From the nondescript office at the original Brillion, Wis., store built in 1960s next to the family’s original farmstead, a few things about Robb Vanderloop come to mind. First, he’s an understated and humble leader, who epitomizes good old fashioned Wisconsin folk. Second, it’s clear that he is proud of his cousin (Carey), son (Mark), the previous generations, and the rest of the 40 plus employees that make up Vanderloop Equipment (VE). Third, he is more at ease talking about wrench-turning and tech-department successes than most of the interviews Farm Equipment has conducted with his job title in the last 2 decades.

Leo Johnson, a fellow Wisconsin dealer who recently retired to pursue part-time consulting via Machinery Advisors Consortium (MAC), had this to say about Robb. “While a progressive dealer, he leads a team that in many ways is ‘old school.’ One example is when he faces out of stock or discontinued parts availability, he manufactures it. That’s old-fashioned customer service that doesn’t happen much anymore.”

Beyond his ongoing participation in a Spader Group 20 peer council, Robb was also hand-picked to serve on AGCO’s “Spearhead Panel,” an advisory board-like duty to optimize the OEM-dealer relationship.

Wrenches & Numbers

Robb is a third-generation partner who recently notched his 40th year with the company. The dealership is a way of life for Robb, who became an expert combine-cleaner as a grade schooler.

In his late teens, he moved on to work as a cheesemaker and truck shop mechanic. “When I came back to the dealership, I started as a mechanic and worked my way through parts. I’d started to do a little bit of sales, but my dad passed when I was just 30, so I immediately moved into day-to-day management.

“I was always a numbers guy. Obviously, you can’t run the business by the numbers alone, but you need the numbers to be able to manage the business.” The financial disciplines came naturally, though he has no formal education as a beancounter. After his dad died, his bookkeeping mother, Marion, helped him understand accounting and the reporting needed to make good decisions.

In its simplest terms, Robb, Carey and Mark serve as a “triangle” of leadership. While he looks after the dollars and operations, Carey and Mark split the sales and technology oversight.

Robb is unique among top executives in that he cut his teeth with a wrench in his hand, which provides an insightful view into the highest stress department in any dealership. He has far greater expectations for today’s technicians than what he delivered in his day. “My service efficiency when I was young isn’t what you’d consider good by today’s standards,” he laughs.

The Cashflow Hallmark

Robb says his pursuit of managing cashflow includes the banking relationships (to ensure a good borrowing base) and near-daily monitoring of the company’s leverage.

“It’s hard to keep the debt-to-equity (D/E) ratio in a good spot; it’s easy to get it out of whack as inventory changes,” he says. Vanderloop is operating in the 2.5 to 1 debt-to-equity ratio, on the low end of the industry benchmarks ratio. As Robb notes, D/E management is key to managing risk and the money available to seize on a new opportunity.

“I’m monitoring deals, including those that are negative cash, including what is basically writing a check to a customer for a large trade. Floorplan interest is another challenge as well, especially today with the interest rates where they are. Inventory management is a big part of cashflow management.”

Robb preaches cashflow. “The more equity you can build, the easier and better borrowing base you have. Selling a piece of paid inventory is key to cashflow because it only takes 1-2 sales of paid inventory per month to make it a good cashflow month. A given month can be good for cashflow but not profitability. We need to balance profitability and cashflow together and need both.”

When business is good, Robb says, profitability leads, but in times like these, cashflow is paramount. “My late dad, Norman, said we should’ve banked more money in good times like the 1970s. Dealers who did were able to weather the storm in the ‘80s.

“Our families ended up putting a lot of their own equity into the store to keep it afloat. We got through it with a lot of faith, cutbacks in living, and pure grit. Obviously, they did better than 50% of the dealer population in Wisconsin.”

But it taught Robb that a dealership must always plan for the next downturn, because in ag machinery, it’s a constant reality.

