• Jay Akridge, director, Purdue center for food and agricultural business • Steve Hastings, director of sales, Croplan Genetics • Danny Klinefelter, director, Texas A & M University executive program for agricultural producers • Peter Goldsmith, assistant professor, agribusiness, University of Illinois • Greg Leaf, president, Miller Meester Advertising, Minneapolis • Pat O'Rourke, professor of agricultural economics, Illinois State University • John Rabby, group vice president, agricultural products, BASF •

1. Decide who you are, who you want to be

   As recently as 1975, farmers looked more alike than they looked different. Today, they look more different than alike. Lesson: You can't use a 25-year-old business model that treats everyone relatively the same. Questions to ask:

   • What do I want to be known as in the future? Service center or discount store?

   • How do I organize to get there?

   • How can I add value for each customer? Steve Hastings

2. Tell the truth, the whole truth …

   Secrecy is a big roadblock to communication. It slows business growth. Except for those few things that can't be shared because of legal or confidentiality reasons, there's no advantage to keeping the company's business plan in a locked file. One-on-one discussions with employees to answer two simple sets of questions have proved to consistently improve morale and performance:

   First, Where is the company headed? How do we plan on getting there?
   What's my role — how do I fit in?
   What's in it for me? (dollars, recognition, career move)
   Then, What am I expected to do?
   Why am I doing it?
   How am I doing?
   How can I improve?

   Try it and future performance reviews will likely become a nonevent.
   Danny Klinefelter

3. Do a “Top 20” winter tune-up

   Make a list of your “Top 20” customers. How have they changed since last year? Expanded acreage? Moved into specialty crops? Change in tillage? List ways to add value to their operations. Formulate an initial pricing strategy based on bundling preferences and information needs. Make an appointment to see each one, preferably in the farm office, to finalize their 2002 product and service package. Finally, list the things about your business that earned their business. Identify and go after five or more potential customers with similar needs and buying habits. It's easiest to grow by targeting the same type of farmer you're already doing a good job with.
   Jay Akridge

4. Don't try to compete with the Internet

   You might be able to compete on the Internet, but never with it. It's hard to go toe-to-toe with someone with a garage full of crop products and an Internet address. Any seller anywhere in the United States can physically post crop protection products or seed and any producer can buy them. That's where price discovery comes through for the producer if he wants a completely unbundled buy. Your best protection from an electronic price war comes from strictly following a value-added strategy. Don't get hung up when someone says he can get a product cheaper on the Internet or down the road. You didn't build your business model around getting his business.
   Steve Hastings

5. Direct change or become a victim or it

   This advice, gleaned from a book on executive leadership by author Phil Koehler, underscores the need to react quickly when a need for change becomes obvious.

   Changes you face may include serving the major customer who now operates a much larger, more sophisticated business. You must treat that customer as a business. All businesses require a steady flow of accurate information to guide decisions that will provide competitive advantages and operational efficiencies. Producers are no different. This season our company is launching a number of retail initiatives involving new technologies, real-time information, account management, inventory tracking and training. By managing these tools within the scope of your retail business, you can provide customers a specialized package of valuable information services. Such services differentiate you from your competitors.

   Grow your status as a trusted advisor and business partner to your customers. Help them better manage their business through use of information technology. In doing so, you have directed positive and value-capturing change.
   John Rabby

6. Learn from your peers

   Peer advisory groups (PAGs) are an effective way for a group of CEOs or middle managers from non-competing businesses within an industry to meet to trade ideas and get honest, objective feedback. They're a great means to get different perspectives from people who have “been there/done that,” particularly people who have been successful and have credibility. Often, meetings are held near a member business to allow a visit of the host company. Spader Business Management is one facilitating firm that has worked with agricultural companies. Get more information at www.spader.com/20groups.
   Danny Klinefelter

7. Make best use of local media

   Learn to effectively and efficiently harness one of your greatest local resources, the local news media.

   Promotional programs are often funded partly by your suppliers and partners. But in addition to advertising products, make sure to consider ads to promote new services, special offers, or even to give thanks or congratulations to local people, community groups or school teams. These relatively inexpensive gestures can go a long way to building local understanding and goodwill.

   Local publicity as a promotional vehicle is often overlooked. Develop a relationship with local reporters and broadcasters. You can become a resource for their agriculture-related news stories, which in turn may provide an opportunity to promote the stewardship message for your dealership.

