Ag Retail is kind of a misnomer. While the industry is classified retail, our customers are usually not what everyone else considers a retailer to be. Mention the term to most people and they think about Old Navy, Walmart, or maybe Home Depot. Think about it, if you say you’re a salesperson in Ag Retail people could think you work as a floor salesperson at the local Farm and Home. There is nothing wrong with being the floor salesperson. However, if you are a salesperson in Agronomy Retail facts are your potential “retail customer” will typically be purchasing tens of thousands if not over a million dollars of good services while operating a multimillion business. They will rely on you to provide the best for their situation in products and services. This is becoming more the more the norm. As an agronomy retailer, you need to consider the best ways to effectively present your products in such an environment. Over the years, I have read many good articles and books on products and marketing. At this time, I want to take the time to recognize the two that apply to this article.
- James C. Anderson, James A. Narus, and Wouter Van Rossum, (March 2006),“Customer Value Propositions in Business Markets”,Harvard Business Review, pp 91-99.
- I would like to thank the countless customers, comrades, and Mfg. Representatives that also gave me much to consider and learn. You all helped a farm boy learn about Agronomy Retail and Marketing.
The Agronomy Retail world is a fast changing world. It is an industry that increasingly finding itself with suppliers of world-sized proportions, staffs, and market presence. And it is with these suppliers that the retailer must form working relationship. On the other side is the customer…the farmer. And so it is that the retailer works with a farmer who due to their growing size and market prominence will also have now fewer than two and perhaps as many as five or six other “specialists” working with them. Each will have their specialty in areas such as animal nutrition, field equipment, grain handling equipment, environmental and safety compliance, ect. On the income side of the business, the farmer will most likely be working with a professional to help determine the best way to market their grain, milk, or animals.
As the size of the farm operation grows so does the complexity of the staff. I have worked with operations that would employ upwards of 40 or more employees and have multiple layers of management, such as in large dairy farms, farming several thousand acres. Then you have the grain farmer. Mechanization allows father and son grain operations to farm well in excess of 3,000 acres with the staff basically being four family members. With over $3 million invested in field and grain handling equipment, they cover a lot of ground but don’t have the time to be the field scout, agronomist, and seed guru. Perhaps you serve the vegetable and fruit farms that can become very labor intensive with labor being the largest expense. To them being able to have a professional agronomy supplier help manage the agronomy decisions may be a very welcomed relief! Wow, what a confidence booster if someone looks to you like that. On the flip side, what an equally high level of expectation!
With the trend of consolidation continuing, the retailer can find themselves in the position of either being the “top dog” in the local marketplace for perhaps the “upstart” competitor that the rest growl about. I am sure we all can identify with one or both camps. There are those within the world of retail that have seen the need for growth through acquisition in order to advance their companies. And in the process attempt to bring the market a certain level of products and services that otherwise could not be effectively offered. Meanwhile, the independent retailer will be looking to perhaps find the “niche” market. The “itch that is not being scratched” by other retailers for farmers in the local area.
Throw in a rapidly changing landscape of vendor consolidations and new product introductions and a retailer can be overwhelmed by this seeming deluge of variables. It is important to always remember that it is the farmer who pays the bills, and it is the farmer who must be served.
With the farmer seeing lower farm revenues for the foreseeable future, perhaps even negative cash flows, they will become more and more tempted to buy based on price. However, they know and we know that price isn’t always the best. Otherwise, why wouldn’t we see cheapest of everything on the farm all the time?? Powerful advertising and highly efficient levels of service already provided by your competition may leave you feeling like you brought a knife to a gun fight!
One way to effectively remain competitive in an environment of this nature is to bring the best in products and services to the farmer. But, don’t we all think we bring the best to the show? Who plans on being the last place finisher in the county fair? One technique to use is the use of developing effective Customer Value Propositions. Think about it. With or without realizing it, your suppliers present them to you all the time. They occur when the new chemical programs come out in the fall or when the new seed programs come out in August or September. We have them when it comes to equipment and fertilizer purchases as well. If you are the buyer/manager/owner you have your needs & desires. Do you effectively place your best products and services against your competitors? Do you unintentionally sacrifice margins to get the sale? Perhaps you even lose the sale even when you were convinced that you had the best offering for the farmer. Did you do a good job at presenting value to that farmer? While we hear these propositions from our suppliers, we don’t always do a good job at targeting the RIGHT proposition to the individual grower.