Divvying Up Duties

There have been no real major changes in the fundamentals of dealerships other than computer software, he says, noting that VE has been running DIS since the mid-1970s. “The systems have also gotten easier, with the ordering and the suggested stocking. Inventory management is certainly better now than 25 years ago, and it’ll continue to evolve. Once AI comes on stronger, it’ll be streamlined to where the system will provide decisions based on trends.”

Robb was asked how he’d define the organizational chart at the 3-store, 3-headed business structure. “I’m probably better at numbers management and cashflow management than I am at people management. It’s a completely different skill set, so it’s something that I work hard at. I’m working harder on the people management side.

“You know, if it wasn’t for cashflow and people management, this would all be easy,” he says.

Sales, Robb says, is handled by Carey and Mark. Carey has the bulk of the experience in sales and sales management and has been the primary driver of adding new suppliers.

Robb describes Mark’s greatest contributions in the range of technology — both internal to VE and with the customer base. “He’s good with autonomy, guidance and mapping and yield and precision stuff. He’s also good at developing processes for the sales team and trade evaluations; sharing data with the rest of the team.”

Another example of sharing data is making all locations’ service techs aware of the odd issues that come up. “It’s a matter of trying to coordinate communication between the locations. If a tech in Beaver Dam or Lena has a problem that a Brillion tech saw a year ago, then we don’t need to re-diagnose the whole system.” Robb says.

“The technology side of it on the dealership level has changed more than any other part of our business over the last 15 years,” he says. And that’s coming from a dealership regarded as one who sniffs out the new opportunities before they become apparent.

Sniffing Out Shortlines

For decades, Farm Equipment has heard and seen of VE’s influence among shortline OEMs; praised for their study, and willingness to take on independent innovations. In fact, editors have bumped into Carey on numerous occasions in the booths of yet-to-be-known European manufacturers at Agritechnica and other international equipment expos.

Finding new products is part of VE’s DNA, says Robb. “Dad and Grandpa were always looking for new things in the industry, and we still are, too.”

There was a time, explains Robb, that 6 Massey Ferguson dealers existed within 30 miles of VE’s Brillion store. “We had to look for a niche outside of the mainline Massey Ferguson, however today the Massey opportunity is certainly greater than it’s been in the last 20 years just because of changes in inline competition. A product must remain profitable for long-term viability in the market. We need the industry to remain profitable from the producers to the dealers to the manufacturers. Ultimately there is a balance needed for sustainability.

“We must look for new ways to do things all the time, so we try to be innovative in new products and new techniques. What we need in Wisconsin is completely different from what they want in California, Arizona or Germany or wherever. But we examine technology from everywhere. That’s how we can find new ways. 

“But we also must work with customers to establish the products’ cost-effectiveness and convince them it’s good to make a change the way they’ve been doing something. It doesn’t always work out, he says, chalking failures up to the cost of progress.

Claas, for example, was an unknown shortline when VE signed with it in 1996. And while the German OEM added new products and became easier to do business with, VE isn’t afraid to go out on a limb with other OEMs, despite the shortlines’ limitations in floor-planning, warranty and additional system challenges. “If there’s a need in the market and the best solution is from another party, we’ll certainly look.”

Industry consultant Zach Hetterick of Machinery Advisors Consortium (MAC) praises VE for entering the European, high-tech voids that it pursued. 

“They took a leap of faith with both Claas and Fendt,” he says, noting that their foresight was significant as the dairy market consolidated. “Their continued success was influenced by partnering with the right brands, in the right market, at the right time, and with the right people.

“VE also invests heavily to ensure they have the right resources to serve the evolving segments they serve.”

MAC’s Russ Green was as an exec at Claas from 2005-12 and AGCO from 2013-20. The unknown shortliner Claas’ self-propelled harvester was one of the best investments ever made in an OEM relationship, says Green and its early adopters.

“Innovators tend to identify with other innovators, and VE has frequently been the first to align with new product technologies from Europe to drive customers’ success. Their performance in this area is truly inspiring.”

