FARWEST DEALEREPA ramps up enforcement of emissions standards 10 Right-to-Repair 15 Drive Repeat...

May | June 2019

FARWESTDEALERFARWEST

Thriving economy boosts small equipment sales

6

Learn to manage, track and improve customer retention

EPA ramps up enforcement of emissions standards

15 Drive Repeat Business10 Right-to-Repair

2 May | June 2019 FARWEST Dealer

13477 Benson Ave. ● Chino, CA 91710 ● Ph: 800.833.3023 ● www.gearmore.com

15 Implements For the Care and Maintenance of Vineyards

IMPLEMENTS

Leaf RemoversLeaf Removers Available in single or double defoliation heads, in row or over the row mountings Featuring 3-pt. air compressor with low pressure air that shatters the leaves

PreprunersPrepruners Cuts the long canes small eough that they fall through the wire for easy clean-up Featuring unique magnetic sensors for opening and closing the cutting heads

Venturi Air 3-Pt Hitch ModelsVenturi Air 3-Pt Hitch Models More uniform spray particles with fog sized droplets 3-Point hitch - 75, 100, and 150 gallon models Distribution heads available to match a variety of foliage pro les

Trailer Mounted Venturi Air Trailer Mounted Venturi Air Spray twice the acreage per day Entire plant evenly covered with spray Trailer - 300 gallon

Trailer Wrap-Around BoomTrailer Wrap-Around Boom Less chemical run-off means better spray utilization and savings Trailer - 300 and 500 gallon

3-Point Compost Spreaders3-Point Compost Spreaders Spreads wide range of materials such as: compost, peat, lime, gypsum, etc. For tractors up to 150 H.P. Capacity - 35.3 cubic feet

3-Point Hitch Sulfur Dusters3-Point Hitch Sulfur DustersThe organic way to control mildew Hopper capacities of 300 and 400 pounds Mechanical agitation for even ow

Vineyard Incorporators Vineyard Incorporators Year round implement for vineyard oor maintenance The Incorporator tills, buries weeds and other small material for decomposition Available in tilling widths of 63" and 73"

Flail Mowers / ShreddersFlail Mowers / Shredders Fine shreds grasses, weeds, and brush SFG Series, (53" to 82") available with double Y blades or hammer knives

Rotary TIllers Rotary TIllers Tilling produces loose textured soil that holds moisture and reduces erosion N Series available in widths of 51", 61", 71", and 81" for tractors up to 70 H.P.

Soil ConditionersSoil Conditioners One pass implement breaks up clods and creates a ne level surface Widths available from 4' to 8' to t all popular vineyard rows

Air Blast Sprayers Air Blast Sprayers Ideal for small to medium sized vineyards Tank capacities of 50, 100, and 150 gallon For tractors 20 to 50 horsepower

In-Row Cultivators In-Row Cultivators

Four different attachments - blade, power disc, back ll disc, and rotary hoe Sensor rod for automatic implement retraction

Double Spinner SpreadersDouble Spinner Spreaders Accurate broadcast spreading attachment available for 2 row band spreading Large 2200 lb. capacity hopper with Cat. 2 hitch

Available in half row, one row, and two complete rows Features stainless steel blades that never need sharpening

Vine Trimmers Vine Trimmers

Far West Ad full page 7.5"x10"

May | June 2019 FARWEST Dealer 3

FARWESTDEALER

8Talent acquistion challenges dealershipsNEW FEATURE: FWEDA board members weigh in on issues dealers grapple with in their businesses and how it shapes their decisionmaking.

2019 Shapes up well for small equipmentEconomic prosperity, new home buying boosts market for small tractor sales across the West.

26Incentives – Engendering EngagementDesign incentive programs that engage and retain your best employees.

5 Message from the Chair

6 Small Equipment Sales

8 Ask FWEDA's Board

10 Right-to-Repair

15 Boost Customer Retention

18 Member Mileposts

20 Industry News

23 Workforce

24 Politics & Policy

26 After Market Sales Force

30 HR Update

Contents

6


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Equipment dealers share common ground on two critical

issues: recruiting and retaining quality talent, and the threat of Right-to-Repair legislation from an underground movement that undermines our industry.

Far West Equipment Dealers Association recognizes these issues weigh heavy on the minds of our members. And that’s why

FWEDA works to support your business in overcoming the challenges they present.

Advocacy is our top priority as we push back against efforts that mislead the public, negatively impact the environment and risk the safety of our communities.

Recently, we launched FW Coaches, a training and education consortium of industry experts ready to coach your teams and complement the resources you already provide.

FW Coaches differs not just in its approach to raising the bar for employee skills, but also by inspiring employees to advance a company culture that effectively conveys an important message to our customers.

The legislator who sponsored the Right-to-Repair bill in Wyoming experienced that message firsthand — our customers CHOOSE to have their equipment repaired in our service departments because they value the relationships we build and the expertise we provide.

Professionalism matters. It’s why we’re members of this association. We recognize the importance of aligning our objectives with like-minded individuals who share our values and want to advance the equipment industry with competent, skilled and qualified employees that set us apart from the competition. We invest considerable resources in our teams and their technical proficiency because successful dealerships know referrals are gold.

I encourage you to be industry ambassadors. Embrace FWEDA’s mission of protecting and promoting dealer interests. Help us help you and all dealers to raise the bar and be even more successful.

From

the C

hair

ERIC MASON Board Chair

Help us help you build greater success

FWEDA OFFicErs AnD DirEctOrs

Chairman Eric Mason Mason Machinery, Inc. Aurora, UT 84620 (435) 529-7445

Vice Chairman Bill Garton Garton Tractor, Inc. Turlock, CA 95381 (209) 632-3931

Past Chairman Keith Greenwood Stotz Equipment Bluffdale, UT 84065 (385) 351-3206

President/CEO Joani Woelfel (707) 678-8859

EDA Director Tom Rosztoczy Stotz Equipment Avondale, AZ 85392 (623) 936-7131

DirEctOrs

Russell Ball 21st Century Equipment Fort Morgan, CO 80701 (970) 867-9434

Nathan Green Belkorp Ag, LLC Modesto, CA 95358 (209) 538-3831

Mike Meth 4Rivers Equipment Greeley, CO (970) 356-3666

Brian Potter Quality Machinery Center Tulare, CA 93274 (559) 686-1579

Brent Scott M & S Equipment, Inc. Coolidge, AZ 85228 (520) 723-4181

FWEDA stAFF

President & CEO Joani Woelfel

Administrative Manager Shunda Justin

Marketing & Publications Jason Peacock

2020 Research Park Drive, Suite 160Davis, CA 95618 Phone: 800.576.8850 Email: [email protected] www.fweda.com

FARWEST Dealer Vol 29 | Issue 03

Cover photo: Kubota Tractor in Field


A rise in single-family home sales and disposable income translates into increased spending on non-auto durable goods and employment in landscaping services, driving small equipment sales. “The U.S. spring home buying season is shaping up as the best in years … About 40 percent of the year’s sales take place from March through June.” the Wall Street Journal reported April 1.Equipment dealerships are adapting to consumer demand:

• Nationwide: the 2WD Tractors under 30 engine HP Industry sales have seen double digit percentage increases every year since 2011• Of the customers who have FSA Acreage information, producers with 20 to 320 acres acquire about 50 percent of these tractors

• For John Deere, residential property owners purchase between 50-55 percent of these tractors• Deere shows about 15 percent of sales going to commercial businessesRegarding changes among customer segments, there is little variation year to year, with only a couple of point changes each year, but no major trending up or down by any one segment, says Jason Tucker, Western Regional Sales Manager for John Deere, who provided the statistics referenced here. He observed customers do a tremendous amount of research online for these products. “Online shopping and understanding what is available and meets needs is key to serving this segment,” Tucker said.

Thriving economy boosts small equipment sales

"I love being a part of Far West. I love what they're doing for the dealers and I think that we need to keep up and get more of the younger generation to start grabbing ahold of the networking and why you do this kind of thing."

– Chanse McGuire VP Basic Software Systems

EXPERIENCE THE BENEFITS OF MEMBERSHIP

INCENTIVE PROGRAMSExciting new programs and opportunities to reach FWEDA members.

EDUCATION & NETWORKING OPPORTUNITIESConnect with members in our publications and during our annual convention with sponsorship and programming opportunities.

DEALER MARKETPLACE LISTINGA listing on the Dealer Marketplace that places your business at our dealers’ fingertips.

