Interview with Denny Docherty, Group Director, Customer Marketing, Commercial & Consumer Equipment Division, John Deere, Cary, N.C.
Dave Kanicki, Executive Editor
Organized By Market Segment
Denny Docherty, Group Director
Commercial & Consumer Equipment Division, John Deere, Cary, N.C.
“The rural lifestyle, or ruralpolitan, market has been a point of emphasis for John Deere for the past 10 years as we’ve seen a shift from farmland to property-owner land. When a farmer sold off 1,000 acres to a developer, we and our dealers saw an opportunity to go from one customer to several hundred. The entire focus of our C&CE division — commercial and consumer equipment — is on serving the equipment needs of these customers.
“Within the C&CE division, we have what we call our property-owner products, which are mainly mowing products that are sold by our dealers as well as through mass retailers. Our higher-end premium riding lawn tractors, the Select Series, along with our Gator utility vehicles and compact utility tractors that range to slightly over 50 horsepower, are sold only through dealers.
“This is a very diverse market, and we segment it even further within C&CE. It includes equipment for our professional landscape group and our golf and turf group. A lot of these products cross different segments. A compact utility tractor can be used by property owners, by commercial landscapers or even by golf courses. There are different specifications and usually they’re equipped with different attachments, but they’re same base machine.”
Sizing Up The Rural Lifestyle Market
“Typically, we look at ‘rural lifestyle’ customers as having 6 or more acres. Most consumers in this segment have a full-time job and a passion for the land. A lot of them have animals — especially horses — and others just enjoy growing their own specialty crops or doing gardening work.
“We break the U.S. market down starting with households, or what we call property owners. There about 75 million households that live on less than 1 acre. About 9 million of them reside on properties that are between 1-3 acres and 7 million on properties that are 3 or more acres. This is where you start to get into the core of the ruralpolitan segment. The biggest pockets of these ruralpolitans are found in the Southeast and Southwest. We not only look at acreage but the types of activities or projects on the property, for example, raising horses.”
Changing Dealership Patterns
“Over the last 5 years, there’s been a significant change within our dealer organization. We’ve seen a lot of dealers consolidate, not necessarily locations but owner groups through acquisitions or mergers. And as dealers get larger, many are segmenting their area of responsibility by location and market served. We’re also seeing dealers investing in brand-new facilities where there is a significant customer base of ruralpolitans.
“Many of our dealers have done an excellent job of adapting to this marketplace, so we haven’t needed to add new dealers to service it. We’ve been fortunate because John Deere dealers that are looking to grow have earned the right to expand based on their business proposal and ability to help us understand how they would get after this segment. So, the majority of our expansion has been through current John Deere dealers.
“We have a variety of training tools available for our dealers on all of our customer segments — from the professional producer all the way to the ruralpolitan — and the best way to work with them and how to market to them. Most of it is hands-on: here are the products and here is what these customers are looking for in these products.”
More Than Selling A Tractor
“Our dealers need to be solution providers. The sales process needs to be focused more on being a trusted partner than trying to sell a tractor. These customers want to view their equipment dealer as their trusted advisor. This can mean taking time to walk their land with them or spending time helping them understand how to operate a tractor. It may mean taking the machine out to their property and letting them spend some time with it. No one wants to look like they don’t know what they’re doing. They don’t want to feel foolish or intimidated. We’re trying to help our dealers understand the importance of value selling vs. just product selling.”
Value Selling Vs. Product Selling
“Value selling is understanding what the customer wants to do with the equipment, and not only how much horsepower it has or the fact that it has a rear PTO. A lot of the ag terminology confuses them.
“We need to talk more about the task and simplify it to where anyone that hasn’t been around this equipment would understand it. It’s being able to explain it as if you were operating your automobile without talking down to the customer. I’m not trying to imply that a dealer needs to keep it simple because the customer is not capable of understanding. That’s not the point. They’re very intelligent customers. But they most likely have never been around equipment, so the sales process and the retail environment is critical.
“It’s also very important how we merchandise the outside of the dealership — what the dealership looks like — to the service support we provide. In many cases, these customers are not able to bring their equipment to the dealership for service. That’s where our mobile service program is a really nice advantage because the dealer goes to the customer to change the oil, tune up the machine and it never leaves the property.
“Value selling is understanding the customer’s needs. The product, service, dealer expertise and the retail environment, and how all those pieces come together to provide the customer — in a non-threatening way — all of what they may need to take care of their property.”
Marketing To The Rural Lifestyler
“We’ve begun running a 30-second TV commercial that brings to life this ruralpolitan segment and how John Deere has the right products — and our dealers the right services — to support their lifestyle and help bring their dreams to life.
“It’s targeted advertising that’s aimed at the ruralpolitan and it’s being shown in both the U.S. and Canada. We even ran it during the NCAA basketball tournament. We’re doing it because we want to make people aware that we understand this segment, and we’ve got the right products and solutions and the best dealer organization to help them.
“We also understand that it may be difficult for the ruralpolitan customer to know who they can go to, who can help them take care of their property and animal needs — and it’s our dealers. This is an extremely important segment to us. So important, that we developed a commercial that’s less about selling tractors and more about ‘We’re here if you need us and our dealers will be there to help you, too.’”
New Products For 2009
“We introduced dozens of new products to our dealers and the media last fall. Most of them are just hitting the marketplace now: from a zero-turn mower to the Select Series X748 tractor to the Special Edition Gator XUVs to our new 3E tractor to the tractors with the quick-attach attachments and the AutoConnect mower decks.
“The AutoConnect mower deck is getting a lot of attention. They’re a great example of how rural lifestyle products need to be simple, easy and intuitive. Think about how we used to view attaching a mower deck to a tractor when we were maybe just focused on the agricultural segments. We would get a wrench out and spend a lot of time moving the mower deck around to position it under the tractor. A lot of time it was a two-man job. The ruralpolitan customer needs those drive-over decks and easy attachments.”
Outlook For 2009
“In our first-quarter earnings release, which we reported in February, we said that we’re expecting our C&CE sales to be down 10-12% for the year, mainly driven by the economic uncertainty and everything else we’re hearing and reading about.
“It’s really difficult to know for sure what impact the current economic environment will have on this segment. We believe it’s a segment that’s solid and will continue to grow. But we’re stepping back and trying to really understand what the growth potential might be going forward, not only based on what we’ve seen the last 10 years but also whether this is the ‘new normal.’ Things have changed a lot over the last 18 months. We’re still very optimistic and, more importantly, we feel we’re ready for when the economy picks back up.”
For More Perpsectives from Manufacturers on the Rural Lifestyle Market, click here.