A&M Green Power Group was founded in 2006, but its roots date back to 1899. Its future is guided by its vision and its investments in the rural lifestyle market and earned it Rural Lifestyle Dealer’s 2013 Dealership of the Year award.

“Growing up in the business, I never thought of doing anything other than working in the dealership because of the tradition we have,” says Eric McCready, turf sales manager and fifth generation owner. His family owned Macedonia Implement, Macedonia, Iowa, one of the original dealerships in the merger that formed A&M Green Power in 2006. The McCreadys, along with the owners of Athen Implement, Hamburg, Iowa, and Jeremy Ostrander, formed A&M Green Power. Athen Implement had been in business since 1941. Ostrander was a John Deere territory manager and had worked in product development and marketing. McCunn Equipment, Massena, Iowa, joined the ownership group in 2007.

“We saw the writing on the wall and the need to get bigger. It was quite a change. ‘Macedonia Implement’ had been on the side of the dealership for more than 100 years, but I don’t think any of my family has ever regretted making the decision to merge,” McCready says.

A&M now has 5 locations and serves southwest Iowa, southeast Nebraska and northwest Missouri. It is one of the largest John Deere dealerships in Iowa.

“John Deere is our major supplier. They are looking for dealers that will cover all the market segments,” says Ostrander, A&M general manager. “If you are a dealership of the future with the company we represent, you’re going to cover all the market segments that your geography has. This has caused us to have more focus over the last 5 years.”

That focus has included a new location in Pacific Junction, Iowa, that caters to the growing rural lifestyle market, along with a dedicated turf sales and service team. In 2012, the dealership overall had nearly $200 million in revenue.

Location Intersects Market

A&M Green Power opened the Pacific Junction location in 2010. In addition to being the dealer group’s primary rural lifestyle store, the location also serves as the administrative center for the entire dealership.

 

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A&M Green Power Group

Founded: 2006

Locations: 5 (Hamburg, Macedonia, Massena, Pacific Junction and Red Oak, Iowa).

Employees: 185 full time, 18 part time 2012

Revenue: $198,582,675 ($169,464,110 whole goods; $17,359,950 parts; $11,515,507 service; and $243,108 other) 2012 Parts/Service Absorption Rate: 87.31% 3-Year Sales Growth Figures: $167,080,297 in 2010; $165,184,430 in 2011; $198,582,675 in 2012.

Lines: John Deere, Honda, Stihl, Frontier, Parker Equipment, Brent Equipment, Unverferth, Landoll, Art’s Way Mfg., Westendorf, Degelman, Gnuse Mfg., Kuhn, Westfield and Yetter.

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“When you look at rural lifestyle customers and large property owners, you have to be in a location that’s easy to find and that’s easy to get in and out of because they might be pulling trailers. We wanted someplace that was visible from a main highway,” Ostrander says.

The dealership is located just off Interstate 29, a main thoroughfare between Omaha, Neb., and Kansas City, Mo. It’s also located along state highway 34, which is being widened to 4 lanes and links Omaha with Iowa. He says many of their rural lifestyle customers work in Omaha, but live in the Loess Hills area of Iowa. They are also about 15 minutes from Council Bluffs, Iowa. “We are far enough out to capture the small property owner. It does hurt us for doing business in the heart of Omaha or Council Bluffs because some of the commercial mowers need parts and service a little closer than 15 or 30 minutes away, but it did position us for the compact and utility tractor market,” Ostrander says.

The location is surrounded by corn fields now, but that will change soon. It is part of an economic development area, so utility services had already been installed on the front side of the property and more businesses are expected to build in the area soon.

Dedicated to Rural Lifestylers

The location provides the initial connection to rural lifestylers, but it’s the inside that delivers what they need. The store opens to a receptionist, retail area and a separate turf sales and service department.

“Sometimes when a customer walks into a large ag dealership, they get intimidated by the equipment. We wanted to separate those and let them have a better customer experience,” McCready says.

“We try to merchandise our floor so there is something for everyone. If mom and dad want to look at a Gator, there are things for the kids to look at, too. We have customers ranging from rural folks to those who stop in wearing a suit and tie,” says Ostrander, about the variety of customers who visit the retail store.

“People expect more these days and I don’t think that’s going to slow down...” Carol Vinton, merchandise coordinator, manages the retail area. She tries to have a mix of smaller items, seasonal items and the “stand-bys,” caps and shirts. Vinton orders items about once a month and regularly checks inventory for items that may not be selling. She moves those items to a different spot in the store or temporarily moves them to storage. They also donate many items for local fundraising events.

