With more and more farm equipment coming equipped with precision technology, dealers need to adapt their sales strategy to include service plans and data management. Precision Farming Dealer sat down with four manufacturers to ask them how they see their precision dealers’ business evolving in the next 5 years.
Q. How are you working with precision dealers to solve compatibility problems and improve functionality across multiple brands of farm equipment?
Mike Martinez, Connected Farm Marketing Director, Trimble Navigation: “When we talk about compatibility in the field, it’s usually in two buckets. One is actual, physical hardware connectivity. Then there is the data that’s being shared between the machines and between the offi ce and the machines. When a farmer has a difficult time because something isn’t compatible, it’s one or sometimes both of those things that usually is the issue.
“We don’t build the OEM machines so it’s hard for us to help out in that respect, but where we can help is on the data side. We can equip our resellers with the ability to sell customers useful tools who say, ‘I have a John Deere tractor and it generated a certain format that I then need to take to a different piece of machinery and do the next application. But that other piece of machinery isn’t John Deere. It’s something else, so what do I do?’
“For quite a few years in the industry, we’ve provided a data conversion tool set that many farmers buy just for that purpose — to convert from one format to the other. It doesn’t solve everything, but it’s one step toward compatibility.”
Jason O’Flanagan, North American Field Marketing & Sales Support Manager, AGCO: “We’re active participants in both the ISOBUS and the AgGateway groups. We try to stay as up to date as possible with what the groups decide so we can be at the forefront and be ready for compatibility standards once everybody’s on board.
“Of course, we can’t really force the other OEMs into compatibility. But by working directly with the groups that are responsible for the standards, we’ll be ready to go when they are set.”
Josh Rasmusson, Marketing Representative, Ag Leader Technology: “Quite a few of our customers are using multiple makes and models of equipment. We’re colorblind. We’re not handcuffed to only work on certain makes and models of combines, tractors, sprayers, planters, swathers or any other type of equipment. One of our goals is to have a more competitive aftermarket product.
“We also look at how we can complement the OEM products with our aftermarket product line. For example, our ISOBUS VT, which stands for virtual terminal, enables ISOBUS implements to work with our display. This gives aftermarket dealers an opportunity to make display, guidance and other aftermarket sales.”
Trevor Mecham, Advanced Farming Systems marketing manager, Case IH: “We want to have cross functionality across platforms, even in the competitive scope of the product that we are able to conform to specific application program interfaces (APIs). So if there are customers who have certain desktop software they want to utilize or a certain application they want to utilize, we have that transferability to look at variety tracking, or interpret data that comes across the combine feed. We have to be open to that mindset and that’s what we’re looking to overcome.
“It doesn’t mean it’s always going to be as such because within certain areas of the industry there may be information that is encrypted or locked down. But we invite others to have the openness that we do. We are involved with the Open Ag Data Alliance (OADA) and are encompassing and focusing our products around being as brand agnostic as possible.”
Q. To what extent can precision data management service be a revenue source for your dealers, and what is your stance on ownership of that information?
Martinez: “We have several different models of reseller. There are definitely the resellers that have a very high level of expertise in hardware. They know machines. Then we have the reseller that is an expert in data management and agronomic service and do some hardware work.
“As we move forward with data management products, it’s becoming more of a necessity to have a tool set that farmers can access easily and derive some value out of, more than just a ‘nice to have’ product. Farmers are looking for more than a product now. They are looking for the complete solution.
“Maybe it’s not just that high-accuracy GPS receiver on top of the tractor anymore. It’s combined with the precision application equipment as well as the data that feeds it. Having a business that is able to help the farmer through that entire solution is really valuable.
“Today’s equipment-only dealer really needs to be looking at providing the whole solution and helping their customer with the data piece. We need to build a solution that’s capable of being managed and sold by that reseller who’s not necessarily a data expert. There are tons of experts out there, but those in the mainstream industry are not computer scientists. All these data management services do contribute to revenue streams, but they are most enhanced when they’re sold as a package.
“Our strategy is pretty simple. Whoever is paying for our service, is the owner of the data. If we really simplify it, we have two customers. One is the producer, and they own their data. Our other customer is the advisor, who is the farmer’s agronomist or crop advisor, whoever is giving them advice.
“If the advisor is buying a product from us, like variable-rate application, map generation, etc., then that data belongs to them. It’s theirs and then they have the relationship with their customer, the grower. At any time the customer can extract the data and has full control over who sees it and uses it.”
O’Flanagan: “This is a challenging question because there’s a whole line of problems associated with data management. There’s the opportunity for a dealer to offer a service or partner with agronomists to offer services to the customers. But when it comes to trusted advisors on a farm, agronomists are the most trusted people.
“I’m not sure that an ag dealership is a good way to step into data management, and that’s my personal belief. Yield information is like sharing your W2 with your neighbor — it’s something that you probably want to keep for yourself. Whatever happens, and especially from AGCO’s perspective, the customer has the final say on who has access to what and where.
“Farmers choose who are their trusted advisors. If the customer chooses to use a data management service that his dealership is offering, that’s fine. We don’t want to in any way be perceived as a company that garnishes farm information and uses it for unintended purposes.
“There are two types of information, agronomy information and equipment information. We would love to have the equipment information. It would allow our dealers to partner better with the farmer to provide more rigorous and instantaneous support for the machine. But if the customer chooses not to be involved with that, then we’re not involved either.
