Dealers who attended the 2019 North American Dealer Conference registered for an event whose theme was from “Surplus to Sold.” Conducted by the Western Equipment Dealers Association in November, that theme focused on a problem faced by dealers throughout North America – used iron.
But the broader problem for some dealerships isn’t solely used iron and how to sell it but also how to be relevant in a sluggish market where equipment buyers aren’t lining up around the block like preholiday shoppers waiting for someone to unlock the doors.
Canadian and Western Equipment Dealer spoke with dealers who spent two days listening to a strong lineup of speakers and dealer panels who spoke about technology, marketing tactics, and best practices. Here is what a few dealers took home from the conference.
Keith Shirakawa is the general manager of Hanlon Ag Centre Ltd., an AGCO dealership in Lethbridge in southern Alberta. He said the 2019 conference began with a “bang” when Tom Morrison, an author, speaker, and life coach, said something Shirakawa took back to the dealership. He said Morrison asked conference attendees, “What are you doing differently when you get back and who did I meet or hear to make a change?”
Recalled Shirakawa, “Right away, I thought about how he spoke about the wow factor, having an active video strategy and videos of customer and employee testimonials. This I will pass on to our social media staff.”
As for used equipment, Shirakawa said, “We all seem to have an issue with this but the only area of concern for us is the movement of high horsepower tractors and application equipment. We don’t sell combines. I am constantly looking at our used inventory so it doesn’t get more than a year old and we try to flip this inventory as soon as possible.
“My take on this issue was we need to understand our customers better so we can sell them what they need not just what they want. We need to be able to work with our customers so their buying decisions make it profitable for both of us.”
Panel discussions also left an impression on Shirakawa. “There were quite a few ideas that came out which our dealership is doing but maybe not to the extent of excellence. To hear it again from our peers in the industry tells me we have to be better.”
Being strong in the aftermarket is important to Shirakawa “since this is where the most profit is in the dealership but you still need the sale to be there. As for the future, Hanlon Ag Centre is constantly trying to think where the next niche in the market is or what the next new trend will be and whether we can make it work for us. Sometimes putting new concepts into place takes capital, which is tough on a single-store dealership but we always try to think out of the box.”
Staying ahead of the technology curve isn’t for the faint of heart. It comes at us at a dizzying pace. “My take is technology is not going away so we try to keep this in the forefront at the dealership,” said Shirakawa. “Autonomy is coming faster than you think and we have to consider how it will affect us going forward.”
After three years of drought in southern Alberta, recent snowfall and some rain makes the next year look promising, noted Shirakawa. “We already have more presells for 2020 then we had going into 2019. I believe we will be up 10-15%. Why? I think we had more customers hold back on purchases as they were uncertain with the economy, political interference, and commodity prices.”
In closing, Shirakawa said, “The WEDA conference is always a great conference to mingle, interact and just hear what is new, exciting, and trending in this business.”
Darrin Ishaug is director of product support at Papé Machinery, which operates John Deere dealerships in five western states. Among his takeaways from the conference were the benefits of using “a customer lead generator – or CLG – and the use of the dealership’s CRM to market competitive trades.” He also supports the idea of providing “a list of support personnel within the dealership to used equipment purchasers.”
Ishaug also liked what he heard from speakers about reshaping the sales process by using an “analytical approach to goal setting for sales professionals.”
In the area of technology, Ishaug, like most dealers, knows it’s evolving and at a rapid pace. “We have to embrace technology to become a smart company and have a culture of constant innovation.”
While early in the new year, Ishaug seems positive about what’s ahead. “With consumer spending at a high point, the turf industry should see spending at the 2019 levels,” he said. “The ag sector should see some incremental growth from the trough we have been in for the last couple of years.”
In closing, Ishaug noticed something missing from the conference – inline dealer meetings with manufacturers, something that’s been a staple at equipment association conferences for years. “I was a little disappointed that we did not have manufacturer breakout sessions like we have had in the past.”
Doug Tibben is general manager of Canada West Harvest Centre, a multistore Claas dealership with four locations in Saskatchewan. He called used equipment the “lifeline of large ag dealerships” and it needs to move quickly. “Turning it quickly (90 days) not only supports healthy cash flow but also reduces unnecessary costs. This seems simple. Yet, as we look around our industry, it’s s not the norm.”
Tibben said the problem with used isn’t limited to equipment on hand, government issues or customer problems. “It’s an attitude problem. Our focus needs to shift from how things were done yesterday and look more to how to better operate today.” He said marketing, which was a focus of the conference, should be high on any dealership’s list of priorities. “Marketing is changing faster than any other component of a dealership today,’ added Tibben, “and hearing from some of the presenters was a great way to stay on top of best marketing practices and consumer trends that are crucial to maintaining a positive and healthy customer experience.”
Like Keith Shirakawa, Tibben agreed technology is moving along at a brisk pace and it’s something dealerships need to be prepared for and willing to accept.
“I agree that technology is changing our business at a fast pace and accepting the change and adapting to what comes next is crucial to survival,” said Tibben. “The key takeaway that I embraced is that no one really knows when it will be here or how it will look, but we need to prepared to incorporate change and be flexible enough to adjust to a different way of doing business.”
In closing, Tibben expressed a careful thought about how the industry might approach the year ahead. “Cautious optimism seemed to be the mood for 2020,” he said. “Companies that want to do more than survive going forward need to stay on top of the next phase of our business. To truly thrive will require more than what got us to this point. We need to advance and evolve to keep pace with what is coming next.”
