Buying behaviors are about as diverse as the people doing the buying. Yet many customers are similar enough in what they find attractive that ag retailers can segment them into groups and develop specific marketing strategies for each segment, says Jay Akridge, Purdue University agricultural economics professor.

The key is to identify customers based on their main needs and wants and not necessarily on other factors that ag retailers might view as more valuable to know, such as acres farmed, Akridge notes. “Ag retailers tend to segment customers based on size issues, but it's more complicated than that,” he says.

Segmenting customers into different groups doesn't necessarily require a lot of effort, says Christine Wilson, a Purdue University agricultural economist. It can be as easy as asking customers what single factor most influences their purchasing decision whenever you have a chance to speak with them, she says, and then recording their answer for use in future marketing efforts.

Most ag retail customers will tend to fall into these three major buying groups, no matter how many acres they farm, Wilson says.

1. Business buyers

“Business buyers value product performance first, and price second,” Wilson says. “They are generally willing to pay a little higher price for a high-quality product.”

However, if the product being sold is a service, such as crop scouting or custom spraying, then the performance of the people providing that service is extremely important, as is their technical expertise, Wilson says. “These customers are looking for someone who knows more than they do about a particular topic and can do it better than they can,” she says. “Otherwise, business buyers won't purchase that service; they'll do it themselves.”

2. Economic buyers

Price is important to everyone, but this particular group of buyers values the lowest price more than any other factor, Wilson says. Service and convenience are generally less important to these buyers, she adds.

“Economic buyers look at price first, but product performance is important to them too,” Wilson says. “If the product performance is perceived to be fairly equal among brands, this group will choose the product with the lowest price first. They're not going to be as loyal as buyers in the other segments.”

3. Relationship buyers

“Relationship buyers are people oriented,” Wilson says. “They are looking for someone they can trust, someone who they can call on when they have questions and who will be there with answers when they need them.”

Trust and honesty are two very important factors for these buyers, Wilson says. However, location is also important, especially if being geographically close helps these buyers to obtain products and services faster.

Ag retailers probably will find it much easier to identify a customer's buying preferences and place them in the right group than to use that information to increase sales. “The hard part of marketing is continually providing unique offers that will match the different segment needs of your customers,” Akridge says. “You need to always be trying to match a different value bundle to each segment.”

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