To foster ‘from the front line’ understanding in this unprecedented time, the editors of Farm Equipment just launched a new video series. The “Farm Equipment Thought Leader Video Series” consists of brief, 1-1 conversations with influencers from different segments of the farm equipment industry. Below is a short sampling of takeaways for a portion of the first videos of the series. You can watch the full video interviews at
Keith Kreps, COO, 21st Century Equipment, Scottsbluff, Neb.
Keith Kreps joined the John Deere dealer group in late February, right before the world changed, which altered his 90-day plans and desire to be out in the stores (while at RDO Equipment, he regularly tallied 200 days a year in the stores themselves). While he’d made it to one-third of the stores before getting grounded, a plus of remaining in his new Scottsbluff, Neb., office for that time, he says, was he could assess the culture of the organization from afar, and in unusual times no less. “Really, I think it gave me a quicker assessment of how strong the culture is in the organization.”
21st Century did not close any showrooms during the crisis, though it limited showroom traffic and made other modifications. “One of our locations came up with the idea to put a table out in the middle of the show floor with a computer and a monitor facing the customer. That way visitors only came halfway into the dealership, and we also eliminated congestion at the parts counter.”
The dealership had a strong start of the year and hasn’t seen any drop in sales to date. “Even if we see a slowdown, we think that maybe flat to 2019 is the worst-case scenario for 2020. But people will need to be comfortable walking into dealerships, grain elevators, etc., by August for us to be comfortable with where we’ll be for sales in the first quarter of 2021.”
Kelly Mathison, Consultant & Trainer, Western Equipment Dealers Assn. Dealer Institute
Kelly Mathison usually spends most of his time on the road, visiting dealerships and providing training and consulting services. Contained at home since mid-March, he’s now been creating short videos for the WEDA YouTube channel as well as doing virtual training and consulting sessions with dealers.
During the spring pandemic, many dealerships reported an increase in farmers buying parts online. But, with that increase in online purchases, Mathison says, there’s a decrease in the “impulse purchases” a farmer might make.
In normal times, parts people can proactively suggest add on items to customers. “If you’re buying this, you may need this or you might need a few of those to go along with it,” he explains. “But, if they’ve made that order online, you may not even have the chance to talk to the customer.”
Mathison advises dealers to respond by creating machine-specific convenience packages that include 10-15 items a customer might need for different pieces of equipment. “It’s $200, and it’s got everything you probably are going to need for service accessories. A customer might say, ‘That’s perfect. I’m going to need all that stuff anyway.’ This makes it so much easier for the customer. It makes the customer happier and it drives your impulse parts sales,” he says.
Arlin Sorensen, Founder, HTS Ag, Harlan, Iowa
With more than 40 years of business experience, Arlin Sorensen has navigated through more than a few leadership crises. Change is inevitable out of crisis, but the key to emerging successfully is a willingness to embrace and adapt from that change.
So what kind of climate can we expect in the next 6, 12 or even 18 months? Chances are, it will be more similar to what we are experiencing today than what we did a year ago.
Sorensen, who founded HTS Ag, an independent precision farming dealership in Harlan, Iowa, suggests aspects of how dealerships do business and operate will be forever changed — in some cases for the better — as a result of their experience adapting to COVID-19.
“Change is going to be survival,” he says. “Two months ago, few companies would have thought they’d be able to run an efficient business with employees working from home. Today, they’re seeing that it can run pretty well and I think even within dealerships, we’ll see some rethinking of workforces and how services are delivered and where they are delivered from.”
Precision specialists tend to be scarce at dealerships during planting and harvest anyway. Going forward, will they spend even less physical time in stores and become virtual employees, especially with the increased use of remote support during the last couple of months?
Sorensen also sees the purchasing model evolving, as customers get more comfortable with making equipment purchases online. He cites the time when consumers were skeptical about buying cars online, but as the market matured, it’s become an acceptable, efficient way of completing a transaction.
“There’s a lot less cost involved, and we’ve all learned how powerful a tool virtual meetings can be,” he says. “I wonder if ultimately, we’ll continue to see salespeople driving all over the countryside to make sales calls when they can target those appointments without ever leaving the office.”
