Like many of you, I’ve been forced to fill the void of live professional sports and social events with constructive and at times, overly ambitious projects. This included what ended up being a time- and sanity-consuming backyard leveling assignment.
Thinking I could achieve the desired grading with a little innovation and a couple of buckets of sweat equity, I dug in with little more than a shovel, wheelbarrow and enough stubbornness to fill the pool planned for the space.
Needless to say, I dramatically underestimated the effort, planning and tools required to successfully accomplish the goal. Three revisions later, the job was finally done and I’d like to think a valuable lesson was learned.
Based on my conversations with dealers during the last few months, some have learned hard economic lessons due to an inability or unwillingness to arm themselves with the tools, training or talent to change with the times.
Others have adapted to avoid or alter business objectives going forward — not abandoning plans for growth — but seeking alternative opportunities. Sitting in on a recent call with investors interested in getting some perspective on dealers’ precision farming priorities, the conversation touched on how satisfied dealerships are with the range of precision products — especially on the farm data management side — they offer to customers.
In some cases, dealers acknowledge voids in their precision product suite, but in the same breath, question whether now is the right environment to be taking on a new platform or even taking the time to research one.
But as was brought up during a conversation with investors, farmers are getting more sophisticated with their understanding and expectation of ag technology, especially as the generational shift continues.
ROI-focused farmers want real numbers rather than generalities and hypotheticals. It’s easy to short-cut the sales process by simulating a yield increase estimate or seed savings projection, but it’s far more valuable — and persuasive — to customers if the example uses their own data.
Talking with Jamie Brand, business development manager for AgriVision Equipment, a 17-store John Deere dealership, he cites the power of AVE’s ROI calculator he helped develop as a tool to validate the investment a customer makes in a new piece of equipment or technology.
“The math is significantly different when a grower purchases the right piece of equipment and uses it the way it was intended to be used,” he says. “What can start out as a highly emotional process, we ultimately want to make it purely a business decision for customers. It's just about the math. We give customers options and they can choose the best one for their operation.”
The AVE team typically has a series of 8 questions they will plug into the calculator and walk customers through with the goal of helping growers evaluate the impact of how a new technology investment can have on their operation.
Calculations are made based on the customers responses and an ROI number is determined with a specific dollar amount. While the dollar figure can differ, Brand says on average, customers see 400-600% return on investment with new planters during an average of 1-3 years of ownership.
“We understand growers don't want pipe dreams,” Brand says. “They want true math. When customers come in planning to or wanting to buy a new planter, there can be high emotion involved.
“But once we’ve walked through the numbers, it’s a business decision — whether a farmer makes it or not — we want to put our customers in the best position to make that decision.”
In retrospect, an ROI calculator would have likely saved me time and frustration in my own land-leveling endeavor, but dealers have far more at stake when it comes to cutting corners with customers on precision payback.