A Clear Direction

RoGator 1286c sprayer

This past July, a significant change took place with AGCO Application Equipment’s Ag-Chem brand, one of the market leaders in the self-propelled sprayer and floater businesses. Instead of buying products directly from the company, customers began making their whole good purchases from Ag-Chem’s parts and service partners. Several of the selected dealers also carry Caterpillar products, and Ziegler Ag Equipment, which represents Ag-Chem in Minnesota, most of Iowa, and Wisconsin, provides a strong example of the new one-stop Ag-Chem dealer.

Of course, adds Steve Koep, vice president of the application equipment division for Ag-Chem parent AGCO, most RoGator and TerraGator customers were probably unaware of the change. And that, he says, is exactly how it should be.

“Many of the changes with this move took place internally within our company and the dealers’ organization,” says Koep. “From the customers’ perspective, the change should have been almost transparent. In most cases, their sales rep didn’t change, so the ‘face of Ag-Chem’ remained consistent for them.”

But that’s not to say this move by Ag-Chem isn’t a significant development in the company’s 45-year history. That’s part of the reason why Koep invited CropLife® magazine to sit down with Ag-Chem and Ziegler representatives this fall to discuss what this move means — and will mean — for everyone involved.

A Working Relationship

Truthfully, the relationship between Ag-Chem and Ziegler dates back several years, when the manufacturer first shifted the responsibility for its parts and service activities to the dealer network. Under this system, Ziegler employs a mobile fleet of fully-equipped service trucks to provide maintenance and service to customers on-site. Technicians in this fleet also conduct regular maintenance checks, oil and coolant analyses, and other optional services to extend equipment life.

At the time this was done, says Doug Pottinger, sales manager for application equipment at Ziegler, it was a pretty visible change for Ag-Chem customers, with a few bumps appearing in the road along the way. “There were a lot of cases where the customers were dealing with servicemen or parts people that were new to the business,” he says. “In those cases, you were bringing in a guy that had all kinds of experience with hydraulic and electrical systems, but he wasn’t the RoGator man that the customer had a long-term relationship with. It took a year to get these servicemen up to where they were adequate, according to the customer, and two years to get to the point where the customer was saying ‘this guy really knows what he’s doing.’ Ultimately, though, things worked themselves out.”

However, according to Koep, there were some drawbacks to this kind of “split” sales/service landscape. “I think the customer was kind of stuck between the direct sales organization and the dealer organization supporting the product,” he says. “It wasn’t conducive to efficiency because neither organization ultimately owned the customer relationship.”

Al Pearson, vice president, agricultural division for Zieg­ler, shared a similar view. “When we put together a five-year strategic plan, the No. 1 recommendation we made to AGCO was asking for the sales side of the business,” says Pearson. “The way we saw it, this business was the perfect match for us. It would help us drive volume, dollars, and synergies with the parts and service business we already were responsible for.”

Starting July 1, AGCO transferred responsibility for its Ag-Chem product sales to Ziegler and several other Caterpillar dealer locations (with plans to add 38 dealers, totalling 323 locations nationwide by the end of 2008). This allows dealers such as Ziegler to sell and service Ag-Chem products through a single point of contact. “In terms of the process this time around, it’s a lot smoother,” says Pottinger. “Previously, an AGCO salesperson would sell the customer an Ag-Chem product. Then, their first service call would be made by someone from Ziegler. Now, the logo on the orders is a Ziegler logo, the machine is sold by Ziegler, registered by Ziegler, and the warranty is covered by a Ziegler employee. It makes one entity accountable for Ag-Chem’s success and customer satisfaction in each territory.”

Market Driven

In many ways, this kind of sales/service structure mirrors that of Ag-Chem’s largest equipment rivals, says Koep. “But I don’t think any of our competitors can provide as timely or consistent service over as wide a geography as the Caterpillar people can,” he adds.

Furthermore, the shift of machine sales to dealers such as Ziegler will better position Ag-Chem to take advantage of some of the rapidly shifting dynamics taking place within the self-propelled sprayer and floater businesses.

