By CSG Talent
In this episode of Conversations with CSG, Alex Zakrevskis is joined by Geoff Knutson, General Manager at Titan Machinery.
Titan Machinery is a major equipment dealership with a vast number of full service agricultural and construction equipment dealer locations across North America, Australia and Europe. They sell, rent and service equipment, as well as providing product support and precision technology. Titan partner with specialty equipment and technology companies and represent some key brands within the industry including; Case IH Agriculture and New Holland Agriculture.
In this episode, Geoff and Alex discuss how the equipment industry has seen significant technological advancements which is having a positive impact on the efficiency of operations. Geoff highlights how important communication and relationship skills are for positive outcomes in dealership management as well as balancing the needs of sales, services and parts departments to ensure optimum performance. There are challenges impacting the heavy equipment industry right now including; talent gaps, an aging workforce, tariff impacts and equipment pricing. During the podcast episode, some of the focus areas we delve into include:
If you’re keen to discuss podcast insights in more detail, please get in touch with Alex Zakrevskis. Alternatively, if you’d like to join us as a guest on Conversations with CSG, to share market insights or tell your career journey story - please get in touch with our marketing team – csgmarketing@csgtalent.com
Full Transcript Below:
Alex Zakrevskis (00:41)
Welcome to Conversations with CSG. Today we're joined by Geoff Knutson, General Manager at Titan Machinery. Geoff, thank you so much for joining us on the podcast today.
Geoff Knutson (00:56)
Yeah, really appreciate you having me. Thank you for the invite.
Alex Zakrevskis (00:59)
And if you don't mind, introduce yourself properly a little bit to the audience, who it is, what you do.
Geoff Knutson (01:06)
So my name is Geoff Knutson. I am the general manager of Titan Machinery in Denver, Colorado. I've been in the equipment industry since the late 90s, mainly on the agricultural side for the first two-thirds of my career and then on the construction side the last third of my career.
Alex Zakrevskis (01:24)
Well, so, Geoff, you've lived and breathed this industry for the most part of your career. What are some of the most significant changes you've seen throughout your time?
Geoff Knutson (01:32)
Probably number one is technology. know, going from small tractors, know, six row planters on the ag side to now everything's fully autonomous for the most part. And now you have, you know, 100 row planters that put seeds precisely where they need to be within centimeter accuracy. You know, it's a far-fetched cry from
You know, your markers extending your wing and having your disc markers to basically auto track, auto guidance, setting it and forgetting it. And some of the farmers I talked to say it's almost boring now because you just, does everything itself. You basically got to raise things, turn it and off you go. And same in the construction industry. You know, you're seeing a 2D and 3D guidance systems coming in where
you know, 2D indicate where it tells you where you need to be, but 3D it actually puts a virtual floor. So you don't have anybody digging further down than they absolutely need to to avoid rework.
Alex Zakrevskis (02:32)
It's interesting, isn't it, how much it's changed, you know.
10, 15, 20 years ago, the technology was just kind of an emerging thing and, you know, contractors were probably looking at it and thinking, do we really need this? Whereas these days it's, if you're selling equipment to a contractor and it doesn't have that technology on it, they're probably kind of like raising an eyebrow and saying, know, we need that. It's efficient. It's ultimately what they're thinking about is how can we complete this project as efficiently as possible.
Geoff Knutson (02:43)
Yep.
Yep. Yep.
Alex Zakrevskis (03:02)
and the technology of these days is exactly what allows that from manufacturers such as Topcon and Trimble and the rest of them.
Geoff Knutson (03:09)
Yeah, and it also opens that talent pool. know, before you need to find a very experienced operator to do some of these tasks, you know, from grading or excavating and dosing. now with this technology, especially 3D, where you can load the plans into the machine, it basically takes away that finesse that was needed by experienced operators and allow an average operator to do the things that need to be done.
Alex Zakrevskis (03:36)
Mm-hmm. Yeah, it's certainly interesting. And that's the other thing as well is what's next? mean, our operator is going to be eliminated completely. Is there gonna be a point where there's literally nobody on the job site apart from one inspector that just kind of makes sure the machines don't go haywire and then start bulldozing the city center? It's interesting.
Geoff Knutson (03:53)
Yeah. Well,
know some industries are testing, I would call it almost a virtual reality, an offsite operator where it's almost like an at-home gaming station where you have your joysticks and you have 360 cameras. And basically, you're sitting in a recliner in your home operating a dozer on a trash pile hundreds of miles away.
