Different Retailers Attract Different Customers.
Ag Retailers know that every farmer is unique and that it’s good business to keep those differences in mind when dealing with customers. Retailers can take that to the next level by planning customized approaches for different customer segments.
June 15, 2013
Stratus Ag Research asked 1,100 Canadian farmers how they decide where to buy their crop inputs.
“All farmers need a retailer they can trust. They want their retailer to have reasonable prices and the right products in stock,” said Mike Weddel of Stratus Research, “but beyond those fundamentals, farmers can be very different in the way they choose their retailer.”
Local, Efficient Services Segment
The Stratus study found that one-third of Canadian farmers really want a convenient location with fast, efficient grain handling and fast, efficient fertilizer blending. Time is important to them. They are also more interested in getting good prices, so they often make that the topic of discussion. They do not look to their retailer for help with new technology and agronomic advice. In western Canada Viterra has a higher share with growers of this type.
Agronomic Advice Segment
In contrast, the study identified another group of farmers who want their retailer to help them get better production. They want their retailer to know which products are best for their farm, have knowledgeable agronomists on staff and bring them ideas about new technology and agronomic practices. In western Canada the independent dealers have a higher share with this group; in eastern Canada Agromart has a higher share.
“A third of farmers fit into this group; they see their retailer as a partner in maximizing productivity,” said Weddel. “They want to have conversations with their retailer about the technical aspects of products, with less of a focus on things like price, crop marketing advice and grain contracting.”
Grain Marketing Segment (Western Canada)
The final third of western Canada growers buy their crop inputs from a retailer who can help them with the marketing side of things. They appreciate good agronomic advice and technical information, but they are especially keen on their retailer helping them out with crop marketing advice and production contracts. This group pays attention to price, but it is not their sole focus. Cargill has a higher share with growers of this type.
“Things like payment terms and helping farmers get the best deal out of manufacturer programs are not a high priority for any of the segments we identified, but it is certainly more important to these farmers than to others,” noted Weddel.
Prices & Programs Segment (Eastern Canada)
In eastern Canada the final third of farmers are focused on getting the best deal from their retailer. They take their business to the retailer that will give them good prices and flexible payment terms. There is a lot of money in manufacturer programs and these farmers want their retailer to make the most of it for them.
“For ag retailers there is a lot to be gained by understanding the different types of customers”, said Weddel “But it’s hard to be all things to all customers, so it looks like, intentionally or by chance, some retailers focus their business approach to align more with one type of farmer.”
Our thanks go to those growers who participate in Stratus surveys. Their input helps to shape agribusiness. If you are a grower and you would like to contribute your opinions, you can sign up for on-line surveys at www.stratusag.com