Selling to farmers in a recession

3 M’s on how to sell when it’s worse than just tough times!

Over the past decade, considerable attention has been devoted to the topic of selling during challenging economic times. I’ve focused my topics and training on selling in Ag and to farmers during those tough times. However, today’s market is different than those times. Today, we are faced with something unseen in our work history: a worldwide tariff war. And during a time in history when the world trade has never been more intertwined. Our products are being manufactured, processed, mined, and resold back and forth across borders at the highest rate in history.

For every agribusiness, they should be looking at this as a recession or simply, more than just tough times. In 1980, we learned from the Russian wheat embargo that trade wars can disrupt a market forever.

What will happen to your business, your sales territory, or your customers after this war settles down? What can you do as a sales organization or individual salesperson?

Three M’s of selling in Ag: Move – Modify – Maneuver

Move: “Get out of the headlights.”

Most of the world is like deer in the headlights (shocked, frozen, and afraid to move). The first step in any crisis is to realize that you are in shock. When the pandemic hit, nobody younger than 90 had ever seen anything comparable (1918 Spanish Flu). The world was in turmoil, and every day was more bad news. The same thing is happening in today’s trade wars. Every day is full of bad news, from the stock exchange to new reactions from trading partners.

The hope is fading that it will all just go away. A new reality is setting in. Our trading partners will have to find some way to move their products. And so do you.

After realizing that you are frozen, the next step is to face reality as it is and not as we want it to be. The changes from this tariff war are big and, in some ways, irreversible. Our trust in how we operate with the rest of the world will forever be eyed cautiously. Your international customers and vendors are shopping hard for alternatives. And so should you.

Ways to Move:

Network harder. Connect with your trade association. They are your voice as an industry. These are some of their most helpful times. Get closer to your company peers. They are out there selling and facing the same market issues as you are. Combine your efforts with your internal team.
Resist the urge to withdraw or remain frozen. There is a strong tendency for salespeople to feel or say, “No one is buying right now…. Farmers are waiting till the last minute to lock in their suppliers…. Every producer is becoming a price buyer.”.
Watch your language: Listen hard to yourself and others when they use absolutes like “Always, Never, Everyone, Nobody, or Constantly.” When you use one of these words or hear someone use these words to describe the current market, challenge it. Just repeat the absolute, “Always?” “Never?”.

2. Modify: “Get them a different product.”

All of us have tough financial times in our own personal lives. When that happens, we make changes. Granted, not all of them are the best changes. Cheaper per pound or box doesn’t always mean we are getting the best deal. However, in our minds, it gets us by for the time period. Farmers are no different. At current input costs and selling prices, something has to give. To get by, they might need a different product or service from you.

Ways to Modify:

Quantity: Change your products to bulk quantities to get a lower per-unit price. Package your products in smaller quantities to reduce the total cash flow needed to buy this year’s needs. Word of caution: Years ago, several companies sold feed and pet food in 40# versus 50# bags. Many customers and salespeople felt this was a bit deceiving to customers. If they get the impression that the price per pound went up on the 40#, it can appear as less than straightforward marketing.
Bundled and unbundle: Either can be a method to reduce per unit cost or to make a smaller dollar investment.
Quality/Performance: This is similar to the examples above. The product still has to work at the recommended levels, but getting a little bit of nutrients into your crops and livestock is better than none.
Distribution: Do you have other options to get product to the market different than your competition or lower than your current cost of trucking? What are similar industries to yours doing that can be copied?

3. Maneuver: “Outflank the market.”

Last month, I toured an old Civil War fort on the North Carolina coast. As I read the history board displays and looked at the map, all I could think about was the concept of maneuvering. There was a great battle for days as both sides fought it out. Why didn’t the navy just bypass the fort altogether and go around? Instead of charging into the barrage of artillery and storming people onto the unprotected beach, why not sail into an open passage further north or south? There looked like several on the map. Again, in 1991, as I watched the first Gulf War from Ft. Wainwright, Alaska, I anticipated deployment to the Middle East. Only to watch as the allied forces fixed and outmaneuvered an extensive defensive line in only 4 days. They fixed them in place, breached several key points, and then outmaneuvered. What about your business? How can you keep your focus on your primary market but begin to maneuver your territory or business to face the new reality (farming recession)? Instead of going head-to-head into a race to the lowest price, what can be done?

Ways to Maneuver:

Change geography: No different than the actions mentioned above, you can look to stretch out into new geographies that you haven’t worked in. This has to work with your distribution abilities, but consider areas that haven’t been looked at by you or your competition.

Change your target markets: Diversifying is, of course, a great strategy to insulate yourself from specific market fluctuations. This takes time and company alignment, but consider a similar segment of customers you haven’t focused on. In the feed world, there was always a primary market in every area: beef in Texas, Hogs in Iowa, Dairy in Wisconsin. However, there also was a tremendous amount of retail animals to feed: horses, poultry, etc. In row crops, the Midwest is predominantly corn and beans. However, specialty crops are excellent ways to diversify for farmers and for an agribusiness.

Allies and Competitors: Network with your allies more than ever before. Connect with vendors and other associated businesses/institutions that serve your customers. How can you add your strengths and network of customers and theirs to arrive at a better market position? For competitors you need to do some deep analysis on who your real competition is. Most often, we think the market leader is our competition. However, “nothing” can be the real market leader. In horse feed, our biggest competition were owners that just put horses on pasture. We thought it was another company until we realized how many horse owners simply didn’t feed a processed/bagged product. How can your products be set up to get these customers to start small with you? One last thought is to keep your mind open to the possibility of consolidating by acquiring your competition. After talking with several of my large customers, I found out my biggest competitor wanted to sell their business and retire. At the salesperson level, you can be a great resource for those in your company who handle the actual process of acquiring a company. In my case, it led to a great win for us, our customers, and the company we acquired.

Expansion and Contraction: It’s time to take a look at every market segment and product line. In tough times, you might allow products, services, or people that don’t pull their weight financially in the market, but not in a recession. I understand that some products don’t make financial sense but are needed for various reasons. Fine, but those need to be the rare exception in my mind. As salespeople, we are guilty of not letting go of poorly performing product lines.

How-to consulting: another maneuvering technique is to provide the ability for your customer to do it themselves. There is more revenue when you sell a product or service than when a customer does it themselves. However, maybe you can lead the market in providing a way for your customer to put in the sweat equity by doing it themselves. It’s estimated that 40% of farmers are using YouTube. My guess is they are on there to see “How-To” videos like I do. It’s not ideal, and you will make less income from it, but you will be seen as the provider of a solution in a recession.

The theme of how to sell in a recession or tough times is going to be with us for some time and I plan to focus on it. So much so that I have to live up to my advice. In doing so, I will be launching several sales training opportunities in the near future. Many agribusinesses have slowed spending. Yet, they also need more sales than before. That’s a problem I plan to focus on. How to develop your sales team despite the recession? Please reach out if interested in learning more.