SHIFTING ROLE OF AG SALESPEOPLE
Dave Downey, Mike Jackson, and Marilyn Holschuh
For many, it is in vogue to diminish the role of the agricultural salesperson in tomorrow's agriculture. The shrinking number of farmers, dealers, distributors, and manufacturers - and the advent of e-commerce and electronic communication systems surely means that we won't need many salespeople. "Why, before long, we'll be using the Internet as the primary communication system - and farmers will be buying a significant portion of their inputs and selling their outputs there," the argument goes. "Salespeople are 21st century dinosaurs."
But as industry rationalization continues, food system integration gets rolling and the introduction of many new technologies and business systems add to the complexity of doing business, it is increasingly clear that the role of the agricultural salesperson is not diminishing. To be sure, the role of the salesperson is dramatically changing. However, the role, with proper adjustment, is growing in importance!
The role of the salesperson has historically been to "sell stuff." But the role is rapidly shifting to one of bringing total business solution value to the customer - a far cry from the value delivered by product alone.
Of course there will be a lot of traditional customers who will still want to complete transactions and maintain a relationship with their traditional salesperson - and many companies will maintain a sizable sales force for that reason alone.
ABG research and analysis shows that commercial farmers today purchase more than two-thirds of all inputs. For them, the delivery of information, expertise, services rendered, flawless and economical logistics implementation, and solving problems quickly and fairly as they arise, become the heart and soul of the total business solution - and the most critical elements in realizing the full value of the "transaction."
The value from a lower price (often the most promoted benefit of e-commerce) is still very important. But, once price is negotiated, making sure the customer realizes the full value is the overwhelming and differentiating concern for both the buyer and the seller.
WHERE IS THE PESSURE TO CHANGE THE SALESPERSON'S ROLE COMING FROM?
Let's examine some of the major issues that are forcing changes in the role of the salesperson.
1. Larger, sophisticated customers. They are demanding more direct communications with highly knowledgeable people. They are simply unwilling to pay for traditional, relationship-centered salespeople who are often less technically competent or professional than they are themselves. This segment of the market will quickly move to suppliers who are willing to put highly trained, skilled professionals at their disposal, or they will move to the simplest transaction fulfillment system available to them.
2. Drive for greater efficiency. Competitive pressures at every level in the distribution system are forcing agribusinesses to wring out every non-essential cost possible to remain competitive. Distribution channels must be streamlined and made more impactive, efficient and effective. This factor alone will lead to consolidation of sales organizations within a channel and more strategic partnering between channel levels, not to mention the standardization/consolidation of back office transaction systems, to get desired results. E-commerce is the enabler of transaction simplification and efficiency, vertically and horizontally.
3. Competition is raising the bar. Every time a company, eager to gain a competitive advantage, introduces a new idea, a more efficient method, or a more aggressive program, everyone else scurries to adopt a similar strategy or face the prospect of falling behind in a single elimination tournament. Moreover, business experiences outside agriculture can increase customers' expectations. When a farmer makes a purchase simply and efficiently on Amazon.com, do you suppose they expect more of other suppliers? Absolutely! As customers experience highly effective programs and services outside agriculture they naturally ask themselves, "Why can't my supplier allow me to access my account directly from my own computer?" Or why can't I reach company tech support 24 hours per day rather than go through a local dealer every time I have a question?" The bar has been raised.
4. New technologies. We now have the capability to streamline communications and logistics. Computers and electronic communication systems allow us to communicate much more directly, effectively, and personally than ever before. Customers expect instant communications and have
little tolerance for lengthy delays and inaccurate information. Most commercial farmers are already accessing the Internet two or three times per week according to ABG researchers. No longer is routine expertise delivered whenever a salesperson gets around to it or cigar box transaction support a major value creator. In fact, old systems are now the cause for alarm and value destruction for most commercial farmers.
In addition, salespeople themselves are increasingly computer literate and capable of handling customer databases, competitive and market information, and complex technology. Effective salespeople will have to have many new skills to meet the expectations of demanding commercial producers.
DEMANDS ON AG SALES PEOPLE
In many cases, the new role of successful ag sales people becomes a true differential advantage in a market filled with parity products and simple electronic transaction systems. All of this requires a new and expanded set of skills and abilities.
Salespeople who do not bring these competencies to the table will not survive in our emerging agriculture environment.
1. Technical competency. While it is not a new idea for a salesperson to be technically competent, the concept is taking on a total new meaning as customers expect them to not only answer questions, but to work closely with them through full implementation so they might realize the full economic value of their purchase. This often means working with company technical representatives as well as the customer's technicians and consultants. It means ongoing learning to stay on top of the technology - and ahead of the customer. The salesperson need not be the final expert, but they must be able to bring and coordinate the technical expertise for the customer.
2. Team skills. Working with a team of internal and customer based technical people to solve problems and add value requires significant coordination, communication, and facilitation skills. Gone is the day when an ag salesperson could "go it on their own." They must have well developed people skills that go far beyond just having a "gift to gab" with important customers. They must be able to organize and lead meetings with high powered and opinionated people. They must be able to get things done through others.
3. Business Skills. The new breed of ag salespeople must have business savvy. They must be able to understand ROI and the implications of the technology and business decisions to the bottom line of their customer's business. After all, this is "business-to-business" selling and every decision ultimately is an economic decision. Often the consequence of product/service decisions go far beyond the simplicity of the product and important implications to personnel, financial, operations, and marketing issues within the customers business. The ag salesperson must understand and deal with their product decision at many levels.
4. Marketing Savvy. Salespeople, in effect, are the implementation of the company marketing strategy. As the first and most direct contact with customers, they have the responsibility to target specific customers that match segments prioritized by corporate strategy. They analyze individual customer problems and needs and tailor company products, services, and programs to the needs of each key account. All this means they must really understand the corporate strategy and implement it in the field. And on top of all of that, they must effectively communicate market trends, competitive intelligence, and customer needs into the company information system to provide critical information necessary for the further development of company strategies.
5. Selling and Communication Skills. As sophisticated as the selling process becomes, ultimately it must result in sales. Even if the "deal" is actually consummated in a corporate office, the field salesperson has a large role in paving the way. Selling skills are as important as ever at multiple points along the complicated journey of selling and servicing the account. AM
Dave Downey is director of the Center for Agricultural Business at Purdue University. Marilyn Holschuh and Mike Jackson are with AgriBusiness Group in Indianapolis.