Prying customers away from competitors is always challenge, but keeping the customers you already have also needs to be a priority.
“There’s an abundance of statistics that say a satisfied customer might tell one or two people about a good experience, but a dissatisfied customer will tell 20 people,” says Cleve Buttars. And he doesn’t like those odds, particularly in light of the changing demographics of farming these days.
“It’s a fact that each year we’re dealing with fewer and fewer customers as smaller farms sell out to the bigger operators. It’s just the way it is. So if you lose a customer, it’s a true loss. There aren’t many replacements out there.”
Farms are consolidating and getting bigger, and so are farm equipment dealerships. And Buttars, CEO and owner of Agri-Service, knows as well as anyone how easy it is to lose touch with customers especially when a dealership is expanding and reaching into new locations.
With 150 employees in 8 eight retail stores and one service location across Idaho, Northern Utah, and Eastern Oregon, Agri-Service is the largest AGCO dealership in North America.
Almost from the time he bought his first farm equipment store in Twin Falls, Idaho, in 1990, Buttars has been on the grow. But so have the other dealerships around him. All of the major brands are in southern Idaho, and they’ve all grown into multi-store operations and increasingly tough competitors. Prying customers away from them is as difficult a challenge as there is. But losing customers to them is absolutely unacceptable.
Keeping customers happy is the Agri-Service goal, but the long-term mission is to keep them coming back.
Consistent Customer Care
Effectively retaining customers has become an ongoing priority at Agri-Service. Buttars acknowledges the need to create a customer-friendly environment in his stores, and that the structure of the organization itself can play a role. But like so many business programs, maintaining your customer base can’t be left to chance. In today’s competitive environment, it takes continuous attention.
While keeping customers happy is everyone’s job, Buttars knows it takes more than good employees working hard. It needs to be a systematic effort that requires meeting customer requirements and consistent communications and behavior. But it goes beyond the customer to the dealership staff as well as the organization itself. Providing a structure and making it a focal point of the entire dealership led to the creation of a new department that focuses specifically on customer retention. “That’s what we call it, the customer retention department,” Buttars says. “We created it for one purpose and that’s to provide consistent contact with our customers.”
To staff the new department, Agri- Service hired a full-time employee who knows farming. His sole responsibility is to call customers following equipment deliveries and before equipment warranties expire.
“He’s not a telemarketer and it’s not an outside service,” Buttars explains. “He works for us and his job is to make sure everything is OK with the customer’s equipment, and that we get all required service work done while it’s still under warranty.
“He has all of the customer information in front of him when he makes the calls. He knows what they bought, what they bought it for, how it’s supposed to be equipped, details of the warranty, and any and all promises that were made.”
But this is only part of the job. “Just as important, he makes follow- up calls to report any concerns the customer may have — whether it’s a missing tool box that was promised or an unresolved service issue. He’s the messenger. His job is to make sure that things get done,” says Buttars.
So far, the dealership is getting “tremendous response” from customers. “People just appreciate the effort and follow-through,” he says.
The ‘Top 200’ List
While the new one-man department has become instrumental in Agri- Service’s customer retention efforts, the owner also believes that everyone at the dealership needs to play a part in keeping current customers. Another facet of the program includes compiling a list of the top 200 customers at each of the Agri-Service locations. Working with its computer and software supplier, each of the 8 Agri- Service stores has compiled a list of its best 200 customers in terms of parts, service and wholegoods sales.
“We know who they are, and this part of the program is aimed at making sure we’re giving them extra attention on a scheduled basis, whether or not they’ve made a big purchase recently.
“It’s easy to say, ‘We see those guys all the time.’ But sales and service people get busy and before you know it, they haven’t touched base with their good customers for 3-4 months.
This isn’t acceptable. As far as I’m concerned, we’re married to our customers and they need constant contact,” says Buttars.
Touch points might include personal notes, e-mails, phone calls or personal visits, and each contact is noted in the customer record. It’s all part of creating a customer-oriented culture throughout the organization.
Nurturing Internal Culture
Buttars understands well that developing a friendly and welcoming environment in each of the Agri- Service locations also plays an important role in keeping customers satisfied.
“We work at being very friendly and welcoming,” says Buttars. “We want customers to feel comfortable coming into any of our stores and with the people they meet. That, of course, is one of our stated goals.”
Making it work is often a matter of paying attention to employee behaviors that work against the kind of culture Buttars is trying to develop.
One area that he believes is often overlooked is employee attitudes toward each other. It’s needs to be given the same level of importance as their approach to customers. “Internal conflict will kill a business as quickly as anything,” he says. “It needs to be addressed quickly.”
