my last planter. We desperately needed a new one, not because it is worn out, but because we are so far behind in what planters can do these days.”
|Support after the sale — with training as well as troubleshooting — is crucial for a dealer to be successful selling precision ag components. Many dealerships are finding they need a dedicated staff to keep up with the ever-evolving technology.|
Dedication Means Sales
Today, precision farming techniques are accepted by many in the ag industry and products that make up that segment are being updated almost continuously. Selling precision ag technology is rarely as simple as pulling a box off a shelf in the parts department and ringing it up.
The dealers Farm Equipment spoke with say they’ve determined that they need to develop a sales team to focus on selling technology to farmers. Many of them have gone that route to not only generate more sales — although it certainly helps — but to provide farmers with the after-sales support the technology requires.
“The dealerships that have a dedicated precision ag department and staff have a head start on their competition,” says Jayme Paquin, general manager for Reichhardt Electronic Innovations. “The dealers who saw the need for it two or three years ago are reaping the rewards today.”
He believes the dealer’s success in selling components is due as much to having salespeople dedicated to extolling the virtues of the technology as it is having already established a good reputation for support after the sale.
“It’s not just about being there to help with problems,” says Paquin, as it also involves training the farmer to help him get the most out of the system. “Going forward, dealers will have to put more resources into selling and supporting precision ag technology. This is not a requirement from Reichhardt, as dealers see that is the direction they need to move, as well.”
Developing a Department
Altorfer Ag Products, a Challenger farm equipment dealership in Clinton, Ill., made its first steps toward a dedicated technology department 3 years ago. The staff was comprised of a manager and two product specialists that covered the territory selling and servicing precision ag products. While the three handled all of the precision ag needs from Altorfer’s customers, they were still involved in supporting the machinery side of the business.
Altorfer’s precision ag product line expanded 2 years ago, when the dealership took on the Topcon line as an aftermarket option for auto-guidance, and then added Ag Leader, Raven, Reichhardt and last fall, MyWay RTK. Selling and supporting the new products made it necessary to have staff dedicated to it. That’s when Derek Strunk, who had been hired as a field service dispatcher in 2004, moved to Altorfer’s technology side.
“We added another staffer so they had more time to go out in the field and push the product, but they weren’t able to cover enough of the market. We ran that way for a year, but I couldn’t see us growing in this area with the way the products were being handled at the time.”
Last year, Strunk hired two additional staff members who now do nothing but sell technology products as well as a dedicated technician who performs the installations, troubleshooting and repairs.
“Before we hired a specialist, we relied on field service technicians for product support, but with today’s advanced tractors and combines they already have enough on their plates.”
When Rick Hoeing joined Jacobi Sales Inc. in Seymour, Ind., a year and a half ago, one staffer divided his time between precision ag technology and machinery sales and support.
“The dealership was using the small company where I worked at the time as their source for precision ag technology support,” he says. “But as that side of Jacobi’s business started to grow, the dealership decided it needed to move that service and support in house.”
Today, Hoeing spends 99% of his time focused on precision ag technology, including systems and components from Ag Leader.
“The business structure we put together is based on the experience I’ve gained from several years working in the precision ag industry,” says Hoeing. “Service is a huge factor in precision agriculture and it goes a long way, but customers really want to work with a dealer who understands the product and can support them when they have questions in the field.
“We separate the sales force from the service side of it. It’s difficult to do, as most sales people for precision farming components end up doing service out in the field, but defining that role has been very important. I’m on the sales side, and during busy seasons I help with the service side. A couple of other individuals normally focus on installation and the service side of the business.”
Adding Service for Sales
Bane Equipment in Ladoga, Ind., has operated a department dedicated to precision farming since 2008, and David Reeves was its first employee to focus on the products full-time. The department, which primarily sells Trimble and Case IH products, currently has six trained precision farming specialists on staff.
