With career experience at both a large equipment dealership and now as a staff agronomist for precision dealership Vantage Northwest in Burley, Idaho, Dillon Bingham has perspective on how both dealership models approach agronomic services. 

At the 2020 Precision Farming Dealer Summit, I had a chance talk with Dillon about how the dealership structures and delivers its agronomic offerings, along with some insight on the future of agronomic services based on market demand, competition and dealership priorities.

Jack Zemlicka: Trust is critical to building out agronomic services. How are you delivering that ROI to customers and capturing that market?

Dillon Bingham: That’s a tricky one because to really measure ROI you’ve got to have good, accurate data. And in my experience, that’s been the number one challenge. We have all the tools in the world to utilize and to capture good data. For me with my customers, I contract the service to do data management for them, but I still have to have the data from them to put it into the system to allow the system to spit something back out to me and working with that. 

Getting that information from them, is it a matter of then taking all their invoices or all their records and putting it on their desk and me coming to get it or them calling me every time they make an application? 

What it comes down to is bringing the information to a central location and that’s been the biggest challenge in my opinion. Once it’s there, then we have platforms, algorithms, different things that can spit out really good information to us that we can use to make good decisions. It’s just a matter of getting all parties involved to cooperate with each other.

JZ: How are you structuring and pricing those services? 

DB: If the customer is doing a full-level service, it’s a per acre charge of $12-$18 which includes everything from beginning to end — soil sampling, tissue sampling, crop scouting, prescription creation, in-season recommendations, data collection and data analysis.

If a customer wants scale back a little bit, then we can’t gain quite as many synergisms and so the price will be more in the $14-$20 per acre range for just a couple of services. For example, if the farmer only wants to buy software support from me and that’s it, it’s about $1,800 for the year. He’ll get all the acres that he wants, satellite imagery on all those acres and he can enter data and analyze data. But if he just wants something simple like a soil sample, then that’s really going to be a per-sample basis.

JZ: What kind of a take rate and customer retention have you had with your agronomic packages and services?

DB: I’ve been here for a little over 2 years and without doing the calculations exactly, retention rate is probably north of 90%. Take rate is definitely much lower than that because there is an awful lot of competition. Each year I may propose a plan to 10 new customers and 2 or 3 of them may take it, so we’re likely adding more customers each year. I’d estimate about a 30% take rate and about 90% retention once they get enrolled in a service.

JZ: How much importance is there today and do you anticipate there being, in the future, on incorporating more agronomic services within a dealership? 

DB: In the last 6 years, I’ve seen that trend grow more and more and I don’t see any reason why that trend would stop growing. It is somewhat regional. In areas where there is a lack of agronomic support from either co-ops or other retailers, the producers are hungry for that. There are pockets that I know of where that agronomic support is very strong from the retailers, from the input retailers, but I don’t see it necessarily dwindling in terms of agronomic support from an equipment dealership. 

I don’t think that’s going to decrease. But I don’t know that it will increase as rapidly as it has in the last 5-8 years. In my opinion, it’s starting to plateau. The reason why is because it is so regional. A dealership that is in a region that has good services from others, they’re really not going to bring much more value. 

From where I am now, where we focus on precision ag, that’s where it’s going to grow a little bit more because it’s 100% of our focus. Our entire business is based around precision ag. 

View extended coverage of our interview with Dillon at PrecisionFarmingDealer.com/DB.