Bill Howard, CEO & Founder, Fastline, Buckner, Ky.
Bill Howard cites a common misconception in marketing — that it can or should work better than in-person selling. “Most haven’t done local research to find how many personal contacts are needed to sell a product. Nationally, the Harvard Business Review and others used to say the average was 5-6. With the computer age, you’ve got to able to hit somebody 17 times, probably even more for capital equipment like in ag.”
Howard maintains that no one wants to waste marketing dollars now, and encourages dealers to be smart and discerning, but active. “History has shown since the Great Depression that companies that keep their name in front of the buyers recover faster. You don’t want to wait until it’s clear. And Mother Nature doesn’t let your customers wait another 30 days to go to the field just because there’s a virus.”
Howard says dealers need to change their marketing messages to reflect the times. Likewise, his company came out with a COVID-19 relief package to offer to dealers and acknowledge the pandemic and respond in marketing to it. He also added that dealers who’ve set up good curbside parts service should be promoting it so customers and prospects can be comfortable doing business with them.
Tim Norris, Business Development Manager, Raven Autonomy
Momentum for autonomy in ag continues to accelerate with driverless systems being developed and demonstrated. However, over the past 6 months, companies have adapted the pace of progress to accommodate the unavoidable impact of COVID-19.
Tim Norris works to develop Raven’s dealer network by scouting and researching prospective partners. Like many, Norris — former CEO of Ag Info Tech — has been working from his Ohio home, but his strategy to develop the seller market in autonomy continues.
He and his team have pushed forward with coordinating opportunities to showcase the company’s AutoCart and DOT platforms. With uncertainty surrounding summer and fall farm shows, strategizing targeted demonstrations with select dealers is a priority.
“We’re coming out with a whole new concept in autonomous technology, so they need to see it in action,” Norris says. “One of the things that we implemented was a dealer demo program where we’re getting dealers to purchase a system at a discount and then train them. Our plan is to do a traveling road show at those different dealer locations where we invite several groups of 10 or fewer people to come in.”
Alpha testing at remote sites is critical to moving forward with development while still respecting the COVID-19 guidelines. Still, Norris explains that they are running these platforms with an appropriate level of human supervision.
Testing at the Raven Innovation Campus in Sioux Falls, S.D., has continued, but operations at sites in California and Arizona were suspended. However, a Raven Autonomy team member, along with his wife, drove a rented camper from Iowa to live at the California site and resume testing.
“It’s on a farm in the middle of nowhere, so they were able to creatively and safely work around the challenges to keep things moving forward,” Norris says. “In spite of the current situation, we are successfully running two alpha sites and testing the equipment every day.”
Jeff Bowman, Chief Experience Officer, Titan Machinery, Fargo, N.D.
Winston Churchill said, “never let a crisis go to waste,” recalls Jeff Bowman, who led e-commerce at Caterpillar before joining Titan Machinery’s executive team. “We’re learning things through this coronavirus that are worth maintaining when we get to a new normal.”
After seeing e-commerce spiked in every sector with the coronavirus, Bowman says some customers will return to the parts counter and some won’t. “If a dealer has not been aggressive in selling parts online, now is the time,” he says, noting dealers can “catch up” in short period of time.
Customer Experience — “Curbside pickup, dropboxes and in-store shipping kept us serving customers even when the front doors were locked. These things will be an advantage to dealers who continue or expand these simple services. We don’t want to go back to the days of being ‘begrudgingly online,’” because it’s needed to deliver a premium experience. He also added that some dealers are starting to use automated lockers for parts pick-ups (with confirmation and credit card payment) that allows them to access parts well after the dealership’s normal hours.
Customer Communications — “As more communications are completed by phone call, text messages and especially video, dealers need better ways of tracking customer issues and requests, especially for service and precision farming. Tools like AgriSync and phone systems integrated with dealer business systems are great assets to ensure a coordinated effort to serve the customer.”
