A rural lifestyle customer enters your dealership because they want to buy something, maybe today or maybe next year, but they need what you have. For every sale, make it your goal to uncover other equipment they need or that will make their job easier — providing a better long-term solution for them and more revenue for your dealership.
“So many salespeople yield too quickly to the customer because they don’t want to lose a sale. It’s a fine line because you don’t want to argue with a customer,” says Dave Teigen, account manager and trainer for Jerkins Creative Consulting. “Many sales managers focus on the ‘home run’ rather than the ‘single or double.’ To increase revenue, they need to coach their people to be confident about putting a package together.” (See “Confidence Increases Sales,” on page 66.)
Attachment packages, higher horsepower, good financing terms and added features and options provide many ways for you to upsell your way to a better year.
Eric Roach, store manager for S&H Farm Supply of Joplin, Mo., estimates that 25-30% of his customers provide upselling opportunities. S&H has 4 locations in Missouri and carries New Holland, Kioti, Bad Boy, Bush Hog, Cub Cadet, Scag, Exmark, Rhino, Stihl, DR Power Equipment and other lines.
Upselling can amount to significant dollars in his market. “Our rural lifestyler is 500 acres and down,” Roach says, with many of them being cattle producers. He says smaller tractors offer good upselling opportunities for his dealership. “A lot of people still don’t understand horsepower. If I have the opportunity, I always move them up to a higher horsepower. A lot of guys think a 50 horsepower tractor will do everything they need when they really need a 75 or even a 100 horsepower tractor to do everything they want to do,” he says. Some customers also match a tractor with a rotary cutter, but they have plans to move up to a larger cutter later, using the same tractor. “I tell them, ‘We want you to be happy and you are not going to be happy with this piece of equipment.’ Ninety-nine percent of the time they will listen to you.”
“Don’t yield too quickly...”
When selling to rural lifestylers, Roach keeps this need in mind: Time is the #1 factor. “It’s the most important thing to human beings today. Most of our customers are weekend warriors and they only have so many days to get something done. They say they’ll buy the tractor if they can have it by the evening — and it’s 3:30 p.m. when you’re talking to them.”
For that reason, Roach believes he’s lost the deal if they leave the dealership without buying. The dealership’s large inventory keeps the discussion going and helps him compete with the limited inventory that his big box competitors carry.
Steve Armstrong, owner of Armstrong Tractor, Donnellson, Iowa, says, “Every customer I feel has the potential to upsell. Armstrong carries Bush Hog, Core, Echo, Mahindra, Scag, Worksaver and other lines. When a customer comes in with a specific model in mind, I visit with them about their needs and what they need the machine to do, what their expectations are and with my product knowledge, I tell them it will or won’t do it.”
He backs up his recommendations by referring to the owner’s manual. “We go through the specifications, so I can show them what kind of tractor they need if they want to lift this much weight. I tell them, ‘You want to be in this price range, but you need to go with this tractor. It will do what you need for a little more money.’ I tell them that I don’t want them to be disappointed with the tractor.”
S&H Farm Supply stocks an extensive lineup to give more choices and to keep customers from walking away without buying.
Armstrong is willing to go an extra step to show the differences for mowers. “If a lawn and garden customer can’t decide, I set up a demo on their property with three different machines, so they can make the decision on their own property and not at the dealership. It alleviates a lot of ‘I should have done this.’ The same thing with tractors. We’ll narrow down the models at the dealership and we’ll bring a couple tractors to their property. They can compare things like a gear drive transmission vs. a hydrostat while they’re doing work on their own property.”
When selling power equipment, Armstrong says he proves that the extra money is worth it. “When they step up to a commercial model, I talk about the longer warranty and show them the heavier bearings and bigger tires — things the customer can obviously see.”