“As far as the agronomy side, we work as the data clearinghouse. We don’t keep the data. We do not peruse the data. We do not have access to it and we don’t process it. Once the trusted advisor logs onto the server and pulls the information off, it doesn’t exist anymore to AGCO or in any of our equipment.”
Rasmusson: “Today more and more equipment is coming from the factory equipped with precision hardware, so while there’s still a huge market for technology, dealers are also looking for service in order to be more profitable. Whereas in the past, dealers didn’t have to offer precision service packages to customers to generate more revenue because the hardware revenues have been pretty easy to gain over the last 5 years.
“Also when crop prices decrease, the tendency is billfolds get a little bit tighter on large equipment sales. What dealers are having to do now is roll out service plans to compensate. This could be tied to data management offerings if they have the employee capacity to do so. Not only does it create an incremental revenue source but also positions the dealer as being the ‘trusted advisor’ for the grower.
“Data management is going to play a huge role in our marketplace in the next 3-5 years and possibly even sooner. We’re seeing dealers adapt to service plans and data management offerings, so we’re seeing an increase already with our dealers incorporating those into their precision business.
“Who owns the data is a big concern in agriculture. Growers fear that if a third party owns the data, it could get into the hands of the wrong people and that could have an infl uence on land values or commodity markets. Production companies could also use the data to sell more seed and chemicals, so that is a concern with third parties owning the data instead of the grower.
“But our stance is different than many others in the industry. The grower owns their data, period. There is no gray area. There is no fine print. The grower owns their data. Using our software and data management and transfer products, the customer can rest assured they retain ownership.”
Mecham: “This has been a big discussion going on under the ‘big data’ umbrella. In terms of the data, that is very much still the customers’ data and owned by the customer. We understand that.
“When a customer is set up with our telematics offerings on their portal, they have a username and password and they can set up all their equipment. Or, they can have the servicing dealer set up their equipment and activate it. But the customer ultimately has the controlling administrator rights to his operation and can delegate who is seeing their agronomic information or who is seeing their machinery information.”
Q. During the next 5 years, how do you see the sales and service responsibilities of your precision dealers evolving, and why?
Brad Rouse, Distribution Manager, North America, Trimble Agriculture Division: “For sales, our dealers will always be our first point of contact with growers. We place a lot of value on our dealers’ ability to grow those relationships with the farmer. For them to be able to do that, we expect those businesses to evolve into a much more full service type of operation, offering a lot more services across all machine types.
“The other thing our dealers will need to do is become more involved in agronomy. As the demographics of the grower changes, along with the consolidation of farms into larger and larger operations, and as suppliers demand more from them, such as traceability and better data management, dealers will really need to evolve into more full service operations. This creates a big opportunity for them to provide all the tools the grower will need, as they get larger and larger. They could even have agronomists on staff.
“Another big driver aside from the demographics of the grower is regulation, particularly if you think about water regulations in the western part of North America. Water regulation is becoming much more of a challenge and growers are going to have to meet those regulations, which is why in the last 6 months or so we’ve started to offer an irrigation option.”
O’Flanagan: “It is evolving. It’s moving away from just supplying a vehicle and moving more toward supplying the solution. If a customer is buying a high-horsepower tractor to do land prep and planting, then what we’re going to find is dealers are actually going to provide the solution there to planting and ground prep. With this comes the peace of mind and guaranteed up time, advanced diagnostics and the ability to service and update the machine remotely. All these things will come into play in the next 5 years.
“Some of these technologies are already around, but what will be the next big role for it? Dealerships will adapt to provide this service that includes the piece of equipment as being part of a complete solution provider.”
Rasmusson: “The hardware sales were always there for our dealers. What happened was we said, ‘Here’s this precision farming equipment, go sell this tool because everybody needs it.’ Now dealers have to be more resourceful to be that trusted advisor for the grower and offer more than just the equipment.”
“When you sell someone a display, clutches for the planter or a yield monitor, once they have it, they have it. Unless they adapt more technology on their operation, you’re not going to gain any more revenue, unless you have a service plan or data management offering, whether that be ensuring all their equipment is serviced and working before harvest or creating maps from their field data to assist in decision making.
“Service plans will be very important for our dealers. It’s how they are going to gain revenue in a down ag economy. Obviously, the service plan isn’t going to be as high dollar return as an auto-steer system but the number of customers signing up for service plans is rising and I could see that becoming a much larger part of our dealer’s overall revenue.”
Mecham: “As a whole, if we look at the adoption rate of consumer technology, everybody has a smartphone, to some extent. We have to look at adaptability and operability. Those are two major factors added to customer expectations. The dealer has to be more technically advanced, and that is the technical aptitude we look to provide in our training and our support initiatives.
“The other piece is OEM integration. Just as we’ve seen in the auto industry, integrating a lot of that ‘infotainment’ screen that’s app-based to start your vehicle, to see the diagnostics, etc. This is where we’re seeing this business going, and a lot of that is the consumer driving that evolution. It’s just becoming more innate in the precision farming market.
“From a service and support perspective, dealers have to be supportive in the data so the customer sees a benefit, not just from a profitability standpoint for the dealership. Dealers also have to be willing to collaborate for specific goals for their customer. Whether that’s with the local co-op, agronomist or other key stakeholders. As the servicing OEM, we have to be the enabler to allow that to happen.
"That’s part of why we are planning to be part of the OADA, having the capability of open architecture, providing systems that become integrated and then just allow those connectivity applications to come in.”