Dealership of the Year 2015: Ritchie Implement Inc. Cobb, Wis
diversity is key for ritchie implement, the 2015 recipient of the over $75 million in revenue category of the grantee of the year program. Ritchie Implement’s commitment to a variety of product lines, a broad customer base, and the addition of third-generation management have made the dealer a success. “We don’t keep all our eggs in one basket,” says CEO and co-owner Ron Ritchie.
Ritchie’s 3 locations in Cobb, Darlington and Barneveld, Wisconsin are within 30 miles of each other and the dealership emphasizes communication and teamwork between locations as well as between departments.
slow but steady growth, along with recognition from the companies, customers and employees who supported the wisconsin distributor to get to where it is today, are key tenets in the ritchie way of doing business. while this case ih dealer always looks to the future, he doesn’t forget his past.
a colorful story
ritchie implement, founded in 1961, was not always a case ih dealer. When the parents of co-owners Ron, Jon, and Connie Ritchie opened the first store in Cobb, Wisconsin, the dealership sold Allis Chalmers.
It wasn’t until 1988, when a nearby dealership in Highland, Wisconsin, went up for sale, that Ritchie Implement became a full-line Case IH dealer. Since then, Ritchie’s has added numerous shortlines to complement its mainline, including Claas, Kubota, Kinze, JCB, and most recently Bobcat. (Related Video: The Defining Moments of Building a Business: Ritchie’s Implementation)
“We’ve seen a lot of changes,” says Ron. “So we get used to painting our trucks different colors every two or three years. The first Allis Chalmers was sold in 1985 and passed to Deutz. At one point when Allis Chalmers was going down we ended up with just Deutz which was a good product but the biggest tractor they had was a 120 horsepower. we were out of the big-team business.”
while taking over the new dealership in highland, case and international harvester were still working out their historic merger to become case ih.
“That was just when everything was changing, when case and international came together,” he says. “It took a few years, but we showed that we were good and fair competition, and we built on that. That was what started our growth. our dealership benefited from the great team that case ih offered.”
In 1998, Ritchie’s added the Darlington, Wisconsin location, and in 2002 it acquired the Barneveld, Wisconsin location.
“The darlington location gave us a great market area,” says ron. “It’s a completely different landscape. barneveld offered a new market opportunity. we have a lot more of the compact tractor business now. having a store in certain areas still makes a big difference.”
ron says it’s important to be accessible to customers in southwestern wisconsin. “Having 3 locations each within 30 miles of each other is helpful to our customers and necessary to compete in the region.”
a diverse lineup
when one equipment market is down, another market is likely to be up, at least in a diverse area like southwestern wisconsin. Ron says, “You always have to be prepared to meet the needs of customers in different markets to take advantage of a rally in one market or another.”
ritchie implement values its many short lines for this reason. “As difficult as it is to have several different lines, it has really contributed to our success,” Ron says. “The selection of products we have helps us satisfy our diverse market. that’s a real key to our success in southwestern wisconsin where there are dairy, beef, cash crops and vegetables.”
“where one area of agriculture is not doing as well, like commercial grains, we can do very well with markets for milk and dairy products, beef and other non-cash crops,” says tony ritchie, jr. de ron, who works in sales and is part of the management team. “One year it might be down in one area, but the next it might be fine. we can keep things together by focusing on different markets and lines.”
“This year, like most dealers, corn and beans are down and our combine, sprayer and four-wheel drive business is down,” says ron. “On the other hand, livestock is stable. they need their slider boots every day. they need their spreaders and their mixers. They are dedicating many hours to their team.” more equipment wear means more service business for ritchie and faster machine turnover.
ritchie remains faithful to its various lines in order to offer more options to its customers. “Maybe an OEM thinks they can give you a pure option now,” Ron says. “But when we started, none of them could meet all of our needs in our market. so they can’t come in now and tell us to get rid of our short lines. those products helped us get to where we are today.”
adds that case ih has been good about not pushing ritchie to remove its short lines, stating that short lines, in many cases, help sell the main line.
