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WHAT'S THE best way to keep good customers coming back and to attract new ones?
Fix annoying problems
The first step is to focus on frustrations, says Danny Klinefelter, Texas A&M University Extension economist.
“I'd look for some really progressive, successful farmers and find out what bothers them to no end,” Klinefelter suggests. “Find out what most frustrates them in dealing with businesses like yours and then try to find ways to fix those frustrations.”
Adequate interaction with both current and potential customers is essential for continued success as an ag retailer, says Joel Nelson, United AgriProducts (UAP), Winthrop, IA. He adds that good communication includes both asking good questions to uncover customer frustrations and being a good listener to understand problems that need solutions.
Tailor services
“That's why we set our selling style to meet the grower's needs and wants,” Nelson says. “Our main goal is to be flexible and to offer different levels of prices for different levels of service.”
For example, UAP sells bulk fertilizer at a lower price to farmers who own their own semitrailers and who can transport and apply fertilizer themselves compared with other farmers who need more help, Nelson says. “We don't offer special treatment,” he explains, “but we do offer special prices, depending on the amount being purchased and how much of our time and labor is required.”
Provide value
Another key selling point is UAP's ability to offer technical expertise along with product purchases, Nelson says. “We work hard to be a credible and trustworthy source of information for all our growers,” he explains. “We want to be the go-to guy, the first person our customers call when they have a concern.”
A good relationship between a farmer and a service provider is one that benefits both parties, points out David Harms, owner of Crop Pro-Tech, a crop consulting firm in Bloomington, IL. He says ag retailers should be strategic in offering products and services that will prove profitable both for themselves and their customers. Bundling services also can be beneficial to both parties, he says.
“Most growers are willing to pay for a service if they know they're getting some value for it,” Harms explains, “either by becoming more efficient or increasing their income.”
All farmers have areas in which an expert can help them improve, he adds. For example, paying a consultant to keep field histories, in addition to scouting fields for pests, can be beneficial to both a farmer and the consultant. “We need to know what farmers put on their fields anyway, before we make a recommendation,” Harms says.
Likewise, farmers often can increase profits if they spend more time focused on marketing and financial management than on walking fields and record keeping, Harms adds. “The farmers who survive in today's environment will have to be good at marketing,” he says.
Marketing and sales also are essential areas in which ag retailers need to excel, Klinefelter says. He recommends agricultural service providers ask themselves what value they can provide to a farmer that is different from what others can offer. He also recommends identifying who the best ag retail managers are and developing a network with them.
“A little bit of research will consistently bring up one or two names,” Klinefelter says. “Sometimes those people will be willing to talk with you, challenge you and give you tips and ideas on how to improve, as long as you are not a direct competitor.”
Always follow up
Ag retailers should also remember to ask their own customers for feedback, Nelson points out. “The times when we have lost customers were instances when we did not have good follow-up,” he says. “We failed to make sure that a customer was satisfied and that we'd taken care of their needs.”
Without follow-up, it's difficult to know how well your business has measured up to a customer's expectations, he adds. “What doesn't seem like a big deal to you may be of utmost importance to them,” he explains. “So it's important to get closure after the sale.”
Deliver on promises
Customer loyalty is built on being able to consistently meet and exceed expectations, Harms says. “We tell our managers to always deliver more than what we've promised,” he says. “That's true whether we're working with a farmer who operates a large operation or a small one.”
Because reliability and reputations are intertwined, ag retailers should be careful to avoid over-promising on the services they can deliver, Klinefelter says. “Especially with large-acreage farmers, the biggest issue is timeliness,” he says. “They need to know that they can count on you to be there when they need you and that you have the capacity to serve them adequately.”
Large-acreage farmers will still use custom services, Klinefelter adds, “but only on those businesses upon which they can depend.”
Dependability is the main reason Harms says he is careful to avoid overextending his own employees. “It takes one crop scout to adequately monitor 2,500 acres per week,” he says. “We charge our customers between $5 and $8 per acre to scout, but if we find a problem, it's not unusual to save a farmer $30 per acre on soybeans and $30 to $50 per acre on corn.”
Finding savings like these has helped Harms retain and expand his customer base since starting his business in 1977. “Once we have a grower on our list, we seldom lose them,” he says. “Our focus is to make them feel that they are getting a good value for their dollar.”
Price-based buyers
Large-acreage farmers aren't easy to woo
EFFORTS TO wine and dine large-acreage farmers often leave an ag retailer with a high tab to pay. Recent Purdue University research helps explain why that's so often the case.
“As farmers increase their acreages, they tend to move towards price- or economic-based buying,” says Allan Gray, a Purdue Extension agricultural economist. “Relationship buyers are becoming fewer and fewer to find.”
Relationship-oriented buyers tend to have loyalty to one particular retailer and its products and services, Gray explains. In contrast, an economic-based buyer typically chooses to do business with a retailer only if he perceives some value from doing so. On the far end of the buying spectrum, a price-based purchaser typically has no loyalty to any particular retailer, is less interested in information or services, and tends to make buying decisions based solely on lowest price. Ag retailers sometimes fall into a trap when they try to increase sales simply by targeting customers who operate the most acres, Gray says. Retailers should be targeting their best customers and their most profitable customers to make sure their business is meeting their needs. “The biggest challenge to service providers is to avoid giving away services and to provide only those services that ag producers find valuable,” he says.
Rather than trying to woo customers among large-acreage farmers, ag retailers would do better to find out which products, services and information farmers typically want most, regardless of their acreage. “The trick is that you have to have a sales force capable of identifying the value proposition for each customer,” Gray says. “You need to know what each customer is looking for and have a package available that appeals to varying customer needs.”
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