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How long have you known your ag retailer?

While price and product availability are table stakes, farm customers say that trust and stability are crucial to an ag retailer’s success.

A recent study conducted by Stratus Ag Research reveals that trust plays a key role when farmers decide how much of their business to give to each retailer. While price and product availability are important factors that farmers consider, the study reveals that ag-retailers’ success is hinged on both trust and stability.

Trust is the key driver of support

When farm customers were asked what differentiates preferred retail organizations from lower-ranked companies, the answer was clear: working with people they know and trust is key. This was reflected in the sales of crop inputs, which were higher among growers who indicated they had a high degree of trust in their local retailer versus those who indicated low trust.

On average, a retailer in Western Canada gets 36 per cent share of total crop input spending among customers with high trust ratings for that retailer, versus just 6 per cent among customers with low trust ratings. Numbers were similar in the east where retailers deemed highly trustworthy get 40 per cent share of total crop input dollars versus the 8 per cent among customers of “low trust” organizations.

“I think that given the complexity of today’s farming operations it is not at all surprising that farmers are looking for business partners that they can trust,” says Krista MacLean of Stratus Ag Research. “Our research shows that there are attributes beyond price that farmers are willing to put a value on and one of those is a trusting relationship with the people they choose to do business with.”


Rapid turnover can derail trust

How do ag retailers build trust? There are a number of factors that play into a trusting relationship.  Interestingly the study shows that the length of time farm customers have known their ag retailer is directly related to how much trust they put in that retailer.

Only 18 per cent of customers who knew the most important contact at their retailer for less than 2 years gave their retailer an excellent rating for “People you know and trust”, whereas 56 per cent of customers who have known their contact for > 30 years reported an excellent rating for trust.

More stability found within Independent Dealerships

Farmers report more stability in their local Independent Dealer than within other retail organizations. At one Western Canadian retailer, for example, 74 per cent of farm customers reported knowing their key contact for less than five years, and of those, many for less than two years. This was in stark contrast to the 23 per cent of customers who report knowing the key contact at their local Independent Dealer for less than five years.

In Eastern Canada, slightly more stability is reported, but the same variability exists. In fact, only 31 per cent of respondents who do business with Eastern Canadian retailers report knowing their most important contact less than five years. In Western Canada, that number rises to 46 per cent.

“It is important for ag retailers to focus on the engagement of their employees whose job it is to interact with the customer on a day-to-day basis”, said MacLean. “The rapid turnover of staff in these key positions is negatively impacting the ability of some retailers to build trusting long term relationships with farmers.”

Stratus Ag Research conducted online interviews between July 3 and August 23, 2013. In Eastern Canada, interviews were conducted in Ontario and Quebec; in Western Canada, interviews were conducted in Manitoba, Saskatchewan, Alberta and British Columbia’s Peace region. 

Every year thousands of farmers and retailers use Stratus surveys to tell the agricultural industry what they think and need. Stratus prepares reports that directly reflect the input provided, then tells the rest of agriculture what’s working, what’s not and how needs can be better met.

Click here for more on Stratus research

By Vice-President, Client Services

Krista MacLean has been studying trends in agriculture in both Canada and the US since 2013 when she first joined Sratus Ag Research.  Krista specializes in helping clients extract valuable insights from syndicated market research, as well as developing the study content and methodology for their proprietary research needs.  Her marketing background and extensive practical knowledge of the agriculture industry enable Krista to assist clients in turning research insights into effective strategies for their agribusinesses.

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