Tuesday, April 8, 2014

I Seem to Have Lost a Customer Someplace!

by John Berry, Extension Educator, Lehigh Co.

How much is one customer worth?  How much does it cost the business to lose one customer?  More than you want to know, and probably more than you can measure in real dollars.

Most people only measure the dollar loss of a sale, or how much revenue was lost for the year.  Big mistake.  For openers, multiply that times 20 years.  Losing a customer once could mean they never shop with you again.  And don't even begin to count the people the could have recommended.

The loss of a customer is more than the
dollar amount on one sale.
Then the real losses begin to pile up.  Besides telling everyone in the immediate vicinity, they will tell all their office mates, everyone at the next association meeting, everyone at the next annual trade show and convention, and - if you do a real bad job of recovery or service - report it to people in local media.

The real cost of a lost customer is the different between "cost of lost" and "cost to fix."  Now measure that against the cost of servicing, fixing, discounting or replacing the situation, defect or problem when you first learned of it.  Seems like a pittance compared to the paragraphs above.

The painful part comes when you ask yourself "How did this happen?" "Could I have prevented this from happening?" and "How can I prevent this from occurring again?"

If you have ever lost a customer you aren't alone.  It's not a one person battle.  It's not a one-idea solution.  You need specific facts before any ideas on how to minimize the issues can be formulated.  Start by switching places with the customer.  Try to use your stuff in their environment.  Try to call yourself from their office.  Wear their shoes, and walk around in them for awhile.  Ask your customer brutal questions.  The ones you don't want to hear the answers to.

Get closer to the customer's "real" life.  Meals and ball games can reveal relevant truths that arms length relationships won't uncover.  How do you do this with your existing budget?  You can't.  You must have a "win back" budget.  Funds that are earmarked to fix problems, create resolve, and build goodwill.

When you get back in - thank the customer for dumping you.  Tell them that without the loss of their business, this innovative solution would never have been possible, and you are willing to offer some (major?) concessions for a re-try at the business using these changes.  Notice we have not apologized or groveled.  Customers are less interested in apology than they are in great ideas, recoverable actions, and solutions to their problem.

And finally, get real.  Know the difference between a problem and a symptom.  Losing customers is a symptom.  Poor service, poor product, late delivery, or back-orders are problems.  Remember, it never costs as much to fix the problem as it does to not fix the problem.

Wednesday, April 2, 2014

Choosing Social Media Tools for Your Business


by Sarah Cornelisse, Sr. Extension Associate, Dept. of Agricultural Economics, Sociology, and Education

"What social media should I use for my business?"  This is an often-asked question, and unfortunately, not one that is easily answered by an outsider.  The appropriate social media tool(s) for your individual business will depend on a number of factors, several of which I discuss below.

What are your goals?  Any time you implement the use of a tool, you should have an identified goal that the tool's use will help you in reaching.  The same goes for social media tools.  It is easy to post lots of content to one or more platforms without accomplishing anything.  Keep in mind also, that it is entirely feasible to identify the use of more than one social media tool to accomplish one or more goals, such as using both Facebook and YouTube to share videos of recipe preparations.

Who do you want to connect with?  Are you looking to connect with consumer, businesses, colleagues, women, techies, etc.?  Different tools attract different types of users.  You'll want to research the demographics of the users for the different social media tools you're considering.  For instance, women are the primary users of Pinterest, while connecting with industry peers may call for using Linkedin.

Where are your competitors?  Some degree of weight should be placed on what social media tools your competitors are using.  What platforms are your direct competitors most active on?  If enough of your direct competitors, or businesses similar to yours, are active on a particular platform, it's likely that is where you should be as well. 

What type of content do you want to share?  Typically, the type of business you operate and the products/services you sell, dictate the type of content, but not always.  Different social media platforms lend themselves better to different types of content.  Photos and recipes are great fodder for Pinterest.  Facebook handles a variety of content types, but photos and video are more likely to be shown in the newsfeed of followers.  To tell stories, educate, or discuss industry related information, blogs are likely preferable.

How do you want to engage?  You may have a preference for how you would like to engage with consumers and followers.  If you enjoy ongoing conversations, can be "connected" a great deal of the time, and are not concerned with followers finding past posts, you may prefer using Twitter. 

Track analytics.  If you're using more than one social media tool, study the analytics that each provides on your activity.  You may find that your followers are conversing with you, sharing your content, etc. more often on one platform than on another.  If that's the case, you'll want to focus your efforts more on the tool that is generating this "return."

Answering these questions should lead you to identify the most appropriate social media platform(s) for your business.  Remember, you don't need to be everywhere.  It's fine to start out with just one social media tool.  The trick is to start with the right one.