So it'll be interesting to see what comes to pass here in the future.
Alex Zakrevskis (04:20)
Yeah, yeah, certainly. And again, I mean, I was just telling you I was in Tampa for the last couple of weeks and it's absolutely crazy to see how fast everything is being built, especially in Tampa. I suppose the weather helps there, of course, but it's in the one week that I was there.
They were building what's going to be the tallest building in Tampa, which I think is amongst other things going to be an apartment block and within one week, I kid you not, they must have added...
an extra four floors within one week and so it kind of makes you think obviously that's at a different stage you're not really using machinery there as much maybe just cranes and other things like that but it makes you think with more and more technology advancements these things are going to be getting built at such a pace that we've never ever seen before and it's I mean it's it's crazy
Geoff Knutson (05:13)
Yeah, mean rework is your biggest time killer and with that technology that's eliminating it. And I know some of the contractors we deal with have on time or early finish bonuses and they push hard for those because it is a very lucrative incentive. And so that's where the technology, even though it is a high cost, is paying off because there's minimal rework. And if they hit their on time or early finish bonus, it more than pays for itself in one job.
Alex Zakrevskis (05:41)
Yeah, it's an interesting challenge for dealers as well though, because, you know, a few years ago, selling the technology was a big thing. You know, you see a lot of dealerships across the country, such as the Cytex, which used to be like, still are, Trimble outlets, specifically, mainly owned by cat dealers or a sub-arm of a cat dealer. But, with everything transpiring over the last few years, right now, they're integrating it at the factory level.
it kind of cuts those out and it's interesting because really now the only revenue you can generate from that is the service and the parts after it. So if I was a dealer and I had that as a big portion of my business, I would be a little bit concerned. I wonder how much do you guys do at Titan in regards to that line of work?
Geoff Knutson (06:30)
It's a small portion right now, but it's ever growing.
So we're putting more and more 3D just because that's what the market demands. So we actually have our own specialist for the three stores in Colorado that cover and help sell, set up, and support. Like you say, there's not a lot to support, there are times electronics go haywire, sensors get knocked off. So it's not the big repair bills you think about, but there still is follow-up to be done on the support side.
Alex Zakrevskis (06:38)
Mm-hmm.
Mm-hmm.
Yeah, yeah. think it's, that's it. It'll likely be a much bigger part of your business, but it's ultimately how much resources a company's dealership is willing to invest into that part of the business. I've got dealers that I have worked with throughout the country, one namely Murphy Tractor and Equipment, the Rajondea dealership in Ohio and...
Kansas as well, that part of the country. And they really went full steam ahead on machine control and they invested a lot. They've hired a lot of people and now they're one of the most successful top con and now even Trimble dealerships in the country. But there's others that perhaps haven't invested as much time and resources into it. And you can actually see the result of that as well.
So it's, I'll be interested to see how Titan approach that being the large of a company they are as well though, right? That's another challenge.
Geoff Knutson (07:49)
Yeah, I think.
Yeah, I think the money and dedication is there on the Titan side. I know we have a lot of GPS experts on our case agricultural side.
You know, lot of our construction integration is really going to be determined by case and when they start integrating more stuff from the factory. That's and that's what I would like to see versus us installing it after the fact. And I know there's plans, I think starting next year to really push for more integration from the factory on that stuff, which will really be beneficial. And I don't want to say force our hand, but get us to the position we need to be.
on the precision side to be able to support it.
Alex Zakrevskis (08:37)
Interesting, definitely something to keep a look out for. Geoff, I want to ask you a little bit more of a personal question. Core areas of your experience and passions include customer relationship management, of course, team building, and optimizing performance, all key traits of a general manager. But I want to ask you...
How important are communication and relationship skills in those three elements and how do you actually attain positive outcomes?
Geoff Knutson (09:05)
Very important. Communication is key. mean, you get lost without it or, you know, into the weeds or you have multiple people doing the same things. So I do a lot of team meetings and encouraging people to stay in their lane, you know, especially on the sales side with their income dependent on the outcome of parts and service. They like to step in their in their lane, parts and services lane.
and try to control some of those aspects, which just causes more heartache than benefit. so getting guys to realize that, trust the process that we've instilled, let things work out, and if we need to step in, we'll step in. So that really has helped the...
team building aspect of our dealership is, hey, this is truly a service task, this is truly a parts task. All you're doing is slowing it down by asking more questions or following up. Trust the process. If something goes wrong, we'll identify it, address it, make sure it doesn't happen again.
