2006 Dealership of the Year Winner
David Meyer, CEO, Titan Machinery
All the instruments in the band need to be working together to play good music.
We need to understand what is important to the customer, what drives his purchase decisions and what differentiates you and your dealership from the others. Farmers work hard, take risks, respect honesty and integrity, believe in family and community, and invest in their operations to prosper through the generations. They are practical, have a large amount of common sense and are for the most part self-sufficient.
Invest in your dealership
Dealerships need to invest in facilities, semis, trailers, tools and equipment to get the job done. Function over glamour is important, but image, cleanliness and overall stewardship must be a priority. Farmers get up early and put in long days. Dealerships need to be accessible when customers need them. It needs to be easy for farmers to contact us. Pagers and after-hour emergency numbers are all noble, but nothing beats being able to drive to the dealership, being open for business and staffed with an eager person wanting to be of service.
Hire the best service technicians
You want a number of technicians that can fix anything, take pride in their work, present themselves well, have great attitudes and would go to the ends of the world for you and your customers. Pay technicians well, don’t ask them to do anything you wouldn’t do yourself. Make sure they enjoy coming to work and make safety as a priority. Spend time in the shop, have a beer with them once in a while and have respect for them and their families.
The biggest value dealers bring to their customers are replacement parts. Counter fill, knowledgeable parts personnel, reputation for stocking parts and accessible parts departments are a must. Watch your parts obsolesence.
Hire effective sales people
You want to have the salespeople in your stable that customers want to buy from. Make sure they are hungry fighters, honest, smart, and can close. Customers will buy from their friends. You want your sales people to be best friends with your customers. Make sure your sales people are financially accountable for their used. Sales compensation should parallel the interests of the dealerships. I believe in straight commission for salespeople with checks and balances for inventory management, margins, used valuations, and market share. Don’t cap the sales compensation. Let the performers make some money. Feed the Stallions!
Marketing, Marketing, Marketing
Promote to your customers. Offer clinics, field days, plant tours, open houses, customer appreciation events, special trips and capitalize on every opportunity to spend time with your customers. Brand your dealership. Put resources toward marketing and do it wisely. Direct mail, target marketing and electronic communication are the most effective. Don’t underestimate the power of the internet. Survey you customers. Insure your customers are “delighted” with all aspects of your business.
Be a leader in the eyes of your customer
Have a reputation of unwavering honesty, character and integrity. Be involved in your community. Support 4-H and FFA and the youth, which are the future of Agriculture. In summary, your customers determine the level of our success. Putting the profitability of your customer as a priority by investing in people and asset resources will make your dealership the first choice for your customer to do business.
Know where your cash is and manage your company to grow cash
Income statements and bottom-line profitability are important but pay close attention to your balance sheet. The best performing dealerships are market-share leaders with “best in class” balance sheet management.There is an important “backside” of the business that should be invisible from the customer but of huge importance to the long-term success of your dealership. Strong accounting, efficient systems and processes, computer business systems, documentation, records, planning and budgeting, are imperative. I must emphasize the importance of accurate and timely accounting with meaningful reports. Surround yourself with the best accounting and legal advisors.
Understand your capital needs and develop strong banking relationships
Make profits, pay taxes and grow your retained earnings or personal wealth. We are in this to make money and you have a responsibility to your family, employees and stakeholders to optimize your financial results.
Know your suppliers well and develop long-term win/win partner relationships with your mainline supplier
Put human resources as a priority
Develop a policy and procedure manual. Hire good, smart talent. At a minimum, have annual performance reviews. Have a small percentage of employee compensation tied to position and dealership performance. Define employee expectations, monitor and periodically discuss them. If possible, have employees participate in ownership or financial success of the dealership. Thank your employees and find opportunities to show your appreciation.
Take time to look at long-term strategies
Have the vision to map the future direction of your dealership. Watch your markets and do what is necessary to insure market opportunities to sustain long-term growth. Keep an eye on succession. Don’t be so concerned about what percentage of your business that you own, but rather maximize the value of the percentage of the business you do own. This could involve non-traditional ownership arrangements, capitalization, mergers, partnerships, venture capital or even the public company arena.
Being a manager and leader are important
But truly, farm equipment dealers are entrepreneurs. Entrepreneurs always have their nose to the pavement looking for opportunities. They embrace and manage risk and they have a true passion for what they are doing. Entrepreneurs have a steadfast determination to accomplish results and most important, entrepreneurs and successful dealers have the rare quality of being able to consistently execute.
You are a salesperson and you are always selling. The “art of the deal” will always be a part of this business.
The farm equipment business is exciting and rewarding. Every day, there are new opportunities and challenges. This business is not for the weak of heart, but rather those with a positive, can-do attitude, strong work ethic, smart business instincts and a love for the farm, agriculture and rural America.