The Power Of A Niche
These dealers have found some effective products to set them apart from competitors.
February 5, 2009
With multiple retailers in a region vying for grower dollars, what's a manager to do to capture customers' attention? One method is to offer something other dealers don't, including unique products that increase clients' bottom lines.
Finding such a treasure isn't easy. The dealers we talked with scour research findings, trade shows and publications, industry meetings, and the Internet. But some unusual products actually come looking for a market, as was the case with AVAIL phosphorus fertilizer enhancer from Specialty Fertilizer Products (SFP). Leonard Long, agronomy manager with Rangeland Coop, located in Logan, KS, first heard about the product six years ago when Dr. Larry Murphy of the Fluid Fertilizer Foundation clued him in on this possible hot newcomer. "I knew it was probably a good product just for the fact that Dr. Murphy has a good reputation," says Long, but the dealership was not ready to invest in the equipment to impregnate AVAIL on dry fertilizer. Two years later the time was right — and another fertilizer aid called NutriSphere-N, a nitrogen manager stabilizer, was also ready for release from SFP.
"We're not a real big company and are in competition with several big, local co-ops. I thought that if these work well, they would set us apart from other retailers in the area," says Long.
Curtis Hora, manager of Mettler Fertilizer in Hurley, SD, says few of his company's competitors can offer such enhancers "or don't want to, as it can slow them down in the busy fertilizer season. These products have to be 'impregnated' onto the fertilizer, just like a herbicide would be," he explains.
Long says AVAIL keeps phosphorus from being tied up in the soil so "it's a lot more available to the plant the first year, and what doesn't get used up will be available for other plants and crops the next year." (NutriSphere-N, a water-soluble polymer additive, works under a similar principle, keeping nitrogen nearby for crop needs.)
In fact, the visible results of such phosphorus availability really sold Marc Price, manager of Southern States' Simpson County Co-op, Franklin, KY, on AVAIL. In a test plot in 2006, he and a grower customer not only saw healthy corn but a vibrant wheat crop planted after it.
Convincing The Customer
While many compounds on the market today make great claims, dealers say they need to find ones that truly work hands-down. "You have to make money at what you do, but you also have to make sure your customers benefit," says Long. "If we save a grower money or make him money, he's going to continue to come back doing business with us. We're offering him something that hopefully will help him continue to grow his business and keep in business."
In the case of AVAIL, Price sees increases in corn yields of 4 to 12 bushels, while Long regularly sees 10- to 12-bushel gains. Hora has recorded yield increases of up to 15 bushels/acre in corn and 6.4 bushels/acre in winter wheat. In addition, Price says plant health and standability are clearly improved. Plus, reduced fertilizer application rates pay off. It's not usually recommended that growers reduce the amount of phosphorus they put down, but Long has found by using AVAIL his growers could cut back by as much as 15% without a decline in yields.
AVAIL and NutriSphere-N each cost growers about $4/$6 to $7/$8 per acre for treatments — and customers often buy the two together.
The business impact of these niche products for dealers has been sizeable. "AVAIL has helped bring in people who heard about it and can't get in from our competitors. It's helped grow our business and add a lot of extra revenue to the bottom line," Price says.
Long is equally pleased. Three years ago, 3% to 5% of customers were using SFP products; today, the percentage is up to 25%. "Every year it grows and helps my year-end margins," he says.
To treat his dry fertilizer, Long says his Ranco blenders needed a pump/metering system that carefully sprayed the AVAIL. He purchased three different systems, at a cost of about $3,500 each. To keep the plant more efficient during crunch times, both Price and Hora pre-treat fertilizer as time permits, returning product to bins.
How do you convince a customer to try unfamiliar products? "You go out and find some growers to put in some test plots," advises Price. Long would agree: "Do your own test plots with your aggressive growers."
The Right Data
When proving results to customers for a compound such as AVAIL, Price says don't just look at the plant above ground. "You're going to have to dig it up and look at the root system."
Hora uses yield data to persuade growers to try SFP's fertilizer enhancers and "show them that we can put more bushels in their bins and more profit in their pockets by improving the efficiencies of the dollars they spend on fertilizer." He says Mettler Fertilizer has had success with other specialty offerings, including WolfTrax micronutrients, CoRon controlled release foliar nitrogen fertilizer, Elemax ENC precision nutrition products, and Hydra-Hume soil humus products.
A company representative can also be invited to talk about a product at your grower meetings. This approach worked for Mettler in the early spring of 2007, when the dealership made a full-scale launch of AVAIL to its growers. "Response was excellent, and sales have really taken off," Hora says.
Finally, word of mouth is a powerful advertisement for a niche item. "We've got several growers who are telling their neighbors what they're doing because the health of their crops is so much better with AVAIL and NutriSphere-N. Neighbors are asking, 'What did you do different than I did?'" says Long.