When talking to agribusinesses, one phrase that we often come across is: “we know all our customers.”
This implies that an agribusiness can rely on their current farmer customers -- and only their current customers -- to have a successful business.
But based on our experience, that statement is almost never actually true.
Relying just on current farmer customers is certainly appealing. You can focus on products and services without the need to prospect. If you have a highly relevant brand, you don’t have to worry about customers switching products and, thus, can rely on brand loyalty.
However, if there’s anything we’ve learned from the recent disruptions in the agriculture industry -- from technological innovations to bad weather to major consolidation -- is that things change. And they do so in impactful ways.
Relying on what’s worked in the past is no guarantee that you’ll survive into the future. The best way to ensure your survival is to have a strong plan to not just maintain your revenue, but expand it going forward.
This post will explain why relying only on your current customers can limit your ability to grow at best, and can be dangerous to your business at worst.
Why Marketing to Current Customers is a Good Start
Before we get into all the reasons why limiting your just relying on your farmer customers can be problematic, it’s important to note that doesn’t mean you should never try to increase your share of wallet with your current customers.
On the contrary, it’s a good idea to start with wallet share campaigns, as your current customers are a prime opportunity for new revenue.
There are many reasons why this is the case:
- They’ve already agreed to purchase your product or service in the past.
- The value you provide them is front-and-center right now
- You have a relationship already built and established with that grower
There’s no need to convince them of your value. But what you do need to do is explain to them why they should spend more with you than what they’re currently spending.
There’s the old adage that you can’t do the same thing over and over again and expect different results.
Your old tactics got you their business initially. But if you want to increase your wallet share with them, you’ll need a deeper level of knowledge than what most companies currently have and utilize.
Knowing the growers in your market is of little importance. If you have their name and address, at least you have a physical location for them, but that doesn’t tell you the scope of the operation.
If you want to grow wallet share among your current customers, you need more information than just name and address.
From there you may have acreage data showing you the size of the farm, but that’s limited in its usefulness until you know where those fields are located and what’s growing on those fields.
Then there’s the whole distinction between owners and operators, specifically between which fields they own versus which fields they operate.
If you want to grow your share of wallet among your current customers, you and your salespeople must have this level of knowledge. Otherwise, you’ll be hard-pressed to make the case as to why they should spend more money with you.
For example, if you’re selling a particular kind of seed, you should know how they might view hybrids. Are they moving away from soybeans? If they own their land, they may be willing to try out new brands they haven’t worked before.
If you have these insights, you can try and message specifically to the kinds of things you know (or at least can very reasonably assume) they’re going to be interested in.
Then you can propose new products that meet different needs than what you’re already meeting, which will in turn lead to more business.
Hitting the Wallet Share Ceiling: Why You Should Be Prospecting
Once you’ve gone after the low-hanging fruit of your current customers, it’s critical that you go after new prospects.
But what if you’re comfortable with your current customers and don’t feel the need to prospect? Should you make this a priority? Is a self-contained customer group sustainable?
Initially, it’s entirely possible that you can grow your business based on increasing wallet share among your current customers. However, that revenue stream is going to dry up eventually.
Eventually you’re going to have to hit a ceiling with your current customers and, if you want to continue growing, you’ve got to get back out there into the market.
Every company has a wallet share ceiling. But it depends based on the spend potential of your growers and the size of your addressable market.
That cap is going to vary from market to market. For example, many farmers aren’t big on putting all their eggs in one basket. Just because a farmer has a certain spend potential for seed, that doesn’t mean that they’re going to spend it all on a single product.
Regardless of where that cap exists and how obvious it is, eventually, you are going to hit it. The question is: what then?
You don’t want to have to get into a new market once you’ve already capped out your potential. The best plan is to start a prospecting effort with limited resources, while still devoting the majority of your resources to growing your wallet share.
Then, once you start to approach that cap, you’ll already have a clear idea of where those target markets are, so you can go after them more aggressively and using more resources.
How to Prospect: Right Product, Right Message, Right Farmer
If you call a farmer and, without any context or information about their operation, start asking them questions and expecting them to tell you about their farm, that phone call would probably not be well received.
Not only does it show that you didn’t do your homework ahead of time, but farmers in general are skeptical about giving out information on their farm:
- Everyone is knocking at their doors, claiming that this product is better than that product. There’s no real reason for them to accept your claims above your competitors’.
- When you come to them asking for information without offering anything -- or even the promise of anything -- in return, you’re signaling to them that you’re interested in what they can do for you, rather than the other way around.
- There are a number of companies who source data from farmers and then resell that data to agribusinesses. Farmers who don’t know you may think that’s what you’re doing.
Instead of going into the call or meeting blind, go into it with some kind of thesis. Think about what might resonate with the farmer.
This could be a particular product that you know they’ll be able to take advantage of. But it’s not just what you’re selling, but how you’re selling it.
For example, if you know that a grower is part of a multi-generational farming operation, that’s going to impact how you communicate with them.
A farmer may be responsible for a 2000-acre operation with his brother. In that case, it would appear that both he and his brother would be the decision-makers. However, his wife could have inherited a farm, and how he farms that land and no longer is as active with the land his brother operates, but still has a stake in it.
Knowing the details of the operation will help you go into the sales conversation with a thesis, some way that you can help the farmer maximize their productivity.
So within one family, you could have two different operations. And there could be key differences between the two. Your sales message has to take that into account and go at them with different, customized, and highly relevant messages and products.
Effective prospecting in agriculture is actually pretty simple: go after the right farmer with the right product at the right time. But simple doesn’t mean it’s easy.
The more information you have at your disposal, the better off you’ll be when it comes to executing that kind of a prospecting plan.
That’s the best possible path you could have to growing your agribusiness revenue.