Seed Selling: Loyalty Pays

In today’s highly competitive market, it is difficult to achieve a sustainable competitive advantage without achieving superiority in service delivery. As part of AgKnowlogy’s Customer Experience Monitor, we measure the willingness of growers to recommend their Primary and Secondary retailers to another grower. When this willingness to recommend is analyzed from many growers, a Net Promoter Score can be calculated, which is a comparison of the percent of Promoters vs. Detractors within a retailer’s customer base and trading area. Promoters are highly willing to recommend you, while Detractors won’t recommend you, and actually look for opportunities to tell other people about their concerns. Passives are vulnerable customers who are receptive to competitive offers.

Here is why you want to care about your Net Promoter Score, particularly if you want to grow your seed business: The “willingness to recommend” is highly correlated to loyalty and the current share of business customers give their Primary and Secondary retailers. AgKnowlogy recently completed Customer Experience Monitor projects that measured how willing growers were to recommend a full service retailer to another grower vs. their willingness to recommend a farmer dealer seed specialist. We expected farmer-dealer seed specialists would have higher Net Promoter Scores vs. full service retailers, but were surprised at how big the advantage was. The Net Promoter Score for several leading full service retailers was quite low at about 20%, while the Net Promoter Score for a Pioneer or DEKALB farmer seed specialist was typically about 60%.

Having More Promoters

In other words, the farmer seed specialists had considerably more Pro­moters within their customer base and prospects in their trading area than the full service retailers we compared them to. Conversely, the full service retailers had more Detractors than the farmer seed specialists they compete with. Re­member — a retailer’s Net Pro­moter Score is calculated by subtracting the percent of Detractors from the percent of Promoters. These segments behave very differently, and this has significant impact on your business.

The graph shows full service retailers receive approximately 60% of the available business from Promoters, and only 19% of the available business from Detractors. If full service retailers have more Detractors than farmer seed specialists, and Detractors give less of their available business to a retailer; then this has serious implications for growth in the seed category for many full service retailers.

I suggest calculating a potential seed opportunity for corn and soybeans per acre based on receiving 100% share of business. Then estimate the financial impact per acre on your seed business from Detractors using the approximate numbers in the Share of Business graph. If we are correct and there is roughly a 40% “hit” from Detractors, this represents a formidable challenge to full service retailers as they attempt to organically grow their seed business.

More Emphasis On Seed

As we all know, there have been extensive mergers among ag retailers over the past decade. At the same time, the value of corn and soybean seed has increased due to the trait package in current hybrids and varieties. Consequently, retailers have seen the value of their seed business expand significantly. I suggest, however, the two trends of mergers and trait value can mask the important question of whether you are growing your share of your customer’s seed business.

At the same time, our focus always needs to be on customers first. Unless we truly understand the needs of customers in our local market and how we perform relative to those needs, it is difficult to focus improvement efforts precisely enough to achieve sustainable results.

The information AgKnowlogy is uncovering with the Customer Experience Monitor represents real strategic insight for full service retailers. We believe there is a bigger opportunity trying to grow at the expense of farmer seed specialists rather than attempting to take share from other full service retailers. By identifying the customer priorities and experiences that drive customers into Promoter, Passive, and Detractor segments, full service retailers can make improvements that will increase the percent of Promoters within their business. If you would like more information on the performance evaluations we have made between full service retailers and their farmer seed specialist competitors, please contact me.

