Finding sources of recurring revenue is key for any farm equipment dealership and with less precision revenue coming from the sale of aftermarket technology, it’s more important than ever for the precision side of the business. During the Precision Farming Dealer Summit, dealers and marketing experts shared their advice on marketing’s role in securing that recurring revenue. 

Jon Eis, third generation owner and COO of Eis Implement, a single-store John Deere dealer in Two Rivers, Wis., points to 6 sources of recurring revenue, all of which play a unique role in the sustainability and profitability of a dealership’s precision farming team, he says. They include:

• Subscriptions
• Agreements
• Service Plans
• Precision Farming Labor Sales
• Repeat Customers
• Sales, Parts, Service Purchases

Identifying the revenue sources is a start, but Eis says it takes marketability, trust, continuous improvement, company-wide support and sales skills for them to be recurring sources of revenue. “How do we get recurring revenue? It requires one thing. Recurring revenue requires recurring effort. If we’re going to knock it out of the park, we’ve got to focus on those five items,” he says.  

1. Marketability 

“People have to know you are in the precision business and they have to be attracted to you,” says Eis. 

This starts with your website, explains Heather Hetterick, ag marketing strategist. Hetterick analyzed dealer websites, looking at how various operations communicated (or in many cases didn’t communicate) their precision farming offerings. (Read more about her analysis at www.PrecisionFarmingDealer.com/websitereview.) 

“What is most shocking is there was more than one website that had no mention of precision farming at all. These weren’t independent dealers; these were major ag equipment dealers with multiple locations,” she says. “I searched five different ways, went back five days later and check again because I really couldn’t believe it.”

Hetterick adds dealers should never assume their customers knows about a program, product or service the dealership provides. “With all the consolidation happening and the changes happening with manufacturers, our products and even with our dealerships, you can never assume that a farmer remembers this or that they know,” she says. “I read an article that said farmers have more than 100 people who they’re dealing with, different vendors. You’re dealing with a farmer but remember, you’re dealing with a business owner as well. You can’t be guaranteed that out of those 100 people who are calling on them, they’re going to remember you.”

When we communicate — whether face-to-face or even over the phone — we receive messages directly. But, digitally there’s a filter, Hetterick says. While most of us would like to think customers are coming to our websites directly, in reality that’s not the case. “I bet you find that most of your customers are not coming directly to your website. They’re coming through some sort of filter. We don’t go to our company’s website; we type it in Google and then it comes up,” she says. 

This is why it’s imperative that your dealership’s website include who to contact and how, what products you carry, what services you offer and what precision offerings you have, Hertterick explains. While this information is useful to your customers, it’s even more valuable to search engines. “Google needs to know you are a dealer of those products so they can serve that information to your customers when they’re looking for it or when they’re targeting that information,” she says. (See “4 Things Every Farm Equipment Dealership Website Needs” for more on what to include on your website.)

Beyond the dealership’s website, Eis suggests marketing your precision farming brands at trade shows. He notes it can be a challenge to make trade shows a success, but dialing it down and targeting a specific product or brand can help. “Contact those brand reps and see if they’ll join you and share the cost for the booth.”  

2. Trust

Trust helps the dealership with recurring revenue by building relationships with customers, and as Eis notes Skip Klinefelter, owner of Lino-Precision, said during the 2019 Precision Farming Dealer Summit, “Dealers should under promise and over deliver. One way Eis Implement does this is through its phone support agreements. 

When a customer buys a precision farming product for the first time, the dealership offers free phone support. “We show a $350 phone support charge on the purchase order, and then directly below it, there’s a $350 credit,” he says. 

Then, come January of the following year, the dealership charges a $350 recurring agreement to the customer. He says they have 93% renewal rate on the phone support agreement. “What we’re doing is building the trust with the customer with that free year. That value gets noticed and it shows,” he says. “In 2019, 28 out of our 30 customers renewed.” 

3. Continuous Improvement

Eis notes that the most successful organizations are learning organizations. Another lesson he learned from Klinefleter was to “Learn it, find it, adapt it, improve it.” Eis Implement applied this to its RTK network. Currently, the dealership’s cellular RTK network has 6 base stations and a total of 45 subscribers. “We’re doing that in a CORS network state on top of that,” he says. 

Eis Implement moved to the DigiFarm RTK network, which allows them as a single-store dealership to provide an RTK subscription to all makes and brands. Other benefits include there’s no need to change towers, it can be accessed across the entire Midwest, there’s a lower investment cost and hassle-free coverage. “The trick here is it gets us on the competitive brand farms. This opens up many long-term opportunities. Let’s take a look at an example. Maybe we start with a steering system. Then that customer finds value in that free phone support for a year and he starts to trust us. 

“Maybe we get an opportunity in there to price some of the shortline products we carry, say a Landoll grain drill. After that, he learns about our free parts delivery service. Now, he starts calling us for parts. Then service. Now we have a relationship. Two years later, our customer needs a new tractor. We get a demo out there and we make a push to convert brands,” he explains.

4. Company-Wide Support

The precision farming staff “often feel like they’re on their own island. It’s difficult to get precision farming to be top of mind for the rest of the organization,” Eis says. But, the dealership has taken some steps to get company-wide support for the department.  

Eis says it starts with simply reminding everyone that the precision team exists and encouraging sales, parts and service to talk about precision with customers. “What has worked for us is having Precision Farming Dealer Summit attendees from our staff create their own PowerPoint presentation and provide key takeaways from the summit to all of our store employees,” he says. 

The precision team has also teamed up with the sales staff on planter dealers, and Eis adds that on any tractor sale the salespeople should be saying, “I’ll make sure that Phil Davister [precision farming specialist at Eis Implement] contacts you and we can look at what kind of steering system we can put on there for you.” 

Eric Hagenow, precision farming manager for the dealership, is also part of the monthly meetings now and precision farming goals and performance are also included in all company updates, Eis says. 

“Ensure incentives for other departments support PF integration. Because I didn’t clarify things and our financial reporting didn’t track properly, I had the service department not wanting to give up a technician to do PF work because they weren’t going to give the customer labor credit,” he says. 

“On the flip side, I had the PF department not wanting to use the service tech because they’re going to get charged $105 an hour. I can’t stress communication and teamwork, especially on the management side of that one.”

5. Sales Skills

Think about the benefit the dealership could gain if its precision farming experts had the sales skills of the No. 1 salesperson. “It’s not for everybody, but if we start small and we can learn a few takeaways, we can help ratchet up a few more sales,” Eis says. “Go to SellingPower.com, and share a couple articles from there. Many salespeople have gone through the Dale Carnegie training. Consider sending some of your precision experts through that program.”

Overall, Eis says everyone within the dealership needs to team up for success and work in unison to capture recurring revenue.