Mid-State Equipment’s success in the rural lifestyle market comes down to one word: Focus. Focus on the rural lifestyle customer. Focus on customer satisfaction. Focus on performance metrics to guide dealership strategies. This Wisconsin-based John Deere dealership is Rural Lifestyle Dealer’s 2012 Dealership of the Year.
Mid-State has seven locations in southern Wisconsin, including a separate rural lifestyle store in Janesville. Bryan Hanson and Chris Frodel, a brother-and-sister team, are the second-generation owners who defined the approach for winning rural lifestyle customers.
“We drill down and focus attention on those people who are important to our success,” says Frodel, vice president.
“Our staff doesn’t have to prioritize their focus,” adds Hanson, president. “I’m not a big believer in a salesperson having to learn everything from a weed trimmer up to a forage chopper. It’s too much to ask of them.”
The Janesville rural lifestyle store opened in 2000, but the dealership group is now in its 38th year in business.
Mid-State’s beginnings were similar to many other dealerships. It was a single-store operation focused on ag customers. Curt and Linda Hanson, Hanson and Frodel’s parents, began the operation in 1974 in Columbus, Wis. Prior to owning the dealership, Curt Hanson had been a John Deere territory manager.
Founded: 2000, rural lifestyle store in Janesville, Wis. Dealership founded in 1974 in Columbus, Wis.
Locations: 7 (two locations in Columbus, Jackson, Janesville, Salem, Sauk Prairie and Watertown, Wis.
Employees: 12 in Janesville; 178 for entire dealership group
2010-11 Revenue (Janesville location only): $4.2 million ($2.5 million whole goods; $1.2 million parts; $500,000 service)
2010-11 Parts/Service Absorption Rate for dealership overall: 98%
Three-Year Sales Growth Figures for Janesville location: $3.1 million in 2008-09; $3.5 million in 2009-10; and $4.2 million in 2010-11
Publisher Michael Ellis (left) and Managing Editor Lynn Woolf (right) present the 2012 Dealership of the Year award to Mid-State Equipment’s Bryan Hanson and Chris Frodel.
“They broke ground in the middle of a field,” says Hanson. The area offered a diverse farm customer base: dairy, beef, cash grain and vegetable producers as well as custom operators.
In 1990, the dealership had its first expansion when it purchased an existing dealership in Watertown. They expanded again in Hartford in 1998, later closing that store and opening a new store in Jackson. They acquired a dealership in Sauk Prairie in 2003, added another store in Columbus in 2008 and earlier this year acquired the location in Salem. However, it was the acquisition in 2000 of the Janesville location that positioned their future success serving rural lifestylers. The location offered opportunities to serve the outlying areas of Janesville and the larger cities of Madison and Milwaukee.
Dedicated Rural Lifestyle Store
The Janesville location originally included an ag equipment store on the edge of Janesville and a small lawn and garden store in the city. Several factors influenced Mid-State’s decision to close the lawn and garden store, which was in a leased facility, and spend $1 million to build a new facility near their ag location.
“We listened to customers and asked what they thought. This important group was telling us the store wasn’t convenient,” says Frodel. Rural lifestylers were unhappy about having to drive into town. The facility didn’t have the space to allow easy access for commercial customers with trailers. And, the ag facility on the edge of town needed remodeling.
“Even if we remodeled and did an addition, there wasn’t enough space,” says Hanson. But, they did have space in a parcel just east of the ag store.
“It was natural to split off and there was enough business to justify it,” he says.
Taking Care of Customers
Eric Halfman has served Mid-State Equipment as its John Deere territory manager for the last eight years and has watched the growing success of the dealership’s stand-alone rural lifestyler store in Janesville, Wis. He credits two main factors for its success: the rural lifestyle store itself and the team that makes it work.
“It’s often intimidating for a smaller equipment customer to walk up to a large ag dealership and see combines and large tractors. That customer wants to feel just as important as a production farmer. When they walk into Mid-State, they already know they are going to be treated with their needs in mind,” Halfman says.
“They also have people dedicated to that business. They are trained in rural lifestyle equipment and can respond to the customers’ needs quickly and more accurately.”
Mid-State’s retail expertise also draws in the rural lifestyle customer.
“When you walk into some dealers, you see the same things every time. At Mid- State, the repeat customer can drive by or come into the store and see different product displays. They do an exceptional job merchandising their equipment and products.”
Halfman hears first-hand from Mid-State customers when he visits the dealership or attends its special events.
“I’ve always been confident with their ability to take care of customers.”
Finally, Halfman credits the leadership of second-generation owners Bryan Hanson and Chris Frodel.
“The team approach they take is very refreshing. They do a really good job communicating with managers and the sales team. They make a concerted effort to continuously look at their business and find better ways to increase customer satisfaction.”
The decision falls in line with Hanson’s “top three” for a successful dealership.
