Posted by David on January 11, 2012 under Tools to Increase Farm Sales | 
Farm Price Key
Who determines what your farm products are worth? Whether you sell produce, pork beef, chicken, herbs, grains, or any other farm product; someone attaches a price to it.
In my last post I asked the question “Who sets the price for your farm products?”
1. Ultimately the consumer decides what they will pay. There isn’t much you can do about supply and demand. People only have so much money and other statements that focus on the customers ability, or willingness, to pay your asking price.
2. I set my prices. I know what I have to have to make a profit and even though it may reduce the amount of potential customers I can market my farm products to, I have to be in control of my prices. People can come up with the money to buy what they really want to buy. There are many factors to consider other than price.
I want to look at the second statement today. “I set my prices”
This mindset is where you study the true cost of producing your product and getting it to the marketplace. Don’t forget the cost of getting your product into the consumer’s hands. In farming this can be a huge cost.
Once you figure out what your cost is, then you look at what similar products cost in the market you’ll be focusing on.
This is where it can get tricky. Let’s use eggs as an example. You might look at a discount grocery chain and find they sell a dozen for 99 cents. But on the other hand you might check at higher end shops or even your local farmer’s market and find them going for three bucks per dozen.
Why the huge price gap?
Is it because the cost of production is less?
For the discount grocery the answer is yes! Add to that eggs are considered a competitive price item at most stores. That means they are checking prices at all the competitors and keeping their prices very close to what others are selling at that week.
The big boys know that if their eggs are significantly higher than the other stores in the area many people assume everything in the store is higher. Same for bread, milk, butter and a few other core items.
The bottom line is they try to keep these items as low as possible because the other side of the coin is if they are as low, or lower, than the competitors, folks assume they have good prices on other products. They also know if they can get you in the store to buy cheap eggs you’ll probably grab a few other items strategically placed throughout the store.
My point is pricing is a science.
If pricing is a science for the big boys it should be a very important component of your farm business.
Don’t assume lower prices are always the best option.
For eggs I keep mine down in the middle of the price range at around two bucks. I use eggs much like the grocery stores. Draw new customers in with eggs and introduce them to other products such as pork, beef and chicken.
I blogged about this here.
On the other hand I have created a few specialty products.
What do I mean by specialty products?
Create products that are higher quality, different, exclusive etc.
For us at Spring Hill Farms the first product we came up with were holiday hams. I’ll never forget being at a relatives home for Christmas one year and seeing the price tag on the famous name brand ham we were eating. I about fell over! It was $77.00.
I remember thinking “this thing isn’t half as good as our hams.” The next year we introduced hams for Thanksgiving and Christmas as a test and sold out in a week!
Since then I quietly introduced a ham that was only for the affluent. These hams are very limited and we have never advertised them publicly.
The pigs are raised on a special diet, they are a special cross breed of pig and we also package them in a way that says “this is one of a kind.” Along with that they are cured and smoked in a special way. We charge a premium for them and sell out every year.
I deliver these hams every year to a few of the “mansions on the hill” around central Ohio. I have even carried a few to the top of high rise buildings for the CEO’s of large companies.
I posted on Facebook – Price may in the eye of the beholder, but it is in control of the provider
We had some lively discussion about the idea but this is what I was referring to. Look for ways to produce a product that commands a high price.
You’ll always have to factor in price points for the market you’re going after. But don’t forget there are plenty of families who have made food a higher priority than the commodity junk you’ll find down at the local discount grocer.
Those are the people you’re trying to reach.
If you are constantly trying to be the lowest or as low as everyone else pretty soon you may find yourself tempted to cut cost on the production end by short cutting quality.
When that happens my friend you are getting dangerously close to being just another commodity farmer. History shows us that the mindset of “faster, fatter, bigger, cheaper” is what got us into the mess farming is in today.
Until next time…
Get my latest ebook The Secrets of Selling Your Farm Products Revealed Learn how to position your products so price isn’t an issue.
