WHO DO YOU TRUST?
5/15/2012 10:08AM By Jeff Hartz
If there is a lack of loyalty in our industry there’s only one place to look. Right down at the reflection in the coffee cup.
I’ve heard a ton of hypotheses about loyalty, or lack of it in the seed industry. “We’re dealing with a new generation that just isn’t as loyal,” is a popular one. “Maybe we disappointed them,” is another. “Some people just don’t see a difference,” and, “corn growers get the service we used to provide at other places now,” all have some credibility or degree of truth.
But I think the truth is even simpler. We just have not treated our customer with enough respect.
Sure, this sounds counter-intuitive, and it certainly doesn’t mean people at companies like ours don’t like their customers. Quite the contrary. Our customers are our friends and usually people we all respect, if not look up to. To the people who work in our office the job of serving a customer is put before everything else. Except maybe expense reports, but that’s another story.
Truth is, everyone wants to be loyal. Corn growers want a brand that serves their needs well and that helps identify them or their operation. And I believe they will pay more for it, and be loyal to it – if it lives up to their expectations. It’s just that none of us are doing it very well. In fact, sometimes it seems like we’ve all gone rogue and taken another route altogether to sell one more bag, or five hundred more bags, right now.
Take price. Ever bought a bag of seed corn from a rate sheet lately? Seems a rate card is more a way to disguise your price from competitors than it is to clearly communicate your price to customers. And if there’s no rate card to trust, then what can you trust? The “sales programs”?
I recently had one grower tell me the process of buying seed was worse than trying to buy a used vehicle. Another said he needed a decoder to decipher the sales programs. Most companies could give the same programs to four of their sales people, have them calculate a price and get four different numbers back. And these are smart, talented people. If our people can’t interpret them, how the hell can a customer? If the customer is aware of them at all.
And then there’s the endless choices. We just released 23 new hybrids. They’re all great. But if we released 23, any guesses at how many DeKalb and Pioneer released? Granted, they’re not all for the same grower, but who in the hell is going to know and understand all of these new products? We’ve built so much choice, with so many options, into the industry that we’re destined to be unable to live up to the expectations that go along with them. It’s a perfect example of the paradox of choice. With so many options out there, the insinuation is that there is something absolutely perfect for my specific farm.
But the end result is that the customer pays more and feels the same. Which leads to less satisfied customers that are more willing to switch. Too many options will confuse. And confusion leads any consumer right back to focus and make decisions on the one thing we all know and understand: Price.
Want an example? I believe this is the fastest growing fast food chain in America. They, coincidently, have five things on the menu.
There’s not a slick solution for this situation. We have better products – we want to get them out, corn growers can profit more with them. So with the endless array of choices, trust becomes even more paramount. Customers rely on brands with a good reputation and their sales person to navigate through this. But when it’s all said and done, even if the sales person is outstanding, the endless choices themselves suggest we should deliver perfection. And we’ve all been guilty of adding fuel to the fire – we’ve all sold something at some time that was perfect for everyone with dirt and a Farm Plan account.
Product changes have also affected loyalty. Around 2005 traits became essential to the purchase. In addition to more complexity, it sort of relegated the genetic portion of the product to a delivery mechanism. You could have the best hybrid on the market, the best engine out there, but if it didn’t have the right trait it was ignored. It’s been near impossible to keep track of genetic improvements the last decade. They’re happening faster than ever, and in response hybrid lifecycles have shrunk to just a few years. Traits are easier to keep track of. They’re changing and tough enough to keep up with, sure. But they’re now a more consistent part of the equation year-to-year. At the expense of the part that is more important in determining yield. Anytime we feel like we’re back to selling hybrids and genetics, here comes a new trait to jack us all up.
But with traditional hybrids there was a level of expertise and knowledge the industry provided – you had to get the right herbicide, the right adjuvant, the right leaf stage. I used to scout for corn borer, and provide economic threshold levels for treatment. And for those that provided these services and consistently got it right, you gave them trust, then loyalty. Now the whole ball is condensed down to who has the cheapest glyphosate. There’s not as much service and loyalty attached to that.
I believe still other growers may switch brands because of frustration and stress with the industry. Masked behind the more publicly talked about grain market increases are the input and breakeven prices that have crept higher. Typical production cost for an acre of corn today is around $750. Five years ago the crop only grossed $400/acre. Frustration at the premise of the highest grain prices in a lifetime not being able to guarantee a profit, but only a monumental degree of risk, can cause frustration with any input supplier. Especially when our prices go up before products are proven.
The frustration with these situations and actions may not be correctly directed or warranted, but it really doesn’t matter. The rationale or truth of the argument is irrelevant. It becomes pretty damn real when the order disappears.
So, lack of transparency with pricing. Sales programs that puzzle more than promote. Too many options to decipher. Changes to, and confusion with, our products. Price increases that feel forced. It’s all part of the same syndrome. And it leads to a lack of customer loyalty that should be expected. And that, to me, is what puts us in situation where loyalty erodes, cheaper is better and theories about commoditization have a foundation for discussion.
The best sales people fix it instinctively. They make things simple for their customer. They work their butts off to learn the depth of the complexities, so they can lead the people they do business with down the right paths. And through that constant process they earn trust and the role of the Trusted Advisor. I’ve watched some take our confusing programs and reface our pricing in a simpler way. If we care to admit it, sometimes they do things better individually than we do collectively. Which is likely no different than it is at every other seed company.
Of course, you still have to start with an outstanding product, great people and accurate billing. But we’ve already got those. And we’re still not close to 85% customer retention, and would be judged a commodity in most industries, especially ones with shorter purchase cycles. What we’re dealing with feels worse than a rational number of customers switching brands annually.
So what’s with the lack of loyalty in the seed industry?
It’s us. If we want more loyalty in the seed industry, we need to give customers more to be loyal to. We have to respect customers more. Give them more transparency in pricing, with simple sales programs. Clarity in our product lineups, with more advanced placement recommendations. Ensure service is still part of the relationship. Sometimes it simply means we have to innovate more than imitate. Together with consistent and high performing products, it will all likely lead to more satisfaction and increased customer loyalty.
If a customer trusts no one, the cheapest seed is probably the best route. But it’s likely a better decision to put trust in a brand and people who you know will treat you fair. And who will watch out for your best interest and bring you a healthy supply of products that perform exceptionally well. That has value, is worth paying more for and cannot be found from the lowest cost providers.
I’ll add this.
Make no mistake, you do get what you pay for. There is great new seed that’s better than what you could get even last year. But only if you can decipher who has it. If it really fits your farm well. If you can get it in time for planting. If you can trust the data the sales person gave you. If Mother Nature doesn’t decide to show you she really is in control. If you have a brand that will stand behind its product. And if you have the trust and patience to wait five months to see if you profit on your investment. There are great products, that deserve to be sold at a significant premiums. But they don’t guarantee success.
So sure, you get what you paid for. Unless your neighbor got a different price than you did. Then neither of you got what the other paid for.
It’s time for more respect.
