Rolling With The Changes Since The 1940s

PHOTO/Matt VOLPINI Michael Klem, left, turned ownership of Klem's over to his daughter, Jessica Bettencourt, in 2011. Her husband John, right, joined the store last fall.

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If there's a core reason Klem Tractor has made it through 66 years and several generations of family leadership, it's that the business has never been afraid to change.

Klem's, as it's known, was founded in Hardwick as a tractor repair shop by John and Bernice Klem in 1947 and soon relocated to Route 9 in Spencer. It would eventually become one of the highest-volume Ford tractor dealerships in the country.

Today, tractors represent a much smaller piece of the business, which over the years has expanded to include unique offerings. The store has become a Spencer institution that hosts frequent community events.

A decline in the number of Central Massachusetts farms forced Michael Klem — a second-generation owner who took over the business from his father in 1980 — to try different approaches throughout that decade. He expanded and started selling lawn and garden supplies, pet food and hardware.

His daughter, Jessica Bettencourt, who took over as president two years ago, recalls her father telling her about a meeting of Ford tractor dealers not long after he added an Agway franchise. Some poked fun at him for selling dog food, she said. But it wouldn't be funny for long.

"Now most of the dealers in this area are doing something else, too," Bettencourt said.

Indeed, diversity is the name of the game at the 75,000-square-foot store, which employs 75 people and resembles a cross between a department store, a hardware store, a pet shop and a greenhouse. Customers can pick up a pair of shoes or pants, a baby chicken, toys, some kitchenware and a houseplant all in one trip.

"We're kind of like a bunch of specialty stores under one roof," Bettencourt said.

It's an approach that seems to be working. The store made it through a tough recession and Bettencourt said it's having its best year to date. She said that's largely the result of a rebound in tractor sales, which fell during the 2008 recession and the years that followed.

"Our business has picked up this year phenomenally," Klem said.

Staying Nimble As Competition Shifts

In the mid-1990s, the Fair Department Store in Spencer closed, prompting Klem's to add clothing, shoes and other products.

Between the growth of Internet retail and the rise of chain competitors, the retail landscape is much more nuanced today. Bettencourt said figuring out how to compete amid those changes will remain a challenge.

Klem's sells several hundred thousand different items, which is a lot for one store. But it can't compete with the purchasing power of big chain retailers.

What Klem's can do, Bettencourt said, is focus on keeping prices on similar goods as close as possible and adapting quickly to changes.

She and her team are also using technology to be more efficient. She can track inventory and pricing using a smartphone app provided by her point-of-sale vendor, and the company is also targeting its market base more effectively thanks to a rewards card program it launched three years ago. The program has more than 23,000 members.

And, bucking any perception that small businesses don't use the Internet well, Klem's has also been selling its products through its website for years, though Bettencourt said most of its revenue comes from in-store purchases.

The other factor that she thinks gives her business an edge is community involvement. The store's events calendar is packed during the summer, with weekly car shows to benefit a children's charity, a Saturday farmers market, an equine rescue day, and perhaps the most fun of all, a Halloween costume contest for dogs, which usually brings in well over 100 contestants.

It wouldn't be an exaggeration to say Bettencourt has been preparing for much of her life to run the family business. She has early childhood memories of roller skating inside the store. She worked as a cashier, purchasing agent and in the shipping and receiving department while in high school and college, and became office manager after she graduated from Assumption College. That got her up to speed with the myriad paperwork that a small-business owner with no dedicated human resources manager must contend with.

She's grateful her father still comes in regularly. But she knew what she was taking on when the company's directors officially made her the owner last December. The family's attorney joked after the papers were signed that Klem looked happier than Bettencourt.

"Really what's shifted now is the ultimate responsibility," she said. "Now it's on me."

Her father's not worried.

"My daughter's been here a long time," he said.

Bettencourt is confident, too, but she also knows the odds are against her.

Only 12 percent of family businesses make it to the third generation, according to the Family Business Institute. She and her husband John — who joined the company in September — have two daughters, ages 13 and 7, who one day might help Klem's enter the exclusive 3 percent of family businesses that make it to the fourth generation.n

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