Pictured Above: Ag Info Tech, a 10-employee precision farming dealership in Mount Vernon, Ohio, receives the 2015 Precision Farming Dealer Most Valuable Dealership award. From left to right, COO Matt Culler and CEO Tim Norris.
Tim Norris doesn’t necessarily like being a manager. In fact, he says it’s one of his greatest challenges as CEO and founder of Ag Info Tech, an independent precision farming dealership in Mount Vernon, Ohio.
But what he does enjoy is solving problems and providing innovative technology solutions that improve the lives of his employees and the company’s customers.
“I didn’t start this business because I wanted to manage people,” Norris says. “I started this business because I believed in the direction that precision farming technology would take agriculture. I knew farm equipment dealers weren’t going to push the hardware right away and they didn’t. I saw an opportunity to be that precision partner with farmers.”
In 2004, Norris formed the company with a skeleton staff, selling auto-steer systems and RTK receivers from a makeshift office on his farm in Gambier, Ohio. While launching the small business wasn’t easy, Norris recalls an early customer service visit that validated the existence of the company and helped define the 2015 Precision Farming Dealer Most Valuable Dealership’s ongoing mission.
A customer spent about $45,000 on two new auto-steer systems and was having trouble with one of them, so Norris drove out and made the necessary adjustments. As he was leaving, the farmer’s wife came barreling down the driveway after him in a pick-up truck.
“I knew she wasn’t real excited about the expense, so I figured she was going to chew me out about the problems they had been having,” Norris says. “But she actually thanked me for giving her her husband back. Since they purchased the auto-steer systems, he had more time to eat lunch or dinner with her and wasn’t nearly as tired at the end of the day. Hearing that helped me really understand how this technology truly impacts our customers’ lives.”
From humble beginnings, Ag Info Tech has doubled its employee base — from 5 to 10 in the last 3 years — and evolved from a product-centric company to one which now offers complete solutions to include soil sampling, water management, grain bin monitoring, variable-rate prescriptions and data management services.
Ag Info Tech
Employees: 10. As the business grew, company CEO Tim Norris developed a chain-of-command flow chart to outline the roles and responsibilities of each employee.
Precision Lines: Ag Leader, Dakota Micro, NORAC, OPI-Integris, Orthman, Precision Planting, Richland Micro Drainage, Soil-Max, Trimble
Locations: 1. In 2013, Ag Info Tech moved from its on-farm location in Gambier, Ohio, to its current office in Mount Vernon, Ohio.
2014 Precision Revenue Breakdown:
Software: Less than 1%
2014 Precision Ag Investment Breakdown:
Precision Staff: 61.7%
2014 Total Precision Technician Service: Total Hours Billed: 1,524 (through October 2014)
The dealership relocated from Norris’ farm in 2013 to an office building, which shares space with a New Holland equipment dealer and an NRCS branch office, among other tenants. Sales grew from $1.6 million in 2010 to $3.1 million in 2013 and Norris projects a similar total in 2014, with sales of $2.5 million through October.
Precision with a Purpose
While perpetual sales growth is vital to sustain success, Norris and his staff pride themselves on selling more than equipment or precision hardware.
“We want to sell partnerships not just products,” Norris says. “The way we view our relationship with customers is if they’re not successful and profitable, then neither are we.”
This past year, Ag Info Tech initiated a new sales tool, called “Precision with a Purpose” as a way to initiate partnerships with farmers and better tailor technology to suit the needs of each operation. Salespeople walk willing customers through a 7-page questionnaire, which asks them to share information on everything from makes and models of equipment used on the farm, to tillage practices, fertility program and soil sampling methods.
Also asked are questions about how farmers collect and store data, areas where they want to improve farm operations and why they farm. For participating in the questionnaire, farmers get an Ag Info Tech jacket, but Norris says the relationship doesn’t end there.
“I want to turn the information they provide into a real precision plan for customers,” he says. “My goal is to get to the point where if they have a problem and call us, we have a list of tractors they own, and can quickly reference which one has the problem and diagnose it.”
With a variety of products offered, Ag Info Tech has product specialists who are internal experts for employees on specific brands. Installation and service technician Matt Dugan (pictured above) is the product specialist for Soil Max and NORAC products.
