Rhonda Brooks wrote an article in Ag Web, Farm Journal, that started: "In times of tight margins, every purchase must have a purpose with ROI top of mind."
Well, as Ronald Reagan would have started his reply (please watch the movie 'Reagan,' it’s great), we all know that these are times of tight margins in all areas. The article was written concerning farmers watching fertilizer costs. However, it also applies to groceries, utilities, insurance, fuel and, most importantly, all discretionary disposable income — the money which we fight for to make our living.
So, from farm equipment, to mowers, to rural lifestyle hardware items, it seems that maybe we could learn a lesson from the directions given to big time operators and farmers that is becoming a paradigm for purchasing decisions.
I’ve been taught for decades "Sell your features, benefits and service, do not sell on price." Features are a distinctive attribute or aspect of something. The most important feature today is affordability. Every purchase has to be justified or rationalized in the customer's mind. For every item I’ve ever made a major purchase, I explained to the wife "Gee, Honey, look what a bargain I got with this!" It’s worth noting that her idea of a bargain and mine are as far apart as Venus and Mars 99% of the time. I don't ever remember going to a coffee shop and seeing someone at a bull session push back and say "By gawd I paid OVER list price for that!" with pride. We all have to live with our decisions and satisfy our brain that we are up to the task of making rational decisions.
Maybe in these market conditions, our key 'feature' should be focused on economic affordability.
Here’s an idea. Maybe our product presentations should start with something besides the Tim, the Tool Man Taylor like spiel like this: "Look at this 300 horsepower, 40 mph, 50,000 feet per minute blade tip speed hot rod mower aghr, aghr, aghr " and, instead, be something like this: "Jim (or Sally), you know in times like this you need make sure you spend your hard-earned dollars just like an investment. This mower will do just that. It’s an investment that will last you for many years, get the job done with low dollar maintenance, and save you money over the lifetime. This would allow you to do other things besides spend capital on your old mower. Your return on investment, that all important ROI, would come in many ways: a beautiful yard, warranty coverage to eliminate major repair bills, and a peace of mind that for the next few years, your mowing will occur with no stressful financial events.” Will it work? Worth a shot, eh? I'll let you know.
Lastly, I’ve mentioned that we were told to always sell yourself, features etc. and not price, right? That is what the manufacturers always told us at every sales school, seminar, book or training. Period. "You can't sell off price, you will go broke doing that…" and on and on. However, when things get tough, what do those same manufacturers do? Cut the price! Today, as we talk to other dealers we hear of up to 30% discount off some invoices. From a couple of years ago when we could not get product and missed numerous sales, to today's 30% discount. Can you say sales cycles ? Go figure.
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Told from the perspective of an in-the-trenches owner/operator — Tim Brannon of B&G Equipment, Paris, Tenn. — Equipment Dealer Tips, Tales & Takeaways shares knowledge, experiences and tips/lessons with fellow rural equipment dealerships throughout North America. Covering all aspects required of an equipment dealership general manager, Brannon will inform, entertain and provide a teachable moment for current — and future — leaders within equipment dealerships. |
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