(Anna Mayer and a 20hp FOTON Tractor with Turf Tires)
The report showed up in my e-mail this morning courtesy of the Farm Equipment Manufacturers Association (FEMA). It's the monthly Association of Equipment Manufacturers (AEM) Flash Report that details monthly and year to date sales of tractors and combines. It has always been an accurate measure of what is happening in the agricultural community. Today's report should be of concern to anybody attempting to market compact tractors and should cause them to carefully consider their marketing approach. Let's first look at the numbers:
Year to Date Sales of Under 40 HP Two-Wheel Drive Tractors:
114,321 sold YTD 2006 vs. 119,432 YTD 2005 - (-4.4%)
119,419 sold YTD 2005 vs. 126,443 YTD 2004 - (-5.6%)
126,265 sold YTD 2004 vs. 118,383 YTD 2003 - +6.7%
118,383 sold YTD 2003 vs. 92,351 YTD 2002 - +27.9%
For two years under 40hp tractors boomed in the market with the best year being 2004 and sales of 126,265 units. This year numbers indicate a drop of 10% over the past two years. What is going on? Speculation on the reasons for the drop in sales go from "lousy economy" to "we've flooded the market" to "less people moving to rural America". I'd suggest to you they are all wrong. I believe the drop in sales is directly related to the customer base being (ready for this?) under-served.
"What?" you say. "Why, there are more choices in compact tractors today then ever before!". "We're doing a splendid job in marketing our compact tractors, after all we are in all the magazines...our agency says so!" Sorry...that is just the point. You are missing the mark...big time.
Remember, this is FREE advice. You can choose to ignore it, you can call us and tell us we are idiots...or you can adjust your thinking. Your choice. (Enough stalling...already!)
Here are the three reasons sales of compact tractors have tanked:
1) Your Marketing Plan is TOO Traditional. - You are blowing big dollars in print media that does not really target your prime demographic. The thousands of people who subscribe (or get free subscriptions) to "farm magazines" are not the folks who you should be trying to reach. Why? The publishers simply don't have them in their data-base. Why? Because this demographic are NOT FARMERS which means they are not easy to find in government database lists of farm payments. But, you counter: "There are special magazines out there that DO target this crowd!" Opps...check their data numbers. There are 27 Million households that make up this demographic. The largest "magazine circulation" in this arena is 250,000. A drop in the bucket.
2) You are targeting the wrong gender. - Sorry guys, in this demographic it is the woman who makes the buying decision. You don't think so? Go out and buy a car or pickup without consulting the female in the family. The purchase of a compact tractor is more like buying a family vehicle than it is buying farm machinery. In addition, a recent survey shows that "discretionary income" for males has remained flat over the past five years. During the same time period the "discretionary income" for women has increased by 12%. Follow the money.
3) Traditional tractor dealers don't get it. - Once again, this group of buyers is very different than traditional agriculture buyers. Many dealers are not prepared to talk "financing" vs. outright buys. Many dealers are not willing to take the time to explain what the heck a "3-point hitch" is and what it does. Many dealers simply fail to work the service portion of the sale. Many dealers don't pay attention to the way their dealership "looks" from the road or inside. Do you want to see how to accomplish these tasks? Visit a new car/truck dealer in a large community. You'll find upscale showrooms, a lack of clutter, great looking promotional items and a sales staff that can actually "sell" rather than take orders.
The bottom line: Sales have fallen because we think many manufacturers of compact tractors have already sold to the traditional ag customer base. And...because many the lifestyle folks only put 100 hours or less on a unit each year....these tractors, in their hands, will last "forever". So, what to do to build sales? It is now time to expand your thinking. Like I wrote...the advice is free. (And you know how that story goes.) BUT, if you are really serious about improving sales to this huge demographic...give us a call. We can help.