Featured Video

Check out these informative videos from Rural Lifestyle Dealer.

‘Getting Out There’ Gives California Dealer a Leg Up

Getting in front of the crowd and involved in its community paved the way for C&N Tractors to grow its rural lifestyle customer base.

Founded: 1974

Major Line: Kubota Tractor

Shortlines: Gearmore, Domries, Strathmore, Land Pride, Solex, BEFCO, Stihl

Locations: 3 (Paso Robles, Watsonville and King City, Calif.)

Employees: 9 (2 sales, 4 service, 2 parts, 1 office)

Paso Robles 2007 Sales: $2.85 million wholegoods; $750,000 parts and service

By Dave Kanicki, Executive Editor

"Our biggest thing is getting out in front of the crowd. If there are a lot of people, I want our dealership and equipment in front of them. No matter what it is or where it's at," says Jeff Sponhaltz, general manager of C&N Tractors' store in Paso Robles, Calif.

His philosophy of creating a presence in the community has been the driving force since day one in branding the dealership as "absolutely the best place to buy a tractor," he says, and is quick to add, "We're not the least expensive place to buy a tractor, though."

Day one for the Paso Robles store was May 1, 2001 when C&N opened its second Kubota dealership in California's Central Coast region. The first, located in Watsonville, Calif., was founded in 1974. These stores have since been joined by a third facility, which began operating in King City, Calif., in November 2007. The three stores combined are one of the largest Kubota dealerships in the country.

Unlike the Watsonville and King City locations, which lean heavily to production ag and are designed to serve the larger equipment needs of the row-crop growers of "America's Salad Bowl," Paso Robles carries smaller gear suited to the needs of the rural lifestyle and hobby farm customer base. Sponhaltz estimates that 75-80% of Paso Robles' customers fall into this category.

Being 'Out There'

For Sponhaltz, the dealership's success is as much about establishing the dealership's brand as it is about pushing product out of the door today. He believes this is especially true when a dealership's target market involves such a varied and growing group of consumers like rural lifestylers. Community involvement — being out there — is absolutely critical.

In the rural setting of Central California, attending county fairs and equestrian events is a part of everyday social life. It's where the action is.

One of the first things Sponhaltz did after the store opened for business in 2001 was to inquire about exhibiting at the mammoth Mid State Fair, a 12-day event held each summer in San Luis Obispo County. He was too late to get the dealership exhibit space that first year, but C&N Tractors has been a regular sponsor every year since.

Unable to participate that year, Sponhaltz did the next best thing — he scoped out the event.

"Of course, the first thing I noticed was there were no tractor dealers at the fair. The Kubota dealer in Santa Maria is also a New Holland dealer and they had two blue tractors there pulling trash trailers with dealership signs hanging from the rollbars. But there was no display or anything else," he says.

"I remember thinking, 'This is the California Mid State Fair being held in a rural, very ag-oriented county, but there are no dealerships displaying farm equipment. This is nuts.'"

He may have had to wait till the following summer to exhibit his Kubota equipment, but with the San Luis Obispo fairgrounds among the busiest in California, Sponhaltz saw plenty of other opportunities to start branding his dealership that first year.

"There's constantly something going on there. It has the second-largest equestrian show facility in the country. Besides all of the local horse shows, they have huge cutting horse events there and another major one called the Equine Experience."

So, rather than wait for next year, Sponhaltz paid a visit to the fairgrounds maintenance department. "I told them who I was and explained if there was anything they needed equipment-wise, they could call us. They looked at me like, 'Oh, sure.' I had to prove that I was serious about working with them.

"So I told them straight out, 'If there's a crowd here, I want to be in front of the crowd. I'll be happy to loan you equipment free of charge just for letting us be out there.'

"We got into the fair doing that. The next year we had display space at the fair and we also provided them with equipment to tow the trash trailer around the grounds," Sponhaltz says. "We provided different tractors and implements to groom the riding arenas as well and we've been doing it ever since."

For a short time, C&N was the only equipment dealer exhibitor. "I thought, 'Man this is going to be easy. This is going to be like taking candy from a baby,'" he says. In 2008, at least three others equipment dealers will have displays at the Mid State Fair.

'Out-There' Opportunities

Sponhaltz sees nearly any gathering of people in his community as an opportunity to "be out there."

