On a daily basis, precision specialists sell and service equipment that pulls reams of valuable data from farmers’ fields. It makes sense that dealers are starting to ask, “What if we could help farmers use the data in addition to collecting it?” 

In recent years, more dealerships — either by choice or by directive — are incorporating agronomic services into their businesses. As has been documented in Precision Farming Dealer’s annual benchmark studies, dealers have a variety of entry points into agronomic services, one being hiring an in-house agronomist.

Results of this year’s benchmark study (see "Boosting Agronomic Revenue and Customer Retention") showed that more than 48% of dealers require agronomic training for their precision specialists — the highest total in the history of the study. But breaking into this business can still be a hard sell — at least initially.

Some dealers admit that early entry into agronomic services was seen as more of a burden than a benefit. But those dealerships that have been receptive to adding prescriptive farming options to complement machinery and component sales, have gradually been able to gain traction with customers. 

In search of tips and techniques for this transition, Precision Farming Dealer caught up with four dealerships that have hired in-house agronomists and asked them to share their motivation and strategies for making the move. While each have somewhat different objectives for integrating internal agronomic services, all the dealers agreed that it’s been a worthwhile direction to bridge the gap between equipment and precision technology.

Bridging the Gap is a series of articles and webinars that tracks the inception, implementation and progress of several farm equipment dealerships' investment in agronomic and data management services. For the latest additions to the series, visit our Bridging the Gap feed. It is brought to you by AGRI-TREND.

 

Bridging the Gap

Pay for Quality & Experience

According to 2017 benchmark study data, in-house agronomists earn an average annual salary of at least $71,000 with more than 20% of dealerships paying staff agronomists at least $86,000. To justify the substantial investment, dealers are seeking experience and quality.

Reynolds Farm Equipment, a 7 location John Deere dealership based in Fishers, Ind., currently has 2 agronomists on staff — one hired in 2013 and the other in 2015. Both were locally known independents before being hired on full-time at Reynolds. 

In addition to instantly inheriting the agronomists’ knowledge of service costs and pricing, the hiring also brought the benefits of removing two competitors from the field and adding new customers. 

Bringing on an established agronomist helped Reynolds quickly build its pricing model and to address factors related to launching their program. Building growth potential was also positively affected.

“We didn’t know what we didn’t know, so to speak, and the first agronomist we hired had over 20 years of experience in the field,” says Craig Benedict, Integrated Solutions manager with Reynolds. This helped develop the dealership’s new program and also allowed Benedict to implement a mentorship program so they could hire more young, inexperienced agronomists and train them under the leadership of Reynolds’ senior agronomist.

RDO Equipment, a 75 location Deere dealership, was able to draw on internal experience when it formally hired its first agronomist about 5 years ago. Coming from an agronomy background, product specialist manager Joel Kaczynski, was a recognizable and trusted face with customers to help the dealership evolve into the agronomic business. 

“Our main reasoning for breaking into this area was to really grow the agronomic expertise of our people within our company,” he says. “The initial challenge we faced was bringing the culture of agronomy into the equipment industry, because customers didn’t view us as somebody they’re going to go to for agronomic advice.”

Kaczynski says the way RDO Equipment differentiates itself from other local ag service providers (ASP) is to develop knowledge and expertise on the agronomic benefits customers can get from farm equipment, rather than directly selling agronomic services. 

“We’ve done quite a bit of work to identify and track the trusted advisors, whether it’s a customer’s agronomist, banker, seed salesperson or whoever is helping them make decisions on their operation,” Kaczynski says. “We built it into our CRM software, so all of our customer management software is designed to help us build those relationships with customers.”

More than a ‘Checked Box’

Some dealers are admittedly skeptical or reticent to allocate valuable staff or financial resources to developing a new part of the business. When Atlantic Tractor, an 11 location Deere dealership in the Northeast initially added its first staff agronomist several years ago, Brian Peterman, Integrated Solutions manager with Atlantic Tractor, says it wasn’t a smooth transition. 

“At that time, I was not a believer in it. But we did it to satisfy our supplier and it was basically a check in the box,” Peterman says. “We utilized a staff agronomist for internal training and the idea was to start promoting the knowledge of equipment and its effects on agronomy, but we just sat there for a couple of years.”

Once the dealership began putting more time into developing their agronomic business — adding 2 more staff agronomists — Peterman began to see the value and benefits unfold. 

“What I’m seeing in the transition right now is that this area is helping to support the data management side of our business,” he says. “The customer who didn’t see a real value in seeding maps, harvest maps and fertilization maps, could now see how we’re adding value through the agronomy side. So whether it’s our agronomist or the farmer’s agronomist, it’s still supporting our Integrated Solutions department and the packages we offer.” 

Competitive Balance 

Before diving headlong into agronomic services, dealers would do well to understand competing companies in their service area. Understanding local competition helps identify opportunities and opens doors for cooperation. 

For Benedict, this meant meeting the competition face-to-face.

“We didn’t want local businesses to hear second-hand that we were suddenly going to start offering agronomy services and competing with them,” he says. “We had meetings with them and explained what we’d be offering and how. In most cases, we were going to be charging more than them. So it’s not like we’re subsidizing the equipment with the service. This helped reduce the amount of issues we ran in to.” 

Wade Inc., a 12 location John Deere dealership based in Mississippi, has 2 agronomists on staff and advanced data analyst Chance Pittman determined that there were some gaps in local service and found that local co-ops could actually be helpful to some degree. 