   Effective and thoughtful use of advertising and publicity through your local newspaper, radio and television outlets can be one of your most effective business practices.
   Greg Leaf

8. Separate needs from wants

   Don't overlook the “want” angle. You may know why a customer needs a specific herbicide, but why would he want to hire your company to custom-apply it? One of our retail outlets had tried to crack a big producer who owned his own spraying equipment. Not much happened until the custom application manager discovered the 35-year-old farmer really wanted to find more time to attend his son's baseball games during the spring and summer. The sales pitch was changed; the customer listened and the dealer got the business.
   Steve Hastings

9. Prepare for radical regulation

   Strategic planning sessions usually look internally. A typical routine identifies critical issues, prioritizes them and develops strategies for the top five or ten. That's valid and a good exercise. But this kind of planning often ignores external forces that can literally change the world you live in and the way you do business. A good “for instance” is the likelihood that increased threats of bio- and agro-terrorism will result in a Cabinet level position in Washington to guard food safety, with strong powers equal to EPA. If you think the structure of agriculture has changed in the past, you haven't seen anything yet if that happens. A possible fallout: Total trace back could be required on all food or feed grains passed into the food supply chain. On the positive side, retailers are the logical group to compile the data and it will be of value to food processors.
   Danny Klinefelter

10. Take care of worst fields first

    Every farmer knows what works for his best ground. Turn it around. Ask him to tell you about his most challenging field. From your product and service menu — precision ag, crop protection, seed, etc. — come up with a recommendation that takes care of the grower's problem. Then ask the question: If I can add value for you on this worst field, would you consider how we can add value to your entire operation?
    Steve Hastings

11. Make yourself relevant to someone in the food supply chain

    Jesse James, when asked why he robbed banks, replied: “because that's where the money is.” If you look at where value is being created overall in the agricultural food supply chain, unfortunately it's not at the crop production level. That portion of the value pie is getting smaller and smaller. So if you're only selling to producers with a traditional “push” strategy, your portion of the value pie is also getting smaller. To go where the “money is”, you need to start planning how to build stronger relationships upstream with life science firms innovating new genetics and/or downstream with food processors. How can you and your supplier base, with 50,000 to 100,000 acres or more under your influence, extract more value from the broader supply chain by working more closely together?
    Peter Goldsmith

12. Set price accordingly

    It's hard to understand the unwillingness of some co-ops to differentially price. It underscores the common belief that co-ops are driven by three things: political forces, social forces and economic forces, and always in that order. As far as I know, there isn't anything in co-op law, or any other law, that says everyone must get the same price. Some customers simply cost less to service and therefore should pay less. At least dig deep enough so that if you are following a one-price philosophy, you know the economic consequences.
    Danny Klinefelter

13. Sign them up!

    Roadside field signs do several things: They tell the countryside that this producer uses your products, they tell the producer you're proud to have him as a customer, and they connect technology answers back to your business. But they don't say anything in the back of the pickup or piled in the shed. Take the lead from an Ohio co-op manager who designated a “sign day” last summer. All employees were assigned a list of fields, and by day's end 600 new road signs were posted on customer's farms. What a way to make overnight impact across your whole marketing area! They wrapped up the event with an employee family barbecue.
    Steve Hastings

14. Fire them up!

    A poorly trained staff sneaks up on you one at a time. A training camp atmosphere is a good, inexpensive way to get your team in shape before the spring rush. Have some fun by patterning it after a football or baseball camp, where younger, less experienced players are teamed up with a seasoned veteran.
    Jay Akridge

15. Share equipment

    What do you do when projected income just doesn't stretch enough to enable you to buy equipment you need to stay competitive? Try thinking creatively. A good example: A southern Minnesota retailer jointly owns specialized precision ag equipment with a Kansas co-op. They get two sets of acres out of one set of machines because their application seasons are different. That's a big cost savings for high-buck rigs that might sit idle half the time otherwise. They even ship their trained applicator back and forth with the equipment to assure quality service.
    Steve Hastings

16. Sum it up

    Don't assume you know what your customers expect from you and what they want. Ask them!

    Don't assume you will keep your customers. Listen to them!

    Don't assume your competition is less intelligent than you. You will, at some time, get surprised!

    Don't assume your people will excel without training and education. You will, sooner than you expect, be disappointed!

    Don't assume tomorrow will be like today.

    Do find time to think about the longer term for your business. Uncertainty is always with us and luck is more generous to those who are prepared.