Leave a Reply

Seed/Biotech Stories
Seed/BiotechSyngenta Delivers Two New Winter Wheat Varieties To Eastern Corn Belt
August 6, 2014
Adding to its portfolio of AgriPro brand wheat varieties, Syngenta introduces SY 007 and SY 474 soft red winter wheat varieties. Read More
Seed/BiotechWater Optimized Seed Flowing Freely
April 1, 2014
As the demand for ag to diminish its water use while maintaining high yields and crop quality increases, three companies are leading the movement to grow more with less water. Read More
Seed/BiotechBayer Applies For Seed Treatment That Protects Against Sudden Death Syndrome
February 26, 2014
If approved, ILeVO seed treatment would be the first product to provide breakthrough protection for soybean seedlings from the soil borne pathogen Fusarium virguliforme, the fungus that causes SDS. Read More
Seed/BiotechSeed Still Central
November 1, 2013
Advancing genetics continue to make seed the crop variable that calls the shots for the season. Read More
Top 100 Articles
Milan Kucerak, president/CEO, West Central
CropLife 100West Central Cooperative And Its New President Are A Match Made In Deviation
June 29, 2015
To appreciate just how unique West Central Cooperative is in the world of ag retail, an observer need only consider Read More
Winter Wheat
CropLife 100South Dakota Co-op Member Owners Vote No On Unification
June 26, 2015
The Boards of Directors for North Central Farmers Elevator (NCFE) and Wheat Growers (WG) have announced that member-owners have voted Read More
CropLife 100The Andersons Acquires South Dakota Plant Nutrient Manufacturer Kay-Flo
May 20, 2015
The Andersons, Inc., ranked No. 22 on the CropLife 100, has purchased Kay Flo Industries of North Sioux City, SD. “This Read More
CropLife 100AgGateway’s Barcoding Initiative Progressing Nicely
May 8, 2015
According to legend (or Wikipedia), the first step towards modern bar codes came back in 1948, when Bernard Silver, a Read More
CropLife 100Pinnacle Agriculture Acquires Minnesota Retailer
April 14, 2015
Pinnacle Agriculture Holdings, LLC, ranked No. 6 on the CropLife 100,  has successfully acquired Liebl Ag, LLC in Ada, MN.  Read More
CropLife 100CHS, Aurora Cooperative Complete Fertilizer Storage, Grain Shuttle Loading Facility
April 13, 2015
CHS Inc., the nation’s leading cooperative and ranked No. 5 on the CropLife 100, and Aurora Cooperative (ranked No. 21) Read More
Latest News
Topcon AGI-4 on MF Planter
EquipmentAutosteer: Compatibility, Accuracy Remain Top Of Mind
July 3, 2015
The world of automatic steering solutions in agriculture has evolved rapidly in the last few years. From after-market add-ons that Read More
ManagementUnited Suppliers/Land ‘O Lakes Merger & Crop Update
July 2, 2015
CropLife’s Paul Schrimpf and Eric Sfiligoj talk about the reasons behind the United Suppliers/Land ‘O Lakes merger and USDA’s recent Read More
Industry NewsBioSafe Adds To Sales Force
July 2, 2015
BioSafe Systems has announced the hire of two new members for its service team. David Britt recently joined the team Read More
Chesapeake Bay
ManagementChesapeake Bay Clean-Up Gets Renewed Attention
July 2, 2015
The Chesapeake Bay has been called one of the most biologically productive ecosystems in the world. It’s also one of Read More
Measuring Bulk Tanks
ManagementBulk Pesticide Compliance: Top 10 Areas Of Improvement …
July 1, 2015
  In honor of the 33-year run of David Letterman’s Late Show, the American Agronomic Stewardship Alliance (AASA) is happy Read More
Industry NewsArysta North America Hires Midwest Sales Manager
July 1, 2015
Arysta LifeScience North America recently announced the hiring of Brian Battles as the Senior Technical Sales Manager for the Midwest Read More
Farmer on tablet
Eric SfiligojThe Never-Ending Battle Against Modern Agriculture
July 1, 2015
In the world of comic books, the character of Superman often refers to the fight to save the world as Read More
Retail FacilitiesBuilding Up Ag Retail
July 1, 2015
In the oftentimes unpredictable world we live in, it’s nice to know some things can be reliably countered on to Read More
Retail FacilitiesMaple River Grain And Agronomy Phases In Site Developme…
July 1, 2015
Marcus Construction helped Maple River Grain and Agronomy in Casselton, ND, with the design-build of its dry fertilizer, liquid chemical/seed Read More
Retail FacilitiesA&B Welding Builds A New Liquid Terminal Hub For Br…
July 1, 2015
To build its new hub facility, Briggs Crop Nutrients enlisted the help of A&B Welding. The result, an efficient facility Read More
Edon Farmers Co-op
Retail FacilitiesNew Marcus Facility At Edon Farmers Co-op Provides More…
July 1, 2015
Edon Farmers Co-Op in Edon, OH, needed a new facility to consolidate outdated locations. Marcus Construction was able to design Read More
Retail FacilitiesKinder Morgan Expands Its Storage With A New Dome Barre…
July 1, 2015
Kinder Morgan wanted additional covered storage at its Dakota Bulk Terminal on the Mississippi River in St. Paul, MN. With Read More
Retail FacilitiesHeartland Tank Protects Fertilizer From Extreme Cold At…
July 1, 2015
The Arthur Companies in Harvey, ND, enlisted the help of Heartland Tank Companies to develop a new liquid fertilizer facility Read More
The McGregor Co. fertilizer loadout
Retail FacilitiesThe McGregor Co. Partners With Kahler Automation To Cre…
June 30, 2015
Kahler Automation helped The McGregor Co. expand its Clarkston, WA, operation with unstaffed loadout technology that enables customers to pick Read More
Dry and Liquid Plant
Retail FacilitiesKahler Automation Helps CHS Dakota Ag Cooperative Build…
June 30, 2015
CHS Dakota Ag Cooperative in Mooreton, ND, wanted a liquid/dry blender system that could meet the needs of its customers Read More
Crop InputsLand O’Lakes, United Suppliers To Merge Crop Inpu…
June 29, 2015
Land O’Lakes, Inc. and United Suppliers, Inc. of Ames, IA, today announced their intent to merge their crop inputs businesses. Read More
FungicidesHelena To Distribute Unique Summit Agro Fungicide
June 29, 2015
RANMAN 400 SC fungicide, the only fungicide with a FRAC group 21 designation, is now part of the innovative Summit Read More
Eric SfiligojIARC Targets 2,4-D In Latest Report
June 29, 2015
The International Agency for Research on Cancer (IARC) has struck again. Earlier this year in March, this agency of the Read More