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 General Business
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   General Business


 

 

Federated Announces New HAZMAT Training Program

     Many types of business, including equipment dealers, are involved in shipping and receiving of hazardous materials in the course of their operations, either between their own locations or with other companies. The ability to safely transport hazardous materials can affect the stability of a business. Manufacturers and distributors are reluctant to provide materials identified as hazardous unless the people shipping and receiving these materials are adequately trained according to the Department of Transportation rules. 

     Although many resources are available, gathering specific information is often time-consuming. Federated Mutual Insurance Company has now consolidated information from many different areas into one risk management tool – an information-packed multi-media HAZMAT Training CD-ROM. 

     The CD includes group presentations, interactive individual modules, and tests with records of training completion. A companion booklet outlining all of the training requirements is also provided along with the CD.

     Members insured with Federated can order the CD through their local Federated marketers. Policyholders can also log in at www.federatedinsurance.com to request the CD, or call the Federated Insurance Field Services Department at 1-800-838-1760.

 

IRON Solutions Distance Learning Webinars
Product Training Made Easy

     IRON Solutions now provides Online Distance Learning Webinars, web-based training classes to help dealerships become more efficient and effective in using various IRON Solutions programs. “These sessions are designed to provide refresher courses for dealership employees or training for new hires or employees changing responsibilities within the dealership,” reports Bob Robeson, Vice President - Professional Services. “One great benefit for the dealership is that there is no travel time or additional costs involved beyond the session cost and calling into the session. All that’s needed to get started is a computer with high speed Internet access and a phone.”

     The webinar sessions outlined on www.ironeducation.com are offered in a group setting, with questions and answers via online chat or e-mail. These sessions are anonymous (you cannot see the other participants), cost effective, cover the main areas of Inventory Manager and Appraisal Manager, and are kept to a one-hour time period.

     “If a dealership is looking for customized or personalized one-on-one training,” continues Robeson, “we provide those sessions as well, in one-hour, four-hour, or eight-hour blocks of “Remote Training” time. The customized sessions focus on the dealership’s specific training needs and can be personalized to their specific brand or dealership issues." The new Distance Learning will be offered to current users of IRON Solutions products and as demand dictates. To learn more about what programs can benefit your dealership, go to www.ironeducation.com.

 

New FMCSA Surge Brake Rule

     The Federal Motor Carrier Safety Administration (FMCSA) last week issued its long-awaited rule clarifying the permissibility of surge brakes on small trailers.

     For the last several years, equipment distributors using trailers with surge brakes have been subject to inconsistent enforcement by state and local law enforcement officials. In some cases, state police have waited outside distributor facilities and ticketed customers leaving with surge brake trailers.

The rule, which was published in the Federal Register on March 6, amends FMCSA regulations to allow the use of automatic hydraulic inertia brake systems (surge brakes) on trailers when the ratios of gross vehicle weight ratings (GVWR) for the towing-vehicle and trailer are within certain limits.

     FMCSA’s action comes in direct response to a petition for rulemaking submitted in 2002 by the Surge Brake Coalition, which was managed by the American Rental Association. The Associated Equipment Distributors played a leadership role in the coalition and helped elevate the surge brake issue on Capitol Hill. In response to considerable foot-dragging by FMCSA, former Rep. Anne Northup (R-KY) included language in an appropriations bill that directed the administration to act one way or another on the Coalition’s petition. Ultimately, FMCSA saw the merits of the Coalition’s arguments, granted the petition, and moved ahead with the rulemaking process.

     Under the new rule, surge brakes are allowed on:

 

Security Interest Disclaimer

Source: NAEDA, January 2007

     Trading equipment covered by a blanket lien is simpler and more secure now that the North American Equipment Dealers Association (NAEDA) has produced a security interest disclaimer.

     The universal “Disclaimer of Security Interest” form developed by NAEDA’s UCC Task Force may be used to release a specified piece of equipment from a binding blanket lien so it can be legally traded or sold. Blanket liens are common in agricultural lending and routinely used by lenders to protect security interests in property put up as collateral for operating loans.

     Problems occur when a piece of equipment covered under a blanket lien is sold or traded without the lender releasing it from the lien. Since the lender has a security interest in equipment under a blanket lien, dealers can potentially find themselves in the disastrous position of owing a lender a piece of equipment or the cash equivalent should the lender seek a customer’s assets.

     “Things get complicated in a hurry when a UCC search is not performed,” says Paul Kindinger, NAEDA president and CEO. “The task force did a great job identifying issues, providing necessary guidance to our legal team, and developing the form.”

     This form addresses the blanket security interest faced by equipment dealers when they take in on trade any piece of used equipment. Often, equipment dealer customers have operating loans with banks, which usually take a blanket security interest in all equipment that the customer has or will acquire while the loan is outstanding. This blanket lien should appear in UCC search results performed by the dealer at the time of the trade.

     When a bank signs this form, it releases the security interest of the bank in the specifically described equipment that is being traded in for new equipment. If the bank does not release its security interest by signing this form, and later the customer goes bankrupt, the bank will usually go after the equipment dealer to recoup the value of the trade-in equipment. This has and can result in a dealer losing many thousands of dollars.

     The customer should give this form to the bank for a signature. The bank should sign the form for several reasons:

     There is no need to record this disclaimer with any governmental body. Rather, the bank, the customer and the dealer should keep a copy for their records.

     Copies of the “Disclaimer of Security Interest” form may be downloaded from the UCC Search section of the Dealer Advocacy Center at NAEDA’s website, www.naeda.com.

 

A Myth or Reality?

By Mark Othmer, Nebraska Field Director

Price is the Only Thing That Matters When it Comes to Property and Casualty Insurance. A Myth or Reality?

     Many times, I encourage members to solicit bids for property and casualty (P & C) insurance every two years or so. If a change in P & C insurance companies is desired, the only person affected is the dealer/owner, and he can live with the consequences. Is this statement a myth or a reality? If you believe price and value are synonymous, you might feel this statement is a reality. However, the lowest price seldom means the best value when it comes to P & C insurance.

     If you think the dealer/owner is the only person affected when a P & C insurance company doesn’t cover a loss, you might want to think again. For example, let’s say a fire at your dealership destroys a customer’s equipment located in the shop. If your P & C insurance doesn’t cover the customer’s equipment, do you think the dealer/owner is the only one that suffers? I’m sure the customer would think different.