“In fact, we win a lot of new customers who see a short-line product in the front rows of our lot. we have people at the gate watching our short lines,” says ron. “We have opened so many doors with customers who come for just one thing, like a Claas chopper, and now we also sell Case IH tractors to that customer. we never would have had the opportunity to sell to that customer if we didn’t have the short line.
“We work hard to get our lines. They didn’t just come and give them to us, and we’ve proven ourselves since we accepted them.” Ron says the dealership is as much a team with its many manufacturers as it is with its employees, departments, and stores.
ritchie’s most recent addition to his line was the bobcat line of skid steers in 2013, which ron says sold better than he expected. “The first year we thought we were only going to sell 30-40 units, but we far exceeded our expectations and are now on track to double that number this year.
“It has brought a lot of new customers to our business,” Ron continues. “When we were looking to pick up the Bobcat, I thought that in 2015 and 2016 we might see a downturn in some of our large equipment, so it’s complementing our service and parts business, as well as our overall business.
“We have a good group of products to sell and that has helped us overcome recessions in different markets. usually we have something that hits us on target.”
ritchie implement was one of the first north american dealers for claas when it launched in 1997. “when claas first arrived in north america, the self-propelled forage harvester business was just beginning to evolve. no one around here had one. we heard a lot about claas and they had the machine ready to go,” says ron.
Although claas started out as a specialist dealer product, it has been a major growth area. Although Ritchie’s only sells Claas at the Cobb location, the dealership is a leader in the Claas market and 30% of Cobb’s whole product sales come from the manufacturer, as well as 40% of its parts.
while both claas and ritchie implement have grown over the years, ron is grateful that the manufacturer hasn’t grown enough to recognize its distributors. “We like to deal with companies that like to deal with us,” he says.
creating product specialists
With 22 short lines in all, it would be impossible for every salesperson to know everything about every team carrying the ritchie implement. therefore, instead of having accounts for each vendor, each one specializes in a few products.
this started 15 years ago when ritchie faced claas for the first time. “we started with a claas specialist for forage harvesters. Nowadays, everything has become more technical, so we need specialists that we can turn to who know how to set up the machine and work with it.
“We found that focusing on one product really helps our sales team. the specialist is factory trained on the product and we know who to ask if there are questions,” says ron. (Related video: product specialization by vendors)
For the past 5 years ritchie has been extending the product specialist system to their other products. “Now we need specialists for all of our equipment lines,” she says.
The usefulness of the system proved particularly true when ritchie took on bobcat and hired an employee designated as a bobcat specialist. having a knowledgeable and committed salesperson for the new line was key to exceeding first-year sales expectations for the line, says ron.
“We’ll have two salespeople call the same customer, if necessary,” says Kevin DePies, sales and administration. “That way, we know we’re giving our client the best information.”
serving large & small producers
“ritchie knows how to support and care for its key customers,” says rick rank, case ih senior director of regional sales. “But with that being said, they also know how to take care of the small, independent customer and are important to them as well.”
ritchie’s broad range of customers also reflects the many markets and lines the dealership serves. The dealership’s motto is “big enough to serve you, small enough to know you,” and Ritchie’s strives to treat all of its customers with this philosophy.
“It goes without saying,” says Ron. “everyone is treated the same when they walk through our door. We value all of our customers no matter the size. we are fortunate to have a diverse customer base in our area.”
To do this, Ron says it’s important to train and emphasize to employees early on that they must treat every customer that comes into the dealership with the same level of service. “We instill that in our employees more than anything,” she says. “It’s especially important now that we’re not selling as many big teams. If it weren’t for all of our customers, we wouldn’t be here today. we talk to our employees all the time to make sure they recognize everyone who walks into our dealership.”
teamwork & communication
To support its broad customer base and diverse equipment lines, the dealership attributes business growth to the dedication of its employees. teamwork and communication between departments and stores is key. “This is something we strive to improve on a daily basis,” Ron says. (Related video: communication leads to quick results)
“You hear in meetings about dealers having a lot of miles between dealer locations, and the challenge is communicating,” he says. For ron, jon and connie, it’s a matter of visiting the barneveld and darlington stores frequently, as well as simply making a phone call or sending an email. “We are in constant communication with each location and department,” Ron says. “if something is going on, we want to know about it.”
