Market and wallet share analysis is important. But unless it provides actionable insights for your agribusiness, it won’t help you grow your revenue.
The U.S. agriculture market is a zero-sum game. Agribusinesses can’t count on growth in total farmer spend, because farmers are already struggling with profitability. Plus, commodity prices aren’t growing in any substantial way, further contributing to a static bottom line.
According to the USDA, farm income has remained stagnant since 2016.
According to the USDA, the average farm size has remained relatively constant for decades.
The pie isn’t getting any bigger. That means that each dollar of growth comes at the expense of a competitor, which is why market and wallet share analysis is important.
Most agribusinesses focus on high-level figures based on USDA data that gives them a broad view of the market. It’s a good start, but it doesn’t provide the granularity needed for action.
Especially in such a competitive industry, you should go after the farmers who are the best fit for your product or service and avoid wasting resources on farmers that aren’t a good fit.
If you aren’t going after specialty crop growers, they shouldn’t be included in your market share analysis. The same applies to geography. If your dealer locations only allow you to serve farmers in ten states, you shouldn’t consider states outside of that region as part of your market.
When Farm Market iD works with clients on market and wallet share, we try to get a clear, detailed picture of who their target market is, so as to provide tangible and actionable insights. Here are some of the questions we get our clients to ask themselves:
- Who are the ideal customers for my business?
- Which segments of those growers are large enough to make an impact, but small enough for me to execute against?
- Where are the growers located geographically, and are they within reach of my physical locations (especially relevant for retailers)?
- Are there pockets of opportunity in other segments, geographies, etc. that I’m not considering right now?
Our MarketView platform is designed specifically to answer those questions, and help clients see the power of segmentation in defining your target market.
Segment by crop, geography, and more (left) to see the counts and spend potential for your target market.
The goal with market definition is to identify the “goldilocks” of targeted marketing: large enough to have a worthwhile financial opportunity, but small enough that you can actually execute against it.
Once you figure out which farmers comprise your target market, you can answer more detailed questions about how your business is performing against that market to formulate your complete strategy:
- Where am I doing well (or not)?
- Are there specific geographies, branches, locations, etc. where we have a lower-than-average market share?
- What are my market and wallet share on a crop-by-crop level?
- If I have 10 percent market share, where is the other 90 percent?
- And many more
Sometimes, it’s important to prioritize customer marketing over prospecting when there’s a greater opportunity for revenue growth among your current customers. That way, you’re going after someone who’s already familiar with who you are and what you do.
Then, dive deep into these segments and understand the various factors that impact their decisioning.
AgriBI's grower analysis dashboard lets you examine a variety of demographics around a group of growers.
This is where analysis turns into action. When you have a clearly defined and accurate picture of your market, then you can engage in further analysis to determine the following:
- Which more specific segments exist within this target market?
- How should I prioritize various groups of growers?
- What’s the best way to message these growers?
- How do I direct my managers to focus on the right markets?
- What tactics can my marketing team use to directly market these farmers?
- What’s a realistic sales goal for the business?
Turning market and wallet share analysis into actionable insights is key to taking what’s often a slide on a PowerPoint and making it into a fundamental piece of your revenue growth strategy.