Creating Customer Alignment

Recently, I’ve heard concerns from some ag retailers about their difficulties in selling seed. Much of this seems focused on margin received for effort delivered. It’s a reasonable concern, but unfortunately these concerns hide a greater trend. Many full-service retailers may be missing the opportunity to fully participate in one of the greatest opportunities in agriculture today, which is the increasing dominance of the seed factor relative to other crop inputs.

It seems to me that many full-service retailers don’t really know how to sell seed, and consequently, they don’t effectively compete against a local farmer seed specialist. I don’t mean to offend, but the business model of too many retailers is rooted in operational competence and not selling skills and customer knowledge. At the end of the day, you get paid for the value you deliver to customers, and increasingly most of this value comes from delivering outstanding customer experiences across the whole customer experience corridor.

I believe full-service retailers can only achieve a sustainable competitive advantage by paying more attention to the quality and consistency of the experiences they deliver to customers. Recently, I have been discussing how this applies to seed market share and profitability. Work done by AgKnowlogy is showing full-service retailers lag behind their farmer seed specialist competitors in terms of delivering outstanding customer experiences.

As a grandparent, I am reminded again how quickly children learn. A child continually re-evaluates the response it receives from its behavior and tries new approaches. Sadly, adults tend to stick with old behaviors that may not produce optimum results. Without a discipline of learning, we cannot hope to improve. This is the primary reason why I aggressively advocate measuring customer experiences for your business. By segmenting your customers (and prospects) into Promoters, Passives, and Detractors and measuring how each of these rates your performance on experiences that drive loyalty, you can begin to make the organizational changes that drive customer loyalty.

Gaining Improvement

Without ongoing feedback from customers on how well you meet their needs, how will you improve? Where will you focus your efforts if you can’t identify which customer experiences are the most important in driving loyalty? If you don’t know your key performance indicators relative to competitors, how do you know if you are winning or losing the market share race with customers?

In 2005, business consulting firm Bain and Co. did a study in which it asked 362 mid- to large-size companies a single question: “Do you believe you deliver a superior customer experience?” The survey found 80% of executives believed their company delivered outstanding value and a superior customer experience, but only 8% of their customers agreed. We are finding similar results for ag retailers, leading us to believe closing this Customer Experience Gap is the single most strategically important initiative a retailer should priorities in 2010.

The Customer Experience Gap means most companies are not well aligned with their customers. Either they don’t know what is important to their customers — and flounder through lack of focus — or they ineffectively deliver on their service promise. The implications of this for a full-service retailer in the seed business are staggering. In one of our projects, we found the revenue deficit between Promoters and Detractors in our client’s seed business was $21 per acre for corn alone. Across all agronomy categories, we found more than $4 million in annual revenue lost due to misalignment between the company and its customers.

A chart plots grower vs. company perception of the importance of various customer experiences in determining loyalty. Experiences where the retailer and its customers “agree” on the importance fall along the diagonal line. Experiences where customers placed more importance are below the diagonal, and experiences that the retailer placed more importance are above the diagonal.
Revealing what these experiences are would violate confidentiality with our client. However, most relate to seed purchases. Point “S and Q,” for instance, are “recommends appropriate seed varieties to me” and “works hard to win my business.” We worked with our client to help them understand that no matter what they thought, customers believe they need to place more emphasis on certain areas of the Experience Cor­ridor. We used the Service Blue­printing technique I have written about to help the client visualize how they actually work with customers, and yes, how they sell seed.

Facing Facts

Our client was able to identify several important areas where service could be improved. Some of these will involved using previously untapped strengths in the company to create new value for customers. As our client’s plan is implemented, we will help them with ongoing monitoring.

At this point, we’ve come full circle. The Customer Experience Gap is real in every industry, and betting it doesn’t apply to you is betting long odds. We recommend taking a serious look at how well you are aligned with customers, measuring your performance vs. competitors on the key drivers of loyalty and then develop a companywide plan to fine tune your service delivery.