     Even if the customer has insurance to cover the loss, what do you think it will do to his insurance rate? How big of a deductible will he have to cover? Will the customer get a settlement he deserves, or will he feel short-changed? What about the time it takes to replace or repair the damaged equipment belonging to the customer? Do you feel that since he wasn’t going to be using the equipment anyway, an extra amount of time to return it to the customer won’t be a big deal? What if that equipment isn’t returned to the customer in an acceptable time frame and condition? Will there be a loss of goodwill and trust with this customer?

     Let’s not stop at analyzing the effect on your customer. How about your employees? Will their working conditions be changed due to the fire? Will they have to work outside or in a less-equipped substitute facility? Will this affect employee efficiency, and thus, their paycheck? Were some of their tools lost in the fire? Will this loss be covered by your P & C insurance carrier? If not, does the employee have insurance that will cover the loss, and if so, does that insurance have a deductible?

     As you may have ascertained from all of these questions, it’s a myth that all P & C insurance policies are created equal. It’s also a myth that only the dealer/owner suffers when a loss isn’t covered by the P & C insurance. The thought that value and price are synonymous is just as much a myth as that furry little creature and his shadow. Unfortunately, just like I let my hopes allow me to think the myth was a reality, many dealers find themselves in the same situation when analyzing insurance policies. They let the hope of lower prices convince them that it is a reality that price and value are synonymous, only to find out later that it’s a myth.

Recommended Service Providers of the Association are the Best Value. A Myth or Reality?

     I certainly hope members feel the “Recommended” designation the Association gives to products and services really means it’s the best value. A significant amount of time and analysis is invested in a product before it receives a “Recommended Provider” designation from I-NEDA.

     Recently, I attended a Designated Risk Manager seminar produced by Federated Insurance. During this seminar, I was reminded how the “Recommended Provider” designation Federated earned from I-NEDA really translates to “best value” for the dealer. If you have not participated in one of these seminars, you’re missing the boat. The good news is, there will be another chance next year. Make sure you don’t miss the boat again.

 

Tractor Roll Over Protection

By Andy Goodman, I-NEDA President

     In 1997, I participated in a Midwest conference on the safety of farm tractor operation. At the conference, I learned that tractors are the leading agent of death on farms, with the primary cause of tractor-related deaths being tractor rollovers. Many believe that deaths could be prevented by more widespread use of rollover protection and seat belts.

     Ten years later, a new national effort to prevent tractor injuries in America is currently underway. The University of Iowa and its Great Plains Center for Agricultural Health have one of the many projects included in this national initiative. In co-operation with the Great Plains Center, the Association recently surveyed our members to obtain input from farm equipment dealers on roll over protective structures (ROPS) issues. Fifty-six of our members participated in the survey, which focused on retrofitting ROPS on older tractors. (New tractors sold in the United States in the last 30 years come from the manufacturers equipped with ROPS.)

     Almost half of the survey participants said they had been involved in manufacturer promotions that encouraged owners of older tractors to install ROPS on their tractors. The most startling result of the survey was that 35 of the 56 respondents listed “no demand from farmers” as a barrier to promote and install ROPS on tractors. Liability and “money losing business” also were common responses to the barrier question.

     To the question, “Would you be willing to gear up to purchase and install a large number of retrofit ROPS should demand be created?” 25 participants responded yes, 11 responded no, and 16 were unsure. This shows a strong willingness to promote ROPS should the demand arise.

     Some other strong responses to questions included:

§       (Q16) Would you favor some financial incentive to you as a dealer to order and install retrofit ROPS? 34 said yes.

§       (Q20) Would you favor some financial incentive to tractor owners to encourage or facilitate ROPS retrofitting?  37 said yes.

§       (Q24) If the government became involved in providing financial incentives, what agency do you feel would be best suited to distribute incentives? 29 said USDA Farm Service Agency.

§       (Q26) Establish limits on liability claims for dealers who install ROPS. 39 said favorable.

§       (Q27) Require that all tractors have ROPS if they are to be operated by youth or employees. 27 said favorable.

§       (Q29) Require that all used tractors have a ROPS installed before resale within the next 7 years. 26 said not favorable.

     What I gleaned from the results of this survey is that dealers recognize the importance of rollover protection. Safety groups could focus on educating owners and operators of tractors to help stimulate the demand for ROPS retrofitting and the usage of seatbelts when operating equipment. Dealers remain prepared to respond to a positive demand from their customers.

 

Fresh Perspective from Industry Professionals

By Tom Junge, Iowa Field Director

     Recently, the Association staff met with John Spader, Dan Westegaard and Steve Nelson of Spader Business Management to review their involvement with I-NEDA members and farm equipment dealers in general. Like many dealers, when I hear the word Spader, I think of 20 groups. During our meeting, John not only reminded me of some high impact workshops Spader conducts, he also explained a couple services I found intriguing – especially considering past experiences I’ve had with dealers regarding financial statements, performance and trends. Here’s a brief look at some Spader services…

Retail Financial Trends

     The first service is called Retail Financial Trends. On a monthly basis, Spader publishes information collected from hundreds of businesses across the United States and Canada. This information is then broken-down based on industry and overall business sales volume groupings. The depth of the breakdowns varies depending on the number of participating dealers.

     Dealers can compare their financials not only with the average of all dealers surveyed, but the 20 percent most profitable and the 20 percent least profitable dealers as well. Comparison data can consist of total company sales; sales and gross margins by department; sales and gross margins by type of unit; inventory levels for new and used products; personnel costs; advertising spending; floorplan interest expense; variable and fixed expenses; and net profit.

     Instead of me providing generalized information about the current sales activity and dealer performance in the area on my dealer calls, this service will answer member questions quantitatively and in a timely manner. Dealers will see for themselves the trends for sales, inventory and margins, and how they compare.

     Currently, the financial data collected comes primarily from 20 Group participants. To increase the value of this service, Spader Business Management needs more dealers to subscribe and submit their financials. For instance, if more dealers from Iowa and Nebraska subscribed to this service, more details could be provided and the data could be broken down into more levels.

     The investment for the Retail Finance Trends service is $1,200 a year. Dealers who submit their information on a monthly basis receive a 50 percent discount.