Alex Zakrevskis (10:11)
Interesting, interesting. And that's it. I process is a crucial part, especially of a successful dealership. I was talking with a president of a large construction equipment dealership that I've recruited for quite a bit over the last couple of years in West Texas, and they do extremely well for themselves in terms of performance. And I asked him, what is it that makes your dealership successful? And he said, Alex, we have taken on board the processes and the systems that our OEM
instills
in us and we've invested the time and the effort to actually implement those within our business. But not just that, we keep our people accountable of using those things to their advantage because ultimately it is to their advantage. It's to make their life easier, it's to make them more successful in their own area and it's kind of a case of, if either you use them...
or maybe this isn't the right place for you. And that's quite extreme, but the point they're trying to make is these are there to help you. These are things which will make you more successful. And the other part as well is that when things inevitably go wrong, because they will at some point, when you have a process in place, you can figure out exactly where that went wrong and you can then make sure that that doesn't happen the next time, right? If there's no process and...
You know, it's an industry where there's people that have been around for an extremely long amount of time and they might just take on the mentality, well, I just do things how I do and that's that, you know? Whereas it's tough to understand where things go wrong when you operate in that way. Processes and systems eliminate that,
Geoff Knutson (11:42)
Correct.
it just builds consistency. know, that nothing ruins a team more than inconsistency with the same issue. Well, this time I did it this way, the next time I'm doing it this way, you know, and that's that wing it mentality. And when you put those processes in place exactly, you can see where the bottleneck is, well, the failure was, and take corrective actions to fix that. Was it a mistake, an oversight, etc. And hey, here's where we went wrong. And this is how we're
to change it or where we need to do better. So totally agree with that statement.
Alex Zakrevskis (12:17)
And especially in departments like the service department, I mean, it's crucial to be as efficient as we possibly can. And that's what will allow that to happen, right?
Geoff Knutson (12:27)
Yep, yep, when you get that versus techs looking up their own parts versus going to their dedicated parts counter person, you know, that's that efficiency is huge. And that's what we're all graded on at the end in the service department and as a dealership is how efficient are you tax and eliminating a lot of those unnecessary steps when you have processes and people in place really, really help them.
Alex Zakrevskis (12:51)
So, Geoff, of course you're a general manager. A general manager at a dealership, whatever dealership it may be, agricultural, construction equipment, whatever, must balance the needs of free key profit centres, sales service in part. So how do you personally structure your time and your leadership style to ensure all three departments are running optimally without viewing each other as competitors?
Geoff Knutson (13:04)
Mm-hmm.
kind of go back to the policies and procedures. mean, like you say, each department is a profit center and they've got a tone for their sins, so to speak, if they make mistakes. know, too many times I see dealership leaders, you know, well, parts is doing really well, service is not, even though it's a service issue, we're gonna, we're gonna ding parts or we're gonna ding sales. And in my opinion, that's not how it needs to be. You know, I, I divide my time up on where it's needed.
And currently at my dealership, our parts department is doing very well. They've got a great staff, I got a great parts manager, two great parts counter people. So I tend to leave them alone unless they need help or an issue. And currently my focus is on sales and service and working with my service manager on how to properly build time, not allow.
on applied time to get out of control, you what are things we can do to get that efficiency number up? And same on the sales side, you know, where are our efficiencies? we, do we not have the right equipment? Are guys not calling on the right customer? You know, is their approach different?
So it just depends on what department needs help. And I encourage my guys to raise their hand when they need help. I could be focused solely on service and I don't want parts to flounder just because they know I'm busy. Hey, please raise your hand. Let me know you need help. This is something that I don't understand or I don't agree with. And then I'll divert my time and make sure they get taken care of.
Alex Zakrevskis (14:53)
Interesting and how does the leadership style change because you've got I'm more referring to sales and service. I think that then I guess you could include parts as well, but sales people and technicians Typically a very different you've got very different personalities very different attitudes and so how do you adapt your leadership style and Change it between the two if you do actually or do you try to be consistent?
Geoff Knutson (15:19)
I try to figure out what works best for each individual person. I don't believe there is a set path straight for sales management and same with service. Service department, I'm working with my service manager to identify strengths and weaknesses of every tech. If we've got a tech that is not as experienced,
Why don't we change him and have him do more service related items instead of having our highest paid tech, most efficient tech doing a basic service on a machine?
