Interview with Shawn Boone, Manager — Livestock and Rural Lifestyle Markets, Case IH, Racine, Wis. from the Spring 2009 edition of Rural Lifestyle Dealer.
Full-Line Brand, Diversified Dealers
 Shawn Boone, Manager Livestock and Rural Lifestyle Markets, Case IH, Racine, Wis. |
“Case IH wants to be a full-line brand and have full-line dealers. We’re an agriculture equipment company and want to be close to the farm segment, which is why you won’t see many Case IH dealers in metro areas. Instead, you’ll see our locations at the fringe of the larger communities.
“As the lawn and garden dealers continue to face a down market, there’s an opportunity for the established agriculture dealer to pick up the rural lifestyle customers. Buyers will likely need to travel further out of the metro areas to find the dealers they want, so many dealers will be in a position to satisfy both customers.
“We believe the successful equipment dealer today needs to be well diversified, not just solely a farm or lawn/garden-focused dealer, but with a variety of options that can supplement their farm revenue. There are periods of the year when cash crop equipment sales will slow down a bit and sales of small tractors and hay and forage equipment can fill some of those voids. Plus, the cash crop market isn’t always going to see the growth it has the last several years.”
A Big Market
“The rural lifestyle market is the largest tractor segment — more tractors are sold to this market than to all of the other tractor segments combined. The hay and forage equipment follows suit; that’s where most of the units are sold.
“So there’s a big opportunity even when the market is soft. Of course, it’s at a lower price point than cash crop equipment, but the typical buyer works off the farm in the private or corporate sector and has the money to support this lifestyle.
“It’s a very important market to us, and Case IH has shown its commitment over the last 2 years — increasing sales by 15% in this segment over that time. Being a full-line manufacturer includes making sure our dealers have the smaller equipment and can strengthen their dealerships with that source of income.”
A ‘Must-Have’ Lineup
“The dealers that do really well in the rural lifestyle market offer a little bit of everything a rural lifestyle buyer would want. Number one on the list of products the dealer must have available is loaders. The tractor goes out with a loader on it as much as 80% of the time. Second would be rotary and finishing mowers. After that, it’s box blades, backhoes, posthole diggers and utility vehicles — as many as half of the tractor owners own a utility vehicle, so that’s a fast growing segment. A lot of successful dealers now also carry light construction equipment, such as skid-steers, mini-excavators and small backhoes. It varies by market, but typically a dealer needs to stock loaders and mowers.
“Nearly every Case IH dealer has small tractor sales, but sales to the rural lifestyle market would represent the majority of their sales for about half of our dealers. Our focus is to steadily grow the rural lifestyle revenue share for our dealers by another 5-10% in next 3 years. We’re putting forth the effort to grow this segment of the business, which includes increasing our dealer presence.”
New Products & Work EZ
“One of our goals is to provide more value-priced equipment. With the current economic situation we’re in, some people don’t want to spend extra money on all the bells and whistles — they’re just looking for a tractor to get the job done. And so that has put a greater focus on the product front.
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“We want to be that farming-slash-rural lifestyle manufacturer. I think dealers are seeing our excitement and aggressiveness as we expand into this market. We want to stress both dealer and brand awareness, and help them attract both the farm and consumer customer to their stores.” |
“Most of our new products for 2009 are on the production agriculture equipment side. On the rural lifestyle side, we have new private-label rotary cutters and hay equipment products available, and also the new Work EZ line from CNH. Painted black, the line includes loaders, box blades, disc harrows, landscape rakes and rear blades.
“It’s a brand between the two manufacturers and is supplemental to both firms’ core equipment offering. It allows Case IH and New Holland dealers to offer a broader line of products from one source.”
Connecting With The Customer
“Most of our dealers can use help identifying and reaching the rural lifestyle customers. They’re used to a core group of traditional farmers who’ve purchased from the dealership in the past. Understanding how to connect with a totally new customer is probably the biggest hurdle.
“We make sure we help them capitalize on advertising to the rural lifestyle customers. The role of the Internet is very different. While the purchase often appears to be an impulse buy, the reality is that many have already spent a lot of time on the Internet investigating that purchase beforehand.
“Because the rural lifestyle customer may never have walked on a dealer’s lot before, it’s critical to advertise and get the dealership’s name into the marketplace. Like the car industry, 0% financing is a major factor for the smaller tractor. A lot of our focus is based around low-rate financing.
“From a retail perspective, the store needs to be inviting and orderly. We want all the tractors displayed out in the front of the dealership. Another factor is making sure you display all the attachments — the implements that make a tractor useful. You want to show you can offer a variety of products to meet their needs.
“And when customers come in, the smart dealer is not just selling equipment, they’re selling themselves and all the supporting aspects to the purchase, making the customer comfortable with the support and service they need.
Inventory Matters
“A lot of our focus has been on educating our dealers and salespeople on how this market reacts. When they’re ready to buy, it’s usually a quick purchase. That’s why dealer awareness, brand awareness and inventory are so key. We’re making sure that our dealers stock the inventory necessary to capitalize on this market. The customers aren’t willing to wait; they want to take it off the lot right then and there.
“More so than in the past, we’re working on programs that provide flexibility in floorplan terms for Farmall tractors under 100 horsepower to help dealers maintain proper inventory levels.”
Best Practices
“The keys among our best dealers are stocking equipment, aggressive advertising, a focus on carrying and promoting a variety of attachments and a capable parts and service department. Another trend we see is extended dealership hours to be convenient for buyers who work 9 to 5.
“It’s best to have a specific salesman dedicated to the rural lifestyle customer — someone who understands the product and is there to answer any questions as the customer walks in. When a salesperson is focused on his farm customers, it’s difficult for them to give the same attention to greeting customers as they walk in.”
For More Perpsectives from Manufacturers on the Rural Lifestyle Market, click here.