Posted by David on October 10, 2011 under Tools to Increase Farm Sales |
Who sets the price for your farm products? That’s the question I have been asking myself and others lately. The response has been enlightening. It looks like there are two foundational beliefs among farm producers.
1. Ultimately the consumer decides what they will pay. There isn’t much you can do about supply and demand. People only have so much money and other statements that focus on the customers ability, or willingness, to pay your asking price.
2. I set my prices. I know what I have to have to make a profit and even though it may reduce the amount of potential customers I can market my farm products to, I have to be in control of my prices. People can come up with the money to buy what they really want to buy. There are many factors to consider other than price.
Let me say right up front; what I’m about to share isn’t to be considered as an absolute answer to these questions. I want to challenge your current beliefs about pricing when it comes to your farm products. I hope to cause you to think outside the box and reap bigger profits because of it.
Let’s look at the belief that the customer sets the price or supply and demand etc.
Supply and demand is definitely a factor in producing a product to sell from your farm. If you start out trying to sell something that has little demand or more supply than demand, you are truly destined for a price war with other producers. IF and it’s a big IF, you can’t show consumers why your product isn’t the same as what is offered by other producers it will come down to price.
This is why you see folks going to several grocery stores to buy food at a lower price. You know they just past by the same product at the last store but their perception is the next store has the same product at a lower price.
That’s the strategy behind sales, loss leaders, buy one get one free, or whatever the latest price scheme may be at the local grocery.
If you are selling on price as your main benefit to your product you are probably fighting a losing battle. Somebody will sell it cheaper.
Think about this: If you’re not the best price, then how powerful is to say to a customer “we are the third best price in town.”
When you’re selling food as most farmers are, it’s tough enough trying to position your product as unique. So it’s imperative to move away from price and move towards something else.
This one of several reasons why I don’t sell at farmers markets. You are either the only one offering a certain product or you end up selling on price.
Having the lowest price is completely unsustainable as far as advantage in the market place. Only the poorest of people have their choices controlled by lowest price – and I’m not looking for poor customers.
So if you can’t have cheapest price and you shouldn’t have the cheapest price, AND the second cheapest offers no real advantage to the customer, stop worrying about where you are on some price ladder.
Instead concentrate on creating a marketing system like the one outlined in my latest ebook, The Secrets of Selling Your Farm Products Revealed and delivering an exceptional experience and service to help make price seem almost a non issue.
If you set prices so you can maximize your profits this gives you more money to provide better service and concentrate more money on acquiring customers.
Both of which are crucial to building your farm business.
Next time I’ll take on the statement that I set my prices. I know what I have to have to make a profit and even though it may reduce the amount of potential customers I can market my farm products to, I have to be in control of my prices. People can come up with the money to buy what they really want to buy. There are many factors to consider other than price.
Until next time…
Posted by David on September 30, 2011 under Marketing |
I have never sold my farm products at a farmer’s market. I talk to farmers who do and they have been saying for some time now that business isn’t any better this year than last or some have said sales are lower for them.
Several have complained of more markets opening up in the town or city where they are a vendor and I’m sure that has had some impact.
According to the USDA 1,000 new markets opened in 2010. Divided by 50 states that is an average of 20 per state!
A New York Times Article on August 20 2011 has many farmers complaining and some actually saying they are not making money anymore at markets. Bigger cities are opening up markets too close to one another. The short of it is, many markets are becoming saturated.
Stacy Miller, executive director of the Farmers’ Market Coalition, a nonprofit organization that supports farmers’ markets, said that the growth had been a boon to most communities and that many places still lacked markets that connect residents with fresh, healthful food.
But, she acknowledges, some markets are saturated. One reason is that more community groups want to open farmers’ markets without doing “sufficient planning to ensure the demand is keeping up with the supply,” Ms. Miller said.
One farmer in the New York Times article stated his sales had been cut in half over the last five years.
