Interview with Doran Herritt, Brand Marketing Manager: Compact Tractors; Ken Hough, Team Leader, Rural Lifestyler Marketing Group; and Rory Chisholm, Product Planning Manager, Compact Tractors, Loaders, Implements, Consumer & Commercial Products, New Holland Agriculture, New Holland, Pa.

Dave Kanicki, Executive Editor

‘Needing’ a Tractor vs. ‘Wanting’ a Tractor

“It’s very difficult to categorize customers in the rural lifestyle market because it’s a very diverse group. They live in or have moved to the country for many different reasons and often have different objectives of what to do with their land.

“One of the really important things we’ve come to understand, and are trying to get our dealers to understand, is that a lot of rural lifestylers don’t need a tractor, they want a tractor. This represents a big shift in how a salesperson approaches the sales process when they’re used to dealing with an ag customer who needs a combine or a planter for their livelihood.

“For the rural lifestyler, it’s often more of a want than a need. The purchase isn’t so much ‘what can I get done with it,’ but ‘how happy is it going to make me on Saturday afternoon.’

“We’re trying to emphasize this and shift our attitudes based on customer attitudes. We need to make sure they’re happy. It’s not always about price, but the comfort and operation of the tractor, the attachments and support of the dealer that will entice them to buy a New Holland product. It’s an emotional purchase.”

A Burgeoning Market

“This is a very important market to us. Right now, sales of equipment designed for this market is a substantial percentage of our total equipment sales. Of course, our agricultural customers purchase some units, but the rural lifestyler customer group is growing and we’re providing our dealers with an expanded product line that fits the market.

“Our most recent studies have shown that the market for this type equipment is approximately $2.1 billion. It impacts 27 million U.S. households and almost 70 million people.

“With these kind of numbers, we see the value in developing new products for our dealers to increase their sales. We’ll continue to focus on it and grow it.”

Building On Its Heritage

“It’s also important to us because clearly our heritage lies in small tractors and the markets that have traditionally relied on them. We’ve always been in the small tractor business. You can go back to the Ford tractors in 1917. The under 100-horsepower tractors have always been our bread and butter. That’s what small farmers used to pull hay rakes and balers. Ford is part of our heritage and we’re capitalizing on it and keeping it as a key part of our business.

“We introduced the 25-horsepower model 1000 in 1970 and that was our first attempt to really get into this particular business. People were looking for something between a garden tractor and a typical farm tractor. The fact is, the rural lifestyler has been out there for a lot of years. We knew that market was there, but it wasn’t nearly the size it is today. Over time, it’s evolved, gotten bigger and more sophisticated. New Holland has always been in touch with that market.”

Dealer Coverage

“We don’t have a specific model or a ‘typical’ dealer that specifically serves the lifestyle market. Many dealers are still ag-oriented but have adapted to hobby farmers and rural lifestylers. What we have found is that this market affects almost every one of our 800 dealers and their 1,100 locations across North America.

“As far as how dealerships organize their sales efforts to service this segment, it’s all over the board. Some do it by sales territory. Some have organized their sales force by product line. For some dealerships, it’s a free for all. We can’t say that there’s been a significant trend in how our dealers have organized their sales teams to pursue the rural lifestyler marketplace.”

Ag Dealers Need To Adapt

 “In some cases, it’s taken a real effort by the long-time ag equipment salesman to adapt his sales strategy to the new customers. Like any group of customers, there’s not a one-size-fits-all sales approach for rural lifestylers, but there are some basics things that we know they’ve come to expect.

“We’ve found that they expect a higher level of service — not only mechanical service — but informational needs through the entire sales process. A lot of them expect flexible hours and fast answers. When they buy equipment, they’re looking for that automobile-like purchasing experience.

“Our dealers have learned that these customers like to hear from other customers like themselves, so a lot of our dealers offer testimonials from local customers. They also set up ways for these customers to talk to each other and share their experiences in what they do and the equipment they use. Many have extended and weekend hours and have learned these customers like to be greeted when they walk in the dealership door.

