Dan, Todd and Dick Kunau have bucked the trend of large multi-store dealer networks by taking risks beyond the comfort level of most equipment dealers, such as creating its own RTK network, “Signal at Kunau Implement,” that helps farmers improve their operation’s bottom line.
Kunau Implement is thriving as a two-store dealer network by focusing intensely on customers and staying ahead of the technology curve.
In the eyes of the Kunau family, running two ag equipment dealerships successfully boils down to actions, not words. That philosophy is tested nearly every day as their dealerships serve demanding customers immersed in big-time Iowa agriculture. But sticking to the retail mantra that “the customer is king” is why Kunau Implement is celebrating its 75th anniversary this year.
Staying in business as an independent, family-owned dealer network hasn’t been without sacrifice, says Dan Kunau, co-owner and general manager for Kunau Implement’s two stores in Preston and DeWitt, Iowa.
He recalled one spring when a Kunau employee planted 900 acres of corn for a customer who was having equipment trouble so he wouldn’t get behind — and the customer wasn’t billed for the service.
Another customer whose combine broke down with hydraulic problems during harvest had a rental unit delivered to their yard by Kunau Implement in just a few hours.
“I still believe that keeping customers happy is the key because they’re the ones paying the bills,” Dan Kunau says, “even though sometimes they don’t realize what it costs us to make that commitment to them.”
The future should remain positive for Kunau Implement, selected in both 2007 and 2008 for “Best in Class” status in Farm Equipment’s Dealership of the Year program.
Todd Kunau, Dan’s son, is taking on more responsibilities while his father and uncle, co-owner and DeWitt store manager Dick Kunau, look for more time off. He has been involved with the company for more than two decades and he also believes in focusing intensely on customer needs. This will become increasingly important, he says, as farms get larger, leaving dealerships to compete for fewer customers.
“Whether it’s guidance, or vertical tillage, we think about how we can solve a problem that someone is encountering,” Todd Kunau says. “And I think we do some things that are riskier, or beyond the comfort level of some of the other dealers.”
Locations: 2 (DeWitt and Preston, Iowa)
Employees: 46 total
Key Employees: Dan Kunau, co-owner and general manager; Dick Kunau, co-owner and DeWitt store manager; Todd Kunau, co-owner and sales and marketing manager; Keith Borman, parts manager (Preston); Todd Ganzer, service manager (Preston); Bob Garien, parts manager (DeWitt); Mark Henningsen, service manager (DeWitt); Rodney Bratthauer, precision ag specialist.
Major Lines: Case IH, New Holland, Kubota
Shortlines: Bush Hog, Bradco, Brent, Cub Cadet, Drago, Farm King, Great Plains, Hardi, H&S, Hiniker, Kuhn/Knight, Maurer, McFarlane Mfg., Kuhn, Land Pride, Meyer, Mustang, Orthman, Alo, Ryan, Sunflower, Trimble, Troy-Bilt, Unverferth.
Notable Achievements: “Best in Class” status in Farm Equipment’s Dealership of the Year competition, 2007 and 2008.
A Long History
The events that created Kunau Implement began in 1936 when Robert and Margaret Kunau marketed International Harvester trucks and machinery.
During the 1940s, they built a new facility in Preston, Iowa, and Kunau Implement was born, marketing New Holland and International Harvester farm equipment.
The 1950s post-World War II boom encouraged family farms to grow, and the dealership doubled its staff to accommodate the growth.
Dan Kunau officially joined Kunau Implement during the 1960s and Richard entered the business during the 1970s. A third generation of family joined Kunau Implement during the 1980s when Todd Kunau came aboard.
The Maquoketa location came about in 1989 when a longstanding Case IH dealer went out of business and the contract became available. The location also allowed Kunau to expand its customer base west of Preston.
Five years later, Case IH approached the family about taking the contract in the DeWitt market and the Kunaus agreed. They moved into a new facility with 4-lane highway access. The new location gave Kunaus access to the Quad Cities metro area, which includes Davenport and Bettendorf, Iowa, and Moline, East Moline and Rock Island, Ill.
While the customer base for Kunau Implement is decidedly agricultural, the market segments change dramatically in the 26 miles that divide the dealerships. Livestock customers at Kunau’s Preston store accounts for about 75% of the store’s business. The DeWitt store serves mostly row-crop farmers, but it has a growing base of rural lifestyle, municipal and institutional customers, as well.
Spotting Equipment Trends
Kunau Implement has been a prominent dealer of both Case IH and New Holland products since the 1940s, but the company also carries many shortline equipment brands.
The dealerships have worked hard to identify innovative or high-demand equipment and get it on the lot before their competitors do, Dick says.
He recalled that Kunau Implement added grinder mixers early on in the region because of the profit potential and opportunity to help customers boost their productivity.
Kunau added Hardi sprayers many years ago because of their precision and durability, and Drago cornheads because of the chopping technology and spring-loaded stripper plates that did a better job than most others.
Kunau was a trailblazer in 2006 when it built its own RTK guidance system for customers. And the Kubota line of compact tractors was added 14 years ago, just as the rural lifestyle movement was beginning to take off.
