Bomgaars: Growing Strong with Customer-Centric Strategy

In fact, the company has grown exponentially over the past 12 years, offering an array of products and services.

Bomgaars is a chain of farm stores with operations in four states across the Midwest. The history of the company starts with William Bomgaars, who began operating a general store in the small town of Middleburg, Iowa at the age of 18. After decades of molding and developing the business, a second store was opened in 1956 in Yankton, SD.

By 1996, the chain had 11 stores, and over the past decade, that number has grown to 46. Today, the company operates in South Dakota, Nebraska, Iowa, and Minnesota. “We expanded into Minnesota for the first time this October,” said Dave Meyer, senior vice president. “Our company philosophy is to grow by opportunity, and the Minnesota acquisition has allowed us to enter a new market.”

In its stores, Bomgaars stocks more than 35,000 products, including farm supplies, paint, lawn and garden supplies, hardware, work wear, and footwear. The company also has a large animal feed and pet department and provides an array of services, including small engine repair. Today, its corporate headquarters and full service distribution center is located in Sioux City, Iowa.

Despite today’s tough economy, the team at Bomgaars plans to continue to focus on re-investing in its existing locations and positioning itself for future. The company is opening its 47th store in January in Rock Valley, Iowa.

“We have been affected by inflation, just like every other business,” said Torrey Wingert, vice president and CFO. “When our costs rise, we have to be especially careful with the decisions we make. Simply turning over all of the price increases to customers would not be a good business move.”

The team at Bomgaars is using a string of IT investments to enhance its customer service. Last year, a new POS system was installed, which helps expedite each customer’s experience in the checkout line.

“Satisfying customers is the key to retaining them,” said Pam Winebrinner, vice president of human resources. “POS systems directly affect the customer’s experience, so it’s necessary to update them every so often.”

But as anyone in the retail industry knows, machines are only as good as the people who operate them. To keep its employees up to par, Bomgaars participates in a training program called Brain Shark.

The Web-based program is used to train both new and existing employees. “This program helps us recruit and retain,” Winebrinner said. “The executive team can’t be at all 46 locations at once, so this system helps us standardize our processes, which enables the business to run at top efficiency. All of our employees are taught the same information. This ensures that they’re knowledgeable, and it also helps the team at the headquarters solve issues more easily.”

Additional services

In May, Bomgaars introduced a private label consumer credit card, which customers can use at any of the company’s stores. Although this type of system is typically reserved for larger chains, the team at Bomgaars sees it as an opportunity to reward its loyal customer base.

The application process is simple, there are no annual fees, and the card allows customers to make low monthly payments on their bills. Cardholders receive information about deferred payment/deferred interest promotions, which is beneficial to them, as well as the company. It encourages them to spend more money, but they also save money, getting more for their dollar. More than 5,000 customers have signed up since the card was introduced.

According to Wingert, customers are responding well to the card. “They can access their account information online,” he said. “They can check their balance and pay their bills electronically, which is convenient for them.”

The team at Bomgaars is constantly searching for new ideas to improve customer service. The recent trend of environmental sustainability inspired the team at Bomgaars to set up a program that helps customers recycle their old automotive batteries. For each battery they bring in, customers receive a Bomgaars gift card, which is great for them and the environment.

“Because batteries are classified as hazardous waste, you can’t just throw them in the trash,” Meyer said. “This program not only makes it easier for customers to get rid of their batteries, but it also rewards them with store credit, which can be used for future purchases.”

Bomgaars also participates in a program that allows customers to receive an instant rebate of up to two dollars when purchasing fluorescent light bulbs. To make this possible, Bomgaars partners with several local utility companies and light bulb manufacturers.

“As we continue to grow our company, both internally and by opportunity, we also plan to expand the breadth of services and products we offer,” Meyer said. At Bomgaars, the executive team knows that, in the retail industry, evolution is essential to survival. As technology evolves, customers’ needs change, and this farm store chain recognizes that.