There are two things Bill Shrock never thought he would do in the same year: build a new dealership and buy another.
Established: 1945 (began selling Oliver tractors in 1945; Massey Ferguson in 1985)
Locations: Plevna and Nappanee, Ind.
Major Line(s): AGCO (including Massey Ferguson, Gleaner, Sunflower, White Planters)
Shortlines: Bush Hog, Great Plains, Hustler, J&M, MacDon, Trimble, Versatile, Unverferth, Yetter
Employees: 26 in Plevna, 5 in Nappanee
2012 Sales: $25 million
Awards: AGCO 5 Star Dealer in 2011, 2012
But in the past 12 months, he has constructed a new 12,800 square-foot facility to house Plevna Implement’s showroom, parts department and sales offices. About that he says, “Except for a few things, my wife and I designed the new building along the lines of what AGCO calls the ‘Massey Ferguson Retail Experience,’ and we’re pleased how it came out.” The grand opening was last September. The new building replaces one that housed the dealership for nearly seven decades.
The other event, which was finalized in November, was acquiring another dealership in Nappanee, Ind., about 75 miles north of the main store, which is outside of Kokomo, Ind. This decision was more than 20 years in the making, says Shrock, and it was one that his better half wasn’t totally behind. “My wife was totally against buying the Nappanee store and it’s taken a lot of time for her to come around. Now, both of us love to go up there and work. In about five years I’m planning on slowing way down and hoping we can semi-retire by the time I’m 60,” says Shrock.
Bill Shrock made a statement that Plevna Implement is going to be around for a long time when he built his new store and reinforced his commitment by acquiring a second store last year.
There are two common themes when Shrock talks about what got Plevna Implement in a position to expand: his profound faith and confidence in his family and the other people who work for the dealership.
“I feel like everything I’ve gotten is a gift from God and He continues to bless me every day,” he says. “And when I see a service manager or a parts manager from another dealership walk in here and ask for a job, it overwhelms me.”
It would also be safe to say that if he didn’t have faith in his sons and the other employees at the dealership, he probably wouldn’t have invested in the new building. Shrock says he wanted to make a statement that Plevna Implement is going to be around for a long time.
“It shows our customers my commitment to be in business. When people buy $100,000 or $200,000 piece of equipment, they want to know somebody’s going to be there to take care of it. Just because you’re in business today doesn’t mean you’ll be in business tomorrow. I needed to show my commitment to this region, to this neighborhood, to my customers that we’re planning on being here for another generation,” says Shrock.
Beyond the new building, he says it will be the people he’s been able to attract to this very small rural community to work at the dealership that will ensure Plevna Implement will continue taking care of his customers for decades to come.
Besides the attractive new showroom at Plevna Implement’s new building, the parts storage area was greatly expanded with the goal of increasing parts sales at the dealership.
“We are having more success now than we ever had, and a big part of it is because of my sons and my nephew,” he says. “They are building relationships with people that I couldn’t do business with. I did the same thing. I built relationships with people my dad couldn’t do business with. A good example of this is my son Kent sold a Massey tractor to a local John Deere customer not too long ago. I kept telling him, ‘You’re wasting your time, you’re never going to sell him a tractor,’ and he proved me wrong. I keep encouraging both of my sons and my nephew to continue proving me wrong.”
As for why he’s making these major moves at this point in his career after decades of growing the business in the same building without expanding to another location, Shrock says simply, “I want this business to continue and continue to grow. How we continue to grow will be the biggest challenge for us.”
While, for years, AGCO had been urging Shrock to expand, it wasn’t until the past few years that Shrock saw the opportunities finally lining up and finally felt the time was right to make his moves.
Shrock’s father and uncle established the business in 1945. Prior to that his uncle operated it as a filling station and car repair shop. “While my dad was serving in the military in World War II, my uncle wrote him a letter that said if he came home they would start selling Oliver tractors,” says Shrock.
In fact, by 1952 the brothers had opened a second location, but it didn’t last very long. In part, it was that experience that has caused Shrock to be very cautious. He adds, “Also, I didn’t expand earlier because I couldn’t find the right people.”
But as the farm equipment landscape all around him changed and as his sons showed interest in the business, his viewpoint changed, as well.