“We’ve always tried to stay on top of things that way, and I think that has been appreciated by our customer base,” Dick says.
Mastering the Basics
Throughout its 75-year history, Kunau Implement has frequently identified and stocked innovative or high-demand equipment before competitors, including grinder mixers, sprayers and cornheads, “and I think that has been appreciated by our customer base,” Dick Kunau says.
Dan doesn’t put much credence in the large multi-store dealer model or rapid pace of consolidation dominating ag equipment distribution in the U.S. and Canada.
He believes the two dealerships have stayed on course without dwelling on the “minutia” of knowing by 5 p.m. every day how much was sold in parts and equipment, or how many labor hours the service techs billed.
“It’s management by walking around and knowing what everybody is doing,” Dan says.
“We closely monitor throughput in the shops; watch how much money we have in the bank; know who owes us money; and know the inventory on hand and how long it’s been there.”
Kunau Implement’s mantra, otherwise, is to keep customers happy, keep them running and offer solutions to their problems.
The parts departments take great pride in laying a critical combine part on the counter, coordinating procurement from another dealership for something the customer needs, or renting equipment to a customer to keep planting, spraying or harvesting.
“You should never let customers go out the front door and ask, ‘What am I going to do now?’ ” Dan says.
Holding Off on Expansion
Dan says the family has seen plenty of chances to acquire more dealerships, but decided it wasn’t in the best interest of the company.
He admitted that a personal friendship once stood in the way. Not long ago, Case IH approached the Kunaus about acquiring a dealership an hour away. The deal would have immediate cash flow.
But this dealership was only 15 miles from another Case IH dealer that Kunaus considered a friend. Dan’s brother, Dick, said buying the dealership would hurt their friend’s businesses, so they declined to pursue the opportunity and let their friend make the purchase instead.
The Kunaus often question whether “wanting more” could jeopardize what they’ve already built.
Dan Kunau says he recently walked into a dealership that was part of a multi-store network and saw 8 employees, including a salesperson, parts employees and receptionist, doing little more than chatting and waiting to punch out. “That’s nothing but expensive overhead,” he says.
“Sometimes people get tied up on all the wrong things,” Todd adds. “If you’re focused on providing good products and being honest and having integrity, everything else falls into place. Getting bigger can jeopardize your focus.” Dan says he hasn’t received much criticism from Case IH for not pursuing more acquisitions. “We sell a lot of their equipment and we pay our bills,” he says.
Staying Ahead of the Curve
A key investment that helped Kunau Implement stay on the cutting edge of dealer development was the creation of its own RTK network.
In 2006, “Signal from Kunau Implement” was built in cooperation with Case IH and Trimble so farmers could take advantage of the benefits of precision ag technology.
For a dealership to do this was a new and radical idea back then. Today, local competitors of Kunau Implement and dealerships across the U.S. are following suit. Kunau Implement took advantage of existing structures for mounting its relay systems and currently has 13 points to broadcast the signal. Each base covers an estimated area of 6 miles.
Kunau Implement accepts RTK subscriptions from customers that purchase GPS equipment from another dealer, but they surrender the technical support that comes with the membership and subscription fees.
The Kunaus saw the network as an opportunity to show leadership and problem-solving capability with customers, including the early adopters who later convinced other customers to pursue precision ag.
Kunau Implement reinforces its brand in a variety of ways, such as billboards placed at showroom entrances during year-end clearances, and by publishing “Kunau Territory,” a 4-color, 8-page brochure promoting dealership events, equipment innovations and more.
Todd says the RTK system allowed Kunau Implement to be seen in its market as a technology leader at a time when precision ag was beginning to take off.
“The RTK system gave us access to competitive users that weren’t getting what they needed from other branded dealers at the time,” he says.
“It’s also given us access to some of the inline competition, and allows us to get a premium for our product because customers know our technological expertise comes with it.”
Kunau’s precision ag specialist, Rodney Bratthauer, adds that the RTK system is helping the dealerships sell iron. While recently attending CNH’s precision ag conference, Bratthauer saw charts that showed how dealerships engaged in precision ag are also among the leaders in selling high-horsepower tractors and combines.
Should a dealership decide to build its own precision ag network, Bratthauer believes it’s essential to devote the resources to ensure the system works and can be maintained.
Face-to-face interaction is critical to selling RTK service because the technology is sophisticated and customers need to know what it can do for them.
“You need the personnel in place who are educated on it,” Bratthauer says. “You need to be able to sell it, service it and support it. And when the busy times come in the spring and fall, it’s not about working 8 to 5. You’ve got to do it all and know it all.”
Spinning Old Marketing Ideas
Another way Kunau Implement focuses intently on customers is through high-quality, customized marketing and special events.
The dealership spares little expense to produce fliers, brochures and other material that brand the dealership’s name and mission in the local market.
Todd Kunau says Case IH executives have been supportive of creative marketing efforts at local dealerships and they usually don’t react negatively if an experiment doesn’t pan out.