Packaging the Sale
Tim Berman, owner of Big Red’s Equipment, Granbury, Texas, says tractor attachments provide a lot of upselling potential. Big Red’s carries Branson, TYM, Yanmar, Echo, Bad Boy, Gravely, Ariens, Hustler and American Sportworks. “The average customer used to buy 1 or 2 attachments and now they’re getting 6 or 8, like a grapple, pallet fork, hay fork, rotary cutter, post-hole digger and box blade. Not all dealers want to carry all that equipment or do that level of work to get the sale, but you can take an $18,000-$20,000 deal and turn it into a $28,000-$30,000 deal.”
Berman says cabs for smaller tractors are a new upsell opportunity for the rural lifestyle market. “A cab with an air conditioner and heater often adds $4,000 to the sale and maybe a little more. With a tractor priced at $18,000 or $19,000, you’ve now added 20-25% to the deal,” Berman says.
Eric Roach is sales manager of S&H Farm Supply, Joplin, Mo.
A needs/benefits approach uncovers buyers. “I ask them ‘How would you like to ‘bush hog’ and not fight allergies? As long as they are not super price sensitive, it’s easy to get them interested,” he says. The same philosophy can be applied throughout a dealership’s inventory. For instance, Berman says a person who is mowing a large amount of acres with a zero-turn mower, may prefer the comfort of a premium seat that is only available on the higher-end machines. “We give the customer the opportunity to upgrade the seat or even upgrade the machine. Sometimes, the seat upgrade gets them close in price to the next level of mower.”
And, he asks customers how they want to take delivery of the equipment, to uncover trailer sales opportunities. “Dealers that don’t sell trailers need to sell trailers,” Berman says.
Roach of S&H says package deals encourage upselling discussions, but they have one drawback. “The problem is when you put packages together, sometimes you have to cut profits. You could get 10% profit on the straight sale of the trailer or 12% on the tractor and then get 8% across the board on the package deal. Or, you could sell more remotes on the tractor and sell the parts at cost and the labor at half rate to get the deal. The competition is so strong and you only have one shot,” he says.
Tim Berman is owner of Big Red’s Equipment of Granbury, Texas.
Armstrong says he’s had success with add-ons that customers may not know exist. “As a customer expresses concern with being able to pull a trailer with a zero-turn, I tell them there’s a hitch available and a sun shade as well. For tractors, there are add-ons like engine block heaters and safety lights, which are big in our rural community,” Armstrong says.
Berman and other dealers sell future needs to maximize upselling opportunities. “One effective strategy is to show customers a little bit larger or higher-end unit than they may have initially inquired about, then show them the next model or two down. This can totally change the customer’s perception of the machine they originally inquired about,” he says.
However, Berman advises staying away from terms like “bells and whistles.” He says, “Automatically, customers will say that they don’t need them — they won’t cut the grass shorter or quicker. If I’m proposing looking at a larger piece of equipment, I always specify the benefit. Price is always a factor when you go from a mid-size to a large compact tractor. People are lured in by the pricing of a mid-size compact and can be upsold to a larger tractor based on the jobs they need to get done.”
Financing to Sell
Low interest rates and lengthy terms help move an upselling discussion to a sale. “With the large offering that Mahindra has and the financing at 0% for 84 months — that’s unprecedented. It takes a lot of the pressure off of upselling,” Armstrong says. He adds Mahindra’s Ready Quote software also helps him quickly present and adjust prices.
Roach says S&H has at least 5 financing sources for most sales and bad credit doesn’t have to stop a sale. His team works with customers to discuss rates or a larger down payment, without it being an awkward situation. “My guys are asking questions and saying, ‘This probably won’t work, but let’s try here.’ Many are already expecting it because they know their credit isn’t good.”
Berman says, “Manufacturers’ offers are well and good, but a high percentage of consumers don’t qualify for these programs. An improvement in financing processes is badly needed.” Since the decline rate is high, they also offer an array of subprime lenders.