MEMBER DIRECTORY Receive membership access to our exclusive online Member Directory.

ADVERTISING OPPORTUNITIESGrow your business by advertising on our website, in our bimonthly printed and digital Dealer publication and 2018 Convention Program.

INDUSTRY PARTNERSHIPSFWEDA and EDA form strategic alliances to develop programs and partnerships that benefit the business needs of our members and their employees.

Join FWEDA today at www.fweda.com/membership

Russ Ball, Bill Garton and Chanse McGuire at the 2018 FWEDA Convention

SMALL EQUIPMENT SALES Continued on page 7

– AEM

TRACTORS SOLD


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Deere outperformed Kubota earlier this year in overall small tractor sales, which is Kubota’s specialty. (Kubota could not be reached for comment on this story.) Market watchers say Kubota has struggled with margins, and the company recently announced its plans to enter the big tractor market in North America. The small equipment segment shows no signs of slowing. Associated Equipment Manufacturers report a 50-percent increase in sales of < 100 Engine HP machinery in the five years from 2013 through 2018 across FWEDA territories.Responding to the most recent Ag Equipment Intelligence Dealer Sentiments & Business Conditions Update survey, one dealer summed up the state of the rural lifestyle market in 2018: ‘"Commercial sales are way up, specifically for less than 100 horsepower tractors." The numbers coming from the Assn. of Equipment Manufacturers back up this dealer's commentary, particularly in the sales of under 40 horsepower tractors. According to the latest AEM numbers, North American sales of compact tractors were 169,788, up 8.8 percent in 2018 and up more than 80 percent when sales bottomed out in 2009.’The U.S. Department of Agriculture released its 2017 Ag Census in April, which shows farms of 179 acres or less represent 1.4

million of the total 2.04 farms reported. It should be noted that California, one of the nation’s largest Ag economies, had less than a 68-percent response rate to the Census.California had the highest value of Agricultural production at $45 billion followed by Iowa at $29 billion. The Census found there continues to be more very small and very large farms with mid-sized farms diminishing, and that fewer farms produce the majority of all Ag products sold.

SMALL EQUIPMENT SALES Continued from page 6Dealer Forecast• About 88% of North American rural equipment dealers say 2019 will be as good as or better than 2018. About 93% say aftermarket revenue will be as good as or better than last year.

• Zero-turn mowers topped the list of products with the most unit sales potential this year. Tractors less than 40 horsepower, utility vehicles, rotary cutters and tractors 40-100 horsepower rounded out the top 5 for unit sales potential.

• Finding good employees, low sales margins and healthcare programs and costs are the top 3 issues dealers are most concerned about.

• More than 53% of dealers say their market has grown 5-19% in the last 5 years and nearly 17% say they’ve experienced growth of 20% or more. More than 70% have been serving rural lifestyle customers for more than 16 years.

– Rural Lifestyle Dealer


• Rising costs from manufacturers. We are reaching a point where the average grower can no longer afford

new iron. It creates concern that this will lead to more corporate farms and fewer customers in the marketplace.

• Low prices and lack of a global market for commodities are a threat.

• Growing legislative pressures from R2R bills.

• Tariffs, rising interest rates, aging growers, aging upper management and a lack of interest from young leaders make recruitment difficult. Rising healthcare costs are a huge concern.

• Young people interested in the business — preparing by working with local colleges.

• Online sales format such as Amazon — quick and free delivery. Preparing by offering exceptional in store service; however, some always buy online regardless of higher prices.

• Manufacture direct sales of whole goods and parts to large accounts. Preparing requires work with FWEDA on manufacturer relations.

• General global economy — increased tariffs,

interest rates, inflation. As triggers happen, act with inventory reductions.

I hate to say it but we have a lot of challenges facing our industry in the coming

years. Some are not unique to us, such as an aging workforce but we do have some unique ones I think about. In California, I worry how the equipment buying cycle will change once government air board dollars are no longer available. This still seems like it's years away so I don’t spend too much time on it. The commoditization of our Parts business: with internet retail plus other physical stores having more and more ability to sell parts that work for our tractors, pricing becomes more and more of a challenge. With limited pricing control it makes it harder and harder to afford wage increase for the parts department. We must find ways to work smarter within our parts department as well as provide better service to our customers so they want to do business with us. Not an easy proposition and without an easy solution.

There are so many challenges facing the equipment industry today.

Q&A Ask fwedA's BOARd

RUSSELL BALL District Manager 21st Century Equipment Cheyenne Wells, CO

NATHAN GREEN President Belkorp Ag, LLC Modesto, CA

KEITH GREENWOOD COO Stotz Equipment Bluffdale, UT

BILL GARTON President Garton Tractor, Inc. Turlock, CA

What do you see as the greatest challenge facing the equipment industry in the next five years and hoW are you preparing for it?

BOARD TALK Continued on page 9


Commodity prices, labor pool and labor talent, competing interests for limited skilled talent pool; regulations, cost of production — service trucks, labor, buildings, interest rates, health care, used inventory, inventory management; market share — balance of growth, trade cycles or inventory management, and gross margin.

When looking at overcoming the limited skilled talent pool, we need to work to have a reputation of being a great place to build a career. Our culture needs to build our employees and then leverage their talents to build the business.

Experienced skilled workers are in high demand so we have developed a strategy of filling a pipeline of younger talented technicians and providing training to help them grow and develop.

I see the biggest challenge as dealership recruitment and retention of valuable employees. Working on the

culture of my business and making it a priority.

A majority of the younger generations today do not want to work like their parents or grandparents. They want a job that is 40 hours or less a week

with no commitment on weekends or evenings when our customers are working. So how do we get our industry image and workload to look

more attractive? How do we make it, let’s say “sexy,” to attract talent today? That is the key to getting good talent onboard for the future. Dealers have to change what we have done for generations and step outside our comfort zones to create an environment that attracts younger talent.

Having skilled labor in all departments of the dealership.

Company growth combined with the distance between dealerships has brought a new challenge to our company that

is a focus now, as well as continuing forward.

We are recognizing the effort and dedication involved in keeping the company culture consistent.

Establishing a new dealership involves much more than just policy and procedures in a handbook. Teaching the company culture and creating an environment centered on the core beliefs that our company was founded on takes mentoring and modeling.

As our leadership positions expand, there is an increased need for company training in the fundamental best practices that represent what our company is known for.

ERIC MASON President Mason Machinery Aurora, UT

BRENT SCOTT General Manager M & S Equipment, Inc. Coolidge, AZ

BRIAN POTTER General Manager Quality Machinery Center Tulare, CA

MIKE METH General Manager, Ag Division 4Rivers Equipment Greeley, CO

BOARD TALkBOARD TALK Continued from page 8


Given the ease of acquiring the applications necessary to modify

power and emissions features across the equipment and vehicle industry, many people seem surprised to find it’s a violation of the Clean Air Act to manufacture, sell or install parts that bypass, defeat or render inoperative any emissions control device. This would include chipping or tuning machinery. Suppliers market these items “to achieve superior performance, more power, cleaner emissions or better fuel efficiency.”

Tuning modifies a vehicle’s electronic control unit (ECU), which is an erasable programmable read-only memory chip. When taking in trades or used equipment, dealers cannot always determine whether engines have been tuned, which creates challenges for customers who could unknowingly purchase a piece of equipment that’s been modified well beyond its performance capabilities.

As it relates to proposed Right-to-Repair laws, manufacturers say end users do not need to modify embedded code to perform repairs. Rather, equipment is designed to comply with applicable safety and emissions standards. “The ability to modify embedded code, in fact, is sought for inappropriate purposes such as circumventing safety

and emissions standards and stealing intellectual property,” according to Natalie Higgins, vice president of government affairs and general counsel to the Equipment Dealers Association based in St. Louis, Mo.

Citing an increase in imports of non-compliant equipment and vehicles starting in 2008, the Environmental Protection Agency pursues various parties for CAA violations ranging from failure to provide a certificate of conformity (COC) or display compliant labeling, to importing compression-ignited (CI) nonroad engines that either do not meet emissions standards or are not exempt from the requirements. The Act and its implementing regulations provide for testing, reporting, recordkeeping, warranty, labeling, tampering, defeat devices, and vehicle and engine maintenance and alterations.

