What Motivates Ag Retailers to Recommend Certain Crop Protection Products – Profit Or Performance?
Most farmers rely on their local retailer to help them choose the right crop protection products for their farm. But farmers sometimes wonder: “Is my retailer recommending the best product for me, or the most profitable product for him?”
In the summer of 2019, Stratus completed a series of surveys with US Ag retailers. One of the markets studied was the pre-emergent herbicide market in soybeans, a market that is characterized by many competing products with similar characteristics. The study examined the soybean herbicides that retailers were recommending to their customers, the reasons they chose to recommend those products and the reasons for not selling other products.
In one of the questions, we asked retailers to tell us which factors are most important and least important when they are deciding which pre-emergent soybean herbicide to recommend. The chart below illustrates the findings with 100 possible points assigned to each factor. Product performance was clearly well ahead of all other factors, with profitability second.
We did not just take their word for it. We asked retailers to rate the products that they sell on 34 factors, and we correlated their answers against their willingness to recommend each product. We found that performance you can count on, good fit for my farm customers and good value for my farm customers were, by far, most strongly linked to retailer recommendations.
Retailers need to earn a profit so they can survive and reinvest in their business. But for their long-term success, they know that the best interests of their farm customers must come first. As a result, they put product performance ahead of all else when deciding which products to recommend.
In 2020, Stratus will continue to conduct the Retailer Advocacy study in major crop protection markets in the Mid-West region of the US. The findings will help the companies who purchase this study know what they need to do to maximize the support they get from the retail channel.