The spring after C&N opened its Paso Robles store, he noticed that a big home show was coming to town. "I'll bet there are more people living on acreage around here than there are people living in town. So, exhibiting tractors at a home show made sense to me."

As expected, C&N Tractors was the only equipment dealer at this show, too.

He constantly looks for opportunities to loan equipment. In most cases, he explains, it doesn't really cost the dealership — or event —anything.

He also points out that the dealership gets some of its best exposure at smaller events in the smaller towns in the area. In Creston, Calif., with a population of about 1,000, a resident built a private barrel racing arena and stages eight events annually. The dealership loans him a tractor during his scheduled races.

This event draws 200 local women that own horses. "That's exactly who we're trying to target," says Sponhaltz. "We're just keeping that orange paint out there in front of them."

In a lot of cases, he says, the tractors come back with barely 30 minutes of run-time on them. "That's demo time," he adds.

The Branding Equation

If building customer preference is the first half of the "branding" equation, Sponhaltz knows that maintaining it is just as important and possibly even more difficult because it involves backing up the promise of "being the absolute best place to buy a tractor."

"I know it's become a cliché," he says Sponhaltz, "but service is where it's at as far as customer retention."

As good as C&N Tractors is at promoting itself, he believes it's the after-sale service that keeps customers coming back and the word-of-mouth that brings in new ones.

The store's service practices are what Sponhaltz calls the "dealership's warranty" and is what sets it apart from competing dealers. He points to waiving technician travel time on service calls for equipment that is under warranty — something the manufacturer doesn't cover.

Another is performing the initial 50-hour service check up free of charge at the customer's residence.

"We have a 3-year, 2,000-hour warranty and try to make sure the customer incurs no out-of-pocket expense unless they've done something to cause a problem," says Sponhaltz.

He says the dealership tries to be "smart" about offering these no-charge services. "With most lifestyle customers, an equipment breakdown or leaky hydraulic cylinder usually isn't the end of the world. So we try to schedule these service calls when we have a tech already in the area."

At the same time, he adds, one of the best things about selling Kubota equipment is you don't have to back it up very often.

Service Starts with Sales

Sponhaltz believes that other than doing the actual mechanical work, service is a sales function. From his experience with most farm equipment dealerships, he notes that the salesperson is usually done with the customer once the sale is completed and a work order is issued. This doesn't work well for the lifestyle customer, he says.

"Maybe that's OK for the commercial farmer, but at our store, the salespeople remain the customer's point of contact during and after the sale. We deliver the tractor and take the customer on his or her first ride. We — not the service guys — spend the time to explain and demonstrate how everything works."

With only 2 full-time salespeople — and Sponaltz is one of them along with his general manager duties — he understands the additional burden being placed on them. That's why he stresses the need for great salespeople in working with rural lifestyle customers.

In his previous job, he paid his salesmen 50% of their commission for selling the equipment and 50% for delivering it. "It was his responsibility to make sure the customer was familiar with how everything worked and was happy with it."

What this does, says Sponhaltz, is to make the salespeople responsible for the entire transaction — from beginning to end — and establishes them as the customer's contact long after the sale itself is completed.

"If I sell you a tractor, I make sure it's set it up with everything we discussed. I make sure the shop gets it done the way you want it. Nothing gets lost in the translation," he explains.

"Then I personally deliver it. We drive it and hook up and unhook implements to make sure everyone's familiar with how it all works. This makes me your point of contact. If that customer needs anything, they call me first," says Sponhaltz.

When a customer has a service issue, needs parts or has a billing question, he calls his salesman first and he directs it along to the appropriate department.

"Our customers always have a person who they know to go to," Sponhaltz says.

Two Steps Further

Because C&N Tractors believes that customer service is an ongoing process, its salespeople take it two steps further. Not only does Sponhaltz put his home phone on his business card, he says they do a fair amount of "going back out" with its lifestyle customers.

"Two years ago we had a lot of rain and sold a lot of mowers," Sponhaltz explains. "Last year we had no rain, so there wasn't a problem with weeds. This spring, I guarantee you I'll be going back out to customers that I sold tractors to 2 years ago and help them hook up their mowers because they don't remember how to do it. That's fine. That's what we do and I know they tell their friends and neighbors."

Along with his office and cell phone numbers, his business card also gives his home phone in "big type."

