“Innovation begins with shortline manufacturers and those innovations bring greater margin opportunities.”
The major lines’ push for brand-pure dealers has been grappled with for decades. For some, the debate comes down to a matter of loyalty, efficiency and economics. For others, having hands tied on being able to sell what the customer wants hinders both market penetration and encourages customers to shop elsewhere.
While the shortline manufacturers would differ, Todd Kunau, dealer-principal at DeWitt, Iowa’s Kunau Implement doesn’t feel any heat. But then again, top-performing dealers like Kunau aren’t likely to face the same pressures as some of their peers.
“We feel that it’s important to have the shortlines in our dealership,” he says noting that a multi-line strategy has long been a vital part of the dealership’s success.
Pointing to his dad and top salesman, Dan, Kunau cited a progression of good decisions surrounding shortline additions, starting with grinder mixers, skid steers, no-till drills and yield monitors. The latter, he says, spurred the dealership’s early innovation in precision ag. The dealership was the first in the area to provide farmers with an RTK tower network.
“That decision continues to pay dividends for us,” he says.
For Kunau, a multi-line strategy boils down to being true to a vision. “We need to be comfortable with our decisions, and that also brings a commitment to seeing a certain philosophy through in your store,” he says. “Brand purity falls short of true market penetration if we look honestly at all the business in our market. You need to put it into perspective how you’re choosing to approach your market and serve its needs.”
Kunau points to the concept of “wallet-share” and how only a finite amount of business exists in any market. It comes down to “what are you doing to capture that business and bring it in the door.”
Actively selling many lines isn’t always easy — it requires a commitment and skill to go outside comfort zones.
In addition to anticipating other complications, dealers must look in the mirror. “Do you have a desire to put the resources, effort and time into managing relationships with all these other vendors — the tracking, order writing programs, etc.? It can get pretty complicated.”
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On the other hand, Kunau maintains that innovation begins with shortline manufacturers and those innovations bring greater margin opportunities. And as Kunau stresses, it’s often the specialty product that gains the dealer entry into that farmer’s shed. “It’s presumptuous to think that we can go into a competitive user’s shed and trade him out of his combine. It’s easier to sell a new corn head or grain cart and give us a chance to prove what we can do for the customer. Then, you can move the relationship forward.”
When it comes to deciding on additional lines, the process is customer driven, he says. “We’re doing our due diligence so our customers don’t have to. We are a resource to suggest a direction that they hadn’t considered before.”
For Kunau, a multi-line strategy is more than just a tool for market penetration; it is a matter of philosophy and vision. Not everyone wants to be on the bleeding edge of technology and dealers need to be honest with themselves. “Be true to the vision of your company,” he says.
Originally published in 2013