Management Link Consulting

     Another service provided by Spader is Management Link Consulting. This service decodes the mysteries in financial statements and the secrets necessary to plan for profitability. Management Link helps businesses reinterpret what their income statement is telling them. It improves scorekeeping and accounting to create a customized plan for making daily decisions toward a clear set of goals.

     Unlike some consulting firms that come in, make suggestions and leave, this Spader service continues for a minimum of 12 months. First, Spader Business Management reviews the Chart of Accounts and accounting procedures of a business. Then they help the business create an annual profit plan and identify specific financial goals and objectives for the next year.

     A Management Link report is generated based on what they see in the financial statements. The report clearly identifies Gross Margins, Key Expense Ratios, Inventory Levels, Collect-able™ Efficiency and other critical measurements by company, department and each activity area. Key areas will be flagged (Red-STOP, area needs immediate action; Yellow-CAUTION, area needs management before slipping into the red zone; Green-GO, identifying outstanding numbers and where you are outperforming your projections and/or others in the industry). The report and a summary of their findings are sent monthly and followed-up with a monthly conference call. Multi-year comparisons are also available for dealers utilizing the program over an extended period. The investment for the Management Link Consulting service is $5,995 a year or about $500/month.

Total Management Workshop

     The final Spader item I would like to mention is Total Management Workshop – a program Spader Business Management feels all dealers and departmental managers should participate in. This workshop provides participants with a clear set of principles, processes and tools to steer their companies toward new levels of performance and profitability. Key principals covered include Spader’s Profit Power® formulas, Spader’s industry-specific Five Key Expense Ratios, One Dollar EmPOWERment®  (the scorecard managers and employees can understand), and how departments can work better together.

     COSTLINE® pricing and systems for maintaining margins while being competitive will also be covered. In addition, managers will learn about the four key numbers to monitor in a department and how to manage them. Key inventory management principles and systems for large and small ticket inventories will be discussed, along with a process for managing unit trade-ins.

     Dealers will also learn about the four personal styles of people, discover their own style and how to work effectively with each style. COSTLINE® pay plans for sales, service and parts that create a “win-win” scenario will be presented as well.

     The investment for the 4 ½ day Total Management Workshop is $2,495 for the first attendee; $2,295 for the second; and $2,095 for each additional attendee.

What Dealers Are Saying…

     Dealers have never been big into management training or asking for professional advice. Maybe that’s why they continue to struggle with performance and profitability issues? Get out of this rut and gain a fresh perspective from a group of individuals who have worked with dealers for more than 30 years.

     “I attended the workshop not knowing what to expect and left after the week’s meetings excited and enthused to change our business,” said Todd Davidson of Osceola Implement & Supply, Inc. in Osceola, Nebraska. “They gave new dimension on seeing my employees and my business in a whole new light.”

     For additional information about Spader Business Management programs and services, visit www.spader.com or call (800) 772-3377.

 

Defense Against Identity Theft Begins with Your Waste Basket

     For a term that’s only been around for a decade, “identity theft” has, unfortunately, quickly become part of everyday business language.

     While the incidence of identity theft in the Midwest isn’t near the levels of East or West Coast states, it’s a growing problem. Farm equipment dealerships aren’t immune. “It’s becoming a bigger and bigger issue for our members,” says Andy Goodman, executive director of the Iowa-Nebraska Equipment Dealers Association.

     Identity theft intrusions are perpetrated by thieves who get to the mailbox before you, “dumpster divers” sifting through discarded paperwork, or hackers who invade your computer system.

     What these robbers do with stolen personal information causes major headaches. Credit card, bank and loan fraud accounted for more than 48 percent of 255,000 reported identity theft complaints in the U.S. during 2005, according to the most recent figures from the Federal Trade Commission. The average identity-theft victim spends the equivalent of 15 work weeks – 600 hours – resolving his or her case. Experts say the emotional impact is similar to that of violent crime.

First Step Is Simple

     Protecting your dealership starts by taking care of the trash, stresses Chris Steinkamp, an AgDirect relationship officer who works with dealerships in western, southern and central Iowa.

     “These days, it’s almost impossible to be in business and not collect or hold personally identifying information (names and addresses, Social Security numbers, credit card numbers, or other account numbers) about your customers, employees and business partners,” Steinkamp notes. “If this information falls into the wrong hands, it could put these individuals at risk for identity theft.”

     A good shredder can be your best friend when it comes to deterring thieves, he says. “Dealerships should shred all discarded credit card slips and any documents (including credit applications) that have any personal information on them such as customer dates of birth, social security numbers or driver license numbers.”

     Steinkamp also advises dealerships to promptly remove mail from mailboxes and to deposit outgoing mail in post office collection boxes or at the post office, rather than in an unsecured mailbox.

Guard Computer System Integrity

     Protecting computer system integrity from hackers searching for personal information remains critical in this age of cyber thieves, according to Jerry Pope, an information security engineer with Farm Credit Services of America in Omaha.

     “Having a properly configured firewall is essential,” he says. “Be sure to tell employees not to share their passwords or save them on their computers.”

     Pope says his company takes every precaution to guard identity-related information from dealers and their customers. “We even test our security by hiring ‘attack and penetration’ services, which will attempt to breach our firewalls remotely. Dealers can find companies that offer this service in most major cities.”

     Finally, a dealership has a significant responsibility to its customers if the company is the unfortunate victim of an identity theft crime.

     “Businesses are required to inform customers about potential identity theft incidents,” Pope explains. “The regulations differ from state to state. If you sell to customers across state borders the notification process becomes trickier because you must follow the rules in the customer’s state of residence, not just where the dealership is located.”

     Pope says an excellent resource for both businesses and consumers is the Federal Trade Commission’s website at www.ftc.gov. “This site has some excellent general background information that equipment dealerships should know,” he says. “But they also need to keep up to speed on changing state-level rules as well.”

     For more information about AgDirect, a financial service of Farm Credit Services of America, contact an AgDirect representative or the processing center at 1-888-525-9805.

 

Leadership In The Dealership

2006 Annual Meeting Keynote Speaker Provides Laughs, Insight

     Association members were thoroughly entertained while learning how to become better leaders by keynote speaker Pat McGaughey at the I-NEDA annual meeting.

