Recently, one of my dealers called me to say that his biggest customer (who had been buying all of his seed from him) is now getting some seed from an out-of-state competitor because it is so much cheaper.
The dealer said the competitor’s varieties have been performing very well and that he feels he has no choice but to drop his price in order to keep this customer. Are these the kind of price pressures and marketplace changes you have been warning us about?
I’m worried about more of this happening. What can I tell my dealer to do?
William – Missouri
I constantly keep my eyes open for marketplace changes that are dramatic enough to devalue one’s competitive advantages.
When producers can’t see the value you offer over someone else’s, you become a commodity, at which point the sale comes down to price.
Since no two varieties are the same in this business, he is buying something different from the competitor—so it cannot be a commodity or price situation. Even if the pedigrees were the same, differences in production and quality practices alone can mean a twenty-five bushel per acre difference in yield.
Add to the product offering, the services that a dealer must provide and the concept of price being a factor is totally gone.
The reason this customer is “flirting” with your competitor is the same reason all customers flirt. He no longer sees the value in what the dealer is offering and this has nothing to do with the seed.
If he were just unhappy with your products, he would buy all of his seed needs from the competitor.
Your dealer started paying less attention to this customer and started the process of handing him over to the competition at least three or four years ago.
Since the customer felt neglected, he decided to respond when someone else called on him and asked for his business. I estimate that this customer started “flirting” at least two years ago, and if your dealer does not fix it now, he will soon be totally divorced from him.
Help your dealer develop a plan on how to get his customer excited about doing business with him again. Help him make a list of all the things he can do for this customer and then put them on a calendar for timely execution throughout the year.
What possible reasons could there be for a good, loyal customer to start buying out of state, unless the customer felt that the value he was getting was poor enough to risk losing him altogether?
- When was the last time your dealer took just the customer and his wife out to dinner alone and not in a group?
- When was the last time your dealer dropped off a Thanksgiving turkey to say I appreciate you very much?
- Is your dealer communicating with this customer about his seed business the requisite three times per month or the typical three times per year?
I bet your rep’s answer to all of these questions would be he is not doing these things, because if he were doing things like what I have mentioned, he wouldn’t be having these problems.
All of these things, and more, are simply the price of admission to this 21st century marketplace.
Thank you so much for your question and happy selling!
P.S. Make sure this doesn’t happen to you in your sales territory this year…
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