A young couple used their enthusiasm, marketing savvy and knowledge of the landscape contractor market to rejuvenate a failing equipment dealership.
Front row (l-r): Derek Dorris, Garrett Conner, Summer King, Todd King, Richard Walther, Acie Holley; Second row (l-r): Eddie Hillman, Ralph Riddle, David Bullock, Brian Balsley, Bobby Johnson
The series of events that launched Todd and Summer King into the world of selling equipment started with little more than a passing comment.
Todd King, who owns a landscaping business, was visiting a dealership near Pensacola, Fla., that he’d done business with for several years when he asked an employee how many tractors he’d have to buy before getting a lunch or some hats, or some other recognition of his loyalty.
After getting rebuffed, King said if he owned the place he’d run it differently. The employee’s answer? The dealership was available for purchase.
Five years later, Todd King and his wife, Summer, have turned the struggling New Holland dealership into a thriving $3.4-million business. With a new location, new name and a renewed focus, Kingline Equipment is battling John Deere and Kubota for market share again in a highly diverse market.
The Kings — a young and energetic couple who had no experience as equipment dealers — say a major facelift was the only way to turn around the 56-year-old dealership, formerly named Pensacola Tractor & Equipment. This included building a new $1.3 million facility along a busy highway and reconnecting with customers.
Aggressive marketing programs, and placing key employees in the proper roles, also paid dividends. In 2009, Kingline Equipment reported an absorption rate of 118% and a return-on-assets of 14%, both strong numbers in a year when it was difficult for rural lifestyle-focused dealerships to make money. Market share has increased from about 10% 3 years ago to 28% last year.
“We just have a whatever-it-takes attitude,” says Todd King, who owns Kingline and operates Pensacola Landscaping & Lawn Care in Pensacola, Fla., while Summer handles day-to-day operations at the dealership.
“Back in the old days, with the old farm dealerships, they’d say ‘We’re open these hours, come find us.’ That’s not the way it is today. We live in a fast-paced world and everybody wants everything now.”
Kingline’s service manager, Eddie Hillman, has been with the dealership since 1969. His experience and knowledge in the industry has been a key factor in the dealership’s growth, and a saving grace during frequent ownership and managerial changes since the mid-1990s. Now he’s enjoying running a successful shop again and seeing Kingline thrive.
“I think the Kings are much more aggressive with advertising to get things done. They’re just newer, more modern people and there’s nothing wrong with that at all,” says Hillman, who’s served as store manager, parts manager, service manager and salesman. “If people don’t know who you are, they will go somewhere else.”
A 5-Year Plan
The story behind Kingline Equipment’s turnaround actually began more than a decade ago, when owner Hugh Barr sold the dealership to New Holland.
According to the Kings, PT&E had been a thriving, service-oriented dealership in the Pensacola area, but after the sale it was classified as a “dealer development store” that, in theory, would give a successful store manager an opportunity to buy into the business over time.
In the late 1990s, an interim manager at PT&E selected a new location and business focus that, according to the Kings, set the dealership on a course for failure.
“Being a customer all those years, I saw it go from good to bad,” says Todd, who’d been buying equipment from PT&E since 1994. “You could tell by looking at it from the outside.”
The decision to buy a dealership wasn’t taken lightly by the Kings. They spent months going back and forth with New Holland over the details, but they felt the customer base in northwest Florida was still there, and some longtime employees would be staying on, making the transition easier.
Another positive was that the Kings had no history in the world of ag equipment retail except their experiences as customers, which would become one of their greatest assets.
Once the purchase was made, the Kings say they had to reverse a series of critical marketing and management errors made by previous owners, including:
• A store location far removed from vehicle, foot traffic and existing customers
• Highly effective employees placed in unfamiliar jobs
• An overly selective, unmotivated service department
• Too little inventory on the lot
• No hours on Saturdays
• Little money spent on marketing
• No website
Todd and Summer then embarked on a 5-year plan to bring the dealership back.
New Name, New Building, New Location. Perhaps the biggest mistake, the Kings say, came in 1999 with the relocation of PT&E 12 miles north from their high-traffic post in Pensacola.