Greg Goepferich is with C&B Operations, LLC, and works in pre-owned wholesale equipment sales. The John Deere dealership operates 38 stores in Iowa, Minnesota, South Dakota, Montana, Wyoming, and Idaho. He was particularly interested in the conference’s focus on used equipment marketing.
“Pre-owned equipment remarketing seems to be the challenge for many dealerships. We have got to get back to blocking and tackling,” he said. “Information gathering and used equipment buying decisions by our prospective customers, via the internet, is not going away. The dealer organization that has a ‘modus operandi’ to provide quality photos, accurate and complete descriptions, at a market-relevant price, will prevail in the used equipment arena. Today’s buyers are savvy, and we better be intimate with the used equipment we are marketing.”
“As ag equipment has gotten more intricate with options, our machine descriptions must promote those features. It’s not enough to state the transmission type, tire size, and the engine hours,” added Goepferich. “To get this accomplished, the salesperson/field marketer – the employee dealing with the trade at the farm – is key to this process. It rests firmly on their shoulders. He/she is the one who has got to be responsible for the accuracy and details of the trade, which is basically ‘a purchase’ by his/her employer.”
Goepferich also suggests that training and accountability are vital in this process. “For someone new to our business, it will require training and coaching until that person has a solid equipment foundation. And until then, the sales manager/store manager shoulders that accountability. This must happen. If it isn’t done correctly or completely at the time of trade, you lose 3 – 6 – 9 months of prime marketing due to poor advertising descriptions or unattractive photos, and all this affects inventory turn and cash flow. You wouldn’t reward an expensive bird dog that brings rabbits back to your feet. So why do we allow it in this business – repeatedly?”
Colleen Francis, founder and president, Engage Selling Solutions, said during a preconference interview that the balance of power in sales has shifted to the buyer. But she also said sellers can level up. Francis shared her expertise with dealers at the conference and her comments struck a chord with Goepferich.
“What I took away from Colleen’s presentation was the importance of building strong personal relationships with key accounts that are here for the long haul. Also, the importance of promptness, whether following up on leads that are being generated by systems or services we have in place, or the shortening of our window to get equipment advertised online. “And finally,” noted Goepferich, “having/requiring accountability on the team, by everyone in the dealership, to do the right things. It gets back to blocking and tackling, which I previously mentioned, and maintaining focus by keeping our eye on the ball. That will make a difference.”
The 2019 WEDA conference also featured speakers who asked dealers to look beyond today to see if their current way to doing business will be relevant tomorrow, next week, next month, or next year. “It’s a little scary to think that the likes of Carvana or Vroom could come to the ag equipment business, but we need to think it could,” said Goepferich.
“From a wholegoods standpoint, specifically pre-owned equipment, our dealerships should be able to provide this value better than any other in the market. But it’s going to require knowledge of the machine and its application, understanding its condition (where it is in its life cycle), as well as what reconditioning is needed that will add value to it. It will require ‘buying’ the trade right, which involves many things, including knowing who the prospects are, and what will it bring in the market in the next 90 days.”
In the year ahead, Goepferich said there will be opportunities in the ag equipment market.
“Those areas will be in tillage, precision ag and nutrient application. Pre-owned combine inventory is still very heavy on the market. I think that new combine sales will need to be curbed 30-35% vs. 2019 to get this inventory back in check,” he said.
“New combines are a big driver for dealer market share metrics, so pushing combine sales (and high horsepower tractors) and ‘betting on the market to come’ – only to send used carry-overs to auction 18-24 months later is not positive for cash flow. We need to get these leftovers cleaned up, and I feel the pendulum has shifted to make that a priority, but there will still be some pain to work through,” added Goepferich. “In general, I feel investment (sales velocity) for equipment purchases will be short, so we will really need to listen to the customer’s needs and make sure we are bringing value to the table.”
In closing, Goepferich said he enjoyed the 2019 WEDA conference. “My main goal in attending was to meet dealers from the western part of North America for networking regarding used equipment. I found the variety of speakers and panels to be informative and timely. The venue was nice. The people I met from the association were friendly and open, and genuinely made me feel they were there to serve the dealers in this industry. It was a great 2.5 days. If I get the opportunity to attend next year, I will strongly consider it. Thanks for a great meeting.”
From the CEO’s chair
WEDA CEO John Schmeiser said the 2019 conference presented “the perfect balance between where the industry is headed in the future while addressing some of the current challenges dealers are facing today.”
He was especially pleased with the dealer panels that discussed Technology Driven Sales, Account Planning, and Transforming Equipment Remarketing Practices. “Once again, the response to the dealer panels was extremely positive. Dealers learning from other dealers has been a cornerstone of our conference and these panels gives dealers strategies that they can take home and implement in their businesses.”
As noted by Greg Goepferich, C&B Operations, networking with other dealers is an important aspect of industry conferences. Schmeiser agrees. “Dealers repeatedly tell us that networking opportunities with other dealers are important. This conference has become the perfect forum for the sharing of ideas and concepts of successful dealers.”
Schmeiser also said industry support, whether from sponsors or manufacturers, is a key feature of the conference “The manufacturer panel, whose participants represented the industry’s major manufacturers, focused on the used equipment question and their insight showed that manufacturers realize that large used equipment inventories hinder new equipment orders.”
In closing, Schmeiser believes the content presented at the 2019 conference ranks among the best provided by the association. “Our initial feedback from attendees exceeded our expectations. The industry looks to WEDA to be a thorough leader in this area and we raised the bar once again.”