“First of all, you must have a good location; you have got to be accessible. You must have a nice facility. It has to be inviting and comfortable with clean, well-lit displays. And you must have inventory. People want to get in the seat,” Hanson says.
Rental equipment and mobile service offer new ways to serve existing and potential customers. Mid-State Equipment tracks rental statistics and customer requests to make sure its lineup includes what’s in demand. Mobile service occurs mainly in spring and fall. The staff qualifies requests for mobile service to ensure they are for routine service and equipment preparation and not major equipment repair.
Hanson and Frodel moved quickly. They acquired the Janesville dealership in March 2000 and by December, they opened the new 11,500 square-foot rural lifestyle store.
Designing the Customer Experience
Mid-State knew they needed to create a retail experience that was unique for the rural lifestyle customer.
“We knew we needed a nice, welcoming showroom that could accommodate rental and the offering of lawn and garden. We needed room up front with the ability to expand the shop if need be,” she says.
The showroom features 25-foot ceilings, windows on three sides, and a center display area featuring popular equipment like Gator utility vehicles and lawn tractors and a collection of John Deere merchandise. Point-of-purchase displays call out specials and new products. An open path through the retail space leads to the power tools area, rental and parts counters, and service center. Before making their way through the store, customers are greeted by Cindy Reilly, the administrative assistant, or by salespeople, Jenny Green or Larry Schlender.
Green and Schlender split duties to make sure every segment of the market is covered.
“Larry is on the road 50% of his time calling on contractors, commercial fleet owners, municipalities and government agencies, and doing demos. Jenny is responsible for in-store traffic,” Frodel says.
Hanson and Frodel work to establish a company culture built on the motto, “You Can Count on Us.”
“It’s putting the customer first and doing the simple stuff. When people walk in the door, you acknowledge them and try to make them feel welcome. It’s crucial that people feel welcome and are being helped. We let them know they are appreciated for their business,” Frodel says.
For instance, after a sale is made, Green or Schlender introduces the customer to the service manager and the parts manager.
“I know we can’t have 100% customer satisfaction, but that is our goal. Every customer is important,” Hanson says.
Developing Sibling Leadership
Bryan Hanson and Chris Frodel started their careers dusting parts bins and count- ing bolts for their parents’ Mid-State Equipment John Deere dealership in Columbus, Wis. Today, Hanson and Frodel are the second-generation owners of a dealership that has grown to seven locations and is Rural Lifestyle Dealer’s 2012 Dealership of the Year.
The brother-and-sister team credits their parents, Curt and Linda Hanson, for their ability to work well together and to take the dealership to new levels.
“It’s unique and can be attributed to how we were raised. Our family is very close and very respectful. We look to our parents as mentors, but there’s a mutual respect that they know we are the owners now,” says Frodel, who is vice president.
The two split management duties by the geography of the locations and they meet monthly with their management team to review financial reports and perfor- mance metrics.
“We rely on each other for advice, but otherwise we are independent to do our own things. When we do have a major decision, we consult with each other. We’ve been able to split up tasks and work well together, while working independently,” says Hanson, who serves as president.
Frodel offers more factors to their success as sibling leaders: “We both know what our strong points are, and we both know what we need to do,” she says. “And, we talk daily.”
Adding Rental, Mobile Service
That “every customer” mentality led to Mid-State’s additional offerings for the rural lifestyle market — rental and mobile service.
“We always rented equipment to farmers and customers who were ag-related. We found that some products crossed over to homeowners and smaller contractors,” says Hanson.
The store began offering skid steers and mini-excavators for rent. They added more equipment based on customer requests and vendor recommendations, including towable boom lifts, concrete equipment and various landscaping tools.
“It brings a different customer in the door. It brings in the weekender that isn’t going to own right now, and it has resulted in future purchases,” Frodel says. They regularly evaluate whether the rental division makes sense for the dealership.
“We run the numbers each month. We make ourselves prove it all the time,” she says.
They also watch for ways to grow the rental business. Managers at each store keep a log of equipment requests.
The decision to offer mobile service for rural lifestylers was also based on what the dealership offered its ag and large commercial customers, whose equipment is either too large or too numerous to transport.
The team at the Janesville location focuses exclusively on the rural lifestyle market. Front row, from left to right: Matt Peterson, rental manager; Jenny Green, sales; Brian Pyszka, service manager; and Cindy Reilly, administration. Back row, from left to right: Jeremy Condon, parts; Larry Schlender, sales; Eric Stith, corporate aftermarket manager; Tommy Stith, parts; and Dean Staude, parts. Team members missing from the photo are Dale Howard, Rick Humphrey and Seth Karkosh of the service staff and Mary Goad, merchandising/www.greentoys4U.com coordinator.
“Could we do this for a residential person with two pieces of equipment, like a Gator and a tractor?” Hanson says. It also fit with John Deere’s “Ready to Mow” online service scheduling program.