The move was made to serve more agricultural customers, but the location was north of a major traffic artery, State Highway 112, that brings Alabama residents south into the Pensacola area for shopping and other activities. Foot and vehicular traffic to the dealership was negatively affected.
“You’ve got to know where your niche is,” Todd says. “To go up there and fight John Deere over a little bit of ag business, you’d go broke trying to do it. I think they thought they’d move up there and all the customers would follow them. But they found out 15-20 miles makes a difference to people.”
Eddie Hillman, Kingline’s service manager, says the dealership’s new location along Highway 29, a busy thoroughfare north of Pensacola, Fla., has boosted sales across the business, including the service department. “If people don’t know who you are, they will go somewhere else.”
The Kings decided to build a new, 10,000-square-foot dealership on Highway 29 in Cantonment, Fla. — just north of Pensacola — that they would own and control, and it would be closer to the customers Kingline Equipment planned to regain.
“What made the decision easy is that we knew it had to be done,” Todd says. “We could wait 10 years for the customer base to expand out there, but we’d never survive. That puts you against the wall and makes you do something.”
Todd and Summer visited several dealerships and spent countless hours talking about designs before coming up with the layout. They wanted the service manager to be accessible to customers, rather than having them walk through the shop. In the new building, the service manager and entrance to the shop is just inside the front doors.
The new dealership’s footprint is 4 acres smaller, but more effective because salesmen and customers don’t have to walk as far in the oppressive Florida heat to look at equipment.
The new dealership is seeing the long-term benefit of foot traffic returning, creating a potential for sales that barely existed at the previous location.
“Out front the other day, a father-son pair came in here,” Todd says. “They were in a hurry, but they looked at 6-7 tractors and the price tags. They might have just been meeting somebody for dinner, but now they have something to go on. It was on their way to go somewhere, and that’s big for us.”
|After buying the former Pensacola Tractor & Equipment in 2005, Todd (l) and Summer King embarked on a 5-year improvement plan that included a new location, higher inventory levels and more aggressive marketing. “We just came in here and made changes and did our own thing,” Todd King says. “Some of it works, some of it doesn’t, and if it doesn’t we move in a different direction.”|
They describe Kingline Equipment as a “redeveloping dealer” and the new name speaks to a new start for employees, and a break from defeatist attitudes. “One saying we have around here is, ‘This isn’t Pensacola Tractor & Equipment any more.’ ” Summer says.
Adds Todd, “One salesman was dead set that you can’t compete with Kubota. We kept saying, ‘Yes, you can. If you couldn’t compete with them, New Holland wouldn’t have a compact tractor line.’ We’ve increased market share.
“Price is very important, but a lot of times it comes down to a customer’s experience. I can chop prices just like the next guy, but some people will pay a little more if they feel comfortable with somebody.”
Taking Care of Customers. One issue that bothered the Kings during PT&E’s more recent changes in ownership was the attitude toward customers, whether it was sales or service. “They had a mentality of let the customer come to you. There was no sense of urgency for anything,” Summer says. “It wasn’t all the employees. It was the culture. It wasn’t conducive to the needs and wants of customers.”
Feeding off Todd’s general knowledge of the needs of landscape contractors, Kingline Equipment has been offering more “TLC” to that segment. “If someone is making a living with their machine, they’re getting priority” when it comes to areas like parts and service, Summer says.
The dealership set up open hours on Saturdays, and began showing some flexibility with customers with scheduling difficulties. “You can keep a customer a real long time by waiting for them to get back here. If we have to work late to get something prepped, we’ll do that. If we have to meet a freight truck after hours, we’ll do that too,” Todd says.
On the outdoor lot, the Kings are trying to do the little things to please customers. They note how small problems with equipment can leave a bad impression, especially with rural lifestylers. For example, sales people have begun flipping up the tractor seats in between showings so they don’t collect rainwater and soak customers when they climb board.
They’re also making sure the seats and steering wheels easily adjust. This might seem like a small detail, but it’s not, Todd says. “You might have that one chance to make an impression, and if that seat won’t slide easily or adjust right, they might say, ‘Oh, I don’t like New Holland tractors.’ ”
Along with having a clean store, having brochures ready and introducing customers to the parts and service managers, the Kings have trained salesmen to listen to customers’ questions with an open mind. Summer has emphasized this since coming aboard 3 years ago.
