Differentiating Your Ag Retail Business Slide Image

Canadian ag retailers are adapting to a changing sales environment that has traditionally depended on in-person relationship building as a primary means of connecting with customers.

Embracing technology at the retail level and developing sales strategies that are focused on giving the customer what they want, when they want it, will be key to both customer retention, and maintaining staff satisfaction.

Justin Funk is a managing partner at AgriStudies Inc. in Ontario and a keynote session speaker for the 2021 CAAR Conference. He says in his years of developing market research for ag businesses, his clients consistently placed honest employees with the capacity to learn the intricacies of their business at the top of their list of importance. Funk believes competent and knowledgeable salespeople motivated by helping the customer can help strengthen the retailer-customer relationship and maintain sales.

According to Funk, implementing strong sales management and competitive sales strategies to an ag retailer’s business may be the key qualifications businesses need to retain their staff and stay competitive in an ever-evolving market.

“If a salesperson’s motivation is to help a customer, then they’re going to still get the sale, but they’re probably going to be much more well rewarded for doing it in the right way," says Funk. "This has implications to the overall company’s strategy as well, because the salespeople, in many cases to the customer, is the company.”

Some sales managers may believe that competition is a good motivator, but instead, it changes the corporate culture for the worse, says Funk. Salespeople need guidance from sales managers with good leadership skills to maintain the company’s consistent messaging throughout all customer touchpoints, says Funk.

“In addition to having salespeople that are well-matched to the customer, you also must have leadership that is sending the correct and consistent company message to their team,” says Funk.

The Importance of a Good Corporate Culture

Scott Downey, professor at Purdue University’s Department of Agricultural Economics in Indiana and a keynote session speaker for the 2021 CAAR Conference, says that in the last 15 years, retirements and poaching of employees have become the two biggest challenges in employee retention. Although retirements are beyond an employer’s control, he says developing a strong corporate culture could help curve poaching and make the decision to stay in a company easier for employees to make.

"Maybe we can avoid poaching by prioritizing job satisfaction and addressing pay issues, but it’s only one issue,” says Downey. “Ultimately, it’s important that we take care of people.”

Downey says instead of treating others the way we would like to be treated or the “golden rule,” retailers should start implementing the “platinum rule,” to treat people the way they would like to be treated. The “platinum rule” method takes more work and understanding, but Downey says it is not much different from a sales perspective.

“We must take time to figure out how our employees would like to be treated,” says Downey. “Isn’t that what we do from a sales perspective? Find out what customers want and try to help them?”

Maintaining Strong Retailer-Customer Relationships

Downey says ag retailers should consider the farmer’s unique pain points depending on their farm’s size and create new services to mitigate them. Large farms have more acres and more employees with specialized skills on their staff, reducing the need for a retailer’s expert advice. They may not need product knowledge as much as they need efficient and convenient product delivery. Small farms have fewer acres and fewer employees, usually comprised of the farm owner and their family members.

Differentiation has to start at the top. It has to be communicated, understood and then properly executed by everybody within the organization, not just salespeople.Justin Funk

“Twenty years ago, most farms were about the same size,” says Downey. “Today, we have some really big farms, but we still have some smaller traditional farms, and their needs are really different.”

For example, owners of large farms may have difficulty finding employees to assist in daily operations, says Downey. To help mitigate their problem, a retailer could create an employee network to introduce farmers to people looking for farm work. These additional services could generate more value in the retailer-customer relationship.

“If labour is the number one issue that large farms deal with, retailers need to ask themselves, ’what is my role in helping farmers deal with labour?’” says Downey. “Retailers should find ways to help farmers with that problem and find a way to get paid to do that – you can’t just do it because it’s nice to do.”

The direct-to-farm sales market could potentially change the ag retail environment, with more emphasis on sales and less on the retailer-customer relationship building. Funk believes it will take time for the ag industry to understand the effects of direct-to-farm sales as it’s still new, but it does show which customers value their relationship with their retailer.

“Having alternative channels does a good job of identifying customers who value the retailer relationship versus those that don’t,” says Funk. “People state their preference through their actions and their behaviour. It wouldn’t surprise me one bit if a farmer decides to dabble in online to try it out.”

Even with the rise of e-commerce, Funk believes most farmers will want to maintain a strong relationship with their retailer while leveraging the ability to buy online. Funk says ag retailers could position themselves as an e-commerce portal or platform, which provides convenient buying and selling options while re-inventing their relationship with their customer.

By understanding how their customers buy products and why, retailers could enhance their services to what they need now. Join Justin Funk for his 2021 CAAR Conference session, The Decision-Making Dynamics of Multi-Generational Farms, on Thursday, Feb. 11.

Keeping Your Ag Business Competitive

Business trends and best practices change quickly in the ag industry. Downey says it is important to learn from other industries like food retail and manufacturing and to continue to learn new ways to keep ag businesses competitive.

“I think we sometimes insulate ourselves with ’ag is different,’ and it truly is, but it doesn’t mean we can’t learn from other industries,” says Downey.

Ag retailers need to differentiate, to be knowledgeable, to help the customer accomplish their goals, not just helping them buy products.
Scott Downey

One way ag retailers can maintain their competitive edge is through differentiation, starting from the top rung, its sales manager. Sales affect every level of the company, says Funk. By implementing an ag business’s sales management and direction from the top-down, every employee from the operations team to administration has first-hand knowledge on how to interact with customers.

"Differentiation has to start at the top,” says Funk. “It has to be communicated, understood and then properly executed by everybody within the organization, not just salespeople.”

Downey believes all employees should be involved in the company’s differentiation. What makes the company standout should be top of mind for every employee – this affects hiring, creating value for customers, and how retailers deliver value.

“Ag retailers need to differentiate, to be knowledgeable, to help the customer accomplish their goals, not just helping them buy products,” says Downey.

Ag retailers should develop their understanding of sales management and competitive sales strategies to better differentiate their ag business. Join Scott Downey for his 2021 CAAR conference session on The Evolving Customer Journey on Thursday, Feb. 11.

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