It’s fall and that means Pat Jones and the rest of our team are bouncing around the country stopping in to say hello to readers and suppliers. A couple of weeks ago, Pat popped into the Jacobsen headquarters in Charlotte to catch up with their team, including the head honcho David Withers. Here are a few excerpts from that conversation.
What was your big concern when you came over to Jacobsen three years ago and what did you discover as you worked through it?
Overall, I was relieved that customers want pretty much the same thing wherever they are, whether it’s here, the U.K., Europe or Asia. I knew the international business pretty well from my time with Ransomes but I was unsure about the U.S. I was kind of nervous that something that worked there wouldn’t work as well here. But the attitude that we took – to be focused on strong customer relationships – is a universal thing. It’s not a wham-bam-sell-it thing…it’s a longer-term commitment and that’s resonated with the customers.
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How’s life in America?
We really enjoy it. I have to say Charlotte is a pleasant place to live. The weather is obviously way better than back home (in England). One thing you notice is that in cities with a lot of transplants like Charlotte you don’t feel like an outsider. Nearly everyone is from someplace else.
One thing you’ve done is to take a different approach to the used equipment business. Tell us about that.
As we look at the data, there’s no question that the market for (golf) mowing equipment is shrinking year on year. Courses are reducing the amount of grass to be cut and obviously we’re shutting about 150 facilities per year. The biggest single change for us is that customers are churning equipment about every six years instead of every four years. People are keeping (units) longer. Fewer courses can afford new equipment every few years.
So we said, how can we help them to still be successful? It’s difficult to get newer technology down to a price they can afford. So we’re encouraging people to trade in after 4-5 years. It’s good for them and it feeds the secondary preowned market. We buy them back, rework them and resell them for 50 to 60 percent of what a new unit would cost.
The biggest difference in our program is we decided to do it ourselves instead of just offering the dealer-check-up that others do. We literally bring them all back here (to Charlotte) to be reconditioned. We genuinely felt it was the right thing for our business. Since 60 percent of our new equipment is delivered in spring, we’re not that busy later in the year so we’re doing a lot of work on that (certified pre-owned) equipment. That helps us keep our skilled workforce busy and we know the job is done right. Because of that, we have enough confidence to put a real, one-year certified warranty on them. It’s a one-year version of our original factory warranty we offer for new equipment. That’s very different from insurance-based warranties.
You also did a little shopping and picked up Dixie Chopper to move into the commercial mowing market. How’s that going?
It’s been great for us as a business to have Dixie Chopper but it’s been a lot of work to get everything back up and running. We completely revamped their marketing, looked at all 15 models and worked hard on how we relate to dealers. From a business standpoint, it helps us with scale. We’re able to get better pricing on things like ignition switches and many other parts we’re buying more of now. Next is how we maximize front-end sales opportunities like potentially making a zero-turn part of a golf equipment package.
Are you done shopping?
There’s no question that we are still not broad enough and we’re missing opportunities. When we win a package bid somewhere that a dealer puts together, probably 70 percent is our (Jacobsen) stuff and the rest is dealer-selected equipment from other manufacturers. We want to capture more of that over time so we continue to look at expanding our portfolio.
Where are you at in terms of “precision turf management” and the addition of onboard GPS-driven sprayers and other systems?
I’m slightly torn. In terms of sprayers that “think,” I believe we’re some years away from that but it’s coming. The problem is that the capital dollars involved are daunting for most customers. Will golf courses be able to fund and justify the big upfront cost for the long-term savings? That is genuinely my concern. It’s serious sticker shock on the front end even though it’s the right thing to do in the long run. Just think…do you go out and buy yourself a $200 pair of shoes that will last for five years or a $100 shoes that will wear out sooner but don’t take as big a bite out of your wallet?
Another big change has been owning more of your dealerships, most notably the launch of Jacobsen West under our friend Tony Whelan’s leadership. Give us an update on that.
We will always go with dynamic, well-funded independent distribution when we have it, but we have to think about customers when we don’t have that level of support. We had so many customers tell us we weren’t a choice because we didn’t play well in their area. So that’s our philosophy…where we don’t have good independent distribution we’ll operate it ourselves. In addition to Jacobsen West, we’re now opening in Houston, Indiana, part of Michigan and we’re looking at the Mid-Atlantic.
This is not a complicated industry. You need to have a good salesperson who’s honest and committed, good service and good support. We have to be competitive on price and have the financing and inventory to deliver stuff in a timely manner. That’s it. We got the right amount of guys on the road, the right amount of demo inventory, parts and technicians. More and more people are appreciating the straightforward and enthusiastic service. It’s also been good for us to get the feedback from (Jacobsen West) to see how it feels from the dealer perspective. Tony Whelan doesn’t hesitate to tell us when we can do things better. As a result, we’re able to really walk in our dealers’ shoes.
So, three years ago you told me your big goal was to at least be in the game and make sure Jacobsen was asked to bid more often when courses were replacing equipment. Has that happened?
There’s no question that we were only considered to bid on a relatively small amount of opportunities in the past. Now, we’re not 100 percent by any means yet, but we’re moving strongly towards “let’s give ‘em a shot” or “I’m not gonna switch my whole fleet to orange but we’ll try something.” Generally speaking they’re giving us a try and they’re happy with us. But our attitude now is one of being long-term partners instead of “you only see me when I’m selling something.” We’re in this for the long haul and that’s our biggest advantage.