Survey Offers Manufacturers Insights into How to Support Dealers

by John Anderson, Michael Bird, and Susan Baier

How do equipment dealers sell to farmers, and are those dealers supported by manufacturers in the process?

A recent study conducted by Spindustry, Fastline Marketing Group and Audience Audit revealed several insights into how dealers think about marketing to farmers along with how supported they feel by their manufacturers. The survey results showed dealers break out into four attitudinal segments:

• Confident (21 percent): Feel they understand their customer well and have a strong grasp on their marketing efforts.
• Adapted (23 percent): Understand farmers have changed the way they buy, preferring more often to go online.
• Supported (26 percent): Feel the most supported by their manufacturer partners.
• Outdated (30 percent): Stuck in the past and increasingly concerned about growing in a post-COVID environment.

Getting New Customers with Digital Advertising

Dealers surveyed agreed that 2021 was a year to invest in their marketing efforts to take market share. However, the data analysis revealed varying degrees of engagement with this thinking. Fifty percent of respondents said their budget in 2021 was the same as 2020.

COVID accelerated the trend to more dealers leveraging their websites for commerce. However, not all dealers have approached this the same, with only 33 percent of the “outdated” group using the internet for sales.

Furthermore, digital marketing tactics are becoming more prevalent, with digital now representing the majority of marketing spend for acquiring new customers. The outlier here is again the “outdated” bucket at only 11 percent.

How Dealers Sell, How Farmers Shop

Social Media. Social media tops the list within digital tactics for dealers, but farmers ranked social media closer to the bottom when shopping for parts and equipment. The key with these platforms is to understand how they are used—it may not be the best tool for lead generation but could prove durable for basic brand building.

Trade Shows. Trade shows rank toward the bottom in spending for all dealer groups. It also ranked low for farmers in their preferred shopping strategies. This could be influenced by the shutdown of the past 18 months, or it could be the beginning of a trend in which more dealers are leveraging websites and videos to demonstrate products vs. trade shows. This is definitely a trend to monitor.

The “outdated” group leveraged trade shows for half of their annual marketing spend which could prove problematic in the future as they seek to reach new customers.

E- Commerce. Only 38 percent of respondents use e-commerce to get new customers, leaving plenty of room for improvement. Close to 70 percent of farmers begin their buying journey at a website or search engine, so if dealers are not creating robust “digital storefronts” (aka: websites) that are user-friendly and represent their brand, they risk missing growth opportunities.

The vast majority of farmers, young and old, are utilizing the internet for some portion of their buying journey. This is most problematic for the “outdated” dealers who are behind in creating a strong digital footprint, continuing to allocate 50 percent of their marketing budgets to trade shows.

Marketing Support from Manufacturers

When it comes to feeling supported by their manufacturing partners, ratings vary wildly. It’s encouraging to note that the “supported” group gives a 50 percent rating, but that also means the other 50 percent do not feel supported by manufacturers.

If manufacturers can provide better images, real-time updates to parts and whole goods, and easier to navigate co-op policies, they stand to grow their revenue and build loyalty among dealers.

Additional Trends to Watch

Sixty percent of respondents have an annual marketing budget of less than $50,000, and only 9 percent are developing their budgets based on a percentage of sales. That runs counter to how most companies allocate other line-item expenses, proving there is room for improvement when it comes to developing a strategic marketing plan. Only 25 percent of respondents are thinking about how they break out their marketing spend by segment (print vs. digital vs. other).

Sixty percent say their businesses use co-op funds. They are used mostly for print (82 percent) vs. radio at 50 percent and digital at 35 percent.

Respondents said the documentation required to be reimbursed for digital advertising is frustrating, which discourages them from pursuing it with co-op funds. The “outdated” group is the least likely to use digital.

Manufacturers should think through how they can evolve their co-op policies to be more accommodating to digital tactics. To hammer this point home, 88 percent of respondents think co-op is important, but many are not using it because they say it is a hassle.

Biggest Challenges Ahead

The biggest challenges ahead as rated by the dealer respondents align with the daily headlines. However, following supply chain, cost and labor challenges are poor or no ecommerce and a weak brand. These are two items that dealers can control.

The ecommerce piece might be a bigger bite to chew, but putting some amount of focus on the basic website look, feel and functionality can do wonders for a brand.

Couple that with some strategic integrated marketing tactics in both the traditional and digital realms to help dealers stay top-of-mind and better position themselves for when inventory corrects itself.

A key focal point for manufacturers is helping pull the bottom 30 percent of the dealer groups up more on par with the other groups, which should lead to big gains later. Now is the time to be strategic and perform the basic “marketing hygiene” to position for the future.