A dealer surveys his market.

A Dealer Surveys His Market

DID YOU ever wonder how much of the available parts and lubricants business your dealership is getting from your trade territory?

How much is going to fleet-type stores, to the local fuel supplier or to other miscellaneous outlets? Is your dealership

Rich Streitmatter, Deere dealer at Brimfield, Ill., near Peoria, found those questions and the need for answers running through his mind from time to time. He had not taken any particular action on the matter, that is, until he attended a dealership management seminar sponsored by John Deere last year. The action he has since taken has helped to boost parts volume by 15 per cent this year over last, and has done so at a time when parts prices are generally declining.

"A page in the seminar handbook set me to thinking how I might get more information concerning farmer buying habits in my own trade territory. It was a summary of a Texas survey made to determine why farmers trade where they do,' he notes. "When I got back from that seminar, I started formulating a plan of action.'

(A report of the survey, "Parts Retailing: Who's Getting the Business,' appeared in I&T May, 1985.--Editor.)

Streitmatter prepared a questionnaire which, when answered by his local area farmers, would give him the basic buying pattern information he needed to guide future marketing plans. The questionnaire was reproduced in quantity and it was ready for use.

During the economic- and weather-induced slow sales period last fall, he armed his salesmen (two outside and one inside) with lists of names and asked them to personally contact every individual. They were to sit down with the farmer and fill out the questionnaire as completely as possible. Salesmen were urged to get factual answers and were directed to refrain from any attempt to guide answers in any way.

100 farmers seen

The salesmen went to work, ultimately contacting more than 100 farmers typical of those in the dealership's trade area. They interviewed each and returned their completed questionnaires. When tabulated, the answers did pinpoint sources those farmers used when buying. In most cases there was adequate explanation why they bought where they did. That was exactly the information Streitmatter was seeking. Since each questionnaire's respondent was identified, it was easy to recontact the person at a later date.

Streitmatter explains: "Naturally, we had long noted that people bought parts and supplies from a variety of sources. If we could learn why they did this, we hoped to uncover some new areas of sales and service opportunity. We might then demonstrate to them that we offered either better products or better prices.

"Our survey revealed that many farmers thought they were getting a better price elsewhere, when actually, we were regularly beating the competition's prices on the same item.'

As an example, he relates, "We noted that very situation on roller chain. We've a super price on roller chain right here at at dealership, but we found many customers were buying roller chain from the fleet and specialty stores where they thought they were paying less. Learning this gave us an opportunity to emphasize our every-day lower prices on that chain and pick up plus business.

"We also found that customers often went to specialty bearing suppliers because they thought availability would be better than at our store. But that, too, is not the case. The survey gave us a chance to prove we could supply their total bearing needs.'

When the survey was completed, the forms went back to the salesmen, who were then able to contract customers and show them how Streitmatter Impl. Co. could offer better deals on specific items than they had previously been paying. As a result, whole goods salesmen then became excellent parts salesmen.

Streitmatter says, "If one of our salesmen stops to contact a farmer and he is not interested in new or used whole goods, then I want the salemen to talk about the parts business. A summary sheet of our survey gives the salesman an excellent parts sales message. As an example, I remind the salemen to keep plugging a better deal we have on gathering chain, roller chain and filters, and to advise of any parts or service specials that may currently be offered.'

Checking competition

An important part of the dealership's information gathering plan is to become thoroughly familiar with the competition's prices.

"When a customer says he buys an item like roller chain from a fleet store because it is cheaper there, then we set out to find out if it really is,' he says. "We comparatively priced all items listed on our survey and found how competitive our prices actually were. So, when the salesmen returned to those persons who filled out the questionnaire, they were able to say, "Hey, have you checked our prices lately?''

Commenting on survey results, Streitmatter points out, "Among the respondents whose machinery inventory was at least 60 per cent Deere, we were getting 84 per cent of the filter business. Forty-six per cent of them, however, were buying oil from the local tank wagon man, their fuel supplier. We were getting 51 per cent of the transmission fluid business.

"As for grease, we were low on the list of farmer suppliers and again the tank wagon man was high. I was especially concerned that we might not be getting our share of planter parts sales, but the survey showed 94 per cent of the respondents bought their planter parts at our store.'

The color of a farmer's machinery seemed to have a definite effect on his buying habits. "For example,' Streitmatter notes, "on planter parts, we get 47 per cent of those farmers' business while the dealer who supplies the "color' of their machine got 50 per cent of the business. Of cutting parts, we got 33 per cent of available business while the original equipment dealer chalked up 47 per cent.

A side benefit of the survey has been to make the entire crew at Streitmatter Impl. Co. aware of how important the parts business is these days.

"Where we might have been inclined to worry that perhaps our prices were too high on many items, we discovered we were really doing a good job. We feel that with proper information readily available we can do much better and that parts sales will continue to climb. Everyone here is working hard to sell parts because we now know we do offer a good value in what we sell.'

Streitmatter says that last year's parts sales were $480,000 and that they aim at hitting a 15 per cent increase this year--$550,000. Total dealership volume tops $3 million annually.

Table: How Rich Built His Survey

Photo: Dan Kelly (left), one of the dealership's salesmen, participated in the one-on-one survey work that sought out equipment owners' reasons for buying certain parts elsewhere. Streitmatter (right) co-ordinated the findings and engineered the company's responses in the form of merchandising effort.

Photo: On the July day I&T called, Streitmatter Impl. was promoting consumer products throughout its brightly lit showroom.

Photo: Susie Berkley, who looks after the toy, gift and clothing section, can also fill in as needed behind the parts counter.