One of the major industry shifts that caused Shrock to take another look at expanding was that 10 years ago there were six AGCO dealerships in and around the Indiana counties where Plevna Implement’s stores are located. Today, Shrock’s dealership is one of the last standing, which has resulted in the dealership covering such a large geographical area that its resources were stretched to near the breaking point to satisfy the pent-up demand for AGCO equipment and parts in the region.
Besides the reduced number of dealers handling AGCO-branded products, the consolidation of farm equipment dealers in general is presenting Plevna with opportunities for growth.
To demonstrate the degree to which the region has changed when it comes to ag equipment dealerships, Shrock points out that when he joined his current 20 Group, 95% of the dealers handled John Deere equipment. “Today,” he says, “there are only three Deere dealers left in my group. Most of them have either gone out of business, been bought by another dealer or merged together.”
Along with the ongoing trend of dealer consolidation in the region, Shrock says he’s seeing the multi-store operations realigning their locations. In one case, a dealer group handling a competitive brand of farm equipment acquired two stores in the area, merged them and built a new facility 40 miles away. This gave Plevna Implement another opportunity to grow. With a strong service department in place, the dealership was able to take advantage of it.
“In that situation, we were able to take in several combines of different brands from several farmers who used to work with that dealership,” says Shrock. “Besides their dealer moving farther away, the farmers switched over to us because of our service department. They knew that we would be here to service their equipment. What totally sets us apart from other dealers is our service,” says Shrock.
He relates another story about a Challenger dealer in the area who was able to pry a large customer (five tractors and two combines) away from a dealership that handled another brand of equipment. But when it came to servicing the equipment, that customer contacted Plevna Implement. “We told them absolutely not,” says Shrock. “He needed to get the dealership where he purchased the equipment to do his service.”
The point being that with its strong reputation for service and the changing nature of dealerships in the region, Plevna Implement is seeing a growing number of opportunities emerging. But Shrock admits that it’s become a constant balancing act as to what the dealership can do, what it can’t and what it should do to take advantage of the changes. But along with its emerging prospects, the dealership also sees serious challenges.
Wanted: More Inline Competition
Shrock’s view of inline competition would seem counter-intuitive to most dealer-principals in this day and age, but he believes having another Massey Ferguson dealer in the area would not only help his efforts to grow and expand, but it would also be good for the brand overall.
“One of the things that’s been rough for me as an AGCO dealer is I don’t have any competition in terms of Massey Ferguson equipment. I need more inline competition,” he says. “What I mean is, I don’t need another guy five miles down the road, but I would relish another Massey dealer 40 miles away so that there was more machine population to work with. I really believe this kind of competition is healthy,” says Shrock.
Referring back to the number of AGCO-branded dealers who are no longer in business in his region, he explains how it has hurt his business overall. For example, he says there was a very good White dealer 50 miles away in Lebanon, Ind., who went out of business 15 years ago. “Those people are not driving White tractors anymore because it’s too far for them to come here.”
The new store that Plevna Implement acquired in Nappanee, Ind., 75 mile north of its main store in Plevna, will not only increase the dealership’s sales territory, but it will also open new market segments in hay tools and other equipment related to serving dairies in the region.
He also refers to a “big Massey dealer” that used to operate out of Fowler, Ind., who’s now out of business. “We used to have a lot more dealers all around the state, but they’re just not out there anymore. I wish there were more of our dealers around because we would have more machines to service and provide parts for.”
He adds that it’s not unusual for Plevna Implement service techs to drive 100 miles, one way, on service calls. Shrock says this is not something he brags about because he would prefer not to do it.
“Most John Deere and Case dealers don’t travel that far. But because of the brands we sell, the fact that we don’t have any inline competition and there are some very loyal Massey and AGCO customers out there, we travel a long way to take care of them.”
He believes the newly acquired store in Nappanee will help out with this situation. Over the years, the dealership has sold a fair amount of equipment in northern Indiana and into southern Michigan including tractors and some planters and combines. Shrock says they know many of the customers in that area, so they’re not unfamiliar with the market.
The new Plevna Implement dealership was also an AGCO dealership until eight years ago. Prior to being acquired by Plevna, the dealership was known as Marty & Ted and it focused on selling Gehl skid loaders and lawn mowers. The building itself is only four years old.
Growing in Parts
In addition to growing machine population in his region, Shrock says he’s been focusing intently on upping his sale of parts. In the past five years alone, Plevna has grown its parts business by nearly $1 million.
