Lee Rogness, the dealer-principal of Interstate Inc. (Fergus Falls, Minn.) before selling to RDO Equipment Co. in 2008, knows the power of shortlines. His business “survived on shortlines” during transitions between majors in the tumultuous 1980s, before Interstate inked a contract with John Deere. “We lived on shortlines,” he recalls. “And then we took on Deere and we made money on both and had good market share.”

In 2009, Rogness was charged with the oversight and management of all ag shortlines for the firm’s 28 agricultural stores. Though Rogness is now retired from this position, RDO continues to use Rogness' shortline strategy when evaluating the performance and potential of new shortlines. The RDO Shortlines office is located on the mezzanine level of the same Fergus Falls, Minn., location he previously ran as dealer-principal.

It’s a big job for an office that oversees hundreds of suppliers to meet the needs of customers from the orchards of California to the big grain producers of the Dakotas. The key, he says, is applying and controlling a process that works for most needs. RDO's shortline strategy is driven by a motto of the 5 P’s: processes, protocols, procedures, people and profit.

Lee Rogness, the dealer principal of Interstate Inc. (Fergus Falls, Minn.) before selling to RDO Equipment Co. in 2008, knows the power of shortlines. His business “survived on shortlines” during transitions between majors in the tumultuous 1980s, before Interstate inked a contract with John Deere.

“There are a lot of dynamics to shortlines, and they must be administered in a totally different way from your major line,” he says. “A lot of dealerships could make shortlines work for them if they’re ready to deal with the many administrative elements involved for each of the manufacturers.”

RDO has worked diligently to find common ground between its needs and that of their suppliers to make it easier to do business with one another.

Lynae Rusch, administrator of the RDO Equipment Shortline Office, explains, “We couldn’t practically accommodate every need of every supplier and they can’t do it 100% our way. We’ve looked to find a way to adapt to our vendors, meet in the middle and thrive with our shortline business.”

Shortlines Office Origins

As part of RDO’s acquisition of Interstate in 2008, Rogness remained as store manager for 6 months to assist the company’s new employees in the transition.

Success in Shortline Machinery is a new regular feature in E-Watch, our bi-weekly e-newsletter. It is brought to you by Versatile.

Versatile, celebrating 50 years of 4WD production, is a full-line equipment manufacturer known for building products that are simple, reliable and easy to service and maintain. Versatile is seeking independent-minded dealers capable of selling and servicing equipment for large scale farming operations. If you want to add more horsepower to your bottom line, contact Alan Graff at agraff@versatile-ag.com or (920) 819-9039.

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As RDO got deeper into Interstate’s performance, they saw a larger than normal ratio of shortline to mainline sales. “It prompted more discussions about how we leveraged that to our advantage,” says Rogness, citing the big numbers in shortline products such as grain carts, material handling and corn heads it had at the time. “With shortlines, your area of responsibility (AOR) is extended — usually half the distance to the next dealer of the same product — and we were doing business with other makes of equipment, and with other dealers. Shortlines gave us a larger AOR.”

RDO had determined that if it was going to maintain and grow its shortline business, dedicated resources were needed. After helping the Fergus Falls employees transition to RDO, Rogness took on the role of leading the newly-formed Shortlines office.

How It All Fits

As at many fast-growing, multi-store groups, shortlines at RDO were akin to the “Wild West.” Every store and every regional manager was doing it differently and continuity and consistency was hard to come by. “When a salesman is confused about the price, product information and who the contact is, it’s a challenge,” says Rusch. “When that happens, it’s easier not to sell that shortline product.”

Rogness adds that the information piece becomes vital to the process. In 2009, he and Rusch started conceptualizing an employee Web portal that would become the organizational and communication channel for all shortline products (see below). “There’s now continuity throughout the operation and all employees have access to the same information at the same time,” says Rusch.

The Shortline Office's role is to use the processes and procedures established by the RDO Field Support Office (FSO) to “connect the dots” on shortline products and assist and give energy to the sales function throughout RDO.

Much of their job is detailed work, communication and follow through — on the front end. “We've work hard to get good data and the same level of detail and specs that a salesperson is used to seeing on their new John Deere tractor or combine order,” says Rogness. “Good data in the computer is good data forever and will follow the unit wherever it goes.”

Imperative to the information element is cost data. “If costs are known and accounted for, the sales team will make good selling decisions,” says Rogness. “On the other hand, if a lack of information causes too tight of a margin, it won’t take them long to quit selling it.”

The Shortlines office has come up with predictable pricing based on proven inventory costs so the salespeople have confidence in the pricing. “Our objective has been to get constant pricing upfront — taking out the highs and lows — that will be good throughout the year,” he says. Regardless of the time of year the sale is made, the salesmen know the pricing, he says.

The head of the Shortline office reports to the Division Manager of Ag Support and provides a weekly report to communicate what they are working on and why. Today, Shortlines revenue is about 4 times higher than in 2009.

