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'Making Hay While the Sun Shines' - Capitalizing on the Hobby Farmer

Dealers who've made a concerted effort to take care of the hobby farmers share what works for them.

By Mike Lessiter, Editor/Publisher

Hobby farmers. Sundowners. Large property (or acreage) owners. Recreational agriculturalists.

Whatever you call them (and there are some differences between the groups), no tag is as important to you as "new customer." From what we've learned, these folks, many aiming to get back to their farming roots or simply on a quest for a more peaceful lifestyle, have "saved the bacon" of a lot of dealers by presenting a new opportunity as conventional customers dwindle around them.

According to dealers, these are customers that:

- buy new, not used;

- buy all year long;

- want all the implements and attachments that fit with the farming lifestyle;

- are driven by a good buying experience, not just price.

"They are an enjoyable and generally pleasant group to deal with as they are excited about the purchasing process because they are joining the 'tractor owners club'," says Ken Keiran, Union Farm Equipment, Inc., Union, Maine.

But perhaps most important, their purchasing behaviors are theirs alone. They're spending "fun money," and they're purchases are not held hostage to the volatility of the rest of the ag world. Jerry Owens, Owens Implement & Supply, McCook, Neb., summed it up this way, "Do you know of any other people that will pay $8 for a bale of hay at the local farm store?"

To unearth some practical things to consider for succeeding in this still-growing market, Farm Equipment contacted an array of dealers catering to the hobby farmer. While the importance of this type of customer varies from single-digits to nearly full penetration, nearly everyone we talked with expects to expand their focus on the hobby farmer in 2006.

Just What the Doctor Ordered

There's no secret that the hobby farmer is paying the bills at a lot of dealerships. A recent Farm Equipment survey showed that the hobby farmer represents 35.6% of respondents' transactions, though a much lesser extent of the sales dollars. With soaring land values in many areas, many older farmers are selling off small acreages that could propel the hobby farm trend for quite some time.

"When a 100-acre farm is sold around here, it's divided into ten 10-acre parcels," says Jason Johnson, Bryant's Tractor & Mower, Renton, Wash. "Yes, you don't get to sell to the previous farmer. But there are now 10 new opportunities to sell $30-40,000 tractors over the same land."

Brian Hays, Mustang Tractor, El Reno, Okla., puts it this way: "Without the hobby farmer I wouldn't be in business." Anthony Clark, Clark Farm Equipment, Gilbertown, Ala., is not unlike many dealerships. "We depend on the weekend farmer, hunter base, or hobby farmer for about 75% of the business."

Billy Puckett, Williams-Trull Co., Reidsville, N.C., says hobby farms in his area have been rising for the past 2 years. "Our customer base of hobby farmers has a 3 to 1 average over the traditional farmer. We've also seen a steady rise in the amount of horse people over the past 2 years as well."

Gary Harton, Jackson County Equipment, Edna, Texas, notes that the hobby farm is a silver lining in his area. "Hobby farmers have become more important, going from 1% to 5% in the last 3 years, as the farming economy in our area is declining. We must concentrate on this market."

Not only are hobby farmers providing new "numbers" for the dealers to chase, but they bring a certain appeal with how they use their pocketbooks. "The hobby farmers in our area are becoming more affluent," says David Courtney, Creel Tractor Company, Ft. Myers, Fla., who notes that hobby farmers now represent 25% of his firm's business. "Tractors being purchased for two horses and 5 to 10 acres are now in the 30- to 40-hp diesel class."

Derek Scholten, AgraTurf Equipment Services Inc., Otterville, Ontario, agrees. "We see the segment growing substantially in 2006 due to the fact that these customers have disposable incomes, are subject to peer pressure in purchasing and enjoy the outdoors."

First, Getting Their Attention

Getting these customers' attention is the first step in establishing the relationship that leads to sales.

One thing that dealers have in their favor is that these buyers chose the lifestyle to fulfill a dream of "acting like farmers." Thus, they also want to do business like farmers, leading them to the local dealership.

But traditional advertising means, like farm papers or traditional ag trade shows, don't necessarily work. It's a different animal, say dealers.

"Advertising is the biggest thing to let them know we are here," says Clayton Camp, West Kern Machinery, Buttonwillow, Calif. Alex Lush, Swanstons Farm Equipment, Rockwood, Ontario, says his firm is designing advertising to market specifically to hobby farms and using specific print media that targets this market segment, as well as a more welcoming web page.