Even at that, he says the dealership isn’t where it should be when it comes to parts sales. “While we were selling some wholegoods in northern Indiana and southwest Michigan, we weren’t getting the parts business that we should have been. So the Nappanee store is one way we hope to grow our parts sales,” Shrock says.
He adds that he has always viewed parts sales as key to operating a successful dealership because of the healthy profit margins parts produce. In Plevna’s case, they usually run in the 36%-plus range.
The showroom at Plevna Implement’s new facility is spacious compared to the nearly 70-year old building it replaces. According to owner Bill Shrock, it was designed around what AGCO calls the “Massey Ferguson Retail Experience.”
In fact, when it comes to metrics, he gives margins on parts sales far more attention than he does absorption and even inventory turns. “Inventory turn is not a direct reflection of the profitability of a parts department,” Shrock says. “I know a dealer that consistently produces four turns on parts inventory, but his margins are absolutely horrible. Our turns aren’t where we need them to be, but our parts business is highly profitable. I’m not a big one for giving away discounts on parts.”
Another important part of Plevna Implement’s parts sales is its parts people are paid a bonus based on gross margins and sales growth, but they must maintain a certain margin in order to earn the bonus.
“You can’t grow by giving parts away or discounting them,” Shrock explains. “You have to grow sales and maintain margins at the same time.”
In fact he’s so dead set on not discounting parts, when his son came to him with the idea of offering a parts discount during the grand opening of the new store last September, Shrock say he felt “squeamish” about saying it was OK.
As well as the dealership has done with its parts business, Shrock knows that segment of Plevna’s operation still hold a lot more potential. “I compare myself with other dealers in my 20 Group. We’re doing $25 million dollars’ in wholegoods sales, but we’re not selling the amount of parts that we should be for a dealership with our level of wholegoods sales. The only thing that I can relate this to is we don’t have the machine population that John Deere and Case have in our area,” says Shrock.
He believes the dealership’s new building and new location will go a long way in growing that business.
In addition to the much larger showroom and additional sales offices, the parts department in the new store is several times larger than in the old facility, allowing for more inventory to be kept at hand. This, in addition to a major investment in storage drawers and cabinets to better organize parts inventory, has already improved the efficiency of Plevna Implement’s counter people. Of the new two-story facility, Shrock says, “It’s just been incredible the amount of traffic that our new building has brought.”
He also points out that there’s more new business to be found in the other areas of the business as well, but it’s going to take more than a new building and a new location.
For example, the area around Kokomo is dominated by 1,500-2,000 acre and larger corn and soybean operations, but there are no dairies left in the area. As a result, the dealership sells no hay tools out of the Plevna location.
The Nappanee store, on the other hand, opens up a big opportunity because there are “lots of dairies and a lot of old equipment up there. I’ve seen equipment there that I haven’t seen around Plevna for 30 years. It’s much different up there,” says Shrock.
But to get the most from his investment in facilities, Shrock acknowledges that it’s going to take more than metrics. He falls back on the time-tested cliché that — people buy from people — and believes customer loyalty isn’t a thing of the past.
“I’m glad to say that I think my customers are more loyal to our dealership than most customers who are loyal to a brand. I have customers who have told me they don’t care what color equipment I have, they’re going to buy from us,” says Shrock.
For Plevna Implement, it’s all about forming a partnership with customers and being a business partner. “Our business is not about, and I hate this term, ‘selling iron.’ I don’t like it because this isn’t how I view what we’re doing here,” says Shrock.
He says his best customers use him and others at the dealership as consultants. “Customers want a relationship where they can depend on you to be part of their business,” Shrock says.
It’s All About People
Once again his comments go back to the importance he places on hiring the right kind of people to go along with his investments in facilities.
“I want to tell you this,” he says. “A major part of the reason we’ve been successful is because I have been able to hire good quality employees. I pay them well, but I give them encouragement and I tell them that they are the most important part of our business.
“In my experience, too many dealers think it’s all about them, but it’s not. I would have no business if it weren’t for my employees. Why so many people cannot figure that out, I don’t understand.”
When it’s pointed out that, regardless of the business, employees tend to take on the characteristics of their boss and they tend to treat customers the way the boss treats them, he responds, “Well, I hope that’s true.” But then he goes on to point out that sometimes employees learn what not to do based on the bosses behavior.
