Marketing feeds and specialized feed materials presents unique challenges at any time, but it is especially challenging when national and global economies are in a downturn. Being conservative by nature and having developed within a business environment which mitigates against change, most producers in the animal protein sector are often reluctant to accept or introduce innovation. This natural reluctance becomes reinforced if their enterprise has encountered unusually tough trading conditions.
A highly topical question at present, therefore, is how to build and maintain sales to these producers. The manufacturer or marketer of a complete feed or feed additive must be prepared to adopt a more modern approach than the methods used traditionally to define which products to promote and how the promotion should be organised.
Many corporate strategies in agriculture remain rooted in traditional models such as the identification of Core Competencies, because few alternatives have supplanted their intuitive simplicity. Even today, marketing may still be based on the Four P's of Product, Price, Promotion and Place (or distribution).
Innovating in feed marketing terms involves altering the innate inertia in the system. In the case of the Four Ps, it means asking:
- Products – What products address real customer needs?
- Price – How can we capture value while delivering value?
- Promotion – How can we address customer needs?
- Place – Are there new ways to distribute the innovation?
History records numerous examples where agricultural CEOs created what they saw as the ideal product or service and poured sometimes substantial resources into the market launch, only to be astonished when their innovation did not meet with immediate market acceptance. Perhaps the failure was due to inaccurate market research. The strategy itself may have been ineffective, or how it was implemented. Often the problem was that the sales force either failed to communicate the innovation or — worse still — they themselves were not convinced that it offered a cost-effective solution.
New opportunities
Just as modern feed marketers can learn from the past, they also have new opportunities for communicating with their customers. Today’s buyer or consumer is being bombarded by an extraordinary array of messages conveyed through multiple media outlets. This technology is opening the capacity to segment the market, target specific users with specific messages and ensure that these are delivered effectively.
The old way was to use a different style and resources for marketing to a rural audience than for urban dwellers. That landscape now has changed totally. The sophisticated messages being circulated by the large consumer marketing groups are not just reaching the people living in towns and cities. A by-product of this is that it raises the bar for the marketing directed to the farmer/producer to be equally nuanced.
Innovation
Organisations that are genuinely committed to innovation can develop appropriate strategies and tactics that are customer-focused to ensure that the industry benefits fully. The first need is to identify 'best practice' for introducing innovations to your market, which also demands careful consideration of the marketing strategy. Secondly, nurture a world-class sales force that is customer-driven rather than sales-driven, because this can then meet or exceed the expectations and requirements of even the most sophisticated buyers.
In our experience, it is the salespeople who sow the seeds of a successful introduction of an innovation. This is particularly critical in a market downturn, where anything less than the right sales approach almost certainly leads to marketing failure. At Alltech we conducted an uncompromising review of the best practices of our leading salespeople and used it to create a Five C's framework that both sales and marketing can use. This framework is now the basis for all of our internal training.
Five C's
Originally the Five C's concept was developed to meet the specific needs of one company and its valued customers, but it clearly applies to all innovative business-to-business products being sold to agribusinesses because it addresses precisely the essence of selling innovations within this field. Today, a number of organizations now follow the Five C process, from crop science to food products, from ag services to genetics.
1. Corporate.
If the customer already knows and trusts the organisation behind the innovation, they will buy the product or service much more readily and incorporate it more quickly. So an early priority for the sales force is to determine the level of the bond of trust that exists. Equally important, and requiring corporate humility, it is necessary to take on board any criticisms that erode customer trust in the organisation and to provide genuine assurances to investigate and report back on any weaknesses, noting remedial actions.
2. Clarity.
The sales force must provide unambiguous and direct explanations that enable clients to grasp unequivocally the benefits of the products and services being offered them. In organisations that fail to focus on customer benefits, there is a tendency to complicate matters in the hope that the bamboozled customer will surrender and buy. But this can only breed customer resentment in the long-term and thus a weak relationship that can be (or deserves to be) exploited by rivals.
3. Consistency.
The data published and completed on the innovation or product must be consistent in quality and quantity. A client making a choice according to the quality and consistency of response should logically therefore chose your product or service. This is sometimes called 'defining the battleground'. But be aware that the principle works only where your technology has been widely tested and proven. If this is not the case, do not try to mask the fact. In such a situation a limited amount of the highest quality information may be a short-term substitute.
4. Cost-effectiveness.
When the 'what is the price?' question comes up, many sales people panic and try to avoid answering. Others quote a price without any justification and do so sheepishly. A quick glance at the potential clients’ personal clothing preferences, the car they drive, the pen they hold, should soon confirm that their life-style choices do not always reflect the lowest available price! Perceived value tends to be far more important.
Having said that, customers in agribusiness quite rightly focus on price as an indication of value and so should the salesperson. Our finding was that our best salespeople tackled the question up front, but instead of just quoting a price they also simultaneously explained the cost-benefit.
5. Consultative sale.
The most powerful question in B2B or B2F sales is 'what can we do to make your business more competitive?'. Often this takes the conversation into novel areas – What are your long term goals? What is your succession plan? Where do you want to do business, in the U.S. or overseas? The consultative process indicates to clients that the salesperson is no longer looking to just sell them the product or service, but also to be their partner, their ally in the future.
Traditionally, pharmaceutical and chemical companies were synonymous with this partnership style of marketing. Often now, however, these same companies are withdrawing from this approach and their customers are seeking new partners. It has opened a gap in the competitive landscape that innovative marketers can fill.
Bringing innovations to a marketplace in a recession or where commodity prices are low is fraught with a history of failures. Successful companies are often not those with the best products or services, but those who are best at developing consensus and groundswell to support them. Marketing and sales techniques such as the 5 C's may be easy to impart to your sales force. But their impact will be negligible unless there is a corporate culture in place that is wholeheartedly customer-oriented.
