Deere unveils new ways to serve buyers of farm equipment. Last December, Nashville was less the stage for country music singers and recording agents than it was for dealers of John Deerefarm machinery. More than 4,500 dealers donned company name tags as they inundated the 9-plus-acre Opryland Hotel Convention Center. They were there to discuss the company's product support strategy for the year 2000 and beyond at the annual Aftermarket Exposition, now in its 10th year. And, for the first time, the company invited select farmers and journalists to listen in.
What Deere has figured out is that the future and profit of its business is less in the product it sells than in the service. Although it says it will continue "to design innovative and productive farm equipment with distinctive features," the advantage over the competition has narrowed. And buyers of these products are becoming fewer in number and more demanding due to increased market pressures and their newfound strength as a sought-after minority with the majority of purchasing power.
In response, Deere is changing the way its dealers have done business for years, according to Rick Thompson, manager of parts marketing for Deere. "Today, we deal on a transaction basis, meaning I have this part and I will sell this part to you, or I will do this service work for you at this expense," he explains. "Now we need to move more toward a solutions mode to offer customers different options so they can choose the product and price they want."
Here is a look at the newest strategies that Deere dealers will be offering to secure your business after the sale.
One-stop shopping. Many farmers today own more than one color of machinery. And rather than trying to change that, Deere is attempting to become a one-stop shop for ag parts of all makes and models.
Deere dealers have been adding maintenance items such as filters, bearings and belts for other makes for the last six years, but with limited success, according to Thompson. "Our blood runs green," Thompson says. "But markets are changing and we know we need to expand that effort." So in late November, Deere purchased a minority interest in A & I, a manufacturer and distributor of remanufactured tractor and combine parts, to offer a greater variety of those parts at a price that is below the OEM price.
Deere also launched a Web site called www.MachineFinder.com where Deere dealers can post all makes and models of used equipment they have in stock. To search the site, you simply enter the category, model and specifications you are looking for, and the site will bring up all the matches for sale, including photos, an inspection form, price and ma-chinery specifications. You can even place an order to buy the machine.
In December, Deere added a new auction feature, called www.Machine FinderAuction.com to this site to allow buyers to bid on the used equipment.
Parts when you need them. According to a recent survey conducted by Deere, the number-one cause of dissatisfaction among customers, regardless of which product line they buy, is not having repair parts available when a machine breaks down. To ensure better parts availability, Deere recently renovated its dealer Web site, formerly called John Deere Personal Service (JDPS) and now called www.JDParts.Deere. com. Now a customer can electronically search his dealer's inventories for availability of parts and even place an order so that when he comes into the store, the dealer will have the parts ready. "It opens the parts store 24 hours a day and seven days a week," says Cary David, project manager of parts Internet applications.
You can even search for parts for other makes of machinery with a new feature called Cross-Search. "So, if you [need] a bearing for a non-John Deere machine, you could see if there is a Deere bearing that will work in that machine," David explains.
Another new service offered by many John Deere dealers is CounterParts. If the part you need isn't in stock at your dealer when you go to pick it up, the dealer will provide it for free the next business morning. "We're the only one in the industry to offer a guarantee like that," says Gary Machetta, manufacturing manager of service parts.
The service applies only to owners of John Deere 8000 or 9000 TEN series tractors and for maintenance parts, wear parts and repair parts that are replaceable within two to four hours.
These include batteries, bearings, filters, hydraulic hoses, belts, sensors, fuel lines, water pumps and various electric components. However, this summer, the program will be expanded to include 7000 series wheel tractors and 50 series combines. "A lot of dealers have signed up to offer this program, and we will see more as new tractors are shipped to their lots," Machetta says.
Deere dealers are able to make such an offer because they are beginning to code and stock parts according to their importance in keeping a machine running. For example, parts that can be installed in less than two hours, such as O-rings, hydraulic lines and alternators, are typically kept in stock at all times. Parts that are installed in more than two hours and require disassembly and reassembly, such as gaskets, sensors and compressors, are stocked at a 90% order fill rate. Stocking based on those categories is designed to provide better parts availability.
In-field service. It used to be that if you wanted to get your tractor or combine serviced, you usually had to bring it into your local dealer. But that old method cost you money in both transportation and downtime. To cut both those costs for customers, more John Deere dealers are investing in mobile service trucks that come to you to do the repair work.
These trucks are equipped with everything you'd see at a dealer's shop, including cranes, air compressors, welders and generators. And the technicians driving them are equipped with a hardened field laptop called a Service Advisor. The laptop has all of the technical manuals loaded inside along with software that can diagnose machinery problems right in the field just by hooking up to the machine. "This is the most significant advance in service in the last 25 years," says Tim Mahan, manager of aftermarket services. The computer can even walk the technician through the stages needed to complete the repair, which further reduces downtime. "We can have the machine fixed in the amount of time it would have taken to load it on a flatbed and haul it to the dealer," says Rick Langford, manager of aftermarket marketing processes.
Currently only a minority of dealers have these trucks because it is still a new concept. "But after this show, there will be considerably more," Langford says.
Dealers also are purchasing mobile lube trucks so that you can have maintenance as well as repair work performed on the farm. The service person will perform all the routine maintenance tasks such as changing filters, oil and other fluids and will dispose of the waste oil and filters for you.
To ensure that the maintenance work is performed at factory-specified intervals, you can enter into a service contract with your dealer called the PowerGard Maintenance Program. All work performed, along with the labor, parts replaced, transportation, mileage and costs, are entered in a computer and printed out for your review and records. You can use the information to budget how much it will cost to maintain your equipment on a per-hour basis and to reduce downtime by preempting problems before they lead to breakdowns. Cost for such a service will vary by location and service intervals defined in the contract.
Crop record keeping. Finally, another way Deere is hoping to improve its service to customers is through a new joint venture with Farmland and Growmark to provide an Internet-based crop record-keeping service called VantagePoint Network (see "Decision-making tool," Mid-February 1999, page 10).
Growers can download all of the yield and location data collected by their Greenstar combine yield monitor into the system along with data of other field activities such as seed varieties, chemical and fertilizer applications, and machinery operations. They can also enter all expenses and income to determine break-even yield and to generate a profitability report at the end of the year. The data are confidential.
The service also provides weather information, ag news, market reports, maps of roads and soils, free e-mail access and satellite maps of fields. Cost of the program is $19.95/month. But a new offer, just announced, waives the charge for buyers of a new or used JD 7000, 8000, or 9000 TEN series tractor.
For more information, contact your local John Deere dealer or John Deere North American Agricultural Marketing Center, Dept. FIN, 11145 Thompson Ave., Lenexa, KS 66219, 913/310-8324.