     McGaughey, a self-described eastern Oregon farm boy, began his presentation by stating that expectations remain key to motivating others. “Simply taking the time to ask what others expect helps a leader understand what drives other people in the dealership,” he explained. “When you have understanding, you have the communication tools to motivate others in your dealership.”

     He encourages supervisors to sit down with their employees to discuss not only what expectations you have for them, but what expectations they have for you. “If an employee responds, ‘I don’t know’ when asked what you expect of him/her, respond with, ‘Well, if you did know, what would you expect?’” said McGaughey.

     “Continual discussion of the generational issues in today’s workplace will also improve any supervisor’s perspective and understanding of employee needs,” added McGaughey. He feels two critical generational issues include 1) understanding ourselves and 2) understanding the generation WE raised.

     “Employees today also need things S.E.X.Y.,” stressed McGaughey. “They need Success in their employment, their Expectations fulfilled, Xtra-ordinary recognition and, most importantly, You.”

     According to McGaughey, successful employment can be found under three V’s: visualization, verbalization and vitalization. “Supervisors and employees must be able to ‘see’ success first (visualization); speak from the same page (verbalization) and facilitate plans together (vitalization).”

     McGaughey also stressed that when it comes to motivating employees, supervisors need to understand that employees want authorship and ownership. “If they write the plan, they will underwrite the plan.”

     He recommends reviewing Abraham Maslow’s ‘Hierarchy of Human Needs’ to help understand what drives and motivates people. For example:

  1. Physical Needs – The quality or lack of food, water and air may affect employees.
  2. Safety Needs – Employees need a sense of security and support to perform well.
  3. Social Needs – Employees use organizations for socializing and human interaction.
  4. Esteem Needs – Employees that receive great recognition (self-esteem) perform the best.
  5. Self-Realization Needs – A successful performance at work helps people find their purpose.

     According to McGaughey, leaders work in and on the future while managers manage in the present. “A great CEO is working 20 years from now, while a great chief operating officer is working in the here and now. Leaders visualize trends, identify numbers and prepare a plan. Managers, on the other hand, know what we are meant to be, say what we are willing to do and implement plans with leadership skills. Often, individuals are required to do both roles.”

     He added, “Creating a future is 100 percent of a CEO’s job. Communicating the future is the other 100 percent. If knowledge is POWER, then emPOWERment is transferring knowledge to others.” He feels training remains key to the empowerment of employees.

     McGaughey emphasized that developing courage with employees begins with a clear vision, mission and planning. “One code of conduct and ethical standards is required to make courageous decisions. Developing an ethical standard requires a total group effort in defining the rules and standards so everyone is accountable,” he stressed. “Consistent ethical standards provide an organization foundation for honesty, fairness, goodwill and industry image.”

     When it comes to trends, McGaughey firmly believes that production, innovation, technology and people will dictate the future of an organization’s development. He explained, “Innovation can be found by allowing open thinking, technology will improve when we train others with dignity in mind, and employee trends are found in recruitment, training and retention issues.”

     He added that future trends involving people, technology and innovation all require change. “People don’t mind change, they just mind being changed,” he stressed. “Change is uncomfortable and people prefer to be comfortable. Use your ethical standards to support constant change. If the change is moral, legal and ethical, go forward.”

     In closing, McGaughey offered the following advice to facilitate a future as a leader. “Create a vision together. Establish a mission together. Establish an emotional goal together. Develop difficult/achievable goals together. Establish meeting agendas from your goals.”

 

What Did Your Salespeople Do Yesterday?

By Tom Junge, Iowa Field Director

     In October of 1983, I started my first full-time job when I became a territory manager for White Farm Equipment. This marked the first time I completed a call report. Twenty-three years later, I’m still at it. With the exception of a few weeks here and there, I’ve completed call reports my entire working career.

Call Reports

     Call reports remain a valuable tool for management to keep in touch with what happens in the trenches. During my White Farm Equipment days, my sales manager used the call reports to gauge the health of the ag economy, learn about competitive deals and keep informed about dealer issues. Often, he called me after reading my call report to discuss the issues and to help me deal with them.

     At the Association, call reports are used to keep staff members aware of dealer issues, changes in dealership organizations, the well being of dealers, and dealer needs. These call reports often result in more in-depth discussions and actions based on the information.

     At White Farm Equipment, these call reports were hand-written and done in chronological order. Today, I enter call reports electronically for each member, which then become part of their member record. These call reports are more than a communication tool to others – they have become a tool to help me schedule dealer calls and to remind me of previous discussions I’ve had with dealers. I can easily refer back to my calls to verify that I haven’t missed calling on any members throughout a six-month period, as well as when I’ve made prospective member calls (cold calls). I can easily look back over a year of call reports and get a snap shot of the numbers of days I called on members, worked on shows, wrote articles, attended meetings, etc.

     I’m always surprised that only a handful of members require their salespeople to submit a weekly call report. One member recently commented how valuable call reports are to him. He said they often refer back to the reports to refresh their memory about previous deals or farmer issues. He also said that it instills accountability to the salesperson’s use of time. An industrial member mentioned that they always had their salespeople submit written call reports. Now, the call reports are entered electronically, so they can easily see who the salespeople are calling. They require their salespeople to call on new accounts and now they can easily generate a report to see if these new accounts are indeed being contacted.

     For a dealership, call reports can provide a wealth of information, including how many customers the salespeople reach in a week, who they are seeing (old vs. new customers), what they quote, etc. It can also be considered a “whether” report: 

     Call reports are like the gauges of a high performance sports car. They tell you how the sales department engine is running and if problems are imminent.

     In today’s competitive market, call reports must remain part of the salesperson’s daily routine and more importantly, part of a customer profile. Salespeople will appreciate the ability to review important notes made from previous sales calls and sales managers will have insight into what’s happening in the trenches in the war of equipment sales.

Time Studies

     Another insightful tool that we use at the Association is time studies. Four times a year we record what we did for a week, broken down in 10-minute intervals. These studies were an eye opener for me since it showed how much time I spent on the road while calling on members. Some days I spent the same amount of time in the car as I had in dealerships. After performing the study, I began scheduling my routes differently and made sure there was a purpose behind the travel. I also discovered how much time is lost to non-productive tasks. At times, it was embarrassing to record what I accomplished for the day. 

