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    Building a Product-Market Fit Strategy for Your Agribusiness

    Posted by FMiD Team on Jun 22, 2020

     

    Building a Product-Market Fit Strategy for Your Agribusiness

    No matter your business model, any successful revenue strategy requires a close fit between the product and the needs of the customer. While it's important to emphasize this fact in individual sales conversations and tailored marketing messages, product-market fit also plays a key role in your overall revenue strategy.

    There are a number of factors that go into whether a farmer or segment of farmers is going to be a good fit for your agribusiness:

    • Geographic location. Farmers can only take advantage of products that you are able to deliver to. A farmer's relative location to your points of sales is an indicator of whether they're part of your addressable market.
    • Price point and spend potential. Only farmers that have the capacity to purchase your product are going to be considered as part of your target market.
    • Product-market fit, or product-farmer fit. Each product you create is going to solve the specific needs of a farmer or group of farmers. Understanding the specifics of their operation and history can help you uncover the products that will be of most benefit to them.

    The agriculture market is in the middle of a season of change and has been for a while. It's important now more than ever that you understand how your product fits into your market, which markets are the best fit for what you have to offer, and adapt your marketing communications and sales outreach accordingly.

    1. Find the farmers who will benefit from your product.

    Whether you're on the marketing, sales, or product team, any go-to-market strategy starts with knowing exactly who's using the product and how it benefits them. This information is critical whether you're working at a strategic, high-level, or if you're initiating a one-to-one conversation with a particular grower.

    While geography and price point factor into the decision, a farmer won't want to purchase your product if it doesn't solve a particular problem they have. After all, every purchase has an opportunity cost. A dollar spent on one thing is a dollar not spend on another.

    So identifying your target market based on product-market fit is a vital step in identifying your addressable market. Here are some key questions to ask in your market research:

    • What is the farmer growing and what is their rotation pattern?
    • How large is their operation? Is it contiguous?
    • Is the farmer primarily an owner, operator, or owner/operator?
    • What is the farmer's overall financial situation, particularly as it relates to their mortgage and lending situation (e.g. is the farmer at risk of foreclosure)?
    • What equipment has the farmer leased and are they soon needing a replacement?

    Your place in the market is defined by your ability to meet those potential customers' specific needs. This, in turn, means that you need to understand what these farmers specifically need, and how your product meets that need.

    Once you do that, you can move your product-market fit strategy from a vague concept to something that's actionable.

    2. Tailor your messaging to each market segment.

    If you know who your target customers are -- both in terms of individual personas and aggregate segments -- then you have everything you need to move the needle toward revenue growth.

    You've already taken the time to dig into your farmers' needs and how your product meets those needs. But instead of just using that information to identify and segment your market, take it to the next step through tailored, specific communications:

    • Create custom email campaigns to each of your segmented email lists
    • Deploy automated programmatic ad campaigns to not only customize messaging for each segment but test headlines, copy and design to verify what resonates with each segment
    • Launch targeted digital ads through social media channels -- Facebook and YouTube, especially
    • Produce direct mail content that's specific and tailored rather than "spray and pray"

    Regardless of which channels you invest your time and money into, because you've create a product-market fit in your audience, you'll be able to craft marketing messages that resonate with those farmers on a deep level.

    That way, your product-market fit strategy isn't something that simply lives in a PowerPoint. It's something you can actually execute against.

    3. Avoid customers with high churn potential.

    As important as it is to know which customers you should go after, it's just as important to understand the customers that you should avoid. After all, time wasted on a bad fit means time that you aren't spending on a good fit.

    There are a number of predictive and machine learning models to help you identify your positive customers -- persona identification, lifetime value, likelihood to purchase, etc.

    But when you establish a product-market fit, you also establish the inverse. You understand those customers who you should actively avoid.

    Just like you used data to understand who your target customers are, you also can use data to figure out who won't be a good fit for your agribusiness. There are predictive models that can help you determine likelihood to churn, for example.

    By both pursuing good-fit customers and avoiding those who are a bad fit, you can increase your chances of success in marketing and sales, thus setting your agribusiness up for revenue growth.

    Prevent lost revenue potential - talk to our sales team.