[Source: INEDA, 05.2017 | Keywords: Precision Farming]
The precision farming market reached $3.68 billion in 2016 and is expected to grow 13.5% by 2022 – a record $7.87 billion. How does your dealership stay competitive in this growing market?
Precision technology can be a tricky thing to manage. From determining who’s in charge of selling and servicing the products, to staying on top of ever changing technology and an increasingly competitive landscape, running an effective precision technology department requires thoughtful planning and a willingness to adapt when necessary.
Precision dealers from Butler Ag Equipment (BA), Brakke Implement, Inc. (BI), Grosshans Inc. (GI), Heartland Ag (HA), LandMark Implement (LI) and Pender Implement Co. (PI) recently gave us an inside look at how they manage precision technology at their dealerships. Here’s what they had to say…
Q: How is your precision department staffed? What is the role of these employees?
BA ñ We incorporated our product specialty group into our technology department, where we have seven product specialists on the ground covering both the technology and equipment side. Our product specialists work in support of our inside sales team. When a customer requests a demo or specific details about the precision side of things, that’s when our product specialists join in the conversation. The salespeople get the conversation started and we help with the intricate details on the precision side. Our product specialists also provide support for our service department, from assisting with an installation, to troubleshooting an issue. They are that second tier of support. In addition, our technology group maintains a call center seven days a week to answer any precision or machinery-related questions and to determine if the issue is a simple over the phone fix or something that needs to be handled by the service department.
BI ñ We have an Integrated Solutions Manager and Certified Crop Advisor on staff to help keep our salesmen informed on the latest precision technology and to help our customers get the right equipment and services. In addition, we have technicians who are trained to service the precision products.
GI ñ Each of our dealership locations employs a Precision Sales Specialist and Precision Technician who are responsible for selling and servicing precision equipment.
HA ñ We have a precision team in both Iowa and Missouri. Our precision technicians spend about 50% of their time in sales and 50% doing installations. Each precision tech has a designated trade area they cover so they get to know those customers well. This allows us to offer customized, full solutions to our customers.
LI ñ We have 10 specialists on our precision team covering 16 stores. These customer technology specialists (CTS) work on everything from computers, web programs and Apex, to anything that involves precision agriculture, to the technology in tractors, combines and so forth. Their primary goal is to make the technology and the equipment work, but also to listen to our customers and offer solutions and support that can help make their lives easier. Our CTS also provide support to our salespeople and service technicians.
PI ñ Our precision department includes a full time precision manager and precision consultant and our technicians are trained to handle situations in the field. We are currently working to transition our sales department to sell precision technology so we have more time to support and interact with customers on their future needs and get involved in their operation to better see what products might fit in. In addition, we handle most of the incoming phone calls at the dealership.
Q. How do employees (and farmers) stay up-to-date on
ever changing precision technological advances?
BA ñ We spend a great deal of time training our precision and equipment technicians in-house. In addition, we hold customer events such as our planter, combine and technology clinics.
BI ñ We conduct a lot of internal training with our technicians to keep them up-to-date on any changes or new products entering the marketplace. Our staff also participates in a variety of John Deere University online and onsite training. Every other month, I also hold a Q & A session with customers to update them on what John Deere has to offer and how it might fit into their operation.
GI ñ It can be tough to stay up-to-date with changes coming at us so fast. Precision technology is daily topic at our dealerships. We participate in training sessions with Case IH and hold customer service clinics as well. We are continually looking at new products to see if it is something that will fill the needs of our customers.
HA ñ We easily spend 20-30 hours on training each year. Whether it’s held at the manufacturer or in-house, training plays a big role in our precision farming business. We also offer training and customized solutions for our customers. I attend several shows and conferences each year to stay on top of ever changing technology. I enjoy discovering what the next big product might be and how it could benefit our customers.