And same on the sales side, figuring out what guys are good at, what are not. I've got one guy that is great with people that he knows, but then when it comes to cold calling, just can't do it. So it's all right, let me go with you, adapt, this is how I do it, and then trying just to figure out what is gonna make him comfortable to get more results out of him and to make him be able to go in and cold call better.
Alex Zakrevskis (16:20)
Interesting, interesting. That's it. mean, we, of course, what we do in recruitment is very different to what you guys do in the equipment side and as a general manager. But I think there are similarities. know, in our line of work, it's the same thing when you, say for example, I've begun managing an individual now and he recruits within the material handling space. And at the start, that's what it's about. It's about going on the client meetings together so that he can kind of see how...
good meeting should go and then use that and pick things from that and then understand, okay, well, this is what works, this is what doesn't, and this is how I combine it with who I am and what I'm good at. And it's probably the same for you when you're going on these sales calls and you're performing in front of the customer and they're kind of watching and seeing how you do it. And then the next time, they can go out there and they can almost mirror what they saw from you and what made that call a successful one, that sales call, right?
Geoff Knutson (17:14)
Very true. I actually just did that with two of my sales guys last week. There's a difficult customer that we're trying to sell a piece of equipment to. And I brought two of my younger sales guys along just to experience what it's like when you have a difficult customer that is dragging their feet on what they want to do because nothing... I can tell them all day long how...
situations go but nothing beats having them there and experience it in person. And I try to do that as much as I can to show these guys, don't be afraid of these, stay calm and collective and this is how I handle it and exactly what you said. Hopefully they soak up that knowledge and can mirror it the next time they run into that situation.
Alex Zakrevskis (17:59)
Yeah, well that's it. You can discuss theory all you want, but ultimately until you put it into practice, you ain't gonna know, right? Sometimes it's trial by error. You have to go out there, you have to make mistakes, but I think when someone like yourself...
is there along for the ride and you can demonstrate what a good one looks like, well then it kind of eliminates the chances of those mistakes happening as often. And that's the thing with your line of work, I've heard salespeople and other positions within dealerships.
say the same thing. With customers you truly get that one chance, that first impression. If that first one doesn't go well, who knows when you'll get another opportunity. Who knows when they'll say, yeah, you know, I'm at the yard, come and sit down with us for a coffee and come meet us. You know, if that first one goes really badly, then it may be a year, it may be two years until you get another chance. And meanwhile, one of the other competitors gets there and, you know, they build a good relationship and that business is gone. So.
by going on those sales calls the first time reduces the chance of a bad one and ultimately increases the chance of winning business and growing the company on, growing their individual performance even.
Geoff Knutson (19:10)
Yeah, and it just helps them gain confidence. When you coach them up, make them understand kind of this is how approach and not every customer, you can do the same approach, but learning to identify how they need to approach these guys just helps their confidence and makes their chances of success that much greater.
Alex Zakrevskis (19:29)
Yeah, and as a salesperson, I confidence is all that you have truly. If you were an unconfident salesperson is a bad salesperson, then you know, that's that's that applies to salespeople who are new and salespeople who have tenured and have been doing it for a long time. Once you lose that confidence and it happens, you have a bad streak. can't make a sale. It's happened to me. I'm sure it's happened to every single salesperson out there. So absolutely confidence is a crucial element. Well,
Geoff Knutson (19:37)
Very true.
Alex Zakrevskis (19:55)
I wanna ask you a little bit more about a specific part of your dealership and that's inventory management. So inventory management in heavy equipment is obviously a massive risk or at least a massive consideration. And so my question is how do you balance the pressure to have large equipment ready to sell with the financial risk of overstocking?
especially given today's supply chain volatility. I know that it's calmed down a little bit since COVID, but still, how do you balance that?
Geoff Knutson (20:22)
Mm-hmm.
lot of reports, a lot of data generation. I am a stickler for data. I love diving into data. I look at market share numbers, industry numbers, monthly and put together my own reports to help me try to make the best educated decision. And unfortunately, even with all the data, things change on a whim, and it's not always accurate. But.
The ability to adapt to the changing environment is how I think we take those more calculated risks, especially with the.
price of equipment just skyrocketing. mean, we're in the scraper tractor business and you know those scraper tractors are starting to push, you know, three quarters of a million dollars and it's making sure that I got to have homes for this stuff and what's the demand and managing my fleet properly.
to be able to sustain having those on my lot because if they sit, the interest is just going to eat me alive. And we're fortunate enough now, you know, the guys have done a great job at my store getting into those customers that utilize those where I have 14 of them out and only one sitting currently. But mainly it boils down to data analysis is how I look at it.
