Fighting Change in agribusiness - "value creation" and successful CRM needs channel cooperation

In a few recent conversations, I have heard individuals "pining" for the good old days: for decades they made money; life was less complex;  and,  change is hard. Competition was less intense. They asked: why can't we just do business that same way?

Rather than try to provide an answer to this question, I would

pose a different question: 

"How can my company create the

future of its business, ensuring that its core competencies, products

and services all mirror a value-added marketing approach?"

We know what the past looks like, and we can't change it.

Conversely, however, although we don't know what the future

looks like, we do have the power to change it, to shape it,

indeed, to create it the way we want it to be. There are thousands

of such future scenarios currently being developed by

your competitors and mine. Our challenge is to create a

future for ourselves that is more meaningfully in touch with

what our customers demand, and provide it more quickly, less

expensively and with fewer mistakes than the other guys.

I've always maintained that channel partners (manufacturers,

dealers and distributors) are NOT customers. They

are partners. Their mutual goal is to provide value-added

products and services to customers : the end users. For

agrimarketers, this means the grower or the producer. Period.

this assertion, if I'm correct, means it's time in agribusiness for our distribution partnerships to craft cooperatively and jointly an actionable, sustainable way to deliver "value" as defined by their mutual customers and in a way that provides profits for all.

10 ways the Customer Management Center Supports CRM and Relationship Marketing

One of the major challenges in agribusinss comes in the form of "Channel Conflict"

When the phrase "integrated direct marketing" first appeared in agribusiness (and I think this observation applies to multiple B2B scenarios) the word people honed in on was "direct."

Making effective use of the call center elevates your customer management efforts and can build, strengthen, fortify and fight off attacks against a relationship with you customers.

Traditionally customer managment centers are used :to manage incoming calls for assistance or information, or out-going account management efforts, or out-going specific purpose calls,  or incoming complaint resolution .  

Here are a few proven ways your representatives who deal with your customers by phone can support your customer relationship efforts and demonstrate that your organization does have a" value-orientation."

10 Ways Your Customer management Center Supports

Relationship Marketing

1. Doing research

2. Assisting with planning

3. Leveraging and supporting the field sales force

4. Leveraging and supporting a dealer channel

5. Functioning as a standalone sales channel

6. Improving productivity

7. Acquiring new customers

8. Assimilating new customers

9. Cultivating existing customers

10. Managing special events for our customers in conjunction with our channel partners

The telephone grows ever more powerful as a tool with which to build relationships: if relationships and customer management are the intended result and what is managed in those call centers.

a new covenant for CRM in Agribusiness

Integrated Direct Marketing

Supports the New Covenant

Achieving sustainable competitive advantage and profitability as we

move into the 21st century requires that we are truly value-oriented and customer focused.

Information and technology and the sensitive use of both hold great

promise for us as marketers, providing the platform upon which to build a

better understanding of our customers' unfulfilled needs. Moreover, with the advance in technology and data capture

as it pertains to everything our growers and producers have done, are doing and intend to do, sensitive use of this data in the context of providing value and building genuine relationships is a reality agribusiness marketers can enjoy in ways very other B2B industries can!

Rather than use this information technology platform to build a fortress to protect your own territory, use it as

an engine to drive targeted direct customer dialogue that collectively support manufacturer, distributor, and dealer. Jointly sponsor and analyze customer needs re s e a rch with your channel partners so you discover customer needs t o g e t h e r, then create a relational database to drive your joint marketing effort. This builds mutual trust, and establishes the foundation

to define what you need to do "t o g e t h e r" in order to fulfill these customer needs and to provide relevance and value in the transaction and service delivery. The expected outcome is a clear demonstration of listeningto customers, and, in turn, greater profits to all channel partners.

We jointly succeed as manufacturer, distributor, or dealer only by providing relevant value. The key for all companies in the 21st century

will be to deliver relevant value to their customers across every point in the value delivery chain. For many of us, delivering relevant value means getting closer to our customers through relationship marketing. That is, using integrated direct marketing which has, as its heart, technology, and, as its soul, a basic sensitivity to people. Customer sensitivity as a value means that we must with align with

our channel partners under a new covenant of doing business. In order for all to be successful, channel partners must collectively understand the wants and needs of our end-user customers better than anyone else, and excite and delight those customers by providing outrageous service and customer-defined value at eve ry point of contact.

