June 26, 2012

by LeAnne Philips, Entira

I'd like to propose a new national holiday. Maybe you don't think we need yet another one. After all, in March alone, you can celebrate "National Quilting Day," "National Napping Day," "National Frozen Food Day," and  "National Chocolate Covered Raisin Day" (just one of a number of candy-related holidays - check them out here). Nearly all these holidays highlight an industry or product. Some are fun; some are downright silly. And at the end of the "day," who cares? But my new holiday would actually strengthen your business and improve your customer relationships. 

What would I call my holiday? "National Talk to a Farmer Day." Its purpose? Talking to your customers to find out what's on their minds, what they're excited about, worried about and planning for the next few years. Ask for their opinions on your products, service and competitors. Most importantly, ask what you can do to better serve their needs. You may be surprised at what you hear.

Recently, the Entira team spent a week interviewing farmers for a research project. We talked with more than 100 growers at kitchen tables, machine sheds and coffee shops. Our goal was to gather input to develop a new product offering for one of our clients. We talked with growers about their farming operations, crop rotations, agronomic practices, etc. Then, we asked for their suggestions on designing a product that would best meet their needs. At first, most responded with a blank look. No one had ever asked them to design a product before. But after a few minutes to gather their thoughts, the floodgates opened! They carefully outlined their decision-making process around crop options and rotations. But most importantly, they shared why they make those decisions, and it isn't always about technology or product performance.

Hearing why your customers make decisions is critical for you to provide them with a meaningful product/service experience. Getting to this depth of understanding requires time, patience and expertise in asking the deeper probing questions that get past the typical answers. But it's worth the effort.

Spending time with your customers and allowing them to voice their opinions gives you better information and builds stronger relationships. Chances are, each customer is struggling with a decision about his operation. For example, with today's fluctuating commodity prices and input costs, the "back of the envelope" formulas many farmers once used to calculate input costs or break-even levels don't hold true anymore. In fact, most struggle with comparing input costs between crop options - not because they don't carefully track costs, but because things are changing too quickly to make good estimates. Giving your customer an opportunity to talk through an issue like this and listening (without pitching a product or solution!) strengthens your relationship and helps you learn a great deal about how he makes important decisions.

In some cases, you may be able to provide advice.  In others, just letting your customer talk through the pros and cons can be helpful to both the farmer and your organization. In addition, bringing the customer voice into your business can provide a number of other immediate benefits for your company's bottom line:

New product and service opportunities

With each farmer, you gain a better understanding of his business operation. When you take the conversation beyond just your product or service, you broaden your knowledge of his needs, priorities and decision-making. And the more you know about his business, the better you can tailor your product offering. You also learn about unmet needs - the products, features and/or services that would provide additional value to your customers. In our work for clients, these conversations typically give us ideas of how to expand their product line or improve their service offering. Because the cost to sell a new product to an existing customer is usually very low, much of the revenue from the new offering falls to the bottom line.

Increased sales and marketing effectiveness

Customer conversations can give you invaluable insights into the competition and positioning. Ask a grower what he likes and doesn't like about your product, and there's a good chance he'll make comparisons to others on the market. By listening with an open mind, you find out valuable information about your competitors' offerings and how your brand is perceived in the marketplace. Because one size doesn't fit all when it comes to meeting customer needs, you can also pick up clues to effectively position your products with different customer types. Whether through a formal segmentation study or just information conversations, learning to position the right products in the right way to the right types of customers is critical to your sales success.

Improved business processes

Armed with insights from customers, you can streamline operations for employees while minimizing hassles for customers. For example, Entira interviews uncovered a cumbersome order entry process that resulted in sales reps and customer service personnel sometimes duplicating orders.  These errors and lack of visibility into order status frustrated customers. The solution? Streamlined business processes and tools that save time for employees while making customers happy.

Optimized profits

All the above benefits can increase profits. But conversations with customers can have an even more direct impact on your bottom line. For one Entira client with supply constraints, our conversations uncovered an opportunity and our formal pricing study proved the company could significantly increase price - and still sell out. As with any major marketing change, the pricing decision was based on a quantitative sample.

For many agribusinesses, planning for 2010 is just around the corner. To make that task easier, take out your 2009 calendar, and pencil in at least one "Talk to a Farmer Day" for your organization. Or contact Entira at info@entira.net to learn more about how we can bring the voice of the customer into your organization to improve profitability. In many cases, a professional, unbiased customer research project can provide you with the "aha moments" that give you the sustainable, competitive advantage you need to celebrate success every day!

This article appeared in the March 2009 issue of Strategic Agribusiness Review.