Bucking National Trends
“Everyone was saying 2008 would be a tough year for tractors,” Little says, but through August he hasn’t seen it. In fact, sales of low-horsepower tractors have been slumping in the U.S. since 2004, reflecting the dismal trend of housing starts and home sales, particularly in the last 2 years. According to the most recent figures from the Assn. of Equipment Manufacturers, U.S. sales of compact (less than 40 hp) and mid-size (40-100 hp) tractors from January to July 2008 were down 13.5% compared with the same period in 2007. Compared with the January to July period in 2006, sales of smaller tractors this year are down nearly 14%. For Little Tractor & Equipment, unit sales in 2008 will be the dealership’s best ever. Further, August ‘08 was the single biggest month in the dealership’s 8-year history as it sold 57 tractors, pushing the fiscal-year (ending September 30) sales total to more than 300 units.
Little figures that the dealership’s sales sweet spot falls in the 35- to 40-horsepower range, but adds that as Kioti’s range of tractors has expanded, so has his customer base. Today, the manufacturer offers units ranging from 22-90 horsepower.
“This is the first year out for the 90-horse equipment,” Little
says. “We’ve already sold several of those and we’re seeing more interest in the 65-horsepower units. With the bigger equipment, we’ve also been able to move into the production farming market, especially with those baling hay.” He also sees promise for increasing sales with the newer models of lower horsepower tractors that come with cabs. “We have a lot of businessmen here that have 3-5 acres lots and they use 45-55-horsepower tractors with cabs just to mow their grass. I think the smaller tractors with cabs will be really good sellers to folks like these.”
A Natural Marketer
While Little says that his marketing program pushes both the dealership and the Kioti brand, it’s evident that it’s the dealership itself that’s the big draw. As most successful dealers have learned, it’s their reputation and service that sells machinery. The equipment brand only supports the dealership’s efforts.
This is what stands out for one of the judges on the panel that selected Little Tractor as the 2008 Rural Lifestyle Dealership of the Year. In his rating of Little as the top deal-
ABOUT LITTLE TRACTOR & EQUIPMENT CO.
“A creative marketing program that includes a ‘finder
fee’ program that works tremendously well with this cus- tomer segment” . . . “Dealer warranty includes free pick- up and delivery” . . . “Truly understands ‘differentiation’” . . . “Largest Kioti dealer in the U.S. 5 years in a row and a member of Kioti dealer council indicates industry leadership and respect” . . . “High revenue with a ‘non- mainstream’ brand.”
WHAT THE JUDGES SAY
ership in this category, he wrote: “Selling $6 million worth of Kioti in Illinois speaks volumes of his ability to run a deal- ership. He has a very high market share while competing against the major lines. What impressed me is how he sells his dealership and his name.”
In fact, Little Tractor’s market share is a solid 33% within a 50-mile radius of the dealership, the typical sales territory for a Kioti dealer. But with its success, the tractor maker doubled Little’s sales territory. Within a 100-mile radius, the dealership commands a 16% market share.
From the very start, Little took advantage of his reputa- tion and community relationships to establish and grow the business. One of his first sales was to a “buddy,” he says. “This fellow’s company is into all sorts of different busi- nesses in the area, from a barbecue restaurant to nurseries to construction. You name it and he’s into it. He talks to a lot of people. So I told him if he bought one of these new Kioti tractors from me, I’d stand behind it regardless of what happened. He did and he was happy with it. He told others and that was a big help in getting us up and running,” Little says.
In addition to TV and radio advertising, Little says that billboard advertising has also worked really well in creating awareness of the dealership. “We have 6 mobile billboards that are moved to different locations every month, so the message doesn’t get old. The company does it for a little more than the cost of one billboard sitting in the same spot for several months,” he explains.
While Little Tractor’s sales territory covers several counties in Illinois, Kentucky, Tennessee and Missouri, up until this year, the billboards only appeared in Illinois and Kentucky. This year, the dealership’s billboards will also show up in Missouri.
One thing he doesn’t do anymore is advertise price. “I used to do it all the time and found that other dealers would cut me by $100. I promote low-rate financing or cash-back offers, but I don’t advertise pricing.” He’s found that manufacturer incentives — like a free front-end loader with the purchase of a 35-horsepower or larger tractor — also work.
“In the past year, Kioti offered that deal for a month and it worked so well that they extended it for another month,” Little explains. “We sold 3 semi truckloads of tractors (24 units) in less than 2 months with that program.”
Paying for Referrals Little says that while he’ll continue to invest 1.5% of gross
sales in advertising and other promotions, his most effective marketing tool remains his customers — both through word of mouth and direct referrals.
Little’s referral program is simple. If someone refers a cus- tomer who buys a tractor, they’re sent a check for $100 or, if they don’t want cash, they’re given a $100 credit when the pur- chase is completed.
“Customers love it,” Little says. “I’ve got one customer who’s received over $2,000 from us. Several others have
20 RURAL LIFESTYLE DEALER DEALERSHIP OF THE YEAR SPECIAL REPORT JUNE 2013
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