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To the Point:
A Customer Lost at the Hands of the Major

For full list of articles from the Oct./Nov. Issue, click here.

Mike Lessiter

As you may have seen in earlier updates on this website, my dad and I recently returned from the harvest in Washington and Idaho for his annual birthday trip. While our journey also took us to manufacturers and dealers, our goal was to ride in the combine buddy-seats of some longtime friends. We accomplished that and more with undivided time with growers during their long combining days.

But we also stumbled on an undercurrent that had virtually everyone talking. Namely, a 13,000-acre operation was harvesting with four new Case IH 8120 combines instead of green ones — for the very first time in 4 generations. We rode with the farmer who made the bold decision (“It came down to financing and costs per acre,” he says), and also called on the Deere dealer who lost the $1.5 million combine sale, a number sure to be dwarfed by lost wholegoods and service revenue in the years ahead.

It was clear from our conversations that denying the annual combine order to his loyal John Deere dealer was an unfortunate byproduct, not the objective. In fact, he and his farm manager both regard the Deere dealer as a personal friend who had taken good care of them for many years. Case IH brought an aggressive financing package on the 4 combines while “Deere Corporate” simply refused.

Asked if he would’ve “stayed green” if John Deere finally matched the price, he quickly shook his head. “At that point, I wouldn’t have given Deere the order even if they’d out-bid Case.” That’s a message for East Moline, not his local dealer.

Let’s review the facts. You have a fourth-generation, father-son operation who forever bled green, a Deere dealer that had performed well and a $1.5 million sale that was forfeited to a red dealership because of what this farmer described as either arrogance or indifference by the manufacturer. Does anyone think it’s fair to hold this dealer responsible for the 25% drop in his combine market share?

When manufacturers measure success or failure solely by market share, there begs a question…Because the dealer always seems to pay (in any number of ways) for ineffectiveness in its AOR, shouldn’t the manufacturer be called on the carpet when it fumbles the ball?

Many of my combine hours on the trip were spent pondering that winning and losing dealer, and what lessons their story provides on earning — and retaining — customers’ business in this changing industry.

First, I saw first-hand that the costs per acre can be so powerful that a business-oriented grower will switch out a fleet of combines to a brand that has never touched his field. Second, the large ticket prices in this business has caused dealers to cede much of the control on an important purchasing variable — financing.

And third, because solid, long-lasting relationships can dissolve over things outside of the dealer’s control, each operation must hone and develop its own “X-factor.” By this, I mean that level of extra service or expertise that’s so vital to your customer that he can’t live without it, no matter what kind of deal or promise your competition throws his way.

If you can’t easily recite your operation’s X-factor, well, there’s a dealer or two I’d suggest you speak with. Providing “good, fair service” is a strength only as long as no one else can deliver it. And those days are gone.

P.S. Speaking of value-added specialties, Farm Equipment has seen the growth in GPS & Precision Farming specialists at dealerships. These titles are now eligible (per BPA-circulation rules) to receive a FREE subscription to Farm Equipment. Please pass the word along to your precision farming specialists, who can qualify to receive the magazine FREE.


 

For full list of articles from the Oct./Nov. Issue, click here or choose from the list below:

Dealers’ Sentiments Turn Sharply Positive for 2011

Dealer Profile: Kern Machinery Learning to Adapt on the ‘Go’

Farm Progress Show 2010: Efficiency & Precision Mark New Products

Grain Augers: Stock ’Em to Sell ’Em

Tying it All Together

Industry Q&A

Trade Values & Trends: Resale Values for Seeding Equipment

Ahead of the Curve: The Growing Trend Toward Vertical Tillage

Planning for Profits: Hard Data + Soft Skills = Improved Absorption

The Business of Selling: Fresh Perspectives on the Art of Selling


Posted October 13, 2010


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COMMENTS: 4
Brand Loyalty
Posted from: Mike Lessiter, 10/27/10 at 11:19 AM CDT
We are delving into the topic of the State of Brand Loyalty right now. If you'd like to share what you're seeing out there, please email me (mlessiter@lesspub.com) or Dave Kanicki (dkanicki@lesspub.com). Thanks in advance
OEM Arrogance
Posted from: Marc, 10/26/10 at 1:48 PM CDT
This article touched on something that I have personally experienced when talking about the perceived arrogance or indifference of corporate John Deere. This customer is without a doubt not alone in this observation and I can tell you, that perception about JD is growing more and more. In the nearly 10 years I have been in the Ag equipment business, 2 of those at a John Deere dealership, the arrogance at the corporate level at John Deere is very real. Now, this is not a dig at their products in any way. Deere does and continues to make great products, but they are not alone. My 2 years of interacting with JD corporate personell really opened my eyes to the fact that I feel they truly believe anything Deere does is instantly the industry standard. I grew up on both brands (I.H. AND J.D) on our farm and the dealership I work for now is a Case IH, New Holland and AGCO dealer. Having experienced personally interacting with corporate personell from the big 3, Deere gave me the impression that they believe they will always be number 1, no matter what they do(or don't do). I'm not saying everyone at Deere is like that, but it is an attitude that you feel exists among many at the corporate levels. And the shame of it is, it will cost them their leadership eventually if this perceived arrogance continues. It happened to International Harvester 50 years ago. It happened to GM just a year ago. GM and IH both thought they were too big to fail. Will John Deere go down the same path? Only time will tell.
OEM Arrogance
Posted from: Steve Smith, 10/14/10 at 8:43 AM CDT
Or, is it just lack of focus on customer service fundamentals, communication, understanding how the customer feels or something else. Whether it's cost per acre, or dealer indifference, if you don't know that "X factor" and how that solves a problem with a customer, and communicate it consistently, there is a BIG chance this happens more often. Take nothing for granted, it's the details that matter, on every level...
OEM Arrogance
Posted from: Mark, 10/14/10 at 5:19 AM CDT
Retail Sales are an art not a science, but the OEM MAJORS all think they can put science into the picture and force customers to make decisions. Customers are definitely smarter and more business smarts than a generation ago. I think the Majors need to understand retail customers and listen to their concerns

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