“Rural lifestyle customers love product demonstrations. They might not know a lot about working the land or even how to work a tractor. Our best dealers get customers in the seat of the tractor and teach them how it operates and what implements they need to complete their chores.

“We know these customers like clean, well-organized dealerships along with organized and robust web sites. These customers are very Internet savvy. And they want quality time from their dealers. They want a lot of information and want it quickly, along with a lot of service to back up the sale.”

New Sales Tools Needed

“We’ve developed a new web site called www.myboomer.com, for both our dealers and their customers. It has a lot of rich video content about the equipment and how customers are using the equipment. It has real customers talking about their experiences in the country, the equipment they use and why they selected it. In some cases, they offer advice on what other customers should be looking for.

“It’s a place where customers share their experience and provide answers to a lot of the questions rural lifestylers have about equipment.

“In addition, we’re launching, what we call, a shoulder-to-shoulder selling tool. It’s focused on the rural lifestyle customer, the compact tractor business and implements. It helps our salespeople go through a sales presentation to these types of customers.

“Those two tools are designed to help our dealers and their salespeople with the selling process. It’s how we see the marketplace developing, the need for robust digital information sharing, and how we’re helping our dealers target this customer segment. Both are ongoing efforts.”

Full Line Of Products

“Another major focus in our efforts to grow our share of the rural lifestyle market is to provide our dealers with a full line of equipment they can offer at both ends of the value range.

“One of our key launches in 2009 is a new transmission that goes in our 40-50-horsepower compact tractors. It’s called EasyDrive CVT and it will be replacing a hydrostatic transmission in our Boomer cab model tractors and is used in our new Boomer 8N. New Holland will be the first manufacturer to introduce CVT technology with this size of tractor and we’re excited about the features it’s going to bring to these customers.

“It has only a single pedal the operator uses to control the speed of the tractor and it functions just like the accelerator in a car. Again, we’re trying to make operating our tractors familiar and comfortable for the rural lifestyle customer. When they get into a tractor that has the EasyDrive CVT they can instantly understand how to operate it and be more confident with a tractor.

“We’re really excited about the New Holland Boomer 8N tractor. It is a retro model that captures the look of the 1947 Ford 8N and combines it with a modern driveline. It’s generating a lot of buzz and bringing attention to the New Holland brand and the rest of our compact tractor line. It’s not just a tractor that looks good, but it’s also a very capable 50-horsepower compact tractor.

“The New Holland Boomer 8N represents our focus on the premium feature market, but we’ll also be introducing our model T1530, which is a 45-horsepower value compact tractor that expands our current T1500 series up into a higher horsepower with a larger frame size. It has all the performance specs, but it’s just a basic tractor to get the job done.

“In 2009, we’ll be launching two new models of commercial zero-turn mowers. Currently we offer a residential line of ZTR mowers. We’re expanding that with a heavy-duty version with more horsepower, bigger decks to handle larger acreage and higher frequency of mowing for professional landscapers.

“We introduced the Work EZ line of implements — rotary cutters, loaders, box blades, etc. — last fall and started shipping them earlier this year. We had always offered a line of implements but it wasn’t as robust as it is today.”

Outlook for 2009

“We see 2009 as a tough year in this market with tight credit, declining home and portfolio values and uncertainty in employment. We’re hoping the stimulus package, along with the new products we’re bringing out, will help our dealers generate growing sales. We see better things in 2010.

“When we met with dealers earlier this year, we reminded them that the grass and weeds will still be growing and horses still need to be fed. We’re also thinking that at some point people may start to smell a bargain — whether it’s automobiles, houses or tractors — and say, ‘Hey, it’s time to buy.’ That will stimulate things.”

For More Perpsectives from Manufacturers on the Rural Lifestyle Market, click here.