IT’S BEEN TOUGH selling and it won’t be easier this winter. It doesn’t take much to upset the apple cart and every month it seems a truckload is turning upside down.
We have to find sales. The traditional methods of how we target our A, B, and C customers are not working. But what are A, B, and C customers? Customers have been classed and targeted using various methods. A few methods shared by dealerships are as follows:
Acres Farmed (most common) – Class A, B, and C have a certain number of acres. The more acres farmed, the higher the class. This format misses out on bushels/acre quantities or types of crops grown. A dryland, high plains producer does not produce the same bushels/ acre as a Midwestern farmer.
Livestock Count – A, B, and C class is based on headcount. As this is written, the U.S. dairy farmer with more cows is likely further behind. Beef prices are never consistent, meaning farm gate receipts are never consistent regardless of the animal count. A customer has a few cows and grows more hay than he needs. This year he is making money on his hay sales but the dealership has him classed as a C since he only has a few heifers. There are many variables in livestock, i.e., intensive or free-range, type of animal, organic production, niche markets, etc.
Past Purchases – A, B, and C are classed on the volume of past dealership purchases. This has merit because customers should be recognized
for their loyalty to a dealership. The misunderstanding is dealerships do not always make money on A-listed customers. In the last few years, many dealerships have stopped quoting A accounts or they are quoting with high cash differences. We have always wanted to ask an A-listed customer if he understands why the dealership seems to be chasing him off when only a few short years ago he was being wined and dined?
Unit Quantity – Dealerships class customers based on the number of units a farm has. Th e problem lies with no one knowing which units are leased and which are owned. How much money is owed on each unit? Are they upside down on equity?
More does not always mean better. As in a dealership, more employees might be an indication of low people/process efficiencies. We have recently been exposed to a number of dealerships with recovery rates well below 30% (target 75%) and billing effi ciencies at 50%-60% (target 100%+). Th e dealerships are not improving processes. Th ey are hiring more people to compensate.
Western Equipment Dealer Magazine Fall 2019 Issue
By Trent Hummel