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| Creating new service strategies is must for modern ag retailers |
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By SARAH B. AUBREY
Indiana Correspondent
WEST LAFAYETTE, Ind. — Call it expectation creep, call it competitive “copycatting” or just call it today’s highly sophisticated, increasingly consolidated agricultural inputs marketplace.
Debate the terms, but there’s no arguing what’s apparent in agricultural sales – more customers are asking “What have you done for me lately?”, a discussion that can quickly lead sales professionals down the dead-end road of price comparisons.
“Customers are presented consistently with more and more good offerings in the marketplace,” said Dr. David Downey, executive director for the Center for Food and Agricultural Business at Purdue University in West Lafayette.
“There are fewer competitors today. The ones that remain are larger, have better tools, are more analytical and are just more savvy. This is all relative to fewer farmers who are better competitors themselves – this all raises the level of expectation.”
In an industry where many products are considered similar, Downey said effectively responding to customers’ growing expectations comes with improving the services a company brings to the table.
“Competitors are competing with each other more strongly and are all ratcheting up the services offered. What wowed customers five years ago just doesn’t anymore,” he said.
He also noted that in the consolidated agribusiness marketplace, what works for one organization is often immediately copied by another firm. He said this phenomenon occurs in part due to the end customer’s global knowledge of the agricultural arena. Reading online and receiving information feeds from a variety of sources fosters an international community, so to speak.
“Farmers now are much more aware of what other farmers are doing around the country and even in New Zealand or England, for example,” he said. “Suddenly, things offered by companies can become ho-hum.”
Downey said while the issue of burgeoning expectations continues to skyrocket past input vendors, the problem can be effectively addressed with the right tools.
“We’re in business-to-business marketing – this is more complex than consumer marketing because we’ve got more dollars at stake, the products are more technical and because there are more people involved in buying decisions,” he said. “In our program, we’re demonstrating what’s going in other industries that we can learn from.”
Offering a service strategy for every customer separately is certainly no small task, but it’s one that is apparently driving profits. “The issue is how you market different types of service to different segments,” Downey clarified.
Creative service strategies don’t necessarily come cheap, especially when sales professionals are charged with developing individual plans for individual accounts.
“Before, customers were similar enough that a program that was for every customer worked. Now, everyone in the organization must understand the uniqueness, especially of key accounts, and design and offer a set of solutions that fits each one’s concerns,” Downey said.
“This costs more, and that’s why you have to earn a premium to do it.”
One way to ensure the effort of going the extra mile generates extra profits is by convincing the customer of the features and benefits of the service, much like salespeople already strive to do with products.
“You must communicate the value (of service) effectively enough that your customer is willing to pay for it,” Downey said, adding that no longer can service be seen as a simple tongue-in-cheek “freebie” that is ad hoc to products. “I like to think of service strategies as an investment.”
New strategies take commitment and change, but a word of caution from Downey for sales managers and marketers: “We can take a great idea and then go out and create too high of expectations. If you fall short, even slightly, you’ve created discontent in the market.”
Because ag retailers are faced with so much perceived product similarity in the marketplace, managers must learn how to differentiate a brand and yet extract enough premium out of the differentiating tactic to cover the cost.
Still, not every service strategy requires a complete rewrite of corporate culture. Downey said sometimes even the simplest strategies can be services that have little or no cost at all.
“Sending an e-mail to follow up after an order or checking to see if a customer received the product doesn’t cost anything,” he said. “This is just a great step toward your next sale.” |
| 10/3/2007 |
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