If you could implement a diagnostic system that measured how your customers rated your ability to meet their needs, would that have value to you? What if this system also monitored customer loyalty and identified opportunities for growth? Most business persons would agree such a system would give them a competitive advantage and pay for itself many times over. After all, if you could take the pulse of customers more accurately than your competitor and then direct your resources to continually improving yourself in your customer's mind, shouldn't you WIN most of the time?

Large consumer companies spend millions to determine customer preferences, opinions, and the market share of their brands. This provides mission critical information in two areas: 1) “How are we doing in terms of meeting the needs of key customers,” and 2) “What could we change to help us meet customer needs more effectively?”

Many retailers don't take advantage of their own opportunity to measure how effectively they meet customer needs. The system I am referring to is a report card from customers in the form of Share of Inputs (SOI). AgKnowlogy believes the SOI a retailer receives from a customer is a fairly accurate assessment of how well the customer believes the retailer meets his needs. Most growers are rational people, and they allocate their business among retailers according to how well those retailers meet their needs.

I believe this because, at the end of the day, that behavior works best for customers. Very few customers are prepared to act contrary to their self-interest over an extended period of time. There are occasionally other reasons, including field locations, why growers don't give all their business to a retailer, but these are exceptions that mask the reasons that drive where growers purchase inputs.

Unfortunately, SOI results are often rationalized by retailers with stories that may be true, but which are only exceptions to the rule. These rationalizations are counter-productive and stand in the way of thinking about why your customers give you the Share of Inputs they do. Consequently, retailers miss an opportunity to use knowledge to improve their business results.

AgKnowlogy strongly recommends quantifying and tracking SOI with High Potential customers. This must be done for each category you sell (i.e., chemical, fertilizer, seed and services). Our analysis of hundreds of thousands of growers has shown a customer can be at several SOI levels with a retailer. Once you know the SOI you have with each key customer, you can implement appropriate strategies based on your SOI in each category. For instance if SOI is low (1 to 25%) in fertilizer, Problem Solving is required to better identify the customer's needs and propose tailored solutions to meet those needs. Similarly SOI may be high (76 to 100%) for chemical with the same customer and a Retention strategy is appropriate for this category. If you knew the SOI of each category you sold to customers, you would notice a single strategy for each customer is generally not appropriate.

Most of the needs of Retention customers are being met (because that is how they behave), and the focus is on ensuring you stay in touch with their evolving business needs so you can continue to position your products, knowledge and service correctly.

Maximize customers give you the majority of their business, but there may be unresolved issues that prevent further growth. Customers in a Build situation show behavior that indicates many of their needs are not being met. Further listening, thinking and tailored proposals are required to move forward.

AgKnowlogy believes most customers in a very low SOI situation require a Problem Solving strategy. Often new customers are in this situation, as are some longer term customers who may purchase from you for convenience but who would rate you fairly low on meeting their needs.

Many retailers have one strategy for all their customers. A few retailers have strategies for groups of customers, or maybe even single customers. The report card and SOI concept urges you to consider you likely need several strategies for each customer. Remember hope is not a strategy, and working hard is not a business plan.

Using your Share of Inputs report card from customers to drive selling strategies can have a powerful effect on your business. I urge you to not rationalize away your SOI results with customers. This would waste a real opportunity to use customer information to increase sales, loyalty and profits. If you need any help getting started, I would be happy to lend an ear or a hand.

Bill Keogh is the owner of AgKnowlogy Inc., a company that helps retailers use customer information to improve their business results. If you have a success story to share or an idea for a future column, e-mail him at info@agknowlogy.com, phone 905/868-9953 or visit www.agknowlogy.com.

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