They call them by a lot of different nicknames: “hobby farmers,” or “weekend farmers,” or “sundowners.” They are affluent and successful people who’ve purchased a tract out in the country of five or maybe 10 acres, and grow crops as much for fun as for profit.
At the Texas-based Alamo Group, these weekenders are called something else: customers.
The company – an ever-growing amalgamation of some of the best known names in large, tractor-mounted mowers and related farm and grass-cutting products – is seeing the rise in hobby farmers, as well as increasing large estates on the edge of America’s suburbs, as offsetting the recent slump of some of its more traditional agricultural markets.
“The hobby farmer is a wonderful market,” said Tom Taylor, the director of sales and marketing for the Alamo Group, which is headquartered in Seguin, Texas, near San Antonio. That is just one of the reasons, along with increased government subsidies for traditional farmers, that the company, which is publicly traded on the New York Stock Exchange, is reporting a 22 percent rise in sales in 2004, putting the firm on track to see sales of $350 million this year.
Record year for agriculture
“This has been one of the best years for agriculture in the last 10 years or so – with the overall economy improving, the farm bill has some good payouts, and the stock market rising, which has helped build up the portfolio of some of our hobby farmers,” Taylor added.
That growth has allowed the Alamo Group to continue with its pattern of acquisitions and expansion that has marked the firm’s history since it was established in 1969. The company currently has 1,875 employees around the globe, with 14 manufacturing plants in North America and in Europe. In addition to its well-known mowing equipment, the Alamo Group’s units make and market street sweepers, agricultural implements, front-end loaders, backhoes and related aftermarket parts and service. The well-known names its products are sold under include Rhino, Tiger, Schulte, M&W, Valu-Built, and Fuerst.
And officials at the Alamo Group are optimistic about even stronger future growth, thanks to a three-pronged company-wide effort that it calls “Driving Customer Success.” The plan is aimed at better interaction with the Alamo Group’s customer base, by developing new products to meet specific needs, improving its after-market service, and better overall customer contact.
Doug Anderson, the executive vice president of the Alamo Group and general manager of its Agricultural Division, said the firm is also working harder at branding its products, especially with its well-known Rhino product lines. “When you buy a Rhino product, it’s the top of the food chain,” Taylor explained. “We’re using a logo and a tag line – ‘Rhino – Built to Lead’ – and the products that we’re introducing are all following that theme.”
Last June, Rhino rolled out the Turbo 120, a new 10-foot, tractor-pulled rotary mower that offers several exciting new features. One is a double deck design, with a top-deck that’s built to keep water or unwanted debris from piling up on top of the machine. And its new, stronger gearbox gives the Turbo 120 the highest horsepower in its class. “The Turbo 120 is also extremely durable – it sets a new standard in that size class,” Taylor said.
New front-end loaders
Last September brought the arrival of the FR15 from Rhino, a new flex-wing rotary cutter. “It’s a flex wing, but it’s taken some of the drive train features from the turbo, and it employs 15-foot wide cutting as a three-section rotary,” Taylor explained. “It’s ideal for the professional user, as well as the rancher or the farmer.” A 235-horsepower divider gearbox and 205-horsepower cutting gearboxes are among the standard equipment on the new FR15.
At the same time, Rhino was also introducing its new TL line of front-end loader, designed to attach to the front of 10- to 45-horsepower loaders and marked by their sleek, modern-looking designs. “People use these to move dirt and clean manure or feed lots or use in the landscaping business, or for moving loose material like dirt or snow or sand – you name it,” Anderson said. “It’s added a whole new series to the Rhino line.”
Another new initiative at the Alamo Group is clearly aimed at achieving the second goal of the “Driving Customer Success” plan, which has to do with meeting the consumer’s needs in the aftermarket. The Pro-Pak is a pre-packaged kit of repair parts for what Taylor called “the extreme duty” user who can’t afford to wait for parts that need to be ordered. He noted that by buying the Pro-Pak package, the parts are also more affordable than buying each one individually.
In addition, he said the Driving Customer Success program is working to boost sales by requiring employees to spend more time talking to the company’s broad network of dealers, and coming up with ways to cross-promote Alamo Group products.
Furthermore, he said that Alamo Group has made improved performance in what it calls its parts-and-service level, a major goal in 2004, and by all accounts the program has been a success. He said the program has brought about a 30-percent improvement in the rate of parts orders that gain a response with 24 hours.
“We do this with daily measurements, and better use of inventory to make sure that we’re in the right place at the right time,” Taylor said. “We have dedicated employees who really want to drive customer success, and that doesn’t happen automatically.” He said some of the improvements in service also came about with a major upgrade in the Alamo Group’s Web site to encourage people to go on line to order new parts, as well as more links that better hook up customers with the actual manufacturers.
“The consumer is becoming more educated, and that’s better for us,” Anderson said. He noted that in particular hobby farmers have become more sophisticated in shopping for agricultural products.
And by keeping its ear close to the ground, the Alamo Group is finding itself in the driver’s seat.