     Since more dealers continue to review their sales department process, I think it would be interesting for a dealer to have their salespeople perform a weekly time study. It may prove enlightening and hopefully valuable to know how much time they spend planning sales calls, traveling, prospecting, cold calling, searching for inventory, appraising equipment, preparing proposals, writing retail and financing contracts, delivering equipment, setting up equipment, servicing accounts (customer problems and questions), attending sales meetings, etc. And let’s not forget the most important task of face-to-face selling. 

     The ultimate goal of this exercise is to improve the sales process and to create more time for sales professionals to “sell.”

     NOTE: Before demanding that your salespeople complete the time study, explain that the purpose of the time study is to discover time-consuming tasks that are dragging their performance down. Be open and tell them that you don’t know what to expect, because I doubt we really know what consumes all of their time. I confess that the first time I did the time study I was uneasy “letting others know how I spent my time.” However, after the week, I had a whole different opinion of the study.

 

Association Hosts Legislative Events

Members Get Opportunity to Meet Elected Officials

     Throughout the year, the Association hosts several legislative events. These events, designed to give members the opportunity to meet and talk with their elected officials and/or candidates, range from the annual legislative breakfasts held in both Iowa and Nebraska, to more intimate get-togethers with individual legislators/candidates.

     This past fall, the Association hosted luncheons with Iowa congressman Leonard Boswell and Nebraska governor Heineman, and a dinner with Nebraska legislator and congressional candidate Adrian Smith, in addition to I-NED members receiving a legislative update from Associated Equipment Distributor’s (AED) Washington counsel Christian Klein during the I-NED annual meeting.

     “I think it is great that we are offered the opportunity to attend events like these,” said Bruce Bowman of Star Equipment in Des Moines, Iowa. “While I realize it requires us to dig deep in our pockets and part with hard earned dollars, everything we do at these meetings is for the good of our country, our state, and ourselves. I believe members should pay more attention to that.  The Association’s legislative efforts (on our behalf) have done great things for our businesses. Attending these events helps the Association help us.”

     Tim Keigher, I-NEDA’s Nebraska legislative director, feels it’s important for members to attend functions such as these. “Association members need to attend events like the dinner with Adrian Smith to show that members of the Association – constituents of the candidate – are supportive of the candidate as well,” he stressed. “Members vote for the candidate, not the Association. What it boils down to is a grass roots effort – members knowing the elected officials. That remains the most important part of working in the political arena.”

     Face-to-face meetings also give members a chance to discuss important issues concerning the equipment industry. Several have resulted in positive changes for the industry.

     For instance, both AED and the North American Equipment Dealers Association (NAEDA) contacted the Association to help persuade Senator Ben Nelson of Nebraska to sign on to the Association Health Plan initiative. Nelson originally did not support this effort, but after visiting with I-NEDA and I-NED members who urged him to change his mind, he became a co-sponsor of the bill.

     “If members of the Association and staff had not talked with Nelson, he wouldn’t be on board with this initiative,” stressed Mark Othmer, the Association’s Nebraska field director. “He even used this issue in his campaign advertising. It’s proof that direct contact with elected officials works!”

     Bowman encourages members to get involved in the legislative process. “I have participated in several organizations and I’m continually amazed at how low the turn out is at the legislative meetings, in addition to donations to the Iowa PAID (Political Action Iowa Dealers)-PAC fund.”

     He continued, “While I realize PAC donations in Iowa are given personally and cannot be written-off as a donation, why would you penalize yourself, your company and your family by being a tight wad when it comes to the Iowa PAC Fund? I have given $1,000 a year on a pretty consistent basis. For this, I received more than I could ever imagine – laws to help with equipment theft, business succession, and the wrongful termination of our dealership. All of this would not have been possible without the Association, its legislative committee and the Iowa PAID-PAC fund.”

     Keigher added, “Campaigns are very expensive to run as we have seen in this last election. PAC money helps candidates get their message to the voters through different types of media (TV, Newspaper, etc), and allows them to travel the district meeting voters. Without funding, it is difficult for the candidates to get their messages to the voters and, in turn, get elected. PAC money helps them campaign instead of spending time raising funds.”

     Now that the elections are over, Keigher encourages members to contact their newly elected officials. “Sit down with them, form a relationship and educate them about your businesses,” he emphasized.

     Bowman concluded, “I urge all of you to consider both the amount you give and your involvement in Association functions. If you don’t have time to be involved, I understand. Just give us the TOOL$ to get the job done.”

 

Dealer Credit & Financing Technology - Now Simpler, Faster and More Flexible Then Ever Before

By Jason Manker, AgDirect

     GPS-based guidance systems, yield and application monitors, computer-driven controllers and a broad array of related technologies continue to change the way America farms.

     For farm equipment dealers, the same types of electronic commerce system advances are changing the way their customers get financing. One example is the second-generation AgDirectOnline system from AgDirect®.

     The newest version of this service will be available to participating dealers in early December 2006 after many months of development and fine-tuning. According to Jason Manker, a relationship officer for AgDirect®, a number of dealership salespeople were involved in the initial design and pre-launch testing of this new online service.

     “Our development team went out to dealerships and asked salespeople what they liked about the systems they were using, and what they didn’t like,” says Manker, who serves the tri-state area of Iowa, Nebraska and South Dakota from his base in Sioux City, Iowa. “Once we had a system ready for testing, we invited a number of dealer salespeople in to take a look and give us their feedback.”

     According to Manker, that advice paid off. “We believe the new AgDirectOnline customer financing application is now among the easiest and quickest in the ag financing business. The system is so fast we think it will change the way dealers think about customer financing applications.”

     The AgDirectOnline credit application itself is extremely simple, Manker adds, taking only minutes to complete. Other key features include:

     “With this new system, most deals can be wrapped-up before customers leave the dealership office,” Manker says. “That saves dealer salespeople the need for follow-up calls and helps prevent lost opportunities due to time delays.”

     For more information about AgDirect, a financial service of Farm Credit Services of America, contact an AgDirect representative or the processing center at 1-888-525-9805.

 

Utilize the Internet to Its Fullest

By Tom Junge, Iowa Field Director

    Recently, a dealer asked me to name one thing that every dealer must do within the sales department. After a little thought, I concluded that the one thing all dealers should do is utilize the Internet to its fullest to market their used equipment. Selling used equipment and turning the inventory remains of the utmost importance, and it all starts with sales leads.

