Carey Vanderloop calls it like he sees it. And in his 30-plus years in the farm equipment business, he’s seen plenty and isn’t scared to take a chance. It is clear that as a business owner he places a high value on trust, and the employees who earn it are empowered to make decisions.
A typical day for Carey starts with a brief discussion with Nichole Bales, parts manager, and Nicki Meager, service administrator, or one of the technicians.
“They’re all self-starters and good at what they do, but sometimes they just need a little bit of a direction or want to make sure I’m informed in some way,” he says.
Carey Vanderloop
Years with Organization: 30
Role: “I focus on new products and ideas. Sometimes we create a market for something that isn’t necessarily mainstream yet like we did with the forage harvester. There was no forage harvester market to speak of. Everything was pull-type. And then in early 2000 we took on Fendt. There was no such thing as a European or a German tractor. And certainly not high speed. And obviously, those two products are wildly successful.”
Quotable: “Vanderloop doesn’t do anything fast. It’s like a ship that’s leaving Europe and is changing course from New York to North Carolina, which is one degree on the compass. It’s not a big change. All the vendors and staff are heavily vetted before they’re allowed into the organization.”
Then, he checks in with his sales team on active deals and where they are in the process. Carey says those conversations involve a lot of pricing and trade evaluations.
“I also remind them they need to push a little harder for sales and try to motivate them to keep them at their full potential,” he says.
When it comes to measuring the sales team, total sales and individual sales goals are the main things he measures.
“We also watch margins like a hawk,” Carey says.
Staying Connected to Customers
While Carey’s role has evolved over 3 decades, he maintains a select group of customers who have been with the dealership for 20-25 years who he’s built a relationship with and continues to service.
And while there’s been some recent pressure to turn those customers over to the rest of the sales team, Carey maintains the client list to stay connected to the customers.
“I thought about it for 6 months or so and decided I’m not going to be the guy who sits in the office completely disconnected from the outside world,” he says. “I also need to be there when the customer is upset … and to be able to deal with the service department or the parts department so I don’t lose touch with reality.”
It’s not often that Carey has a customer who is mad, but when he does he wants to hear about it.
HR Decisions: They Can be Hard to Make, But Are Better for All Parties Involved
When Carey Vanderloop comes into the store in the mornings, the one thing he hopes he doesn’t have to deal with are employee issues.
“It’s something that you don’t have a lot of control over,” he says. “Somebody might’ve got in a spiff with someone else. Somebody might’ve had a bad or inappropriate reaction to a customer. Somebody might be terribly angry or upset over some trivial thing. The human resources thing is probably one of the tougher things that you have to do, especially when you need to fire someone.”
Parting ways, whether because someone is fired or resigns, can be touchy. Carey says he tries to reflect on the situation before he reacts. “Sometimes you need to collect your thoughts and say, ‘OK, what’s right for the company? What’s right for the employee?’ Instead of begging someone to stay, I’ve taken the position that if you’re not happy here, you need to go find what makes you happy.”
Vanderloop had a technician who recently left — who Carey described as long overdue to be let go or resign — and the change it had on the other employees was immediate. “When I went up there the other day it was like you needed a chisel and hammer to get the smiles off their faces,” he says. “I can see the bounce back in their steps. People are happy and one person can take the whole group down. We don’t need that. Those guys are going to have to work their asses off to cover for him, but I think they’re happy to.”
“I’d rather have somebody upset with me than say nothing,” Carey says, noting that the customers who say nothing are gone forever when they leave.
“There’s no getting them back. In very rare circumstances do we get a local, angry customer back,” Carey says. “Because it seems like after they’re done chewing you a new one, you can both take a pause and within a short time you can move on because it’s behind you.”
Sales Pay Structure
The Vanderloop salespeople are paid based on cash through the door, Carey says. “We need to sell things because if you don’t generate revenue, you’re not going to be here.”
As Carey puts it, they stress available income is needed to pay the bills. To put it into context, he says if a salesperson sells a $1 million forage harvester and takes a $900,000 forage harvester in on trade as part of the deal, the salesperson gets a percentage of the $100,000 difference. When the trade is sold, whoever sells it gets the commission on the rest of the unit, he explains.
If they had sold the $1 million chopper and took no trade, they would be paid on the percentage of the $1 million.
“I remind them they need to push a little harder for sales and try to motivate them to keep them at their full potential…”
“We can’t open the doors and make payroll and insurance, and pay interest and the building rent without cash,” Carey says. “That also motivates them to sell the trade so they can get the rest of their commission on a million-dollar piece.”
There’s no limit to how much money a salesperson can make.
“If a guy wants to go crazy and nuts and he’s got an A game, understands his product and he understands his customers and their needs, with some hard work, he could make a quarter million a year here.”