The mobile service operates mainly in spring and fall, helping ready equipment for mowing and snow season. It’s not a repair service, however.
“We ask a lot of questions on the front end. We have to confirm that this is for a basic inspection because it is more difficult to do diagnostics and those repairs in the field,” Frodel says.
They charge slightly more for mobile service than for the customer who brings equipment in. It’s worth it for many customers who prefer to have basic service done on their properties, Hanson says.
Management Team Metrics
Hanson and Frodel continue improving their rural lifestyle strategy by paying close attention to financial reports and established metrics.
“We’ve always looked at the numbers. Our dad ingrained that in us. We study the financials and dad still does to this day,” says Frodel. They’ve used PFW’s business information systems since the 1980s. They began taking more of a planned approach with budget-setting about three years ago.
“One thing we all do at the beginning of the year is develop a budget by location and by department. We monitor the budget monthly and grade ourselves against the budget. When numbers dip, we look at ways to improve and compare it to last year’s performance,” says Frodel.
That monthly monitoring happens with their management team, which includes the corporate after-market parts manager, controller, human resources director, administration manager, and sales management.
“We make short-term decisions based on what we see happening. We review certain criteria and see if we’re meeting set goals, and, if we’re not, discuss what we have to do to get there,” Hanson says.
They review such criteria as revenue per employee, revenue by department and inventory turns. The sales team has its own weekly meetings and Frodel meets monthly with the dealership’s full-time marketing and advertising coordinator. The dedicated marketing person has helped with workload, consistency and ongoing branding.
“It’s a constant re-marketing of ourselves every year. People who come in for the first time often say, ‘I thought you were just a tractor store,’” Frodel says. “It’s a constant reminder that we have to keep our name out there and really market ourselves.”
Mid-State’s marketing outreach includes billboards, community sponsorships, direct mail, newspapers, radio, point-of-purchase displays, special events, trade shows as well as online marketing through its website, Facebook page and its merchandising site, www.greentoys4u.com.
The marketing tactics are often coordinated with John Deere promotions and the dealership has had particular success with special events. (See “Special Event Wins Female Lifestylers” below.)
Special Event Wins Female Rural Lifestylers
Would you like 90 potential female buyers in your dealership? Invite them to an event just for women, where they can demo equipment and ask ques- tions. And, don’t forget the fun. That’s the formula for Mid-State Equipment’s popular Ladies’ Night. The dealership has seven locations in southern Wisconsin, including a stand-alone rural lifestyle store in Janesville, Wis. It is Rural Lifestyle Dealer’s 2012 Dealership of the Year.
“I was ecstatic about getting 90 people here on a Thursday night. It got people in our facility to see everything we have to offer,” says Chris Frodel, Mid-State’s vice president. She estimates about 80% of the women had never been in the dealership before.
Mid-State partnered with local businesses for workshops and prizes for the event. The spring 2011 event had four rotations of 25 minutes each. The local nursery talked about spring plant- ing ideas. The local food cooperative shared the benefits of eating organic foods. Mid-State’s service department talked about mower maintenance. The most popular rotation was the test driving of Scag zero-turn-radius mowers around the lot.
“We signed up people for service that night and that service business turned into a trade-in,” says Frodel. She can track at least a compact tractor and Gator sale back to the event. They fol- lowed it up by inviting the women back for the dealership’s open house.
This year, Mid-State is having its Ladies’ Night in the fall to promote win- terizing summer equipment and preparing other equipment for winter service.
“People are already asking me, ‘When are you going to have it?’” says Frodel.
Bryan Hanson, Mid-State president, says the event is about brand aware- ness and giving people a reason to come into the dealership to see the new equipment and retail offerings.
“If they come back in and buy a ‘onesie’ for a grandbaby or a battery powered Gator for their two- or three-year-old or come in for toys, that’s another time they are in the store. They get a little more familiar and find different things in the store.”
Mid-State’s newest store in Salem further expands its rural lifestyle presence. The store will serve customers in the southeast corner of the state, including those from the Chicago area, many of whom own properties in Wisconsin.
Both Hanson and Frodel say the dealership is in a good position for more acquisitions. However, Hanson says growth doesn’t always have to come from new customers.
“The best way to sell more equipment is to sell to people who are already customers. That first apprehension of dealing with somebody new … that’s all in the past,” he says.
The customer is already familiar with the dealership and the salesperson. The salesperson already understands the customer’s needs, making follow-on sales easier.
Other areas for growth include attachments and UTVs. Frodel says UTVs are popular across the segments: ag customers, rural lifestylers, hunters, construction contractors and others. Compact tractors also continue to offer opportunities.
“The whole gamut of horsepower and the versatility of attachments are astounding,” says Hanson. “While it’s a growing market, it’s also a challenge because it’s saturated with so many players in compact tractors. It’s important that John Deere keep delivering innovative, quality products that we are proud to promote. We’ll do our part in offering an outstanding customer experience.”