In this episode host Casey Seymour of Moving Iron LLC sits down with Charles Anderson, CEO and founder of Arrow.
The two talk about how advancements in technology have changed the way growers research and buy equipment.
They also talk about how Tesla is changing the car buying experience and if and how that could translate to farm equipment dealerships.
Watch the VIDEO REPLAY of this podcast.
Full Transcript
Kim Schmidt:
Hi, I'm Kim Schmidt, Executive Editor of Farm Equipment. Welcome to Farm Equipment's Used Equipment Remarketing Roadmaps Podcast. In this episode, host Casey Seymour of Moving Iron, LLC sits down with Charles Anderson, the CEO and founder of Arrow. Let's jump in as Casey and Charles talk about the changing behaviors of farmers and how they're researching and buying equipment.
Casey Seymour:
I have Charles Anderson here with me. He's the CEO and founder of Arrow, and he's a guy that I've seen the privilege of knowing here. He's a smart guy, knows a lot of different stuff and he is really trying to look at the way the things are being done now and positioning things for the future. So Charles, how you doing, man?
Charles Anderson:
Yeah, Casey, what's going on? Good to see you. I'm the co-founder of Arrow.
Casey Seymour:
Co-founder, okay.
Charles Anderson:
And it takes a village. There's a bunch of us, but thank you. It's good to see you. It was great to see you in Nashville a few weeks ago too. That was awesome.
Casey Seymour:
Yeah, I'm glad you can make that down there. I know you had a tight schedule and I appreciate the fact that you could get out there and give your presentation.
Charles Anderson:
Oh, I loved it. I mean, such good people in the audience. It's a unique group of I'd say like-minded people in the equipment industry who are trying to change the business and change the model and push forward. So it always makes for a fun conversation.
Casey Seymour:
Yep. And the reason that we try to push and change so much is because of what our customers' demands are, and what that looks like. I think you can see that when I first started doing this back in 2000, I got in the actual equipment business in 2006, and I had a few other jobs that led up to my stint here in the equipment business, but it was the early 2000s. And I remember going out and seeing customers and talking to them, and some of those customers really embraced the idea of the internet and thought, "Hey, this is great. We can do so much more and be so much more connected to what we see happening. The way we do business now is becoming easier and easier to have contact with our customers."
And some had the whole, "The internet's a fad, and it's going to go back to the way it was." And I'm sure somebody somewhere said, "The tractor's a fad. We're going to be sticking with horses forever." Actually-
Charles Anderson:
That's true.
Casey Seymour:
... one of the CEOs of John Deere did say that, I mean, a long time ago. That was one of those turning points of time. And I think what you see now with what Tesla's doing with how you buy houses now, so much of the stuff that you're doing is so internet-driven in the way that you deal with your customer, the way you look at your customer, those kind of things.
I've said for a long time I always wanted my goal to be I wanted to be the first guy to sell a combine on Amazon. So hopefully, that'll happen, and I can put my name in history for that, but I think it's not that far away that I can do something like that. So-
Charles Anderson:
Yeah, no, I think it's such a fascinating-
Casey Seymour:
What's your thoughts, man?
Charles Anderson:
Yeah, it's just such a fascinating shift with what we do. And I wish I knew why. I don't know if it was because of COVID or because technology caught up or something, but I've been studying the metrics with how this buying behavior has changed for 10 years now.
And everything is different from before COVID and after COVID. And I don't know if that's because the Baby Boomers are getting older and their kids are now starting to make purchase decisions, but something has really turned where people are starting their search for equipment on their phones. And when that happened, all of the math changed.
So it's interesting, I don't even look at it as internet or not anymore. It's a given that the majority of people have some version of a smartphone today. So that's a given, so it's more of a how are you doing your research to figure out what you're going to buy, and that's going to dictate the next step much more than internet or not. So that to me is an absolute foregone conclusion. I don't know, what do you think?
Casey Seymour:
I still run across a customer or two who still have a flip phone and they're fighting that tooth and nail, but they may have a flip phone, but somebody in their organization somewhere has the smartphone, and understands how to use the internet and understands the power of what's going on around them.