Praised for Tech Efficiency

VE participates in the Spader 20 Peer Group as well as on AGCO’s Spearhead Panel (facilitated by MAC), which provides lots of dealer-to-dealer benchmarking and networking.

Robb says his peers are most interested in VE’s technician efficiency plan incentives.

He explains that the keys are the billable labor calculations goals, which start at 70% and move up to 85%. “The efficiency plan accounts for the non-billable labor; or the 10% that include training vacations and holidays. “If a tech is going to be 85% efficient, he’s got to be 95% billable when he’s clocked in. The system has been in place for 20 years, so VE has seen the longstanding pros/cons of it.

At 70% efficiency, the bonus is 5% of the labor rate, while top-tier techs can earn 11% of the labor rate. “So as the labor rate increases, so do the efficiency bonuses.”

There’s no perfect system, he says, citing a host of likes and dislikes from the technicians.

“But the bottom line is that this is all about how much revenue is generated and what we can afford to compensate our tech talent as a percentage of revenue generated. They are their own business entity almost in and of themselves,” he says, noting that making techs independent contractors was even studied but abandoned because of long-term insurance uncertainties.

Thoughts On Expansion

Expansion is a key to VE’s future but requires a diligent cashflow czar to responsibly do it.

“A dealer can be profitable and then tries to double its business and finds it doesn’t have enough cashflow to support the expense,” Robb says. “Buying a building is the easy part. Getting the contracts and the right people — and growing profitably — are the challenge.”

Robb has strong preferences to launch vs. acquire its ways to growth plans.

“We once bought a dealership with no succession plan — with older buildings, old inventory, old parts and employees who were set in a way. We struggled. We had far more success getting a contract for an open location and finding a building — or building one — and building our own team. It takes longer than a turnkey acquisition, but we can then bring in our culture, values and our systems from the get-go. It’s much easier than trying to convert somebody who’s been doing something ‘their way’ for 20 years.”

The area that would later become served by the Lena store was originally an acquired dealership in Marathon, Wis.

“It was an existing Massey contract, and we ran it in Marathon for 17 years. The 125 miles from Brillion was too long a distance for us to manage. We spent enough time and money ultimately concluding that the challenges outweighed the successes. So, when we built the Beaver Dam store, we closed that location to focus on the east side of the state.

“If we go back to Central Wisconsin someday, it’ll be on this side of the Wisconsin river. We can make things work with stores 60 miles apart. It’s easier to manage and creates a better experience for the customers.”

European Building Design Complements High-End European Product Line

Vanderloop Equipment’s (VE) Beaver Dam, Wis., store is unlike any other farm equipment dealership you’ll find in Central Wisconsin and is the nicest Farm Equipment editors have seen in 21 years of reporting on this business.

The European-style building, built as a Claas location, is the newest of VE’s 3 stores, opening in 2016. The building was designed with the German brands VE now carries in mind.

“We wanted it to have a European look from the front. We told the architect to draw us something that was ‘European.’ We didn’t anticipate a store this large,” says Robb Vanderloop.

While the back end of the 30,000 square foot facility is a pre-engineered building, Robb says the storefront was a custom design they worked with the architect on.

When it came to designing the service area, VE stuck with what they know works. “Over the years, we’ve made our facilities work as efficiently as possible. So we made the service department similar to the Brillion store,” Robb says.

Customer Reactions. As impressive as the store’s design is, it did raise a few eyebrows from customers, says Larry Schamberger, a salesperson who started at the Beaver Dam location when it opened. “It definitely catches the eye,” he says. “But it was one of the hurdles we had to get over when I first started.”

Schamberger says they would have people say things like, “You guys built that Taj Mahal,” and they would suggest the dealership was charging too much to recoup the cost. Schamberger and the other staff would set the record straight, explaining that their price value included the extra efforts in service and backside administration.