“Our industry is so much more manual than the auto industry. We’re 20 years behind them,” he says, referring to an auto dealer being able to send a request through many credit agencies at once. “Since 2/3 of tractor buyers finance, it’s critical to have both prime and subprime lenders in the F&I arsenal. Financing is critical to maximizing the margin on each deal through upselling,” Berman says.
Dave Teigen is account manager and trainer for Jerkins Creative Consulting.
Confidence Increases Sales
Many rural lifestyle customers come armed with research when they visit your dealership. However, they don’t know what they don’t know — and your expertise can help uncover more equipment and options they might need.
“Most customers today, especially in the rural lifestyle market, have done their homework. Customers come in and have zeroed in on a piece of equipment based on their price range. If you really want to provide the customer a service, you have to listen to what they want to do with the machinery. During that time of listening, have confidence in your product knowledge, so you can quickly adjust and upsell,” says Dave Teigen, account manager and trainer for Jerkins Creative Consulting. Teigen has 25 years in sales and store management and 33 years of experience overall in the farm equipment industry. He was with Bonneville and Madison County Implement, Idaho Falls and Rexburg, Idaho, when Farm Equipment magazine named them its 2009 Dealership of the Year.
The good news is that by doing this prior research, many customers are ready to buy when they visit a dealership. “When I worked in a dealership, a customer would call and say ‘I want this tractor, this loader and this cutter.’ It was a $40,000-$50,000 impulse purchase,” Teigen says.
He suggests this 4-step approach when they arrive in the store as a way to uncover what else they might need.
- Listen to their needs.
- Assess the products that could fit those needs.
- Find out their total budget — as well as the monthly budget.
- Uncover future plans for the equipment or property.
Dave Teigen of Jerkins Creative Consulting leads a training class for dealers. He says salespeople often give in too early because they are afraid of losing a sale. By doing so, they miss upselling opportunities.
Teigen says a salesperson should repeat what a customer says when talking through the options. “Say things like ‘Based on what you’re telling me, I think this mower, although it costs a little more, will be better for you,” he says. Also, know exactly how much additional options or attachments will add to the monthly budget. And, don’t give in too quickly if you know the option you are proposing is the best long-term choice for them.
Think long term as well in terms of the customer relationship. “Sell to the next sale. It’s all about repeat business. A rural lifestyler is making an investment for 3-5 years. You want them to be fully satisfied down the road. With today’s computer power and CRM systems, you can uncover prospects that you sold to 3 years ago. The second sell is to an enhanced model or to a bigger model — as long as they were satisfied and felt well taken care of the first time,” Teigen says.
Dealers share how they balance making the most of their sales strategies while still selling with integrity. Berman says, “If you’re meeting the customer’s needs and making recommendations about how to mow a pasture faster or be more comfortable, it’s not unethical to try to upsell. Dealers who are being unethical are telling customers that equipment is going to do something that it’s not going to do.”
Armstrong says his dealership’s team approach, rather than individual quotas, helps maintain good sales ethics. He is the main salesperson for the dealership, but his parts manager, Dan Workman, and Kim, his wife and the office manager, also help with sales. Any bonuses are shared with all. “We all work together. We share the pain and we share the gain,” Armstrong says.
Roach says this about his sales team: “Even though they are on 100% commission, I don’t allow the ‘used car mentality.’ ” He is referring to selling for quotas and not for customer satisfaction. Roach asks four questions when he evaluates the efforts of his sales team:
- Do I trust them?
- Do they have initiative?
- Do they care?
- Are they willing to do whatever it takes to make the customer happy?
When training new salespeople, Roach says, “I’ll look at all their invoices and ask the hard questions. When you do that, they know it’s not just about the numbers. I’ve actually accused my guys of caring too much. They are so involved with making it right, they’re tying up too much with non-essentials.” Instead, he advises on when it’s time to turn the transaction over to service or parts. However, that kind of customer service builds strong relationships. “We have customers who say, ‘Whatever you think. Go ahead and get it ready.’ That’s trust,” he says.