They're just more directing that customer around. From a podcast perspective, you can look at my podcast numbers and my podcast numbers go up between April and June, and that's planting season and early in harvest. They taper a little bit and they start to pick back up during fall harvest and you see the same peak there and you see that same peak ride all the way through until about January. Then you start seeing some people fade off, but it's the same-
Charles Anderson:
Fascinating.
Casey Seymour:
... system that you see the buying pattern too. I mean, it's the same thing. So it shows you that more and more people are in the cabs of these tractors that are for all intents and purposes, fully autonomous, they just need to have someone monitor inside the tractor, and they are out making those buying decisions. You see people doing that. I mean, it's not like-
Charles Anderson:
True.
Casey Seymour:
... they're just in there watching movies or whatever. I mean, they're doing stuff while they're in there, listening to things, looking stuff up on the internet, all these different things they have going on around them. So, you're right.
Charles Anderson:
One question for you on your flip phone customer or customers, however many it is, do those customers text from their flip phone?
Casey Seymour:
Yeah, they will. They don't like doing it, but they will. Yeah.
Charles Anderson:
So in today's market, actually, I quoted you in my presentation at Moving Iron, you closed a multimillion dollar deal over text message in 2021, right?
Casey Seymour:
Right. Yep.
Charles Anderson:
So to me, maybe smart phone was the wrong way to say it. Maybe cell phone was the right way to say it, is that people are using their cell phones today to figure out what they're going to buy and how much they're going to pay. Would you agree with that, or do you see it differently?
Casey Seymour:
Oh, 1,000%. I mean, what you're carrying in your pocket is not just a phone. That's just such a small part of what it actually is. I mean, it's a mini-computer in your pocket. All the stuff on my cell phone, I have an iPhone, so everything on your iPhone I can do, for the most part I can do on my Mac. There's a few things you can't do, but I mean, for the most part, I can do an Excel spreadsheet on my phone. I can look at stuff on the internet, and all those kind of things.
A funny thing, my wife and kids and I were sitting up in the living room last night talking about something and we were trying to remember a fact, and I don't remember what we were talking about. And I looked at all of us and we all had had our phones within arm's length of where we were at. I'm like, "Somebody pick that up and Google it real quick, and then we could figure it out real fast." I mean, the information of the entire world is at your fingertips. You just type some numbers, and you're good to go.
Charles Anderson:
Yeah, and how you consume that information is personal preference. If it's an article you're going to read, if it's a video, if it's pictures, there's filters at the top of Google for you to consume the information with how your brain works best, which is crazy.
Casey Seymour:
Yep, totally there. The information you need to solve whatever issue that you're looking at is literally at your fingertips. And just like you said, if you need to see videos, YouTube, I don't watch YouTube for anything much other than trying to find... If I need to fix something, I'll Google it and go to YouTube and how do you fix a whatever, and run through the things.
And it's amazing what you can find there, how much information is there for free as long as you can do what they're asking you to do. And just getting that information out to people, and the way it's done now is I'm doing something with my son's truck the other day, I don't remember even what it was. An electrical thing, I don't even remember what it was, but there were 40 videos on the exact same thing by 40 different people showing you how they did the exact same thing.
Charles Anderson:
Right.
Casey Seymour:
And it was all from a different angle. So I think I watched 25 of them, and there are quick two-minute to five-minute videos on how to do whatever I was doing. But you think about that. You put that into true dollars, that probably saved me 200 or 300 bucks of diagnostic time at the garage to getting my son's truck looked at.
Charles Anderson:
No question.
Casey Seymour:
You know what I mean? So it's little things like that, that add up so quick, and it's just there for the taking.
Charles Anderson:
And the people who create the videos are very enthusiastic about what they're doing. They love their equipment, they love their process. Sometimes they're paid for doing it, but most of the time, they just like creating the content in exchange for a thumbs up on their video. It's crazy.
Casey Seymour:
So it comes back to how as a dealership, how do we capitalize on that? Here's some free for something down the road that we need to capitalize on that. And I think that's something, like the slide you have up here of Elon Musk, he's done a good job of capitalizing on here's a little bit of free, and then here's how I'm going to make my money. And I think you're starting to see more and more of that, where people, it's almost like a partnership of sorts.
I mean, I know [inaudible 00:09:21] buying is always a partnership, but it's more of a real life, "I'm going to do this for you, you do this for me, and we'll meet in the middle and we'll both be happy." And it's that partnership, I guess is the best way to put it.