Employee Experience — Titan discovered that a lot of work can still get done working remotely. Bowman observed that staggered shifts could be a trend even with service technicians. “Techs could be staggered at 4-day weeks — and greatly impact employee satisfaction at the same time as their safety.”
Expenses — As teams learn how to work together virtually, there is opportunity to reduce the time and expense for travel. “Customer events, factory visits and other relationship building is important to do face-to-face, but 10-15% of travel-related expense can probably be eliminated for good.”
Jim Wood, Chief Sales & Operations Officer, Rocky Mountain Equipment, Calgary, Alta.
In 2018, Rocky Mountain Equipment (RME), Case IH’s largest dealership group in Canada, entered the U.S. market with its Dealzone outlet store in Tonganoxie, Kan. The location just outside Kansas City was chosen because of its proximity to CNH’s combine factory in Grand Island, Neb., explains RME’s Jim Wood. And, he says they’ve just announced plans to open up another Dealzone location in Canada within the next month. “We’ve had great success in Kansas and feel there’s a need to have the same model in Canada,” he says.
The intent with the outlet store in Kansas, Wood says, was to move late model used equipment that had a demand in the U.S. market. “We had plenty of it in Western Canada because our sales haven’t slowed down since 2013 like the U.S. has. Since then, it’s evolved. We’ve added an extra salesperson and they have access to all our used inventory in Canada.”
Once a trade is taken in, it’s available to the entire organization to sell.
“When we first started in the fall of 2018, we started moving equipment down there because our new sales are very heavily loaded to pre-sale and to the fourth quarter. We ensured that we had the location set up in the fall of 2018 and then as we went down to the combine factory to pick equipment up to bring back for Q4, we would drop stuff off in Tonganoxie,” Wood explains.
Wood says RME has moved its focus to selling used equipment, and over the last 5 years has averaged about $370 million per year in used equipment sales. “But we’re also trying to have a 1:1 ratio. And there are some years where we’ll sell considerably more new than used. Then you start to see that used pile up. We all know that used equipment is a huge risk for a dealer group, but it’s also a large source of income. So, we’ve just taken a healthy approach that we want to get our used down to a manageable level, and in doing so we’ve purposely backed off of the new business.”
Wood will share more details on RME’s used equipment strategy and outlet store concept at the 2020 Dealership Minds Summit — Profit Moving Trades — Aug. 4-5 in Omaha, Neb. Learn more at www.DealershipMindsSummit.com.
Jamie Meier, Director of Sales, Landoll Corp., Marysville, Kan.
Providing a shortline equipment manufacturer’s perspective was Jamie Meier of Kansas-based Landoll Corp. After a quiet ordering period this fall, Meier says tillage tool orders boomed in the last half of December and carried well into January.
“Farmers were late getting the crops out of the field, many ended up with more bushels than they anticipated, and the market facilitation payments also led to strong buying,” he explains. Last year (2019) was a good year and 2020 started out strong for the company as well.
A big challenge of the pandemic for manufacturers is managing the supply chain. “Suppliers were backed up even before the coronavirus hit — some out as many as 6 months — but it complicated things further,” he says, noting that as many as one-third of some suppliers’ workforces were suddenly staying at home. Landoll needed to tap more into secondary suppliers and even so, missed the opportunity to take new retail orders this spring.
R&D. Meier says Landoll has long continued its engineering and R&D activities in spite of whatever the market conditions may be, an approach that publicly held or stocked own companies may not be able to afford. “When our projects and prototypes are ready to go, we’re not holding back.”
Outlook for Sales’ Return. Looking back on the age of Landoll tillage tools sold in the 2013-14 heydays, he says, “We’ve got some pent-up demand.”
“But if you look only at commodity prices in this business, you’re going to be behind. Whenever this thing changes, it’ll probably change before we realize that it’s going to, so we’ve got to be ready to go.
“Right now, things look like they could be tough. But things could start to swing, like a weather condition or hopefully more soybean exports.”
Independent manufacturers, he says, can emerge in a stronger position if they have the courage to move forward and can be quick on their feet when the demand returns.
“There’s going to be great opportunity for the dealers that have some level of inventory. I think we could still have a good 2020.”