AEM RELEASES REPORT "THE OEM-CUSTOMER RELATIONSHIP IN AG: WHERE IT STANDS AND WHERE IT'S HEADED"
Jul. 16, 2020
Association of Equipment Manufacturers (AEM) reports:
Milwaukee - The relationship between ag equipment manufacturers and the customers who use their products is a complex one, and there is no shortage of factors poised to influence how that relationship will evolve - for better or worse - in the not-too-distant future.
Manufacturers today are feeling the pressure to meet the changing needs of equipment end users, as well as provide the necessary support their customers need to get the greatest possible return on their investment in the machinery they purchase. And, according to a recent AEM research report conducted by Clutch, three takeaways regarding the OEM-farmer relationship have become abundantly clear:
• Working with customers directly, an OEM can develop a knowledgeable, personal relationship of individual customer needs today, but it takes time.
• Most manufacturers are not able to do it on the scale they need for the relationship to dramatically change. However, positive strides can be made by engaging in various forms of outreach (field days, webinars, social media, etc.).
• Manufacturers have to be very cognizant of who "owns" the relationship, and they need to ensure congruency with their dealer network.
It's becoming more and more important for ag equipment end users to purchase the right equipment at the right time. Sixty or 70 years ago, the purchase price of a tractor ranged between $1,885 and $4,850. Now, however, a tractor of a similar size can be as much as 10 times the amount. As a result, how farmers approach equipment purchases is far different than the generations that proceeded them.
According to Clutch's research, customers today are more demanding on cost of acquisition. They are more demanding on quality. They are becoming more educated about the products available on the markets today. And it's no surprise why. Advancements in technology have greatly impacted the ways in which equipment is run, so much so that it can sometimes seem overwhelming. As a result, it's critical for farmers to be made to feel comfortable about how a piece of machinery works and - perhaps more importantly - how to best use all of its features and capabilities in order to get the most out of their substantial investment in it.
The customers of today are also asking for a greater level of service than ever before. After all, farmers simply cannot wait several days for equipment to be fixed. Weather doesn't wait for them. So, when equipment breaks down, fast and effective solutions are needed.
The Evolution Of Farming
As ag equipment continues to evolve with time, so does the practice of farming. The Clutch research found farming is becoming more and more localized. It used to be that every farm field was viewed as the same, but now many farmers divide fields up into different sections. As a result, identifying and implementing universal solutions is proving increasingly difficult. In addition, the research found a number of factors will play a significant role in how farming will continue to evolve, including:
• Different geographic pressures
• Urban sprawl
While all of this presents challenges for end users of ag equipment and those who manufacture these products, it also presents a unique opportunity for the equipment manufacturing industry. With advancements in new technology comes the option to tailor it to a farmer's specific needs. And, as precision farming becomes a more widely adopted practice, the days of 20 or 30 years ago - where almost every farm in a particular region was viewed as being more or less the same - will be firmly in the rearview mirror.
Meeting Customers' Needs
Simply selecting the right equipment they need is becoming an increasingly difficult - and complicated process for farmers. Manufacturers are taking notice, and they feel the pressure to help farmers make informed purchasing decisions.
According to the Clutch research, 95% of farmers utilize a dealer at some point during the equipment buying process. It seems safe to say the dealer is always going to be a key part of the purchasing process. However, the data shows the responsibility is increasingly falling on the manufacturer to ensure its dealer network is fully educated and aware of new trends and technologies. And, perhaps more importantly, it's ultimately up to the manufacturer to maximize the dealer relationship to help better serve existing and potential customers.
However, as equipment becomes more advanced and customers further educate themselves about what's available, many manufacturers are having trouble meeting customers' needs, the research finds. Specifically, the Clutch data shows:
• Manufacturers are finding it difficult to train a sufficient number of people that can interface with the customer, in the way the customer expects.
• Acquisition decisions are now so complex, the understanding necessary to counsel a client is deep and not quickly or easily acquired. Experience and intelligence are needed in a variety of areas.
• There's no overstating the importance of the ongoing support required to ensure the customer gets what he or she needs for the life of the purchase.
Today's customer wants it all. As farming becomes more localized and customers' needs for customization continue to increase, the relationship between OEMs and equipment end users will only grow in complexity. Many manufacturers today are trying to respond accordingly and anticipate the ever-changing needs of the customers they serve. However, ultimately what matters most - and what will continue to matter most - is just how effective OEMs are at supporting farmers' efforts to secure the greatest possible ROI on the equipment they purchase.