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

Trending Articles

InsecticidesNew Research Study Shows The Value Of Neonics
October 29, 2014
The study evaluated seed treatment, soil and foliar uses of neonicotinoid insecticides in the U.S. and Canada. Read More
Crop InputsPlatform Specialty Products To Acquire Arysta LifeScience
October 20, 2014
Once the acquisition is complete, Platform Specialty Products will combine Arysta LifeScience with previously acquired companies Agriphar and Chemtura Crop Solutions. Read More
Seed/BiotechMonsanto Offers New Support For Ferguson, Area Communities
October 8, 2014
Monsanto Co. has committed $1 million in new support for several collaborative efforts in Ferguson, MO, and surrounding communities in North St. Louis County. Read More
Seed/BiotechUnapproved Genetically Modified Wheat Found In Montana
October 3, 2014
USDA reports that one year after discovery of Monsanto's unapproved wheat in a single Oregon field disrupted U.S. wheat export sales, the GMO wheat has again been found in Montana. Read More
Equipment2014 Product Of The Year Voting
September 19, 2014
The deadline to vote for the 2014 CropLife IRON Product of the Year is October 31. Please cast your vote today to help us determine the winner. Read More
FertilizerFall Fertility 2014: Forecasting Fertilizer Use
September 7, 2014
Great crops this year have tapped the soil, and fall work is definitely called for, but how challenging will that get? Read More

Latest News

StewardshipTFI Recognizes Michigan, Maryland Farms For 4R Stewards…
October 31, 2014
As farming practices increasingly attract interest from the general public, two farmers are ensuring they meet public approval. Read More
Eric SfiligojBig Brother Is Already Watching
October 31, 2014
Opponents to UAVs seem to think they could be used to spy on other people. But spying is already taking place, through the Internet. Read More
StewardshipAsmark Institute’s New Training Center Focused On…
October 31, 2014
The newly dedicated Ford B. West Center for Responsible Agriculture will be used as a national training and education center for professionals in the ag input industry. Read More
StewardshipCTIC Tour Dives Deep Into Everglades
October 31, 2014
The most recent Conservation In Action Tour (CTIC) hit South Florida recently to tour the Everglades Agricultural Area. Read More
StewardshipResponsibleAg Begins Auditor Training
October 31, 2014
ResponsibleAg auditor training is now underway at the Ford B. West Center for Responsible Agriculture in Owensboro, KY. Read More
CropLife 100ValueAct Buys Stake In Fertilizer Dealer Agrium
October 30, 2014
ValueAct has bought 8.2 million shares in Calgary, Alberta-based Agrium, making them the second largest investor in the fertilizer dealer. Read More
InsecticidesNew Research Study Shows The Value Of Neonics
October 29, 2014
The study evaluated seed treatment, soil and foliar uses of neonicotinoid insecticides in the U.S. and Canada. Read More
StewardshipUSDA To Provide $4 Million For Honey Bee Habitat
October 29, 2014
Agriculture Secretary Tom Vilsack announced today that more than $4 million in technical and financial assistance will be provided to Read More
Crop InputsValent Launches New Low VOC ProGibb LV Plus Plant Growt…
October 29, 2014
ProGibb LV Plus PGR is a high-potency, liquid gibberellic acid formulation designed to comply with California’s new air quality standards for high volatile organic compound agricultural products. Read More
Crop InputsBayer CropScience Acquires Certain DuPont Crop Protecti…
October 29, 2014
Bayer CropScience and DuPont Crop Protection have signed an agreement for Bayer to purchase certain DuPont Crop Protection Land Management assets in the U.S., Canada, Mexico, Australia and New Zealand. Read More
ManagementWest Central Names New President
October 29, 2014
West Central’s board of directors have announced their unanimous decision to name Milan Kucerak President and CEO-elect following Jeff Stroburg’s retirement at the end of the fiscal year. Read More
InsecticidesValent U.S.A., MGK Form Marketing Agreement
October 24, 2014
Valent has formed an agreement with Minneapolis-based MGK to manage the marketing and sales of MGK’s crop protection line of insect control products within the U.S. beginning April 1, 2015. Read More
StewardshipFlorida’s 4R Advocate Keeps Improving
October 24, 2014
Florida farmer Alan Jones uses the 4R principles of nutrient stewardship as the core of his fertility program, which allows him to maximize production and keep costs in check. Read More
Seed/BiotechMonsanto Named One Of The World’s Best Multinational …
October 23, 2014
Monsanto ranked No. 8 in the world’s largest annual study of workplace excellence that identifies the top 25 best multinational companies in terms of workplace culture. Read More
Crop InputsArysta Hires Former Agri-Chem, CPS Employee For Delta S…
October 23, 2014
New Territory Sales Manager Mark Peel’s primary role will focus on working with growers regarding fungicides in Louisiana, Mississippi, Arkansas and Tennessee. Read More
CropLife 100GROWMARK Announces Appointments In Plant Food Division
October 22, 2014
GROWMARK, Inc. has announced the three key staff changes in its Plant Food Division. Read More
CropLife 100GROWMARK Appoints New VP Of Finance And Risk Management
October 22, 2014
Wade Mittelstadt has been named GROWMARK Vice President, Financial and Risk Mangement, effective December 1, 2014. Read More
FungicidesEPA Approves BASF In-Furrow Corn Fungicide
October 22, 2014
Field trials show Xanthion In-furrow fungicide provides more rapid emergence, extended residual control and improved seedling health than untreated crops. Read More