“My father was a God-fearing man, but when he was running this business and somebody made him mad, he’d kick them out the front door. I don’t operate like that. I never have.”
Shrock goes on to offer several anecdotes about why dealerships must balance business relationships with metrics and bottom-line numbers.
“When I was a young kid and a guy owed us a $100 for a lawn mower repair and didn’t pay us, I wanted to take him to Small Claims Court to get that $100. I came to believe that if the customer can live with it, I could live without it. So we’ve never been involved in a court case. We just don’t go there.”
He recalls when a customer near Indianapolis, about 1.5 hours south of Kokomo, complained about the cost of a service call for his tractor. It required removing an injection pump, sending it out for repair and then going back to re-install it.
“This customer said we charged too much and insisted we take a couple of labor-hours off his bill. We did and six months later I sold him a brand new tractor. Had I made him mad, he would have never walked back in my door,” says Shrock. “We try to remember to treat people the way we want to be treated and it does make a difference; I guarantee it makes a difference.”
But what has amazed Shrock is that he seldom needs to actively recruit new employees because so many knock on his door wanting to work at Plevna Implement. He says he doesn’t believe in recruiting employees from competing dealerships. Instead, they’re coming to him.
He points to a parts manager with 31 years of experience working for another farm equipment dealer who, for personal reasons, wanted to come to work for Plevna. He had been using the same DIS business software as Plevna and knew how to use the AGCO parts lookup system.
“It was like he fell out of heaven for me because he came right into our dealership and I didn’t have to train him,” says Shrock.
Then there is a service tech who ran his own one-man repair shop in northern Indiana and bought parts from Plevna Implement for the better part of a decade. When Shrock acquired the store in Nappanee, he closed up shop. With his experience working on AGCO equipment, Shrock approached him to come to work for Plevna Implement and has proven to be real asset.
Expansion into northern Indiana with the Nappanee store also opens up potential for employee advancement, according to Shrock. “My idea is to go to northern Indiana and duplicate what we’re doing here up there. Whether we can do that remains to be seen, but I believe we can.”
While Shrock and his wife are serving as the store managers while getting Plevna Implement’s new Nappanee store up and running, in the longer term they’re moving one of the dealership’s best service techs, Wade Symons, to the area to ultimately manage the new operation.
“Wade was a very good shop tech and he’s developed relationships with customers that I could only dream about,” says Shrock. “We knew for some time that he wanted to get into sales and, in fact, he was one of our best salespeople even though he worked in the shop. The new store is a great opportunity to let him grow, and he has totally embraced it.”
The Next Generation
What really seems to rev Shrock’s engine, though, is seeing the younger generation develop the kind of passion that’s driven him for his whole career as a farm equipment dealer.
He points out that his service manager’s son, Brady, is the dealership’s first precision farming specialist. The father, Terry Howell, has been with Plevna for 40 years. In fact, his second son, Ryan, who had been managing the Federal Express hub in Kokomo, approached Shrock a year and a half ago and asked to come to work for the dealership. Today, he’s the warranty administrator for the dealership and also oversees the service department for tractors and lawn and garden products.
But what motivates Shrock the most when it comes to getting the dealership ready for the next generation is his two sons and two nephews are now involved in its day-to-day operations. This came about when Kyle, the older son who has been working at Plevna Implement since high school, talked his brother Kent into coming back to work in the dealership. His nephew Trent Shrock has been working in sales at the dealership and the second nephew, Drew, just started in sales in February.
Shrock is fully confident that between them, Kent and Kyle together with their cousins will continue growing the dealership’s business when he finally steps away from the business.
While the next generation of Shrocks has his full support, what concerns Bill most about the future of the dealership is this new generation has never experienced any really tough times that are bound to happen in a cyclical industry like agriculture.
“This is the third generation to run the business and I’ve read all the studies of what happens to a lot of family business by the third generation. I believe the boys can work their way through this,” says Shrock.
“On the other hand, what concerns me even more is this generation has never seen anything but double digit growth year after year after year. I’ve been doing this long enough to know that it’s not going to continue and that sometimes concerns me. I think you have to go through it to know how to deal with it.”
But like the two generations before, Shrock believes that a strong faith in the Lord, hard work and treating customers right will see them through even the hardest times.