LI ñ This past winter, we held three days of in-depth, specialized training for a select group of technicians to bring them up to speed on the latest precision products. Our customer technology specialists also participate in online John Deere training, in addition to hands-on learning while on the job. Part of their job is to keep employees trained at each location. Annually, they conduct at least five training events with each event geared toward a specific product and work with all departments (service, sales and parts). In addition, we conduct some pretty extensive clinics for our customers throughout the year, such as our annual sprayer and planter clinics. These clinics are centrally located between all of our locations and are typically very well attended.
PI ñ A lot of our employee training is web based through John Deere. Our employees also attend two offsite training sessions conducted by John Deere each year and we conduct several seasonal in-house training sessions so our employees are ready for planting and harvest seasons. In addition, we hold annual clinics for our customers that cover precision products and tie-in with our planting and harvesting clinics. We also like to sit down with our customers each year to discuss the past year and what we can work on for the upcoming year.
Q. What sales techniques have you found work well for selling precision items at your dealership?
BA ñ Most of our precision sales come with the sale of a piece of equipment. Our salespeople
discuss the ROI and share the benefits and features of the precision products. Precision has become more and more important to producers
as they start to recognize and better understand the benefits.
BI ñ I really enjoy sitting down with our customers and learning more about their operations and long-term goals so I can better understand their needs and what they are capable of doing, because our ultimate goal is to make them more efficient and productive by saving them both money and time. Our average farmer is 50-plus years old and new technology can be hard for that generation to grasp at times. That’s why we take the time to sit down with the customer and explain what capabilities the equipment has to offer. Whenever possible, I like to get the younger generation involved as well, since they understand technology better.
GI ñ When selling precision products, we feel it’s important to show customers the potential return on their investment. We have tools that help us show this information. We also show them that the technology we have to offer can help control their input costs. If we can show them that a precision product can pay for itself and save them input cost then chances are they will invest in it. For example a customer probably does not need the same amount of fertilizer across his entire field. Through variable rate technology he can put the correct amount of fertilizer where he needs it in his fields.
HA ñ We work hard to develop relationships with our customers and end users. These conversations lead us to the information we need to determine the right solutions for them. Once we have this, we can build their trust and recommend products that will truly meet their needs. We strive to offer the best solutions at the most affordable prices so our customers don’t have to break the bank.
PI ñ Our sales staff is trained to make precision ag part of the conversation when sitting down with customers. They show them the return on investment and/or how they can cut their cost per bushel. It helps take the fear of what the market is doing out of the equation, because they know the break-even point.
Q. Do you offer service plans for your precision farming customers?
BA ñ We are in the early stages of developing some support plans for our precision products. A call support plan would grant customers access to our call center, while start-up plans for new equipment would bring a product specialist out to the farm to start up the equipment (monitors, sensors, etc.) and make sure it’s working properly before it goes into the field. We also have integrated a smart phone app that allows us to video conference with our customers. Often, it is difficult to provide an answer until we see the display screen. Having this kind of technology integrated into the service side of our business has helped to eliminate service calls and allows us to answer customer questions faster.
BI ñ We offer three support packages. Our first package covers phone and email support, as well as software updates. Our next package includes everything from the first package, plus two farm visits (to go through the display and make sure everything is set up correctly) and maps (to advise on what they can do different or what I can do to help). Our last package includes everything from the other two packages, plus full access to the John Deere support line. Farmers are slowly beginning to realize the value of having unlimited access to this information. Those not on a support package are charged per call (no limit), and trips out to the farm are charged an hourly fee in addition to the service call fee. Several customers have found that having a support package is a lot simpler than getting a bill each month.
GI ñ We do not offer service packages at this time. Our team can resolve a lot of issues over the phone. If it takes more than 10 minutes to troubleshoot over the phone, then we usually need to go out to the farm and service the equipment. We’ve kicked around the idea of service contracts, however at this point we feel our customers should only pay for service when needed; this may change in the future. Precision labor sales are no different than our Service Department labor sales. We need to maintain a certain level of recovery rate and bill in a timely manner.
HA ñ We spend approximately 55% of our time troubleshooting with customers over the phone. Since most problems can be solved this way, we spend a lot of time during the planting and harvesting seasons on the phone to keep them running. We don’t charge the customers for the phone call if they bought the product from us – it’s a free service offered to our customers. However, if the equipment was purchased from someone else, we charge for the phone calls. While we may not offer the cheapest product out there, it’s this level of service that sells our products.