“You can see we have organic lawn fertilizer, safety equipment, safety hats and belt buckles and weather vanes in our showrooms — things that are a little different,” Todd Kunau says. “If that doesn’t work, we’ll try something else. We just throw it up there and see what happens.”
A Message Worth Reading. Any dealership can put out a flyer that screams about sales events and slogans. But Todd decided to create something with a little more quality and focus.
Six years ago, he began assembling two different 8-page, full-color newsletters. “Kunau Harvester” was produced for row-crop farmers and “Kunau Territory” for hobby farmers. The publications have since been combined into a single newsletter.
“I wanted to put something out that’s high quality and has a longer shelf life,” Todd says. “Hopefully, the customers put them by the Laz-Z-Boy in the family room, pick them up over a few weeks to read it, and they’ll get another one in a few more weeks.”
The brochure, with a personal, signed message from Todd on the inside cover, has evolved from a sales tool into an editorial one, with messages that promote dealership events, developments in technology or new equipment lines acquired by Kunau.
One 2009 edition discussed the latest equipment from mainline suppliers and announced a summertime “efficiency clinic” where customers could learn how to better use the technology available on their equipment.
“It’s branding for our dealership. We’re giving customers a feeling of who we are and what we stand for,” Todd says of the newsletters. “It’s another place where they can see our brands and the things we’ve got going on.”
Calling All Buyers. In late November, after the buzz of harvest dies down, the Kunaus send a flyer to customers about Kunau’s end-of-year closeout sale to boost equipment sales and move excess inventory.
Through the years, the Kunaus identified a sizeable group of “year-end” customers who want to know what equipment their dealership has and its price. While there’s always a risk of bombarding customers with too many advertisements, Todd says the response has been phenomenal.
After the fliers go out, Todd puts a large display board on an easel inside the front door when the closeout takes place. The board shows the available equipment and the price.
“We cross off the sold items so people can see there’s an active sale going on, that it’s an actual event,” Todd says. “We had another success with this in 2010, and let it run into the middle of January. It gets people buzzing when they can see what’s been crossed off.”
Opening the Doors. Yearly open houses aren’t a new idea at dealerships, and they’ve been done at Kunau for a number of years, too. But employees began rethinking the event a couple of years ago after it seemed to get stale.
“Growing up in this business, on open-house days you’ll see a line that runs out of the facility and down the sidewalk, and it’s people you’ve never seen before or will ever see again,” he says. “So you ask yourself, what does it mean to your customers?”
After returning from Case IH’s parts trade fair, DeWitt parts manager Bob Garien talked about the small carnival, tables of vendors and frequent giveaways he witnessed.
So Kunau Implement borrowed some ideas from that event and hosted its first revamped open house in 2009.
The employees cleaned out a corner of the shop at each store, added vendors from the Case IH fair as well as some local ones, organized seminars and offered customers a chance to “come and talk to experts,” Todd says. Mark Henningsen, service manager in the DeWitt store, suggested the dealerships give away a flat-screen television to attract more people. So Kunau Implement gave away two.
“It was a lot more fun for everybody. Everybody learned something, and some people stayed all day,” Todd says. “It’s something more valuable to the customer than just a free burger.”
Helping Customers Succeed. Kunau Implement is still getting some mileage from precision ag field days, combine clinics and efficiency clinics.
They organize these events to show customers how they can better use the innovative technology on their equipment, and how that technology can improve their operation’s bottom line.
“The Automatic Productivity Management featured on some of these Case IH tractors will select the right gear and RPM for maximum fuel economy. Not every dealer even knows that’s on there,” Todd says. “So we’re bringing value to our growers on things they’ve already invested in.
“Technology is driving the sale of the products,” he adds, “and if you don’t understand the technological part of wholegoods, then you’re out of business. It’s just that simple.”
An Extended Family
Dealer owner-principals often say — almost to the point of cliché — that their employees and customers must be treated like family.
But such a statement is taken very seriously at Kunau’s dealerships, and Dan says he’s made sure that filters down through the two stores.
Employees are allowed to flex their schedules to attend personal appointments or their children’s events.
The Kunaus are also big believers in an open-door policy that allows employees to ask questions or voice frustrations, so negative energy isn’t transferred to customers.
Dan recalled a recent morning where several employees in the Preston store were joking with each other as the work day arrived. A young man about to get married was absorbing most of the friendly ribbing.
“There are some businesses you walk into and you can feel the tension,” Dick explains. “There’s been a conscious effort on our part to not have that kind of atmosphere. It’s about keeping people on the same page. Our employees are our most important asset and we want them to know that they are appreciated.”
It’s also essential for employees to have a humble attitude with customers, Todd Kunau adds. Farmers who have bled red, blue or green in the past might not do so forever, and he’s seen many multi-unit customers switching frequently from brand to brand.
“Sometimes you go to meetings and talk to salesmen from different parts of the country and they’re grousing about their customers,” Todd Kunau says. “What I say is that we’re trending toward larger farms today and these customers don’t need to do business with you. We need to earn their business on our merits”