Charles Anderson:
I really enjoyed the conversation at this year's Moving Iron Summit and thanks for the privilege to speak again. I have a lot of good follow up questions on the topic of what does the future of the dealership look like?
And I don't own a dealership, we're not a dealership ourselves. But we have been delivering software for dealers for 10 years now, so I have a lot of experience thinking through not the dealership model, but from the customer's perspective, how that customer ideally would interact with the dealer. So I thought this was a really relevant several minute conversation, I wanted to share some of the things that I've learned by studying Tesla because I think in a lot of ways, Tesla is similar and the auto industry is similar to dealerships.
In a lot of ways, it's completely different. So I thought it would just highlight some of those quickly, and thought it'd be relevant for your audience, if that's okay?
Casey Seymour:
Absolutely. Sounds great.
Charles Anderson:
Sure. So this is an Elon Musk quote, and he said this a couple years ago. And he said this obviously after Tesla was already proven, and I'll read the quote for those who don't have the screen in front of them, which is, "The problem with car dealerships is you've already decided what you want to buy before you even go there. You're really just going there to talk through some sort of annoying negotiation." You're going there to have an annoying negotiation, and if we're honest with ourselves, I don't think anybody enjoys the process of buying a car.
Casey Seymour:
I hate it.
Charles Anderson:
You hate it, right? No one has said for a long time, "Man, I just love buying a car." It doesn't happen, unless you know of someone. I've never heard that.
Casey Seymour:
I've never heard anyone say that.
Charles Anderson:
So the counterargument to that is I think we all enjoy looking for a new car, the process of searching online for a new car. Would you agree with that?
Casey Seymour:
Yeah. The excitement of finding the new car is great. Yes.
Charles Anderson:
Right. The joy, the enthusiasm, the images. So what I think we take away from this, and one of the cool things about equipment versus the auto industry is that in the equipment market, there are massive manufacturers who have built things that are not going to be displaced.
You're not going to displace Deere, you're not going to displace CAT, it's not going to happen. They have such a head start and they have over 100 years of proving that there's a best way to do it. So you're not going to invent an electric tractor that's going to displace what's already out there unless you're Deere displacing your own products, but we can look at the parallels, because Elon has done a lot of things that basically helps us to see how has he solved for the buyer? Because the person buying the Tesla is the same human being as the person buying the tractor.
If you haven't seen a Tesla dealership live, and I live in Los Angeles and these are all over the middle of the country and the coasts, if you haven't seen a Tesla dealership live, I'd encourage you to go to a mall in Los Angeles, in New York, and walk through this experience. And when you walk into the Tesla experience, and I know that Deere is working on something like this as well, walking into a Tesla dealership is like casual shopping at the mall where you're going not to order the car but to window shop what the vehicle's like. Have you ever been to one of these Tesla dealerships?
Casey Seymour:
I've walked by them several times, but I've never actually been in one.
Charles Anderson:
It's wild. And-
Casey Seymour:
You know why I've never been in one? Because I hate the process of buying a car, so that's my first assumption, that as soon as I walk in there, there's going to be someone trying to hard sell me on something as soon as I walk in the door.
Charles Anderson:
So funny. So I've never bought a Tesla before. I have gone through the experience and I do know that you actually, if you were to walk into a Tesla and you were to buy one, and I'll show you what the process looks like. It's all digital. You actually sign the loan docs inside the Tesla on the screen. I'm going to skip to the end here, but you're focused on reserving your vehicle, not paying for your vehicle.
So a question for you, if you can share this, awesome. If you can, then talk in generalities, your dealership that you work for, what percentage of your new assets do you have sitting out in the yard right now?
Casey Seymour:
For sale or stuff that people have bought, or what do you mean? Just in general?
Charles Anderson:
Available to buy, yeah.
Casey Seymour:
Oh, right.
Charles Anderson:
If I wanted to buy a brand new, call it 2022, do you have any available 2022s right now?
Casey Seymour:
No.
Charles Anderson:
No? Zero?
Casey Seymour:
Not that are useful. Yeah.
Charles Anderson:
0%?
Casey Seymour:
Yeah. Yeah.