"I tell customers, 'If you're out there on a Sunday afternoon and have a problem, call me at home. I'll explain it to you and if I need to, I'll come and help you out," he says.

In the last 8 years, he's had only two people call him at home with a problem, "but people are impressed when I tell them that," Sponhaltz adds.

We're always looking for new products to grow the business; anything new and innovative that people want.

All Day Saturday

With its high-visibility location just off one of Paso Robles main thoroughfares, C&N shares "Tractor Row" with two of its biggest competitors. And with all three located within a mile of each other, differentiating itself from the others has been critical.

His neighbors — the John Deere and New Holland stores — maintain limited Saturday hours. But bucking the trend, C&N is open all day Saturday, from 8 to 5.

When it first opened, C&N Tractors was also open only from 8 to 12 on Saturday. But Sponhaltz noticed that as it got closer to closing time on the weekend, customer traffic increased. "I couldn't help but wonder how many of them we were missing on Saturday afternoons," he says, and decided, "If they're coming, we need to be here."

What he quickly discovered was that once it extended the hours, the dealership was doing far more business on Saturday afternoon that it ever did before noon.

He says this may be unique to the area for a couple of different reasons. He theorizes that the horse people are busy with chores on Saturday mornings and their best opportunity to take care of their business at the dealership is in the afternoon.

Another involves Lake Naciemento, just north of Paso Robles. Heavily populated with vacation homes, it takes homeowners 3-4 hours to drive to the area from either Los Angeles or the San Francisco. Driving up on Saturday morning only leaves them the afternoon to visit the dealership during the weekend.

Whatever the reason, Sponhaltz says, it's paying off. While his competitors maintained standard Saturday hours, he says, "In this type of market, you need to be open all day."

And it's fine with him if the competition doesn't buy into it, because, he adds, "At 12:01 on Saturday, we're the only game in town."

Stiff Competition

While C&N sells the full range of Kubota tractors (<20 to 125 hp), it's the "L" series (28-57 hp) that keeps the dealership's lights on.

Sponhaltz says C&N sells about 150 tractors per year, which, according to Kubota figures, gives them a 75% market share for San Luis Obispo and southern Monterey Counties. But the competition is getting stiffer.

Along with the dealers that C&N shares "Tractor Row" with in Paso Robles, new McCormick-Landini and Gehl-TYM tractor dealerships have moved into the area. But Sponhaltz sees the inline competition from other Kubota dealers as perhaps his biggest competition.

Selling Value

With the growing competition, it could be tempting to hedge his bets and start selling on price. But Sponhaltz hasn't found it necessary. But staying the course when it comes to his philosophy of being the best — not the cheapest — place to buy remains a challenge.

For one thing, he believes in offering only top-of-the-line equipment. He admits this takes a lot more salesmanship. Sponhaltz estimates that they sell 3 implements with each new tractor sale.

"When I order implements, I get them with the features our customers really should have. This can add costs and it takes a little salesmanship and a little explaining to the customer."

For example, when he orders rotary mowers, he orders them all with chain guards on the front and rear. "It's more expensive that way, but it's safer," he says.

He also orders them with slip clutches on the drivelines rather than shear bolts, explaining that if they hit a rock, it breaks the shear bolt. "Then they have to go find a wrench and shear bolts and they probably don't have them. For $150, if they have a slip clutch, they're still going.

"I'll hear, 'Well, you're $300 more than the guys down the street.' Then I need to give them $300 worth of whys."

But he extra time and effort also gives staff time to further establish the credibility of the dealership. While generally effective, Sponhaltz admits it can be frustrating, too.

"We explain the features and benefits of the Kubota tractor and why it's a superior machine to others and why the implements might be more expensive, and customers become convinced that they want the Kubota. But then they call the dealer in the next town to get a price and it's $500 less.

"We can't really get around it without abandoning our philosophy. I know that I could get on the phone right now and call five other Kubota dealers and probably get three better prices than the one I quoted. We could sell tractors all day long if we wanted to advertise low prices statewide.

"It can be hard to swallow. It happens, but I'd rather sell one tractor and make a reasonable margin then sell four or five and incur four or five times the expense to maket the same profit," he says.

Keeping It Going

Sponhaltz believes growth will come from continuing to do what's already made the dealership successful — this and staying ahead of the curve when it comes to anticipating customer wants and needs.

