The following article is based on Nathan Zimmerman, Lanty "Spud" Armstrong and Ed Pollock's presentation at the 2019 Precision Farming Dealer Summit. To watch the presentation, click here.
There are profits to be made for dealers who sell and service the ever-changing mix of precision farming goods and services. The key to success is understanding your customers and their farming operations, then identifying the precision farming tools and technologies that can increase their productivity and yields.
To ensure that both farm equipment and precision solutions work seamlessly together — ease of use — dealers are increasingly looking at technical service plans aimed at providing the level of support that growers need to take full advantage of the precision solutions now available.
During a panel discussion at the 2019 Precision Farming Dealer Summit, 3 dealers explained how their billable service plans are helping them boost precision profits and build stronger customer relationships. They identified three basic approaches that dealers can adopt to strengthen their precision business and establish lasting customer relationships.
1. Start with a Service Plan that Offers Call-in Support.
Most dealers provide call-in technical support anyway, so why not charge for it? That’s the basic idea behind the call-in service plans now offered by many dealers, including the three panel participants.
Nathan Zimmerman | Precision Farming Manager
A.C. McCartney, a 4-store AGCO dealership
Durand, Wataga, Carthage and Mt. Sterling, Ill.
Lanty “Spud” Armstrong | Precision Farming Manager Ag Technologies Inc., an independent precision dealership affiliated with a 7-store New Holland dealership
Ed Pollock | Sales Manager
SDG Precision Ag Services an independent precision dealership and ag service provider
New Era, Mich.
A.C. McCartney, a 4-store AGCO dealership in Illinois, offers a base plan that provides unlimited phone support for $300 per year. To incentivize customers, the base plan includes 10% off all parts and labor for repairs, a free loaner if available, and two training classes per year.
Compare standard fees at $25 per call, $75 for a loaner, $50 per training class, and it’s easy to see how this plan quickly pays for itself. “Our customers feel like it’s a fair value,” says Nathan Zimmerman, A.C. McCartney’s precision farming manager. “It doesn’t take but a $3,000 repair or a hardware cost for it to pay itself off with the 10% discount.”
“If customers pay you $300, they expect you to answer the phone,” he adds. “It makes them feel good, that they’ve got somebody to call. It also gets customers into the training events, because they feel like they paid for it. It gets them back in the door, so you could possibly sell them something at that training event.”
Ag Technologies Inc., an independent precision dealership, affiliated with a 7-store New Holland dealership in Indiana, offers a similar phone service plan for $400 per year. That compares with a $30 flat per-call fee for customers who aren’t on the phone service plan — a fee that’s applied to problem-resolution calls but only if the problem is resolved.
The plan also includes New Holland’s PLM (Precision Land Management) 24/7 customer support line, along with online training offered through New Holland’s PLM Academy.
To keep calls in check, Ag Technologies limits the service to business hours, and the dealership doesn’t take calls on Sundays. “We don’t want to be on all 24/7,” notes Lanty “Spud” Armstrong, precision farming manager for Ag Technologies. “You can’t do it.”
SDG Precision Ag Services also offers an annual phone-support plan that includes a 24-hour answering service except Sundays, with the promise to return missed calls within an hour. The plan costs $225 per year and covers both software and hardware issues.
“It doesn’t matter if it’s a software or a hardware issue they’re dealing with,” says Ed Pollock, SDG sales manager. “We do either one and will work through it both ways.”
Pollock also advises that with phone support, “you’d better have an answer or find an answer quickly, because it’s hard to charge for something and then not be able to give an account or an answer. You need to bring value for the customer.”
2. Add Optional a la Carte Services.
At A.C. McCartney, additional options to the base phone plan include discounts per unit on everything from preseason inspections to firmware updates, subscription services, yield data processing and monitor calibration, guidance calibrations and setup and map printing.
“The customer can choose what he wants on top of just a base service plan,” says Zimmerman. “The customer, I think, looks at it as an insurance policy.”
