When New Holland vice-president Abe Hughes spoke to a room full of farm media at the company’s North American headquarters in Pennsylvania in July, he wanted to talk about more than the shiny new iron parked outside. It was important, of course, to highlight the innovation in the brand’s 2015 equipment introductions, but Hughes also had another message he wanted to get out: the brand needs dealers.
While that’s something of a surprise, what really got the journalists scribbling was Hughes’ suggestion that big corporate dealership networks need not apply to fill that gap.
Hughes has a vision for the ideal New Holland dealer, and it doesn’t involve a big public corporation run from out of town.
“We’re bucking the trend — and this is really important — I’m not announcing dealer consolidation,” Hughes said. “I know other brands have done that, where they bring dealers together and say, look around the room, look at the dealer to the right, look at the dealer to the left, in five years they’re not going to be here anymore. That’s not what we’re selling. We’re looking to make sure the New Holland brand maintains a strong local presence with independently owned dealer networks.
“We want to have a community link,” Hughes said. “We want to have people who are on the school board, who go to the local church, people who have been involved in the community. We believe this business is best done when there is community engagement and there is trust, honesty and reliability within that community. That’s the New Holland model.”
New Holland’s dealer network must reflect the “authenticity” that’s at the core of the brand, Hughes said. “That’s an important distinction, I would say. That’s the commitment to the local dealership model.”
Having said that, Hughes acknowledged there are already a few NH dealers which are part of relatively extensive networks, and he has no plans to pull the rug out from under them. Most are doing a pretty good job, he believes. It’s just that the giant corporate dealer, which is owned from afar, won’t form the core of the New Holland dealership network of the future.
That puts considerable distance between the blue brand and its sister company Case IH.
From the dealer perspective, however, operating multiple locations is something that many say they must do in order to get the operating scale they need to provide the expertise and resources necessary to support today’s high-tech machines. So don’t think Hughes is ruling out the multi-store model. Far from it.
In fact, flexibility in meeting customer needs is at the heart of Hughes’ dealership vision, and it has even influenced the way he has organized Hew Holland. As he sees it, different industry segments need different things from a manufacturer and its dealers.
Hughes’ vision is for a New Holland in three segments, he said. “We don’t just go out and do business as one dealer network or as one type of company. We manage it (our business) in segments.
“First we have our main business, which is dairy and livestock. We have about 450 dairy and livestock dealers, and they sell all kinds of equipment around that. Then we have our other business, which is cash crop, where we have our combines and high-horsepower tractors. All of that is our cash crop dealers, and we have about 150 strong. Then we have our pro work tools; these are our compacts (tractors) and our light construction area.
“We’re managing this business completely different, as businesses need to be run these days. We understand our customer, we understand their needs, and then we go from there.
“We know we’re not No. 1, and our aspiration isn’t to be the biggest. In many markets we are, but in North America our aspiration is to be the best at what we do. And that is in particular in hay and forage and in combining in small grains. We made a great entry into the sprayer market. And we are making really good inroads in developing market share for our high-horsepower tractors. Those are the areas where we want to be the best.”
In a way, Hughes’ strategy seems a little reminiscent of Apple’s. The go-its-own-way technology firm developed a loyal following among customers (some might say a fanatic following) by doing just that. Apple users want something a little different. Hughes thinks the blue brand’s customers see things in a similar way.
“We think our customers are a unique bunch of individuals who think a little bit differently, who always want a little bit better out of their equipment,” Hughes said. “They want to be the early adopters on new innovations.
“We want people to have a brand experience with New Holland. It’s not just about the iron. That’s why we’re probably the leading innovators with social media. We’re trying to create an experience around this brand. And that means involving the users.”
In past years Hughes has often said he wants to run his business on integrity, where a handshake means more than a written contract. He reiterated that in July, and he wants dealers who will carry that business philosophy to the showroom floor.
“It’s all about people relationships,” Hughes said. “That’s how we run the business. We think business should still be done on a handshake. Not as corporations to corporations. We think that’s a unique aspect of the way New Holland does business compared to a lot of the others in this day and age. We want to get back to a lot of those short-liner roots with its real relationships, real authenticity.”
Hughes now wants New Holland dealers who share those core values.
“We want the rural entrepreneurs to think about New Holland as a business proposition,” Hughes said. Hughes has instituted a plan to give those who choose to open up a New Holland store a bit of an edge to broaden sales opportunities. Merging NH North America’s ag and construction divisions has given his retailers the right to sell both ag and light construction machinery.
“We believe that a lot of skid steers and a lot of backhoes are really used in the agriculture markets. A lot of those customers are farmers. And more importantly, a lot of our dealer network is in all of those rural communities. A lot of government and municipality business uses light construction as well. That’s really our whole strategy for pulling all of this together. We’re going to be more present in that municipal business than we have in years.
“There was a time when Ford dominated that business. That Ford backhoe was part and parcel of every municipal community. We want to get back to those days when we have a skid steer, we have a tractor, loader, backhoe and light construction in every municipality. So we (ag and construction) are back together.”
Since beginning his rejuvenation of the brand when he took over North American operations, Hughes has had dealers in mind. Efforts to help them upgrade and carry the brand’s message to customers have been ongoing. This latest announcement works to expand that effort, and there are a few reasons for it.
Hughes wants his dealership plan to not only help reinforce that brand experience for those who walk through retailers’ doors, it also aims to expand the company’s reach into previously under-represented regions. And there is the reality that many existing dealers are getting close to retirement age. They’ll need help transitioning out of the business, which isn’t a problem unique to New Holland.
“(In the past) we really spent a lot of time focusing on our biggest and our best (dealers),” Hughes said. “Now, we have to pull up all the rest, including the ones that need an upgrade. What got us to this is we did a huge consultant study over the last couple of years. We went into the network very deeply and discovered quite a few things that we had to get our heads around. For one, we have an aging dealer force. There are a lot of dealers out there who need a succession plan. So we’re working on figuring out how we transition them, because they’re in need of our help.
“Soon we’ll be coming out with an ad campaign,” said Hughes. “We’re looking to recruit dealers in key places. So expect to see more visibility of us actively recruiting dealers.”
This article originally appeared as “Bucking the trend” in the October 2014 issue of Country Guide