Rigg's Outdoor Power Equipment, Valparaiso, Ind.
Founded: 1981, with stores in Valparaiso, Mishawaka, La Porte and Lafayette, Ind.
Location: The Lafayette store is located a few miles off of I-65 on Highway 25. Each location serves a variety of customer types including residential, municipal, agricultural and commercial.
Lines: Kubota, Hustler Turf, Cub Cadet, Stihl, Dixie Chopper, Western, Land Pride, Toro Consumer and Honda Power Equipment
Challenge & Solution: Rigg's Outdoor Power Equipment works to find the right balance of employees to manage through the slower winter months, but still maximize the high volume of business in spring and summer. Managing cashflow is a year-round challenge
February, even if the polar vortex and snow may have suggested otherwise. In February, the dealership was reaching out to customers with service specials, encouraging them to bring their equipment in for pre-season maintenance.
"We still do free pick up and delivery for all our customers who would like to get their equipment serviced and not wait until the last minute in April or May to bring it in. We get them in here early and get them serviced, which keeps my mechanics busy during this slow period," says store manager Don White. Rigg's offers free pick up November 1-March 1. White joined the dealership about a year and a half ago after 17 years at a car dealership.
White says this helps ensure the shop isn't too backed up when business starts to pick up. "It helps us on one end and then helps the customer on the other, so that when commercial customers breakdown come March 1, I don't have all this already piled up waiting. Then, all of a sudden we're 2 weeks out," he says.
The technicians were able to balance their workload last spring and White says the Lafayette location's service department was never more than 2 weeks out on work. This past winter, the dealership was fortunate enough to stay busy. "Normally, it's a little bit of a downtime especially since we are one of the newer dealerships in town. We have time to catch up and get inventories done and reorganize for the spring," White says. "But it's been busy all the way through and we're hoping to catch our breath a little bit and go into the spring services so we can get people in a little bit earlier."
'All Hands on Deck'
When the spring rush hits, White says the biggest challenge is time management and staying organized. It can be a challenge because there are so many different things going on at once, from assembling new products and preparing them for delivery, to regular service work, selling new equipment and keeping up with the daily operations. "During the spring, we're in our busiest season for service, so it's 'all hands on deck' at that point in time where everybody is helping in all areas," he says.
"I've always treated customers how I want to be treated, so that's been my philosophy and that's what's worked during my 17 years in the car industry and now into the lawn & garden side..."
Spring is also when Rigg's Lafayette location hosts its open house. White says they try to hold the event when home and garden shows are taking place, usually on a weekend in April. "You try to target when you think the weather's going to break. Ideally, it's going to be a nice, beautiful weekend and you're going to have hundreds of people coming in," he says.
The open house is a 2-day event - Friday and Saturday. In addition to having representatives from their various brands on hand to do demonstrations and talk with customers, the dealership also has a giveaway each day. Rigg's tries to make it a community event and invites a local radio station. Last year, Dog 'n' Suds, a local eatery, was part of the open house, which White says was a good draw. "To alert people to the event we do a combination of marketing related activities that include radio advertising and direct mail to targeted demographics likely to be interested in our equipment," he says.
Last year's open house drew 223 people over the 2 days with the majority showing up on Friday. "The nice thing is that we're still new and rural enough here that there's 30-40% of the people who want to see it, feel it, touch it, and you can't see it on the web," White says.
Partnering on Promotions
Rigg's has a unique arrangement with the Subaru Isuzu factory in town. During the open house, the dealership will have a special giveaway from one of the sponsored vendors for the 3,500 Subaru employees. They can follow the event and find out the giveaway winner through ads that Subaru allows Rigg's to broadcast on TVs located throughout the manufacturing facility. In addition, Rigg's offers Subaru employees a 10% discount on parts during the open house.
"They love doing things within the community and being right in their backyard, this was a great fit," says White. Rigg's relationship with Subaru goes beyond the special giveaway. The dealership provides the automaker with bulk salt in the winter for parking lot and driveway maintenance and also serves as the supplier for the contractors who manage the facility grounds.
White says the relationship with Subaru is one thing that sets the dealership apart from others. "I think a lot of dealers try to have a relationship with different companies and so forth. You just need to have that right situation. Again, I think that's helping them year round. It's helped us with Subaru - 'We're going to help you do this and we'll be a part of that open house' or whatever," he says.
Geoff Blanco, co-owner of Rigg's Outdoor Power Equipment, says the arrangement with Subaru is a unique situation for Rigg's as more rural dealerships may not have a major manufacturing plant nearby. The dealership is making an effort to foster more relationships like they have with the automaker. "Some of the bigger companies in the area, just by the sheer amount of properties that they own, are clearly doing some type of facility maintenance that we should be tapping into. You have to be proactive in doing that," Blanco says.
In addition to working with Subaru's facility maintenance staff, White says 70% of the dealership's business is residential, large property owners and ag. The remaining 30% of their business is commercial/construction, municipal and institutional with more than 40 reliable commercial customers in these markets. "Then we have another 10 commercial customers that use us here and there and they travel from Frankfurt, which is 20 minutes away, or they might travel from different cities because we carry Kubota and they need service. However, the residential customers and the businesses that serve them are our bread and butter in this area," White says.