LI ñ We offer our customers support packages that focus around machine start-ups. For example, when a customer signs up, we send a CTS or tech out to their farm (preferably pre-season) to help them get started. We put the machine in the field to make sure everything works and work with the customer to make sure they are comfortable and ready to go. These support packages are machine specific, so customers can pick and choose which piece(s) of equipment they need help with to make sure they get the most from that machine and the technology. While some customers are taking advantage of these packages, we are still doing a lot of support that is billed hourly. With many customers we are still in that transition of going from getting billed hourly to purchasing a support package and realizing the value it provides the customer.
PI ñ We offer personalized support agreements that include phone calls and so forth. We sit down with our customers to discuss their needs and build a customized agreement to fit those needs. At the same time we like to handle the calls in our department so we can make a decision on whether or not a technician needs to go out to the farm. Customers who do not have a support plan are charged for each phone call.
Q. Does your dealership provide data management services?
BA ñ While we can help customers with their data, we do not manipulate the data. We simply pull the data from the equipment and process it, so the farmer can pass it along to their agronomist.
BI ñ We do not get involved in data collection. Instead, we’re the helping hand that sets the customer up with his agronomist or seed salesmen through John Deere’s Operations Center.
GI ñ Currently, we sell autopilot, variable rate systems and Precision Planting components – things you can touch and feel. Down the road I think we’ll be selling more things you cannot touch or feel – for example programs to manage data. While I cannot put my finger exactly on where things are headed, I think that data will be the next big thing, from how to transfer the data, to how to use it, because customers simply are not using the data to its full potential. We need to decide with the customer which data is going to benefit them and how they can use it to increase productivity.
HA ñ We are more hardware based since we don’t want to compete with our core customers, the commercial application industry (farmer cooperatives, CPS farm services, seed reps, etc.). As a result, we don’t do a lot of data management since our end users offer that service. Instead, our goal is to sell them products that help with the software solutions they use.
LI ñ We are currently working to get more customer data uploaded into Operation Center. While we do some data interpretation, our main objective is to get the data into the hands of the customer’s trusted partners and utilize the benefits of WDT and Ops Center.
PI ñ We look at the farmer’s whole operation and break down the data to show them areas in the field where there are concerns, because we want to give them a good return on their investment. We share this data with our customers and put them in touch with their advisors to work further with them on the problems. A lot of farmers are still uncertain about trusting data, so we work with them to better understand the benefits of the precision products they own and show them how they can use this data to avoid problems from previous years and make better plans moving forward.
Q. How has the competitive landscape changed since you started selling precision farming at your dealership? How do you see it changing down the road?
BA ñ We have seen a decline in aftermarket sales as precision products have become more prevalent on OEMs. We are fortunate that we are on the equipment side so we can recoup the revenue on those products. It doesn’t matter what color you are, OEMs are more or less getting with the times and offering precision products on their machines. However, the same issues will still be there on the service side, we just may go about trouble shooting and fixing it differently.
GI ñ As we run into more precision products equipped on OEM equipment, there will be less for us to sell aftermarket, leading to a shift in focus on the service end of the business. Fortunately, we are able to offer a wide array of precision equipment to fit different manufacturer’s machines. Another thing we’ve seen more of is transferring a system from one machine to another. If they already have a system in place all we do is put on the platform kit or cabling so they can run it on the new equipment. We’re not selling as many full systems anymore, most of our customers already are using the technology.
HA ñ Despite the growing trend of more and more precision technology being added to OEMs, there are still a lot of opportunities for us to sell and service precision ag. A lot of older machines need to be updated and some of the newer technology isn’t offered on OEM machines yet. So as long as we stay on top of the latest technology, we will always have new products to add on to existing equipment. In addition, when machines come from the factory with this precision technology already in place, they will still need to be serviced.
