November 5, 2014

Ag Retailers Have to Provide More Than Products

The phrase “value-added” is commonly used in business and marketing discussions, but what exactly does it mean? A value-added proposition generally refers to a buyer getting something extra for his or her purchase price, but that can cover a wide range of options. Maybe it’s additional service, preferential treatment or a complimentary product enhancement.

However you define it, a value-added situation provides an advantage for the seller. In other words, if two companies are selling the same thing at a comparable price, buyers will naturally be attracted to the option that represents some “added value.” For modern ag retailers, that value difference often comes down to technical support and the ability to offer useful advice.

“You really can't be a successful retailer if you can't add value to the grower,” agreed Todd Denzin, Vice President of Marketing and Sales for Specialty Fertilizers at Compass Minerals®. “Adding value is taking information and turning it into recommendations that will improve the grower's bottom line. That could be, does my product save them time? Does it make them more money? Does it improve the quality of the crop they’re growing?”

The need for knowledge.

The days of customers telling retailers, "Just give me what I used last year" are going away. The new specialization and customization of products are changing the purchase patterns of smart growers, and successful retailers need to adapt to that reality.

“Good retailers today must be research-oriented,” said the Agricultural Retailers Association 2013 annual report1. “Retailers need to turn big data into a value proposition so that (they) can help farmers. They have to get their arms around it soon in order to stay relevant to their customers.”

A recent survey by Stratus Ag Research confirmed that a majority of growers now expect their local retailer to provide informational support, such as field scouting.

“In the business of farming we heard that there is an expectation of a higher level of service and expertise,” said Krista MacLean, Project Manager with Stratus2.

“Whether you're a retailer or a manufacturer, you have to bring new ideas, and maybe reinvent how your products are being used,” added Compass Minerals’ Denzin, “to help a grower make a decision and improve his overall production.”

1Agricultural Retailers Association 2013 annual report; Brian Reuwee

2 "Survey Finds Successful Ag Retailers Not Afraid to Get Their Boots Dirty"; Stratus Ag Research