After peaking in 2013, net farm income has been on a downward slide ever since. Until we see a turnaround, producers will continue to look for ways to cut corners and reduce input costs. As an ag marketer, that puts you in a bit of a quandary—how do you retain customers.
Do you keep pushing to squeeze every dollar possible from producers who are already struggling? The downside is that you risk pushing too hard, and alienating customers who are already hurting.
Or do you meet them where they are, and help them work their way through some of the market’s current dynamics? Though this approach may mean sacrificing some of your own sales goals, the results will pay off in the long run.
At VistaComm, we’ve noticed some smart strategies taken by our clients to maintain—and even build—relationships during this challenging farm economy. Here are three examples:
Feel their pain. There’s no reason to sugarcoat it: Making ends meet is tough right now. Several of our clients have gone to great lengths to let customers know that ag suppliers understand their situation. One client even suggested tax tips to help customers who anticipate reporting a loss for 2018. The key is to help customers find workable solutions until we come out of this cycle.
Help producers cut costs carefully. When times get tough, producers are prone to making blanket cuts. The downside of that approach is that the loss in production might be more than the amount saved by reducing input costs. One of our clients offered the services of their agronomy and animal nutrition specialists to help customers make some calculated cuts that won’t damage their ability to produce down the road.
Sell them what they need. Producers might be a bit surprised if you suggest using a less expensive input for the short term. After all, upselling has become the standard way of the world. But when a seed company, for example, recommends one of its conventional “workhorse hybrids” instead of a newer and more expensive stacked hybrid, it shows that you’re not just trying to sell. Instead, you’re working alongside producers to get through the current challenges. When things turn around, producers will likely reward you for sticking with them.
Though the immediate outlook for agriculture may be gloomy, we know the farm economy will rebound eventually. After all, the world population needs American farmers. The key is to work with producers during these lean times, so we can all be around to reap the rewards in the future.