Thursday, March 27, 2014

Do Your Products Meet Your Customers' Values?

by Brian Moyer, Program Assistant, Lehigh Co.

Many times when we introduce our products to the marketplace,we don't always think about how our potential customers will view the product.  We may know how special our new product is, but how do we get that information to our customers?  An example might be trying to sell freezer beef in the local "Penny-Pincher" paper.  Most of that readership are looking for inexpensive purchases and might not respond well to the purchase price of a quarter or half of a beef.  On the other side, if your goal is to be the lowest priced sweet corn producer, an up-scale farmers' market might now be your best outlet.  Those customers might view your product as lower quality simply because you are offering a lower price than your competitors.  In both cases, neither is a good product-place match.

How surveyed consumers were categorized
based on their involvement in "sustainability."
The Hartman Group, who specialize in researching and understanding how consumer attitudes and behaviors lead to purchases, surveyed consumers about their involvement in "sustainability."  They identified four categories - reflected in the image to the right.  The "core" are those who are very involved (recycle, purchase local food, conserve energy, etc.).  The "periphery" reflects those who do not necessarily go out of their way to follow any kind of sustainable practices.

Notice the kind of language these groups use to reflect what they value or what is important to them when making purchases.  Words such as "transparency," "greater good," and "authenticity" are the values of the "core" and "inner mid-level" groups.  It's very similar to the language of the local food movement, so if you believe your product would be beneficial to this group, then think about where they might make their purchases or get their information and center your marketing efforts and materials on their values and shopping habits.
Values expressed by those surveyed regarding
their involvement in "sustainability"

"Price," "convenience," and "comparability" are words that are used here by the "periphery" group and most closely resemble what we might see in box stores and grocery stores.  If your product's benefits meet those customer needs then you will need to capture this group where they get their information and where they shop.

Now, think about where you think your product falls in here and does your promotional materials and language reflect that of the group of consumers you are trying to reach.  Let's say you raise grass-fed beef.  Maybe your customer base will lie within the "core" and "inner mid-level" group of consumers who are interested in a sustainable lifestyle and would most likely purchase your beef products.  You need to show how authentic your products are and that your values of farming reflect their values when making food purchases.

How some consumers may prefer to envision their
beef - "faceless" - yet still knowing how they were raised.
The picture to the right demonstrates some of those values that the customer may envision when purchasing your grass-fed beef.  The customer wants a high quality eating experience from beef raised on beautiful pastures.  The one thing you will notice missing from this ad is pictures of cows.  We as farmers are greatly interested in our animals, but the customer may not be.

Whether we share the same values as our customers isn't as important as making sure our products do.

Thursday, March 20, 2014

"In Market" - Getting Ready for the Farmers' Market Season

by Brian Moyer, Program Assistant, Lehigh Co.

In my great-grandfather's diary of his farming activities, you will find entries for most Saturdays that say "in market."  One can imagine what it took in the late 1800's to get ready to be "in market."  It might be a bit easier to get to market today, but anyone who sells at a four-hour once-a-week farmers' market can tell you, the preparation takes much longer.  Winter is usually the time for planning the growing season.  But, as we all know, growing it means we also need to sell it - so winter is also a good time for planning our market season.

According to the USDA Agricultural Marketing Service (AMS), farmers' markets have grown by 3.6% from 2012 numbers of 7,864 to 8,144 in 2013.  Pennsylvania has seen a 30% growth in the number of farmers' markets across the state since 2010.  The opportunity this presents is that farmers basically have their pick of markets they want to participate in.  That also means that the customer also has their pick of what markets they wish to patronize.  Market patrons will want to buy from vendors who's products appear to be clean, high quality, clearly priced, and with attractive displays.  You can greatly increase your market day bottom line by taking some time to evaluate how you plan to sell your products at the farmers' market.


Here are some things customers (and market managers) will expect to see from you:

  • Signage: Clean, colorful, and consistent signage is a must.  Customers do not want to have to ask you the price of your produce.  Customers are already making an effort to step outside of their shopping routine to come to the market and purchase something.  Don't make them work any harder than they have to.  Signs should have:
    • Clear hand writing
    • Price
    • Name of the item
    • What's special or different about it.  Is it an heirloom variety? Special flavor? Hot, mild, or sweet?
    • A white board or chalk board is a nice and simple way to let folks know what is in season this week or what is on special