Courtney puts his advertising dollars for this part of the business into highway billboards in specific areas of growth potential, horse publications and community magazines that advertise rural real estate.

James Parker, Parker's Parts & Equipment, White Pine, Tenn., adds that he's learned to "surprise them with personalized, special mailings. Personalized service is what these buyers really appreciate."

Open For Business

According to Lush, appearance counts with this segment. "We need to have the product on hand, well displayed, clean and shiny and then we work to gain their trust. We don't automatically have their trust, simply because we earned it over the years in the farm trade," he says. Like Lush, Alain Lefrancois, Garage J.L.Lefrancois, Inc., St. Remi, Quebec, is using his showroom and lot to show the breadth of choices that the buyer can use. "One thing we are doing to cater more to this market is keeping more units on display and showing them with different attachments, such as front end loaders, backhoes, snowblowers, cabs and mowers," he says.

The biggest thing to show the commitment to this group, according to dealers like Parker, is store hours. If these buyers aren't able to drop by the store after their weekday jobs, they need Saturday morning to prepare for their weekend "hobby.' "Convenience is the name of the game, being open when you aren't supposed to be," says Parker. "It's a competitive market, and if we aren't convenient enough, they'll just go somewhere that is."

Keiran's operation differentiated itself from the competition years ago by offering all-day Saturday hours. "At the time, it was done for the farmer's needs for emergency service," he explains. "Since service was open, we kept all departments open." He says the extended hours worked out extremely well for the hobby farmers with weekday jobs. While not in favor of Sunday hours, he is contemplating expanding in-season hours of operation to accommodate these people and to make the service department more accessible to them.

While Courtney's operation is like many in that it is open until noon on Saturdays (though many are examining going full-day Saturdays this year), he says one dealer in his area stays open until 9 p.m., Monday through Saturday, and sees good results from its hobby farmer clientele.

"There's no secret formula for success with the hobby farmer segment," says Keiran, who estimates the hobby farmer represents 50-60% of his total business. "We're honest, we don't push customers to make a purchase decision and we've created an environment in which people feel safe and welcome. As an example, it is cool to see people looking around and taking pictures of children on tractors."

Winning Sales Approaches

When asked about the biggest lesson learned in succeeding with hobby farmers, Jackie Vick, Louisburg Tractor & Truck, Louisburg, N.C., replied with one word - patience. "Many of these customers' grandparents had a farm and they spent summers on the farm operating equipment. Years later, they aren't sure about what they need to do their job and they need our help. We must be willing to spend the time needed to make them comfortable."

Mike Wiles, S&H Farm Supply, Springfield, Mo., agrees. "We put a big emphasis on this market, but it takes patience and we need to 'gear down' our comments in the selling process. If you start talking 'three point' and 'PTO,' their eyes roll back in their head. They have no idea what you're talking about, so you need to start out very basic."

Jason Monro, Maple Mountain Equipment, Mansfield, Pa., says a lot of hand-holding is needed with this type of buyer. Nevertheless, their expectations can be huge. "If he needs something, we've learned to respond as quick as possible."

Despite the fact that the buyers are often novices when it comes to equipment, that doesn't mean they're pushovers. In fact, they tend to be highly educated, and in many cases, are very shrewd businessmen. "Many of these part-time farmers do good research on their own, so we try to know our product better than the competition," says Ian Bunbury, Avenue Farm Machinery, Sumas, Wash. "They often require a considerable amount of time in giving advice, and convincing about a product." Lefrancois adds that these customers need as much information, if not more, than the farmers demand. "They read a lot from sources like magazines, but the fact is that they want to hear it from the salesman."

Gary Brown, Ankeny Tractor, Ankeny, Iowa, has concentrated on the hobby sector for decades. He maintains that "if you can give customers tips on how to best use what you're trying to sell and the things to watch out for, you can beat your competition, which may not be as knowledgeable or doesn't care about the customers' problems. I do a lot more listening than talking. That way I can customize a piece of equipment to what they want, instead of getting hung up on a price conversation."

Keiran agrees, stating that his firm's website, www.unionfarmequip.com, offers basic tips about tractor and equipment acquisition, maintenance and operation for new buyers. "We take a great deal of time to fit them to the right tractor, and we stay with them until they are comfortable operating their new equipment - prior to handing over the keys."

Many dealers insist on a walk-around training program (often done by the service manager) to help first-time buyers understand how to operate all equipment safely and effectively, as well as understand maintenance issues. "We need to do a good job showing the operating procedures, how to attach implements, etc.," says Bunbury. "If we give them some quality attention, they are very trusting and appreciative."

