Key Takeaways
- Cash-strapped farmers are reluctant to invest in mid-season crop inputs, which could jeopardize their yields.
- Agronomists are reluctant to broach the subject of additional spending given the current macroeconomic conditions.
- A formal sales plan that features an outcome guarantee can help force necessary conversations, improve yields at harvest, and drive revenue growth for retailers.
Around the country, seed is going in the ground even as farmers grapple with higher-than-expected fertilizer prices on top of already elevated input rates (plus low commodity prices and high interest rates).
Meanwhile, ag retailers are looking out to the rest of the year. Maybe you’re hoping your agronomists will be able to convince tapped-out farmers to invest in the mid-season inputs needed to maximize yields.
Unfortunately, hope is not an effective business strategy. That’s doubly true during the busy season, when even the best-laid sales plans tend to falter in the face of urgent customer needs and requests to reduce spending on crop inputs.
So how can ag retail leaders build a system to reach growth targets while also meeting customers where they are? A formal in-season sales plan can help.
One tool we’ve seen drive success is an outcome guarantee (like Crop Plan Warranty). In this guide, we’ll walk you through…
- How outcome guarantees work,
- How to use one to nudge agronomists from order takers to active sellers, and
- How to use them to drive optimal outcomes for everyone involved.
How Outcome Guarantees Work for Mid-Season Offers
Beyond simply selling products to farmers, ag retailers act as key advisors. In that capacity, one of their roles is to guide farmers toward products that will maximize per-acre yield.
In a tight economy, though, agronomists’ reluctance to talk about money – or suggest farmers spend more of it – overrides their drive to recommend additional inputs once seed is in the ground.
That can backfire for everyone involved. When farmers don’t get mid-season guidance, they might miss out on yield. When agronomists skip these conversations, retailers are less likely to hit their sales quotas. The result is worse economic outcomes for everyone.
An outcome guarantee can help. Here’s how it works:
- A retailer identifies a mid-season treatment that will help maximize yields (say, fungicide, micronutrients, foliar nutritional products, adjuvants, surfactants, maybe some biologicals new to the market).
- The retailer creates a bundle of these products and adds an outcome guarantee to it. Farmers who purchase the full bundle and apply products as directed are eligible for a cash payout if yield is not increased as expected.
- The outcome guarantee removes the risk of adopting new products and so encourages farmers to adopt the full bundle.
- This drives product adoption and increases per-acre yields, thus benefitting all parties.
Because the outcome guarantee ensures a cash payout in the event that yields don’t reach certain thresholds, it greatly reduces the risk of purchasing or financing mid-season inputs.
How to Use Outcome Guarantees to Nudge Agronomists from Order Takers to Sellers
One common challenge for ag retailers is inspiring agronomists to more actively sell. Agronomists often feel most comfortable talking about the details of soil health or product specs in the context of farmer-led conversations.
But a passive approach to selling leaves money on the table – for both retailers and the farmers they’re meant to serve.
In the context of mid-season offers (and now), that challenge tends to manifest in two ways:
- It’s hard to find time to invest in an organized sales campaign with formalized goals.
- Agronomists are reluctant to have hard conversations about investing in additional inputs when most farmers are looking to reduce overall spend.
An outcome guarantee can help overcome both.
Outcome guarantees as an organizing tool
Structuring a sales campaign requires sales leaders to step back and evaluate – something that may feel out of reach once the season’s rush begins. An outcome guarantee facilitates that process by giving you a structure to work with.
You might bundle a mid-season foliar health prescription that includes top-performing products that happen to have a higher upfront cost. By attaching the outcome guarantee, though, you remove much of the adoption risk for farmers: they’ll either enjoy the yield boost offered by the products or a cash payout.
It’s fairly easy to set up a handful of bundle offers to address the most common needs your customers have mid-season.
From there, it’s key to establish clear targets for the organization and for individual agronomist sellers.
Outcome guarantees to spur hard conversations
At a time when farmers are generally looking to reduce overall spend, agronomists may be reluctant to broach the topic of additional inputs.
If you find yourself in that situation, consider reminding your team that one of their jobs as advisors is to help farmers maximize yields. This reminder can help agronomists reframe their thinking from “asking farmers for more money” to helping farmers realize the full potential of their crops.
Outcome guarantee–backed bundles can also make it easier for agronomists to start these conversations. Rather than asking farmers to take a leap of faith at a time when money is tight, agronomists are guiding them to an investment that actually decreases the amount of uncertainty they’ll have at harvest.
That’s a win for both parties. In fact, outcome guarantees benefit everyone involved.
For a deep dive on this, check out our ebook How Agricultural Sales Leaders Can Inspire Change.
How Outcome Guarantees Can Drive Optimal Outcomes for Everyone
Outcome guarantees are a flexible tool that can benefit not only ag retailers and farmers but also input manufacturers.
Farmers benefit in two ways. The first and most obvious is, of course, the guaranteed positive outcome from using specific products. When a farmer purchases a guaranteed bundle, they get the assurance that they’ll either increase their yields (and therefore income) or receive a cash payout.
The second benefit is tied to the first: removal of one source of stress. With some portion of their crop outcomes guaranteed, they can worry less during the rest of the season. That’s no small thing, especially in today’s environment.
Essentially, an outcome guarantee asks farmers to trade money today for increased certainty about their harvest. That’s a substantial benefit.
Retailers, likewise, enjoy multiple benefits.
The most obvious is in how an outcome guarantee inspires product adoption. By tying the guarantee to higher-margin products or multi-product bundles, retailers encourage larger purchases, which helps drive profitability.
Beyond that, offering an outcome guarantee gives agronomists a reason to reach out to farmers. Because the offer delivers meaningful value, it can help retailers build trust with their customers over time, which compounds as the years go by.
Finally, an outcome guarantee gives retailers an alternative to offering discounts to drive product adoption. Discounts can trap retailers in a cycle that’s hard to escape by keeping everyone price-oriented.
Outcome guarantees, on the other hand, refocus attention toward value. This helps reframe sales conversations so they’re more productive for everyone.
Manufacturers can also benefit from outcome guarantees.
Those who produce biologicals, for example, may find it difficult to drive adoption, especially given current economic conditions. An outcome guarantee that includes their products helps remove the risk to farmers of trying something new, which helps manufacturers build familiarity with a famously risk-averse population.
And because manufacturers also stand to benefit, they can collaborate with retailers on offers to make the terms of an outcome guarantee even more attractive to farmers. For example, a manufacturer might help finance the cost of the guarantee on the back end so the investment from a retailer is minimized and able to impact more acres.
Compared with other marketing spend, this can be a highly impactful way to increase sales.
Offer Some Certainty with an Outcome Guarantee
Uncertainty is a natural part of farming. The last couple of years have been particularly challenging in that regard. But retailers aren’t completely at the mercy of the weather and international relations.
With tools like an outcome guarantee, you can offer farmers some certainty about harvest in exchange for an upfront investment in specific crop inputs – and stop “hoping for the best” as your main sales strategy.
For more information on how to set up a mid-season offer that suits your customers and the products you offer, get in touch. We’d love to help you see what’s possible.