“The only thing that’s required is they spend the money as though it was their own,” Carey says.
Margin & Washout
Carey gets quarterly reports on each salesperson. His top metrics to watch are margin and total sales.
“I live and die by the washout tree,” Carey says.
The washout tree — or washout cycle — is the number of units generated from the sale of a new machine until the last used unit does not generate a trade.
“You can sell a piece of equipment and make a 10% or 12% margin on it, and you feel like ‘Wow, we made all this money, it’s great.’ Then you close the tree out 3 trades later and it’s 3%, and it’s terribly disturbing.”
For example, on the surface it looks like you may have sold nearly $2 million worth of product because you sold the first one for $1 million, the second for $500,000, then $250,000 and $100,000 on the last trade. By the time the last unit is sold, he says, the margin has diminished. “Then you find out you did all that for no money,” he says.
Vanderloop Equipment Develops Retrofit Manure Pump for Forage Harvesters
Eastern Wisconsin’s Vanderloop Equipment (VE) is using its patents for self-propelled manure pumps to buoy the value of used forage harvesters.
“We developed a pump system to go on a forage harvester and are currently testing a prototype to integrate the software necessary to control the pumps and engine of the two systems,” explains Robb Vanderloop.
He says the concept is designed to use an existing forage harvester chassis and running gear to provide a commercial-grade manure pump — in kit form — for the feeding industry.
“We patented the design and used many Claas parts, such as bearings, shafts and belts, for the kit. We call it Pro-Flow,” he explains. “Basically, one can remove the feed rolls and cutting cylinder from the harvester, install the pump kit, hook up the drive belts, hydraulics and a few electrical connections and have an 800-900 horsepower pump.”
Mark Vanderloop says his company did the internal design work on the project and oversees the build of necessary components for the kit. A big challenge, however, is coding and software to blend the controls of the harvester and pump systems.
“We’re outsourcing that work close to home and a local vendor is doing the harnessing and controllers. It’s a major move, but if we did nothing it could be a mirror image of what the Class 8 and 9 combines market is currently suffering. It’s our way of keeping the forage harvester market up by adding to their value by using them in different ways.
“We’ve seen some interest, but the key is to convey the concept to the right people,” he says. “After all, everyone who makes forage also makes manure.”
Make Their Own Repair Parts Too. VE’s staff includes a design engineer as well as fabrication workers to produce commercial parts, as well as more complex systems such as the Pro-Flow kit.
The new product is the latest extension of VE’s historic ability to craft parts for current and/or discontinued equipment models. At one point the family founders of the company were building complete tractors.
“Basically, we do whatever we need to try to keep our customers going,” Robb explains. “If it’s a back-order and that part isn’t not available, make it we will.”
— Dan Crummett, Contributing Editor
“A trade on a trade — that’s where the evil begins. Because either you overpay for the trade or it’s your cash sitting there looking you in the face — and you get overly aggressive to get it sold.”
Carey uses planters as an example. If a customer buys a new planter and trades in a 2017 model, it still holds some value. But, if a customer trades in a 2012 planter for the 2017, that planter has near zero value, he says. “It doesn’t matter how nice it is or what kind of condition it is in, nobody wants it.”
In instances where the dealership doesn’t want the trade, Carey says they either advise the customer against trading or come up with a discounted value off of what it shows the unit should be worth. That could be 30% or sometimes more, he says. How hard it is to sell used equipment depends on the type of equipment it is, he says.
“Tractors are completely different,” he says. “Forage Harvest especially competitive machines are a big challenge, Planters have been a learning experience and tillage has always been a problem child.”
Big Opportunity: Application Business
The dealership is just getting its feet wet selling Horsch equipment, including the German manufacturer’s sprayer, but Carey says the application business is the biggest opportunity for VE moving forward. In addition to Horsch sprayers, Vanderloop also sells Fendt and Apache application equipment.
“We’re pretty new to the sprayer business, but I love it,” he says. “We are going to be the king of sprayers.”
While the dealership is new to the sprayer business, the main customers thus far are co-ops.
“We believe our claim to fame, at least initially, is going to be the fungicide market because the current application method is substandard and people just aren’t happy,” Carey says. “We figured that there’s going to be an implosion of ground rigs putting on fungicide. Drones, in my opinion, have a lot of shortcomings. The ground rig covers 100%.”
Carey says VE demoed a sprayer for a customer last year, spraying 30 gallons per acre in adverse conditions. The demo helped highlight both the savings in input costs as well as the bump a farmer can see in bushels with proper chemical application.
“He wants all that plant covered, and in adverse conditions a good fungicide application can net you 10-40 bushels per acre. That’s a lot of freaking money, even at $5 it’s a lot of money. And in my opinion, that’s free money.”
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: 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
Post a comment
Report Abusive Comment