Let’s touch briefly on the three main ways to effectively compete using Customer Value Propositions.
ALL BENEFITS propositions are what we hear a lot of in our lives. Remember the ads you hear promoting all the benefits you will receive if you buy from that company? That is typically what is called an ALL BENEFITS value proposition. If the customer says, “why should I buy your seed?” That can probably be taken as an All Benefits type of question. However, I would suggest that this method has been used so frequently that just like weeds becoming resistant to atrazine, our farmer customers have become kind of resistant to this type of Proposition Statement. It is an easy one to teach the sales force. You can call together a sales meeting, hand out the tech support sheets and a punch list of the benefits of the product. Throw in some good ribbing and teasing, and some laughs and you had your sales meeting. But, in an environment that is becoming increasingly “homogenized” in the products offered the farmer, this will perhaps leave you lacking in the sales closings column.
But, what if the farmer is tired of that approach? You tried that before and the conversation ends just as quick as it starts. You may consider using FAVORABLE POINTS of DIFFERENCE. That shows that you are different than the competition. FAVORABLE POINTS OF DIFFERENCE propositions are the professional technique of sitting down and explaining how your product/service differ from the competitor. You have seen or heard those who trash their competitors. That is NOT what I am talking about. Instead, this is a very professional review performed by you as the spokesperson for your organization explaining (not telling) what it is that makes your product/service different than your competitors. This exercise will bring to light those things that make you unique. Being unique is a good thing. For the farmer who is looking for a different option, it may not always be about selling benefits – It may be all about explaining your differences. The typical question to signal this may be, “Why should I buy from you instead of my current supplier?” Great time to position yourself as being different……allow the farmer to determine if you can say you are “better” than you competition.
But, what if the farmer likes some of the things that your competitor has but you need to make the pitch for the business by offering something different, something you know would be better for this customer? How about combining both the benefits and the differences? That is RESONATING FOCUS. Focusing on the specific customer’s situation, you provide points of parity relative to you competitor. (points of sameness) while at the same time offering a point of difference in a blend that provides just enough for the customer to begin to relate to what you are offering and compare it to the current supplier.
This strategy is a little more difficult to administer and takes added effort on your part with some well-written sales training that perhaps includes some role play.
RESONATING FOCUS is probably my favorite one. In the retailer world, supplier financing, cross-merchandizing and other regional and national programs can make it look like everyone is all the same. “Homogenized offerings” is a phrase that comes to mind. And in the process, it can sometimes seem difficult to find anything but the price to stand on. Might I suggest the use of RESONATING FOCUS? It takes a level of technical understanding about your and your competitor’s products. If used effectively, it could put you in the driver’s seat with you customer, regardless of how mighty the competitor. First, look at the list of benefits you put together about your product. They are undoubtedly good, solid benefits that make your product worth consideration. These show that you are different than the competition.
But, what if the farmer likes some of the things that your competitor has but you need to make the pitch for the business by offering something different? Go ahead, acknowledge your competitor. How about combining both the benefits and the differences? That is RESONATING FOCUS. Focusing on this specific customer’s situation and in doing so show that you command a thorough understanding of their farms. You provide points of parity relative to your competitor. (points of sameness) while at the same time offering a point of difference in a blend that provides just enough for the customer to begin to relate to what you are offering and compare it to the current supplier.
It’s important to remember, you don’t always have to hit a homerun on every benefit your product has. In the use of RESONATING FOCUS, you acknowledge that while your competitor may have this point of difference you have a point of parity with them while offering a different benefit…a more suitable benefit to their specific need. In such a scenario, you need to have a firm grasp what it is you have to offer, what your competition has and how to effectively present the two in an Effective Customer Value Proposition.
When you learn how to accurately place all three types of propositions you will find yourself having happier customers, higher customer service levels, more effective and confident sales people. It’s a positive energy cycle, and customers will truly consider you the professional they desire for agronomic support.
Thanks for reading! Feel free to share your success stories and how you helped show the farmer that you had the best solution to their problem.