“In 2007, the market for sprayers with product tanks ranging from zero to 1,000 gallons was down approximately 20%,” says Koep. “On the flip side, the market for sprayers with 1,000-gallon-plus tanks was up approximately 20%. That sales group probably includes some large growers, but it’s mostly made up of commercial applicators. This group makes many more planned replacement equipment purchases than other customers tend to, so a single-source sales/service structure like the one we’ve created with dealers such as Ziegler is a better fit for their needs across the board.”

Moving into the 2008 season, Koep expects the self-propelled sprayer to stay relatively flat as growers shift from corn to less application-intensive soybeans. Floaters, on the other hand, could see some healthy growth as dry fertilizer application potentially continues to increase.

Forward Progress

One year from now, both Ziegler and Ag-Chem representatives expect to see significant growth take place with their business relationship as well as the customers both serve. “We will be learning together and I think we will be successful together,” says Pearson. “It’s a great opportunity for everyone involved.”

Koep agrees. “I think this is the perfect relationship because everybody wins,” he says. “Ag-Chem wins because the company creates more volume. Ziegler wins because it creates more volume and ties the customers into its business. And, most importantly, the Ag-Chem customer wins because he’s no longer stuck in the middle between a sales-only organization and a parts/service-only organization. Everything is now under one flag.”

Leave a Reply

Equipment Stories

EquipmentDeere Announces Factory Layoffs
August 18, 2014
Deere & Co. has announced it will reduce the size of its manufacturing workforce at some agricultural equipment factories in response to current market demand for its products. Read More
A finished Willmar 16-ton side-shooting tender.
TendersNew Production Facility Helps Willmar
July 17, 2014
In 1963, a group of businessmen started Willmar. Today, a half-century later, the company is one of the ag industry’s longest-running brands. Read More
SprayersHooded Sprayers Help Minimize Spray Drift
May 15, 2014
Willmar Fabrica­tion's hooded sprayers have the potential to minimize pesticide drift, especially when combined with other drift reduction technologies, such as drift retardant adjuvants or low-drift nozzles. Read More
Nozzles18 Spray Nozzles That Reduce Drift, Optimize Coverage
May 7, 2014
This year’s line-up of tips feature the versatility to handle any spray job. View photos and product descriptions of the latest nozzles on the market in our slideshow. Read More

Trending Articles

EquipmentAdvance Your Technology IQ At MAGIE
August 13, 2014
The Midwest AG Industries Exposition (August 20-21) is the place you need to be to see, study and evaluate how new advances in the equipment, operations, crop protection and fertility sectors can help your business prosper. Read More
HerbicidesScouting Key To Next Season’s Soybean Herbicide Program
August 12, 2014
When growing soybeans, growers need to think ahead to stay one step ahead of weeds. That means examining weed threats and evaluating which herbicides work best. Read More
StewardshipMichigan Agriculture Leaders On Toledo Water Ban: We Want To Be Part Of The Conversation
August 8, 2014
Leaders of Michigan agricultural organizations said Thursday that the government should not have a “knee-jerk reaction” based on last weekend’s water ban in Toledo due to fertilizer run-off in Lake Erie. Read More
CropLife 100BRANDT Acquires Lemon Ag Services
August 4, 2014
The acquisition of Lemon Ag fits BRANDT’s aggressive corporate strategy of providing superior agronomic advice and services for customers in central Illinois. Read More
Eric SfiligojThe Resurgence Of Crop Protection
August 4, 2014
Plenty of new offerings over the next few years should see a rebirth for the crop protection products category in terms of market share. Read More
LegislationUSDA Implements Key Farm Bill Crop Insurance Provision
July 30, 2014
The new Supplemental Coverage Option, available through the federal crop insurance program and set to begin with the 2015 crop year, is designed to help protect producers from yield and market volatility. Read More