The dealership opened a new location in Pacific Junction, Iowa, in 2010 to be closer to rural lifestyle property owners. The Pacific Junction store serves as the administrative center for the dealership, which has 4 other locations.

Vinton makes it easy to buy. For Easter, Christmas, Father’s Day and other holidays, she packages items in themed baskets. Last year, she made 40 baskets. She’s even planning to hold John Deere themed birthday parties.

“I want them to come to the John Deere store and have fun,” Vinton says.

Just past the receptionist area are the rural lifestyle equipment display area, turf service desk and 2 turf sales offices. The service desk has windows so rural lifestylers can look into the turf service area to see the progress of their repairs or go in to talk with the technicians.

The service team includes Dale Vorce, turf service advisor, Bruce Simpson, turf service supervisor, and two turf technicians, Jeff Fansher and Brian Knocke. Jerry Johnson extends the reach of the service department with the Ready to Mow mobile unit.

The turf sales team includes Jamie Trinchitella and Alan Foy. Both were hired for their turf experience and have no experience selling ag equipment. They say A&M’s targeted approach helps them be successful.

“A dedicated service area, shop foreman and dedicated salesmen like Alan and I … these are the biggest things that A&M gives us. Yes, ag is an important part of what our dealership does, but turf is just as important.”

Trinchitella and Foy also credit their success to A&M’s ability to have inventory in stock.

“They keep enough inventory which is extremely important. With 5 stores, we can quickly pull something from another store,” says Foy.

From the Ground Up Budgets

A&M plans for inventory and makes other financial decisions through its board of directors. The dealership calls it a “bottom to top” budgeting process with a focus on department function.

Its board now includes 4 members that represent the ownership group, but Ostrander says they may be looking for outside members.

“We recently looked at bringing in outside board members to take us on a more strategic direction long term, especially as we look to expand into other market segments or as mergers and acquisitions come into play. That will keep this business thriving long term and help us serve our customers for a long time,” Ostrander says.

The budget process begins in fall. “We usually have some idea of where we think the year could be from upper level management, but we usually start by tagging location sales managers, aftermarket managers and some of our sales force and work it from the bottom up. We have them bring numbers in and we roll them up to do a litmus test to see if it fits overall with the expectations,” Ostrander says.

The board then finalizes the annual budget and hands it over to the management teams, who present it to their employees. Goals are tracked quarterly.

A&M’s Pacific Junction location opens to a large retail area. The turf sales and service departments are located near the front of the store.

“We have structured our management team to be more functionally driven vs. store driven. We have a service manager, parts manager and sales manager corporate wide. They communicate across all the stores,” McCready says.

Ostrander offers this example of how budgets and goals are implemented.

“Let’s say we want to move into a new market. Some of what gets spread throughout our organization is making sure we have the marketing and advertising capacity to match sales goals. We might work across multiple departments to communicate that and make sure that everybody has a focus.

“Some locations might break that down individually. If we want to sell 200 zero-turn mowers, we break that down by store and, in some cases, they will drive that down to the individual salesperson in terms of how many zero turns they need to sell.”

Inventory planning is a critical component to meeting goals and McCready checks the status weekly and sometimes daily.

“I have to do a lot of planning because there are a lot of early order programs that go along with this market. You’re planning 6 months out to have inventory and sometimes there is lag time to get that inventory,” McCready says.

Ostrander says inventory planning has become more complicated over the last 5 years or so because of the rapidly changing model lines. “It used to be that you could sell a model for 5 years. These days, some models change yearly or some every two years. So, as the market shifts, we have to be able to predict. As good as we may be, sometimes we miss the mark.

“It’s easier with 5 locations to plan and to move inventory to meet customers’ needs. It is more inventory to manage, but it does make it easier to have the right product at the right time,” Ostrander says.

Watching the Right Metric

Inventory management supports another key metric that McCready watches, which is market share.

“I look at what the industry is doing compared with how we are doing and whether we are missing the boat on a certain product line,” McCready says. “We look at the industry potential by location and by county.”

Making Turf Service a Priority

A&M Green Power Group takes 3 major approaches to making service a priority for its rural lifestyler customers. First, the dealership has a dedicated turf service desk and service writer, positioned so that customers can immediately see them when they enter the dealership. Second, the dealership has a dedicated turf service team that operates in a shop separate from the ag service side — and behind a glass window, so rural lifestylers can see them at work. Third, its Ready to Mow mobile service unit operates 12 months a year serving rural lifestyle and commercial customers. A second mobile unit has just been added.

