The Great Transition

As I write this, I am still getting through the “information hangover” that always follows our PACE Advisory Council annual meeting. This was a particularly robust discussion with some new participants and lively opinions shared by all.

One of the primary goals of the meeting is to get a feel for the 2010 industry outlook and beyond from a wide range of perspectives. What we learn serves to shape our thinking and planning as we enter the season ahead. While there is certainly too much to cover in a single page, the overall theme is coming into focus: This is a time of transition.

This is especially true when it comes to the customers we service and how that impacts the sales force that represents our business on the front lines. As growers evolve, can we evolve our approach to sales and service to meet their needs and demands?

At PACE, we spent the better part of the morning talking about the increasing sophistication in the grower ranks. And although size does enter into the equation, it’s not about that as much as a fundamental change in approach — more professional, more business-like, and less relational.

That’s not to diminish the importance of relationships — this still carries a lot of weight. But more sophisticated growers are looking for advice on more fronts. Agronomy matters, but it’s one tool in a larger box that also includes risk management, financial planning, and growth opportunities — top growers are incorporating more voices into the decision-making process from more sources. If your goal is to provide “full service” to growers, do they truly perceive your dealership as the provider of that level of information? Is your sales force equipped with the kind of training and information that keeps your services front-of-mind with growers?

In some of the survey work we’ve done in preparation for our CropLife 100 and State of the Industry report coming up next month, retailers are clearly concerned about staying relevant with growers. An online survey of retailer perception of threats and opportunities for dealerships showed two particularly sensitive areas. Topping a list of 20 threats were these two: That manufacturers are trying to disintermediate the retailer by selling direct and that cash-and-carry “brokers” are setting up growers with low-service, low-price product.

We’re not surprised at all by this — growers can see as clearly as anyone that uncertainty increases as the ag economy becomes more globalized and, more significantly, they’ve felt the impact of it on their operations. It’s no wonder they want to control what they can.

So how do retailers carve out a niche with this subset of progressive growers? One PACE participant questioned whether it was even possible to get an established sales staff to think outside-the-box with more progressive growers. A second participant responded: “If a dealer can’t find a way to segment and service these growers, then maybe that dealership should consider whether or not they can stay in business.”

Harsh words perhaps, but perhaps it should serve as a conversation starter for retailers. We need to ask how confident are we that we’re meeting the needs of a grower-customer base in transition. And if we’re all about full service, what can we do to ensure our future advisory role with the grower?

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