A late spring snow storm. Rain for the whole month of April. Finally, warmer weather and May breezes. The soil dries out. OK, the crops are in—bring back that rain. Summer storms, stay away.
No matter what seasonal agricultural conditions you face, as a producer, you’ve got to be able to change strategies and pivot at a moment’s notice. Things don’t always go as planned when your business depends so much on Mother Nature.
Julie Deering in her December 2016 article for Seed World magazine likens operating in today’s agribusiness circles to playing a game of Pac-Man. Remember Pac-Man? You’ve got to be in constant motion searching for the next move to put you ahead in the game. Thinking fast. Staying away from an enemy who could gobble you up – these are KEY!
Released in 1980, Pac-Man was the best-selling arcade game in North America. It grossed more than $1 billion in quarters within a year.
It’s not only the individual “little guy” who must stay on his toes. If you’re a producer who’s joined forces with other producers in a cooperative, the terms merger, acquisition, consolidation, joint venture are very much part of your vocabulary, and happening all around you. Re-structuring the way you do business is not necessarily bad — but always an adjustment — in order to stay in the ag game.
Over the past 4 decades, the number of co-ops in the county has dropped from 6,445 to about 2,100, and the pace of consolidation is accelerating.
So, IS there an answer to “staying in the game” or even WINNING! For valuable tips to consider, I return once again to the Seed World feature where Deering, following her expert research, sites four strategies. You may have heard them all before, but they are truly worth repeating—over and over again.
Focus on Your Customer and his "Pain Point"
If you’re a small- to medium-sized individual producer, you’ve got to know your end-user—the consumer who will give you the best possible chance of making a profit in a given year. You can’t plant everything you’ve ever wanted to grow or feed and market every live food source there is. You’ve got to focus—determine your niche products and go big with just a few—the few that are in most demand by your end-user.
For agribusinesses, this means you’ve got to know your target audience (customers) as well as you know your own family. In the movie classic Field of Dreams, Iowa farmer Ray Kinsella follows a voice no one else can hear with memorable results. Among the messages he receives: “Ease his pain.” Do you know your customers’ pain points? What keeps them up at night? The agribusiness that does the best job of making life easier for customers will likely gain more of them. Word travels fast in the country.
BE READY TO CHANGE
In any business, you must be forever conscious that failure can happen. Be prepared to FAIL FAST. What do I mean by FAIL FAST?
PIVOT. Pam Moore of Marketing Nutz calls pivoting the art of recognizing that the pursuit of a specific idea, direction or product—in which you’ve invested significant time, money and energy—is no longer the correct path to follow.
In Western Kansas on April 30, 2017, a rare spring snow storm wiped out 40% of the wheat crop in the state. But after a quick melt and dry-out, the hearty plainsmen in this area were out making plans to till, then plant the damaged fields with milo — a crop that could still make them a good profit in 2017. That’s a pivot!
“Be agile,” says Moore. “Develop processes that reward quick decision-making. Don’t be afraid to take a risk. Learn to FAIL FAST and learn from each success and failure along the way.”
DARE TO BE DIFFERENT
As a small- to medium-sized agribusiness, you’ve got to make yourself stand out by being different from your competition. This is sometimes quite hard to come up with when your annual process seems so cut and dried: planting — irrigating — pest and weed controlling — harvesting — moving — storing — etc.
Troy Schroeder, a management consultant with Clutch Performance, Inc., says business success that’s sustainable is all about the customer experience, and making sure that every function of your organization is based on customer-first thinking:
- Better customer service
- Added value for your customers
- More knowledge
- Better delivery
- Tailored sales approach based on specific customer needs
- Better application of your products
- Ease-of-use of your products that’s better than anyone else
What can you do better than your competitors?
LEVERAGE BIG DATA
Analytics. Agricultural consultant, Jim Thrift, is convinced that effective data management will drive the future of agribusiness. He says, “A smart person with the most information wins!” He feels that agribusinesses that can transform complex data into actionable information can make effective business decisions.
Forward-thinking agribusinesses are getting onboard with this strategy. A recent survey reveals that 73 percent of companies have invested, or plan to invest in big data during the next two years—a number that has risen from 64 percent in 2013. Business investment in analytics is increasing at an average annual rate of almost 30 percent.
This strategy requires a real commitment. Once you start collecting relevant data from within the ag industry you must constantly analyze what you’ve got to see if your tactics are holding up and paying off as you would like. You’ll be making numerous tweaks along the way—that’s just how it works!
In conclusion, everyone needs planning and strategy. I hope these four I found in my reading will find a place in your marketing plan, whether you are a farm operator or a small- to medium-sized agribusiness. Just be smart, agile, reactive and ready to play the game — like Pac-Man!
Resource: How to Power Ahead in a Competitive World, Seed World, December 2016.