Shortlines: Not ‘Fill-Ins’

Rogness agreed with the tenet shared by proponents of specialty equipment — that shortlines give those farmers loyal to another color a reason to come into the dealership, and an opening for a broader relationship. “RDO's account managers are responsible for their customers, to add prospects and to find those conquest-sale opportunities. We've told them, ‘You’ve got a right to drive up that driveway.’ Because with the shortline, you have something to say when you get there — you don’t have to attack their pride-and-joy tractor, combine or sprayer.’”

Yet most dealers, he says, still treat shortlines as a secondary, or fill-in, product. “If you work and promote them, shortlines are ongoing opportunities.”

Rogness believes that a choice helps the sales process, and as a result RDO offers options in most specialty equipment categories, usually with 2-3 lines.

Pictured in front of a sampling of manufacturer-provided brochures, Lynae Rusch is the administrator of the Shortlines office at RDO Equipment Co. She is the liaison between salespeople and their shortline manufacturers, and oversees and updates an Internet-based employee portal to make information easy to access and to ensure accuracy and consistency — a challenge with the number of manufacturers involved.

He explains that RDO works hard to create an environment where customers are happy with the John Deere product and don’t seek out a competing choice. But if there was a true demand for a product from an outside line, Rogness says, RDO would be studying it and making a determination if it has the critical mass and opportunities in repeat sales to bring it on.

Good for Manufacturers, Too

After joining RDO, Rogness saw first-hand the challenge of managing hundreds of shortlines within a large dealer group. The shortline manufacturers who knew Rogness well shared their frustration about getting lost in a large-store pond. Because of a lack of stock and PO numbers (“not workable in RDO system,” he says), incomplete paperwork could end up in a “black hole.” The problem was that manufacturers didn’t know who to call to get it resolved.

Processes were needed to streamline everything on both the front (where accuracy can be controlled) and back end, and that’s where he and Rusch came in.

Now, when sales orders and specs are built into the PO, which is done only once, Shortlines has a final record of it. Because of the IT work that was built in, the PO-building process includes specs, price and all details needed to see that the ordering, delivery and payment are done correctly. “If everyone, including us, follows the system,” says Rusch, “we won’t hear anything more; that means everything was executed as planned.”

Rusch adds that the centralized command is appreciated by the manufacturers. “The vendors and their territory reps like having someone to go to. You can imagine how we couldn’t expect all our people at the store to know all the answers on all manufacturers we represent. Likewise, if our store people needed something from the manufacturer, they may not know who the right person is at the plant. Because of our system, our people and the manufacturers come to Shortlines knowing that we’ll have contacts on both sides. It removes frustration and maintains goods relationships.”

Employees throughout RDO have also learned to answer manufacturers by saying, “Send it to Shortlines — they’ll help you out,” says Rusch. “The FSO is happy for all shortline details to land here because we’ll handle it. And if there’s a problem with an invoice not matching the PO, we know how to get to the bottom of it.”

John Deere isn’t likely to promote the idea of a dedicated shortline department, but Rogness says the system is good for Deere because of the transparency. “We have an excellent relationship with our rep and talk about it.

“So it’s good for John Deere too because they don’t have to watch us or wonder what we’re doing — it’s all upfront. Sure, they want to be exclusive and most of what we do is not competitive, but where there is overlap in a product based on customer preferences in a region, they know about it and why.”

Line-Adding Decisions

When it comes to decisions on shortline products, Rogness says he tried to “drive it from the bottom up instead of the top down.”

He would come into the picture if/when there’s awareness there’s a void in a segment or with a product. “We'd look into whether we’d best meet a specific need through a shortline product. Sometimes Deere’s got something in prototype stage that’s close to production, and in some instances, that may meet customer expectations.

“We tried to pay attention to product development. We could sense whether a new product would address the deficiencies identified. So at the end of the day, we'd either conclude a product meets the current market demand, or if we need to pursue the next step. Sooner or later, the producer is the one who ultimately makes that decision — they’ll tell us.”

Shortlines have also been known to showcase new farming practices and alternatives to RDO’s customer base. The European-style compact discs are one example, he says. “We didn’t bring it on just as another piece of iron; it gets discussions going on alternative ways to get that black soil, keep the soil structure, maintain the bottom and highlight the environmental and economic benefits. These kinds of things have a place in a larger farming program.”

Shortlines Web Portal

Below is an overview of some of the key elements with the Web-based employee portal that all RDO personnel can log into to access information on “all things shortlines.” The system will soon undergo another evolution, but here is a sampling of just a few of the key informational points that RDO employees can access.

'Connecting the Dots'

Web Portal Sign-In – Resources available to dealership personnel on shortline equipment. Click here to enlarge >>

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Product Search List – Quick reference to lines in each segment that employees have access to. Click here to enlarge >>

Product Publications – Distributed weekly to keep personnel aware of specific products at key times of year. Click here to enlarge >> 

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In addition to an array of enterable forms (demonstrations, product registrations) and manuals, the Internet-based portal is a clearinghouse of information of “all things shoreline.”

Product Search — Here, salespeople can easily see some of the common lines that RDO has to offer in an alphabetically organized product category, such as augers, beet lifters, beet toppers, etc. There are typically two brands available in each product category.

