Currently Viewing: Precision Farming Dealer Newsletter: December 5, 2013 PFD: Editorial: Who's In Charge of Your Precision Service?: December 5, 2013
December 5, 2013
Who’s In Charge of Your Precision Service?
Jack Zemlicka, Technology Editor
When it comes to putting a price tag on precision service, dealers tell me they sometimes struggle with deciding on a dollar amount that ideally should boost the bottom line, but also avoid giving customers sticker shock.
No easy task, especially since many longtime customers may still be accustomed to free precision support and paying any fee is probably too much.
But this isn’t deterring those dealers who see the potential profit to be made from precision service, either as a driver of hardware sales or an independent revenue source.
Successfully selling precision service is a topic we’ll be exploring in depth in our March print edition of Precision Farming Dealer, and customer backlash isn’t the only obstacle dealers face when deciding to charge for support.
Talking with an experienced precision farming dealership owner in the Midwest, he notes that dealers are submarining their own efforts to implement precision service packages.
“The worst thing you can do is sell precision products and not charge enough for the service,” he says. “I see a lot of cooperatives doing this or even equipment dealerships because they’re thinking ‘I’ve got to supply this service to sell the seed, or this service to supply the tractor.’”
In some cases, service is treated as a cheap or free incentive for customers to buy a new piece of equipment or bag of seed. This is especially true if there is only one person in charge of the dealership’s precision operation.
“The dealership expects that person to do everything and maybe doesn’t give him the resources needed to succeed, because he’s not making enough money to improve the dealership’s bottom line,” the Midwest dealer says. “But yet, he’s still giving the service away with that new yield monitor.”
Compounding the challenge is that more often, manufacturers roll farm equipment out of the factory equipped with precision technology, and service is included in the initial sale.