Rural Lifestyle Dealer’s year-long look at Heritage Tractor has uncovered its proactive and aggressive approach to the rural lifestyle market. In just 1 year, Heritage developed a strategic plan with measurable goals, added new products to fill gaps, found new ways to market to customers online and in person, and acquired 3 new urban locations.
That same approach carries over into how the dealership is improving its parts and service departments. The results have been good for this John Deere dealership with 10 locations in northeast Kansas and northwest Missouri. “We are on track to set records in 2013 in the rural lifestyle business. We’ve come a long way and are definitely progressing toward new numbers,” says Derick McGhee, Heritage Tractor’s integrated solutions manager.
Improving Parts Delivery
Heritage’s new approach to parts delivery is helping this strong performance. The dealership added a parts van this spring to more efficiently and quickly meet customers’ demands for parts. The van is already having a significant effect on parts revenue. McGhee says in the month of June, the van transferred more than $174,000 in parts, which was 17% of the total parts purchases for the month.
“It’s hard to say how many of those parts sales we would have gotten without the van. However, if you can instantly tell a guy when we can get a part, that takes going to another dealership out of the equation,” McGhee says.
He says the dealership continues to ask, “How else can we build our parts business and be more efficient?” They answered that question this summer by adding a trailer for the parts van.
“Originally we saw it was something that had potential, so, fortunately, we bought a van that supported hooking up a trailer. Now, we move smaller products, too, such as blades, tillers and even mowers. We don’t have to send a special truck to transfer that kind of equipment between our locations.”
Heritage Tractor, Baldwin City, Kan.
Founded: 1998, with stores also in Atchison, Kansas City, Kearney, Lawrence, Topeka and Paola, Kan., and Clinton, Harrisonville and Platte City, Mo.
Location: On a main highway on the outskirts of Baldwin City, Kan., and near metro areas of Lawrence, Kan., and Kansas City, Mo.
Lines: John Deere, John Deere Landscapes, Frontier, Honda, Land Pride, Schaben Industries, Stihl and Polaris
Challenge & Solution: Heritage Tractor, www.heritagetractor.com, adapts its parts and service business to improve efficiencies, provide better customer service and increase revenues.
The van now has a two-day route, covering about 250 miles each day as it travels to the northern locations on one day and the southern locations on the next. Based on its financial performance, Heritage is now considering adding a second parts van to further increase speed and efficiency.
“We had the biggest parts month ever for our organization in June because of that flexibility to move parts and equipment,” McGhee says. “Customer satisfaction is what the parts van really does for us. It shows our customers the value of our larger organization — a larger resource for them.”
The van offers advantages to other departments as well, such as sales. “That guy is worth his weight in gold,” says Kevin Bradford, rural lifestyle salesperson for Heritage’s Baldwin City location, about the parts driver, Alex Langton. Not only do Heritage’s 10 locations give Bradford the inventory he needs, but Langton gets him that inventory faster. “It makes it easier for us to close a sale.”
The van has even improved communication between the stores. For instance, each dealership already had a shelf for stacking mail, promotional materials or supplies that needed to be transferred. However, there was no schedule for when those supplies were transferred and who delivered them. Now, each location can count on receiving that information several times a week.
Communication Drives Service
Communication is a strategy that also drives success in Heritage’s service department, both with its service technicians and with customers.
“This place has been here a long time. We have a good reputation and they know our people are going to shoot straight and be honest,” says John Newman, assistant service manager. “I sometimes have to tell them, ‘You may not like what I have to tell you, but it has to be done.’”
He says he makes sure customers know the difference between when he is able to give a firm quote and when he is estimating repairs. In those situations, Newman stays in contact with the customer by phone or email, based on their preference. He says on a typical day he may spend 2 hours on the phone with customers.
The other part of customer service is getting the repair done on time. Heritage has 3 service technicians dedicated to its rural lifestyle customers. The department has 30 or more machines in the shop at a time during its busy season, and it strives to have all repairs done within a week. Newman says they track and communicate through several methods to keep repairs moving. Its primary method is its John Deere business system, Equip, which includes parts and service management functions. Plus, they have two Heritage-specific methods: instant messaging on their computers and color-coded magnets on a white board.
Watch Buying Trends
Kevin Bradford focuses exclusively on selling to rural lifestyle customers from Heritage Tractor’s Baldwin City location. He says business is very good and getting better because people are continuing to move from the metro Kansas City area. Here’s what his rural lifestyle customers want:
“They want all the ‘bells and whistles.’ They’re looking for more creature comforts, like GPS, cruise control and even buddy seats. For the UTVs, they want air conditioning and power steering — all the conveniences of their cars. And, they don’t belly-ache about the price because they want it. They’re spoiled.”
This color-coded white board helps assistant service manager John Newman communicate with his service team. It also serves as a double-check against the dealership’s service planning software and helps technicians visualize the overall orders.
They’re also smart about what they want. “They know the transmissions, the size of the tractor, the different loader options … they know what they are looking for, which is good. They know what they want, but they still want to talk about it.”
Here’s what they don’t know, according to Bradford: “They don’t have a concept about how many different implements there are, the same way for front-end loaders. They don’t know how many attachments there are to make their lives easier.”
Bradford says the big sales opportunities are for utility vehicles. “It’s unbelievable. We’re selling 200 Gators a year. We used to sell 100 ATVs a year, but those sales are really slowing down.”
He says he is also seeing some growth in haying equipment, because of the increasing numbers of horse owners.
