There’s no silver bullet solution to generating recurring revenue from agronomic services. Dealers continue to experiment and evolve their approaches, with some hiring staff agronomists and others collaborating with third-party data management service providers.
Results of the 2017 Precision Farming Benchmark Study show that some 56.7% of dealers offer data management services and about one third require agronomic training for their precision staff.
But what is the most proven pathway to growing precision profits and how can dealers seamlessly bridge the gap between hardware sales and agronomic services?
During a dealer-to-dealer panel discussion to kick-off the 2018 Precision Farming Dealer Summit on Jan. 8, you will hear from 3 precision farming managers detail the opportunities and obstacles they’ve encountered implementing data management and agronomic offerings as sources of recurring revenue.
Speakers for this panel include:
Joel Kaczynski, product specialist manager, RDO Equipment in Moorhead, Minn. (2005, 2009, 2010 Farm Equipment Dealership of the Year Best In Class). With a 20-year career in precision farming and agronomy, including the last 13 with RDO Equipment, Kaczynski has drawn on his diverse experience to help launch and develop the 75-store dealer’s information management service offerings.
Hiring its first staff agronomist 6 years ago, the dealership’s investment has contributed to a doubling of precision service revenue during the last 3 years. Coming from an agronomy background, Kaczynski, was a recognizable and trusted face with customers to help the dealership evolve into the agronomic business across a diverse 10-state service area extending from the upper Midwest into the Southwest.
He details the dynamics of a profitable agronomic partnership and why getting a seat at a customer’s table during the decision-making process is a primary objective for entering the agronomic market as collaborators, not competitors.
Chris Conway, precision ag coordinator, Southern States Cooperative in Richmond, Va. (2017 Precision Farming Dealer Most Valuable Dealership). Unlike traditional farm equipment dealerships, Southern States Cooperative doesn’t sell hardware or machinery, and agronomy services account for nearly 50% of total annual revenue for the 200,000 member co-op. In fiscal year 2016, $679 million of the company’s $1.6 billion in revenue came from its agronomy division. To meet revenue expectations along with the diverse support needs of customers from Delaware to Florida — and states in between — Southern States has cultivated a precision culture rooted in training diversity, service flexibility and a proof vs. projection sales mentality.
Conway discusses how banking on the agronomic origins of precision farming is the cornerstone of Southern States’ “decision ag” business model that is modern and innovative, but also transparent and practical.
Paul Bruns, owner, Precision Consulting Services in Canby, Minn. Bruns has been offering soil sampling services since he started the independent precision dealership in 2004. Using a proactive per-acre model for agronomic services, Bruns likes to get as many of his customers on board with multi-year packages designed to be comprehensive data management programs. “There is stability in the cashflow,” says Bruns. “If we had 50,000 acres that’s under contract for 4 years and we have a set price, we can already know what the income over the next 3-4 years will be just with the existing customer base.”
Bruns shares the value of establishing stable, yet flexible agronomic services and the importance of delivering on the Big Data promise long-term, to increase predictability in costs for himself and customers.
Co-located with the 26th Annual National No-Tillage Conference, the 2018 Summit will be held Jan. 8-9 at the Galt House. Among the Title Sponsors making the learning and networking opportunities possible for dealers are AgriSync, Charter Software Inc., DigiFarm VBN, e-Emphasys, Farmers Edge, HBS Systems, Laforge Systems, Montag Mfg., Reichhardt, Topcon, Trimble and Yetter Farm Equipment.