Knocking on Doors, Handing 'Em the Keys

Noting that his firm is targeting hobby farmers through direct mail and specific demonstrations, Don Van Houweling, Van Wall Equipment, Perry, Iowa, has also become more aggressive in cold-calling.

"Our key job is to make sure they know we want their business and what we have to offer. Our territory sales personnel no longer drive by these folks; they stop with a customized vinyl of goodies that we leave at their door even if they are not home. It contains a store brochure, product information - business cards, etc. We also will look up addresses and phone numbers so we can also call them and leave them a personal message as well. They are also added to a mailing list for future programs," he says.

"The market is growing every day - you can't go down a rural road without seeing another house being built on 2-5 acres. You don't know who they are unless you go out and find them."

Jared Nobbe, Wm. Nobbe & Co., Waterloo, Iowa, is another who intends to get more aggressive this year, and expand on its 10% large property owner customer base. "We hired a dedicated salesperson to focus on this market. We are also pushing our salespeople to regularly call on this segment like any established customer. We are planning clinics and open houses specifically targeting the large property owner, and are constantly reviewing our marketing strategies for this group. This group is also very interested in vehicles for recreational purposes, thus making utility vehicles and all terrain vehicles other great sales avenues."

Demonstrations are another way to penetrate the market and remove the initial unease that some buyers have about new equipment. Carolyn Vandermeulen, Elmira Farm Service, Acton, Ontario, is planning greater positioning for the hobby farm market, and expects a dramatic increase in sales due to the horse farms. "One thing we're prepared to continue is offering 'Ride-N-Drive Clinics' to this segment of our business, in our own facility or on the customer's property. We have qualified and knowledgeable staff in our parts and service departments on this market, too." Scott Brown, C.L. Benninger Equipment, Merlin, Ontario, is also doubling its demonstrations aimed at this segment in 2006.

Melanie Leckler, Leckler's, La Salle, Mich., believes that the real payoff is 4-5 years after the initial purchase, when they become a "'Leckler's customer' and not a 'brand customer.'" Noting that it takes a while before the brand takes a back seat to the dealership, she says these customers come to the dealership to find solutions for the many jobs they need to perform in their very busy schedules.

"They love to come into our store and ask questions about the problems they have on their property that may not even have anything to do with what we sell," she says. "When you don't know the answer, you need to do the research for them and e-mail them back as soon as you can. If we can do this, we'll succeed in gaining their trust and their business in your parts and service department as well. This is our ultimate goal."

Product Selections

"The hobby-farmer/recreational based customers demand quality, supported by unwavering attention to service," says Keiran. "They're interested in ease of operation, with hydrostatic transmissions being the norm, and quick-attach front and rear implement hookups growing constantly in popularity."

According to some manufacturers, there's been a considerable increase in hydrostatic transmissions and full-featured hydraulic drives. Customers are demanding it, presumably because this type of customer is better suited to intuitive style operations. Noise and vibration control are important due to operator comfort (mainly from an increase in female operators) and equipment use in confined land spaces.

Brown says front-wheel drive is a must. "I won't even stock 2 wheel drive models, not that they won't do the job, but the customer demands front wheel drive, or 4 wheel drive, just like their cars."

Several dealers cite the success they've had by creating packages for the farmer. "We offer package deals where the customer can back his new pickup to a trailer and get a tractor/loader and Bush Hog for one price and take it home," says Wiles.

Keiran is also a believer in packages. "Our equipment includes standard add-ons that our competition sees as 'giveaways.' We include them because we think they are useful and it is what we want and have on our own tractors.

When it comes down to what to offer, the choices are near-endless, but there are some "staples." The list on p. 48 is a composite of the most frequently cited products purchased by hobby farmers, as a result of a Farm Equipment dealer survey.

Front-end loaders, top the list, and several dealers say every single tractor that they sell is equipped with a front-end loader. Noting that hobby farmers represent 70% of his firm's business, Brent Vander Pol, Brim Tractor Company, Mount Vernon, Wash., falls in this category. He says 99% of his compacts tractors are sold with a front end loader, and a large majority leave with at least one implement depending on the time of year.

Wiles has set its sights on being a leader in attachments. "The products we offer to this market generally revolve around grass/brush maintenance, landscaping/dirt work and wildlife plot establishment," he says. "We're exploring every option we can to fill all of the voids in the attachment market. Even if the customer buys his tractor somewhere else, we want to be the place where he gets attachments for whatever he buys. That at least gets him in our door."

