Remember those heady days a couple of years ago when wanting a piece of equipment was reason enough to justify the purchase? It was easy to succumb to the intoxicating draw of the one-trick-pony specialty machines: Projects were plentiful, money was loose, and who doesn’t love a new tool?
Then the construction economy skidded and the need for value became the major factor in buying decisions. Fuel efficiency, strong ROI, high productivity values, and unmatched versatility are the purchasing keywords now. Those words describe the 14-foot backhoe loader: the ideal balance of wants and needs.
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“Before the slowdown, contractors would think they needed a 14-foot backhoe, go buy one, and be on their way,” says Jim Blower, JCB product manager. “Since the slowdown, buyers are taking a closer look at their applications and asking themselves if they really have the right machine for their jobs.”
Loader backhoes were developed to meet multiple needs, specifically those that demanded both a wheel loader and excavator, says Tom Reith, product manager at Terex Construction Americas. “Their wheel loader versatility and excavator functionality increase jobsite productivity and cut operating costs by offering one machine that does the work of two,” he says.
Now, says Blower, users are taking an even keener look at machine capability. “They are asking what they can get out of the machine, what the features and benefits are of each type of machine out there,” he says. “Will the addition of quick coupler attachments increase the machine’s utilization? The end result is they may buy a little more machine than they used to instead of buying two or three single-purpose machines. Customers are optioning-up with more attachments and features.
“Where they may have had a mini-excavator, skid steer and a wheel loader in their fleet, customers are finding that by getting into the right backhoe, they can replace those three machines with just one. People are really looking for how far they can stretch their money.”
Buyers looking at 14-foot backhoes with this post-slowdown perspective are giving manufacturers and dealers the opportunity to reemphasize the benefits of current features, redesign financial options, and refresh the image of the machine’s capabilities.
Bill Buckles, vice president of sales at Murphy Tractor and Equipment in Wichita, Kan., a John Deere dealer, says his company is seeing good backhoe loader sales in the government and underground utilities markets. Versatility is high on his buyer’s check list.
“We’re seeing more backhoes being sold with hydraulic couplers on the front so customers can use pallet forks, along with the bucket or multiple attachments,” Buckles says. “We’re also seeing more backhoes sold with hydraulic thumbs. Customers are using more attachments than they used to because they are trying to make the machine a little more versatile and do more things on the job.”
Other manufacturers are building on their strengths to give customers more of what they buy a backhoe for. The new Case N-Series backhoe loaders are an excellent example. Case’s 580N, 580 Super N, 580 Super N Wide Track, and 590 Super N models, ranging from 79 to 108 horsepower, are taking on excavator-heavy lifting duties with a new Power Lift feature. Hydraulic power goes directly to the newly fabricated boom to lift extra-heavy objects while still running at low engine rpm. A new auxiliary hydraulic system for powering attachments includes flow control as a standard feature.
Buyers comparing a compact excavator or wheel loader to a backhoe loader are finding models such as Terex’s TX760B have the ability to dig 22 feet deep, reach a maximum load height of 15 feet 6 inches, negotiate challenging ground conditions with four-wheel drive, have better ground clearance, and offer comparable bucket breakout forces.
Manufacturers are aggressively pursuing fuel economy by fine tuning every component to squeeze out every drop of fuel efficiency. The cost savings promised are attention-grabbing. JCB says its new 3X 2010 and 4X 2010 backhoe loaders offers up to 16 percent on fuel savings, and the combination of its Smooth Ride system and TorqueLock option reduces consumption up to 25 percent, while increasing speeds up to 10 percent over previous models.
Cost of ownership carries as much weight as the initial purchase price in the buying decision process. John Comrie, competency manager at Volvo, says offering services that contain maintenance costs is an important consideration for its customers. Volvo’s selection of customer support agreements tailor flexible programs that can cover everything from inspections to major repairs, allowing the fleet manager to stay ahead of breakdowns with scheduled preventive care.
Longer term and more comprehensive warranties can sweeten the buying equation and cash flow concerns. “There are more people buying extended warranties today, usually in the three- to five-year timeframe, because the warranty limits their exposure to unexpected expenses,” Buckles says. “They’re not at risk for any unforeseen major component failures.”
Even when customers are sold on the versatility, productivity and economy of a backhoe loader over other machines, new financial factors are creating imposing sales obstacles that manufacturers are working to overcome.
“The inability of smaller contractors to get credit continues to be one of the top issues facing the construction industry,” says Kristy Jennings, account manager with Terex Financial Services. “With access to capital so constrained, contractors are looking to their equipment manufacturers to develop innovative equipment ownership strategies.”
Murphy Tractor is seeing more leasing. “Leasing lets the customer know exactly how much they are going to pay for what period of time,” Buckles says. “They also have some flexible options after the lease—they can buy the machine or turn it back.”
Manufacturers are also working to build their customer’s confidence in their buying decision in today’s economy. “Uncertainty is a major sales obstacle for manufacturers,” Comrie says. “Contractors are telling us they are getting bursts of bid requests but then don’t hear anything more. Jobs that are bid don’t get awarded, and customers are afraid to make a commitment.” With that in mind, some manufacturers are offering flexible financial programs that make it easier for their customers to get into—and out of—a new machine.