     In today’s market, dealers can’t afford not to have their complete list of used equipment on as many websites as it’s possible to manage. These lists should also include photos and/or complete details on each piece of equipment. Dealers have found the need to utilize multiple publications for print ads and the same goes for the Internet.

     Farmers continue to find the value and convenience of the Internet, as I discover just about everyday when calling on dealers. In the Association’s April 2006 used equipment marketing survey, Iowa and Nebraska dealers also rated the Internet as the most effective media for the investment for selling used equipment.

     One member recently stated, “A dealer is a fool if he isn’t listing his equipment on the Internet.” This particular member has only listed his equipment for less than one year. I tried at least three years to get him to list his used equipment on the Internet and now he’s a true believer.

     This member has sold numerous items over the Internet. He told me, “It’s like having a third sales person in the dealership.” He wonders why other dealers don’t update their listings or convey all the details of their equipment. While his time remains just as valuable as other dealer principals, he sees so much value in it that he has someone in the dealership dedicated to keeping the listing current.

     When talking with dealers, the number one excuse I hear for not listing all of their equipment or for only using one Internet listing service is TIME. Rarely does money come into the discussion. I can’t stress enough the importance of finding the time. You need to have one person dedicated to keeping the listing current with as many details as possible, as well as one to three photos. This person can be your bookkeeper, parts person or sales manager. If necessary, delegate this task to a sales person and offer them an incentive, such as giving them all of the Internet leads.

     To assist members in getting their equipment to as many websites as possible with a minimal time investment, following are some suggestions.

AGCO Dealers

     You can update Machinelocator.com1 and have your listing go to your website, IRONSearch.com2, agweb.com (Farm Journal) and iowafarmbureau.com. You can use Inventory Manager to update your website, machinelocator.com, IRONSearch.com, agweb.com, iowafarmbureau.com, fastline.com1 and farmcountrytrader.com1.

CaseIH and New Holland Dealers

     You can update equipmentlocator.com1 (ELS) and have your listing go to your website, IRONSearch.com2, agweb.com (Farm Journal) and iowafarmbureau.com. You can use Inventory Manager to update your website, equipmentlocator.com (ELS), IRONSearch.com, agweb.com, iowafarmbureau.com, fastline.com1 and farmcountrytrader.com1.

John Deere Dealers

     You can use Inventory Manager to update your website, machinefinder.com (UsedXpress) 1, IRONSearch.com2, agweb.com, iowafarmbureau.com, fastline.com1 and farmcountrytrader.com1

Other Dealers

     You can update IRONSearch.com2 and have your listing go to your website, agweb.com (Farm Journal) and iowafarmbureau.com. You can use Inventory Manager to update your website, IRONSearch.com, agweb.com, iowafarmbureau.com, fastline.com1 and farmcountrytrader.com1.

     While this may sound like a commercial for IRON Solutions’ products, IRON Solutions is the only company that provides dealers with the tools and connectivity for them to promote their used equipment to multiple websites. Is it a coincidence that it is also the only company owned by Association members? Not hardly

Click the following link to view a chart depicting the above options: www.ineda.com/Retailer/2006-12_Retailer.pdf  (The chart is on page 5.)

 

Members Take Steps to Prevent Theft

    Since January, members have reported over 23 pieces of stolen equipment to the Iowa-Nebraska Equipment Dealers Association. These thefts ranged from skid loaders and mini-excavators, to mowers, ATVs, gators and more.

     Several members have taken steps to help prevent theft at their businesses. From installing global positioning systems (GPS) and surveillance cameras, to electrical cords, burglar alarms and fencing, members have not taken the threat of theft lightly. Following is a brief look at the different types of theft prevention utilized by Association members.

Global Positioning Systems

     Several members, especially those in the construction equipment industry, often have global positioning systems (GPS) on their equipment. While some members install GPS on units themselves, other units come directly from manufacturers with GPS already installed. For instance, Komatsu (as part of the Komtrax program) has made GPS standard on units introduced after January 1, 2006.

     While the primary function of GPS is to track equipment repairs, members have also discovered it’s a great way to locate a missing piece of equipment. “A contractor or dealer can set up an electronic fence around an area in which the Komatsu unit is going to be used,” explained Larry Smith of Road Machinery in Des Moines, Iowa. “This can be set up as a few feet or many miles. If the unit is taken out of that area, only a Komatsu dealer has the ability to start the unit.”

     “It’s a great way to keep track of units,” stressed Smith. “We can ‘ping’ them every day and find the locations and error codes on the control units.” He added that customers can also “ping” the units to find a location, determine the amount of fuel remaining in the tank, and get performance read-outs.

     Currently, Road Machinery only has GPS on their Komatsu units. “We will install GPS on our other brands when we find a way to do it as well as Komatsu,” stressed Smith.

     Bruce Bowman added, “I don’t really look at GPS as a theft deterrent, but more as a recovery device instead. However, I feel that any time you can deter and/or recover equipment from theft, it’s a good investment.”

     “Since we are doing more and more business outside the state of Iowa and we rent highly mobile equipment, we felt that installing GPS on our units was the right way to go,” explained Bowman of Star Equipment in Des Moines, Iowa. “It allows us to quickly locate a piece of equipment and determine whether it’s moving out of the area where the customer said it would be used.”

Fencing

     Steve Swartzrock decided it was time to install a fence around his dealership when a new Brent cart was stolen from his business. “I knew that he (the burglar) was going to come back and steal more,” said Swartzrock with a sigh.

     His problems virtually disappeared after installing the fence two years ago. “I feel the fence around our business makes it look harder to steal, which causes thieves to move down the road to another business without a fence,” said Swartzrock. He recommends placing remotes in company pick-up trucks so you can open and close the gate from the vehicle, and posting home and cell phone numbers both in and outside the fence.

      A fence was installed around Vetter Equipment in August, following a rash of theft and vandalism during the summer months. “Our lot was already fenced on three sides, but after the thefts and vandalism this past year, we decided to install fencing on the fourth side to completely enclose the lot,” explained Carswell. Since that time, the Nevada, Iowa dealership has had no further incidents.

     In addition to fencing, Vetter Equipment now features more outside lighting, as well as a video surveillance/recording system. “If something like this happens again, we’ll have a better chance of helping the police identify the culprits,” added Carswell.