“at ritchie’s, our goal is to solve problems as they occur,” adds depies. “Let’s hope the issues are resolved and aired before they become bigger ones.”
“We get together a lot, especially before the seasons,” says Tony. “We’ve sold a few large planters this year and we’ve tried to meet with everyone—sales, service, and parts—to be ready.”
“It is also important to know the day-to-day operations with everyone”, adds depies. “We don’t go in and sit in our office. we are constantly walking around the dealership talking to our people.”
Part of the dealership’s success with communication is due to the fact that they send employees back and forth to different locations. Every Wednesday morning, all the salespeople from all 3 stores meet at the Cobb location to make sure everyone is on the same page.
The service departments of the 3 stores began meeting quarterly and Tony says that no one is afraid to ask another store for help. “If we have a tech who left here for the barneveld region, we’ll make sure to use him there instead of sending another guy right after him when the first guy could have taken care of both problems,” she says.
“we have to work together as a team,” ron told everyone. “We are not in competition between our locations.
“With modern technology, it’s easy to keep in touch with each location,” he says. “I feel like I almost know what’s going on all the time.”
ritchie’s sales group is in constant communication with each other so everyone knows who is working with which customer on which product. This, Ron says, helps keep the stores from competing with each other. “It helps ensure that the same customer doesn’t show up at a different store and get a different price for the same product,” she says.
The dealership also sends out a schedule every day for its fleet of trucks. “Each location knows where the trucks are going and how much they are hauling,” Ron says. “If they need to ship something, they know which truck they can add it to, so we’re saving time by not sending two trucks to the same location when one could have done the job.”
24/7 service
ritchie implement’s dedicated team mentality helps achieve 24/7 emergency service to customers who want to deliver.
Tony recalls how he dealt with an emergency situation recently, “a farmer had a hay melt failure around 10pm on a Friday night. He needed to make hay and it was going to rain on Saturday so he had That being out in his field was an easy fix and our tech got him up and running around 10:45.” (related video: benefits of living nearby for 24/7 service)
“Word of mouth is still our best sales tool,” adds Ron.
“Take care of your customers and you’ll win them over,” says Tony.
“and then you can sell that. You may not be the cheapest person in the world, but you’ll take good care of them when they need it most,” says Ron.
Part of what makes this possible is that the Ritchies (Ron, Jon, Tony, and Jon’s daughter, Chelsie Klaas, who handles finance, human resources, and marketing for the dealership), live across one mile from dealership. in fact, the culture was built when ron would drop by and leave a part outside the door for a farmer in need of an emergency fix late at night. your journey on foot is almost 50 yards.
The dealership also has an emergency weekend program so all employees know who is “on call” and when.
“We can pull out of all the stores for emergency service, which also helps it not become a burden for a single employee,” says ron. “Years ago, when it was just Jon, our dad, and me, we had to do everything. but as we’ve gotten bigger and added more people, we have more resources to draw from to share the load.”
maintain a sense of urgency
the dealership credits its employees as the key to its success and growth. Ritchie’s management says the employees are motivated, highly trained and well equipped. “Every single one of them excels during seasonal demands, even when the season calls for 10-hour workdays, 6 or 7 days a week,” says Connie.
“a sense of urgency is absolutely key to success,” says depies. “If people get comfortable and lose that sense of urgency, you lose the momentum of the business and everything that goes with it.” (Related video: maintaining a sense of urgency among employees)
“There are people who will say, ‘Well, it’ll be done tomorrow,'” says Ron. “But that doesn’t work here. it has to be done now, and we make it happen to keep our customers running.”
