To call Brokaw Supply Company a “niche” precision farming dealership would almost seem to stretch the definition of the word.
After all, the single-store business in Fort Dodge, Iowa, sells and supports six different brands of precision equipment, has developed nearly 100 precision kits, and services a customer base that stretches into Minnesota and Wisconsin.
But Brokaw’s General Manager Craig Harthoorn says the term niche conveys the right message to customers and guides Precision Farming Dealer’s 2013 Most Valuable Dealership’s philosophy when it comes to technology.
“It’s the only word we can find that fits us the best, and being niche is what we thrive on,” Harthoorn explains. “That’s what our business model is built off of and we’re not a company that comes out of the same box as other dealerships.”
For starters, Brokaw is a shortline dealer of farm equipment — including Apache sprayers and Blu-Jet strip-till machines — and a relative newcomer to the precision farming fray.
After Gary Nelson and his son, Dave, purchased the then 50-year-old dealership in 2008, they hired Harthoorn to run the business and develop a precision platform, now known as the Yield Center.
It started in 2009 when the dealership hired a former engineer as it’s first precision farming specialist and got a modest start of selling Raven Industries hardware.
But it wasn’t until 2011 when the company hired Phil Draude — an experienced precision salesperson and technician — that Brokaw’s precision department began to take off.
“When I hired Phil, the goal was for him to make our Yield Center profitable within three years,” Harthoorn says. “He did that in one. His department has turned our precision operation from being a necessary tool to help us sell equipment to where it is now a successful profit center.”
Proving Their Worth
Brokaw’s precision revenue has more than tripled since 2009, but one of the initial challenges for Draude when he joined the dealership was to grow the line of precision products offered and supported by the company.
After starting with Raven, Brokaw added Ag Leader, Precision Planting, CAPSTAN, NORAC and Intuicom precision products.
“The challenge of the expansion we’ve had is proving to the suppliers that we can take on their products and move enough volume to be a full dealer,” Draude says. “There’s still a couple product lines we’d definitely entertain getting if we can get our numbers to where they need to be in order to support that many major brand products.
“But now, we have the advantage of going from where we began with Raven, to being able to walk on to any farm and sell or service anything that customer has.”
As the precision ag sales manager at Brokaw overseeing a staff of three, Draude says one of the reasons the dealership has been able to rapidly grow its precision operation is because technicians are capable of servicing more than what the dealership sells.
The ability to provide solutions — not just products — is one of the foundations of Brokaw’s precision business plan.
“With the changes in technology and so many custom cables that can be built nowadays, a lot of times that’s what it takes to be able to put products together and make the best of two worlds,” Draude says. “That’s one thing that’s almost frowned upon, but why sell a customer part of a solution when you can sell him two products and put them together and provide a complete solution.
“So being able to do that and just going on to farms, word of mouth, building the relationships that we have with some of our suppliers, our vendors and even some of the other companies that we’re working with.
“This has taken us into markets where a guy says, ‘I never heard of you before, but you come highly recommended.’ Having that behind your name, can take business to a whole new level.”
While Brokaw has a strong relationship with its precision suppliers, the dealership doesn’t benefit from the support network of a mainline equipment manufacturer.
For some dealers, this might be viewed as a limitation, but for Brokaw, it’s an opportunity.
“A lot of dealers have those one or two guys who are really good on precision as long as it pertains to the mainline products and they’ve got a comfort zone with that,” Harthoorn notes. “As long as they can stay with their tractors, combines and planters, they’re OK. If they go beyond that equipment, their attitude suddenly changes to, ‘I’m not sure we want to mess with that.’
“We’re not afraid of the different products out there. We know how to take the products that each of the manufacturers supplies and we know how to take it, break it down and make it work for any color paint.”
Company in a Book
One way Brokaw is making the most of its independence and showing customers that its willing to find the best technology solution for their respective farm is through the development of its precision kits.
The company started putting together the kits — priced-out lists of precision parts for farm equipment — in 2009 to give customers a better understanding of what they were buying, and to provide salespeople with a handy tool.
“Why sell a customer part of a solution when you can sell him two products and put them together and provide a complete solution…”
“We wanted to make it simple for our salespeople,” Harthoorn says. “They just can’t sell a toolbar and say ‘OK, I want this cable, I want this flow valve, I want these on/off valves.’ The kits we make have a complete bill of materials and everything is prepackaged. They’ve just got to remember the part number and then everything comes off the shelf and it makes it that much easier.”
