Take it from dealers that know; salespeople need to discard old sales approaches when working with the new lifestyle customer.
Some dealers say that getting a seasoned ag equipment salesman to adapt to the new rural lifestyle customer is like trying to teach a pig to sing: it wastes your time and annoys the pig.
Voluntarily or kicking and screaming, equipment dealers that have traditionally specialized in selling to the professional farmer are increasingly finding they must adapt to the “new” customers who walk into their stores.
What some dealers are finding is that their biggest challenge is getting their sales staff to accept and adapt to the different breed of clientele that want to frequent their stores.
A dealer’s motivation to service the rural lifestyle customer is becoming increasingly evident. While the professional farmer remains the mainstay for most ag dealerships, the level of business available from the hobby farmer and estate owner is progressively impacting the dealership’s bottom line.
Today, sales generated by this customer segment have grown to slightly more than 20% of dealers’ total revenue, according to Farm Equipment’s just-completed 2008 Dealer Business Trends Survey. This represented the second-greatest source of revenue for dealers. Coupled with the turf/landscape market, the two markets represented nearly one-third of ag dealers’ revenue.
Emily Henderson, controller with Clapp Brothers Tractor & Implement, Siler City, N.C., says, “Our reps are really comfortable helping a farmer who knows tractors. However, the hobby farmer typically doesn’t know beans about a tractor and salespeople get frustrated.
“In one example, a woman who lived 45 minutes away called after seeing our ad in the newspaper and wanted to buy a compact tractor for her husband’s birthday. Our ‘best’ salesman answered the phone. After his normal line of questioning, he advised her to come to the store to see the tractors and bring her husband along. Of course, she never came and may have been offended.
“We are just now really trying to reach this market. So far, our number-one issue has been training our sales reps and the ones doing it for years are very resistant. As controller, I know some of these tractors can generate as much gross profit as the larger ones.”
This was the situation facing Clayton Thornber, store manager of the Fond du Lac location of Service Motor Co., a 6-store Case IH dealership with sites throughout northeastern and north central Wisconsin.
Now in its fourth generation of being owned and operated by the Sommer family, the organization’s roots are firmly planted in production farming. Today, the Fond du Lac store has found a solid sales balance in farming, construction equipment and compact tractors, but getting there wasn’t without some pain.
In 1997, sales of new and used compact Kubota tractors (<40 hp) and lawn and garden equipment represented 5% of the Fond du Lac store’s total wholegoods revenue. Despite the growth potential that Thornber saw, the percentage remained unchanged two years later.
He says his salespeople weren’t motivated to work the small tractor and hobby farm market. “Part of the problem was a perception that they weren’t going to make any money.”
This was puzzling because, as Thornber says, “We maintain good profit margins and we pay as a percentage of profit.” So far, they’ve managed to get a 9-10% profit margin on the small tractors.
Frustrated by the lack of progress into the emerging small tractor market and deciding against forcing the issue with his experienced sales staff, Thornber took another approach.
“In late 1999, we took a very personable young garden tractor mechanic out of the shop and assigned him to go out and develop our small tractor business. I noticed that Brad O’Briean got along well with customers.” He spoke the customers’ language without talking down to them, Thornber says.
“He understood early on that upscale buyers of these expensive little tractors like to be talked to as though they’re knowledgeable. My ‘professional’ salesmen never really caught on to this.”
Before assigning Brad the task of developing sales in the compact tractor market, Thornber says he had given another individual the task, but he was unable to improve sales of Service Motor’s small equipment.
“His problem was he didn’t get out and about enough,” says Thornber.
In addition to instructing his new salesman to focus strictly on consumer sales, Thornber armed him with the tools needed to assure that he would have a fighting chance to crack the market. He also gave him clear marching orders.
“We told him to get out there,” says Thornber. “We gave him a pickup truck and a trailer and told him to do as many demos as possible. We said, ‘Every pitch you make, if you don’t walk away with an order, walk away with a scheduled demonstration.’ He’s used that very much to his advantage.”
Thornber adds that during the first few years, the store invested in “some pretty hefty advertising” aimed at the consumer market. This helped him move from the 5-6% level up to the 10-13% level.
The store manager says that he’s now been able to cut back on his advertising and yet maintain a strong position in the market. The dealership has an active presence at local home shows and works with the local horse clubs. “We have made a number of sales to the horse people and they tend to come back and buy accessories and implements. This is an ongoing business for us.”
Can’t Argue with Success
One example of how Service Motors has grown its small tractor business can be found a mile or so up the road from the dealership. With a new housing development going up, the new salesman made a dogged effort to get in the door of the first new home. Among the 22 houses in the development, the dealership has eight orange tractors working the 1.5- to 3.2-acre lots.
“Most of these sales have come from word of mouth and referrals,” says Thornber. “Brad has made very good use of referrals.”
By the end of 2000, the Fond du Lac store’s percentage of wholegoods sales attributed to compact tractors and other equipment in this market segment had risen to 10%. In 2006, it reached 22%.
More recently, the Service Motor store rearranged how it displays its consumer goods on the lot. Today, the small Kubota tractors and Scag lawnmowers occupy the lawn in front of the store, where previously big ag and construction equipment was displayed.