“It’s a resource for dealership employees which spans every experience level and background, to see what choices we could help the farmer with,” says Rogness, noting that the list is always changing. If a farmer arrives with another line in mind, the list will help the salespeople readily identify an alternative brand RDO has access to and can present the merits of why the company inventories that particular brand.

Manufacturer’s Info — Listed here are updated contact info for the manufacturer contacts, locations and confidential info on terms, discounts, ordering, etc., as well as the official dealer log-ins and passwords for each manufacturer. The employee portal also is home to any incentive programs from the manufacturers. “It all goes onto the portal for one go-to-place — not only to know about all programs, but to know where to find them,” says Rogness.

And because time is spent on informing manufacturers of what is showing on the portal, they find additional champions in their shortline reps. We hear them saying, ‘Check it out, it’s on your portal.’”

Literature, Publications & Advertising — Each Monday, Shortlines sends out a 1-page PDF “Product Publication” that highlights a specific shortline product. Formatted into a consistent, easy-to-understand layout with photos and talking points, these pages keep shortlines top-of-mind with the salespeople who have many products and brands to stay abreast on.

The ability of the salespeople to easily locate the same ad message the customer saw is also useful, says Rogness. “The customer might recall seeing an ad but not the specifics. Because the ads are also on the employee portal, salesmen can go in and instantly see what the customer saw — without having to stay on top of every ad slick that may have run in the paper. Salesmen don’t like it when they’re caught off-guard,” he says.

Product Registration & Warranty Form — “Every manufacturer has something different and makes the registration available in a different way,” says Rusch. “Some registrations come in the manuals in the plastic tubes attached to the unit, others on websites only or reply cards that have to be stored and handed out.”

Because there are so many different forms, the Shortlines team spoke with manufacturers about the key, “must-have” info. The result was an enterable, Web-based form with the primary info in one place (the make, model, serial number, size, purchase and delivery dates, and all contact info for the purchaser) that goes directly to the Shortlines. Because it’s used across the board, it’s streamlined and familiar to salespeople. 

Rogness adds that Shortlines developed the system because getting warranties paid first requires the product to be registered, and the company wanted to streamline that problem. “Completion levels still aren’t where we want to be yet, but we’re providing what we can and encouraging it.”

Product Demonstrations — The days of the old dropping off a unit with a farmer to try out on the back 40 for the weekend are over, says Rogness, noting that RDO’s demos are performed by trained personnel and with objectives and costs outlined.

Documenting the demo, which is streamlined through the company’s online form, is an important piece. Included with the dates, personnel, serial and stock numbers and other key information is a statement of who was present (the owner, the hired man, the neighbors), the type of demo (tillage, planting, etc.), a description of conditions (wet/dry, standing corn stalks, stubble, etc.), the general results and the prospect’s reaction.

In addition to all the obvious benefits that can lead to sales, it also helps with manufacturer programming. “If the manufacturer knew we were demonstrating a unit, they may decide to occasionally give us demo credits to help move a unit out of inventory and into retail,” says Rogness. Rusch adds that the system makes it easy to know whether they’re at the demo levels to earn those credits. “I forward these reports as they come in so the manufacturer knows what we’re doing and how their unit is performing.”

She adds that because a John Deere tractor accompanies tillage demos, the information gathered up by the form is of more use than to just that shortline product.

Parts & Service Manuals — RDO has started storing shortline parts and service manuals on the employee portal as a “go-to” location. While still a work-in-progress, the online storage of these manuals increases customer satisfaction because personnel can get their hands on them quickly at the parts counter or email them to the customer in real-time.

Pricing — For products within RDO’s inventory, salespeople utilize a separate inhouse business system with CRM capabilities that RDO developed last fall. For requests not in inventory, they use the employee portal to develop a quote. They’ll open the manufacturer’s price book within the portal and see a lead page with RDO’s discounts to see what to apply to the price book. Rusch says PDF software allows her to box and highlight specific pricing.

In the next evolution of the employee portal, and with more real-time pricing, the portal may no longer have price books but a log-in to the manufacturer’s site. In the meantime, however, they have it covered. Because Rogness worked to instill a culture of “Send it to Shortlines,” the salespeople notify Shortlines as they come across any pricing or program changes. Because of the volume of vendors RDO works with, that communication is critical, says Rusch.

Rogness is pleased with the interconnectedness that the portal provides. “That’s where we hang our hat — how fast and easy our people can find the rep, the phone numbers, etc. Of course, this and how the pricing information can be found for quick response.”

And while Rogness and Rusch are there to answer questions via phone or email, each question allows them to point to a Web link to help find the answer — and other information — on the portal the next time it arises. It then becomes a teachable moment, says Rogness.

Success in Shortline Machinery is a new regular feature in E-Watch, our bi-weekly e-newsletter. It is brought to you by Versatile.

Versatile, celebrating 50 years of 4WD production, is a full-line equipment manufacturer known for building products that are simple, reliable and easy to service and maintain. Versatile is seeking independent-minded dealers capable of selling and servicing equipment for large scale farming operations. If you want to add more horsepower to your bottom line, contact Alan Graff at agraff@versatile-ag.com or (920) 819-9039.

 
 
Originally published in 2015