About 5 years ago, the dealership saw it was missing out on equipment sales because it was not then offering aftermarket products for precision farming. Bane had outsourced that work to an outside vendor that would install auto-guidance and other systems on machinery sold by the dealership. “That worked when we had only a few customers interested in the technology,” says Reeves. “But as interest in precision farming started to grow, we found we were only getting that initial sale, and the follow-up business would go to the outside vendor. That didn’t work out well for us.”
It was Bane’s own customers who finally encouraged the dealership to take the business in house. “Our customers said, ‘if we buy the machinery from you we want you to support the technology, too,’” says Reeves. “We started a dedicated department and became a one-stop shop.”
|Altorfer Ag Products recently added RTK correction subscriptions to its product offering. MyWay RTK permits farm equipment dealerships that are authorized service providers to put its own brand on the Internet-based service.|
Profits with Precision Ag
While all of the dealers Farm Equipment spoke with saw sales of precision farming components increase as a result of dedicating staff to the sales and support of precision ag products, overall revenue increases did not always come exclusively from that department.
Reeves says Bane Equipment covers its expenses with precision farming sales, but by offering a total solution to customers, “iron sales and profits have increased because of the one-stop-shop support we give farmers” by having precision ag components and machinery under one roof.
The strength of the agricultural market has helped Jacobi Sales, says Hoeing. Because they can afford it, “one area that our customers are really focusing on is technology and the benefits it can bring to their operations. I’m confident in saying that our dealership has seen a tremendous amount of return on the investment of specializing in precision ag.”
At the same time, unsold stock can bring down the bottom line. This is especially true when it comes to precision ag technology. When it comes to keeping stock in inventory, keeping up with the latest products can be difficult, says Reeves. “What I started with 3 years ago as a new product is still good, usable equipment, but it’s already been replaced by newer technology. These products have a very short lifespan, so it can be difficult to make sure you keep the product in stock so you can sell it, but that you don’t keep too much of it. You don’t want to have product sitting on the shelf for months.”
|Because its products are “color blind” and permit third-party components to work in an auto-steer-ready machine, many dealers have been able to use Reichhardt’s electronic products to sell iron.|
Are Dealer Agronomists Next?
With auto-steering now a factory-installed feature on most high-dollar equipment, Strunk anticipates that in the near future, the greatest opportunities for increasing sales will be in data management.
Yield monitors have been recording yield data for 10 years,” says Strunk. “But what farmers do with that data will be important going forward. It’s nice to say that this corn will produce 200 bushels in this spot, but what they really need to know is why the corn only produces 150 bushels in another part of the field. With advancing precision agriculture technology it will be increasingly important to record and utilize the data that is gathered. Technology allows machines to automatically meter machine functions such as spraying and seeding.”
|Launched last fall, Illinois-based MyWay RTK has its home state covered and plans to expand nationwide this year. Don Bierman, manager, says the product is neutral in terms of machinery brand, so it can be “easy for farm equipment dealers to put the hat on and support farmers with professional RTK correction.”|
Down the road, Strunk believes having an agronomist on staff could be justified to help customers get the most out of their equipment.
Hoeing, too, believes the next shift in precision agriculture will go from tracking the movement of hardware to data management.
“We have already done some data support. This is one area we are looking at expanding. An important offering in the next few years will be taking all this data and making decisions based on it. A lot of electronic retail facilities do an excellent job of that, but some farmers prefer to work with a farm equipment dealer. Since dealers are already supporting the hardware side, we could also support them on the software side.
As for hiring an agronomist, “we do work with a lot of fertilizer retailers that have staff in our area that specialize in agronomy, and who can make recommendations for inputs based on the data coming off of these machines,” says Hoeing. “But that might be an option in the future and it will be a business decision for us.”
Don't forget to read this article's short companion pieces:
Make sure to read through the rest of the articles from the March 2011 issue:
To The Point:
- Just Getting Started (with Rick Walters of Southwest Ag in Bayfield, Colo.)
75 Years of Keeping the Customer Running
Planning For Profits:
Benchmark Your Service Personnel Costs
The Business of Selling:
Replacing Non Performers
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