Charles Anderson:
Okay. So then if that's true, if I wanted to buy a new tractor, I'm buying something that doesn't exist today, is that true?
Casey Seymour:
That's a fair statement, yes.
Charles Anderson:
Okay. How do you do that today?
Casey Seymour:
You go through the whole quoting process, and the building of the equipment online there, and you send a quote to the customer and they look it over and talk about the trade-in, and those kind of things and go through that process, and then when you get to the end, you send it to them. And more times than not, you do an electronic signature type deal, DocuSign type of thing. But I mean, yeah, there's multiple steps to it. It's not as easy as just pulling it up online and checking a box.
Charles Anderson:
No, and my point of that is to show that Tesla figured this out years ago, meaning what you just described Tesla figured out probably seven or eight years ago, which was I can sell assets that I don't actually have. If I show you a picture of an asset, a PDF, or just a picture, if I show you something virtually or I let you touch one tractor, one Tesla, that's enough information for you to make a decision to buy. You're doing this right now all day long, Casey, where you actually are also selling things that you don't have available based on information about the machine. Is that fair?
Casey Seymour:
Yeah, but I'd also say the reason we don't have machines sitting in the lot right now is truly a supply chain issue. It's not because we do it that way normally. If this was any other year, we might have eight or nine tractors out in front for you to come look at and buy, at each store. You might have two or three combines sitting out there, those kind of things. So typically, we wouldn't have one machine sitting out there.
Like, "This is what it looks like and we can order yours online." It wouldn't necessarily be like that. It would be more of a, "Here's what we have for inventory. If you want to order one, we can, but it's six, nine months from now, if you're going to get it, type of thing."
Kim Schmidt:
We'll get back to the conversation in a minute. But first I wanted to invite you to join us virtually this December 8th and 9th for Ag Equipment Intelligence's Executive Briefing. To learn more and to register, visit agequipmentintelligence.com/executivebriefing. Now back to Casey and Charles.
Charles Anderson:
Now, let me unpack that, because I think that's really interesting because you now have proven, you've proven that you don't need to have an asset sitting on the yard in order to sell it. Would you agree with that?
Casey Seymour:
I agree, yes.
Charles Anderson:
Okay. And that's the same thing that Tesla proved as well. So do you think as supply chain gets worked out in call it 2024, 2025, who knows? When the supply chain chaos is now solved, do you think that dealers are going to skew more towards what it used to be, which is order inventory, let it sit, and I'll have eight available and you can come pick one, or do you think it's going to stay more in this direction of pre-order it and deliver it when it comes available?
Casey Seymour:
I think in the farming business and the equipment business, you'll have more of a hybrid approach to that than you will-
Charles Anderson:
Interesting.
Casey Seymour:
... the consumer end of it. And the reason for that is the majority of the equipment that people buy, they know they need, but there is the, "My combine caught on fire and burnt to the ground. I need another combine now." So that's going to be one of those just-in-time inventory type things, I think a little bit to some extent. Hay tools or something like that too, where you have... I hate to say that a baler's an impulse buy, but a baler, a $60,000 baler, a $40,000 baler, coming to buy that because the one they had, it blew up and they needed to get a new one to get through the last cutting of hay type of thing.
Some of that will be planned purchases, and I think that's going to be 75 to 80% of the overall approach to what we see now. And that last 25 to 20% or whatever that is, that'll be some kind of, "We've got this one you can have, that's your choice or we can order you one," type of thing. But it won't be like it was in the past where... and the reason for that too in my opinion is we're talking about some serious dollars sitting here on for planting, interest. You're talking about if you have five new combines sitting out there.
Charles Anderson:
You're saying for the dealers?
Casey Seymour:
For the dealers. So if you have five new combines sitting out there, you might've got two and a half million dollars' worth of equipment out there at four and a half, five, 6%. Who knows what interest rates are going to do? Next thing you know, you're paying some real money every day in actual interest costs. So it's not like it was 20 years ago, where you had a piece of equipment that was a tenth of what it costs now. So now, you're really-
Charles Anderson:
Especially with interest rates going up too.
Casey Seymour:
Yeah, and that's a big problem with that. I think the overall approach to the way the dealership looks at business and also the way the customer looks, because the customer doesn't want the machine any earlier than they can get it either. I mean, they want it to show up just in time to get it set up, ready to go for whatever they're going to go do with it.