Bull Pen

     When Green Line Equipment constructed “bullpens” at both its Grand Island and Norfolk, Neb. locations, it not only found a way to provide superior security for its equipment, but a better way to market the equipment as well.

     “We used to chain several items together with one long chain,” explained Russ Rerucha of Green Line Equipment. “It was pretty easy for someone to cut the chain and have access to all of the items. Our new bullpen fencing is made with one-inch steel rods, which are much more difficult to cut through.”

     Rerucha added that the bullpen has helped the dealership market its equipment better. “We used to have our used lawn and garden equipment chained up in various spots on the lot, so we had to mow around them and trudge through the mud to view the equipment,” he explained. “The bullpen contains a cement floor with secure fencing, and the items remain very visible through it.”

     So far, the bullpens are working great at both locations. “I recommend bullpens,” emphasized Rerucha. “While nothing is completely foolproof from thieves, the bullpen does make it much more challenging for them.”

Surveillance Cameras

     Over the last several years, things like cracked windshields would “suddenly appear” on vehicles in the morning at Carroll Implement in Luverne, Iowa. While Jim Carroll suspected what was causing the cracks, he was unable to prove it. It wasn’t until the dealership installed surveillance cameras last May that this activity stopped.

     “We haven’t had any problems since we installed the cameras,” explained Carroll, who decided to give surveillance cameras a try after observing the cameras at an area tire dealer. The dealership, which also sells gasoline, has found the cameras useful. “We don’t have inside readouts on our gas, so some mornings our amounts would be off with no way to verify it,” explained Carroll. “Now we can go right down the book and document it.”

     Carroll found surveillance cameras to be the most cost effective form of theft prevention. “Our dealership also saved more than $6,000 from last year on insurance costs. Our new insurance provider said the cameras helped reduce our costs.”

     While Bancroft Equipment has never been burglarized, Randy Hinton decided to take action when a neighboring dealership was hit. “Over the last 1½ years, thieves have been stealing skid loaders, gators, etc. along Highway 30,” explained Hinton. “I decided to be proactive rather than reactive.”

     The 10 cameras at the Bancroft, Iowa dealership are activated as soon as movement is detected. “I can sit in my office and see what’s going on throughout the whole organization,” said Hinton. “In addition, I can pull up what was going on at midnight last night anywhere inside and outside of the building.”

     In addition to the surveillance cameras, Bancroft Implement also has an alarm system. “I’m glad that I put them in place,” emphasized Hinton. “I plan to do it in other stores locations as well.”

Electrical Cords

     Over five years ago, at the insistence of their insurance agent, Southard Implement installed electrical cords through its equipment displayed outside the business. “We’d had too many things stolen,” said Larry Southard. “So we decided to try this program through ADT.”

     According to Southard, the program has been quite successful for the dealership. “It definitely reduced our theft loss considerably at all three store locations,” he emphasized. “It’s well worth the expense.”

     He encourages members to give it a try. “If you plan to leave equipment outside and want exposure after hours, this has been an excellent way to handle it.”

 

2007 Farm Bill Direction Still Unclear
Major Change or Minor Adjustments?
By James Nygren, AgDirect

     It’s still too early to predict whether the 2007 U.S. Farm Bill will end up including radical shifts in agricultural policy or incremental adjustments in current programs, but there are strong indications the Department of Agriculture is aiming for the former. The debate’s final outcome will have a significant impact on the sales environment through 2012 for farm equipment dealers and others who serve agriculture.

     James Nygren, director of legislative affairs for Farm Credit Services of America (FCSAmerica) and a former top Washington aide to U.S. Senator Ben Nelson of Nebraska, says the USDA – led by Secretary Mike Johanns – continues to advocate significant changes in policies including trade, conservation and renewable fuels research.

     “Johanns has said that the U.S. has two choices – to allow the World Trade Organization to dictate our role in international markets, or for us to take the lead in proposing and enacting solutions to the issue of government subsidies that limit market access,” says Nygren.

     “The Department wants the country to take a more aggressive approach to moving our products abroad,” he adds. “The administration’s position is that American agriculture can do remarkable things if we have access to the markets.”

Answers to Key Questions Sought

     Nygren says the administration, Congress, and a host of lobbying groups will be searching for answers to at least three critical questions that directly impact producers, as well as the people who serve them.

     “The first is whether producers will receive value from the marketplace or government subsidies,” he says. “The debate will focus on maximizing producers’ profit per acre. For example, do commodity loan rates help, or do they contribute to low unit prices? And can the government provide a safety net for producers without distorting prices?”

     A second question is whether the new farm bill can affect the rise of input costs, FCSAmerica’s Nygren says. “If the policies can get fuel prices to a reasonable level, such as through the support of renewable fuels like ethanol and biodiesel, that would help. Holding off on any more interest rate increases also would be beneficial. But action in that area, as well as in tax policies, is beyond the scope of the Farm Bill. Work by the House and Senate finance committees will have an impact there.”

     A third area of debate will center on an age-old question: What do we do about the weather? “What the discussion will be about is whether we need the year-to-year disaster assistance programs, or if better, expanded risk management programs can be built in the bill,” Nygren says. “There will be a push to expand reliable, non-politicized tools like revenue assurance that are actuarially sound.”

     How the administration and Congress finally deal with these issues could have considerable impact on producer profitability, Nygren observes. “All of us who provide products and services to farmers and ranchers understand the profit outlook has significant effects on their willingness to invest in machinery and equipment upgrades.”

     Nygren doesn’t expect the department to introduce its proposed 2007 Farm Bill until after January 1. For those interested in more information about the major issues, USDA has published a series of theme papers on significant areas to be addressed in new legislation. They are available at www.usda.gov/farmbill.

 

Wanted: Sales Consultant

By Tom Junge, Iowa Field Director

     Wanted: Equipment dealership needs professional individual to build customer base, maintain customer profile, develop relationships with customers, present features and benefits of products, provide solutions to customers, collect trade-in information, present quotes, close sales and assure customer satisfaction after the sale.

     Since I covered the need for a dedicated sales manager in my article in the October Retailer, I decided to go out on a limb and suggest a change in the role of a salesperson as well.