“The way we had our lot arranged put too much emphasis on the big iron,” says Thornber. “We’ve made a conscious effort to make compacts the most visible equipment on the lot and to demonstrate that compact tractors aren’t a sideline for us.”
By moving the big equipment to the main machinery lot, the small tractor customers don’t feel intimidated by big red combines.
“Our farm customers know what they’re looking for and where to find it. But the ‘shopper’ needs to see what he’s looking for up front,” says the store manager. He also mixed the Case IH DX inventory in with the other small tractors, which has produced some interesting side effects for its mainline supplier.
From 2002 to 2004, Kubota was the largest wholegoods contract the store held in terms of revenue. However, 2007 is turning out to be its biggest year for Case IH compact tractors.
“Part of it was the fact that Case offered some special incentives that made it worthwhile to push them,” explains Thornber.
Service Motors, along with Case IH, established store goals for various classes of tractors. “I’m happy to say that our store has met the goals in the under 40-, the 40-60- and the 60-100-hp classes. Four or five of those units were the compact DXs, but Brad also managed to sell a couple 65-70 hp JX models as well. One went to a hobby farmer and the other to a horse owner.”
As Thornber strategizes on how to capitalize on the aftermarket for the compact tractors, he recognizes that they still have work to do. “Besides adding a second tech that specializes in compact tractors, we need to extend our store hours. If we’re going to develop this market, we’ll need to keep the parts counter and maybe a tech available for more hours.”
Sell the Family
When buying a small tractor is a family matter, no one understands the importance of making sure that all parties involved are given equal attention more than Lisa Jordan, sales manager of GW’s Equipment, Cleveland, Texas. She says taking time and having patience is the key.
If the female half of the decision-making process is up to speed on the equipment — its benefits and versatility — then she’s more likely to agree with the purchase.
“When a couple is shopping, you need to sell both,” she says, “but women are harder to win over than men. They often look at the purchase as their husband just wanting a toy, which sometimes it is. But until she fully understands the functionality of the small tractor, she’s never convinced that he really needs it.
“I’ve heard them say to their husbands, ‘If you’re just going to cut grass, why don’t you just get a lawnmower?’ That’s why you need to take the time so they understand how things works. If you can show them that they can use it too, it makes their decision easier,” she says.
Jordan, together with her father and sister, has operated the dealership in Cleveland, 40 miles north of Houston, for 10 years. They employ nine people and have a full-service shop.
Most farming in the area involves hay or produce, predominantly small gardens. But as professional farmers have aged and left the business, once-productive farms have been sold off in 5- or 10-acre lots to people wanting to move out of the bigger cities.
Jordan says that nearly 80% of the dealership’s business involves selling compact tractors and implements to the rural lifestyler, mostly Montana and Farmtrac brands in the 30-39 hp range. Nearly all of their tractors are sold with 4WD and a loader and either a mower or box blade. “I don’t think any tractor should be without 4WD or a loader,” she adds.
The real switch in their clientele started about 5 years ago and the dealership’s sales of small tractors have doubled each year since.
What Lifestylers Want
Unlike the professional farmer who knows what he’s after and what he wants to pay, says Jordan, the rural lifestyler seldom has a clue what he needs for what he wants to do. “Many times, all the first-timer wants is an overgrown lawnmower,” she says.
But for most, a compact tractor is a much more important decision. What these customers are really looking for is someone to show them what they need, she says. “They need your time and that takes patience.”
Price is seldom an overriding factor in the lifestyler’s purchase of a small tractor. “Everybody’s prices are pretty much the same. It’s so competitive in terms of tractors and prices. There really isn’t a retail price that you can mark down. Everybody’s pretty much already marked it down as much as they can.”
According to Jordan, first-time buyers don’t want to be intimidated by the equipment and they want to feel some certainty that they’ve done the right thing.
She does this by thoroughly going through each sales brochure and specification sheet, making notes on each as she explains how everything works together. “I show them how to read a spec sheet. They usually know brand names but not what they should know in terms of specifications. For instance, we take the time to explain gpm in regard to hydraulics, the importance of tractor weight and why three-point capacity is important.
“I spend whatever time I need with them until they feel comfortable.” Jordan likes to put the new buyer in the tractor seat and let them operate it. “Once they see how easily these tractors are to operate, they begin to get ideas on how else they can use it besides cutting grass. Usually, by the time I get through, they have plenty of ideas.”
And unlike the traditional farmer who comes to a dealership to buy, Jordan adds that when first-timers come into a dealership they’re shopping.
“That’s why we put the price on everything; tractors and implements. Shoppers want to know the price before they ask questions. If the price is there, they’ll say, ‘I think we can afford that. Let me look into it.’
“We have people visit the lot when we’re closed. We’ve sold a lot of equipment on Monday morning after they looked around on Sunday,” says Jordan.
What They Don’t Want
One of the problems Jordan sees with established farm equipment dealers that now want to tap into the rural lifestyle market is that they want to “pick and choose” their customers. In today’s market, that’s a formula for failure.
“We’ve gotten a lot of business because some dealers have that attitude. Customers have told us they won’t go back to certain dealers after they’ve been treated poorly. It’s usually salespeople that are only interested in the sale and not the customer,” she says.
She’s not complaining, though. “It’s just fine with me.”
Orginally appeared in the Fall 2007 issue of Rural Lifestyle Dealer