They don't want a planter to show up in September. They want it to show up sometime between January and March, depending on when they start planting. Because there again, it's interest cost to them, what that looks like and those kind of things. Or it's capital expenditures out, and all those things that matter and how all those things flow that there's going to be more of a demand to get things delivered to the customer and to the dealership in time.
I don't want to say just in time, because I think COVID taught us a lesson about just-in-time inventory and what that looks like, but it's going to be more of a seasonal approach of when to start manufacturing that piece to get it out to the customer at the right time. And I think to your point here about those things, that that's going to be more thought out than just showing up one day saying, "Hey, you know what? I need to get a $300,000 something." The "cheaper stuff," $75,000, so I think those are always viewed as an "impulse buy" stuff. But the big ticket stuff will be way more thought out than I think it's been in the past.
Charles Anderson:
So I just want to separate and better understand what you're saying because the customer who is doing the impulse baler purchase, is that same customer doing an impulse tractor purchase, or is there almost no such thing as an impulse tractor purchase?
Casey Seymour:
Probably not on the tractor. The baler impulse thing is because something happened, either they catch on fire from time to time, or it could be just such a catastrophic failure that they want to get it fixed but they just don't have the time to get it fixed because it broke because they were using it, and they need to get the hay baled that they're working with.
So those kind of things I think are more on that. Not to say that kind of stuff doesn't happen with combines, but it's not as frequent as you would think, as it would be.
Charles Anderson:
Understood. Understood. So then unpacking that a little bit more, if your gut is let's say in 2019, pre-COVID, if you can remember that, different world, in 2019, if the typical store had 10 brand new assets sitting on the yard, five were large and five were small, say five tractors, five balers, just for argument's sake, today, if there's 10 sitting on the yard again, how many of those are going to be large purchases and how many are going to be small purchases? With all the information we have, cost of interest, et cetera, et cetera.
Casey Seymour:
I think just in today's market, because the shortage of equipment, those things, I think all that stuff would sell real quick regardless of what it was. I mean, I guess to answer your question, I would say if you had a $450,000 row crop tractor sitting there that just showed up and nobody's name was on it and then someone came and looked at it and said, "You know what? I want to get that machine," they could've been thinking about it for a while, and then here's my opportunity to come get that machine.
But it's not something where they woke up today saying, "I'm going to go buy a tractor today." They've had that in process, in play, trying to find the one they want up until this point. And then lo and behold, here's the one I've been looking for, I'm ready to make a move on this one. Most of that stuff is bought, and this time of year too, I mean, it's end of the year, tax season, all that kind of stuff.
So there's a lot of guys looking to buy stuff for tax purposes and those kind of things too. So there could be some of that, but it was something that they had penciled into a budget of some sort, varying levels of advanced budgeting practices. But that had been on the forethought of their mind for a while.
Charles Anderson:
Got it. So you would say, I'm putting words in your mouth a little bit, but we all as an industry have gotten better, both the customers, the end user buyers, and also the dealers at forecasting, because we've had to. Would you say that?
Casey Seymour:
Yeah, because of the circumstances that we're in.
Charles Anderson:
Okay, that makes sense. And would you say because of that, we're moving closer to just-in-time, not further from just-in-time? We're more to just-in-time manufacturing and delivery than we were before?
Casey Seymour:
Yeah, I'd say so. I think we have set the table for what the new norm looks like when it comes to ordering equipment. I just don't see a dealership just going out and just ordering a bunch of stuff for stock. I just don't see that. I mean, don't get me wrong, it's going to happen. We're going to order stuff for stock, it's going to be there, but I don't think it's going to be on the scale that we've seen before.
Charles Anderson:
So I think that's fascinating. That's where I wanted to get us to, was there is now a structural change with how we as industry think about what's in stock. And everyone has an incentive to be better at forecasting. Everyone has an incentive to make sure that we're only manufacturing what people need and as soon as we manufacture it and get it to the yard, it's being moved as fast as possible.
And the majority of that ideally is being thought through ahead of time. And to me, in everything that you said, Casey, it was all about the customer experience. You talked about their buying cycle, you talked about their payments, you talked about they didn't wake up and decide they want a tractor. You talked about unless they had a fire on the combine, they needed a combine, so there's some cushion in there you need to think through.