     The job description for a sales consultant or relationship manager (as one dealer calls it) is similar to that of today’s salesperson. Two tasks worth noting are building a customer base (cold calling) and maintaining customer profiles. Dealers report that these tasks are not being fulfilled today. Their salespeople are not calling on enough new customers or customers who own competitive equipment. It remains essential to the dealership that these relationships be established.

     Three responsibilities you don’t see included in the sales consultant’s job description are 1) setting the selling price, 2) determining the value of the trade-in, and 3) estimating the reconditioning cost of the trade-in. In dealerships today, there is no set pattern on how these responsibilities are being handled.

     Too often, dealers tell me that some of their salespeople consistently have lower margins than others, while some over-value the trade-in, and others only recover about half the reconditioning expense. Should we expect anything different? These are difficult tasks that require a lot of experience. Sales consultants need to know the customers’ needs and serve as solution providers. You can’t expect them to know all of the features and benefits of the products, as well as selling points against the competition, and still maintain the skills of a highly trained technician or used equipment buyer.

     Imagine what would happen if we took the salespeople out of the equation on these tasks. What if the sales manager determined the selling price or pricing structure and value of the trade-in, and the service department assisted in determining the reconditioning expense for all deals? Even though the salespeople wouldn’t perform these tasks, they could still prepare the proposal, present it and close the sale.

     In simplistic terms, price becomes less of a selling or negotiating point during the quote presentation. Sure, the salesperson can come back to the sales manager, but it remains up to the sales manager to lower the price based on his superior knowledge of the used equipment market and the dealership’s used inventory mix and level. It also takes the “farmer loyalty discount” out of the pricing equation. What do I mean by this? At a 20 group meeting, a consultant asked the salespeople what they would do if they won a million dollars. Almost everyone in the group said they would go back to farming. Why? Because most of the salespeople in our industry have farmed or continue to farm. From the consultant’s viewpoint, this reply makes you wonder where their real loyalty is – the dealer or the farmer.

     The only other “judgment call” that affects the pricing of the deal is the estimated reconditioning expense. This is an extremely difficult task and should be left up to the experts of the service department. The service department people have service records to review and they understand what to look at. It is also my belief that it will be much easier for the salespeople to justify the reconditioning expense if the estimate comes from the service department rather than the sales department.

     One dealer told me he implemented these changes in his sales department. He said half of the salespeople liked it, while the other half didn’t. Some liked it because it took the pressure off of them for valuing the trade-in too high and saved them time in researching the used equipment value. They also liked not having disputes with the service department regarding reconditioning expense. One salesperson, referring to the price of equipment today said, “we’re trading in houses every day and it can be quite scary.” The ones that didn’t like it were the ones who felt they lost their authority to make a deal.

     If you want to see this process in action, check out a large metropolitan car or truck dealership. The sales consultant greets you, provides information on the vehicle you are considering, collects basic information on your vehicle, and presents the information to the sales manager. The sales manager puts a value on it or they have their used car manager value it as if he is buying it from the new car manager, which is basically what they are doing. Once your vehicle is valued, the sales manager gives a quote back to the sales consultant or provides the numbers and the sales consultant prepares the quote to present to the customer and close the deal.

     As a consumer, I preferred the old way of dealing with a salesperson because it seemed like I got better deals. These dealers changed for a reason and I have adjusted. As a side note, at one dealership the sales consultant showed off their new customer profile software. He was able to look up my customer information, which included complete details of the car (trade-in) I purchased from them two years ago. This substantially reduced the time required to value the trade-in.

    Although an equipment dealership is not a car dealership, we seem to eventually follow their industry and processes. It only seems logical to have one professional approving the selling price, monitoring used equipment values in the industry and controlling inventory levels instead of 6, 10 or even 18 salespeople.

     Let the sales consultants do what they do best – sell! Relieve the salespeople of the burden and very difficult tasks of determining the value of used equipment and reconditioning. Instead, let them cultivate new customers, develop new relationships and create new sales opportunities.  For additional information, contact Tom at tomj@ineda.com.

 

Market Share & Titling of Equipment
By Andy Goodman

     Recently, Paul Kindinger, CEO of the North American Equipment Dealers Association (NAEDA), wrote articles about market share and the titling of equipment.

Market Share

     The market share article focused on issues dealers face while trying to meet their manufacturer’s market share standards. The numbers not only affect the fulfillment of dealer standards, but pay for performance and volume bonus programs as well.

     Manufacturers utilize different processes to submit sales data and apply market share information to individual dealer situations. This lack of consistency makes the data somewhat subjective.

     Given the importance of this issue, the NAEDA board of directors is convening a Market Share Task force with the goal of improving the collection, analysis, reporting and use of market share figures. The Chair of the Market Share Task Force is I-NEDA member, Steve Kayton, from Seward, Nebraska. Ivan Dorhout , another I-NEDA member from Rock V all ey, Iowa, has also been appointed to serve on this task force.

Titling of Equipment

     Last year, NAEDA created a task force to study UCC laws and regulations. One of the findings of the task force was that the UCC system falls short of fully protecting buyers and sellers of equipment, the value of which may be in excess of $100,000. Many other commodities in this price range have some form of titling or registration for security purposes. NAEDA is in the process of creating a task force to study and make recommendations concerning possible titling and/or registration of equipment.

     The Titling and Registration Industry Task Force will work together with representatives from financial institutions, customers, insurance companies, law enforcement, and manufacturers to work toward a solution that works best for all parties. The Titling and Registration Task Force is holding its first meeting in Chicago on November 1, 2006.

     One session at the I-NEDA annual meeting on November 15, 2006 will cover theft prevention and recovery. It will feature representatives from the National Insurance Crime Bureau (NICB), the Iowa State Patrol Motor Vehicle Theft Division, and The Nebraska State Patrol Motor Vehicle Theft Division. 

     The NICB reports that the recovery rate on stolen equipment is only 25 percent, compared to more than 60 percent for stolen automobiles. Can this low recovery rate be attributed to the lack of a standardized equipment identification system and titling? Automobiles and trucks have titles and standard uniformly placed vehicle identification numbers to help document their authenticity.

     The Titling and Registration Industry Task Force will work toward establishing a common industry vehicle identification number system and a nationwide database that will provide security of ownership that could be similar to real estate or titled motor vehicles.  I-NEDA member Tom Haley, from Carroll, Iowa, has been appointed to serve on the Titling and Registration Task Force.

     Please join us on November 15th for import