  • Canopy: Have a good quality canopy and always use it, even on good weather days.  A clean canopy looks professional.  It is your "store."  It also helps keep your products clean and cool which will go a long way in maintaining the quality people expect to find at a farmers' market.
  • Displays: Rule number one; no products on the ground! No one really wishes to purchase food that sat on the ground, even if it is in lugs or boxes. Set them on something.  The general rule is, displays should be between knee high and shoulder high.  Give some though to how you will draw customers into your booth space.  Once they are there, how do you want them to move through your booth?  Say you have a ten foot by twenty foot space and you are selling produce. Maybe you will want to locate your register at one end so they will have to pass by every item you have to offer.  You may want to place staple items like sweet corn, tomatoes, and potatoes at one end with more "impulse" purchase items closer to the checkout area.  One last item, make sure to keep your displays looking full as items sell throughout the market day.  If an item no longer fits in a bushel basket, make sure you have some smaller containers with you so you can transfer the remaining items to the smaller container to maintain that "full" appearance.
  • Tell Your Story: One of the attractions at a farmers' market is you, the farmer.  More and more consumers want to know where their food is coming from and the people who grow it.  Some things to consider using to help you tell your story are:
    • Framed poster board with photos of your farm
    • A logo that is on all your signage and farm sign
    • Brochures that tell your farm story
    • Copies of any good articles that were written about your farm
Last, but not least, make sure you have all your permits that you many need to sell at market.  Depending on what items you are selling, you might be required to have a permit from the local, county, or state health department (Pennsylvania Department of Agriculture).  To find out what, if any, requirements you will need to follow, go to www.eatsafepa.com.  There you will find downloadable documents and requirements for selling at farmers' markets.

It is well worth taking time now to have all these items in place so you will be ready for your market when the season begins rather than trying to get all your market items and permits together one week before the market opens.  Waiting until the last minute may delay your ability to go to market if you have to wait for your permit.  Needless to say, you will also miss a lost of sales!

"Prepared for market" was usually the Friday entry in my great-grandfather's diary.  If you take the time and do your preparation, your "in market" experience can be even more rewarding.

Wednesday, March 12, 2014

When Business Plans "Take on a Life"

by Winifred McGee, Extension Educator, Dauphin Co.

At the Food for Profit workshop last week, I talked about researching and writing a business plan (as opposed to the "mental plan" for which many entrepreneurs settle).  After listening to me for a number of minutes, one of the participants asked: "How long should you plan? Couldn't trying to create "the perfect, complete plan" keep you from ever starting your business?"  What a good question!

Planning ahead is great -
but you need to get off the ladder to live!
Since my days as a Small Business Development Center consultant, I have believed that having written goals, objectives and strategies is essential for having a successful business.  However, writing the plan is just the tip of the iceberg.  If you want to have more than a "great novel," you have to progress from planning to action!  In Extension's food and farm business planning class, Your Future in Focus, we discuss 4 M's: Mapping, Move, Monitor and Modify.  The idea is, while having a plan is a great thing, it is not an end in itself.  The planning process includes a regular checkup of results, evaluation of the business' health, and revision where warranted.  Those other three M's are just as important as the initial mapping process to have a vibrant venture.

The SBA Blog Spot has a great article by Tim Berry, Founder and Chairman of Palo Alto Software and bplans.com that addresses this very subject.  Mr. Berry says that the assumptions in our plans can change very quickly in today's world, so we should see a business plan as a tool that we manage while running the business.  He suggests the following steps:

First, do a plan that has concrete specifics you can track.  Include not just the obvious numbers for sales, costs, and expenses, but also other manageable numbers like web traffic, visits, leads, presentations, calls, downloads, likes, mentions, updates, and whatever else drives your business.

Second, set a regular schedule for reviewing plan vs. actual results.  Have a monthly task to look at progress and identify problems.

Third, learn to distinguish problems of execution from changed assumptions.  If assumptions have changed, then the plan should change.... Usually, unexpectedly good results are a good reason to look at shifting resources towards the positive; unexpectedly bad results are a good reason to shift resources to correct a problem.

So, should you have a plan? Yes - absolutely.  Should business planning BE your venture? Not at all!  To do that would be similar to opening the promotional materials for a cruise, reading them, looking at the pictures and saying "Now I've been to the Bahamas!"  If we really wanted to see the Bahamas, we'd read the literature, talk to others who have visited there, contact a travel agent, and get a great wardrobe to wear on-ship as preliminaries - the point is to get on the boat!  And, having taken the trip, consider what you'd do differently in future trips.  In much the same way, business planning is not the end, but only a means, to a great (ad)venture.

Tuesday, March 4, 2014

What Retail Produce Marketing is About!

by John Berry, Extension Educator, Lehigh Co.