But to me, all those things line up squarely with what Tesla solved already, which is educate the customer about the product and when the customer's ready, get the product into their hands as fast as possible. Tesla has not done this perfectly, by the way. There's so many stores of Tesla's where products are on delay. So, not holding them out as a gold standard. What I am pointing to is Tesla is bigger than the largest auto manufacturers in the world, by a lot. Bigger than Honda, bigger than BMW, bigger than Ford, bigger than GM, bigger than Volkswagen, bigger than Toyota.
But they make a lot less cars. They're more valuable than a lot of these companies combined. I mean, they're over 10 times more valuable than Ford, over 10 times more valuable than GM. So the whole point of going through this exercise is to get to this punchline, which is the thoughtfulness that you're bringing to the customer experience is the same thoughtfulness that Tesla brought to their customer experience. That allowed them to as close as possible get to just-in-time delivery by pre-selling the machines based on what customers actually want to buy.
So my point of view is that this will shift how we think about holding things on stock, and the buyers have already changed how they're researching and deciding what they're going to buy next. That's my point of view. Curious if you agree or disagree with that, but that's my early conclusion on this.
Casey Seymour:
Yeah, I mean, I think we're seeing that now. I mean, especially with the generational shift that we see happening across the entire spectrum of any industry right now. I mean, I had this conversation with my mom, she came out and visited me here this last week, and we were talking about generational things. I don't even know how we got on the topic, but it was one of those conversations I had where I was sitting there, I was like, "When you had the difference between your grandparents and your parents as far as technologically advancements go in life, don't get me wrong, there were some very major things, talking from horses to cars. I mean, that was probably the biggest thing that happened in there. But there was a big leap there. But if you start looking at in mechanization, those kind of things, when you look at the same leap between your parents and your generation, it wasn't like there was a huge leap in any really magnificent change in the way you lived your life from the way your parents lived it, to the way you lived it.
Today, now, we're talking me and my parents' generation, they're distinctly different, but they're living in the same situation that I'm living in now. So they're living in the same social media, texting things and everything else. My kids are living in totally different than the way I grew up. When I grew up, there was no... I mean, you just went away and you ran around town all day and then you came back and no one was really concerned if you got hit by a car, or no one was that worried about what was going on with you.
Charles Anderson:
No, they wouldn't get an alert on their phone, like they do with iPhone.
Casey Seymour:
Now, if your kid is gone, you haven't talked to them for 30 minutes, it must be something wrong. I mean, oh my God. So it's like that constant connection that we see happening now, I mean, it's all there, and the difference in technology that my kids are going to grow up with versus what I grew up with is it is going to surpass my ability to be involved in it at some point.
There's going to be some point where I'm like, "Whatever. I'm not getting a hologram phone now," or "I'm not doing all that." Whereas my kids are going to be like, "This is the way of life, Dad, you got to have this to function." And I hear my parents say all the time, like, "You don't need to have a phone to get around." Well, when kids aren't communicating with their friends anymore, they're not doing the same way of communication that I did. We were going out and driving around town on Friday night.
We did that kind of stuff. They're not doing that now. They do it to some extent, but it's not really the same functionality. So I think this generation that we have is they want something totally different than probably what they even know, because of the way technology's speeding up and how it functionally wraps around in your life. I think that's a totally different concept for my generation, the generation that I'm in, and especially my kids' generation.
I mean, it's going to be such a dynamic change in the way technology, the way you buy things, the way you communicate, the way you do anything. I mean, to live in the right city, you don't even have to go to the grocery store anymore, they just deliver it to you. I mean, you order it online and it shows up at your door.
Charles Anderson:
Yeah. And the information, the information that you have now is completely different. It's night and day. We know how long it takes to manufacture fill in the blank. If you order an apple online, you know how long it takes for that apple to be delivered to your house. People used to go to the grocery store, and you'd see them in a few hours. You didn't know where they were. You couldn't Find My iPhone to track them.
There's so much information that is now captured and organized and digested in simple ways for us to figure out when we need what we need, when we want what we want. It's fascinating shit. That's a good analogy with your mom. So does she have an iPhone?
