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

ManagementMACA 2014: The State Of The Agricultural Industry, And Then Some
October 9, 2014
The trade association’s annual gathering featured speakers from across agriculture and beyond. Read More
StewardshipA Multi-Layered Approach To Water Quality
October 6, 2014
Illinois event highlights research and technology designed to better monitor and improve water quality — and the benefits of cooperative, coordinated effort. Read More
StewardshipMichigan Agriculture Leaders On Toledo Water Ban: We Want To Be Part Of The Conversation
August 8, 2014
Leaders of Michigan agricultural organizations said Thursday that the government should not have a “knee-jerk reaction” based on last weekend’s water ban in Toledo due to fertilizer run-off in Lake Erie. Read More
ManagementRussia Bans U.S. And EU Ag Product Imports In Ukraine Sanctions Battle
August 7, 2014
Russian President Vladimir Putin has banned the import of agricultural goods from countries that have imposed sanctions on Russia. Read More

Trending Articles

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
CropLife 100CHS To Build $3 Billion Fertilizer Plant In North Dakota
September 5, 2014
The fertilizer plant in Spiritwood will be the single largest investment in CHS history, as well as the single largest private investment project ever undertaken in North Dakota. Read More

Latest News

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
EquipmentAgraScout App Available At No Cost To Universities
October 21, 2014
AgraScout, a fast and easy to use mobile crop scouting app, is now available at no cost to University students, Read More
LegislationNew Farm Bill Program To Provide Relief To Farmers Affe…
October 21, 2014
The USDA has implemented a new Farm Bill initiative that will provide relief to farmers affected by severe weather, including drought. Read More
ManagementGreenfield Scholars Program Aims To Sustain Agronomy Wo…
October 21, 2014
The program encourages talented students to study agronomy, crop and soil sciences while cultivating networks to develop the necessary workforce to sustain the profession. Read More
Paul SchrimpfPrecision Ag: Taking It To The Hill
October 21, 2014
A new coalition took the good news message of precision agriculture to Washington, DC, last month. Read More
ManagementUSDA Awards $18 Million In Small Business Research Gran…
October 21, 2014
The grants will provide high quality, advanced research and development that will lead to technological innovations and solutions for American agriculture. Read More
FertilizerCF Industries Terminates Merger Discussions With Yara I…
October 21, 2014
CF Industries Holdings and Yara International have terminated their discussions regarding a potential merger of equals transaction. Read More
Seed/BiotechSyngenta Ranked A Top 10 Biotech Employer For Third tim…
October 20, 2014
Syngenta ranked in the top 10 among the world’s top biotech employers, according to an annual survey conducted by Science magazine. Read More
CropLife 100Wheat Growers Break Ground For New Facility At Kennebec
October 20, 2014
Wheat Growers has broke ground for a state-of-the-art shuttle loader grain handling, fertilizer and agronomy facility in Kennebec, SD. Read More
FertilizerVerdesian Life Sciences Signs Agreement With Los Alamos…
October 20, 2014
Verdesian Life Sciences has signed a licensing agreement with Los Alamos National Laboratory to develop and market LANL’s latest nitrogen enhancement technology for plants. Read More
MicronutrientsStoller Group Announces Groundbreaking At New Office Bu…
October 20, 2014
Jerry Stoller, founder and president of Stoller Group, announced the groundbreaking at the site of the company’s future headquarters in Read More
Crop InputsBioSafe Systems Opens New Production Facility In Nevada
October 20, 2014
BioSafe Systems has completed construction of a state-of-art production facility in Sparks, NV, for its line of activated peroxygen products. Read More