“A lot of times people ask questions and think they’re asking stupid questions, so they quit. But they really want to know why you can break the two pedals apart on the brakes,” Todd says. “If a salesman says ‘That’s a good question, let me explain this to you,’ then they will keep going with the questions.
“That might be the difference between us and another dealership.”
Dealership of the year Judging panel
|The challenging job of choosing this year's Dealership of the Year went to three highly experienced and involved individuals that comprised the independent judging panel. This year's group included Dr. W. David Downey, Center for Agricultural Business, Purdue Univ. David Kahler, former CEO of the Ohio-Michigan Dealers Assn., and charles R. Glass, Glass Management Group, and past chairman of the Farm Equipment Manufacturers Assn.'s Dealer Relations COmmittee.|
Dr. W. David Downey
Executive Director, Center for Agricultural Business (CAB), Purdue University, West Lafayette, Ind.
David L. Kahler
Retired CEO of Ohio-Michigan Equipment Dealers Assn., Dublin Ohio
Charles R. Glass
President, Glass Management Group, chairman emeritus, Farm Equipment Manufacturers Assn.'s (FEMA) Dealer Relations Committee, Arlington, Texas
Right Employees in the Right Place. Many dealer owner-principals know that good employees are key to running a successful, profitable dealership, and how difficult it is when employees aren’t in the right jobs.
When PT&E was purchased during the mid-1990s, Kingline’s parts manager, Bobby Johnson, and Hillman — two long-time employees — were moved into sales as numerous changes were being made.
From a customer viewpoint, the move was puzzling to Todd, since he felt Hillman could run a shop better than anyone else in the Pensacola area. The move made him question whether the new owner understood how to manage his employees.
When the Kings bought the dealership in 2005 they put Hillman and Johnson back in their old roles, and it’s no surprise that those departments are flourishing now. “When you build a relationship with somebody and all the sudden they’re not the go-to guy anymore, you have to start all over,” Todd says. “You have to be careful about making too many changes.”
Turnover is the Key
While the economic recovery has plodded along this year, the Kings have savored economic success, having tripled Kingline’s market share in the past 3 years and increased overall sales by 21.2% in just 2 years.
The Kings say many factors have contributed to their success, including a renewed aggressiveness in the market — something that customers, and the competition, may not be used to seeing in this area, Todd says.
Running a landscape business has programmed Todd to push for efficiency at Kingline, and watching business operations stumble along drives him “nuts.”
“The name of the game in the small tractor business is to turn the deal over,” Todd says. “In the past, the previous owner was dragging deals out. There’s not a lot of money there to begin with so you can’t drag it out. Complete it, sell it, move it.”
Productive parts and service departments are another key to diversifying and strengthening a dealership’s financial footing, but PT&E hadn’t followed that practice, the Kings found. The dealership was overly selective with its service work, turning away jobs for large or older equipment and often declining to make service calls in the field.
|One problem Todd and Summer King encountered when they bought the dealership was a lack of inventory. They’ve boosted inventory levels 65% over 3 years and work hard to turn around purchases. “There’s not a lot of money there to begin with,” Todd says, “so you can’t drag it out. Complete it, sell it, move it.”|
Todd watched this transpire as a longtime customer and he became frustrated with the disorganization and lack of responsiveness. “There were just a lot of practices that we really didn’t agree with,” Todd says, “and most of that comes from being on the other side of the fence. You’re on the side of the road with a tractor you just bought has a minor problem, and they say ‘Bring it into the shop.’
“It’s a 100-horsepower tractor with a 15-foot mower, it’s not like you can get a trailer and put it behind a pickup truck. It becomes an ordeal.”
When the Kings bought the dealership, they pushed for a more eager, motivated service department. They started advertising that technicians will work on any brand of equipment, and spent time and money to beef up customer participation in winter service programs.
Hillman says winter discount programs on parts and labor, and free pickup and delivery of equipment for participants, is getting more customers and jobs through the doors. In the parts department, Kingline started carrying parts for competitors’ equipment, on the theory that developing a relationship with potential customers could generate sales down the road.
