ABOVE: Equipment for managing wood and debris has become very popular in regions like Washington where municipalities have established “no burn” regulations.
The markets served by rural lifestyle dealers are far and wide. The customer base can range from professionals who know the equipment they need to keep their businesses running and profitable to inexperienced homeowners who require a lot of guidance and education. Back in 2008, Rural Lifestyle Dealer dug into what made up this new “ruralpolitan” market (“Understanding the Buying Preferences of Ruralpolitans,” Fall 2008.) Ruralpolitans are residents who bridge the gap between suburban property owners with no farming operations and full-time commercial farmers. The vernacular has since involved and we now describe the group as rural lifestylers.
Rural Lifestyle Dealer has tracked the evolution of the segment, exploring the different market opportunities that exist for dealers, from hobby farms to lawn care companies and everything in between.
In the long-standing “Market Opportunities” series, dealers share what they are doing to achieve success. For instance, one of the biggest challenges rural lifestyle dealers face is developing the best retail experience for selling their products. Do you sell and display equipment in a “traditional” way that emphasizes the farm business and features or do you retail the equipment in a way that is in line with more typical consumer shopping?
And how do you sell to customers that don’t have the traditional agricultural identity? For instance, hobby farms are more likely to generate revenue from livestock than from crops (40% have cattle or dairy cows with an average of 10-20 head), and many own sheep, goats, poultry or exotics like alpaca, llama or ostrich. Yet, 80% of these customers don’t consider themselves farmers, according to the 2008 article.
We turned to the experts — dealers — to answer these questions and more. Here are highlights from over the years of some of the more important profitable segments.
Selling Wood Handling Equipment
Wood and debris handling equipment — including chainsaws, wood chippers, stump grinders, log splitters, etc. — are items that most rural lifestylers need. This equipment shouldn’t just be thought of as ancillary items to your business. The equipment should be displayed in an inviting manner, rather than just pushing them back in a corner or wherever there’s available space, dealers say.
Ask your customers questions to learn about their operation and then fit the equipment to their needs.
For landscape or fleet customers, bring equipment to the job site for the crew to try. Mow beside them to see how they use the equipment and what other needs they may have.
Rental equipment can lead to future sales and serves as a way for customers to get familiar with different equipment. But before committing to rental, be sure your insurance policy covers it.
“Put some thought into how your display exhibits are set up. Inventory must be neatly displayed in an eye-catching manner, clearly priced and cleaned up so it looks brand new,” says Tom Scaberhorn, owner and president of Issaquah Honda-Kubota in Issaquah, Wash. Scaberhorn shared his thoughts in our Spring 2008 issue. “Once you’ve built a solid wall infrastructure to properly display items, utilize the manufacturer to help you with the rest of the display. Companies such as Shindaiwa and Echo both came into my dealership and did a great job of providing signage and displays for us to use. Use the manufacturer as an in-store marketing resource. You’re carrying their items — they want you to succeed.”
In the past, fall was considered the main season for wood cutting equipment, however, Scaberhorn says the demand is now more year round. “People would need to load up on firewood for the winter, so they’d purchase chainsaws and log splitters in the fall. With the expansion of the rural lifestyle market, however, we’ve seen that people have a need to clear and cut debris as soon as it gets nice outside. This brings about a need not only for chainsaws and log splitters, but also chippers, stump grinders and other types of debris clearing equipment,” he says.
Reaching Commercial Market
|The staff at Harmony Horsemanship and Freedom Stables now use a John Deere Gator XUV with a dump bed instead of a wheelbarrow to haul bulk material.|
Turf and landscape contractors make up 19% of revenues for rural lifestyle dealers, according to the 2016 Dealer Business Trends & Outlook Report. This is a market that deserves attention, but landscape customers’ needs are different from your consumer customers. When selling to landscape contractors, specializing in one or two product lines is advantageous, dealers say. This allows you to better understand how the equipment works and tighten up the diagnostics and repair work. In addition, it eases the burden on the parts department and can increase your purchasing power. But, it’s an absolute must that suppliers you choose offer a complete line of products for landscapers.
For landscapers, sales aren’t necessarily made by upselling wholegoods. Instead, dealers should focus on accessorizing the landscaper’s operations with push mowers, trimmers and fertilizing equipment. “Accessorizing landscaping operations makes sense on a lot of levels. Anytime a dealer can sell in bulk, he’s going to be working in wider margins. Not only that, but various fleet programs allow dealers to offer liberal discounts for purchases of three or more units. Additional inventory going out the door means great amounts of parts and service work on the way back in,” says Todd Lane, manager and partner of Lane Sales Power Equipment in Morristown, Tenn. Lane shared his thoughts in the Spring 2009 issue.
This market is also a great fit for package deals, so dealers advise educating landscapers on fleet discounts they qualify for at different levels of purchasing. Most landscape contractors have the capital and buying power to purchase an entire fleet in one visit, so make sure they are aware of the options available to them.
Remember, new landscape customers aren’t just going to walk into the dealership. They need to be actively sought out and constantly cultivated and attended to, says John McCrimmon, a Hustler turf dealer and distributor in Loveland, Colo. McCrimmon shared his thoughts in the Spring 2009 issue. “The absolute best way to attract new customers is to load up a truck and trailer and go where crews are working. Get out and mow some lawns with them so you can understand their situation. It’s important that they know you understand what they’re looking for and it helps you better understand the products you’re selling.”
Dealers advise showing how you can be a partner for this business. For instance, for a cutter you’re hoping to turn into a customer, consider teaching their crew how the equipment works and then leave it with them for a few days. Let them run it the way they use it in their business and tell them to drop it off when they’re finished. When it’s returned, take the customer around the dealership, including the parts and service departments, and introduce them to the techs who will be working on the equipment.