Latest News

ManagementNCGA DuPont New Leaders Program Enters Sophmore Season
August 20, 2014
The National Corn Growers Association and DuPont are pleased to announce the second year of the NCGA DuPont New Leaders Program. Read More
FungicidesVerdesian Links Up With Mitsui, Hokusan
August 20, 2014
Mitsui Chemicals Agro, Inc., and Hokusan Co., announced the signing of an exclusive licensing agreement allowing Verdesian Life Sciences global access to its patented technology for suppressing mycotoxin contamination in wheat and barley. Read More
SprayersUniversity Of Illinois Introduces New Spray App
August 18, 2014
University of Illinois Extension has released a new smartphone app for making sprayer-related calculations. Pesticide Spray Calculator, or Spray Calc, Read More
Crop InputsSyngenta Names New Manager Of Federal Government Relati…
August 18, 2014
Laura Wood Peterson has joined Syngenta as manager of federal government relations, based in Washington, DC. Read More
ManagementExpert To Discuss Farmland Value, Rent At Farm Science …
August 18, 2014
While cropland values in Ohio increased in the past two years, they have remained flat in 2014, declining in some cases, according to an Ohio State University agricultural economist. Read More
EquipmentDeere Announces Factory Layoffs
August 18, 2014
Deere & Co. has announced it will reduce the size of its manufacturing workforce at some agricultural equipment factories in response to current market demand for its products. Read More
HerbicidesNew DuPont Afforia Herbicide Gives Crops A Clean Start
August 18, 2014
DuPont Afforia is a preplant herbicide for soybeans and other field crops that provides excellent burndown and residual control of many challenging weeds, such as marestail and waterhemp. Read More
Equipment21 Products Showcased At MAGIE 2014
August 18, 2014
The annual Midwest AG Industries Exposition is upon us. Here is CropLife IRON's look at some of the products visitors can expect to see at this week's event. Read More
EquipmentAGCO Seeks Nominations For 2014 Operator Of The Year
August 15, 2014
Ag retailers throughout the U.S. and Canada are encouraged to nominate their best applicators. Read More
EquipmentAdvance Your Technology IQ At MAGIE
August 13, 2014
The Midwest AG Industries Exposition (August 20-21) is the place you need to be to see, study and evaluate how new advances in the equipment, operations, crop protection and fertility sectors can help your business prosper. Read More
ManagementCropLife’s Buyers’ Guide Issue Now Availabl…
August 13, 2014
One of our most read issues of the year — the August Buyers' Guide — is ready to download on the iPad. This popular issue features equipment for "In The Field," "At The Plant" and "In The Office." Read More
WebinarsWebinars On Demand
August 13, 2014
Register for one of our upcoming Webinars or access our archive of past Webinars to view recordings of presentations that may be of interest to you. Read More
HerbicidesBASF: Fall Burndown Benefits Go Beyond Weed Control
August 12, 2014
While unpredictable weather may delay application timing of spring herbicides, more growers are adding a burndown application in the fall Read More
HerbicidesScouting Key To Next Season’s Soybean Herbicide P…
August 12, 2014
When growing soybeans, growers need to think ahead to stay one step ahead of weeds. That means examining weed threats and evaluating which herbicides work best. Read More
StewardshipNitrogen Efficiency Supports Environmental Stewardship
August 12, 2014
As growers prepare for another harvest, it’s important to consider how nitrogen stabilization not only supports healthy plant growth but also fosters environmental stewardship. Read More
Seed/BiotechMycogen Seeds Introduces 19 New Corn Hybrids For 2015
August 12, 2014
Many of the new hybrids feature Mycogen's SmartStax Refuge Advanced technology for maximum protection of the genetic potential and planting convenience. Read More
HerbicidesDow AgroSciences Introduces Enlist Ahead App For Enlist…
August 12, 2014
Designed for use with the Enlist Weed Control System, the app is a precision agriculture tool for maximizing weed control performance, managing weed resistance and making responsible applications of Enlist Duo herbicide with Colex-D Technology. Read More
CropLife 100CHS Announces Senior Leadership Team Changes
August 12, 2014
Current CHS strategic leadership team member Shirley Cunningham will assume a new role as executive vice president and chief operating officer, Ag Business and Enterprise Strategy. Read More