"We're always looking for new products to grow the business; anything new and innovative that people want. We keep our ear to ground and make sure we have the next big thing before it becomes the next big thing," he says.

When the current housing slump gets turned around, Sponhaltz sees the area's lifestyle resident base continuing to expand. "There are 1,000-acre cattle ranches that are getting split up and sold into smaller parcels. (See article on one C&N customer on p. 12-16) I kind of hate to see a lot of the 'ruralness' going away, but I suppose that's the price of progress."

Down the road from where he lives, Sponhaltz says they're splitting a 120-acre parcel into 12, 10-acre lots. As he sees it, "That's 12 potential new customers."

With its push to be out there in front of the crowd, even when there isn't one, C&N Tractors creates its own with its annual "Demo Days." These two-day events attract hundreds of customers and prospects each April and have proven to be the dealership's most successful selling opportunities.

Three years ago, the Paso Robles, Calif. dealer moved 27 tractors over its two days of "Demo Days" at MSRP. Last year, they sold 12.

While December is traditionally C&N's single best month of the year for end-of-harvest and tax reasons, April and May are its biggest months for selling.

General manager Jeff Sponhaltz says this is when his equipment inventory is at its highest, with a minimum of 50 Kubota tractors on hand, with each attached to different implements.

With a large Kubota tent, the dealership barbecues up a mess of tri tip beef — a local favorite in the Central Coast region — and plenty of other eats. He heavily promotes the event through print and radio.

But he advises other dealers that may want to follow C&N's lead: "Never advertise free food. You'll bring out a lot of people, but not necessarily the ones you want."

He says he finds that radio and direct mail advertising works best. His thoughts on promoting the events include:

• Radio advertising is best, Sponhaltz says. C&N Tractors uses a mix of classic rock, country and news talk stations because that's what most of his rural lifestyle customers listen to. "Lifestylers don't watch a lot of TV because they're too busy. But they listen to radio while working with their horses out in the barn or while they're working in the vineyards."

• When he advertises on TV, he uses local networks on satellite feed because the cable networks only go into town. Without cable service, lifestylers in the rural areas rely on satellite services.

• Direct mail is very focused on specific zip codes which Sponhaltz selects using letter-carrier maps.

• He also promotes Demo Days at other events for about 30 days prior to the two-day sale.

The area around Paso Robles is considered the third largest grape growing region of California, just behind Napa and Sonoma.

"A lot of our lifestylers are involved with vineyards and winemaking," says Jeff Sponhaltz, general manager of C&N Tractors. "When it comes to wine and wineries, we have things here that Napa wishes it had."

He says 90% of his commercial ag business involves vineyards, but most are of the "boutique" variety, small operations involving 10 or 20 acres.

But vineyards only scratch the surface of the rural lifestylers in this area of California's Central Coast. They range from horse owners to families raising pigs and sheep for 4H and FFA. Many others are simply acreage owners who need equipment to maintain their 20 or 30 acre estates. And it's become increasingly popular for retirees and vacation homes.

"We're almost exactly halfway between Los Angeles and the San Francisco Bay area. We've got a lot of people who are retiring and moving to this area from the big cities where the cost of living and real estate is incredible. They're selling land they've owned for years, coming here and paying cash for 10, 20 or 30 acres. Then they plant 25 acres of vines and make their own wine. This is a big part of our business," says Sponhaltz.

Before joining C&N Tractors in 2001, Jeff Sponhaltz ran a boat dealership in Fresno, Calif., for 10 years, which may be one of the reasons the dealership owners approached him about running their new location.

"When C&N bought this dealership it was selling both Kubota tractors and MasterCraft boats, which never made any sense at all to," Sponhaltz says. "Having been in the boat business, I could never understand what boats and tractors were doing in the same dealership."

He was also familiar with ag equipment having grown up around horses and cattle. "I used to rodeo and I was into bull riding in high school," he says.

He suggested that they get rid of the boats as quickly as they could.

"Paso Robles is located between several really big lakes and of course we have the really 'big lake' on the other side of the mountain called the Pacific Ocean. But there was also a dozen other boat dealers in this area," says Sponhaltz. "There was too much competition. C&N knew all about tractors, but nothing about boats."

On top of it all, the facility — which was originally a dairy barn — would work well for tractors, but not for selling boats.

Before they opened their doors as C&N Tractors, the boats were gone.

Share this page: