Jack Zemlicka, Technology Editor
When it comes to quantifying the value of precision farming services for dealerships, there isn’t a standard or measurement to cover them all.
Precision operations come in all shapes and sizes — from the single technician operating out of one store — to an entirely separate business spun-off from an iron dealership.
But one of the universal challenges for equipment dealers today, according to precision farming consultant Dr. Thomas Krill, is plotting a profitable course for their precision business based on practical knowledge.
“I think it’s very much something missing today,” Krill says. “Nobody is having those practical discussions and dealerships need to have those conversations about where they want to play in precision farming.”
Krill has worn many hats in the ag industry, including an agronomist for John Deere, ag professor at Ohio State Univ. and Iowa State Univ. His involvement with precision technology dates back to the 1990s and he’s worked with equipment dealers on developing strategic plans with their precision operations.
He is currently working with Jerkins Creative Consulting (JCC) in Benton, Ill., on a comprehensive precision farming training program for equipment dealers.
The program — offered by JCC and scheduled to begin in January, 2013, with a series of webinars — will tackle everything from precision farming basics to educating dealers on how to develop strategic goals for their precision farming operations.
“Precision farming isn’t going away,” notes JCC President Floyd Jerkins. “So we want to help dealers understand how they can profit from it.”
Often, Krill says iron dealerships struggle with deciding how to structure precision departments or where to classify precision staff to be a profitable compliment to their equipment revenue.
For dealerships that don’t have a specific precision ag department, he notes that precision specialists can be ambiguously positioned in sales, parts or even as overhead.
“Overhead doesn’t generate any income,” Krill says. “As a dealer, if I’m spending money on expertise, where’s the revenue stream? I get nervous with the amount of service giveaway today because it’s been ridiculous.”
He acknowledges that it’s been difficult for dealerships to keep pace with the evolution of precision technology, and also take the time to thoroughly evaluate their motives for getting into the precision business in the first place.
While precision farming dealers are being trained on the latest technology and how to install and service it in the field, Krill says there is a need for better education on how to manage precision operations.
Equipment dealerships need to realize that precision farming is much more than bells and whistles in a tractor cab, he says. It is a system, not just pieces of technology — a point of emphasis for the JCC seminar series.
“It’s tough for dealerships that are used to their primary revenue source being purchase events,” he says. “Precision farming offers tremendous opportunity for a perpetual income stream through service contracts. Most dealerships don’t know how to do that.”
For many dealers, tapping into the full potential of their precision farming operation — from structure to sales to service — is a mystery, notes Krill.
But it doesn’t have to be if dealers are asking the right questions.
“I’ve talked to dealers who have added precision specialists at each store location because their OEMs said they should,” Krill says. “So the dealer checks that box off of things to do, but they should be thinking, “How does that make me money and how does it play into my mission?’”