For those of us who go to market through a two- or three-step distribution

channel, this marketing approach requires internalizing

several vital concepts:

1. The customer in this new marketing paradigm is not the distributor

or dealer; it is the farmer, the grower or producer.

2. Conflict between members of the distribution channel is unacceptable

for our mutual success.

3. Value needs to be redefined from the perspective of our mutual

end users.

4. Retention of customers is the single most profitable way to grow

our business, and as such, it needs to be separated from customer

acquisition and carry the highest priority.

Like many distribution pathways, agribusiness faces the monumental challenge of dissipating the conflict which has characterized the

question, "Who is our customer?" Today, now that we do know who our real customer is, let's get past the conflict and rise to our new

covenant together.

Communities, Neighborhoods, and Passports

A Civil Way of Doing Business

National Center for Direct Marketing

Conference

July 26-28, 1995 Chicago, Illinois

Growing Sales by Managing

the Channels to Farmers

Presenter: Nick Poulos

As product quality and perfo rmance issues reach pari t y, the bond

b e t ween channel partners is one critical area where true diffe r e n t i a t i o n

can be created. M a nu facturers can assist their channel partners to target

c u s t o m e r s. In order to accomplish this, ri va l ries about who owns the customer

must be remove d .

Agribusiness, its channel partners & a new covenant for business

Founding Principles of the New Covenant

In building our new covenant, let me suggest a few critical

founding principles:

1. Our true customer is the grower, whichever place in the

distribution channel we hold.

2. We are committed to building customer communities

whose foundation is a civil way of doing business.

3. Value is what drives purchase decisions both at the dealer

and farm-gate levels.

4. Value-based, relevant communications serve as our pass -

port into this agribusiness community.

5. Conflicts and rivalries over who owns the grower and

grower information are destructive to serving the grower,

and are unacceptable.

6. We define value according to what our mutual end-user

customer wants.

7. Each member of the channel is committed to understanding

what the grower ,"our mutual customer" values, needs & wants.

8. Some degree of tension within the channel and between

channel partners - when focused on meeting customer

needs- provides a healthy strengthening of the channel.

9. Manufacturers identify the areas in which they can best

deliver value and the areas in which their retail partners

can best deliver value to their mutual customers. These

partners then help one another to deliver this outstanding

value proposition focused on meeting the unique needs of

each individual customer.

10. Agribusiness is committed to raising the performance of the

e n t i re channel by re-creating its infrastructure to deliver relevant

value, information, education, and support wheneve r

and where ver necessary.

With these founding principles in mind, let us now work

together to identify what this new covenant is, and, over the

next few months, paint a real-world picture of what doing

business within this new paradigm looks like.

A new Covenant for CRM in Agribusiness: delivering Value

My observation is that it is time to establish a new covenant

among agribusiness channel partners:a customer-focused,

value-based covenant.

Research indicates that conflict exists within agribusiness:

conflict centering upon who "owns" the customer. Rather

than focusing marketing efforts on delivering superior products

and services to the grower, efforts are focused on "one-upping"

others in the channel. While there is seldom a "winner"

in such a conflict, there is a clear "loser":the grower.

To get an idea of where conflict may exist in your agribusiness

channel, ask yourself these questions:

1. Who is my customer? Is it the distributor or dealer? Or is

it the grower and farm operator?

2. What does it mean to be truly customer-focused? Does it

mean different things to different members of the distribution

channel?

3. How do I and my channel partners react when one of us

asks another for information regarding the grower?

4. Is there conflict or rivalry over who "owns" the customer?

5. How do I define "value"? In whose terms do I define

"value"? Does Value Change with every step along the customer corridor?

Does "value" change over the duration of your relationship?

6. Do I consider others in my channel (manufacturers, distributors,

dealers) customers or partners?

7. What is a suitable covenant for a customer-focused

agribusiness channel?

An unhealthy tension exists in many distribution channels,

including agribusiness, as manufacturers ask channel partners

for customer-specific information. Dealers and distributors are

vocally leery of marketing paradigms which ask for such sharing

of information. The fear of course has been discussed for a decade: 

Disintermediation. 