Alex Zakrevskis (21:37)
Mm-hmm. Mm-hmm.
Interesting. And when you're, when you say you're getting them out, is that primarily through rental? Are you selling? What are you focusing more on now? What I can imagine, or at least from what I'm hearing in the market right now, of course, everybody knows it's a lot easier to rent than it is to sell. Your point about interest rates. That's the biggest thing, right? It's more expensive than it has been for a while to purchase equipment. So I'm curious for you and your location, you know, what are you, what are you doing more of the rental or the sales side?
Geoff Knutson (21:58)
Yep.
to own RTO, RPO, depending on where you are, what you call it. You just with expensive equipment these days, people aren't just coming in and writing a check for five, six, seven hundred thousand dollars. So it's identifying customers that will either take it up front on an RTO or you just dedicate that piece to your rental fleet, get it cooked down enough and then have that third, fourth or fifth renter have
in line to purchase those machines.
Alex Zakrevskis (22:43)
Interesting, interesting. With regards to, I guess more of my area of focus, talent, you know, within the dealership space right now, at least what I'm seeing is, know, talent...
There's an aging workforce. I think there's no hiding that. It's an industry where people go into it and they fall in love with it is a lot of what I hear and just like yourself, they stay in it for a very long time. And I think we're kind of in an interesting period right now. You've seen it a lot with dealer principles moving on and transitions going to the second, third, fourth generation. But if you look down a few levels and within the actual management ranks, there is an aging workforce. People are coming to a point where
they're coming up to retirement and it's presenting a big challenge to organizations like Titan, to smaller dealerships and so what do you think are the biggest impacts we're seeing with an aging workforce and what can we do to turn that around?
Geoff Knutson (23:40)
To me, the aging workforce is knowledge, the loss of knowledge. You're just getting people like you've said who've stayed in this industry for 30, 40, 50 years that all of a sudden, hey, it's retirement time, I need to go enjoy myself and they're done. I don't know if there's a lot that you can do to...
hold off people from doing that. Some of the things we've done in the past or I've done in the past, example, techs. think techs is the most crucial one. You're getting these 30-year veterans who are level four or five techs retiring, and the up and coming workforce doesn't have the drive.
and willingness to learn like those guys did. And that is where we're really feeling it. But we would transition techs that are not yet ready to retire.
to equipment appraisers or inspectors. So they still get to go beyond machinery. We send the tech to every trade-in, have them run it, inspect it. They know what to look for. They will put together reports on what to fix if they have all that same knowledge, and yet still be a resource for these younger techs when needed.
Alex Zakrevskis (24:58)
Yeah, it's interesting. That's the thing. It's, you know, for someone like yourself, you're running a location, high performing location. You've got so many things to worry about on a day to day basis, service parts, sales, and a million different other things. And, you know, as you say, people are retiring and it's kind of also amongst everything else that you have to do on a day to day basis in the back of your mind, thinking about succession planning and thinking, well, I have a service manager, for example, that's moving on.
you know, at this point and you've got to kind of actually keep that in mind and start setting in the the steps to make sure that the person that takes over is capable of doing that and you also have to make sure that the service manager who's moving on for just using it as an example is capable and dedicated to give them their time to kind of train them up and develop them because we'd love to go there and say that you know
help this guy out, train him up to take over from you, but maybe not every service manager wants to do that. Maybe they want to come in, do the job and they're busy. They've got a lot of things to think about again and that's an extra thing. So it's, how do you manage that? You know, from the succession planning side of things.
Geoff Knutson (26:06)
I just try to get ahead of it. I have conversations with all of my direct reports, service manager, parts manager, rental manager, admin. What's your goals? What do you want to do? Do you want to do things different? Are you wanting to look?
I try to stay a step ahead as much as I can and also always have people in mind if somebody does surprisingly step down. If we continue on with your service example, do we have somebody that is in house next in line, which would be ideal? If not, I've got an external candidate that, if things go south with him, I've got somebody at least I can reach out to right away to try to have that contingency plan in place if the worst were to happen.
Alex Zakrevskis (26:50)
Interesting, interesting. Well, you know, we've spoke about technology quite a few times so far and of course, one thing we've established is that new technology is reshaping the industry and there seems to be more focus on digital skills, technology and so...
How do you think we can attract these skillsets to the industry? know, people that have perhaps begun in some kind of a technology background, never really been around equipment, but they have skillsets which could really benefit somebody like a Titan Machinery, somebody who's looking to really expand the technology side of the business. How do we attract those people to our industry? What makes our industry special to these people? What's the selling point, would you say?