So far, Brokaw has developed nearly 100 precision kits — for planters, tool bars and sidedress application. Draude and his staff are working on kits for sprayers and precision product-specific kits for tool bars.
The hardest part in the process is establishing the kits, Harthoorn explains. This starts with identifying the need and engineering the right combination of products.
“That responsibility almost always falls on Phil because he does the R&D to figure out what it takes to make it work,” Harthoorn explains. “That also includes the installation. He goes from being the precision ag manager to the installation tech, and he’s figuring the pin-outs he needs to use on the harnesses, and everything down to the length of the harness.”
Prior to the Yield Center, Harthoorn says all of Brokaw’s precision offerings “stopped at the hitch pin.” When salespeople sold a piece of iron, they would have to send a customer elsewhere if they wanted to add technology in the tractor cab.
Now, Brokaw has gotten to the point with their kits that they are essentially the “company in a book,” Draude says. This means the precision kits are categorized and listed in a database, and then updated as new ones are developed — a handy resource for customers and technicians.
For the salespeople, turnaround time on quotes is quicker and the kits save a lot of phone calls between the sales force and the precision technicians. Plus, the parts department benefits by not having to look up as many part numbers.
“It just saves a lot of hassle of bringing other people into a situation and the customer can work one-on-one and the salesman has the company in a book, in a nutshell,” Draude says. “Between our parts catalog and the kit books, that salesman is kind of a standalone supplier. He has us a phone call away, but he has his first reference with him all the time.”
Time is Money
With the growing popularity of the precision kits and the success Brokaw has had partnering new equipment sales with technology, the company plans to expand its precision service offering in the future.
In 2012, the dealership’s precision specialists billed about 900 service hours, but Harthoorn acknowledges that charging for customer service is a challenge.
“You have to show the value,” he says. “You have to prove that there is a value to us being on call for when you need us.”
While the majority of Brokaw’s precision revenue comes from hardware sales, the dealership has increased its precision service revenue during the last three years, as well. In 2010, precision ag service revenue accounted for 5% of Brokaw’s overall precision ag profits. This grew to 7% in 2011 and 10% last year.
The dealership has had success with providing on-site customer training programs and precision field days. Recently, it began offering one-year precision service agreements on new equipment sales.
What the Judges Say…
The goal is to provide better, faster service to customers and allow technicians to avoid paperwork worries after the fact.
“With the high volume of phone calls that come in, the cost to go out and do one service call nowadays, all that plays into one simple package,” Draude says. “With what we have going in the sprayers, it’s a way for us to include it with those first year sales and then show the customer what we can do for service. If he feels it’s worth it, he’ll usually go with the support agreement.
“If they don’t see the value in it, then they’ll decide after the next year with the amount of calls and stops for service if that support agreement is something they should look at again. It’s been kind of trial and error and 2013 will be when we’re really getting it launched.”
At this point, Brokaw is offering a single precision service package for $500 to include on-site visits, priority phone support and in-field customer training.
The agreements also allocate a set amount of service hours for customers, and then include a reduced hourly rate for additional service needs.
“We’re giving a discount on our regular rate, since these customers have already dedicated themselves to us,” Draude explains. “A lot of people say, ‘You’re not carrying a major brand,’ and I say, ‘I’ll put my guys up against any mainline for the same amount of service. Just because we don’t have their mainline brand doesn’t mean that I’m not going to be able to provide service at a superior level.’”
So far, customers have been generally receptive to the agreements, Draude says, but he adds that a big selling point is giving customers their money’s worth.
He says the goal is to eventually offer tiered service plans based on customer needs and to give salespeople more flexibility when quoting prices.
“Right now, if we can keep it as an all-in-one it takes the confusion out of it for salesmen and for the customers,” he says. “In the future, we’ll probably want to find the happy medium where we could make a lighter package and we can make a more aggressive one. As this process evolves, we’ll be looking at other levels. We won’t have any choice.”
Building the Brand
Flexibility is critical to Brokaw’s success with its precision farming service offerings.
This includes knowing when and where to invest time and money into a new product or program.