Leave a Reply

Management Stories

EmployeesOABA Program Develops Future Generation Of Agribusiness Leaders
September 29, 2016
The Ohio AgriBusiness Association will select up to 25 promising leaders to participate in a leadership enhancement program early next Read More
ManagementThoughts on CropLife America and the PSM Appeal
September 29, 2016
Editors Paul Schrimpf and Eric Sfiligoj talk about the recent CropLife America annual meeting and the successful appeal of the Read More
Young Corn Field
StewardshipStudy: Ohio Farmers Doing ‘A Good Job Of Managing’ Phosphorus Levels
September 27, 2016
Leaders from Ohio’s largest grain farming organizations announced today that Ohio farmers are doing their part in effectively managing phosphorus Read More
StewardshipMonsanto Invests $1.6 Million In System To Quantify Greenhouse Gas Reductions
September 23, 2016
The USDA – Natural Resources Conservation Service (USDA-NRCS) recently awarded the National Corn Growers Association (NCGA) and its Soil Health Read More
Trending Articles
Corn Field
Eric SfiligojFacing Ag Industry Challenges
September 26, 2016
At the 2016 annual Mid America CropLife Association (MACA) meeting in September, a pair of crop protection company representatives discussed Read More
Bayer Monsanto
Crop InputsBayer-Monsanto Mega-Merger: 6 Things You Need To Know
September 14, 2016
Mega mergers have become almost routine in the agricultural industry. Right on the heels of Monday’s news that fertilizer giants Potash Read More
Potash Corp Agrium
Crop InputsAgrium, Potash Corp To Merge To Create $36 Billion Company
September 12, 2016
Canada’s Agrium Inc. and Potash Corp of Saskatchewan Inc. have agreed to combine in a deal that would create a Read More
Osage Co-op Elevator Osage, IA Finished Building
OpinionAre We Crazy?
September 8, 2016
At some point in the first few months of my employment here at CropLife® magazine, I started getting curious about Read More
ManagementMAGIE 2016 Highlights and Deere Anti-Trust
September 1, 2016
CropLife Editor Eric Sfiligoj discusses the recent Midwest AG Industries Exposition and the Department of Justice’s objection to John Deere Read More
ASMARK 2016 Retailers Live! Tour - CPS
CropLife 100CPS Acquires Texas Retail Operation
August 23, 2016
Crop Production Services (CPS) has acquired the assets of Larry’s Chemical and Spray, Inc., for an undisclosed amount in an Read More
Latest News
Pat Bowe The Andersons
CropLife 100An Eventful Year For The Andersons
October 1, 2016
On November 2, 2015, Patrick Bowe was formerly appointed the new President/CEO of The Andersons, Inc. He became the first Read More
Engenia soybeans
Special ReportsResistant Weeds Continue To Confound Control Efforts
October 1, 2016
In the annals of weed scientists, 2017 will mark a milestone of sorts. This will be the 60th anniversary of Read More
CHS St. Paul, MN fertilizer terminal
CropLife 100Farmers Union Oil Co. Votes To Join CHS
September 30, 2016
Eligible voting members of Farmers Union Oil Co., a diversified agricultural retailer based out of Oslo, MN, have cast affirmative Read More
EmployeesOABA Program Develops Future Generation Of Agribusiness…
September 29, 2016
The Ohio AgriBusiness Association will select up to 25 promising leaders to participate in a leadership enhancement program early next Read More
ManagementThoughts on CropLife America and the PSM Appeal
September 29, 2016
Editors Paul Schrimpf and Eric Sfiligoj talk about the recent CropLife America annual meeting and the successful appeal of the Read More
Corn Field
Industry NewsMarrone Bio Innovations’ SVP And Chief Sustainability O…
September 29, 2016
Marrone Bio Innovations, Inc., a leading provider of effective and environmentally responsible pest management and plant health products, announced today Read More
Young Corn Field
StewardshipStudy: Ohio Farmers Doing ‘A Good Job Of Managing…
September 27, 2016
Leaders from Ohio’s largest grain farming organizations announced today that Ohio farmers are doing their part in effectively managing phosphorus Read More
Growmark FS Outlet
Industry NewsGROWMARK To Purchase Suncor’s Share Of UPI
September 26, 2016
GROWMARK and Suncor have reached an agreement in which GROWMARK will purchase Suncor’s 50% interest in UPI, Inc. in Ontario, Read More
Corn Field
Eric SfiligojFacing Ag Industry Challenges
September 26, 2016
At the 2016 annual Mid America CropLife Association (MACA) meeting in September, a pair of crop protection company representatives discussed Read More
Syngenta Seedcare Institute
Seed/BiotechSyngenta Opens New North America Seedcare Institute In …
September 23, 2016
Syngenta unveiled its new Seedcare Institute in Stanton, MN, during a recent grand opening celebration. More than 150 industry leaders, Read More
StewardshipMonsanto Invests $1.6 Million In System To Quantify Gre…
September 23, 2016
The USDA – Natural Resources Conservation Service (USDA-NRCS) recently awarded the National Corn Growers Association (NCGA) and its Soil Health Read More
Pipe rack
LegislationCourt Sides With Ag Retailers On PSM
September 23, 2016
The D.C. Court of Appeals has ruled the Occupational Safety and Health Administration violated the Occupational Safety and Health Act when Read More
ManagementPacific Coast Fertilizer Announces Interest In Longview…
September 22, 2016
Pacific Coast Fertilizer LP (PCF) announced at the Cowlitz Economic Development Council board of directors meeting its interest in developing Read More
Young corn plants in soil
UncategorizedCool Planet Raises Additional $9 Million To Commerciali…
September 22, 2016
Cool Planet has announced the first close of a new financing round to commercialize the company’s Cool Terra Engineered Biocarbon Read More
Crop InputsJim Loar Promoted To President And CEO Of Cool Planet
September 22, 2016
In a move that reflects and reinforces the company’s commitment to the agricultural market, the Cool Planet board of directors Read More
BlendersNorth Dakota Coop Debuts Dry Fertilizer Plant
September 22, 2016
North Central Grain Cooperative has begun operations at a new dry fertilizer plant at its Rolla, ND, site. It is Read More
Crop InputsMonsanto, Bayer Officials Defend Proposed $66 Billion M…
September 21, 2016
Top officials for Monsanto and Bayer defended their proposed $66 billion merger before skeptical senators on Tuesday, insisting that the Read More
ManagementUpcoming Shows & Recent Events
September 19, 2016
Editors Paul Schrimpf and Eric Sfiligoj talk about upcoming trade shows and events and review the Mid America CropLife Association Read More