According to a study by Oregon State University, 62 farmers’ markets opened in Oregon from 1998 to 2005, and 32 failed.
I sell pork, beef, and chicken and I know most every local farmers market has several meat vendors. The bulk of them are the slaughter houses/butcher shops. They have found the markets as a great way to bolster sales.
This is a sign of things to come. Sooner or later, the farmer’s market is not going to be a viable marketing venue for many small farms.
What can you do?
Start working now to establish other more profitable ways to move your products. My business continues to grow and I am confident it will continue no matter how many farmers markets open up.
Until next time…
Get my latest ebook The Secrets of Selling Your Farm Products Revealed and have customers coming to you instead of competing at farmers markets for the customers who come through.
Posted by David on June 23, 2011 under Tools to Increase Farm Sales |
A bold prediction: An increasing % of the meals eaten in the coming years will:
- Be smaller than they are now
- Include more locally grown food (vs. that from industrial agriculture)
- Contain more vegetables
- Have less sugar
- Be less likely to include a large meat entree (e.g. steak, hamburger, pork tenderloin, etc)
What’s my basis for this-given the overwhelming evidence that folks are doing just the opposite right now?
- The trend-setting baby boomers began turning 65 on Jan 1. As folks age (I speak as one of them as I became 65 last year) their dietary preferences change because:
- The future (declining health, retirement homes and death) can no longer be ignored. So steps likely to extend their healthy years begin to weigh heavily into their choices. That means less soft drinks, less alcohol, less fatty foods, more vegetables and smaller portions.
- They want something different (one reason they are so keen to travel in retirement). The foods they ate previously (hamburgers, pizza, big steaks/tenderloins and slabs of chicken or turkey) may still taste good but it bores them. “Been there, done that” is a common phrase for these folks.
- They can afford more expensive food choices. I know the recession damaged many folks’ retirement funds but many are still well heeled and their kids (now age 25-40) are no longer as dependent upon them. So when they eat at restaurants and when they buy food from stores, taste, health and perceived quality matter more and price less.
- Taste buds decline in capability with age. So the search for flavorsome food (often associated with smaller portions) will increase.
- For every action there is always a reaction. The obesity epidemic and the food choices that have produced it will, in time, produce an opposing response. We can expect an increasing % of people who quietly increase their resolve to eat less, eat better and exercise more.
This reactive trend will appear first in the areas in which a higher % are more educated and more affluent.
Example? In late April I was on Martha’ Vineyard in Massachusetts (for a farm event not a vacation) for 2 days. My hosts took me out to breakfast. The little restaurant’s ambiance was ordinary and the prices not that high (it was off season). But the portions were noticeably less than breakfasts offered in 99% of Iowa restaurants. The flavor was excellent. Much of the food was both locally sourced (and attributed).
- The costs of the obesity epidemic will become ever more clear. A pressure point will be its impact on Medicare and Medicaid-all funded by we taxpayers. Expect, in time for taxpayers to pressure the government to take more active steps to prevent it-just as was done for smoking. As with smoking the producer groups whose foods most contribute to obesity and excess weight will oppose it-and they are well organized and well-financed. But over time the huge cost to the taxpayer to fund the costs of obesity and excess weight will force the government’s hand. Already there is talk of a tax on sugar-laden drinks. That’s the thin edge of a long-term trend.
So who will be the winners?
- Folks who produce quality food and sell it locally in stores and farmer’s markets.
- Sheep (I’m biased here) and goat producers-because the smaller meat cuts that they offer have for decades suffered in competition with pork, beef, chicken, and turkey. This will gradually change-particularly for those producers who focus on increasing the eating quality of their lamb and chevon (goat meat).
Best Wishes To You All,
Stan Potratz-Premier 1
Posted by David on May 24, 2011 under Marketing |
A wise person once said this: “You either have to be first, best or different.” I couldn’t agree more when it comes to small farm direct marketing. Would you like dynamite results in your farm sales? Work on all three!