For the last two summers, Brokaw has hosted a precision field day at the dealership to showcase their products, but also to offer in-person advice for attendees.
“We use the event primarily to help instill confidence in the customers that we interact with, and because of that we usually pick up sales a lot of times right there at the event because they see the value in doing business with us,” Harthoorn says. “This past year we sold two sprayers at the field day. The year before we sold three. We might have gotten some of those deals anyway, but we wouldn’t have got all those deals if it wasn’t for our precision field day.”
Brokaw Keeps Precision Talent in the Pipeline
“We don’t take on a new line unless we’ve seriously researched it…”
The plan for 2013 is to establish multiple field days at several locations throughout Iowa as a way to reach more growers.
But beyond the face-to-face interaction offered by Brokaw at its field days is the personal attention to customer service that precision technicians stress after the sale. This includes being there for all initial start-ups and also providing after-hours service.
As Draude jokes, some of Brokaw’s precision customers probably think their technicians are “vampires” because they are only seen at night.
“A lot of dealers don’t understand the value of providing that late night service. We’ve got guys that have day jobs and they don’t get home and start farming until 8 or 9 at night because that’s a second life for them,” he says. “Sometimes you get a call at 2 a.m. in the morning and you’ve got to get up. It’s a give and take in our industry. If you don’t give a little, you’re going to lose more on the other side.”
What Brokaw doesn’t want to lose is it ability to offer a broad range of products that its precision specialists can effectively service.
As Harthoorn notes, every time a new precision product is added, it takes time for salespeople and technicians to get up to speed.
“We don’t take on a new line unless we’ve seriously researched it. If we feel that it doesn’t provide significant support to a major product line we already carry, or it does not have the potential to meet our primary business model requirements, we won’t take it on,” he says. “If there’s not a significant revenue stream to be seen from it, we won’t even consider it because we’ve got plenty to handle already.”
Draude says one area of growth for Brokaw is through “accent” products, which make financial sense for the dealership, but also offer value to customers.
He’s had success with “accent” products like Colorado-based Intuicom’s RTK Bridge — a device used to automatically connect with a variety of RTK corrections — to test the cellular strength of a Wisconsin customer’s signal.
“We were able to drive through his field, down through some hollows out there in Wisconsin, and see where his actual dead spots were with just the simplicity of having that Intuicom box with us,” Draude says. “Those little things make a big difference for the customer by not having part of a monitor or more cables to deal with. It was quick, simple and effective and helped wrap up a sale of an Ag Leader system.”
No ‘Magic Pill’
The willingness to pursue opportunities to add new products and services that can boost the bottom line of the dealership is a big part of what distinguishes Brokaw from the pack after just four years in the precision farming business.
What Other Say About Brokaw Supply
But Harthoorn is quick to point out that success didn’t come overnight It took long hours and innovative thinking to get to where they are today.
“There’s no magic pill and it’s a lot of work. It’s a lot of 12 and 14 hour days. It’s a lot of investment in promotion and marketing,” he says. “It’s delivering on what you say you’re going to deliver. Branching out into markets that we haven’t been in before or doing things that other people just don’t want to try is a big part of what got us where we are.
“If it doesn’t work, it’s going to cost us a little money, but if it does work it can be very profitable and that’s what’s helped us sell more sprayers and toolbars. It’s also created other opportunities for us because we have other dealers call us who want our kits, or our advice on how they should change their structure to be able to get into the market.”
Moving forward, Harthoorn says the dealership is planning to open a second full-service store in Minnesota and plans to expand its precision offerings into water management and data management.
During the coming year, Harthoorn says the Yield Center will be adding another two people — one salesperson and one installation technician. Within the next two years, Draude says he hopes to have a full-time data management specialist on staff.
But even throughout the planned growth, Draude says the long-term key for Brokaw’s sustainability will be to remain a niche company, while offering solutions — not products — to customers and maintaining a high level of service and support.
“Our dedication is to the customer. We’re dedicated to no specific supplier, but we support everyone. We don’t want to put ourselves in a corner, but we’ll open up our door to look at the best possible solution for any farm,” Draude says. “When we talk to farmers, they usually talk about what they want to do today. Forget about that. Let’s look at what you’re going to do in five years and 10 years. That’s what we want to help you decide.”