One night last March at an ag equipment dealership in Janesville, Wis., something happened that would raise the eyebrows of most dealer-principals.
About 90 women packed the showroom during a special event at Mid-State Equipment's rental/consumer store and spent 2 hours getting tips about landscaping and outdoor power equipment maintenance. The scent of aromatherapy products wafted in the air, courtesy of a co-op grocery store that participated.
Promoted publicly for several weeks, the event won over some new customers for Mid-State, and word got out about the dealership's outreach efforts with rural lifestyle customers in the region. Most of the women admitted that they'd never stepped foot in the building, which sits about 200 yards away from Mid-State's production-ag focused dealership.
"I was ecstatic about getting 90 people here on a Thursday night," says Chris Frodel, Mid-State's vice president. "It got people in our facility to see everything we have to offer. And since then, I've had 3 or 4 sales from people who came back from that event."
Addressing a Problem
Mid-State Equipment — a store organization founded in 1974 — acquired its ag-focused dealership, just outside of Janesville, in 2000 to capitalize on the presence of high-caliber farm customers in the area and continue building a footprint in southern Wisconsin. The company also saw potential to serve commercial and residential customers in the region's cities and resort areas.
Mid-State Equipment Rental/Consumer Store
Location: Janesville, Wis.
Major Line: John Deere
2008 Gross Revenue: $4.1 million
Employees: 13 (5 in service, 2 people each in parts and sales, a full-time rental manager and an after-market sales manager)
Key Staff: Chris Frodel — Vice President
But the dealership wasn't set up to serve rural lifestyle customers, even as more and more urbanites began to invade the countryside.
Initially, Mid-State rented a small lawn-and-garden store in the city of Janesville, about 3 miles away from the ag dealership, that had only 6,000 square feet of space. Commercial contractors visiting the location had to pull their trucks and trailers into small spaces to drop off equipment and then back out.
Production farmers at the ag dealership that needed a simple part for outdoor power equipment couldn't get what they needed in one stop. They were forced to the other store instead.
"For the commercial operators with a trailer full of equipment, it was cumbersome," Frodel says. "We decided that we couldn't do this any longer."
Mid-State's managers decided they were giving the wrong signals to their customers.
Rather than cram lawn-and-garden equipment and staff into the existing ag dealership or build an addition, Mid-State spent $1 million to build an 11,500 square-foot, free-standing dealership that caters to horse farms, fruit-and-vegetable growers and large-property owners in the region.
"A lot of the time, the perception is that since we're the John Deere dealer, we're about big iron and big ag," Frodel says of Mid-State, which has additional locations in Columbus, Watertown, Jackson and Prairie du Sac, Wis. "What we're trying to do here is to attract rural lifestyle and commercial customers and separate that from the large ag."
The first challenge was deciding how the store would be built, keeping in mind the types of customers they were serving. Managers wanted the layout outside the building to be "easy in, easy out" for commercial customers dropping off or picking up equipment from the service department.
"If we have a operator who brings their commercial fleet in here, where would it be convenient to drop off their equipment and keep going?" Frodel says, recalling the conversations. That led to the design of a continuous driveway in front of the store so equipment could be loaded and unloaded efficiently by customers near the service entrance.
Creating a unique feel inside the dealership was also important. When customers walk through the front door, they immediately see Deere-themed clothing, toys, dishes and other retail items — a deliberate move to differentiate the store from a traditional ag dealership. Sales staff sit just inside the entrance, and tractors, lawn mowers and other featured products are prominently placed in the store's mid-section, with other equipment placed around the perimeter.
The retail items add an extra dimension for customers. And the new building has enough space to hold the inventory for Mid-State's website, www.greentoys4u.com, where customers can buy memorabilia from Deere, Ertl, Bobcat and Kubota.
"At least a couple times a week people come in the door and say they didn't know we had all of this," Frodel says.
The building itself has a modern, inviting atmosphere inside and out, with large windows and high ceilings. Workers enjoy a conference room and kitchenette upstairs in the loft, and the service shop is in the back.
Frodel, who manages both Janesville operations, says it's key for their rural lifestyle dealership to get new people in the door and not rely solely on established customers. "Equipment is obviously our main business here, but you can also see the merchandise we have to offer is a huge thing."
The Pros & Cons
Catering to a customer's needs is a major focus of a rural lifestyle dealership. But Frodel admits there are pros and cons to having a separate building to serve specific market segments.
There's extra money involved in lighting, heating and cooling the building year-round, and paying salaries for 13 employees, including 5 in service, 2 people each in parts and sales and one full-time rental manager. And due to the seasonal nature of the rural lifestyle market, it is a challenge to utilize the building to its fullest all year.
But Frodel says Mid-State Equipment has improved its efficiency overall, including the rural lifestyle store, by sharing staff on occasion. Both dealerships in Janesville share truck drivers when needed. Technicians in both buildings help each other out during busy periods.
Having two buildings in one location, instead of two in different locations, also gives customers "a more complete idea" on what Mid-State has to offer, whether it's a commercial landscape contractor getting equipment serviced or farm customers that need parts for their mowers.
