When visiting with precision dealers, it’s evident that most enjoy the freedom and independence that comes with the job. The good ones tend to be a rare breed — a hybrid of technical know-how and sales savvy.
They also know that continued success depends on adaptability and a willingness to change. As we move into a period of relative uncertainty in the farm equipment business, one thing to watch will be how the relationships between precision dealers and suppliers evolve along with the industry.
The landscape for precision hardware continues to change and more and more, selling a product or component isn’t enough for dealers to increase revenue year after year. There’s an ongoing movement toward selling “solutions” that include agronomic expertise and farm management advice.
This is something that Tim Norris, CEO of Ag Info Tech, our 2015 Most Valuable Dealership understands and embraces. As you will learn in our feature story in this issue, the dealership prides itself on product and service diversity to sustain growth.
“Creating profitable and recurring service revenue streams is something farm equipment dealers had to learn in the ‘80s and ‘90s,” Norris says. “We need to be like ‘Big Iron’ dealers and have service and parts departments that not only stand on their own, but sustain the company in hard times when new equipment sales are down.”
As an independent dealer, Norris doesn’t have the same obligations to OEMs as precision managers at farm equipment dealerships. But he has certain expectations of his suppliers, especially in the midst of a downturn in the ag economy.
“For a supplier to be successful, they need to be in-tune with the agronomic needs of the end user and the economic benefits to that end user if they purchase their system,” Norris says. “With commodity prices lower, they have got to prove their products.”
Some are doing this better than others, providing dealers with tangible return on investment tools, which can be valuable ammunition in closing a sale. But others are still stuck in “supplier mode,” says Norris, meaning they build products and then put the onus on dealers and customers to figure out the ROI.
What he looks for in a supplier is a partner willing to accept feedback and work to improve products that will better serve the customer, rather than let dealers guess on the value a piece of technology will bring to a farmer’s operation.
“The suppliers who survive will be the ones who turn their dealers from cowboys, working alone on the range shooting from the hip, to business-minded, purpose driven dealers who can sell and support their product lines,” Norris says.
While some dealers may not mind the comparison to cowboys, they also want to contribute, or in the case of Norris, run a profitable company. There’s only so much room for self-reliance and a loner mentality in a constantly changing industry.
Dealers pride themselves on providing consistent and reliable service to farm customers. Not every dealer is going to have the same purpose or objectives with their precision business, but they should universally be able to count on a consistent level of support from their suppliers.