Another objective is to leverage the information farmers provide to set them on a progressive path of precision farming purchases, instead of a one-time or unnecessary sale. Salesperson Derek Geitgey says they try to avoid singular sales because they don’t often do the customer or the dealership any good in the long-run.
His least favorite situation is finding out a customer bought a product from somewhere else that doesn’t meet performance expectations.
“We sell a lot of different products and monitors, so having some background on how customers are using their existing technology helps avoid selling them something they don’t need,” he says. “Customers are a lot happier when we explain they can use a product they may already own for 3 or 4 things. They appreciate us not just giving them a sales pitch and often will end up spending more up front with us, rather than trying to save a buck and having to waste more money down the road.”
A valuable tool for Geitgey and other salespeople is a customized return on investment calculator that Norris developed as a part of the “Precision with a Purpose” plan. Using acreage, crop and input cost provided by the farmer, salespeople can attach an estimated ROI summary. The numbers are specific for different types of precision systems and are based on manufacturer testing, university research and their own data.
For example, a customer with 400 acres looking at a $30,000 investment in planting technology to include auto-steer, swath control, row clutches and automated downforce, can expect a ROI of more than $46,000 after 3 years, based on Ag Info Tech’s calculations.
The dealership’s customer relationship management tool, AgriVault, lets employees track and manage sales and service quotes from start to fi nish and has helped increase billable hours during the last year.
“When we can come to a customer and say, ‘Here’s what we think you need and here’s why’ with numbers from their farm and a payback, it’s almost a no-brainer for them,” Norris says. “This is part of that partnership we want to build with our customers.”
Norris acknowledges that not every farmer is willing to share such detailed information about their operation. But the dealership had enough success during a limited rollout of its “Precision with a Purpose” plan in 2014 to expand this year. “We’ve had farmers say, ‘No’, but when our salespeople have gotten customers to go through the profile, it’s led to additional hardware sales 70% of the time,” Norris says. “We’re definitely going to be more proactive in the future based on the initial return we’ve seen.”
Defined by Diversity
Like many precision dealerships, hardware sales account for the majority of Ag Info Tech’s annual revenue, with more than 82.2% coming from products in 2014. But the dealership doesn’t only sell the standard array of monitors, displays and receivers.
2015 Most Valuable Dealership winner Ag Info Tech has doubled its employees in the last 3 years. From left to right, Carla Augustine, Matt Culler, Jeff Studer, Matt Dugan, Dustin Crunkilton, Tim Norris, Derik Geitgey, Andy Butts and Brandon Kaple.
As an aftermarket dealer, Norris understands that the OEMs are increasingly carving out a larger piece of the precision equipment pie with more technology coming standard on new equipment. Rather than watch the traditional precision aftermarket dissolve, he began adding peripheral product lines to complement their cornerstone brands. These include Orthman strip-till units, which allows them to tie in variable-rate prescriptions, Soil Max tile plows, which can be sold with GPS control systems and OPI-Integris grain bin management systems, which can be installed during summer or after harvest.
These additional products not only infuse additional revenue into the dealership, but also provide steady work for employees in between planting and harvest, the two peak precision seasons.
“I’m not a person who wants to hire people seasonally and lay them off,” Norris says. “I’m making a commitment to them and their families to provide a steady job. To fulfill that commitment, we have added products and services to keep us busy year-round.”
What Others Say About Ag Info Tech
Precision Farming Dealer interviewed Ryan Oehler, Ag Leader Technology territory manager for Indiana and Ohio, Dan Bruck, OPI-Integris district sales manager for the eastern U.S. and Scott Azbell, regional district manager for Trimble Navigation, to get their personal and professional observations on the 2015 Most Valuable Dealership of the Year, Ag Info Tech.
Customer Care. “The number one thing that makes them successful, is they care for their customers, almost to a fault,” says Oehler, who has worked with Ag Info Tech since 2000. “Tim [Norris] will move heaven and earth if a customer isn’t happy. He and his staff won’t rest until an issue is resolved.”
Creative Thinkers. “Everyone at the company embraces technology and are very eager to learn about new things,” says Bruck, who began working with Ag Info Tech in July 2014. “They have the broad expertise that we want in a precision dealer. Not everyone understands our product, but they get it and can explain it to customers.”