Another key to the building's success has been the rental business for equipment like aerators, roto-tillers, loaders, cement equipment or lifts — items that some customers don't want to own. The dealership offers daily, weekly and monthly rentals. It's another way of getting customers in the door, even if they're not in the market to buy equipment.
Mid-State isn't too worried about the rural lifestyle store's profitability. Gross sales were up 12% in 2008 and have gone up 5-8% every year since the building was opened.
"We do need to focus on the volume of equipment and parts to make it a viable operation," Frodel says. "There are months where we might operate a little slimmer than we'd like, but we make up for that in our peak seasonal times. It is paying off."
Picking a Sales Staff
Having a unified sales staff in a single dealership that caters to different market segments might create some problems if sales people prefer to work with certain types of customers or product lines.
But Mid-State faced a different issue — recruiting and training a sales staff that focuses on the unique needs of consumers and commercial customers.
Existing sales staff were kept on when Mid-State took over in 2000, but they've all moved on over time. The company began to tap recent college graduates to work in sales, emphasizing to them the chance to grow with the dealership.
Something else is unique: women have a significant role at the business.
Marketing research shows that women figure prominently when rural lifestyle-type equipment is purchased. Jenny Green, a current lawn-and-garden sales associate, is the second woman to work in sales at Mid-State's rural lifestyle dealership.
"Whether my sales person is a man or a woman, it's brought to their attention that we expect them to pay attention to the woman of the house because they're an important part of the purchase. That emphasis personally comes from me," says Frodel.
While it's possible for Frodel to rotate the sales staff between stores, she prefers to have them focused on their market segments — especially with rural lifestyle customers because they require more time and attention. There are big-box stores in Janesville that sell John Deere tractors, a fact that constantly motivates Mid-State to focus on service.
"It's just taking the time to understand what their needs are and what they're looking for. We know what they're comparing us to, so we make sure they're comparing apples to apples with the product lines," Frodel says.
The philosophy of serving a market segment extends to how the service department and shop is run. Mid-State strives to have a 24-hour turnaround for commercial customers. And the importance of customer attitudes is also stressed, she says. "Some customers may want to know the all ins and outs, but some just want their equipment fixed and don't want all the technical conversation."
The Marketing Game
Mid-State's commercial dealership seems to break away from the pack when it comes to creative marketing.
Catering to customers with horse farms in southeastern Wisconsin has been key for Mid-State, especially as mid-box competitors like Tractor Supply Co. have entered the fray.
Two years ago, Mid-State hosted a fashion show for horse riders at its rural lifestyle building. About two-dozen people attended, which wasn't the greatest turnout but probably sparked some ideas. "We coordinated other horse organizations in town, we brought in saddles, some younger riders and had a fashion show with different things they would wear when they were showing horses," Frodel says. "That brought in a whole different set of customers that hadn't been in here before."
Last spring, Mid-State tried something that struck a major chord in Janesville.
Employees organized a "Ladies Night" event, with Green taking the lead. Frodel encouraged Green to contact other businesses in the community to work with Mid-State on the event in attracting a female audience.
Seeing an opportunity to showcase their own businesses, a greenery and co-op grocery store agreed to participate. They put flyers in customers' bags about the event, and the local radio and newspaper also promoted it.
Invitations were sent to customers through the dealership's mailing list. Some of the households only had a man's name listed, so Mid-State addressed them to the "lady of the house" if there wasn't a female name available, Frodel says.
Green also convinced local businesses to donate dozens of door prizes, including spa gift certificates, free health club memberships, gardening supplies or flowers. Mid-State donated a weed trimmer.
The gathering was billed as a chance for women to learn maintenance skills in an environment they were comfortable with.
But they got much more than that. When they arrived, the women were greeted with a glass of sparkling organic cider, chocolate fountains and appetizers. And for 2 hours, the women traveled to 4 stations to learn basic techniques for lawn and equipment maintenance.
At the lawn-and-garden station, they learned how to check the oil and sharpen blades on a mower. At the small-handheld-power-equipment station, they learned how to reload a string trimmer and determine what machines need a gas-oil mix. A local plant nursery hosted a session on spring landscaping ideas and how to prep soil for planting. The co-op grocery store hosted a session on aromatherapy.
"We had nice gift bags made up with a bunch of different items. Half of the women left with something," Frodel says. "We were trying to make it a fun event, not just a learning event."
Mid-State plans to hold the event again next year, possibly in late May or June, so some ride-and-drive activities can be organized outdoors. The company also plans to hold similar "Ladies Night" events at two other dealerships.
Frodel says the customer base has grown tremendously at the rural lifestyle store because of the special marketing events. "If customers have a good experience, they tell somebody. They tell their neighbor, they tell somebody at church. That's what keeps us going — new people coming through the door."
If Mid-State would have done anything different with its rural lifestyle dealership, it would have been to build a bigger shop, Frodel says. The current one is barely 4,000 square feet.
"That's a good sign. It means our business has grown. That's always a good problem to have."