Increasing call volume, scarcity of technician time prompts Minnesota dealer to start charging for phone support.
Charging for precision service calls is a move dealers can be hesitant to make, in part because there is the risk of alienating loyal customers. But they also acknowledge it’s an increasingly necessary step to manage customer demand and potentially create another source of revenue.
Single-store dealership L&D Ag Service in Hartland, Minn., made the decision to put a price tag on precision phone support starting in January, although not without some anxiety.
“We have the word service right in our company name, so it’s a pretty big part of what we do and our reputation. We didn’t want to lose that,” says Travis Routh, general manager at L&D. “In a way, that’s also our downfall, because we get people relying on us for service that don’t buy equipment from us. We started getting stretched with our capability to keep up with demand.”
L&D is a longtime dealer for Trimble, Ag Leader and Raven, and precision products account for a third to half of the its business. The dealership also sells liquid application equipment, sprayers and grain carts.
About 10 of the dealership’s 30 employees are dedicated to selling and servicing precision equipment, but throughout the years Routh has seen an increase in the number of customers turning to the dealership for technology support, despite not having purchased equipment from the store.
Travis Routh, general manager at L&D Ag Service in Hartland, Minn., shares how the single-store dealership set up their precision farming service plans, including some of the concerns and expected benefits of trying to make precision service a profit center.
“Last year we were taking in 500 to 600 service phone calls a day on average, not counting cell phone calls,” Routh told Precision Farming Dealer during a recent tour of the dealership. “Whether the equipment came from us or not, the phone call volume was increasing and the tech support was in such high demand, charging a fee was a move we needed to make to try and generate some income.”
Starting in January, the store began charging for precision phone support — giving customers the option of a per-call charge or an annual fee. Generally, Routh says customers pay about $25 per call or $400 per year for unlimited precision phone support.
“There are a lot of stipulations, like if the equipment is new, we don’t charge,” he says. “We’re also not turning people away. But if they want our help or to use our time, it’s going to cost.”
To try and minimize confusion, L&D began notifying customers in advance about the service fee through an open house, brochures and emails. But Routh acknowledges that the effort probably only reached about 10% of the dealership’s customer base.
Still, he says loyal customers appreciated the proactive approach and they’ve stuck with the dealership. Those who purchase equipment from other dealerships haven’t been as receptive to the change, Routh says.
“They are the price-shopper types and would rather not have us charge for support,” he says. “We’re still struggling with that a little bit, because we feel a little guilty because we’ve had so many loyal customers we don’t want to lose them. But we also know we’re going to lose customers if we can’t answer the phone.”
Routh says the dilemma of when and how to charge for precision phone service is one that dealers will likely face — if they haven’t already — as customer demand increases and technicians are stretched to the limit.
His advice, based on the approach taken at L&D, is to consider a phone service fee structure to help control service call volume and allow technicians to provide quality support to customers, as well as to generate income to help pay for new employees and training.
“Those are the things we’re trying to accomplish with our set up,” Routh says. “We’re still learning on the fly, but we realized there are only so many calls you can take and only so much help you can give. Our goal is to keep customers happy and keep their equipment working.”