While strides have been made establishing precision as a standalone business, dealerships continue to seek a better balance between revenue generated by hardware sales and service.
This mindset is reflected in a continuing trend toward a more balanced breakdown of precision revenue sources in the seventh annual Precision Farming Dealer Benchmark study. However, there are few reversals in recent trends.
For the first time in 3 years, dealers reported that half of their precision revenue came from hardware sales, curbing a downward trend that started in 2016. The most dramatic year-over-year drop was in signal subscriptions, from a high of 11% in 2018 to a low of just under 6% this year.
The way precision products are sold saw some subtle shifts in this year’s study. Most notable was the continued 3-year downward trend of aftermarket sales of technology, to a low of about 41% in 2019.
Factory installed technology ticked up for the second straight year to about 37%, while dealers selling used precision equipment dipped for the third straight year to a low of 5%.
Interestingly, 15% indicated they sell precision technology through other methods, which could include service-only sales or agronomic support.
Platte Valley Equipment, a John Deere dealer with 4 locations in eastern Nebraska, closed out the first year of its E3 precision farming service program with around 25 customers. Now in its fourth year, almost 80 farmers are enrolled — and the program’s 98% retention rate speaks to the value customers are getting out of the investment.
E3 — which stands for Enable, Engage and Educate — is unique to Platte Valley in its all-encompassing package and 24/7 dedication to its subscribers.
Cory Allely, AMS specialist, notes that a key to the success of the program is in its flexibility and reliability in meeting customer expectations.
“Some of the success stories are definitely with our service department and our uptime guarantee. Basically if a machine is inspected by us and it goes down, in-season and we can’t get it fixed within 24 hours, we’re getting the customer a loaner. This gets them back up and running in a timely manner. That aspect, to some customers, is huge, especially if they have a lot of ground to cover and weather is always unpredictable.”
Allely adds that future growth of the dealership’s E3 program will rely on expansion of connected support and the ability to anticipate breakdowns before they occur