“Our main objective is that they come in one color and come out blue,” Todd says. “It doesn’t happen every time, but with their next purchase we might be considered.”
The moves have been more than successful. Kingline’s 2009 absorption rate was 118%, which is outstanding whether it’s a rural lifestyle or ag equipment dealership being examined.
The increased jobs booked in the service department generated $210,000 in revenue in 2009, and sales in both the parts and service departments have gone up every month in 2010 when compared to the previous year’s totals.
“We’re constantly tweaking what we do. We have real programs, not used-car-lot stuff. We do it with flyers, direct mail, all kinds of stuff,” Hillman says. “A lot of it is word of mouth, too, with things I see when people have their equipment in here. They may not want to spend the money on it now, but I suggest it to them and, for the most part, they listen.”
Dealers of the Future: What Does This Mean?
Times haven't been easy for New Holland dealers lately because of shortages of equipment, high turnover at the top levels of management and, now, a demerger of parent CNH Global from Fiat, creating even more uncertainty.
‘Look Like You’re in the Business’
Most experts in the equipment market say rural lifestyle customers aren’t patient buyers. They’ll move on to another dealership or brand if something they want to buy isn’t in stock.
That was another rule that PT&E was ignoring, the Kings say. The dealership rarely carried more than a handful of each tractor and mower model, but in reality a dealership “has to look like it’s in the business,” to be successful, Todd says. “Everybody wants to touch it, sit on it, feel it.”
To address the problem, Kingline is stocking more New Holland tractors on its lot, and has added 3 new zero-turn mower lines, each offering something different for landscape contractors and consumers. Inventory levels are up 65% compared to 3 years ago.
Having heard about
the high-quality grass-catching system offered by Walker mowers, Kingline asked the manufacturer to carry their line and was approved.
After that, Kingline succeeded in adding Ferris mowers at the dealership. The Kings saw Ferris’ suspension system as a key draw for customers, and the decision was also marketing-driven. “Ferris does a lot of advertising,” Todd says. “We feel if we’re going to take on a brand, we don’t want to have to educate people on a brand of equipment. We want the consumer to know who they are.”
The Kings are philosophically opposed to being a “Heinz 57 dealership” and carrying too many lines, so initially they resisted frequent overtures from Toro Co. to stock their mowers. But they changed their minds and agreed to carry Toro consumer and commercial mowers, citing the name recognition and huge market for parts and service sales in northwest Florida. “The whole game plan was to create more traffic. Some dealers have different thoughts on that, but we want people in and out of this place,” Todd says.
Even the philosophy about selling toys and retail items had to change. Todd says toys should be set up at the level where kids can reach them — not on shelves behind the parts counter, where the previous owner stored them.
“If the customer is a man, they’re not going to say, ‘Can I see that toy tractor?’ It’s a pride issue,” Todd says. “Second of all, if a grandfather brings a grandson in here and the kid grabs it, the grandfather will buy them anything. So we brought the toys down and we started selling them.”
A Positive Outcome
The Kings say it’s satisfying to not only run a dealership that is successful, but also see employees growing in their jobs after initially fighting the changes.
Some employees swore that certain customers would never return to the store, only to see them come back and make purchases. “If you make changes and there’s a positive outcome,” Todd says, “they start believing in what you’re doing.”
Kingline Equipment Sales Growth, 2007-09
“The economy is not good for a lot of folks, and we’ve felt some of that,” adds Hillman. “But we’ve been really busy through the whole time because of the diversified things we sell and do. Tractor places down here come and go all the time, but we succeed by helping everybody we can.”
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For full list of articles from the Fall 2010 Issue, click here or choose from the list below:
Click here to watch exclusive interviews with Kingline Equipment, 2010 Rural Lifestyle Dealership of the Year!
Perspective on the Rural Lifestyle Market: Compact Tractor Manufacturers
Read about each company by clicking on the links below:
- Kioti Tractor: Thriving as a Sole-Source Supplier
- LS Tractor: 'Dealers Are Part of Our Family'
- TYM-USA: Taking the Next Step
- Mahindra USA: Helping Dealers Sell
How To Sell Series:
Wood Burning Stoves: New Technologies Fuel Sales
What Your Customers Need To Know:
Safe Operation of Loaders & Attachments
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