The EPA isn’t shy about targeting industry leaders for these violations: Briggs & Stratton, Caterpillar, Cummins, Toyota, Doosan, Nissan, Komatsu, Kubota, Krone, Claas, John Deere and Husqvarna are just a few that have paid fines and incurred expenses for non-compliance. In 2011, EPA settled a claim of violations with Caterpillar “for shipping more than 590,000 highway and non-road diesel engines without the correct

emissions controls. Caterpillar also allegedly failed to comply with emission control reporting and engine-labeling requirements.” Caterpillar was fined $2.55 million that included a recall of non-compliant engines. In 2017, Husqvarna was fined $2.85 million for failing to provide EPA with “complete and accurate emissions testing information relating to engines used in handheld lawn, garden and forestry equipment.” And late last year, EPA set its sights on tuning when it penalized Derive Systems, maker of “Bully Dog” and “SCT” tuning software, asserting the company manufactures emissions defeat devices. Derive was fined $300,000 and will spend another $6.25 million bringing its products up to standards.

Thus, it’s no surprise the equipment industry operates in a heightened state of sensitivity when it comes to modifying embedded code, machinery performance and emissions. EPA regulations treat dealers selling new

EPA RAMPS UP ENFORCEMENT Continued on page 12

EPA RAMPS UP ENFORCEMENT OF EMISSIONS STANDARDS

This is the third in a series of articles related to Right-to-Repair, a movement that seeks unrestrained access to equipment tools and technology. These articles address the Right-to-Repair vs. Right-to-Modify machinery, the potential impacts that compromise safety and emissions standards set by state and federal governments and the ramifications consumers face by altering equipment.

R2R RESOURCESFor detailed information on Right-To-Repair visit:

www.fweda.com/r2r


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EPA RAMPS UP ENFORCEMENT Continued from page 10

engines the same as manufacturers. The potential cost for violating the CAA is $45,000 for each piece of equipment in breach of the standards. EDA’s Industry Relations Task Force advises equipment dealers to avoid these penalties by employing best practices.

New equipment:• Verify that each engine is covered by a Certificate of Conformity (COC).

• Confirm equipment has a label or tag signifying the COC on the engine or part.

• Do not alter or “improve” the new motor in any way prior to sale.

Trade-ins:• Evaluate the engine to determine whether defeat devices or other items used to impair, disable or bypass emissions controls have been installed.

• Verify the equipment complies with CAA standards and has not been

modified to violate EPA regulations from its original purchased state.

• Require owners to indemnify dealers for any claims arising from the resale of the equipment (as allowed by state laws).

Engine maintenance:• Maintain the engine in factory condition.

• Ensure that any change or parts substitution is supported by documentation verifying it does not affect emissions.

• Keep records to demonstrate compliance.

• Emissions labels on any device or part should not be altered or removed; instead keep them intact and up to date with accurate information.

• If a part must be replaced get a duplicate of the original label installed by the certifying manufacturer or

another authorized person. Typically, these labels are permanently attached to parts that normally don’t need replaced.

The equipment industry has a vested interest in ensuring the integrity and life cycle of the machinery it sells and services. Dealers make significant investments in technology and training to support customers and provide prompt, reliable products and services to reduce downtime and increase productivity. The industry has committed to providing the necessary tools to diagnose and repair equipment. Our final article addresses that commitment and progress toward the industry’s goal to meet the demands of customers who rely on their equipment to sustain their businesses.

Joani Woelfel is president and CEO of Far West Equipment Dealers Association. This article appears in Wyoming Agriculture, a publication of the Wyoming Farm Bureau.


According to the Assessment of Business Cyber Risk (ABC) report released in April by the U.S. Chamber of Commerce and FICO, the level of cyber risk to the U.S. business community is holding steady for the first quarter of 2019, with a national risk score of 687.

The ABC measures the aggregate cybersecurity risk faced by the U.S. business community. Based on data from the FICO® Cyber Risk Score, the ABC is intended to advance cybersecurity awareness and improve the overall effectiveness of cyber defense programs.

The report reveals that since the fourth quarter of 2018, small firms showed a slight improvement—up to 740 from 737—while large firms moved from 646 to 643. These changes indicated relatively stable risk performance from quarter to quarter.

“The disparity in risk scores between small and large organizations is due to the fact that large firms have a wider attack surface and are more frequently the target of cybercriminals,” said Doug Clare, vice president for cybersecurity solutions at FICO.

The ABC is the revenue-weighted average of the FICO® Cyber Risk Score for nearly 2,400 small, medium, and large companies. The score calculates the probability of an organization suffering a material data breach in the next 12 months. Just like a FICO credit score, the range is 300 to 850. For individual companies, the higher the score, the lower the likelihood that an organization will experience a data breach in the next 12 months. Similarly, a lower score indicates greater risk of a successful data breach, based on five years of historic breach data. The score analyzes billions of cyber risk indicators and uses machine learning to produce a forward-looking metric for measuring cyber risk.

“As businesses review the results for their organizations, it’s important to note that industries carry different levels of risk, which are outside the control of individual firms,” said Clare. “Banks are riskier than bakeries because they are richer targets, with more data to steal and that data is more valuable. The FICO® Cyber Risk Score looks at both security preparedness and sector-level risk factors, and both are reflected in the ABC.”

Tips for Improving Cybersecurity“When we launched the ABC in October 2018, it was a wake-

up call to many businesses across the country,” said Christopher D. Roberti, senior vice president for cyber, intelligence, and security policy at the U.S. Chamber of Commerce. “Our focus this quarter is to help businesses understand how to improve their cyber posture. It is important to emphasize that a lower score—whether for a company or a sector—does not necessarily imply that insufficient diligence is being applied by those entities. Such entities may simply have a higher risk profile (i.e., they face greater risk of breach) due to the nature of their businesses.”

Managing risk in the world of cybersecurity is about managing behavioral risk and skills gaps, as well as technical flaws. Based on the observations of thousands of businesses scored for the ABC, the U.S. Chamber and FICO offer these six recommendations:

• Use the National Institute of Standards and Technology (NIST) Cybersecurity Framework to develop an information security program. The framework enables organizations—regardless of their size, risk profile, or cyber sophistication—to develop a cybersecurity plan or improve an existing one.

• Develop a reliable understanding of one’s network. This includes identifying assets to apply security management based on risk.

• Identify functions and teams whose process and policy maturity are not performing adequately. This will enable organizations to identify weak links in technology, personnel, policy, and leadership.

• Oversee an organization’s network team to confirm alignment to the details of network management policies. Avoid unnecessarily exposing network infrastructure assets and ensure correct configuration for those that must be exposed.

• Protect and monitor network endpoints. Organizations that monitor endpoints are able to provide an early warning of potential problems.

• Develop a process to confirm that active certificate management programs are in place and are being implemented.

More information on how to improve cybersecurity in your organization can be found in the report and on the FICO Blog at www.fico.com/blogs.

– U.S. Chamber of Commerce

Cyber risk assessment higher for larger businesses as criminals target wide surface


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Along with its multiple browser compatibility and mobile-friendly design, our application and quoting tools are easy to use, responsive and offer quick navigation.

See for yourself. Check out the simple, fast – and awesome – online tools at agdirect.com.

Andy BustillosCalifornia, Nevada(209) 329-2015

Chris StoutArizona, California (480) 291-4021

Ed HarrisonWyoming(406) 403-2688

Brent YoungColorado(620) 923-6652

Ryan KrugerUtah(931) 619-3577


In the beginning stages of any business, most owners are hoping they can simply find customers that are willing to buy their product or service. Customer retention isn’t a high priority for most people during those early stages.

As your customer acquisition efforts begin gaining traction, your business will start to make sporadic sales. Over time, these sales will continue to grow and become more predictable.

If you make it to this stage, you’re faced with a new hurdle. It’s time to figure out how to get your previous customers to buy from you again and spend more money the next time. This is called customer retention.

Customer retention mattersThe future growth of your company depends on customer retention. Researchers like the Gartner Group found that 80 percent of a business’s future profits will come from 20 percent of its current customers.

In spite of this, businesses are twice as likely to focus on customer acquisition than they are on retention efforts. Let’s look at three reasons why customer retention is important:

Affordability: According to the Harvard Business Review, It’s 5-25 times more expensive to acquire a new customer than it is to hang on to the ones you already have. Your current customers are 60-70 percent more likely to buy from you again whereas the likelihood of converting a new customer is only 5-20 percent.

Increased revenue and profitability: Improving your customer retention rates will increase your revenue. This is because it’s easier to sell to an existing customer than it is to convince a brand-new customer to make a purchase.

