I often speak about customer experience in my blogs. I do so because a company that provides a superior customer experience creates a robust strategic differentiator. However, today I want to focus on product innovation and a success story of one of our clients, AGCO.
Recognizing the Problem Their Customers Faced
AGCO is a global company with US headquarters in Atlanta, GA. Managers recently solved a customer problem by creating a new category of tractor for the US, the Challenger 1000 series, which they introduced in late 2016. It has received rave reviews and appears to be selling well in a tough market. The American Society of Agricultural and Biological Engineers awarded the tractor two recognitions for the tractor itself; one for the overall design of the tractor and one for the suspension system.
The success of this tractor is based on the fact that it improves farm equipment utilization. For the reader of this blog, a typical larger scale farmer requires two different types of high horsepower tractors.
One is for tillage and is designed to pull heavy harrows and other tillage equipment. It typically has large tires and is designed to prepare the land for planting.
The second tractor is used for planting and cultivation. These tractors might have slightly lower horsepower but designed to be nimbler for planting and cultivation chores.
Acting on Opportunity Leads to Success
AGCO saw an opportunity. The typical larger farmer has one tractor sitting while the other is in use. Each tractor may accumulate only 300 hours of annual use. AGCO designed a tractor with the power and torque to do the heavy tillage and the nimbleness to handle the planting and cultivation chores. The farmer could then buy one piece of equipment instead of two, thus improving return on investment and profitability. Along with this, they made some innovative changes in the engine and transmission that dramatically improved fuel economy. Please check out the Challenger 1000 here.
This long-time problem for farmers was recognized as an opportunity by AGCO. They solved it in a most creative and effective way.
How many similar types of opportunities masquerading as problems do you have in your market? Is it worth looking?