Stratus Research has been capturing research information on corn and soybean seed purchases for five years. In its latest report, Mike Weddel of Stratus says there’s one big takeaway.
“Nothing really happens unless a retailer is involved in the discussion,” he says.
For “Decoding Seed Decisions” the data collects all business models in the seed sales channel as being retail–farmer-dealers, seed agencies, and retail seed sellers.
Here are core takeaways:
1. Layers of marketing build success.
Weddel says the data highlights the key role retail plays in the seed purchase process, and when paired with other marketing, the success for a sale is amplified.
“There’s a combination of a retailer discussion and that farmer has seen traditional media advertising, then the effectiveness of that retailer discussion goes way up,” he says.
The report details how traditional advertising alone leads to 1% of the time a farmer will buy a seed brand. A conversation with a retailer/seed brand representative leads to 25% of the time the farmer will buy the brand. But paired together---traditional media plus the retail conversation—it’s 34% of the time a farmer will buy the brand.
Direct contact increases the sales success even more. If a farmer attends a plot tour, if a rep visits their farm, etc, the success rate is 55%.
“And when fully integrated—direct contact, traditional media, social and retailer involvement—it’s two-thirds of the time a farmer will buy a seed brand.
2. This creates a tension in how to invest in marketing.
“The great thing with traditional media is you can reach a lot of people, and you can with a very consistent message,” Weddel says. “But alone, it’s not as effective as tying it to the retailer discussion. However, while direct contact is the most effective way to influence a farmer’s decision, it’s expensive. You’re limited on how many farmers you can reach, and you have to be very selective about who you’re approaching using direct contact methods.”
3. There’s no “one and done” method.
“On average, when a retailer makes one farm call, or one contact, one interaction with a customer, they’re successful maybe a quarter of the time. But when they’ve had three interactions with a farmer, their success rate goes up to 75%.”
Weddel says you can look at it as the retailer will be more successful based on the number of times they’re willing to interact with the customer.
4. Retailer recommendations carry weight
Weddel says seed companies need to outfit their sales organization with four key resources: training, clear value propositions, product performance data, and confidence-building resources.
“It’s increasingly difficult to make money growing corn and soybeans. Commodity prices are low, so what farmers are doing is they’re changing their behavior in that regard. Yield and performance characteristics were always the most important thing when farmers were making a decision. But it’s even more important today,” Weddel says.
And he says the demands from farmers today when it comes to seed don’t stop there. In additional to performance, value is increasingly at the top of purchase decisions.
“What they’re doing in terms of the value, is making sure they’re getting the best value. Where they can, they’re working grower programs even harder to try to find where they can save some money. Once they’ve decided on a brand that they’re going to grow, they’re seeing if there are program opportunities to reduce the cost or save money.”
Weddel also says to expect farmers to shop around more for the best products at the best price.