Let’s take a look at these three rules a bit closer.
Rule #1 Be The First
Always try to be the first when it counts most. You can be the first to bring a new product to the market or the first to catch a mistake on a customer’s order. Either way it’s good to be first!
Ask yourself how many times am I first? How can I be first more often? Evaluate your farm business and determine where being first matters the most. Then work to accomplish it.
Rule #2 Be The Best
Always, always strive to be the best you can be. The best source of a certain product, the best at educating customers, the best display at the farmer’s market. Whatever it is, try to be the best. Being the best you can be makes you feel better and causes potential customers to be drawn to you. I didn’t say perfect – I said best. People appreciate it when they can see you are trying to be the best in your field. They want to do business with you.
Rule #3 Be Different
I teach this constantly because it so essential to your farm. Figure out what makes you different from any other farm or farmer. Can’t think of anything? You are doomed from the start for mediocrity.
If you are no different from any other place customers can buy your products then the only thing you can focus on is being the lowest price. That is a no win situation for you AND the customer. Think about it, you will end up out of business and the customer will have to go to the farm who charged enough to stay in business.
Take a good look at these three rules and focus on them in your farm business. You’ll be glad you did and so will your customers.
Until next time…
Get David’s special FREE report “Three Key Elements of Small Farms – Building a Successful Foundation.” Click Here for your free report before your neighbor does!
Posted by David on May 2, 2011 under Tools to Increase Farm Sales |
I have identified three key elements that are critical to success if you plan to direct market your farm products. In talking to hundreds of farmers it became obvious to me that most of them do not have these three key elements in place to insure that they succeed.
Time and time again I’m asked ‘How did you grow your farm sales so quickly?’ Although these are just the beginning of building your farm sales, these three foundational principals are the pillars that you can build a solid, fast growing, small farm endeavor.
These principals work no matter what you’re selling!
Think about it…you can’t build much of anything without a good, rock solid, foundation. If you’ve ever watched a building go up it seems like it takes forever from the time the crews first show up and start excavated to the time you actually see some thing happening.
And the higher the building is going to be, the more time it takes to get the foundation work competed!
Suddenly one day you drive by and “WOW” that building is going up fast! Once the foundation is compete it seems to go up in a couple of days.
Your small farm is the same way…
If you spend some quality time getting the foundation designed and completed, the sales will spring up and you’re off and running.
- Focus your farm sales with laser accuracy.
- Set your small farm apart from others no matter what you sell.
- Learn to communicate in a way that gets sales and repeat customers.
- Get a fair price for your farm products and the customer see the value.
- Much, much more!
I wrote a three part report that will help you get your small farm foundation dug down into bed rock and from there you can build it as high as you desire.
Click here and get your free report. That way you can have a decent start on your farm sales foundation before your neighbor see this…
Posted by David on April 12, 2011 under Tools to Increase Farm Sales |
Action always generates inspiration. Inspiration seldom generates action. These are words to live by for your farm business.
Don’t wait to get inspired before you take action. Take action and you’ll become inspired! What system do you have for obtaining more customers? Use that system over and over.
Need more farm income? Don’t wait to get inspired to do something…take action!
The more meaningful action you take the more meaningful results you will get. Don’t just get busy. Busy doesn’t necessarily mean productive.
Take some time each week and determine what action will get you closer to your goals.
Some questions to ask yourself:
What can I do this week to obtain new customers?
What is the best action to take to connect with my current customers?
Who could I contact to ask for a referral or testimony?
What would give my farm more exposure?
Don’t run your farm business based solely on inspiration. Base your business on goals that you can take action on…the inspiration will overtake you.
Until next time….
I explain exactly how to do this and more (minus the website information) in my latest book “The Secrets of Selling Your Farm Products Revealed.” If you’re looking for increased sales and more customers click here to get your copy today.