SDG Precision Ag Services also offers à la carte options that allow customers to build a plan that works for them. It includes phone and remote services, data management, display updates and pre-pay service hours, which can be billed in increments of 0.5 hours.
3. Consider Remote Support.
In addition to the phone support and à la carte options, SDG offers remote support. The remote service plan includes the unlimited phone support as well as remote support for in-season display issues and post-season software issues.
“If customers pay you $300, they expect you to answer the phone…” – Nathan Zimmerman, A.C. McCartney
Pollock explains that he uses a tablet or computer to log in and view the same display information as the customer. He then works remotely to troubleshoot any issues the customer is having.
“There’s some great software out there that allows you to remote into the guy’s computer and be able to work with him on the software side,” he says. “Once we log into the customer’s display, we can see what he’s doing and walk him step-by-step through that. This has been a very useful tool.”
In addition to the revenue opportunity, the ability to troubleshoot customer issues remotely saves him time on the road. “It could take a little more time, initially because I have to stop doing an install or driving,” he says. “But it saves me the half-hour or the hour drive to the customer’s place. He actually can call me when he’s sitting in front of his computer, wherever I’m at.”
Pollock notes the remote plan is a great way to get new operators up and running quickly. “I recently walked a new operator through all the setup of the display, and actually watched him spray part of a field so he got comfortable with it,” he says. “He found great value in us being able to do this for him.”
The remote service plan also helps SDG sell file transfer subscriptions. “Whether they want to move files to an ag retailer, move files to us so we can help them with the data management, or move files from a display into their own cloud account — it helps me sell file transfer subscriptions as well, so we leverage it for that also,” says Pollock.
Unlimited calling means all hours — 24/7, 365 days a year — something that’s not sustainable for all dealerships. To keep calls in check, dealers are advised to limit hours.
“If a customer is running at midnight, I need to take the call anyway,” says Zimmerman. “That’s the way they expect it to be done.” To avoid these types of calls, Zimmerman is looking to change the call-in plan at A.C. McCartney from unlimited calling to a set call-in schedule.
He’s also looking to add an auto renewal option, to make it easier for repeat customers to opt in each year.
For calls taken on the road, Pollock suggests using tracking tools like Pipedrive and OfficeTime.
Bottom Line Value of Precision Service Plans
Spud Armstrong, precision farming manager with Ag Technologies in Rochester, Ind., broke down the benefits of building precision service revenue to supplement other sources of equipment sales. While other aspects of the dealership’s revenue declined in 2018, precision service plan sales increased.
“When calls come in, and they’re getting answered, we can track and make sure that we’re actually billing accordingly,” he says. “I have guys that call like 40 times. If they call that many times, typically the next conversation is ‘Hey, we should look at a different plan and get you some more remote support.’”
Keep It Simple
Dealers looking to bill for technical service support should start with a basic plan that’s easy to understand.
“Keep the service plan simple,” says Armstrong. “The more complicated you get, the harder it is to make it work for everyone. We also have to get into the mindset that customers have to pay for the dealer’s help. That is huge. We’ve got to realize that there is value in what we do.”
Pollock agrees. “When you start saying, ‘What is your downtime worth?’ They find value in that. In some of our high-value crops, that’s a very important thing. If they don’t get their crops done by the time they need to get them out, they get in trouble with the processors. So that’s helped us a lot.”
In fact, value is realized every time a dealer makes contact with a customer. “This plan has been very helpful in creating that on-farm, good touchpoint that you’re always there, that you’ve got their best interests in mind,” says Pollock.
“You can’t really bank on much unless you set something up,” says Zimmerman. But with a little planning and perseverance, dealers can earn residual income and perhaps add another precision specialist with the revenue generated.
Zimmerman estimates the service plans at A.C. McCartney now bring in $20,000-$30,000 annually between the 4 stores. Armstrong estimates the plans at Ag Technologies take in $16,000-$17,000 per year. But the prospects for growth go well beyond the plans themselves.
“At the end of the day, you’re going to sell more product and make more money,” says Armstrong. “And that’s what we’re in business to do.”
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