First popularized by John Deere, dealers of all colors can
rev up their business by developing an on-the-property
service program for consumers and rural lifestylers.
To make it as an equipment dealer in this competitive landscape, you’ve got to m ake enough margin to cash flow your operation while also retaining every possible customer you can. The problem is, these two “marching orders” can be in conflict with another.
You can try to make more on a wholegoods or service order, but end up with a customer determined NOT to give you his business next time. Conversely, there are plenty of stories of dealerships that have lots of “happy customers,” but still go belly up because they underpriced their wholegoods, parts and service and couldn’t make ends meet.
Onsite mobile service, however, is one of those things that not only deepens relationships with hard-to-reach customers, but also can be a great profit-generator. Popularized by John Deere’s “Ready-to-Mow” program, dealers are seeing how driving their service trucks to the rural lifestyle and homeowner customers for repairs and maintenance is a booming business. Not to mention the “free” advertising they get from the natural built-in billboards that a service truck provides.
“With the at-home service, the biggest advantage to the dealer is customer retention,” says Craig Martins, national program manager of John Deere Mobile Service. “Dealers don’t have the chance for the same relationship with small tractor customers as they have on the ag side, where they know the family, the kids’ names, etc. With the lawn and garden tractor, it’s traditionally been a relationship of ‘give us a call if you have a problem.’ Mobile, onsite service is one of those tools that has greatly improved the relationship with the small equipment owner.”
This article examines the mobile service at Bowen Supply and how it has used the program — and a home-grown truck — to attack the hobby farmer market from its new store in Florence, Ky.
New for the
Hobby Farmer Segment
According to Mark Ross, general manager, of Bowen Supply in Florence, he and his brother, Brad, now the third-generation owners, were raised up on mobile service. “We’d always done it from our Gardnersville store, as far back as our Chevrolet one-ton truck with a tool body,” he says, referring to the long-established dealership that concentrated on production ag customers. “My dad, Arnold, always said, ‘you’ve got to give people a reason to do business with you’ and mobile service was a way of taking care of customers.”
With Gardnersville somewhat isolated out in the country, management saw the opportunities in the rural lifestyle and suburban market in the communities closer to Cincinnati, and drew up plans for a new facility. Long before it opened in 2006, the Ross brothers knew that a mobile service enterprise was there for the waiting with the clientele that surrounded their new location.
While the barrier to entry in mobile service is not tremendous, spending $70,000 for a fully outfitted service vehicle wasn’t attractive as the company ponied up to invest in a brand new facility in a brand new market. So, they sent Arnold to a dealership in Tennessee who had recently bought a state-of-the-art truck endorsed by John Deere. Equipped with a notepad and digital camera, he was commissioned with getting the low-down on the owner’s likes/dislikes and also whether it was something they could consider tackling in-house.
After management concluded that they could probably do it themselves, the Ross brothers found a 2003 model year Isuzu diesel NPR truck for $22,500 that had 22,000 miles on it that was previously used by a seamless gutter operation. The Ross brothers were familiar with the make and model as they had a flat-bed version of the unit since 1999. Jody Parnell, service technician, received a directive to outfit the vehicle so it could efficiently and effectively service mowers, garden tractors and utility vehicles.
“We basically gave Jody the dimensions of the truck and a list of everything we needed to have in there and told him to make it happen,” says Ross. “And he did a phenomenal job outfitting the truck and having it ready for the dealership’s grand opening in November of 2006.”
A longstanding tradition at Bowen Supply is the annual harvest dinner at the Gardnersville store. In November 2006, it was relocated to Florence to also celebrate the grand opening of the new store, and the service truck was one of the main attractions.
Anatomy of a Mobile Service Truck
Deere’s “Ready-to-Mow” program endorses two suppliers for participating dealers: Knapheide (trucks) and Pace American (trailers). According to Ross, Bowen’s techs created a home-grown unit that measured up very well, including a couple of improvements. An inventory of Bowen’s mobile service truck for the mowers includes:
• Side cabinets
• Lift system that lifts the front axle of the tractor
• Powerpack air compressor/generator combination
• Waste oil collector
• Fluorescent lighting
• Vinyl floor tiles
• Flatboard on the sidewalls, with accommodations for pegs
The firm even added a roof-mounted heater and air conditioner that it secured from a local RV dealer to make techs’ work more comfortable in extreme weather. In the floor, a trapdoor was created so techs could sweep blade sharpenings, grass and leaves right into a refuge box. At night, the tech empties the box and it’s ready for the next day’s work.
Bowen also worked with a credit card company to locate a wireless remote credit card transaction unit so that the tech can prepare the work order, swipe a card and roll onto the next customer.
As far as stocking parts, Ross says that the new John Deere tune-up kits have been a big hit with the techs. “Rather than needing to stock loose filters, plugs, etc., they throw the kits in there and know they’ll have everything they need right in one box. Just today, I saw them with the forklift, restocking the supply of tune-up kits.”