Another piece of advice is to have a decent used tractor offering, according to Brown. "Many acreage owners have no idea what a new tractor sells for. So after you pick him or her off the ground from the sticker shock, you can show them your reconditioned used units. Appearance is everything, though, so just like the car business, you will want to recondition these used tractors."

When it comes to a product and consumer profile on the hobby farmer, it's easier said than done, say some dealers. "We try to analyze the trend of the hobby farmer, but it's impossible," says Rob Tyler, Hamilton Equipment, King William, Va. "One is born every day. If it snows, and he is inconvenienced by it, he'll buy a plow. If a hurricane comes through and blows down his trees, he'll buy a wood splitter and a grapple to move the debris. There's a lot of knee-jerk reaction on what is bought and when. There is some planning, but mostly it's a reaction to a new problem. Look at the sales for mowers during a wet season vs. the sales of the same equipment during a dry season.

"Chain harrows, sprayers, seeders, loader attachments, discs and PTO tillers are big movers for these folks. The hunting scene has played a big role too. With cool weather, they start thinking about game plots and what they can do to improve their land for game. Money is no problem for a large percentage of these folks. What farmer do you know is going to buy equipment to plant seeds to help get more deer or turkeys on his land?"

Profiting from Service

Just as with conventional customers, service presents the opportunity to make the margin. In fact, dealers find fewer hobby farmers willing to dabble in the maintenance issues. As one dealer put it, these users "don't want to fight with their tractor, they want to enjoy it." And they'll pay the dealer to make sure it's properly taken care of.

"We offer onsite maintenance programs with annual or hourly based visits," says Keiran. "While similar to other ag service programs, these programs are tailored to the needs, wants and desires of this well-defined group of customers. For instance, I have my tractor serviced in the fall to make sure it will be ready whenever I need it to remove snow. While I could remove my summer equipment and install the snowblower, I don't want to. I'd prefer to use my precious leisure time working 'with' the tractor rather than 'on' it. And like many of our customers, I am willing to pay for this elevated level of service."

(Editor's note: In my town, I know a hobby farmer in who has his tractor and other equipment serviced on-site by his beloved dealership. Further, he also contracts with the service manager to have the crew clean out the barn for his Halloween party at the same time as they service the equipment. Now that's a dealership finding out what the customer's true augmented need is, delivering it, and collecting on a value-added service that is good for both parties.)

Camp says that his firm sells self-service kits should the buyer want to give maintenance a whirl, but promotes the full-service maintenance program. Lush agrees that selling service packages is also a good opportunity.

According to Brown, pick-up and delivery is mandatory, as many don't own trailers. "Speed of repairs appears to be just as important as to the professional farmer, as they may only have a limited amount of time. They're used to the 'fast-food concept.' While they can be very demanding, the good side is that if you can meet their demands in a reasonable manner, service payment is not a problem - most will pay with a credit card."

Brown shares another tip for selling hobby farmers on his service department. He logs onto local website forums and responds to that tractor owner expressing a problem. "I will try to solve the problem for him and, of course, try to sell him the proper parts."

On the subject of price's place in the equation, Brown maintains that it is knowledge and helpfulness that brings repeat business. "How many people know the price of a universal joint, for example? A lot of hobby farmers neglect to grease their equipment and often their u-joint locks up or breaks along with the yoke holding it. Most people won't price-shop a u-joint and yoke because there aren't many places that will have it.

"So if you have a good relationship, that customer will automatically contact you and be overjoyed that you know what they are talking about and can solve his or her problem."

Still Full Steam Ahead

While the hobby farm trend didn't start yesterday, there isn't much evidence to worry it'll end anytime soon, at least in most areas. Even the most curmudgeon of dealers estimate continued rapid growth over the next 5-7 years, before a leveling off occurs.

"With the loss of active farms and a large amount of small and medium sized lots available as open space, I don't see the market becoming mature for a number of years," says Keiran.

Vick agrees, expecting growth for years to come. "So many people are purchasing land and they want a horse for the children. This requires a tractor, front end loader, rotary cutter, scraper blade and various other attachments. Most currently don't own any machinery at all, so they have to purchase most of it."

Courtney feels the hobby farm trend could reach a saturation point in a lot of areas. But, he says, "Miserable winter weather up north sells southern real estate. Also, citrus canker and citrus greening have caused a lot of Florida growers to consider planting houses instead of re-planting trees."

