There’s a familiar math problem for manufacturers of new crop inputs: provide farmers with relevant information about your product and how it can improve their harvest or reduce their costs, and about 2.5 percent will eagerly give it a try. These are the innovators.
With a little more convincing – and perhaps when they see the innovators’ success – another 13.5 percent (the early adopters) will come aboard (Figure 1).
Once you’ve brought those two groups in as customers, though, there’s a chasm to cross before bringing anyone else onboard.
Convincing the remaining 84 percent of your target market to purchase your product requires a different approach from what worked for the first 16 percent. And while the specifics will vary from one product to another, one strategy that’s universally helpful is to minimize the risk associated with embracing your product. In this piece, we’ll explore why that is and how agricultural manufacturers can achieve it.
We’re Wired to Fear Loss (Not Get Excited About Gains)
Most humans (with the exception of maybe the 2.5 percent of folks considered “innovators”) are hardwired to fear loss. This phenomenon, called “loss aversion” means that, as a species, it’s more painful for us to lose something we have than to gain something new of equal value.
A farmer considering whether to purchase a new fertilizer is more motivated by the potential decrease in yield that an unknown product might cause than by the potential yield increase that the product promises.
What’s more, loss aversion increases when the stakes of a decision get higher. Convincing a grocery store customer to try a new flavor of Oreos is one thing; it might be less delicious than the customer’s old favorite, but they can buy their favorite again the next time they shop. When you’re asking farmers to try a new product that will impact a season’s worth of revenue, the hill you have to climb is much higher because the associated risk is much greater.
How to Minimize the Risk of Change Associated with Trying New Ag Products
So how can manufacturers of innovative agricultural products reduce the risk they ask farmers to take on? Historically, they’ve turned to things like discounts and rebates – and those types of promotions can work in some situations.
But keep in mind that, while they can reduce the loss associated with purchasing a new product (i.e., by asking the farmer to part with less of their money to get the new product in their fields), they don’t address the larger concern of what happens at the end of the season.
This is where a warranty can come into play.
Our Crop Plan Warranty product, for example, makes it possible for manufacturers to offer financial compensation at the end of a growing season to any farmer that uses their product as directed and does not enjoy the projected yield.
In other words, it reduces to near zero the risk associated with trying a new product.
Manufacturers can sell direct to retailers with the warranty already baked into their product or collaborate with retail partners to attach the warranty to a product or a full-acre prescription. (In fact, there are several other ways to use a Crop Plan Warranty as well – read about six of them here.)
To see what this looks like in action, let’s take a look at the case of Phospholutions, which manufactures RhizoSorb, an alternative phosphorus fertilizer that optimizes phosphorus use so farmers can use less fertilizer without impacting their yields.
Case Study: How Phospholutions Drove Adoption of its Fertilizer by Minimizing Farmers’ Risk
As you can imagine, Phospholutions faced an uphill battle convincing farmers to use RhizoSorb. Because it uses technology that makes phosphorus more efficient, it requires farmers to use less fertilizer than traditional products. But farmers associate less fertilizer with lower yields.
To overcome farmers’ hesitation, Phospholutions added a Crop Plan Warranty to its product: if farmers used the product as directed and didn’t achieve predicted yields, they would receive financial compensation for the difference. Craig Dick, Phospholutions’ Vice President of Sales, said the warranty “was a key element in the growth of RhizoSorb adoption for Phospholutions.”
Crucially, though, Phospholutions didn’t rely solely on the warranty to win over farmers. In fact, they trained their sales reps to mention the warranty only after they’d laid out the agronomic and economic benefits of the product, as a sort of icing on the cake.
This strategy proved effective. It let the manufacturer illustrate to retail partners – and ultimately farmers – that their product made sense in terms of unit economics, mode of action, and impacts to other parts of their operations first, and only then mention that farmers could, thanks to the warranty, try it virtually risk-free.
With support from the Crop Plan Warranty, Phospholutions’ initial rollout has led to farmer adoption in more than 12,000 acres.
Cross the Innovation Adoption Chasm by Helping Farmers Eliminate Risk
To be clear, getting widespread adoption of any new product requires an ongoing, multifaceted effort – marketing, sales, education, branding, positioning, messaging, and potentially product iteration all have roles to play.
As part of that larger universe of persuasion tools, digital products like Crop Plan Warranty can help manufacturers cross the chasm between those most eager to embrace innovative solutions and the majority of farmers who prefer a wait-and-see approach.
If you’re curious about how Crop Plan Warranty might help you drive adoption of your most innovative agricultural products, get in touch. We’d love to talk you through potential applications.