According to Eurostat, the value of agricultural production in the European Union in 2019 grew year on year by 2.4%, to EUR 418 billion. This trend is visible not only in the EU. And, as production worldwide is growing and competition becoming stronger than ever, efficiency is the key to success.
A significant part of agricultural production relates to the costs involved, including planting materials, plant protection products, fodder, etc. According to the same Eurostat report, agricultural production costs last year accounted for close to 57% (EUR 236.5 billion) of the total EUR 418 billion. To put this into perspective, the value of sales of cosmetics in the EU amounted to “only” EUR 79.8 billion in the same year (source: Cosmetics Europe Association).
Although the agricultural and cosmetics industries are different, there is one point they have in common, and which they share with other businesses: the customer. Whether you are buying shampoo, a mobile phone or fertilizer, you want to be treated professionally and individually, and to be rewarded for brand loyalty. The customer-centric approach is a strong trend across the global economy.
Loyalty and credibility in the agricultural business are even more crucial components in building commercial success than they are in other sectors. The impact and irreversibility of the decision about which product is used in agricultural production make the choice of supplier a strategic and long-term commitment. As a result, the cost of acquiring a new, loyal customer is significantly higher than in other industries. Agricultural companies should take special care to retain existing customers and grow overall revenue by increasing individual share of wallet.
One of the greatest tools in building a real relationship between client and supplier is the loyalty program. How can this be applied in the agricultural industry? Here are some ideas you may start with.
1. Learn who your customer is. Knowing and understanding your customer is the first step in building the relationship. This can include anything from personal data such as name and address, through information about the business (the type of crop grown, acreage of farmland, head of livestock, number and types of machines, etc.), to information on other suppliers they have (for seeds, plant protection products, etc.). Based on the data collected, you can analyze current needs and potential demand, and build an offer that reflects the customer profile. The better you know your customer, the better prepared you will be to seize future opportunities.
2. Educate. Agricultural business is complex and prone to constant development. Knowledge of recent trends, new products and market dynamics is essential. This may be achieved by digital transformation and its educational functions. By enrolling in your loyalty program, the customer can access a knowledge base containing articles, videos, tips, etc. VIP customers can access exclusive meetings and training sessions held on-site or online by supplier representatives. The better the quality and diversity of materials you provide, the more loyal your customers will be. They will appreciate the added value that membership of your program brings to their business, while you make sure that your customers are always up to date with current trends and your product line and recommendations.
3. Reward. Almost every loyalty program offers something in return for the loyalty of its members. Whether this takes the form of points, unique experiences or services, the customer must feel that loyalty pays off. What you give depends only on your creativity and knowledge of what your customers might appreciate. Rewards could be training and education, free products, extra services, discounts, or simply the title of “customer of the year” or a badge in the ranking list. Also, you can reward for transactional and extra-transactional activities, such as filling out a survey, giving feedback, the anniversary of your partnership... the options are countless. What matters is that your client knows their actions will result in a certain benefit.
4. VIP clubs. Some customers are more valuable than others. To honor them, you can create a club of selected customers, members of which will have access to different perks and benefits. It’s the same as in the airline industry, where “platinum” customers receive exceptional customer service or exclusive treatment.
5. Communication. When you know your customer, you can automate the communication process and send content relevant to your clients based on their preferences and behavior. By personalization, you can be sure that your offers and messages will always get to the right people at the right time. Thus, they will be treated with special attention and will never be missed by your clients. This will save you money and raise the effectiveness of your campaigns.
6. Build advocacy. There is no better salesperson than a satisfied customer. So why not reward them for their advocacy? Thanks to your loyalty program, you can give bonuses to members who bring others on board, and who are evangelists for your brand. Additionally, you can make your clients feel important by asking them for their feedback and suggestions for improvement.
The goals of your loyalty program may be varied. You might wish not only to reward your customers (as end-users of your products) but also to stimulate and track the whole distribution channel of your products and services. Some companies go the extra mile, making their loyalty programs boost direct sales instead of managing them through a complex net of distributors.
These are some of the basic perks and features supported by loyalty programs in the agricultural sector. It is worth mentioning that a loyalty program might be a good start of a bigger and more complex digitization process for your company. One thing is sure – there is no solution for success in the agricultural industry that does not involve more technology and greater automation.