If an employee needs to make an “adjustment” to their work behavior, they’re made aware of it. “As long as they’re making progress, we’ll work with them. But sometimes you need to cut your losses and move on. The days of workers being so confident that we put up with their personality disorders are gone. It’s no longer tolerable,” Buttars says.
Screening employees during the interview and hiring process is critical to developing a customer-oriented culture. “If the choice is between two applicants, and one has an experience or technical edge, but the other has an overpoweringly better personality, we’ll go in that direction. You can take a good personality and develop a confident worker that cares about the customer,” he says.
The dealership has also found ways around the adversarial relationship that can often develop between sales and service. “How much the shop puts into fixing up a trade-in can affect the salesman’s pay,” say Buttars.
“We avoid this situation at the time the sale is made because reconditioning is handled through a separate budget and isn’t charged against the sales commission. In some cases, our salespeople will get higher commissions because reconditioning isn’t charged back against the sale like it is in most dealerships. But it’s important to us that sales and service get along.
“We ask our salesmen to give their best effort in analyzing a tradein. If they miss it big-time, then we’ll address that as a separate issue. We have a long history and other tools that take a lot of the guesswork out of it. Nonetheless, we win some and we lose some, but it all washes out in the long run and we keep peace in the family. It works for us.”
In Buttars’ view, it all gets back to developing the kind of organization that stays focused on customer needs and not internal issues, and plays into the very nature of how Agri-Service is organized and managed.
The philosophy of the owner is that employees should do what they do well and not be distracted by functions that others can do better. In the case of Agri-Service, all business functions take place in Twin Falls, which allows store employees to focus on their customers. At the same time, communications and consistency are critical in making this type of organization work.
“If we were a government, I’m not sure how you would describe us,” says Buttars. “We might be a representative republic because everyone has a say, but we really don’t stress store management, per se. Each location has a store leader, but if everyone is functioning as planned, his duties are basically to call the fire department if there’s a fire and to generally keep things coordinated and rolling. All of the bookkeeping and purchasing comes out of Twin Falls. The stores don’t need to think about any of it.”
The whole goal, he says, is to get salespeople doing what they do best — talking and selling. When it comes to paperwork, all that’s required of them is to get customer signatures during the sale. Everything else is done at headquarters, where a threeperson finance department prepares all contracts and credit applications. “If more information is needed, the ladies in finance call the customers because they do a more thorough job of it,” says Buttars.
Communication is facilitated with twice-a-month sales meetings, monthly get-togethers with store managers as well as monthly parts and service meetings. Office staff meets on a quarterly basis. Local staff meets face to face at the Twin Falls store and the others are present via teleconference, but the dealership will be switching to webcasts in the near future.
Buttars says these meetings are absolutely critical to the success of the dealership because all companywide policies are developed at these staff get-togethers. “This type of regular communication gives us consistency between stores and throughout the organization,” says Buttars.
Consistency is Critical
Along with communication, uniformity throughout the 8 stores is imperative because it evens the playing field for employee and customer alike, which is particularly important when it comes to sales. Buttars says the Agri-Service web site is critical to the communications function.
A customer can walk into any one of the Agri-Service stores looking to buy either new or used equip and all of the salespeople are working from the same script. All of the equipment — both new and used — is prepriced and the advertised prices are the same for all the stores.
The salespeople have parameters in which they can operate, but they’re not allowed to sell new products for more than the standardized price. All quotes are forwarded to headquarters and salespeople throughout the dealership have access. If a customer tries to shop price among the stores, the system is designed to prevent salesmen from providing different numbers from the original quote.
There’s no financial advantage for a salesperson in selling the inventory at his stores. “We have specials on old or discounted inventory and everybody participates in that,” says Buttars. All salespeople have access, via the web, to the complete used equipment inventory for the entire company, with multiple photos depicting each piece of machinery. “Our web site is critical to the whole sales process,” says Buttars. “We have standardized charts that show the trade-in values for our company for common equipment that we handle, like big balers.
We develop the charts based on our knowledge and history and we also utilize the IRON Solutions used equipment services.”
With all of this in place, Buttars says, the dealership has taken “most” of the guesswork out of selling. “All of our salespeople should be able to provide pricing on both trade-ins and new equipment within minutes. This also builds customer confidence.”
Good Business Practice
Some estimates put the cost of capturing new customers at nine times that of retaining ones that a business already has. Buttars believes that too many businesses take for granted that their employees are consciously aware of the importance of keeping satisfied customers coming back. This, together with a shrinking farm customer base, he says, continues to push Agri-Service into looking how it can become a more customer-focused business.
“I suppose some people might think that what we’re doing here is just sucking up to our customers, but it isn’t. It’s just basic good business practice, but it has to be carried out in a professional manner and not be just a surface kind of thing. It’s hard to fool a farmer for very long.”