Editor’s Note: This is the fourth in a series of articles based on an over-lunch interview with Case IH’s North America’s Jim Walker, Vice President, and Melinda Griffin, Director, Network Development, at the headquarters offices last fall in Racine, Wis. The first article in the series focused on a new Sustainable Growth plans rolled out to dealers in early 2017 and the second article explained the logic behind the new volume incentive changes. The third article explained new communication initiatives and the re-emphasis on the Dealer Advisory Board.
Everyone who has ever taken the athletic field or courts has heard a coach bark these famous words ... “It’s not the size of the dog in the fight; it’s the size of the fight in the dog.”
Any good dealer is one that is going to have some fight; the sort that’s needed to win the sale. Yet that fight also isn’t easily turned off; dealers are apt bring it with them no matter who is on the other end, including their major brand supplier.
Case IH’s Jim Walker and Melinda Griffin
During the interview at Case IH’s North American headquarters in Racine, Wis., last fall with Case IH’s North America’s Jim Walker, Vice President, and Melinda Griffin, Director of Network Development, Farm Equipment and Ag Equipment Intelligence ventured into what can be a touchy line of questioning for major-line manufacturers. That is, the pressure a dealer feels to acquiesce to its major-line OEM brand who they feel want all their time, attention and resources.
It’s no secret that all the major brands like the idea of “brand-pure” store locations without competing colors. Meanwhile, the dealers who believe in shortlines and independent brands point to the voids in the major OEM lines, the big numbers of loyal customers it brings and the aftermarket business it represents.
Brand purity in dealerships has been ever-present subject (at least as long as this editor has been covering the business). Case IH uses the term “brand alignment.” Regardless, the theme reached a new level of “heat” when word got around about Case IH’s new dealer agreement in 2015, and then the reactions to it. Plus, still in recent memory among Case IH dealers was an infamous speech to red dealers (before Walker arrived at Case IH) with very strong language, and certain rival brands even isolated for targeting. Even the most supportive of red dealers felt their loyalties were being challenged from the podium.
When asked about how the Dealer Advisory Board reacts to the “brand alignment” conversation, Griffin says it’s not a topic she regularly hears a lot about, though it did spike following the new dealer agreement in 2015. “There is a clause in the agreement that says that at some point if a dealer gets to a certain level with multiple brands, sales resources and capital investments, that CNH can make you separate the resources.
“It doesn’t say that we’re going to prohibit you from having it. What we are saying is we want a business plan with every dealer. Through our Global Order Excellence program, the field person sits down with them and says ‘OK, these are the targets I see based on your market share targets’ and then we back into how many units they need to sell and how much to order — having a plan in place. So, all we ask in our agreement is that they stick to their business plan.”
For example, many Case IH dealers carry Kubota for products that Racine doesn’t carry, and she acknowledges that some dealers need it for their profitability. “Really, what we’re focused on is trying to get dealers to plan their business, because we still have quite a few that don’t, or don’t do it in sophisticated manner. That’s what our contract says.”
Walker adds some historical perspective. “We put a lot of the dealers into those businesses. Hesston had to be split off as part of the CNH merger, and a lot of our dealers were Hesston dealers. When we didn’t want to produce a subcompact tractor, a lot of people went to Kubota. When we didn’t offer a simplistic planter, they went to Kinze to get a simple planter. So, they were trying to serve as many customers as they could in their area and we just didn’t have the product range.
"There is a clause in the agreement that says that at some point if a dealer gets to a certain level with multiple brands, sales resources and capital investments, that CNH can make you separate the resources. It doesn’t say that we’re going to prohibit you from having it. What we are saying is we want a business plan with every dealer."
— Melinda Griffin, Director of Network Development, Case IH NAFTA
“Now, as our product range grows in R&D and we invest and broaden it, we’re not telling them they can’t sell the products they’ve had before. Remember our Performance Plus payouts start at the North America average, so that’s taking into consideration everything that dealers are stocking today to start with. They can choose whether they want to go get more customers or competitive customers with our product, or they want to display something they have. We’re not telling them to do one or the other, though in all honesty we’d rather they grab new and competitive customers.”
In answering the perception of the purity/alignment issue, Walker replied, “We don’t have anybody out there berating our dealers for carrying competitive lines. No one talks to that.”
Griffin says that once explained, dealers understand. “If you read our contract, almost every section says, ‘in accordance to your business plan.’ Even in the parts section as far as ordering and stocking. We heard a lot about that because when the associations said ‘These are the top 5-6 concerns we have — and it was promoted as a top concern. So, of course, that’s what the dealers hear. But we rolled this out at the end of 2015 and I probably haven’t heard that issue in a year.”
Coming Next … Future installments in the series New Resources in Best Practice Sharing and more.