Geoff Knutson (27:33)
that's a great question. Recruiting, think, is kind of a two-fold portion.
We need to start at a younger age, kind of like what we do with service techs. We have a handful of recruiters at Titan that are dedicated to going to high schools and junior colleges and diesel tech schools. And I think we need to focus that as well on the technology side, going to more tech recruiting events within high schools and colleges where those people can see, because I think a lot of the outside world doesn't know how much technology
is really involved in the equipment side. And I think the more we're able to get our names out there, the more we're gonna be able to attract some of those people to get them into our stores and understand that there really is a home for you. We're not trying to take your skills and then put around...
shape in a square hole. We're not going to force you to do something you don't want to do. Your skill sets are truly needed for what we need to make our business success.
Alex Zakrevskis (28:43)
Yeah, yeah. I think if you take your mindset and you apply that across the industry, I think it would drastically improve that because for organizations like Titan, massive public dealership, one of very few public dealerships, of course, far advanced in many areas than some of the small mom and pop shops that you see where it's a one, two location dealership where, you know, for them, mean, technology.
it's not really a thing that they're gonna be thinking about. And I think that's where it kind of, perhaps, if I was three, four, five years younger and I was looking at the dealership market, for example, or the construction equipment market specific to dealers again, of course, on the manufacturing side, I think it's completely different. You're talking about some serious big organizations, Case, C.A.R.T.
Kamatsu, but when we're looking at dealers, you know, you look at it and it's you see a warehouse on the side of a highway selling a bunch of machinery There's nothing that makes you think damn. I bet those guys have some cool technology, but I think it's as you say if actually we Start at a younger age and we're more vocal about the kind of investments and how big of a thing technology is for us I think that's how you probably attract that younger talent So
Geoff Knutson (29:54)
Yeah,
I agree. just think people don't realize there is a need for those type of skill sets in this industry. And it's only going to get stronger. And we're going to need more of them going forward because as manufacturers integrate this technology from the plant.
everything's going to have it. It's not just going to be one contractor wants it, another one doesn't. We don't put it on here or there. Everything's going to have it and it's only going to increase our body count to support the technology going forward.
Alex Zakrevskis (30:28)
Yeah, yeah, absolutely. Well, so I've heard that Titan have recently developed an AI platform which will impact the speed and efficiency of orders slash workload. With what you know, mean, tell us a little bit about how this will benefit dealerships and the rest of the supply chain.
Geoff Knutson (30:45)
I'm very excited for it. Basically, it's going to be a database where all of the service work orders are inputted. basically, you can ask. It'll be an AI platform. Ask it a question, and it'll search everything and find specific answers. ⁓ So if you're putting in that engine sputters at idle,
Alex Zakrevskis (31:03)
Mm-hmm.
Geoff Knutson (31:09)
you type that in for your specific model, it'll actually bring up past work orders, parts, try to pinpoint what you do first instead of taking the steps that you normally would. Well, we're going to check fuel pump and then we're going to go to pressure and then fuel filter.
I think it'll reduce our diagnostic time, reduce repair time, and then also give us better data to stock things based on our machine population and what issues we're seeing in parts. The asterisk I put on that is...
you get out what is put in. And that's the part that I'm going to be interested to see is that is going to rely a lot on the service department putting in good stories to that database to where if it's a very basic question, it can still generate a good answer.
Alex Zakrevskis (32:06)
Mm-hmm. Mm-hmm.
Geoff Knutson (32:07)
So techs
are going to have to, instead of writing one or two liners, are needed to put in a full story. And if that happens and it's put into the database correctly, I think it'll drastically reduce downtime in general and then turn around time for customers to get their machines back in a more timely manner.
Alex Zakrevskis (32:27)
Interesting. Well, that's it. I was going to go on to kind of being critical. The limitation of that AI platform I was going to say was it's heavily reliant upon data and how do you ensure that the right data is entered? Of course you've answered that there, it's, I mean, it's training, right? Because that's what's going to have to happen is these technicians are going to have to be put aside for a little time so that they can understand the platform. They can understand the benefit of that platform. And so that
when they do use it, used properly. Otherwise, you you've invested a lot of resources into a system which has the potential to be fantastic if used properly. So I suppose the training is another element of that that would need to be of utmost importance.