Adds Oehler, “They are a very innovative group. If I’m going to a meeting with Tim, I keep my ears and eyes wide open, because I’m probably going to pick up a tidbit or idea I’d never considered.”
Gradual Growth. “Tim is constantly trying to improve the business and grows every year,” says Azbell, who has worked with Norris for 12 years. “But the growth isn’t so fast that it’s overwhelming. I’m leery of dealers who go from zero to $1 million in a year, because it can overwhelm them.
“Tim is calculated in how the dealership grows and they’ve done so every year with us. He also has trigger points for growth, which he uses to identify when additional employees are needed at the right time.”
Exceeding Expectations. “Tim and his staff are self-motivated,” Oehler says. “I never have to set expectations in terms of sales goals or benchmarks. If I give them the right tools, they surpass any goals I can set.
“My communication with Tim is almost zero about yearly goals. We don’t have any major barriers and can talk more strategy about new products and how they will fit into a customer’s operation.”
Adds Bruck, “They’ve gotten extremely comfortable with our product line the last 3-4 months. They have the staff to sell, install and support our technology and that has made them more successful.”
Passionate Personnel. “I’ve worked with Tim for nearly 15 years and one thing I’ve learned is that he is passionate about what he does,” Oehler says. “It’s the way he is wired and he’s surrounded himself with a team of similar people. They get a lot of satisfaction and fulfillment from helping people, and that comes through in their sales and service of precision farming products.”
Norris has also incorporated “add-on” precision products, which can offer higher margin sales. He likens this approach to McDonald’s strategy of offering fries with a meal.
“It doesn’t take a whole lot to buy a potato, cut it up into french fry shape and deep fry it,” Norris says. “We wanted to find some of those fries in our business, something that perhaps we can take to market at 30-40% margin.”
Ag Info Tech is a dealer for RAM Mounts and will sell brackets or mounting devices for different agricultural machinery.
But they’ve also been successful selling the accessories for trucks and other vehicles. “We carry these products on our service trucks and customers notice, which will lead to a sale of an extra bracket or two,” Norris says.
“It takes a lot of ‘fries’ to increase our overall margin, but I like that we carry something unique and of value to the customer. Offering these types of products is important.”
Along with adding peripheral products that contribute to the bottom line, precision services have become increasingly important offerings for Ag Info Tech.
Few competitors have developed robust data management service programs, Norris says. But that hasn’t stopped him and his team from expanding theirs to include soil sampling, yield mapping and variable-rate seeding prescriptions.
“We manage about 100,000 acres with variable-rate prescriptions and have our equipment on even more,” Norris says. “We’re soil sampling about 35,000 acres and have about 300 different businesses we do transactions with every year.”
Service accounts for about 17% of overall revenue and the dealership has grown the total service hours billed annually from 1,182 in 2013 to 1,524 through October 2014. Despite the growth, Norris says there is room for improvement. In the next 5 years, he hopes to get to the point where sales of hardware and service are split 50/50.
“The OEM dealers get paid by the manufacturer to fix problems in the field while the products are under warranty,” Norris says. “We do not, but we’re working with our suppliers to develop a program where we can recoup some revenue for the time we spend fixing those issues under warranty.”
To combat a shrinking aftermarket for precision sales, Ag Info Tech began adding peripheral product lines to complement their cornerstone brands. Some of these additions include 30-40% margin products, which can be sold as useful add-ons to customers.
The dealership began offering annual service programs 2 years ago, but Chief Operating Officer Matt Culler, says they are still a work in progress. They offer two tiers of service plans — one priced at $295, which includes 4 hours of on-farm service and free access to the dealership’s loaner equipment. The other plan costs $495 per year and includes the same 4 hours of included on-farm service, free loaner access and one free service call up to an hour.
“Our service plans are very much in their infancy,” Culler says. “We’ve had about 25 customers enrolled, but it’s been hard to know how to charge for the plans and ensure the proper follow-up.”
Locked & Loaded
As the number of acres serviced by Ag Info Tech increased, one of the challenges for employees was keeping track of billable hours and sales quotes. Norris wanted a customer relationship management tool to make sales and service tracking more transparent and efficient.
Unhappy with the options on the market, Norris teamed with a local software company, VivioSoft to develop a proprietary program called AgriVault, which they launched in 2013.
