Ag retail is different from most kinds of retail. Farmers may value traditional incentives for customer loyalty (like rewards programs or loyalty cards). But they’re also business owners – and they’re often wary of how new products will affect their bottom line.
The most effective loyalty incentives speak directly to those anxieties. A couple to consider: financial products like warranties and input financing.
Here, we’ll explain how they can create a loyal customer base. We’ll also share how two top ag retailers used warranty-backed products to boost customer loyalty year after year. But first, let’s take a closer look at some of the top loyalty drivers in ag retail.
Background: What Drives Customer Loyalty in Ag Retail?
In our experience, three major factors tend to drive customer loyalty:
- Confidence in your products. Ideally, the products you sell should tangibly increase crop yields and profitability. But if the products are new to market, you may need an alternative way to communicate that you can vouch for their value.
- A genuine relationship. Farmers shouldn’t just view your brand as a resource for crop inputs, but as a helpful advisor and partner that’s invested in their agricultural success.
- Trust in your brand. The two drivers above ultimately fuel trust in your brand. But there are other factors involved, from personalized customer service to educational resources and so on.
To turn one-off customers into loyal advocates for your brand, you’ll want concrete strategies that help you achieve at least one of the factors above. In the rest of this piece: how two financial products – warranties and input financing – can help you do that.
Warranties Can Communicate Your Confidence in New Crop Inputs
Farmers view new crop inputs not just in terms of the value they’ll create – but also the potential for loss. In fact, farmers’ aversion to loss can be so strong that it outweighs their desire for material gain.
But loss aversion, at its core, is a problem of confidence. And you can boost confidence in new crop inputs with warranties that provide a helpful safety net. If an input doesn’t live up to its promise or otherwise underperforms, farmers can cash in on your warranty to recoup some of the losses.
How does this increase loyalty? For one, warranty-backed products signal that you’re attuned to farmers’ fears and want to actively lower the risk of trying new crop inputs. To go a step further: you’re so confident in the performance of these products that you’ll put your money where your mouth is.
This reassurance can encourage farmers to continue their relationship with your business. And if competitors don’t offer something similar, it’s yet another reason to turn to your company over the competition.
Ideally, customers will never have to use the warranties you offer. But the peace of mind a warranty creates is invaluable on its own – and can reinforce your brand as a positive force in farmers’ lives.
How Two Major Ag Retailers Delivered 20+% More ROI to Farmers (and Drove More Sales) with Warranty-Backed Products
We’ve seen first hand how warranties can create loyal customers. In 2021, we partnered with a major ag retailer to create a warranty-backed program for farm technologies, seed, fungicides, fertilizer and additional farm inputs.
Since then, the retailer has been able to drive significant value for farmers. Two of the biggest indicators:
- Farmer ROI: Yields grew more than 20 percent from 2021 to 2023 – and are anticipated to grow another 33 percent by the end of 2024.
- Acres enrolled in the warranty program: This figure has doubled every year. Even better: 78 percent of participating farmers re-enroll annually.
Another ag retailer saw similar results with a warranty-backed wheat yield stack. Compared to farmer purchases in 2023 (i.e., before the retailer introduced Crop Plan Warranty), farmers bought…
- 185 percent more seed products.
- 194 percent more crop protection products.
What’s more: the warranty encouraged many farmers to try a foliar nutrient product that the retailer wanted to promote.
What does this data show? For one, farmers trust these retailers’ crop inputs enough to make repeat purchases year after year, and in some cases purchase more than before. But more than that, warranty-backed products are a key loyalty driver – and farmers are overwhelmingly satisfied with the financial peace of mind they provide. As one sales rep at the first retailer put it, “[Growers Edge Crop Plan Warranty] not only helped grow sales with the customer but helped solidify a multi-year commitment to our organization.”
Input Financing Can Lower Financial Barriers
Even with a warranty on the table, some farmers may still be reluctant to try new crop inputs. A new fertilizer, for instance, might be proven to increase yields (and, in turn, revenue). But maybe a farmer thinks the upfront price is steep compared to what they typically use. And this year’s budget is too tight to justify a more costly purchase.
Input financing can lower financial barriers by giving farmers easy access to capital for crop inputs. In the scenario above, for instance, a farmer might choose from flexible financing options directly at the point of sale so they can spread out payments over the growing season. This flexibility lowers upfront costs and makes it easier to try innovative products without overextending.
By making crop inputs more financially accessible, you can prove you’re invested in farmers’ actual success – key to enhancing customer loyalty. Alongside the financing itself, you can further deepen loyalty with…
- A self-service portal that makes it easy to check financing approvals, make payments, and contact your team for support.
- Branding at every touchpoint (from checkout to follow-up communications) that visually connects your company with the financing being offered.
The overall impact: easier access to new crop inputs and financing that positions your brand as a supportive partner.
Offer the Right Mix of Financial Products for Your Customers
It’s clear that warranties and financing options can strengthen customer loyalty. But the reality is that not every product will work for every customer.
Our recommendation? Take some time to understand your customers’ unique pain points around specific crop inputs. Then, offer financial products that are tailored to alleviate those concerns.
Growers Edge is here to be your partner. We can customize each Crop Plan Warranty and Input Financing program to meet the needs of farmers and your business. We’ll help you make tweaks as needed to achieve the outcomes you want. And we’ll manage the back end so you can focus on serious relationship building – and get innovative products in farmers’ hands.
Want to learn more? Let’s start a conversation.