Which is better to focus on,
a producer’s needs or their wants?
The short answer is Both!
As farm profitability tightens up, so does the farmer’s wallet. Their first reaction will be to reduce spending across the board. Large ticket items like tractors, buildings, and expansions will immediately come to a screeching halt. The next thing I find is that all purchases take at least one step down on the total cost. In other words, they stop buying the gold level package from you and buy the less expensive silver level package. In the case of feed, they would drop from the $16/bag product to the $12/bag product. And from the $12, they drop to the $8. And so on.
Your customers are no different. They may go from name brand to generics, or from primary brands of equipment to sub lines. For service type businesses, they may reduce their number of crop scouting passes, or decide they can balance their own livestock diets, or make their own agronomy recommendations. In their mind, something has to give in their finances.
Your company’s reaction:
Your company feels the brunt of this as your P&L statement begins to take a hit. Gross sales and gross margin are down. Yet, overhead hasn’t changed. So, your agribusiness company has its own choices. Top of the list of choices is to put equipment and building expenditures on hold. Next, employee headcounts are reviewed for reductions. The single biggest expense line in many businesses is payroll.
These are all reductions in spending. The next option is to increase company income. To do that, it’s decided we need the sales team to make more farm calls and sell more.
Your reaction as a salesperson:
You compile more data. You develop more ROI calculations for your higher margin products. You dig deeper into the technical side of your products. You become more confident that your customer “Needs” these products more than ever before.
On your sales calls, you focus on selling to the need for this product. You lean on the data to sell. All good stuff, but there is one missing piece to this puzzle.
Your customer’s reaction:
They consider your comments but decide to go with a lower upfront or out of pocket cost. Why? Because that is what they “Want”. They want to feel they are doing something about their predicament. They want something to show for their efforts at reducing costs and preserving profitability.
They appreciate what you do for them and trust your recommendations. But today they want the feeling they are reducing their spending. Long term gains in yield will be given up for short term spending reduction.
What to do?
1. First, I think it’s important that you understand the difference between wants and needs. For these purposes, needs are what is actually needed to produce the level of crop yields or livestock production. It takes a certain amount of nutrition and crop inputs to produce yields on their farm. They need certain technologies and services to provide the data and precision it takes to manage their farm. A want is just what it sounds like; a feeling that the producer has. It can certainly be the same as their needs. However, it is often different due to emotions.
- Examples of wants:
- They want to Continue to farm the way they always have.
- They Refuse to upgrade their technology or manage data to improve results. “Dad never used that technology and he farmed for 40 years with no problems”.
- The might Make conservative or misguided grain marketing decisions. “I don’t sell any grain until it’s in the bin. I forward sold grain and missed $8 corn in 2012”
- They want to Feel safer with their big-ticket spending
2. Help your producers balance between Wants and Needs. This is not easy as their wants are frequently driven by emotion. Fear, frustration, stress, and anger can become so impactful to our customer that no amount of need is going to change their mind. As their salesperson, you need to respect their emotion-based decisions.
At the core of selling, there are three ways you provide value to a customer.
We call them value factors:
- Financial value
- Time value
- Emotion value
Too many salespeople focus on financial because that’s what the producer tells us is their main criteria for buying. Yes, your product needs to ROI, but that doesn’t take into account the importance of emotion.
If you don’t believe me, think about your own budget and how much you have spent on insurance. Like most people, I have had home and auto all my life, but rarely ever collect on a claim. Forty years of monthly premiums and only collected on them a few times. Yet, I would never risk the possibility of losing my home. Risk and fear (emotions) are the motivations to spend on it versus any chance it will ROI.
One note on total spending. Cash flow is obviously a critical element. If your customer isn’t getting enough of an operating loan or doesn’t have the cash flow from grain sales, they will have to make upfront decisions that may not ROI on their yields or livestock production. They have to make payroll every week. They have to put something in front of their animals to chew on. They have to buy seed and a baseline of NPK for their crops. As cash flow tightens, every producer will react in different ways. Some might be fairly irrational.
3. Explore the emotion behind the Wants. What is driving their decisions at this point?
Study the DISC profile of you and your customer. If not familiar, please reach out. Each quadrant has different emotions that drive their decisions. It’s helpful for you to have a basic understanding of the predominant emotion driving your customer’s decisions.
- D = Control/Results
- I = Influence/Image/Recognition
- S = No conflict/Social acceptance
- C = Accuracy/Analysis
4. How do they approach change? Often, when selling, we are asking a customer to change. As you dig into how your customer approaches change, you uncover a great deal about their DISC profile and their emotion-based decisions.
Once you have these discussions and reviewed their history of making decisions, now it’s time to discuss your products and how they can help with their operation. Focus on the emotional value first. Despite what they tell you about price. The phrase, “We buy on emotion, and justify it with data” applies more today than ever.
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