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Commitment to Customers
The company's commitment to its customers was challenged during the early part of the 20th century. In 1929, the United States slipped into a devastating economic depression. The stock market crash, high unemployment, sagging farm prices, and two disastrous droughts forced huge numbers of U.S. farmers to the edge of bankruptcy. John Deere, which had sold equipment on credit to thousands of farmers, found its customers unable to fulfill their financial obligations.
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| During the Great Depression of the 1920s and 1930s, John Deere chose to carry the debt of thousands of customers who owed the company money for their farm implements. This decision allowed farmers to continue to operate their farms and provide for their families.(Photo courtesy of the Library of Congress, Image#LC-USF33-012202-M5) |
Believing in the honesty of the American farmer, Frank Silloway, vice president in charge of branch sales, suggested that the company not foreclose on its customers who were already struggling to provide for their families. The board of directors agreed. By 1931, John Deere found itself carrying more than $54.6 million in receivables for products sold to customers on credit. During the same year, the company's sales totaled only $27.7 million.
The company chose to carry, as long as necessary, the customers who were hopelessly behind on their farm machinery payments. The risky decision paid off. By 1936, almost 99 percent of these past-due debts were paid back to the company. The company's faith in its farmer customers has been returned many times over by incalculable customer loyalty.
During the 1980s, American farmers faced challenges similar to those of the Great Depression. Land prices, which had risen rapidly during the late 1970s, fell dramatically. Farmers, saddled with massive debt, faced declining grain prices and reduced demand from foreign markets. Banks and lending organizations foreclosed on thousands of family farms.
Many of these beleaguered farmers also owed money to John Deere. And as it had done during the Depression, the company made every effort to deal with its customers compassionately. While John Deere did foreclose on some loans, credit was extended to many customers even if they could only pay a few dollars each week toward their debt. Grateful customers often expressed their appreciation for the empathy shown by the company.
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