Bradford’s selling process for rural lifestylers follows solid practices of communicating, giving his customers lots of information, learning about their operations and being professional, such as by providing complete quotes. And, he gets out of the store.
Heritage Tractor sales-person Kevin Bradford says rural lifestylers do their research regarding tractors and mowers, but need his expertise to understand attachments.
“This week alone, I only spent 1 day in the store. A customer was here at 8 a.m. Monday morning and then the phones were ringing non-stop. Tuesday and Wednesday, I made deliveries. Thursday, I did a delivery and pick-up and worked a trade-in. We stay busy or we would hear about it. But Heritage doesn’t micro-manage us, which is nice. I just take care of customers and sell equipment.”
The instant messaging is for short and quick communication, such as a part that might be needed. It saves time walking back and forth. The white board helps Newman double-check orders in the business management system and gives the team a visual look at what’s in process and what’s waiting.
Each magnet lists the repair order number, the customer name and the type of equipment. That information is written with a blue marker to indicate the customer dropped off the equipment. Purple shows Heritage picked it up. Red indicates a service call and green indicates it’s an internal order, such as an equipment set-up.
The white board lists the technicians’ names and the magnets are moved to that technician when the job is assigned. They are then moved to another board when the repairs are finished and the equipment is ready for pickup or delivery. The technicians use the board as a way to work in smaller jobs when they are waiting for parts on larger repairs.
Heritage Tractor’s retail display shows off equipment for working and playing on properties this fall, such as racing utility vehicles.
Newman says some repairs never make it to the dealership and he is glad to work through those, too. “A lot of times customers are just looking for suggestions on how to fix something themselves. We start walking through what was happening before the machine shut down. People just want to talk to somebody and know they will be treated right.”
Visible Goals for Employees
Like the white-board approach, Heritage is now incorporating a more visual approach for employee and dealership management. They’ve added John Deere’s Foresight Dashboard functionality to their business system. The dashboard helps managers track how an employee is progressing toward a goal. Employees can log in and see charts that show they are meeting goals or need to make improvements.
Metrics for each location’s financial performance are also tracked, so management can see if company-wide goals are being met.
“This is all driven by the accountability we put on people. It gives our company transparency and drives changes from within. It’s about changing a culture where employees self-motivate,” McGhee says.
Heritage recently hired a new vice president of service operations, Darren Zerr, to ensure goals are met. “He will bring a level of consistency among our stores and hold our locations accountable,” McGhee says.
• Derick McGhee, Heritage Tractor’s integrated solutions manager, shares how the dealership is speeding up parts deliveries and helping employees perform better.
• John Newman, assistant service manager, shares how the service team increases efficiencies and communication.
• Kevin Bradford, salesperson for Heritage Tractor, shares his view of the rural lifestyler buyer.
“Service techs are compensated based on efficiency and productivity. In order for them to understand and drive their own performance, they need to know where they stand at any one time,” says McGhee.
This position had been open since last December, with other managers taking over these duties. “The reason we didn’t fill this quickly is we firmly believe that filling a spot is not the solution. We wanted someone with the right qualifications who understood our vision.”
For Heritage, that vision involves more changes to better reach the rural lifestyle market. In October, the dealership will move its Harrisonville, Mo., operation to a different location about 20 miles farther south and build a new facility in a nearby town.
Equipment Redesigns Offer New Sales Opportunities
Derick McGhee, Heritage Tractor’s integrated solutions manager, says the equipment redesigns for 2014 will offer rural lifestylers new levels of comfort — and offer salespeople new ways to sell.
“This market is used to rapid changes from the design standpoint like with the auto industry,” McGhee says. “We’re not seeing a lot of mechanical changes, but a fresh, more modern look. That keeps our inventory looking new and gives our salespeople new talking points.
“The rural lifestyle market is intrigued by features. They like versatility, such as more attachments for riding mowers. That’s a big deal for this customer segment.”
McGhee thinks these enhancements will bring more sales in 2014: power steering for the complete X300 lawn tractor series and the new cab, quick attach loader and backhoe and Tier 4 compliant engine for the 3000 series of compact tractors.
McGhee says enhancements also encourage rural lifestylers to trade up. “We’re seeing a lot of customers coming in with lawn tractors. They only have them for a few years and they want something new.”
“Our location in Harrisonville is aging. It was part of our long-term strategy when we acquired the location in 2007,” McGhee says. Another driving factor is the changing infrastructure. The dealership used to be on a state highway and now it’s on an access road off of an interstate, which has meant restrictions regarding transporting larger equipment.
The more southern location will allow the dealership to serve rural lifestyle customers that had been served by Paola. The new store will focus on ag customers.
McGhee says it’s this willingness to adapt that keeps Heritage growing.
“To be a progressive dealer, you have to show up open minded and think outside the box. It’s about not only what’s best for our organization, but what’s best for our customer base,” McGhee says. “We’ve seen astronomical changes in technology in the last 10 years and that is only going to exponentially increase. We have an expectation that every person in our organization can expect change and be willing to adapt.”
Introducing the 2014 Season-to-Season Dealer
Thank you to Heritage Tractor for allowing Rural Lifestyler Dealer to dig deeper into how successful dealerships manage year-round challenges and opportunities. We plan to check back in and share more of their success stories.
Now, it’s time to introduce our 2014 Season-to-Season dealership: Rigg’s Outdoor Power Equipment, with 4 locations in Indiana. We look forward to learning more about their dealership and how they serve the rural lifestyle market.