By increasing your customer retention rate by just 5 percent, your company revenue could increase anywhere from 25-95 percent. So, by focusing on customer retention strategies, your company will always generate more revenue than by focusing on customer acquisition alone.

Lower customer acquisition costs: Customer acquisition costs are the amount of money a business spends on convincing a new customer to make a purchase. This includes things like marketing expenses, market research, sales outreach, and more.

It’s no secret that acquiring a new customer can cost a lot of money. But focusing on customer retention can actually lower your customer acquisition costs.

Loyal customers are more likely to recommend your business to their friends and family and bring in more word-of-mouth referrals. One study found that customers acquired by word-of-mouth referrals spend 200% more than the average customer.

Another important thing to keep in mind is that, once you have a customer, you don’t want to pay to acquire that customer again as if they were brand new.

Tracking customer retention metrics

Before you can improve your customer retention rate, you have to first understand where you are now. This involves looking at four key metrics.

Understanding how to figure out these metrics and ultimately

improve them is key to maintaining and increasing your customer retention. Here are four customer retention metrics your business should be tracking:

Repeat customers sustain businessYour repeat customer rate is the percentage of customers who have made more than one purchase from your company. Tracking this rate is the best way to see how well your retention strategy is working.

To track your repeat customer rate, you need to know two things:

1. How many customers made more than one purchase within the past year

2. How many unique customers you’ve had within the past year

The formula for tracking your repeat customer rate is:

The number of customers that bought from you more than once / The number of unique customers

This in not a metric that you should calculate once and forget about. The best way to use this and any business metric is to monitor your performance over time and understand how the methods you use affect this metric.

Boost customer retention to drive repeat business

A HAPPY CUSTOMER IS YOUR BEST ASSET. HERE'S A BREAKDOWN OF HOW TO MANAGE, TRACK AND IMPROVE CUSTOMER RETENTION

CUSTOMER RETENTION Continued on page 17


3 Keysto theSUCCESS of anyDEALERSHIP

The equipment industry’s everchanging landscape demands company leaders focus on THREE KEY areas of training that are crucial to THE SUCCESS OF ANY DEALERSHIP:

FW Coaches specializes in adapting our programs to your company’s needs. FWEDA’s partnership with The TRAINING A.S.P.E.C.T. offers a tailored coaching approach to providing your dealership with the necessary skills and solutions to achieve profitable and successful results. Contact us at 800.576.8850 or email us at [email protected] for a free consultation, or to schedule a customized training session.

As conditions tighten for equipment sales, it’s imperative that parts and service departments produce sufficient income to absorb all dealership expenses. Do your employees know what defines 100 percent absorption? Are they aware of the best practices to achieve it?

ABSORPTIONFACTOR

1

Exceptional customer service is the key to building and retaining client relationships. Do your employees know the difference between an order-taker and a solutions provider? Are they aware solutions providers create value for the dealership?

CUSTOMEREXPERIENCE

2

A well-educated, efficient workforce requires a substantial commitment of time and financial resources. Does your dealership have the right culture to recruit and retain key employees? Are your employees key to the progress and success of your dealership?

WORKFORCEDEVELOPMENT

3

Shane Wilker [email protected]

WE ARE NOT A TRAINING PROGRAMWE ARE A TRAINING PARTNERSHIP


Customer churn The customer churn rate is the rate at which your customers stop doing business with you. This could mean a customer cancels their subscription or stops buying your products. Either way, that’s a customer your business was unsuccessful in keeping.

A certain level of customer churn is normal in any business. Depending on the type of business that you have, a churn rate of between 5 and 7 percent could indicate a problem.

A high churn rate could indicate that your product or service is failing to help your customers reach their goals. The frequency with which you track and calculate customer churn depends on your business volume.

All of this depends on the product or service you are providing to your customers. For example, if you sell refrigerators directly to consumers and you have a lot of repeat business, that could mean that you are selling bad refrigerators, so keep in mind the nature of your business.

The formula for tracking customer churn is:

(Number of customers at the beginning of the year - Number of customers at the end of the year) / Number of customers at the beginning of the year

Purchase frequencyPurchase frequency looks at how often the average customer makes a purchase from your business. A higher purchase frequency results in higher revenue and overall profitability.

Calculating the purchase frequency is similar to figuring out your business’s repeat purchase rate.

The formula for tracking purchase frequency is:

The number of orders placed / The number of unique customers

Average order value:

The average order value calculates the average amount of money a customer spends on each purchase. This metric allows you to see how much each customer is worth.

The more each customer spends with you, the less money you need to spend marketing to new customers. This results in higher revenue and less money out the door.

The formula for tracking the average order value is: Total revenue earned / The number of orders placed

The bottom lineFinding and obtaining new customers will always be a priority for businesses. But once that customer makes their first purchase, there is more work to be done.

Smart businesses know that the real value lies in keeping that customer, not just earning the first sale. Current customers already know your company and enjoy your products or services, so invest most of your energy in improving the experience for them. If you do this, you’ll see more growth in revenue and profitability than you will be just by focusing on customer acquisition alone.

– Growth Studio, Good Company

4 ways to improve customer retentionNow that you understand why customer retention matters and what metrics you should be tracking, let’s look at four ways you can begin to improve customer retention:

Be accessibleRegardless of your industry, being easily accessible is an important part of building trust with customers. This is especially true if a problem arises.

A 2016 survey looked at the top customer service frustrations faced by 1,200 consumers. The survey found that the top cause of frustration with customers is if the wait time to speak to a representative over the phone is too long.

To ensure you are accessible to your customers, you should allow customers a way to get in touch with your company 24/7, provide a variety of ways for customers to contact you such as through email, live chat, a phone call, and social media, offer customers the option to receive a quote or ask a question on your website, and when customers call, make it easy for them to bypass the automated phone service and speak to a representative.

Personalize the customer experienceYou can personalize your interactions with your customers based on their location, purchase history, product variety, and more. One study found that when companies create a personalized customer experience, they generate nearly four times more revenue than companies that don’t.

You can personalize your interactions with your customers in the following areas: Email marketing, social media, your website and webinars

Ask for feedbackRequesting and acting on customer feedback is the key to customer loyalty. After all, you can’t improve your customer retention rates if you don’t know why your customers are leaving you in the first place.

• Send email surveys to all new customers and ask them for feedback on their experience.

• Always provide a customer feedback form on your website.

• Provide live chat support on your website; 44% of customers feel like this is the most important feature e-commerce businesses can offer.

Create a loyalty programOne of the best ways to increase customer retention is by creating a loyalty program. Loyalty programs allow you to provide more value to your customers and give them an incentive to continue doing business with you.

However, your loyalty program is only as effective as the number of active participants you have. Most customers are members of 19-29 different loyalty programs but only actively participate in about 5-12.

Keep the following points in mind when considering a loyalty program:

• Make sure that it’s easy for your customers to understand how they can earn and redeem points.

• Make sure that you have a good onboarding strategy in place for new members.

• As soon as a new member signs up, send them an email thanking them and letting them know how they can earn more points.

• Give members ways to earn points and rewards beyond just making a purchase. For instance, your customers could earn additional points for referring a friend, social sharing, and more.

CUSTOMER RETENTION Continued from page 15


RDO Equipment Co.'s Forth Worth, Texas, store sponsored the seventh annual Weekend to Remember, an event hosted by the Halo for Freedom Warrior Foundation, an organization dedicated to supporting military veterans who have been wounded in the line of duty. For the Weekend to Remember, wounded warriors – many of whom have lost arms or legs as a result of their service – are invited from across the country to the Fort Worth area to participate in a multi-day lineup of events, from aerial hog hunts and target shooting, to parachuting, racecar driving, and bow fishing.

RDO Equipment Co. customer Dana Bowman visited the Fort Worth store to ask about a sponsorship. Bowman, a retired Sergeant First Class with the U.S. Army, served in the Special Forces

and was a member of the Army’s elite parachute team, the Golden Knights. In 1994, Bowman’s life changed forever when a parachuting accident cost him both of his legs.

Despite his setback, Bowman went on to re-enlist in the Army, something a double-amputee had never done before. He became a motivational speaker and eventually went on to establish the Halo for Freedom Warrior Foundation.

General Manager Matt Daniell said it didn’t take much research after Bowman’s visit to decide the event was a worthy cause to get involved with.

“We’re lucky enough to work for a company that encourages us to give back to the community, to give something of ourselves,” he said. “We thought it was a good opportunity to pay those guys back who sacrificed so much for our country.”