Casey Seymour:
Yeah, she got a Samsung, whatever that is. But I mean, yeah, but it's the same thing. I mean, she does everything on that phone. I mean, it's just the way it is. I mean, there's no turning back. I think it was... Oh, I remember what it was. We were talking about the next generation of the place where she works were coming in there, wanting to put everything on Excel and make it all automated and this, that, and the other thing.
And the people that worked there were like, "Why would we do that? It works fine the way we got things rolling now." And I go, "Well, I hear you, but there is an easier way to do it."
Charles Anderson:
Yes, yes.
Casey Seymour:
So it was a good conversation.
Charles Anderson:
Yeah. Because we as customers are unwilling to have a bad experience. We're unwilling to let my smartphone take 30 seconds to load. It needs to happen right away. I'm unwilling to let that happen. So I'll be fascinated to watch over the next 10 years how that unwillingness will show up with how fast we expect our people to respond to us, how fast I expect my quote to come in.
I expect digital signatures now. I'm not willing to do physical signatures unless that's a special request. That's unique. 10 years ago, everybody wanted physical signatures. They thought it was fraud if it was digital.
Casey Seymour:
Right. Yep. It's amazing how it's changed, and I think technology, I guess you can fight it all you want and you can scoff at it at every turn. But at the end of the day, Charles, you and I both know this. Biometrics on my cell phone, I can use your face and it unlocks it. To me, that was the dumbest thing on the planet, because now somebody somewhere has got my biometric measurements and oh my God, they're going to go do whatever.
One day, I started thinking about first off, I mean, what are you going to gain by understanding what my biometrics of my face looks like? But I mean, it's just one of those things where I didn't want to do that for the longest time, because I didn't really trust what it was doing. Now my kids on other hand, oh, right away, why wouldn't you not do this?
Charles Anderson:
They don't care.
Casey Seymour:
Because it's theirs, you might as well take advantage of it. And I'm like, "Oh, there's repercussions to all this stuff. You going to have to understand what it is you're doing." But I think that's the difference in growing into technology and growing up with technology. Those are two different things-
Charles Anderson:
I like that.
Casey Seymour:
... that you're looking at there. I mean, when you've only been immersed in that your entire life, your ability to adapt and change to technology is nowhere near as hard as if you go from having a flip phone to... I used to think texting was the dumbest thing on the planet. Why would I text you when I can call you? That is so stupid. And now-
Charles Anderson:
I had that same thought.
Casey Seymour:
... no, why would I call you when I could text you?
Charles Anderson:
We have data and we'll get into this over our next few conversations, on how we have tools to help dealers move more online and sell more digitally, but we have data that shows that someone is 40% more likely to respond to a text than a call.
Casey Seymour:
Yeah, I believe that 100%, because I'm guilty of it too. People have called me and I just text them back, "Hey, I'm in the middle of something right now, but what's up? Can't talk to you right now, but text me."
Charles Anderson:
Yeah. Yes. Give the point. Bottom line this for me. Bottom line this for me.
Casey Seymour:
That's part of that other side of the technology thing too, because you remember what dial-up was like?
Charles Anderson:
Oh, yeah.
Casey Seymour:
See, I got internet, my girlfriend had just got internet at her house and I was over there doing a report or something like that. And I remember the page took two and a half minutes to load, and I thought that was the coolest thing ever, because I couldn't have found that information in two and a half minutes in a book.
Charles Anderson:
Yes. It would load like one inch at a time, slowly from top to bottom, and you could see a little bit more and a little bit more, a little bit more.
Casey Seymour:
Yeah, and now if that happens today, you're calling your internet provider going, "What's the problem?"
Charles Anderson:
Oh, you are pissed.
Casey Seymour:
"What are you guys doing to address this?" You're just so fired up, so, yeah.
Charles Anderson:
You're demanding a refund. Yeah, but the same thing is happening with our experience of how we buy things.
Casey Seymour:
Yep, that's exactly right.
Charles Anderson:
Your customers are not willing to wait for a minute to two minutes for your quote to load. They're not going to wait. They're going to find another option.
