Exploring the needs and desires of your customers

 Producers were asked questions related to where they viewed similarities and differences with respect to price and quality of the expendables they purchase (Table 2), with the results separated for crop and livestock producers. Livestock producers identified perceiving greater differences in price and quality compared to crop producers. Differences in the quality of services from one local supplier to another was very important for both crop and livestock producers with 57% of crop producers and over 60% of livestock producers reporting that they “agreed” or “strongly agreed” with the statement that there are often significant differences in the quality of services. Given that producers perceive significant differences among suppliers with respect to both price and quality — are you doing the most to take advantage of this for your business? Evaluate the level of service that you are offering and how that fits the needs of your key target customers. Are there ways that you could adapt your service offerings (either increase or decrease) to be a better fit with your customers and provide more profit for your business?

Branding and distribution

 In addition to capturing information on producers’ perceptions of price and quality differences, respondents were also asked about their preferences when making purchase decisions. Over 60% of respondents indicated that they were willing to pay slightly more to purchase locally. One can conclude from this result that there are opportunities for local suppliers to play a vital role in the marketplace. About one-third (30.9% of crop producers and 35.9% of livestock producers) preferred to buy most of their expendable items from one supplier. This result suggests that there is significant opportunity for you to attract new customers to your business — with about two-thirds of the customers buying expendables from more than one supplier. Over one-half of the respondents noted that the purchasing of inputs is becoming a more time-consuming activity, suggesting that there may be opportunities to serve commercial producers. There are opportunities for your business if you can find ways to provide information that is helpful for your producer customers as they make their purchase decisions. This opportunity also presents a challenge, as you need to make sure that your cost to provide the information can be covered with the prices the producers are willing to pay. Only 28% of crop producers and one-third of livestock producers identified that they felt expendable branded products provided higher levels of performance, suggesting that a significant percentage of all producers are not committed to specific brands and thus are open to purchases of generic products (Table 3).

Sources of information

 Agricultural producers in the feed and grain business are faced with an array of choices when selecting their providers. As a provider, you are also faced with selecting the best communication media to communicate effectively and efficiently with your customers. Respondents were asked to identify the level of importance they placed on different sources of information on a five-point scale ranging from “1=never useful” to “5=always useful.” As reported in Figure 1, the most important information source was the local sales representative followed by other farmers and then manufacturer representatives. Crop producers reported these sources of information were slightly more useful as compared with livestock producers.

Information is a key to success in business and producers have many sources for their information. Figure 2 reports the usefulness of different communications media. Livestock producers often found these media slightly more useful than crop producers. General farm publications along with crop and livestock publications were identified as the most important media sources, followed closely by agricultural newspapers. Although not shown in the graph, the survey also revealed that younger producers are as comfortable with electronic media as with print media. How are you communicating with your customers? To communicate directly to your customers, are you and your salespeople using the media they find to be the most useful? How are you preparing for the new generation of customers? Do your websites have information that complements what’s available in print?