Geoff Knutson (33:10)
And it needs to start from the top down. It needs to start on the people that oversee service at our corporate level and then push down to the regional service guys and service managers so you can get that consistency. And that's kind what I was saying. What you put in is what you get out. If you have different people putting in different information, it's not going to do us any good. It's got to be, like you said, that consistency, having the training so people know this is how it's got to be put in every
time so the system, the AI can generate proper answers versus sending out a wild goose chase.
Alex Zakrevskis (33:47)
Yeah, yeah, yeah. Well, I mean, if it works well, it'll definitely put you ahead of the competition, because I don't know of many other dealerships locally that use such a platform. Maybe there's something, don't know, but maybe you, have you heard of anybody else using something like that? No.
Geoff Knutson (33:58)
I haven't.
Nope. No,
this is, I'm excited for it, but I have not heard any rumblings of anybody else trying this. And very anxious to see it come to pass and see how it works.
Alex Zakrevskis (34:10)
Yeah.
Yeah, certainly. I'll check in with you at some point in a few months time and see how you guys are getting on with that. I'd really be interested to hear about the results of such a platform.
Geoff Knutson (34:24)
Yeah, me too.
I'll be happy to dive in myself and share those. Hopefully it's a positive experience I can report.
Alex Zakrevskis (34:31)
Well, make sure you stay on top of the training, right? So, you know, we've talked a lot about various things and the market and what's going on. I think a bit of an elephant in the room and tariffs, right? I think everybody's talking about tariffs across, well...
Geoff Knutson (34:34)
Yes, sir.
Alex Zakrevskis (34:46)
everything not just equipment but it's you know it's a huge talking point impact of the tariffs have been felt across the entire supply chain and so you I guess personally or maybe not personally just what you've heard in the in the market as well what are some of the biggest areas right now feeling the impact of tariffs would you say
Geoff Knutson (35:06)
Parts is probably the biggest area, at least looking at my dealership. I mean, we've had...
tariffs, material surcharges, however you want to call it, of up to 35 % on parts. And yeah, so it's hurt more there than anything else. You you look at the whole good side, anywhere from two to 6 % is what we've seen. And it's nice, at least on the case side, I know they're trying to spread them out.
So for example, if a backhoe coming in from overseas really gets 10%, they're only putting 4 % on it because we get combines and tractors and some of our small equipment made locally where there really isn't a tariff. So that's been a...
bright spot is that we're not having one product line just get priced out of competition. ⁓ It's being spread around, but I have heard of certain manufacturers not importing models because the tariffs are so high. So they basically discontinued sales in the US.
Alex Zakrevskis (36:02)
Mm-hmm.
Interesting. Well, that's the thing. mean, when you know construction equipment, I think you've got a little bit more flexibility. But when you look at the ag business with how tight the profits already are, how tight the margins already are on the equipment, when you take into consideration that even that extra 2 %
Geoff Knutson (36:22)
Mm-hmm.
Alex Zakrevskis (36:32)
increase in price. I mean that's a big increase in ag. Maybe not so much in construction equipment but in ag where the margins are super tight. I mean that's a that's a challenge a big one.
Geoff Knutson (36:43)
Yeah,
yeah, and it still is in our industry. know, margins, you know, in my experience between ag and CE, margins are a little better, not by a ton, but yeah, that one to 2 % could cost you a deal if you're not careful understanding how the pricing works and going into who you're up against.
Alex Zakrevskis (37:02)
Mm-hmm. Mm-hmm. Yeah, and that's it. And it's interesting to see in our industry as well because you've got some fantastic manufacturers of equipment who are, you know, the one example I can think of specifically is somebody like a Vergen. You know, they are a fantastic manufacturer. Everybody respects their product very much, but they are susceptible to those tariffs. And that's a...
Geoff Knutson (37:16)
Mm-hmm.
Yeah.
Alex Zakrevskis (37:25)
manufacturer has a very well established dealer network across the country. Of course, you know, since the acquisition by John Deere, they've now been switching the product over to the John Deere dealerships. There's still a few others. I know there's a few Komatsu dealers selling that product. And you know, there's businesses out there such as a, there's a dealership in Texas, a Kirby Smith machinery, who a lot of their products are all fantastic products, Komatsu, Vergen, and a few others.
Geoff Knutson (37:38)
Yep.
Alex Zakrevskis (37:51)
but they are all susceptible to tariffs so I can't even imagine what a dealership like that has to deal with when they're seeing these tariffs go up every day.