“As our business grew, we increasingly found that we needed an accessible database where employees can track and update everything from service quotes, equipment orders and soil sampling data,” he says. “But we also wanted it to be something that customers can use to manage their own farms.”
AgriVault features different modules and once a price is quoted to a customer for a product or service package, it’s entered online. If the customer makes the purchase, office manager Carla Augustine makes sure the product is in stock or ordered, and an installation date is scheduled. The technician assigned to the job knows when the product will be ready and can complete the job.
“This tool has made us a lot more efficient for when a customer or salesperson wants a variable-rate prescription made, because the farmer can directly upload the raw data,” Norris says. “We’re the only ones who can change the planting, harvest and application reports, but we don’t have to chase down dozens of USB sticks to gather the information.”
Customers can upload field information and track their purchases for free, which Norris says helps farmers get familiar with the program. But the real value of AgriVault for farmers — and the primary selling point — is the Yield Crawler module. This is an online data analysis tool that breaks down customers’ yield information by soil, crop or fertility levels and seed variety, in a searchable database.
“This is what is getting our customers’ attention and where we’re going to make our money,” Norris says. “When farmers sign up for this program, all they need is an Internet connection and they can access this database of multiple years worth of data, which helps them be better managers of their fields and overall operation.”
For farmers with a 40 acre field average or larger, it costs $2 per acre for the Yield Crawler module, packaged with a variable-rate seeding prescription. For farmers with field averages 40 acres or smaller, the cost is $3 per acre and there is a $65 per hour service charge to upload previous years’ yield data or soil sample fields which aren’t in the AgriVault database.
“We initially tried selling just the Yield Crawler, which was a harder sell,” Norris says. “Now that we’ve included the variable-rate prescription, it has much more of a purpose for customers because now they are getting the prescription file that allows them to use their data.”
The dealership initially had about 5,000 acres enrolled in Yield Crawler and during the last year grew that total to more than 20,000. Norris says his goal for 2015 is to add at least another 20,000 acres in sales of the AgriVault platform.
But Ag Info Tech is also marketing and licensing the AgriVault platform to other precision dealers as well, as an additional source of revenue. The dealership offers a 30-day free trial of the software and then charges $120 per month for up to 3 users or $1,200 per year. Additional users are $25 per month and there is also a $0.50 per acre charge to dealers for any customer data that is run through Yield Crawler.
So far, 5 precision dealerships have purchased the software and Norris hopes it can also be utilized as a networking tool.
Ag Info Tech’s business philosophy centers on selling customers partnerships, not just products. In 2014, the dealership implemented its “Precision with a Purpose” program where salespeople work with customers to develop a long-term precision plan.
“It’s one database, so ideally, it would be nice if we can all share certain information that’s being tracked, such as solutions to service issues, which will improve our sales and service efficiency,” Norris says.
With a diverse line of products and services, and a growing employee base, Norris understands the importance of planning for long-term growth. He recently developed an organizational chart that details the role and responsibilities of every employee at Ag Info Tech.
“Right now, we have a lot more positions than people, but I want a structure in place where everyone takes ownership of their positions,” Norris says. “Rather than being told what to do, employees know what needs to get done.”
One of the newer roles created was product specialist within the sales department. Employees have specific product lines they are the internal point people for questions. For example, installation and service technician Matt Dugan is the product specialist for Soil Max and NORAC products.
“He’s responsible for knowing everything about those products and we send him to the training sessions for those brands,” Norris says. “This is extremely efficient because internally, we all know who to go to for answers, rather than trying to have everyone be an expert on every product line.”
Norris also recently promoted Matt Culler to COO and he is also vice president of service. Culler now handles day-to-day operations at Ag Info Tech, while Norris focuses on growth opportunities and business management. With a defined organizational structure in place, Norris says he’s confident the dealership can thrive even in his absence.
“With the number of employees we have, I knew I needed to step back and devote as much of my time to planning for the future, instead of letting the industry dictate where we go,” he says. “I think in this business, too many people are chasing whatever sale they can get and not always thinking about the future.”
8 Tips for Building Better Dealer-Farmer Precision Partnerships
Three farmers and three precision equipment specialists discuss strategies for anticipating service needs, maximizing sales opportunities and avoiding customer conflict.