The truck has a rollup garage door and, due to two air cylinders working in tandem with the compressor, a tailgate that is quickly and easily lowered to allow the tractor or mower to be driven right up and into the truck.
“The end product was every bit as efficient,” says Ross of the truck, which can handle lawn tractors, compact tractors and even 24-hp utility vehicles.
When asked what he’s most proud of, he cited the tailgate system and also a unique winch system that is hooked to a truck receiver hitch placed in the floor of the unit. “When we get a call for a customer’s heavy-duty lawn tractor that hasn’t started in who knows how long, we can still winch it up and get it into the truck to be worked on,” he says.
Because the mobile service is priced on a flat-rate system, the truck remains within 25 miles of the store. “Flat rate pricing works well within 25 miles. Outside of that, we’d have to reconfigure pricing because there’d be too much drive time.”
To avoid crisscrossing the county (it has agreements with four of the area’s big box stores), the dealership came up with a schedule. “For customers in zip code ‘A,’ we are always there on Wednesdays. We accumulate enough work to concentrate in certain areas of town on certain days.”
Martins notes that some dealers are charging a service labor rate that’s 20% above the shop rate for at-home service, and that it’s very rare for a customer to question a bill for service done at the home. “They see first-hand the very expensive vehicle, the fuel and the tech’s time spent behind the wheel,” he says.
Ross agrees. “You don’t have the issue in the shop where someone claims to be surprised. If they discover something unexpected, like a bad bearing, you can show it to the customer right then and there and let them know it’ll be extra to have it fixed.”
With a shop labor rate of $66, Bowen receives an extra $10 in the field. With average revenue per call in the area of $220, Ross estimates a gross profit of $100 on each visit — not bad when the firm estimates it’ll make 175 calls this year. By being mindful of scheduling in small, defined areas each day, the truck (on the road typically for 4 hours per day) sees fewer than 20,000 miles per year, keeping fuel and maintenance expenses in check.
According to Martins, getting the right person behind the wheel is one of the most critical decisions the dealer will make. Ross says that the candidate needs to know how to take care of the customer, be polite and give the client the kind of experience to gain a repeat customer.
“Our lead guy is very personable, knows what he’s doing and has fun selling, too. He’s very good at pointing out that a tractor is tired and worn out and asking whether the owner has thought about upgrading.”
Promoting Mobile Service
Mobile service is not an afterthought at Bowen Supply — it’s actively promoted to customers. In addition to the packets that accompany all of the big box sales, Ross says that he keeps Deere’s tri-folded brochure on his desk along with a brochure on financing options. “Every time we sell a tractor, we go over onsite service programs. It’s part of every sale.”
While not yet happy with the customer take-rate of the John Deere Maintenance Plans (Ross says some dealers are up to 60% in conversions with the time-of-purchase service plans), he says that the revenue is strong nonetheless.
In addition to the point of sale efforts, Bowen also finds good results from direct mail. “If we do a good job of preparing our customer lists, each customer receives a compelling direct mail piece letting them know we can take care of their service needs.”
Unlike some other Deere dealers, Bowen has not yet solicited maintenance service of other brands of equipment, as he has plenty of Deere business to keep his team busy, without needing to source any additional parts. “But when a customer wants both his Deere lawn tractor and a Craftsman walk-behind mower service, we take care of the simple things for him.”
A Growing Profit Center
With no mobile service competition in a 40-mile radius, Ross shrugs when asked why competition isn’t concentrating on a mobile service business. “It’s sure nothing to be afraid of,” he says. “If you have a tech you can send out on the road who will represent your company well, it’s a good opportunity on many fronts.”
Speaking of the success of the service, brother Brad points out: “We’d need a mile-long shop to service all the mowers that the dealership does now.”
For Bowen, the only question is how soon they’ll be able to justify the second truck. But there will be a discussion on whether to buy or build. “It took a while to build it, but I’d certainly have no problem doing it again,” says Ross.
An Advertising ‘Vehicle’ By Itself
The best advertising for the Bowen Supply’s at-home mobile service is the truck itself. Mark Ross says whenever the truck is available, it’s used to deliver new tractors and mowers so buyers can get a hands-on feel for how their equipment can be professionally serviced on their own property. “We’ve also used it for things like tire delivery,” he says. “As much exposure as we can get with customers, the better.”
When not on call, the truck also gets the nod for setup and predelivery visits to Home Depot and Lowe’s (parked close to the main entrance, of course) and is always taken to the dealership’s exhibits at the county fair.
When asked about the value of the exposure the truck provides, Ross reluctantly says that while he spent a great deal of money advertising the store’s opening, he’s often heard that it was the truck’s presence around town that got people to take notice of the new dealership. “We had a guy — who lived right here in town — who said he didn’t know we were here. He hadn’t seen or heard any of our other advertising, but saw the truck at a stop light, saw the address and phone number. He found us because of the truck.”
Originally published in the Spring 2008 issue of Rural Lifestyle Dealer.