The Fort Worth store provided skid steers, a compact excavator, and even a $450K dozer for the warriors to try out as part of the Weekend to Remember events.

RDO Equipment Co. Supports Wounded WarriorsFW MeMber Mileposts

Have a tip, comment, question, video, photo, product, or article idea you want to contribute? Help us share the great things people do every day that set them and your business apart: Promotions, moves, relocations, acquisitions, community service … all the things that make your business successful. Send us news and information at [email protected].

For 90 years, T.G. Schmeiser Company has been manufacturing and delivering versatile solutions for progressive soil management. The Schmeiser

Manufacturing Company was founded by Theodore Schmeiser in the early 1900’s in Davis, California. In the late 1920’s Schmeiser moved to Fresno, establishing a plant and a new company on Stanislaus Street, naming it the T.G. Schmeiser Com-pany. Founded in 1929, one of Schmeiser’s first inventions with the new company was the patented Schmeiser Grouser Lug; which gave better traction for steel wheeled tractors. During World War II, business was slow, but allowed him time to devise a floating rings roller

to follow the contours of the furrowed soil.

Now in the 4th generation of family members, Andrew Cummings (President), Cory Cummings (Sales Manager) and the rest of the team are leading the organization to the next level of achievement.

For more information about T.G. Schmeiser Company please visit www.tgschmeiser.com

T.G. Schmeiser celebrates 90 years of innovation

OPEI Board of Directors appoints new leadership

The Board of Directors of the Outdoor Power Equipment Institute (OPEI) met with staff recently at the association’s headquarters building to discuss the challenges and opportunities

ahead for the outdoor power equipment industry.

During the meeting, the Board appointed Rob Moll, CEO of MTD, as a director, and named Tom Duncan, President and CEO of Positec, to the executive committee as secretary/treasurer.

Nevada youth among 2019 CASE Institute Scholarship RecipientsCASE Institute Scholarship scholarships, sponsored by Association of Equipment Manufacturers (AEM), in partnership with the Equipment Dealers Association (EDA) and

the Farm Equipment Manufacturers Association (FEMA), support workforce development and hopefully spark student interest in the equipment manufacturing industry.

Among the 34 recipients was Chance Crain of Wells High School, Nevada.



FW industry news

INDUSTRY NEWS Continued on page 21

An April 26 report from Bloomberg was headlined “Farm Equipment Sales Plunge Most Since 2016 in Trade War Fallout.” The tractor and combine sales numbers published by the Assn. of Equipment Manufacturers (AEM) throughout the first quarter of this year don’t seem to tell the same story.

The reference to “Trade War Fallout” in the headline is the real tell of what direction the story is heading. After all, it all depends on how one defines “plunge.”

According to the Bloomberg report, “Purchases of farm equipment plunged by an annualized $900 million in the first quarter, the sharpest drop in 3 years, as U.S. producers struggle with falling commodity prices and collateral damage from President Donald Trump’s trade wars.

“The Commerce Department cited the drop in agricultural machinery purchases as a contributor to the paltry 0.2% quarterly rise in overall business spending on equipment, also the weakest performance since 2016. The softness in the category came despite promises by Trump and Republican leaders that tax breaks for equipment purchases in the party’s signature tax law would boost investment by farmers and manufacturers.”

There is little doubt that sales of big farm tractor sales in North America aren’t where we would like them to be and commodity prices aren’t where we’d like them to be. The fact of the matter is farm equipment sales in North America have been pretty soft since 2015, at least a couple of years before the “trade war.”

Here’s a look at the first quarter sales figures from AEM. You can judge how much ag equipment sales have plunged.

Unit sales of under 40 horsepower tractors in the first quarter of this year were up year-over-year less than 1%. But compared to the average first quarter sales between 2015-19, sales through the first 3 months of the year are up 17%.

For utility tractors, unit sales were down 2.8% on a year-over-year basis. First quarter sales in 2019 vs. average first quarter sales over the past 5 years, for 40-100 horsepower equipment are down about 1.5%.

Year-over-year March 2019 row-crop tractor sales were down 2.2%. Through the first quarter of this year, sales of tractors over 100 horsepower are down 19% compared to average first quarter sales during the past 5 years.

Unit sales of 4WD tractors were up 1.3% in March vs. March 2018. The sales of this tractor category during the first 3 months of 2019 were down by 4% compared to average sales during the first quarter over the past 5 years.

Finally, North America combine sales in March were up more than 41% year-over-year. During the first quarter of this year, sales of combines are up 14% vs. the 5 year average first quarter sales from 2015-19.

The Bloomberg report concluded by citing comments made by Brent Norwood, manager of investor relations for Deere & Co., during a conference call with analysts to discuss the company’s earnings more than 2 months earlier. “U.S. farmer sentiment remains fluid and continues to erode the longer trade uncertainty persists” … [this] “has resulted in some U.S. farmers temporarily pausing equipment investment decisions.”

– Ag Equipment Intelligence

Did Ag Equipment Sales “Plunge” in the First Quarter?


FW industry newsINDUSTRY NEWS Continued from page 20

Did Ag Equipment Sales “Plunge” in the First Quarter? Revolutionary Ag Tech Gaining Interest From FarmersScientific Cal Ag has released results of its first Farmer Research Study. The study was conducted at World Ag Expo held February 12-14, 2019 in Tulare, CA. "With over 100,000 attendees at the Expo, this is the largest such event in the world," states Anthony Hall, President and CEO of Scientific Cal Ag.

While exhibiting at World Ag Expo, the company offered a two-night stay with dinner and free wine, including wine tasting, at the exclusive Allegretto Resort in beautiful Paso Robles, CA. Kaveh Nemati, the company's data scientist, notes, "the incentive to participate in the study helped yield a statistically sound representation for sampling". Nearly 60% identified themselves as growers or farm owners, while agronomist/crop scientist, agriculture research and development, consultants, operations and sales comprised smaller portions. Among the notable results:

• 50% of responders grew fruit (including wine grapes) and nuts, which affords the greatest opportunity for Scientific Cal Ag’s drone driving technology. Smaller farmers (less than 440 acres) represented 63% of the survey, which is lower than the 89% reported for all U.S. small farms, according to the 2017 USDA Census of Agriculture.

• The survey found that 16 out of 100 farmers refrain from hiring a specialist during the growing season, preferring to handle the ground truthing themselves. Of those that hire a specialist, 31% are to detect disease and pests, with 22% for soil inspection, 17% for irrigation advisement and 14% for fertilization.

• Depending on the number of acres farmed, smaller producers spend up to $60,000 annually for the services of crop scientist/PCA's and other specialists. Nearly 41% of farmers spend between $60,000 and $120,000+ annually for these services.

During World Ag Expo, news of the new

drone technology spread like wild fire, with local news agencies lining up to interview the team. "We had interviews from KBAK, FOX58, CBS47, KSEE24, 23ABC and FOX26, which were all aired during the Expo", states Jacob Lindberg, Product Design Engineer. "Attendees were approaching us mentioning how they had seen our drone on the news.”

The survey further assessed the likelihood of adopting this new drone technology, indicating:

• 51% acknowledged that they use precision agricultural technology to make decisions in the field.

• 97% stated they consider agricultural technology/services worth the cost.

• Farmers responded positively to Scientific Cal Ag drone technology, with two-thirds stating they would definitely use their services, if available.

While adoption rates for farmers transitioning to agricultural technology remains below 10%, the general consensus is that innovators of agricultural technology do not fully understand the requirements of farmers. "We tend to be bombarded with all of this new technology, but so far I just don't see any savings", was a common theme from visitors at the Scientific Cal Ag booth. During the survey company officials asked farmers, "what are your main concerns within farming?" 31% responded water/drought, 24% crop yields, 23% disease/pests, 10% picking decisions, 5% maturity and 7% other.

– WAE News

States developing battery recycling initiatives The Department of Energy is leading an effort to develop technologies to recycle lithium-ion batteries from electric vehicles, cellphones, outdoor power equipment, and other sources to ensure a reliable and affordable supply of crucial metals to battery production in anticipation of soaring global demand and potential shortages. Metals such as Lithium and Cobalt are both expensive

and dependent on foreign sources for production.

Additionally, individual state initiatives that focus on battery recycling programs are being kickstarted that address sourcing of minerals, as well as proper handling and management processes. Maine and California, in particular, are creating regulations that not only impact manufacturers but the general public as well. Other states, including Illinois, Maryland, Texas, Minnesota, and Vermont are preparing similar bills to help address these growing concerns. OPEI continues to engage with regulators and monitor these developments.