The incentive to consider retail marketing is obvious.  The closer you can get to retail customers, the more retail dollars go in your pocket.  However, it's not all profits.  If you sell retail, you will be providing services the wholesalers, packagers, distributors, and retailers typically provide.  As we approach another fresh produce marketing season, let's review some of the key details of operating a direct-to-consumer marketing enterprise.

Visual Display
Proper presentation of products increases sales.  Shoppers receive a positive impression if products are top quality, clean, and tastefully displayed.  Remember that high-quality products are the strength of produce markets!

A lively, well-stocked produce department entices the customer to buy and increases sales and profits.  Think of yourself as an artist, with several palettes of colors to choose from: visual - color, contrast, shape, size; smell - herbs, fruits; and touch - soft or firm.

Make displays that look like they came from the farm.  Wooden crates or boxes work well.  Baskets are beautiful; slant them toward the customer.  Even an attractive tablecloth can add to your sales.  Stair stepped displays create an array of depth, color, and texture; however, they may not be easy for the customer to reach or easy to restock.  Utilize vertical space by hanging products from slings or hangers.

Merchandising
"Pile it high and kiss it good-bye!"  Full, well-stocked displays make customers want to come back and get it.  Customers don't like taking the last of something from a bare, picked-over display; they want to choose the best.  Remember to not overstock to prevent the risk of crushing tender items on the bottom.

Make it easy for the customers to reach for the produce.  Your display should be no more than an arm's reach in depth, and between knee and waist level in height.  Don't put your merchandise on the ground.  Instead of placing your boxes flat, try slanting your produce to give the customer a more pleasing visual sense of your product.

Excellent example of using color and texture with a wide
product mix.  Everything I need to make a delicious side
dish for my dinner.
Organize products in related groupings.  Such groups might include dessert items, salad items, cooking vegetables, apples and pears.  Displaying compatible products together serves as a suggestion for additional purchases and uses of the products.

Research shows the use of color and texture greatly enhances eye appeal.  People enjoy food with their senses, so displays that are eye appealing tend to increase purchases.  Mix a row of radishes between the mustard and kale, tomatoes between the lettuce and cucumbers, or intersperse peaches with blueberries to create dazzling color displays.

Suggested good color groupings:
  • Red and yellow or green
  • Light green with yellow or purple
  • Dark green with red, orange or yellow
If you don't have a lot of variety, create a color mixture with flowers or signs.

Price Signs
Prices should be clearly marked.  Most shoppers are in a hurry and will not search out the manager to find out how much something costs.  Include a few product features and perhaps menu suggestions on signs to stimulate your buyers' thoughts on how to use the item.

Great use of limited sign space to describe the product itself,
how to store at home, and possible uses.
Final Thoughts
Restock displays frequently, rotate products as needed, and remove damaged, decayed, or unsaleable products promptly.  Unsightly produce left on your stand not only detracts from sales, but it leaves the customer with the notion that you sell rotten produce.  If you'd buy it, leave it; if not, pull it out.

Friday, February 28, 2014

Celebrate National Ag Day!

by Michelle Kowalewski, Extension Educator, Susquehanna Co.

March 25th is National Ag Day, a time when producers, agricultural associations, corporations, universities, government agencies, and countless others across America gather to recognize and celebrate the abundance provided by American agriculture.

This year's theme for National Ag Day, sponsored by the Agriculture Council of America, is "365 sunrises and 7 billion mouths to feed."  American farmers are working harder than ever, and it shows!  Today, each American farmer feeds more than 144 people.  And, the need for food produced in the United States is dramatic.  Agriculture is the nation's #1 export and vitally important in sustaining a healthy economy.


As the world population soars, there is even greater demand for food, fiber, and renewable resources produced in the United States.

The National Ag Day program believes that every American should:
  1. Understand how food, fiber, and renewable resource products are produced.
  2. Value the essential role of agriculture in maintaining a strong economy.
  3. Appreciate the role agriculture plays in providing safe, abundant, and affordable products.
  4. Acknowledge and consider career opportunities in the agriculture, food, fiber, and renewable resource industries.
Ag Day is a good time to reflect - and be grateful for - American agriculture!  It's a teachable moment.  Consider holding your own Ag Day event, write a letter to the editor about the importance of agriculture, create a public service announcement, or even reach out to your local schools and educate youth about agriculture.  We are finding more and more that consumers want to know where their food comes from.  This event creates a great opportunity to open the door to consumers in educating them about the farmers that produce the food they eat.

2014 marks the 41st anniversary of Ag Day, so make it a tradition in your community and use it as a marketing and promotional tool for your agribusiness!