In all too many situations such a rivalry over customer ownership

has erupted into open, hostile conflict. This channel conflict

is transparent, however, to our mutual customer, the

farmer. All customers want is value: value as they define it.

They know if they're getting it; they know if they're not.

On your Channel Sales Performance hinges the effectiveness of your CRM

When successful, CRM ties together all partners along a  businesses' value chain. There is a need to integrate and coordinate the efforts and goals of your sales, marketing and product service organizations with those of your channel. For B2B companies, however, that go through independent dealers and distributors, this need to share, integrate and forge partnerships creates a major stressor:  successful CRM demonstrates cooperation, integration and interdependence between separate, independent businesses. The independence of our channel partners can pose a risk or present a problem. We as the providers of products and services need our channel partners to represent our offerings profitably, effectively and efficiently. 

One value a company can offer to its channel members is to strengthen dealer operations: for example, history has shown that programs designed to focus dealer business performance,  dealer development, dealer excellence and certification and accreditation have strengthened both the overall operations of the dealerships but have also enhanced the performance of channel sales people. Help the independent business  people become better at what they do and how they represent your products and how they manage their business and operations.

Building strong customer loyalty and a depth of product usage relationships and a great customer experience management framework for B2B firms means that your channel partners play an immense role.  Teach them that Professionalism, consistency of product representation, strong product and service knowledge, strong communications skills, and the ability to sell value are crucial. Then help them reach for their own world-class performance. Your CRM effort will be much better off for the effort. 

7 Principles for Actionable, Needs-based Segmentation, # 6

Step 6: Validate your Segmentation Model and your Hypotheses

 

Suppose that as a result of your segmentation analysis, you’ve developed such hypotheses as this: “Quick response, combined with a limited number of face-to-face visits, supported by telephone support for the account management combined with E-mail ordering capability, order tracking and greater use of electronic media for information summary are top priorities for our decentralized customers in the automotive aftermarket in the northeast with annual sales volumes of $50-$150 million.”

 

Before you take action, you’ll want to validate your conclusions. The segmentation model you’ve devised should, first of all, make intuitive sense based on your marketplace experience – and especially on that of your sales and customer service people. Where findings are at issue, you may want to see if customer focus groups, closed on-line communities, or direct contact with the people in your Customer Management Centers confirm them. Timely and rigorous vetting of data hygiene and knowledge transfer come directly into play here. Clearly a great deal rides on having accurate information form which to work.

 

This would be a wonderful opportunity to make sure that you are incorporating that valuable insight now available to us through “social media.” An additional source of insightful wealth on this topic was published in Forrester’s Groundswell. For B2B marketers, their “social technographics profile” provides a superb tool that allows us to map their characteristics into our actionable model and affords us, through the on-going assimilation of knowledge available from the social media, the opportunity to monitor the substantive issues affecting our segmentation and to the course correction every CRM effort expects to need to make – only that much more quickly.

Define a customer as your sales person and what do you get?

I have been around long enough to remember the progression in management movements over the last 2 decades: it went something like this - initial quality programs, the movement to satisfaction, then on to loyalty, throwing in relationship and experience management into the mix.

Each movement brought with it a new jargon . Each was, and still is, a powerful management principle added into the mix. Each of these movements kicked up a social dialogue. One on-going social and business dialogue centers on the word "customer." On the periphery  of this dialogue, the chatter headed down a path that included discussion of the fact that there are internal and external "customers" . 

Under no conditions though should that mean that the salespeople are the customer and not the end-user.

In retail banking, at least at jpmorgan chase, the platform bankers were "the customer".

The natural outcome of this was less than ideal end-user experience (the true customer) and clear rips in the fabric of fiduciary and lending tapestry.

And, to some extent this wrong definition helped lead to the lending crisis in equity products

defining a customer: have you - especially if you are a B2B firm - defined a customer

e.g., a customer is someone who buys X-dollars of Y-products over Z-duration

or as Dennis Gaukel at Pioneer Seed, one of the finest marketing minds I've met, would say : " a customer is a farmer who plants 80% of all acres planted in our variety

think about how precise, telling and directive that definition really is and let me know what you think

thanks

Nick

Riddle me this, if you would? Define: "a customer is..."

no pithy or cute riddle. just a simple question I ask anyone I can:

Define " a customer" for your business or your product or service ?

Can you provide a definition?