– OPEI

Don’t Forget to Submit Scholarship ApplicationsThe Equipment Dealers Foundation (EDF), the charitable arm of the Equipment Dealers Association (EDA), has released the scholarship application and guidelines for the 2019-2020 academic year. The deadline to submit all application materials is 5:00pm (Central) on April 30, 2019.

ED’s scholarship program supports the training, retraining or advancement of current and potential employees of equipment dealerships. Candidates must be sponsored and recommended by a dealership to be eligible to participate. This program is part of EDF’s broader workforce development initiative and aims to provide an incentive for qualified employees to begin or continue their professional growth within the agriculture industry.

Scholarships from EDF are $1,000 and are matched by the sponsoring dealership for a total of $2,000. These funds can be used for any educational program; associate, bachelor’s and post-graduate degrees in any field as well as technical training in the ag equipment industry. EDF awarded 10 students a total of $20,000 for 18-19 academic year.

Please direct questions to [email protected].


At Basic Software Systems, we make our software adaptable so you can grow bigger, better and stronger. Our software integrates with your dealership and will take you into the future, lacking nothing.

ADAPT. GROW. SUCCEED.HELPING SUSTAIN GROWTH SINCE 1979

www.basic-software.com | (800) 252-4476


FW workforce

Previously a declining sector of the United States workforce, blue collar

jobs are growing at the fastest rate in nearly three and a half decades, yet workers are scarcer than ever, according to studies from The Washington Post and The Conference Board, respectively. This unique combination of circumstances creates significant new opportunities for Americans who may not have a college education. And, as they look to invest in a career, they face a question: is taking a blue collar job a smart decision?According to America's blue collar workers, the answer appears to be a resounding yes. Today, Express Employment Professionals released a new white paper, "The State of Blue Collar America." Drawing on the expertise of Express franchise owners and on original polling commissioned by Express and conducted by Harris Poll, the white paper offers an in-depth look at blue collar workers, how they find meaning in their work and why filling open blue collar jobs is so important."For the first time in modern history, blue collar job openings outnumber white collar opportunities," said Express Employment Professionals CEO Bill Stoller. "These are some of the most in-demand jobs in our country. So as our paper argues, it's time to rethink negative stereotypes about blue collar work. Job seekers really are in the driver's seat, and that's part of the reason we're seeing rising wages in many of these fields."The recent Conference Board study reveals blue collar labor shortages are the result of "converging demographic, educational and economic trends in the U.S. economy." Baby boomers who once held these jobs are retiring, while others have left the labor

force because of disabilities. And more Americans are obtaining four-year degrees, while those without continues to decline. Industries that are feeling the squeeze in particular include transportation, production/manufacturing and health care support. Gad Levanon, lead report author and Chief Economist of North America at The Conference Board, says that while the picture may look bleak for businesses, it looks very different for the workers. Blue collar workers are now more likely to enjoy their jobs and be rewarded with rapid pay increases, which confirms the Express survey findings of this segment of the workforce. The vast majority of blue collar workers (86 percent) say they are satisfied with their jobs, and 91 percent say their work makes them "proud." And as the paper reports, blue collar workers are more likely to have a positive outlook about the direction of the country. Accurate perceptions of blue collar life, then, are important for those considering career paths. But there are much larger implications: if jobs go unfilled, the strength of the American economy is at stake too. As Luke Sodergren, an Express franchise owner in Wisconsin and Minnesota puts it, "We have many skilled positions that go unfilled because there is a shortage of talented individuals wanting to enter the trades."The paper breaks down what more Americans need to understand about blue collar workers:• Blue collar work brings satisfaction.• Blue collar work offers viable career paths and advancement.

• Blue collar workers recommend their career paths.• Well-paying jobs are possible without a college degree and the debt that comes with it.• While they acknowledge challenges, blue collar workers have a positive outlook on the future.• Blue collar workers have positive expectations for 2019, and very few are concerned about automation disrupting their careers.• Blue collar workers may face unique retirement challenges.• Blue collar workers lament that, despite their own satisfaction, society looks down on their work. "There's been a great deal of chatter about the future and frustrations of America's blue collar workers," Stoller added. "But our research shows that most blue collar workers feel good about themselves and their jobs. It is in all of our best interest, then, to check our preconceived notions-because our collective future will be determined in part by whether these jobs are filled. One thing that will never change is the importance and value of skilled workers in the modern and future economy."– Express Employment Professionals

THE STATE OF BLUE COLLAR AMERICA: SATISFIED WITH WORK, SATISFIED WITH LIFE

NEW WHITE PAPER EXPLORES TRENDS IN THE BLUE COLLAR WORKFORCE

HIGH PAYING JOBS WITH NO COLLEGE DEGREE-OR MINIMAL DEBT

BLUE COLLAR WORK IS RED HOT


FW politics & policy upcoMing events

Arizona

California

Colorado

Hawaii

Nevada

Utah

Wyoming

US Regular Session 1/3 – 12/31

Legislative Sessions

1/14 – 4/27

1/7 – 11/30

1/4 – 5/4

1/16 – 5/2

2/4 – 6/3

1/28 – 3/14

1/8 – 3/1

17-18 September 2019

FWEDA September Board Meeting & Networking Event

6:30p.m., September 17 Wave @ Hyatt Regency John Wayne Airport, Newport Beach 4545 MacArthur Boulevard Newport Beach, CA 92660

FAR WEST 2019 ConventionPhoenix Marriott Resort Tempe at The Buttes2000 W Westcourt Way

Tempe, AZ 85282

5-8 November 2019

18-19 June 2019

FWEDA June Board Meeting & Networking Event

6:30 p.m., June 18 Morton's the Steakhouse 1745 Wazee St. Denver, CO 80202

California SB 468 sponsor Senator Hannah Beth-Jackson targeted the farm machinery exemption as part of legislation that would repeal all major business tax incentives by December 2023, if certain conditions are not met, and result in one of the largest tax increases in recent years.

Jackson took amendments to SB 468 to remove some provisions, and instead require the establishment of a state board to study the loss of revenue and other effects of tax incentives. Among other things, the proposed language would:

• Require the legislative analyst’s office to complete an assessment of all tax incentives and policies above a certain dollar threshold;

• Require the board to make recommendations to the legislature regarding repeal or changes to tax incentive policies; and

• Exclude from the review those incentives authorized under the personal income tax; sales tax exemptions on food, electricity and prescription medications; and exemptions for nonprofit organizations.

FWEDA joined a coalition of organizations opposing the measure in a letter to Senators:

“This measure would create a new body in state government that would direct the legislative analyst’s office (LAO) to study “tax expenditures,” establish deadlines for completion of the studies, and report findings and recommendations to the legislature.

While we appreciate the stated intent to promote government accountability, we believe this goal can be achieved without creating a new and potentially costly bureaucracy, through legislative guidance to the LAO and other state agencies, and by expanding the scope of the study to provide a more comprehensive assessment for the legislature.

Unnecessary and potentially costly new agency. This measure would create a bureaucracy that is duplicative of functions currently performed by a number of existing agencies, including the Department of Finance (DOF), the LAO, the state auditor and others.

For example, SB 468 requires the LAO to annually review tax expenditures and report its findings to the legislature. This function currently is performed by the DOF. Every year, the DOF identifies all tax expenditures that cost $5 million or more; estimates the fiscal impact over 5 years;

assesses the number of businesses/taxpayers who are affected; and reports many more criteria as required by law. The DOF study includes all tax expenditures targeted by SB 468, many similar evaluation criteria/factors enumerated in SB 468 and comparable notification and transmittal requirements.

Both the LAO and the state auditor can initiate studies under their own authority or at the specific direction of the legislature. In 2013, prompted by questions regarding the state’s Enterprise Zones (EZ), the LAO and DOF each independently analyzed and made recommendations to the Legislature. Upon finding the EZ program to be less effective than others, the Legislature eliminated EZs and replaced them with three other tax incentives. More recently, the State Auditor conducted an assessment of several of the state’s primary tax expenditures and recommended improvements to some, while noting that others appear to be achieving their objects.

Moreover, numerous state entities are tasked with review, analysis and reporting for their specific tax expenditures, including the California Department of Tax and Fee Administration’s annual report on the Manufacturing Exemption, the California Film Commission’s evaluation of the Film Tax Credit, the State Treasurer’s annual report on the California Alternative Energy and Advanced Transportation Exemption, etc.

