A Tale of Two Customers

Selling to the farmer AND the reseller

It is the best of selling methods and the worst of selling methods. This, of course, is the sales version of the opening lines from the famous book, “A Tale of Two Cities.”

A recent sales training workshop reminded me that knowing who to focus on isn’t always easy. Selling in agribusiness has its own two worlds or sales structures. Too many agribusinesses that sell through a reseller channel struggle to balance between these two selling processes.

The first sale is to the end user or consumer of your products. For most of us, this is the farmer or livestock producer.

The second sale is to the reseller/dealer/distributor of your products. They go by several names depending on the product line of farm products you sell. For the rest of this article, I will refer to them as your dealer network.

If you sell through a dealer network, then you will forever be deciding on which to focus your efforts and resources on.

Everyday, you will need to decide if you should focus on pull or push sales efforts.

Pull sales are when you promote to the end user and the end user generates pull through sales at your dealership.

Push sales are when you focus on pushing products to your dealer network, and the dealers promote to the end user.

These two sales are very different and require a different set of considerations. These considerations include products, programs, and sales approaches.

Let’s start with the first conversation/question you should have internally when deciding to sell through dealers. “What are the primary roles for us and for the dealer?” By us, I am referring to you as the manufacturing company and their salesperson.

Manufacturing company roles for the consumer (farmer): Build your brand

Manufacture and market a product to an end user.
Generate public knowledge about the product.
Create demand for the product and connect end users with dealers

Manufacturing company roles for the dealer:

Develop delivery methods for your products that match the dealer capabilities.
Develop financing programs to match the dealer’s inventory and reselling time line.
Help the dealer achieve differentiation in a designated market.
Provide tech support for your products to the dealer and how tech support will be accomplished with the farmer.
Develop products that sell and turn over in line with freshness expectations.

Dealer roles:

Maintain adequate products and inventory to be qualified as a dealer.
Provide or manage logistics from the manufacturer to the farmer.
Develop customer relationships to bring customers into their dealership.
Provide financial programs that facilitate farmers’ ability to buy from them.
Learn enough technical product information to be able to sell their manufacturer’s products.

These are not complete lists, but include some primary responsibilities. Roles can certainly be shifted from dealer to manufacturer and vice versa, depending on the product line, dealer capabilities, and how you want to go-to-market.

As mentioned, the first step is to internally decide how and who will be responsible for the basics listed above.

The next step is to decide who to focus on. Brick and mortar retailers…. those that have delivery vehicles, those that have the ability to inventory your products in the store…. those that have service/maintenance teams…. those that have an outside sales presence, etc.

Now, how many of those types of dealers are in the geography you plan to sell into? In a recent sales training exercise, a breakout group designed the ideal retail dealer. When I asked how many dealers in their market were like that, they replied, “none!”. So, it was back to the drawing board for them. You either identify the type of dealer that exists or develop a plan to create them in the market. And building a new retail structure is fairly difficult in the agribusiness world.

After deciding on who you want as a dealer, ask these questions: Are farmers already going to those dealers? It’s much easier to build sales in a place that end users are already going to than to build new buying habits with farmers.

Now, go talk to a few of these ideal dealers. How are they currently providing the type of products you plan to sell them? What are their thoughts on your products and dealer programs? What do they like, and how would it help them? What do they not like, and why would they not carry your products?

Expand on the positive feedback and fix the negative feedback issues if you can. You want to develop a sales approach that removes all barriers to doing business with you.

Once you have a dealer go-to-market strategy, then develop your strategy for selling to the end farmer. Too many companies and salespeople focus on end-user sales first, as it is the most interesting and probably the reason they are in the business. Most horse feed salespeople love horses and can talk all day about them. Very few dream of developing feed dealer programs, promotions, and lining up freight.

I want you to think of this go-to-market strategy as a separate business venture. Yes, it incorporates your dealer network, but it has a structure all its own. Start by asking a few questions:

Who are they? age, financial abilities, number of acres farmed or animals raised, on-farm equipment needed, etc.
Where do they gather? You can’t go everywhere. Time and finances usually prevent us from doing so. So, fish where the fish are. Focus on one hot spot. Have success there and then move to the next.
How do I reach them? In-person at trade shows, online on a particular platform, on-farm sales calls, text, or email, etc.

In today’s agribusiness world, I find that we need to use both an online and a traditional approach to our go-to-market strategy. It won’t last forever, but in today’s market, we still have farmers who prefer hard copy marketing approaches: magazines, direct mail, etc. Of course, there are plenty of them who are online with email, Twitter, YouTube, and Facebook being the most popular for farmers. Unfortunately, for the near future, we need to focus on selling and marketing strategies that include both traditional methods and more modern technology methods. It won’t be long before most age groups we sell to will have grown up with technology.

One last consideration: Exclusivity.

As a manufacturer, this needs to be discussed and decided upon internally first. Does our dealer network have to be exclusive in carrying our product line versus other suppliers of similar products? Secondly, will we sell our products in a designated geography exclusively through one dealer?

In other words, do we have to be exclusive and does the dealer have to be exclusive?

The answers to these questions run deep into the success of your market strategy.

If you are going to grant exclusivity to a dealer in a designated geography, how big will that geography be? 10, 20, 50 miles? Does that dealer actually cover that geography with their current customer base? Can they service that big of an area? I found the dealer typically wants a bigger geography than they serve. While the manufacturer wants more dealers in a geography. This tug of war is best established before you get into business together.

As the manufacturer, if you require the dealer to exclusively carry your products in a category, I recommend considering a few questions before setting out on this path. First, does it make sense to the dealer and to the farmer? If all the farmers are currently going to one dealer for your competitor’s products, what is the likelihood they will go to a different dealer to buy your products? What is the likelihood the dealer will throw out their current brand and bring your new products/brand into their dealership? The answer to both questions is “highly unlikely”.

What about hybrid methods? Such as selling both through a dealer network and direct to the farmer? Thin ice is what I would describe it as. Obviously, taking a sale away from your dealer is not going to go well. The only way I have seen this work with any success is when there is a great job done on customer segmentation. Particularly when it relates to the size of the farmer or livestock producer. If the dealer network you decide to work with is mostly working with smaller farms and does not have large farmers coming into their dealership, then this can be an area where selling direct can work.

Again, it’s best to have these discussions up front. Understand that certain dealers are still not going to like it. Hopefully, you can come to an understanding of why it will work. Best results are when there is a clear line between who can and who can’t buy direct. Otherwise, understand that customers talk, and it won’t take long before smaller customers will want to buy direct, just like their bigger neighbors.

A go-to-market strategy that involves a dealer network can certainly be the best of methods and the worst of methods. The best approach is to consider these as two sales and be very clear in your approach to both.