“Another special part of making this work is that management doesn’t just preach a sense of urgency and then run off at 4:59,” says depies. “jon is in darlington every sunday when we have season hours, making sure he’s with the team when they’re there. morale can drop when everyone is tired and going 10 straight days of 10 hour days. But when they walk in and see Jon sitting at his desk, answering phones, looking for parts and being a team player, it makes that drive to be on a winning team that much easier.”
“Just a couple of weeks ago, we had a customer bring in a sprinkler that wasn’t working,” says Ron. “The customer needed it the same day, so I personally went to the store where they were working to talk to the employees and let them know how important it is that we finish this job the same day. and most importantly, I let them know how much I appreciate their hard work.”
“We try to meet with our people and make sure everyone knows how much we appreciate them. They need to know that we see that they’re putting in the extra time and that it won’t go unnoticed,” says klaas.
“The day after we delivered the sprayer, the customer called me and was very happy with the way we took care of it,” says ron. “The customer told us, ‘They may not have had the lowest price, but they really took care of me on this project and got me going when I needed it.’ This resulted in the sale of a new sprinkler.”
The revenue per employee of $1.2 million is a reflection of the self-motivation of ritchie implement employees. the dealership says this is one of the main reasons its parts and service business has grown. ritchie implement’s strong 95.1% take-up rate can also be attributed to a sense of urgency and highly dedicated employees.
the case ih rating says that dealer service helps attract and keep customers, which is also reflected in their numbers. “They have a large population of machines and recruit service businesses to keep their take up high,” she says. “Their service helps them retain customers to maintain that absorption rate. With things slowing down these days in the farm economy, service and parts keep the dealership running smoothly.”
find creative ways to finance
To accommodate those customers who need and want new equipment but don’t think they can justify it in their operation, ritchie implement is creative with financing.
“We are proactive on the financial side of the sale,” says depies. “We investigate the best option for the client and the best program that exists for their individual needs, whether it is a lease, supplier financing, financing with external companies or taking advantage of early payment discounts. at that point, it’s all about the customer and getting them the best pricing program we can.”
“Not all customers have the same financing needs,” says Tony. and ritchie’s works to meet the individual and varied needs of its customers.
“It’s creative funding,” says Ron. “I always remind our salespeople at our Wednesday meetings to try to find a way to help our customers succeed.”
ritchie implement does about 80% of its financing deals through case ih.
“cnh capital has been a great partner. their quick response time allows us to close deals in a timely manner,” says tony.
centralized structure
Ritchie Implement’s Cobb, Wisconsin location serves as the dealership’s headquarters and handles all human resources, accounting, and marketing. but the dealership also seeks frequent input from its other locations.
“ritchie’s has a very strong leader in rum, but at the same time, he empowers his group,” rank says. “Not everything has to go through rum. store managers and sales managers also make decisions.”
An example is your exchange value system. Vendors at each location submit trade reviews to the management group (Ron, Jon, Tony, and DePies) who review and approve them. Ron says they can respond quickly to sellers, and still have more than one set of eyes on transactions.
“If we don’t get a quick response to the customer, they’re going to find somewhere else to go,” says ron. “We don’t want this review process to be too difficult or cumbersome.”
The dealer’s centralized structure requires constant communication and its dealer management system (hbs systems) is critical to maintaining a continuous flow of information. to make it even better, ritchie hired an hbs trainer to train staff to better use the software.
“A couple of people who have worked here for years, but never had any formal training, said they didn’t know they could do so much with the system,” says Connie. “As the company adds more programs to our dealer management system, it’s much easier to learn how to use them in person than just through an email from the vendor. we strive to keep up with the latest and greatest advancements in the software to get the most out of it.”
grow a family business
When ron, jon and connie’s parents opened the dealership, they were little kids and grew up around the dealership their entire lives. Ron jokes that they were raised with PhDs or “Daddy had a dealership.”