Targeting Horse Owners
Horse owners offer many opportunities to sell tractors and attachments, along with other equipment. The customer base is large; the American Horse Council says 2 million people own horses. And, the horse industry in the U.S. contributes $39 billion in direct economic impact to the U.S. economy, according to the council.
Horse owners’ equipment needs vary based on the kind of horses they own or the type of riding they do. Make sure to find out about their operation and their needs and then build a relationship with them. “It’s more than just selling equipment. It’s helping people grow their business by selling them equipment that makes them more productive,” says Jennifer Green, sales representative with Mid-State Equipment in Janesville, Wis. “With my equine customers, they’ve done a lot of research and they definitely know what their needs are. They don’t have time to shop around. They want to spend time with their horses, so our job is to suggest equipment that meets their needs very precisely. Once you sell something, you create a relationship.”
Horse owners are looking for ways that can save them time on major tasks, like mowing and manure handling, so they can get back to what they love — working with their horses. Equipment that performs multiple tasks is more likely to please horse customers. Smaller tractors are ideal for these customers who need to be able to operate the equipment quietly and cleanly in extremely tight spaces like barn aisles and indoor arenas. In addition to a small tractor, an arena plow is a must have for horse owners as well as weed eaters, post-hole diggers and tillers, dealers say.
Understanding Livestock Owners
Rural lifestyle customers who own livestock or other exotics (like llamas, alpacas and ostrich) offer sales opportunities because they need equipment to feed their herds as well as manage and maintain their properties. However, the challenge is that their smaller number of acres often doesn’t justify purchasing hay production equipment, like balers, and many don’t have the knowledge necessary to operate the hay equipment, dealers say. That said, there are still opportunities for dealers to specialize in compact hay equipment targeted to the rural lifestyle market.
According to Jason Gouge, corporate sales manager for Coufal-Prater, a John Deere dealership with 5 locations in Central Texas, a good setup for the small livestock operator is a tractor in the 45-75 horsepower range, a loader and bucket, plus a hay spear for the back and another spear to interchange with the bucket. He provided comments in the Summer 2014 issue.
Customers who own exotics require much of the same equipment and services as other livestock producers. In addition to utility tractors, mowers and UTVs are popular equipment as well as hay tedders and manure spreaders.
“When working with beginners, I think more dealers should put more emphasis on the smaller ground-drive, four-wheeler type equipment and lawn tractor type of attachments. They need equipment that meets their abilities. So, smaller utility wagons and ground-driven manure spreaders are most appropriate for them. Some people could probably grow into using a small skid steer,” says Dr. Kristy Brown, a veterinarian who maintains 50 llamas on The Brownderosa farm near Sparta, Wis. Brown’s comments were featured in the Summer 2011 issue.
|Llama owners, as well as those who own other exotics, have many of the same equipment needs as rural lifestylers raising other types of livestock. Shown is Barbara and Tom Parsons, who raise llamas near Dousman, Wis.|
While llama owners’ needs are similar to those of other small livestock operations, there are differences and dealers should take the time to learn about their operations. If a dealer wants to be helpful they should stop in and see what their customers are working with, says Tom Parsons, who raises llamas on his and wife Barbara’s 40-acre Animal Acres Llamas farm near Dousman, Wis. “The first spreader I bought was matched to the tractor. I used it once and took it back. I told the dealer, ‘This was too small.’ The dealer didn’t understand I was spreading llama dung, which is dry and as heavy as cow or horse manure. The first spreader wasn’t heavy enough and I ended up getting a 175-bushel spreader, which works just fine. He didn’t know any better and never asked what I was spreading,” he says. Parsons was also featured in the Summer 2011 issue.
The equipment rental industry is a growing segment. In fact, the American Rental Assn. (ARA) is forecasting 6.7% growth in 2016 and 2017, 6.2% in 2018 and 5.8% in 2019 to reach $48.7 billion.
“This means equipment rental companies can prepare for steady growth, plan for expanding their markets and build inventory to meet their customer demand,” says Christine Wehrman, ARA CEO and executive vice president. “The forecast also shows that many customers who have turned to renting equipment during and after the recession have seen the benefits and will continue to rent to control their costs. The secular shift to rental is here to stay.”
More business owners — landscapers and contractors, for example — are turning to rental rather than buying equipment and so are rural lifestylers.
While there is a large market for rental equipment, dealers face tough competition from rental-only stores, both those that are independently owned and national chains. To compete, dealers need to understand and market their dealerships’ strengths.
“Understand what you’re good at. Be committed to what you’re good at. Don’t try to be all things rental,” says Heath Watton, manager of Southeastern Equipment’s Cambridge, Ohio, location. Watton was featured in the Summer 2013 issue.
Southeastern Equipment has been renting equipment since 1957 and the company now has 18 locations in Ohio, Indiana, Kentucky and Michigan.
One benefit of rental is it can lead to sales. Watton says that about 70% of Southeastern Equipment’s equipment inventory is available for rental. “It’s a fantastic way for the end user to pay for a demo, and it’s a fantastic way for people to see what your company is all about. We wouldn’t hesitate to put something in our rental fleet to fill the need of a good customer,” he says.
Before venturing into the rental segment, though, dealers should take a look at their insurance policy to ensure it covers rental equipment. If it doesn’t, you will need to purchase separate rental insurance.
Know Your Customers
Regardless of which market segments your dealership is serving, good customer relationships come down to knowing your customers and their needs. While a horse owner is a very different customer from a landscape contractor, both want you to get to know them and their operations. Repeat business is based on building those relationships and following through with good service. Taking the time to manage those relationships will set you up for success in any number of rural lifestyle markets.