LI ñ As more and more precision ag gets built into tractors and combines, I feel it will become supported more by our service department and technicians down the road. I also feel that precision ag will become more agronomically focused. We are working to shift more toward the agronomic end of things. However, while we do have a Certified Crop Advisor (CCA) on staff, we continue to work in partnership with local agronomists versus competing with the local ag service providers.
PI ñ Down the road, I definitely see us moving away from selling precision whole goods as more precision products are coming standard on the machines. Our focus will then turn to making sure the customer is using the technology and taking the data and doing something with it. I see us becoming more service based than hardware based.
Q. As precision technology continues to evolve, how do you see this impacting your dealership?
BA ñ As more precision technology becomes standard on machines, the bigger part it will play in the support side of things. I also feel there’s going to be more demand for people in positions like ours where they have a dual role in supporting both the sales and service side. While I don’t think precision aftermarket products will totally disappear over the next 10 years, it will be harder to make those sales. Fortunately, since we are an equipment dealership, we will always have
equipment support. The technology that ties in with the equipment will need someone who can play that middle man role, which I feel will be huge going forward.
BI ñ I think precision ag will become more commonplace as producers continue to get bigger and bigger. It’s just a fact of the ag economy. Larger producers need to have precision farming. It’s not a transactional occurrence anymore, they are buying smart technology.
GI ñ What it boils down to in the precision arena is, “Who has the best service?” Any dealership can sell precision products by offering big discounts; it’s the dealerships with employees who take care of the customers that matters most. We’ve seen that first-hand in our dealerships, where we’ve gained customers not because we sold them something, but because of our customer service.
HA ñ We will continue to look at what possibilities we have for adding precision at our other two stores and work to build relationships with those farmers so we can recommend products that will meet their needs. This business is constantly changing, so it’s vital that we stay on top of any new technology available out there. We always are on the lookout for new products to add to our product offerings. For example, we recently picked up a drone line to sell to co-ops so they can sell that service to their customers.
LI ñ I think there’s going to be a big opportunity with data and helping customers turn this into knowledge to improve their operations. Our challenge will be, “How do we fit in there?” I still feel we are the conduit that helps the data move from the machine to the right people that make the data work for the customer – not the ones doing the interpretation.
PI ñ The more productive farmers are adapting the precision technology for spraying, fertilizing, planting and so forth. This results in more one-on-one conversations with farmers about how data can enhance the piece of equipment they are using. At the same time, this data should lead to selling a better piece of equipment or an attachment that can help things perform even better. I truly believe that data is going to help improve equipment sales.
MEET THE precision dealers:
Butler Ag Equipment (BA) | Matt Miller, Nebraska Ag Technology Sales Specialist
With 17 locations across Nebraska, South Dakota and North Dakota, Butler Ag Equipment offers a wide array of precision technology and services from Trimble, Raven, Ag Leader, Reichhardt and AGCO.
Brakke Implement, Inc. (BI) | Jeff Paullus, General Manager & Justin Burmester, AMS/Integrated Solutions Manager
Brakke Implement, Inc. sells and services the full line of John Deere precision ag technology out of its dealership in Mason City, Iowa.
Grosshans Inc. (GI) | Mike Kenyon, Precision Sales Specialist
The four precision specialists at Grosshans Inc. in Central City and Aurora, Nebraska maintain
an extensive RTK network and sell and service Trimble, Precision Planting and Case IH
Heartland Ag (HA) | Ryan Bengston, Precision Ag Manager
With single locations in Iowa, Nebraska, Missouri and Kansas, Heartland Ag – a Case IH application distributor – sells and services Raven, TeeJet, Trimble, Ag Leader and Case Application precision equipment.
LandMark Implement (LI) | Justin Atwood, Customer Support Manager
The Precision Ag Department at LandMark Implement maintains an extensive RTK network, and sells and supports John Deere precision ag technology and other technologies at its 16 locations across Nebraska and Kansas.
Pender Implement Co. (PI) | Reed Allen, Owner/GM & Tom Liakos, Integrated Solutions Manager
Pender Implement Co. sells and services John Deere precision ag technology and maintains an RTK network out of its dealership in Pender, Nebraska.