“A lot of our competitors don’t want to pursue agronomy services — they’d rather just sell farm inputs,” he says. “I’ll work with them sometimes when I am trying to determine minimum and maximum seeding rates for a certain crop variety or finding the best rate of fertilizer to use for a crop in our area.” 

Many ASPs also don’t want to dabble in selling and servicing precision technology either. This created an opportunity for Atlantic Tractor to capitalize on a its in-house ag technology expertise, while supporting — not stepping on — the business of local agronomists. 

From the start, Peterman assured local seed and fertilizer retailers that Atlantic’s intent wasn’t to take their business, but to support it by recommending precision products or how to use them accurately in conjunction with a field prescription.

Still, he sensed an agronomic void in the region that Atlantic could help fill.

“Most agronomists, whether from an ag service provider or an independent firm, would supply a piece of the puzzle — a seeding or fertilizing prescription — but nobody could commit to full year support for that crop season.

“We’re creating the crop plan for the customer and doing a year-end review. If our customer is partnered with his ag service provider, the inputs they’re providing shine too, because we’re providing management behind the application or seeding.”

Peterman says agronomists don’t necessarily want to be product specialists in the precision world, which allowed the dealership to fill a service void. Atlantic’s agronomy packages are designed as start-to-finish programs, including soil interpretation and writing a crop plan, which is managed throughout the year. 

“It’s not just a part-time, in and out-type of scenario on our part,” Peterman says. “We’re trying to support our agronomy services the same way we do our equipment all year long, with a total support package to give customer’s a premium agronomy feel for that crop result, whether we lowered inputs or increased yield.”

Proper Packaging 

Correctly packaging services can easily be the line between profit and a loss leader. However, one size doesn’t fit all. Working with an experienced agronomist is helpful in this respect, says Benedict. 

“Our agronomists are available for a fee of $11-$14 per acre and we offer à la carte programs for the farmer to choose from,” he says. “We offer soil sampling, variable-rate prescription writing, tissue testing, zone creation, soil mapping and more. Once we figured out which packages and solutions our customers were looking for along with what could benefit our dealership the most, we were able to better define our service and make a better business plan for agronomy.”

Pittman says that Wade has had luck attaching service packages to new equipment sales. “If someone buys a new planter or sprayer, they may get a reduced price on services the first year,” he says. “We also include equipment optimization packages. Sometimes farmers pull their new planters right out at the start of the season and expect them to run fine, but there are bugs with the software sometimes and linking up on the ISOBUS may cause issues. 

“This way, we can come out a few days before they start getting ready to plant and actually run the system and plant a few seeds to make sure everything is running smoothly.” 

Getting a seat at a customer’s table during the decision-making process is an objective RDO Equipment had with entering the agronomic market as collaborators, not competitors. An ideal scenario involves a customer’s agronomist, along with an equipment salesperson and agronomist from RDO Equipment, Kaczynski says. 

This environment is comfortable for the customer and also opens doors to new opportunities everyone in the conversation can play a role in. “We were recently involved with a customer who was just getting into variable-rate in his operation. He had just hired an agronomist who had the skillset for building prescriptions, looking at variable-planting for corn and fertilizing as well,” Kaczynski says. 

“The customer wanted us as the equipment dealer to understand what agronomic direction he wanted to be going and what goals he had, along with some of the obstacles he was facing. We helped identify some of those and his agronomist ended up bringing our agronomist into the conversation.”

During the course of the meeting, everyone contributed to creating a year-long plan for the customer, which included working with his agronomist to get the farmer’s software aligned with Deere’s Operation Center platform, setting up permissions from the customer for data transfer and then running though the needed equipment to execute variable-rate goals.

Realizing ROI

Like any new service or product, there are some upfront investments, but the ends have to justify the means. It took Reynolds 2 years to become profitable with its agronomic services, says Benedict. 

“Our program is in its fourth year now,” he says. “We set a goal of $250,000 of added revenue per agronomist. Our senior agronomist has already surpassed that mark and as our customer base grows, we see the goals being easily attainable and then some.”

As a data analyst, Pittman sees himself in a sales support role. His services to customers justify his salary, but his efforts also translate into increased sales revenue for the dealership. 

“We do variable-rate, tissue sampling, soil sampling and throw in some precision ag consultation too,” he says. “By doing what we do, we support our salespeople because we’re encouraging our customers to get hydraulic drive planters, row command and section control. We want to make sure that every piece of equipment is variable-rate too, so our customers get the most out of our agronomy packages.” 

Benedict notes that because of the intangible value the agronomists add to the dealership they’d still be worth their salaries even if they stopped charging for their services tomorrow. This value comes in the form of training the dealer’s staff and customer base. 

This training is done through one-on-one sessions as the agronomists distribute their time among the 7 locations and through general sessions in their 50 person training center.

“We want specialists to know what kinds of things will impact farmer outcomes like sidewall compaction, improper spacing or depth control,” says Benedict. “It’s important to have agronomic knowledge across the whole organization because it gives us all a better idea of what the grower is trying to accomplish so we can devise better solutions. 

“Learning how different types of closing wheels perform in certain soil types will help staff make the right recommendations. It raises the level of expertise of our salespeople, service techs and even our parts guys. The benefits are tremendous.”

PFD Summer 2017 Contents