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 PRECISION SELLING AND THE GOLDEN RULE by Scott Downey June 2006 Occasionally as we travel the country spreading the gospel of segmented selling, we en-counter resistance from salespeople who are concerned that treating complex farm businesses differently from traditional farm customers smacks of elitism. Intellectually, most understand that a 60,000 sow swine operation or a 40,000 acre row crop producer have different needs than their traditional farm counterparts, but the idea of treating them differently violates the Golden Rule. We should treat everyone the way we would want to be treated, the argument goes. The Golden Rule of working with customers, though, is that everyone should be treated in the way THEY would like to be treated. Unfortunately, even this definition isn't helpful if doing so raises service costs which must be spread over units sold to traditional buyers who can't afford to pay for them. Even if a producer would like to be treated to daily on-farm visits, the systemic costs of providing that service would ultimately not result in a combination of benefits and price that they would be happy with. Precision Selling focuses investment in those relationships where we may expect a return from the investment. At its simplest, Precision Selling requires two things. First, every salesperson has to recognize they have not one, but two jobs. The first job is to figure out which customers to serve with an efficiency strategy and which to serve with an investment strategy. The second job is for managers to provide an environment where this is possible. TWO STRATEGIES Efficiency and investment strategies are very different approaches. With an efficiency strategy, the salesperson must expend creative energy to figure out how to satisfy customers with a minimal investment of face-to-face time. The goal is still customer satisfaction, but it may not be achieved directly by the salesperson; it may rely on information provided by e-mail, a phone call from Jim in billing, or Suzy at the counter. With an investment strategy, the goal is still efficient satisfaction, but the tasks are different. In an investment strategy the salesperson's job is discovery and communication — discovery of the customer's goals and communication of all the things the organization is doing that are worth paying for (shaping perceptions of value). Many firms struggle with how to cover the costs of investing in service for complex producers who demand volume discounts for products. Largely, this struggle stems from complacency in defining service the buyer would be willing to pay for. For complex buyers, service may not mean responsiveness, delivery, or application. For this group, it is more likely to be defined as the delivery of information or process efficiencies that will make them more profitable — what we call co-created value. Complex buyers may be willing to pay for value that helps them be more profitable, but won't pay for old definitions of service that don't. Simultaneously, selling with two different strategies is hard. Finding efficiencies and creating unique value require time, energy, and creativity. This brings us to the second component of precision selling, which is leadership. Creating unique value in two different segments at the field level means retraining, or redefining the culture for the entire team of customer contact people. Every touchpoint where customers have contact with your organization must be configured to communicate value consistently according to the appropriate strategy for that customer. Leading this effort takes management time and attention. Time and attention are in short supply when there's barely enough to make numbers for this growing season. Just as sales professionals must recognize that there are places to focus investment and places to focus efficiency, so must managers. Precision selling offers an opportunity for sales organizations to be good stewards of the Golden Rule by investing where it makes sense -serving complex growers with unique, specialized value who are willing to pay for, while at the same time continuing to serve traditional customers. Organizations who are able to sell precisely will be leaders in the next era of value in agribusiness. Those who don't will need to find their success in a shrinking marketplace. W. Scott Downey is Associate Director of the Center for Food and Agricultural Business at Purdue University. Precision Selling: Building Relationships with Large Farmers will be offered at Purdue University July 27-28. For more information, go to http://www.agecon. purdue.edu/cab/programs/ps. Tweet |
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