As the business grew, the next generation entered the business with Ron’s son Tony and Jon’s daughter Chelsie working at the Cobb location. Ritchie’s has also brought in managerial talent from outside the family.
ritchie’s treats all of its employees like family, says depies. “When Ron goes to the other places, she stops and talks to everyone. that instills a sense of family and a feeling of ownership as part of the business,” she says. (Related Video: Making Employees Part of the Family)
“We never want anyone to feel like they’re just a number,” Ron adds. in fact, connie has personally brought donuts every morning for over 20 years. the tradition began when her mother baked treats for morning rest. this is now done at all locations.
“the feeling of family is part of the reason we can retain employees for so long,” says depies.
Ritchie’s has awarded seven 25-year awards worth $5,000 each to employees in the past 10 years, and Connie says low employee turnover is one of the main reasons they are successful.
invest in the future
“you can see a future for the ritchie implement in the future,” says rank. “They don’t have blinders on. they look to the future and invest in it.”
Ritchie’s has been renovating and updating its locations for the past 3 years and plans to continue to do so in the future. The dealership recently modernized its Cobb location, adding a 12,000-square-foot shop with two overhead cranes and air conditioning. expanded the accounting department and added a large 2-story showroom to display large equipment inside. also added a meeting space on the second floor.
“They have invested in the dealership,” rank continues. “They took an old building and put the attributes we look for in a classy dealership. they have taken it very seriously and have done it very well.”
“we keep getting back to business,” says ron. “Every year we are doing something. keep our rolling stock up to date and keep our buildings in good repair. that is very important.”
“we were about to explode when we renovated the cobb location,” says connie. “We were either going to need to reduce what we were selling or we needed to keep building.”
“We keep a close eye on our cash,” Ron says. “We like to know where we are and what we can do without trying too hard because you can get in a bind if interest rates go up and you have to borrow money.
“We like to have a strong cash position,” he says. “It’s kept us strong for the next opportunity that may arise so that we can do it again, whether it’s an acquisition or investing money in our business to stay modern. (Related video: Cash Flow Management)
“We don’t have an established formula for reinvestment. if we have to do it, we do it. People know that if you’re investing in your business, you’re going to be around for a while and they’ll want to keep doing business with you,” she says. “We kept our growth slow but constant. let’s not overreach. we hope to add more locations in the coming years. not much, but we’d like to surround ourselves.”
“If you grow too fast, you can become too bureaucratic, where there’s too much paperwork to get anything done and you lose your sense of urgency and effectiveness,” says depies.
Ritchie’s believes there are times when it’s harder to pull back on the throttle than it is to push it down.
“That could be the case now more than ever,” says Ron. “don’t grow beyond your means.”
succession planning
ritchie implement is in the early planning stages for the next generation of the dealership, with tony and chelsie assuming increasing management roles.
“this won’t end when ron, jon and connie decide to retire,” rank says. “They are developing talent to continue in that area of Wisconsin and support the brand and their customers.”
“Tony and Chelsea’s entry into the dealership takes us to a whole new level,” says Connie. “They have energy and are passionate about the business. it’s great to see what they’ve done and will continue to do to get the dealership into the next period of growth.”
The succession plan may be a work in progress, but Connie says it’s been in the works forever. “It’s something natural for us. Kevin has been a great addition to a key management role. We also have other kids who work elsewhere or are still in college, but could go back to the dealership,” she says.
“Our goal is to keep it a family business,” added Ron.
After tony and chelsie finished their business studies, they received outside experience before returning to the dealership. tony worked for case ih for two and a half years, first as an intern in combine marketing and then full-time with sales support, before returning. she’s learned to see the industry from the manufacturer’s perspective and takes those views into account when she works at the dealership. chelsie received her master’s degree in finance and worked in the financial services industry for 5 years in madison, wisconsin.
It’s important that the next generation receive outside experience before returning to the dealership in a management role, says ron.
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