Casey Seymour:
Yep, and we're seeing that. We've seen that on so many different surveys and stuff that we've put out there about, "It took your sales guy four days to get back to me with a quote." Well, that same guy that took four days, when he was dealing with dad, that was perfectly fine. You know what I mean? Now, he's not dealing with dad, he's dealing with son. Son wants it that afternoon, and it's just like... Well, you've seen the stuff, you get the email about, "I'm interested in buying X," and it comes across the thing.
If you don't respond to that in the first three minutes that you see that come through, they've moved on and went to somebody else and they've already bought something. It's amazing how fast the speed is. But back to your thing there, when you go to the car dealership, you're already 85% sure of what you want. Maybe even more than that. You're just looking to go check a few boxes, just to make sure that's exactly what it is that you want.
Charles Anderson:
That's it. That's it, but that's what's so special about the heavy equipment market, especially the ag market is you're somewhat just checking to make sure that the person that you know and trust, that the Casey that you know and trust is giving you the thumbs up that it's the right decision.
Casey Seymour:
Right.
Charles Anderson:
It's not what it was five years ago, where you were going through some dumb negotiation. It's somewhat already pre-negotiated. You're really just saying, "Yeah, this is the right machine. For your business strategy and what you're trying to do, we think this is the right machine for you, and we agree with your decision." And they're looking for that stamp of validation, because they know you're going to be there for them if and when the combine catches on fire and then you got to bail them out.
Casey Seymour:
Right, yeah. And I think that's a good point, is now we have so much data that we can draw off these machines to show how much you've actually utilized the horsepower range that you're using, and how much idle time that they have, how much work time that they have. All these different metrics that you can sit down and talk to a guy with, and unfortunately, the hours of depreciation are the same whether it was at work or at idle, and some of these machines, we see they've idled for 60% of the time.
And you look at a 200-hour machine and 40% of that timeframe was at work, man, that's a lot of hours that you just let it sit there, that you're paying for. And I think that's another option, and I think that people are growing more accustomed too, because that used to be, "That's just big brother watching me do what I'm doing. If you can see where it's at, so can somebody else." And that's gone away too. So I mean, again, I think it goes back to that growing into technology and growing up with technology are two different things.
Charles Anderson:
It's a different market. Interest rates are going up, we have to be better. There's less margin there. Things are getting more expensive. Pick your poison, either inflation is going up or interest rates are going up. Either way, things are different. We have to be that much better at serving our customers right now.
Casey Seymour:
That's right. 100%. Well, that's a lot of good stuff right there, Charles. If you were to wrap this up and put a bow on this, what would be your synopsis of what we talked about so far today?
Charles Anderson:
My conclusion right now is that how people buy has changed, how people research has changed, and because people now start their research for what they want to buy over their phone, if your selling experience is not set up for how people are buying, then you're behind the curve. So through these series of conversations, I want people to understand how we have built tools for the dealer to allow them to sell in the way that their customers are now buying.
Casey Seymour:
Right on, man. Well, good stuff man. I love having these conversations with you, Charles. If folks want to reach out to you and get more information about what you're doing over at Arrow, what's the best way to do that?
Charles Anderson:
Email me please, Charles@heyarrow, H-E-Y-A-R-R-O-W.com.
Casey Seymour:
Right on. Charles, appreciate you being on the podcast, man.
Charles Anderson:
Thanks, Casey. Talk to you soon.
Casey Seymour:
Right on. I'm Casey Seymour, Moving Iron Podcast. Make sure you check me out on Facebook, Twitter, and Instagram. You can find the latest editions of the Moving Iron Podcast there. You can also go to movingironllc.com and you can find everything Moving Iron related there. Latest blog posts, latest everything there.
So all the information for the Moving Iron Summit coming up here in Nashville, Tennessee, September 11th through the 13th. That's already been booked for 2023, so check that out if you're interested in doing that. That'd be great. Check that out. Charles, like I said, was there last year. Hope he comes back again this year, and gives another one of his speeches about what he has seen happen in the marketplace. So with that, I'm Casey Seymour with Charles Anderson. Let's go be smart, folks.
Kim Schmidt:
Thanks to Casey and Charles for sharing their conversation with us. You can keep up on the latest industry news by registering online to receive our free newsletters. Visit www.farm-equipment.com. For Casey as well as our entire staff here at Farm Equipment, I'm Kim Schmidt. Thanks for listening.