If different data on tax expenditures is desired, this can be achieved without adding another bureaucracy and costs by the Legislature’s changing of the parameters of existing reports, giving different direction to the LAO or State Auditor, and soliciting stakeholder input as part of legislative hearings. We respectfully request amendments that would delete creation of an unnecessary state agency.

Lacks Comprehensive Evaluation Metrics. This bill enumerates evaluation factors intended to ascertain the revenue loss to the state, but lacks critical criteria for measuring the revenue gain from tax incentives and their multiplier effects through the economy.

The PEW Charitable Trusts report in 2017 entitled “How States are Improving Tax Incentives for Jobs and Growth” recommended that states incorporate examination of “multipliers” to fully evaluate tax expenditures.

California measure threatening tractor exemption advances through legislature

POLITICS & POLICY Continued on page 25


FW politics & policyPOLITICS & POLICY Continued from page 24

2019 audit risk high in light of Wayfair

With last year's Wayfair ruling on sales tax collection, dealers can expect heightened enforcement actions in the coming year. The ruling tied sales tax collection to the amount of sales volume and number of transactions.

HBK CPAs & Consultants released an updated Wayfair Sales Tax Chart. This reference tool can be used by dealers to comply with the Wayfair statutes in effect in the various states.

Members can download the Wayfair Sales Tax Chart at www.fweda.com.

Colorado lawmakers to codify big change to online sales tax system

The Colorado House Finance Committee has unanimously approved legislation (HB 1240) that would codify a controversial rule change announced last year by the state’s Department of Revenue establishing a destination-based sales tax system.

Under the state’s current system online retailers assess, collect and remit sales tax based on the tax jurisdictions they share with their customers. But under the new system, the retailers pay sales taxes based on their customers’ addresses.

With more than 700 unique sales tax combinations in the state, due to its multitude of special taxing districts and home-rule cities, the new system could be a significant burden on small-businesses.

Another bill (SB 131) that would have exempted businesses with less than $100,000 in annual

sales in the state from the new system died in committee in February. – Denver Post

Death tax requires education

Helping lawmakers, especially new members of Congress, get a good handle on the overall importance of farming and ranching is the first step to securing support for repealing the estate tax, Rep. Jason Smith (R-Mo.) recently told several members of the Family Business Estate Tax Coalition. The American Farm Bureau Federation is a member of the coalition.

Smith, a seventh-generation Missouri family farm owner who serves on the House Ways and Means Committee and the Budget Committee, along with Rep. Sandford Bishop (D-Ga.), earlier this year introduced the Death Tax Repeal Act (H.R. 218).

“There’s a lot of opportunity to provide basic education about agriculture” to members of Congress who may not know a lot about farming, Smith said, noting that getting additional support for estate tax repeal legislation, especially from Democratic members, would take time.

“A lot of great things don’t happen immediately. We can get there, slow and steady,” he said optimistically.

Lawmakers who haven’t been exposed much to agriculture have a hard time understanding that the estate tax can really hurt family farmers, who are far from wealthy.

“Many farmers are truly land-rich, but cash

poor,” Smith said, citing a cotton farmer in the boot heel of Missouri who doesn’t need to farm very many acres to go over the estate tax exemption, especially with a cotton picker costing around $600,000.

The 50-plus members of the Family Business Estate Tax Coalition in February sent a letter to Smith, Bishop and Sen. John Thune (R-S.D.), who introduced the Death Tax Repeal Act of 2019 (S. 215) in the Senate, thanking them for their efforts to eliminate the estate tax.

– American Farm Bureau Federation

Three bills seek to ease ELD mandate

US Rep. Collin Peterson, R-MN., introduced two bills to provide relief from the ELD mandate. HR1697, the Small Carrier Electronic Logging Device Exemption Act, would exempt businesses which operate 10 or fewer commercial trucks. HR1698, the Agricultural Business Electronic Logging Device Exemption Act, would exempt certain agricultural haulers from the requirement. It contends that transporting live animals and perishable products requires flexibility that the mandate does not allow. Both bills were co-sponsored by Rep. Greg Gianforte, R-MT. Rep. Austin Scott, R-GA., unveiled HR1673, would amend the Motor Carrier Safety Improvement Act of 1999 with respect to the definition of agricultural commodities, and more clearly define ‘agricultural commodities’ as applied to transportation laws, extending regulatory relief for all farm commodities.

– LandLine Daily eNews

To provide a more accurate and comprehensive assessment of state revenue impacts, we suggest that any tax expenditure study incorporate “multipliers” and their effects on the economy, including but not limited to:

• Increases to state revenue from jobs, employee wages and business income related to the tax incentive.

• Increases to local property tax revenue from business investment and homeownership, and their funding support to schools.

• Reductions in public assistance spending, and other general fund savings due to greater employment.

Additionally, we believe it is critical to examine California’s policies in the context

of competitiveness with other areas of the country:

• What incentives are competitor states offering?

• How do other states’ jobs climates stack up to ours?

• What will be the loss to our state in terms of jobs and revenue if ta California tax incentive is eliminated?

Tax Uncertainty Discourages Investment. While it is meritorious for the state to consider the effectiveness of tax policies and programmatic expenditures, this measure would create significant uncertainty with respect to the future of the state's tax structure.

When businesses choose to locate in a state, factors such as the availability of a

skilled workforce, infrastructure, regulatory environment, and tax structure all play a significant role, and businesses evaluate whether they can rely on these factors to remain relatively stable and consistent in the long term. Furthermore, for capital-intensive industries like manufacturing and research-and-development, investment decisions are made many years into the future. The ability for corporate decision-makers in these industries to anticipate costs over a span of many years is an important factor when determining locations for these investments.

The threat of repeal of tax incentives, in light of our state’s already high cost of doing business, poses a significant barrier to jobs, investment and the state’s long-term economy."


A s a dealer principal I liked

to think that the wages we paid our people provided enough motivation for them to be personally invested in delivering a quality experience to

our customers. Over time I found that while wages are necessary, the best and most productive employees are hard-wired to innovate. For that additional innovation they want a chance to get a little extra. My goal in designing incentive programs was always to try and foster a team environment and an atmosphere that called people up to the next level, both in our dealership, and in their personal lives. Employee engagement is a funny thing. Over the years I have learned a thing or two about what motivates people to find that inner magic. The big surprise was that many times it was not really connected to wages, or even bonuses and over-rides. Instead there were a myriad of other motivating factors that are seldom considered in even the most robust incentive programs. We have all talked ad-nauseam about the generational differences that exist in our workforce, but despite all the talk, I am not sure that we have made the organizational shifts to keep our millennials and Gen-X’rs engaged. We still hang money in front of them and expect them to jump for it. When they don’t, we still seemed surprised.By 2025, the millennial generation will represent over 50% of our workforce. The more we do the same old things, the harder it will be to get them excited about our business. We have to address what compels them to engage. Studies have shown that overall, our newer employees value many things as much as OR MORE than adequate compensation:1.) Time and work/life balanceBaby boomers always saw their

working life as a CALLING. Much of their identity was tied up in their occupation, and they validated themselves through achievement in the working world. Employees currently in the workforce however may not see work as a calling. Instead they view their employment as a CONTRACT. Their validation and identity are many times completely separated from how they earn their money. It’s not that they aren’t serious about what they do, but they truly VALUE their time as much (if not more) than their money. 2.) Meaningful ContributionConnected to this obsession with time, is the burning desire they have to be a part of something important, and worthwhile. They want their work to be meaningful. They want to solve problems and overcome challenges in new and different ways. They value efficiency, and find it exciting and motivating to find new answers to old problems. This is why they constantly ask WHY. Management wrongly sees this question as an affront to their authority, but most of the time the WHY is simply an attempt at finding an alternative (and perhaps a better, and more profitable) process. We think we know what works. But maybe we are missing an opportunity.3.) RecognitionYes, everyone still likes to be recognized publicly. What we recognize employees for however has changed little over the years. We made our numbers!!! We had no accidents!!! We met our sales goals!!! All of this is great, but it does nothing to really motivate today’s crew. Younger employees like being recognized for achievement, but even more than that they value being appreciated for their IDEAS. Things like reducing the current

administrative paper trail, writing better and more customer focused SOP’s, and making computer enhancements for the benefit of all departments. These achievements should be celebrated as much if not more, than selling some implements, and signing up winter service specials. If we find a way to weave rewards into our programs that address these areas, it is likely that you will find that elusive magic formula that draws employees to be personally involved and engaged. All that said, what should an incentive plan look like? How do we meet the motivational needs of a diverse intergenerational workforce? Not everyone is a millennial, and we want a broad enough program to engender participation from everyone.I don’t know if there is an easy answer, but I do think that whatever incentive format or system you put in place there are some compulsory components that need to be included.• Incentive program products need to be customized, focused, and planned.Don’t broad brush the program. Customize both the products and the rewards based on the department you are trying to motivate. As an example, road techs should be rewarded for tire sales, but tires are not necessarily a hot item for parts countermen. Scale the products in the program toward items that fit naturally within the department’s capabilities and customer opportunities. • Rewards should include CHOICES

Incentives – Engendering EngagementBy Dave Baiocchi, President, Resonant Dealer Services LLC

After MArket SAleS force

Dave Baiocchi

INCENTIVES Continued on page 28


PEED

TTENTION

ATIGUE

MOTION

DRIVE

Scan the code or visit federatedinsurance.com for online tools and resources.