Bruce Simpson, turf service supervisor, sums up the dealership’s approach to service this way: “We’d like to see a goal for same-day service. At certain times of the year that’s very possible with the amount of technical staff we have.”

Throughout the repair, the team communicates with customers on the progress.

“We are in constant contact with our customers. We may talk to them 3 or 4 times during a typical repair. For example, we give them updates if we need to wait on a part. If we get into something and it gets a little deeper, we always stop and may even create a new estimate,” Simpson says.

The mobile service adds to the efficiency of the staff and helps build service revenues. “The small services that we can do out in the field creates openings for bigger jobs in our shop,” Simpson says.

Jerry Johnson is the Ready to Mow technician. He completes close to 600 service calls a year and the unit accounts for about 25% of the turf service revenues. His work is a mix between scheduled maintenance, seasonal attachment changes and repairs.

Simpson says the unit has helped earn them commercial service accounts, even for equipment they didn’t sell.

“We sold 4 Gators to a hospital and also sold maintenance contracts on them. By Jerry going up and doing that maintenance, we were able to sell service contracts on 4 other Gators they had bought from a competitor.”

And, they don’t shy away from small jobs, which differentiates them from other dealers. For instance, Johnson goes on site for tire repairs.

“Customers are frustrated when they can’t mow. Price doesn’t really matter to them. They want somebody there to fix their tire. If we can get Jerry there in a reasonable amount of time to fix a tire, they are a very happy customer,” says Simpson.

Ostrander also closely watches return on sales.

“One of the things I’ve learned over time is that you can get too focused on small segments. At the end of the day, it really boils down to what is our return on sales? Some people may think a 3% return on sales is adequate. If you study business very much, that is barely breaking even,” Ostrander says. Instead, they strive for 5%.

“At the end of the day, it doesn’t matter if it comes through parts, service or sales, we have to take care of our customers and make a fair margin to stay in business.”

Ostrander also watches metrics like expense and sales ratios and measures them against other dealers and industry standards. He gathers those standards from a dealer networking group he belongs to, which is implemented through Spader Business Management.

“As we make changes, I find myself looking back at the ratios to see if we add 3 more people and if we add this amount of sales, do we still maintain our personnel ratio?” Ostrander says.

Know Your Customers

A&M’s success is also tied to the fact that they have adapted to what rural lifestylers need and how they buy. For instance, McCready says knowing a customer’s monthly budget helps them make a sale — and helps them offer the best long-term solution for their property.

“That has been a transition in our business. We’re not used to talking that way. We’re having to retrain ourselves to think about payments and find a solution instead of just saying the price of a tractor,” McCready says. He adds that sometimes they can sell attachments and service packages and increase the monthly payment by only a small amount.

Selling service at the time of sale meets another need for rural lifestylers. “Some might look at that as salesmanship, but ultimately rural lifestylers want convenience. They want the machine to work when they get home,” Ostrander says. “We have a high rate of return business once they buy that maintenance package. People expect more these days and I don’t think that’s going to slow down. We have to adapt our business to meet their expectations.”

Keep Solution, Budget in Mind

Jamie Trinchitella and Alan Foy are A&M Green Power Group’s turf sales team. They both come from a turf sales and service background — neither has ever sold farm equipment. It’s that focused experience and approach that makes them successful. Here’s what they say is important when selling to rural lifestylers.

“What has worked for me, because it works for the end user, is to be a provider of solutions. They come in and don’t have a great idea of what they need. They may have an uncle or a neighbor tell them you need one of these. In a lot of cases, that’s not really what they need. Listen, ask the questions, open your ears and find the solution for whatever their problem is,” says Trinchitella.

“In a lot of cases, they don’t mind if it’s green or another color. In most cases, they don’t care if it has 12 gallons per minute on the hydraulic flow or 11 and wouldn’t understand the difference anyway. Get away from industry terminology and bring it back to simply solving a problem.”

Part of solving that problem includes understanding their equipment budget, Foy says.

“It’s not just our business, but commerce wide. People are really aware of their budgets, more aware than ever before. The fact that we can finance over 5 or 6 years really helps our ability to sell. They can budget and buy more of what they need. They can buy a complete package, rather than just buy a start-up now and add to it later,” says Foy.

Foy says he keeps these practices in mind when selling: “Be polite. Talk to both members of a couple. Be honest and if you don’t know something, say ‘I don’t know’ and then follow up and find out. Stay in contact throughout the sales process and after.”

Trinchitella says to do this: “Keep your mouth closed and your ears open.”