Lawn and garden customers make up most of the daily transactions, however, in terms of revenue, Blanco says the split between lawn and garden equipment and larger tractors is about 50/50. "We can sell one Kubota tractor for $30,000 but we've got to sell 15 Cub Cadet lawn tractors to make up that same amount of revenue. So, on a per-unit basis, the lawn and garden market is a higher transaction, lower deal size, whereas the Kubota is a much higher deal size with fewer transactions. With that said, both types of equipment have their strategic value in generating profit for the business" he says.
The Stihl and Kubota lines have helped Rigg's serve a broader market now that Cub Cadet is available in so many locations, including big box stores.
Rigg's Lafayette location is no stranger to competition. The dealership has a John Deere tractor and construction dealership nearby, which carries lawnmowers as well as Honda and Stihl products, White says. In addition there is a Bobcat dealership in town which competes against Kubota construction equipment but has also been active in selling commercial zero-turn mowers.
"We have 2 'mom-and-pop' places in town that have been around for a while. We try to set ourselves apart from the mom-and-pop stores and offer more. We compete at the higher end of the dealer spectrum," White says.
Being part of a larger network of stores has helped set Rigg's apart from the smaller dealers in town. Besides the Lafayette store, Rigg's also has locations in Valparaiso, Mishawaka and La Porte, Ind. White says the dealership group allows the Lafayette location to have access to parts and equipment more quickly than if it was a smaller stand-alone store as well as a company infrastructure for centralized accounting and order management.
As is the case for many rural lifestyle dealers, big box competition has increased for Rigg's as well. "We have a Lowe's, a Home Depot and a Tractor Supply Company all right in our backyard here selling power equipment," White says. With Cub Cadet being available in more places now, including box stores, Kubota and Stihl are dealer-only lines which has helped Rigg's serve a broader market that wants to invest in quality vs. low price, disposable equipment. "Ten years ago you couldn't buy a Cub Cadet tractor anywhere but here. Manufacturers that choose to offer their product through box stores mostly erode their brand by being associated with box stores and the poor service and knowledge base that comes with selling their product through that channel," Blanco says.
"During the spring, we're in our busiest season of service, so it's 'all hands on deck' at that point in time where everybody is helping in all areas..."
White says the big box stores provide customers a way to shop by comparing prices on similar products that Rigg's carries. "For example, the big box store might advertise a Cub Cadet lawn tractor at the same price but offer a discount if the purchase is on the store's credit card. They use the tractor as a loss leader to get the customer to buy other home improvement products and get one of their credit cards. This makes it difficult to compete on price so we compete by offering better models and better service" he says.
Rigg's has been in contact with the Home Depot in Crawfordsville, Ind., - about 35 minutes south of Lafayette - and the Lowe's in town to service equipment sold at those locations. "People looking at equipment at these stores ask the question about service after the sale and they are directed to us. We can do warranty work for the Tractor Supply Company out here or any of those locations with proper information from the customer on date of purchase, receipts and things of that nature for the warranty to be honored, but our customers are always prioritized," White says.
While the smaller dealerships in town and the big box stores provide some competition, White says people like to come to Rigg's because they know they can get the service and customer care they want. "They know we service it, we sell it, we deliver it, and if there's something wrong we will own it - we've got more power to get it fixed. And, so far, that statement is very true. And if we do sell it, they're coming right back to us because we make sure to talk up our parts and service capabilities," he says.
A customer who buys from Rigg's rather than somewhere else also gets preferential treatment when coming in for service. "We have a set policy for service priorities based on customer type. We get our commercial customers in immediately because it's their livelihood and we very clearly understand that. Then, we follow the same protocol for our customers based on if it's in or out of warranty. And then you have your walk-ins and service for other brands, but at the end of the day we have to reward those customers that bought from us with priority service," White explains.
Learning from the Auto Industry
White says rural lifestyle dealerships could learn a few things from auto dealerships. He says there is a different level of professionalism in the car industry. "If you could bring a little more of the professionalism from the car industry over it would help in a lot of areas," he says. "I've always treated customers how I want to be treated, that's been my philosophy and that's what has worked during my 17 years in the car industry and now into the ag side and lawn and garden."
Blanco adds that car dealerships have grown in size and complexity, as well as in their relationships with their business partners over the last 30 years that has resulted in a much more refined business model. "This industry is evolving in that direction just more slowly, but I do believe it is the future. Business operations based on sound policies, procedures, and financial metrics must be the cornerstone of growing power equipment dealerships or eventually the whole thing falls apart," he says.
The need for the change, to an extent, stems from the changing attitudes of customers and a new generation of customers. "The 50-plus customer can still deal with the quaintness of walking into a place and there's a guy behind the counter who's got grease on his hands and says 'Hey, how you doing Bob?' But the new generations coming up are doing research on the Internet, buying expensive SUVs, going to nice restaurants, and when they move out to a 3-acre property they expect the same level of professionalism," Blanco says. "That whole dynamic is changing dramatically even in the rural communities. Farmers and construction workers are no longer sitting in dusty tractors and wiping their brows. Now, they're sitting in air conditioned, climate controlled cabs with as much electronics as their cars."
It's Blanco's goal to hit a middle ground between the professionalism and sleekness of a car dealership and the hometown familiarity of the local equipment dealership. "Hopefully, a company like ours can succeed because we continue to develop those business principles and professionalism like in the auto industry but still maintain some of that, 'Hey, how are you doing Bob' experience," he says.