Geoff Knutson (37:59)
Oh, it hurts, but then you've got to change your selling skills from pricing to support and show that, our product and you investing in us as a dealership is still going to be worth your while, even though these prices have increased 3%, 4%, 5%, 6 % or more in some cases.
Alex Zakrevskis (38:18)
Yeah, well that's it. That's where parts and services, as they say, you know, you might sell the first piece of equipment, but to sell the second one, it's got to be parts and service that'll do it for you, Something along those lines. I think I butchered that a little bit, but something along those lines.
Geoff Knutson (38:34)
No, that's spot on. I preach to my team, it's how you respond in the wake of an issue. I don't care how many issues there are, it's all about how we respond. To parts, finding it another local dealer or next day airing it to service, moving things around to be able to get to this customer sooner, whatever it is, there's always, like you said earlier, it's machinery. There's gonna be a problem.
all in how our dealership responds and like you say that leads to the second and third sale and that's what we preach highly at our local location is it's the response time and how we do it is going to lead us to future success on the whole good side.
Alex Zakrevskis (39:15)
Excellent, Well, this is a question we always ask our podcast guests and I want to ask you, Geoff, what's the most valuable piece of advice you've ever received throughout your career?
Geoff Knutson (39:29)
Details and data matter.
My dad was very detail and data oriented. I mean, in our time of owning dealerships, the spreadsheets he has were just phenomenal. But he could predict a lot of downturns and upturns based on prior market data. And he instilled that into me big time of don't ignore data and don't ignore the details because like we talked about earlier, if you ignore the details,
it's kind of a wing it mode. Well that doesn't do any good and as we touched on with stocking requirements and pricing going up those are going to matter more and more and so I try to focus on data and details more than anything because then that leads us to better decision-making across the whole dealership and taking care of our customers better and ultimately growing market share which what we're graded on the most.
Alex Zakrevskis (40:25)
Yeah, that's interesting. You know, I have to be honest. I am very bad at setting up data documents. Not so bad at setting them up. I'm bad at tracking them. I do like looking at data. For me, in my job and leading my team, it's crucial because you have to understand what somebody is doing and when they're doing it and how they're doing it. And so that helps you understand.
from a factual basis what's going on. Of course, you know, don't want to get lost in the data as well, right? You want to understand what's actually happening in reality. But the detail part, I think, although again, I don't want to pretend that I know what it's like to be a general manager of a branch, but I find similarities in what I do and what you do in the detail part.
It's extremely important for me to remember every single detail that somebody tells me, whether it's a client or candidate. And it's the same for you guys on the machinery side. You know, a client tells you something about a project that is happening at this date. It's crucial to make sure that there is a note made of that so that when the time comes in two, three months, you look at your CRM, that project's coming up. Let's go down there and see them and we get that sale. But without...
the application of that data and actually using it, you'd miss out on that.
Geoff Knutson (41:38)
And I also think it helps take out the emotional side of your decision making, you know.
I want to have 10 350s here at all times, but does the market support that? Looking at the data, I think we can do it, but that's an emotional decision, not a fact data driven decision. And that's where I think those details really matter is it helps you take the emotion out of it to make the best decision or educated guess, as my dad would say, you know, and what the future is going to bring.
Alex Zakrevskis (41:50)
Mm-hmm.
well it's a fantastic piece of advice. I'll keep that one in the back of my mind and then try to improve my ability on actually keeping track of data.
Geoff Knutson (42:12)
I appreciate it.
It's
a love hate relationship. know, when my dad would put them together, I just didn't understand it. I'm like, this just seems miserable. And the further along I get in my career, it's the same old story. Your parents were right. You know, that data really does matter. And keeping track of it really helps your decision making. But also when people in my organization don't see how I'm thinking, it helps either prove my point or disprove my point.
Alex Zakrevskis (42:19)
You
Yeah.
Geoff Knutson (42:46)
either way of what they're wanting me to do.
Alex Zakrevskis (42:49)
Mm-hmm. Well, you can't argue with data, right? They say so it's definitely a good it's a good thing to have in your corner. Absolutely Absolutely. Well Geoff, thank you very much for joining me on the podcast today. It's been great to chat with you It's there's a lot of valuable insights. I feel I've gained and hopefully the the future viewers have gained as well and Yeah, once again, thank you very much
Geoff Knutson (42:52)
Yes, that is true.
Correct. Correct.
Yeah, appreciate you having me. It's been a pleasure.
Alex Zakrevskis (43:15)
All right, we'll catch up soon, Geoff. See you.
