Dealers change to succeed.

by the AgriMarketing editors

THE EQUIPMENT DEALER

Up until 1990, JD Equipment, Inc., (JD) headquarted in London, OH, was a typical John Deere dealer, successfully serving the crop and livestock producers in its community.

But then, something changed. People from the nearby cities of Columbus, Dayton, and even 100+ mile distant Cincinnati, began building second homes in the gently rolling hills of south central Ohio.

But their needs were considerably different than the large commercial farmers in the area that JD had served for so many years. These new consumers wanted equipment to cut and haul firewood, mow their more than three acre lots, and tend their small cattle herds.

"We saw this as a totally new market for us," says JD's Ed Smith, "and one that will continue to grow." JD operates five stores in south central Ohio and three in Michigan's thumb area. Smith, JD manages its Lancaster, OH, store and oversees the firm's company-wide rural lifestyle marketing activities along with Don K. Mitchell of JD's London location.

To attract and serve this active market segment, JD built in the Lancaster area what Smith coins, "the world's largest billboard"--a new 17 acre state-of-the-art complex which sports an attractive showroom, parts department, shop, and equipment displays, with plenty of room to ride and drive. The store was relocated from a downtown location to a highly trafficked, and very accessible, highway bypass around the city.

"This is not your old John Deere store," Smith says. "To show the lifestyler we care about their business, we put the equipment that appeals to them right up front. The big horsepower tractors, combines and other farmer-market equipment sit in the background. We even have a water feature in our coy pond to attract our target customers!"

To evaluate equipment, farmers will go to shows, study literature and be willing to wait up to three months for delivery. "Lifestylers aren't like that," Smith says. "Because their time is so limited, they will see an ad, stop in the store, want to test drive it, and have it delivered that weekend."

Another twist--the competition. "There are several other equipment dealers in the area that compete for their business," Smith says. "But in this segment, we have an additional competitor. Because this is a 'hobby' for most, we compete with other hobbies they may have like boats, RV campers, a hot tub, etc. If we don't have the equipment they want now, we may lose their business to another of their passions."

JD advertises in the local shopper and radio. In addition, it has open houses with tents, balloons and other consumer-attracting activities.

"The lifestyler is more service plan-oriented, too," Smith reports. "We offer a plan in which we pick up their equipment, bring it in for regular maintenance and deliver it back to them." JD's Lancaster store has two full-time service technicians who work strictly on that type of equipment and is about to add another.

Is all this effort worth it? You bet it is. The lifestyle market now represents 30% of JD's volume.

THE FEED DEALER

Located 20 miles west of the Houston, TX, suburbs, Purina Mill's dealer Mike Steinhauser also saw his market area changing.

Large cattle ranches and feedlots used to be king in his area. They are being replaced with what he calls "ruralpolitans"--folks that have purchased small acreages Cranchettes") and raising their families and animals in a rural environment.

Steinhauser's still serves the commercial livestock producers, of course, but it is selling a lot more horse, dog, cat, and even goat feed than before. "In addition to feed and animal health products, our stores are now carrying other items the ruralpolitan wants, Steinhauser says, "including fencing materials, lawn and garden items, and wearables including Carhartt, Wrangler jeans, and Justin boots.

Steinhauser's has grown to five stores, all located just west of Houston.

"The farmer is in the business to make money," Steinhauser says, "so they are watching every dime. But the ruralpolitan is in it for the experience and view it as their hobby. It is the product selection, quality, service and convenience that is important to them."

In addition to advertising in the local and regional consumer-based publications, Steinhauser's also sends a monthly e-newsletter to those who have signed up for it. It hosts an annual customer appreciation day featuring a petting zoo and lets the local 4-H and FFA clubs sell soda and popcorn.

And, it is a much different consumer that Steinhauser's needs to attract. "When we were strictly in the feed business," Steinhauser says, "the women would stay in the pickup. They didn't want to come into a dirty feed store. Now they are our target market--they are the purchasing agent for the ruralpolitan family, so we dramatically changed our stores to make them appealing to the 30-55 year old woman.

"We even changed our personnel to serve the ruralpolitan market by hiring females to assist them in the customer-friendly manner that they are used to. Everything we do is geared toward the woman."