“We must convey that point to customers. There’s a lot of stuff on the back side that we do that most others won’t. There are things that we know that may arise shortly after startup that we’ll take care of if it happens”

Selling a premium line like Claas means the VE sales team, led by Carey Vanderloop, needs to move well beyond selling on price. “If we sell on price alone, we’ll have a difficult time,” Robb says. “We need to show how we can make things cost-effective for the customer.” Today’s machines are capable of doing in just a couple hours what it used to take a week to do, he says.

Adding Other Lines. When VE approached Claas about building a new “Green Line” store in Beaver Dam, one stipulation the OEM made was it needed to be a Claas-branded store, owner Robb said in a 2016 interview. At the time, it was one of few primary Claas stores that was not company-owned in the U.S.

When Fendt introduced its combine in 2018, VE was able to open one of the first Fendt cornerstone stores in the U.S. Traditionally a Massey or Challenger contract was needed to carry the Fendt brand. Today, the Beaver Dam store still sells Claas equipment, but also now sells and services Fendt and Horsch and other equipment as well.

—Kim Schmidt, Executive Editor 

Robb explains that new customers do business with more than one store and deservedly should get the same experience at all locations. “We must have systems to ensure they get the same recommendations and know-how across the stores. When a machine is brought in for winter service at any store, the process should be the same.”

All the manufacturers have seen what John Deere has done and expect higher sales volumes and territory, says Robb. But it must be done profitably for the dealer, too. The OEMs will have a hard time finding investors in a dealership if that ROI isn’t there.

As a result, VE is more likely to put up its own flag in an underserved area than acquire brick/mortar and employees. Buying a dealer without a succession plan isn’t a progressive way to do things. It doesn’t work because it generally lacks an investment in the dealership.

A New Management Philosophy

The questions about many stores the 3 Vanderloops could practically manage on their own brought an unexpected dialog.

“We’ll be switching from a function-driven management approach of managers of parts, service and sales management to a “store-managed approach” where a location manager is responsible for the parts service and sales functions,” he says.

“We’re still making sure that the parts systems, the service systems and the processes are running the same. How warranties and warranty receivables are tracked and maintained is also important,” he says.

As for his projected number of stores moving forward, Robb says it “depends on the opportunity.” 

“Our goal is to double in sales volume in 5 years, and we’re 12 months into that goal. So, we have big growth expectations. Can we grow within the footprint of what we have today? For sure. Especially with the manufacturers wanting to operate with less brick and mortar and expansion of product offerings. 

“But what we need in Wisconsin and what they can get away with in Texas or Kentucky is different. We have -10F winters and it’s more challenging to work out of the service trucks here.” 

Dealership Minds: Vanderloop Equipment Introduction

Dealership Minds: CFO & Co-Owner: Cashflow Rules The Day

Dealership Minds: Sales Manager & Co-Owner: Guiding Sales, Finding New Markets

Dealership Minds: Technology Sales & Co-Owner: Learning from the Past to Move Forward

Dealership Minds: Parts Technician: ‘Don’t Take Me Away From Customers’: Right Personality in Farmer-Facing Role Brings Repeat Business

Dealership Minds: Lena Store Lead: The Power of Personalization

Dealership Minds: Parts Department Lead: Customer Communication Key to Success in Parts

Dealership Minds: Beaver Dam Sales: Techs are ‘Game-Changer’ in New Wholegoods Sales

Dealership Minds: Service Department Manager: A True Passion for Customer Service

Dealership Minds: Service Department Lead: Service: Beyond Just Repairs

Dealership Minds: Parts Lead: Parts Department Brings New Challenges Every Day

Dealership Minds: Brillion Sales Reps: Building Relationships Beyond the Sale

Dealership Minds: Parts Manager: Versatility Proves Priceless Through Nearly 3 Decades in Parts Department

Related Content:

• Rolling Out the Welcome Mat for Autonomy & AI
• Vanderloop Equipment’s Most Important Product Lines
• Future Succession Plans
• Managing the Balancing Act of Manufacturer, Dealer & Customer Needs
• Vanderloop on Ag Dynamometer