Jim Campbell, Birkey's Farm Store in Oakland, Ill., is one who says the hobby farmer trend is largely a thing of the past in his area. But he's already seeing another type of customer emerge. "I would say we are seeing a lot of wooded acres being bought up by the city people and the people that really like to hunt." They aren't necessarily buying traditional farm implements, but they are buying other pieces that his dealership carries.

At any rate, hobby farmers represent a silver lining to dealers as the farm numbers game continues to shake out. The drivers are a bit more predictable than the traditional ag customer too, replacing commodity prices, farm bills and input prices with things like the Dow Jones, interest rates, housing starts and consumer confidence.

"The manufacturers are certainly up on this market as they continue to introduce more equipment aimed directly at attracting it," says Darrel Cryderman, Max Equipment, St. Charles, Ontario.

Steve Higgins, Western States Equipment Co., Boise, Idaho, is at a point familiar to many dealerships, some of whom have "fallen into success" with hobby farmers.

"We intend to develop a business model to entice this customer into our place of business in 2006," he says. "Traditionally, we haven't catered to this sector. It will take a new set of marketing rules to meet their specific needs. We have the product and the facilities, now we just need to develop a customer friendly feel for that market."

Several dealers say that many small hp tractors are sold with cabs, and that these hobby farm buyers don't even ask about the price.

Instead, they only want to know how much a cab will increase their monthly payments. Price never enters the picture, say some dealers.

Having not worked on farms, these hobby farm customers aren't used to working outside with snow, dust, cold or hot weather. They want the same conveniences that they are used to with their cars and trucks, such as air conditioning, heaters, radios and protection from the elements.

By Gary Brown, Ankeny Tractors, Inc., Ankeny, Iowa

Most of my customers with small compact tractors have an acreage, maybe some timber ground, pasture ground, and perhaps horses. Some are focused on gardening, but the gardens are usually smaller than in the past and the tractor is usually too big so they will use a walk-behind tiller.

What we do see is more specialized use for the tractors and equipment. For example, vineyards are starting to pop up in Iowa and there is a need for mowing between the rows, along with spraying and watering. Orchards use similar equipment. Horse people, of course, need small manure spreaders and loaders for cleaning out stalls, etc. There are also uses for tillers in horse arenas to fluff up the mulch, saw dust, dirt, etc., along with gardening usage.

Another specialized area is the hunting area. A lot of poorer farm ground in southern Iowa is being bought up by hunting groups strictly for hunting. These people are putting in stands of corn and other grains to draw in game. They need smaller tractors for the hilly conditions and smaller equipment like planter-seeders and tillers.

It would probably be a smart idea to handle additional items other than tractors and equipment, such as pet food and bird seed, and maybe salt blocks for deer. Many of the farm supply stores handle these products and it makes sense. Just like the Wal-Marts of the world try to have everything for everybody under one roof and not let the customer leave till they've drained the poor devil dry, perhaps this same philosophy should be used to supply as many things that a hobby farmer could use.

No Wal-Mart can't compete with dealers on knowledge, service and helpfulness. This should be the way we can become successful in today's economy with the hobby farmer.

Don Hoover, Binkley & Hurst, Lititz, Pa., says that in his rapidly developing area, there's still another developing market beyond the estate owners, sundowners and mini farms. "Among this rural-urban 'yuppie' crowd is the new and used parts sales for the restoration craze," which he says is resurging in his area.

Greg Szemborski, Ski Services, Edgar, Wis., agrees. "The growing tractor collector/restorer market shouldn't be overlooked," he says, noting the disposable income that this segment possesses. "More people are looking for that tractor from the 1940s or 50s that they operated as a teenager on their families' or a neighbor's farm."

1. Loaders

2. Rotary Cutters

3. Scraper Blades

4. Finishing Mowers

5. Tillers

6. Post-Hole Diggers

7. Hay Tools, Balers

8. Backhoes

9. Manure Spreaders

10. Snow Blowers, Blades & Buckets

11. Zero-Turn Mowers

12. Landscape Rakes

13. ATVs and UTVs

14. Forestry Attachments (Grapples, Forks, Buckets, Splitters)

15. Chain Harrows/Arena Grooming

16. Skid-Steers

17. Seeders

18. Sprayers

19. Chain Saws

20. Cabs and Canopy Tops

Compiled from a survey of farm equipment dealers on their hobby farmer customers, this list shows the most frequency cited products purchased by hobby farmers.

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