    Do ask what your customers expect from you and what they want. Stay ahead of your competition by keeping your people well trained. Be ready for change — coming from customers, competitors or new technologies. Don't get caught thinking you don't need to change because you are “special”. Being special is no protection in competitive markets.
    Pat O'Rourke

Want some good winter homework? These motivators were recommended by our agribusiness troubleshooting team. All are available at www.Amazon.com.

The Discipline of Market Leaders by Michael Treacy and Fred Wiersema

Agribusiness Management by Steven P. Erickson, Jay. T. Akridge and Freddie L. Barnard

Principles of Agribusiness Management by James G. Beierlein, Kenneth C. Schneeberger and Donald D. Osburn.

First, Break All the Rules: What the World's Greatest Managers Do Differently by Marcus Buckingham

Getting Partnering Right: How Market Leaders are Creating Long-Term Competitive Advantage by Neil Rackham

Everyone's a Coach by Don Shula

Stop Selling, Start Partnering: The New Thinking About Finding and Keeping Customers by Larry Wilson

Don't Fire Them; Fire Them Up
by Frank Pacetta (cassette tape)

Agribusiness Selling Principles and Practices by David W. Downey

The Change Cycle: The Secret to Getting Through Life's Difficult Changes by Mary Ann Salerno

“Know your customer” is one of the oldest rules of marketing. And every farmer's needs and buying habits are different, as revealed in these comments from Team FIN members when asked what they expect from local retailers. Team FIN members are commercial farmers enlisted to help Farm Industry News editors test new products under actual farm conditions and file field reports. Their message here: stay flexible.

Price Buyer
Bob Wietharn,
Clay Center, KS.

Wietharn farms 1,100 acres of irrigated ridge till corn and soybeans, has a 300-sow farrow-to-finish hog operation and engineers much of his own application equipment.

I look for a reputable retailer with a flexible pricing strategy. I want to be able to buy all my chemicals for next year at one time in the fall, prepay the bill and walk out the door. After that, they probably won't see me the rest of the year. I apply all my own chemicals, so I don't want to be helping to pay for a custom sprayer I'm not using.

We would rather buy locally, but there comes a point where you can't justify it. We shop around, and check out prices on the Internet. Last year, we found a dealer in Illinois online who would have delivered herbicides for a really good price. Geography simply doesn't matter if you can get door-to-door delivery. When we let the local dealer know he was too high, he came down close enough to where we could live with it.

With ridge till, we cut rates by banding chemicals, so we aren't concerned about performance claims. By being off label, we don't expect the manufacturer or dealer to acknowledge a product performance problem anyway. But we save enough money by banding that we can lose a time or two and still be way ahead.

Service Buyer
Daryl Bridenbaugh,
Pandora, OH.

Bridenbaugh shares management of a 1,000-acre row crop and hog finishing operation near Lima, OH. He tests products thoroughly before using them on a commercial scale.

I look for a really good custom applicator. Our local Royster Clark dealer fills the bill. They have several up-to-date applicators and well-trained operators, and get out within a half-day of being called. After riding around with them a few times, I was convinced they're worth the money. My old sprayer just couldn't do it as fast or as effectively.

We also like the protection we get from product warranty programs offered by manufacturers. On corn, we've been using Guardsman herbicide, and most of our soybeans are Roundup Ready. We don't have to worry about performance because the companies pay for a respray if there's a problem.

We also rely heavily on custom fertilizer application. A number of years ago, we switched from traditional fertilizer to sewage sludge accessed from nearby Ohio cities. They add lime and apply it at about three tons per acre. It's convenient, cheaper per unit of nutrient than conventional products and adds a lot of organic matter.

Performance Buyer
Steve Webb,
Needham, IN.

Webb farms 950 acres of corn, and soybeans in central Indiana and partners with his wife in a computer consulting and repair business.

I always deal with more than one retailer, so if something happens to one of them, we don't have to spend time getting someone else up to speed. And the first thing I ask is that they can the b-s. If I take their recommendation, I expect them to stand behind it. But I'm not looking for handouts. The first thing I want to know is what caused a product failure and how we prevent it in the future. Was it rate, timing or what? The second thing is what we do now to salvage the situation for this year's crop. The third thing is who pays the bill. Usually by the time we figure out one and two, the answer to three is obvious. I'm willing to share in the responsibility, but I think a manufacturer or dealer has to live with conditions the same way I have to.

“I'm careful about listening to product recommendations, because it's no secret that some manufacturer programs are more profitable for certain dealers than others. There's nothing wrong with that; you just have to pay attention. But I have no problem working with a good dealer on something I believe will work to my benefit.

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