JUST DRIVE.Your poor driving decisions could keep you and your

employees from making it home S.A.F.E. today.

Please make

it home safe today.Ward’s 50® Top Performer

A.M. Best® A+ (Superior) Rating

Federated Mutual Insurance Company and its subsidiaries*19.02 Ed. 8/18 *Not licensed in all states. © 2018 Federated Mutual Insurance Company


Yes, it’s easier to just throw money at them, but in light of what we discussed earlier, perhaps we could add some PTO hours, sporting event tickets, Snap on tool credits, or even dining or travel awards. The wider the range of choices, the more participation you will get, regardless of the generational proclivities.• Programs should include EDUCATIONIf you give someone a story to tell, they may just tell it! If your dealership is highlighting a product, and hanging a reward on it, you will have much more success if you educate the people selling it on the compelling reasons why a customer may want to buy it. This addresses the “WHY” we discussed earlier. It they want to know WHY, let’s tell them! • Programs must have adequate INVENTORY

Nothing kills an incentive program like NOT HAVING THE ITEM. Your employees will actually ridicule the management for their lack of planning and any traction you established early on will disappear.• Programs must be internally advertisedIf you don’t talk about it, why should you expect them to? Banners, leaderboards, paycheck stuffers, blast emails, just keep the communication going. Your employees are watching you and they will only be as excited as YOU are about the program.• Rewards must be distributed no less than monthly, and only during staff meetings.Nothing says “we’re really serious about this” more than actually paying the rewards. Doing so publicly even heightens the effect. Once again on the subject of choices…. you may allow your employees to accumulate points toward upper level rewards, or cash them out as you go. Flexibility is the key

to making the program popular. Just as an aside…. I know that employees always prefer CASH. Their preference notwithstanding, if the program is successful, this may complicate tax consequences for both the employee and the dealership. We did not pay cash, but instead created and presented our own internal payroll voucher. The employee got a copy of the voucher knowing what they earned, and were able to anticipate getting their reward on their next paycheck.There are dozens of ways you can engender participation. The key is to be creative. Perhaps you can reward the world of “ideas and improvements” (discussed earlier) by having managers submit candidates that made intellectual contributions every quarter. Reserve some rewards just for the idea generators among you. We even offered shop techs rewards based on completing jobs under the quoted hour allowance. Whatever you do make it fun, talk it up, and pay it often.

Connect with the right audience of buyers across multiple platforms with behavioral, demographic and social targeting.

Contact us for more information.

(800) 626-6409 FastlineMediaGroup.com

Take your marketing to the next level.

After MArket SAleS forceINCENTIVES Continued from page 26



The skies are clear. The

river is at its normal level. Authorities are reporting a low risk of wildfire. Fault lines have been quiet. It’s tempting to operate your business as if these will always be the

case. But what will you do when disaster strikes? Ask any business owner who has been through a disaster — thorough preparation makes all the difference.When you experience a catastrophe, the trauma and stress make it difficult, if not impossible, to think clearly enough to begin setting things right. And unless you’ve collected all the documents and information you need for operational continuity, you’ll have a hard time getting things moving again. Federated Mutual Insurance Company offers the resources you need to prepare your business for a disaster with the

Institute for Business and Home Safety (IBHS) Open for Business-EZ program. The program, available online or in print, guides business owners through the process of developing a plan to help keep a business profitable after a disaster. The toolkit contains documents to record information about the major areas of your business, including basic operations, equipment, employees, customers, suppliers, vendors, finances, and information technology. It also helps you record and assess your risk for a variety of natural and man-made disasters, and test your plan for reaction and recovery. To access the toolkit, visit the IBHS website, or log on to Federated’s Shield Network and click on “IBHS – Disaster Planning.”The IBHS website also offers a tool that helps users identify threats specific to their geographic region, helping to focus preparedness efforts. It also provides information on best practices, including assessments, guides, and checklists to help prepare for these perils:

• Earthquakes • Floods • Freezing weather • Hail • High winds • Hurricanes • Tornadoes • WildfireThe site www.disastersafety.org, is also great for employees of the business to learn how to prepare for disasters. A business cannot recover unless they have employees that can help and employees can’t help the business until they have their own personal situation under control. For more information on OFB-EZ and the library of other risk management resources Federated Insurance offers, contact your local Federated marketing representative.

— Federated Mutual Insurance Company

This article is for general information and risk prevention only and should not be considered legal or other expert advice. The recommendations herein may help reduce, but are not guaranteed to eliminate any or all risk of loss. Qualified counsel should be sought with questions specific to your circumstances.

Planning Tool: Disaster preparation and recovery strategies

Erick Johnson, Regional Marketing Manager, Federated Insurance

FW Hr updateCalifornia Employer Update Notices

The updated notices have been released by the Department of Fair Employment and Housing (DFEH) and the Employment Development Department (EDD).

Effective April 1, 2019 the DFEH requires all California employers to post the NEW Family Care and Medical Leave and Pregnancy Disability Leave poster. This notice was previously named Family Care and Medical Leave (CFRA) and Pregnancy Notice and only employers with 50 or more employees had to post.

This new updated notice has a revision date of March 2019 and all employers with 20 – 49 employees must post and employers with 50 or more employees must update their exiting notice.

Please be sure to update your bulletin board(s).

In addition, the EDD has updated two pamphlets: California Paid Family Leave

and Disability Insurance Provisions, both have a revision date of March 2019. These pamphlets are to be provided to new employees and to employees either taking a covered leave of absence or a non-work-related disability leave.

–Western Agricultural Processors Association

CA Insurance Bureau Proposes Workers' Compensation Changes

The Workers' Compensation Insurance Rating Bureau of California (WCIRB) is proposing changes to classifications contained in the California Workers’ Compensation Uniform Statistical Reporting Plan–1995 (USRP) that may apply to employers in your industry.

The draft report will be considered by the WCIRB’s Classification and Rating (C & R) Committee at its meeting scheduled for May 7, 2019.

Any recommendations approved by the

C & R Committee will be referred to the WCIRB’s Governing Committee for approval. Approved changes will be submitted in a Regulatory Filing to the Insurance Commissioner for adoption January 1, 2020.

Please be advised that the proposed changes will be reviewed by the WCIRB’s Governing Committee, at its meeting on June 12, 2019. (Please confirm this date on the WCIRB’s website prior to the meeting.)

If approved, the changes will be included in a Regulatory Filing that will be submitted to the Insurance Commissioner for consideration in June 2019. Changes approved by the Insurance Commissioner will be effective January 1, 2020.

If you have any questions regarding this matter, please contact Brian Gray at [email protected] or by telephone at 415.778.7177.


220 S. Jefferson • Dixon, CA 95620(707) 678-5533 • Fax: (707) 678-9788

www.solexcorp.com • [email protected]

220 S. Jefferson • Dixon, CA 95620(707) 678-5533 • [email protected]

www.solexcorp.com

Compact Estate Sprayer

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Available 105 to 320 gallon tanks are made of high-• impact UV and chemical resistant polyethylene. Tank includes site gauge, Hand wash tank, jet agitation, and sump drain valve for complete emptying.

Selection of blowers, booms and spout sets makes it • easy to choose the machine which fits your needs.

Electrical remote control of all functions and is available • with 2 distribution valves. The pressure valve is made of stainless steel for maximum corrosion resistance.

UPN steel chassis provides excellent durability. Chas-• sis is powder coated for long life.

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