SERVICE
By Jane Wooldridge
VistaComm Journalist
Think VALUE,
not just PRICE
2017 is the fourth consecutive year of a downward slide in the ag economy. So what
are producers doing to “keep the lights on” during this downturn? For starters,
they’re looking for ways to spend less and produce more—not an easy formula to
master. And they’re likely pushing for lower prices on input costs.
If you’re an ag marketer, you’re in an awkward position. Do
you cut your margins—already razor thin—so you can give
price-sensitive customers the breaks they want? Or do you
hold steady on prices, and search for ways to add more value
for customers?
According to Will Secor, a Purdue University ag economist*,
you might see some short-term gains by dropping prices. But
it’s a different story in the long run.
EFFECT OF CUTTING PRICES TO
GAIN SALES DURING A TOUGH
AG ECONOMY:
• Erodes value perceptions of your brand.
• Reveals just how much margin is built into your prices.
• Makes it difficult to raise prices in the future.
As an alternative, Secor suggests getting a better
understanding of what your customers and prospects find
most valuable in the products and services they use. Then
adjust your offerings to communicate value during this
economic downturn.
FOR MORE INFO
6
AGRI-INSIGHTS ISSUE 2 2017
THE DIFFERENCE BETWEEN PRICE
AND VALUE
A cheap price focuses on what your customer pays, not
what they get. Whereas value focuses on getting more for
the money they spend.
In terms of marketing in agriculture, value means
more than the seed, chemicals or feed you’re selling. It
means everything that goes with it—expertise, delivery,
application, grain marketing and more. And it goes even
further than that.
• There’s value in working with an ag business your farm
customers trust.
• There’s value in doing business with an ag cooperative
where farmer members share in profits.
• There’s value in supporting a local business, which in
turn supports local employees and the communities in
which they all live.
* SeedWorld, December 2016, “Navigating a Tough Ag Economy”
VistaComm has helped farm cooperatives and ag businesses for the last 20 years retain
and grow sales numbers ... even during down cycles. Find out what we offer to support
your efforts. Visit www.Vistacom.com.
844.453.9261