Posted by David on March 15, 2011 under Marketing, Tools to Increase Farm Sales |
The mind set with which you approach your small farm sales is critical to your success. If you approach selling direct from the farm as a traditional retail operation it will require a completely different set of parameters to operate by than if you approach your business as a direct marketing endeavor.
I’ll confess right up front I am biased towards direct marketing. I posted a while back as to why I don’t sell at farmer’s markets.
To me they encapsulate the retail mindset of selling farm products. You set up and essentially wait for customers to show up to buy.
I realize that farmers can do very well at these type of venues, but I see a huge amount of risk and loss of control. Take for example the farmer’s market closes up shop. Where do all the customers go? How many of them do you have a way to contact? Do you have a relationship outside the market with them? If you answered “no” to any of those questions you will take a big hit if that ever happens. Risky and not much control over what happens I say!
Contrast that with direct marketing of your farm products. You have a large diverse group of people that you actively initiated a relationship with.
Wouldn’t you rather have a large group of customers that isn’t dependent on them getting out of bed and coming down to see you at the market?
I contend that in some ways we are training the customers who want to buy off the farm to remain in the retail mindset by how we market to them.
One of the most common questions I get is customers trying to figure out the system by which I sell products! They ask about my attendance at local farmer’s markets then about coming to the farm to purchase.
They are in the common retail mindset. I understand why. It’s the most common way to buy food. Once they experience how we market, they love it!
We encourage folks to come to the farm and visit, but discourage them from thinking it how we sell products. Farm gate sales are fine, but just as with the farmer’s market you are waiting on someone to come by and spend money.
I would have never grown my sales to level that they are so quickly by waiting on someone to stop by the farm or a farmer’s market!
That’s the retail mindset.
In speaking with farmers I think the main reason they gravitate to this type of marketing is because it’s what they know to do.
Let’s face it…the question on every bodies mind is:
Where can I find customers in significant numbers without using these venues?
Good question!
Since I have never sold at traditional farm venues I can only tell you how I’ve built my business. These steps are simple, but not always easy.
Figure out what your U.S.P. is. That’s your unique selling proposition. Why should people buy from you? Do this first. It helps you focus your efforts where they make the most impact.
Connect with I call “people of influence” to try your products. This was the second step I took when I started selling direct.
Create a system to glean referrals from your current customers. A high percentage of my new customers are from word of mouth advertisers – the best, least expensive, kind of advertising.
Have a system in place to get testimonies from your current customers and incorporate them in your materials.
Consistently use a system to identify and obtain new customers. I adapted a method from another business I owned that works like magic.
Find ways to make it easy for your customers to pay you. I collect payments automatically which makes it much easier for me and the customer to do business with my farm.
Develop a website and learn to drive traffic to it. This took tons of time and learning, but I now have a significant amount of internet customers. (a whole subject in itself -more on that another day.)
These are some of things I have done to build my farm business. I’ve never used a farmer’s market or had a wholesale account because I haven’t needed to! I believe farmer’s markets are a viable way to market your products and some of these techniques would work for them. For me, I like spending time with my family on Saturday morning.
Until next time…
PS- I explain exactly how to do this and more (minus the website information) in my latest ebook “The Secrets of Selling Your Farm Products Revealed.” If you’re looking for increased sales and more customers click here to get your copy today.
Posted by David on March 10, 2011 under Marketing, Tools to Increase Farm Sales |
My last blog talked about confirmation questions. These are questions that open an interview. The next type of question we’ll look at is the New Information question.
This type of question enables you to get more details about the prospects required results.
In the confirmation question stage I asked the question; “You mentioned on the phone you were looking for 100 % grass fed beef, is that still the case?”
I can follow that up with a new information question such as:
“What’s happening in your current situation that you decided you wanted to talk to me about our beef?”
This gives the potential customer the opportunity to give you their reasons for wanting to talk to you. They might respond with something like ” Well we watched a documentary about how conventional beef is raised and we were shocked.”
Or, “A friend of ours recently had us over for a cook out and they served grass fed beef. We were impressed with the flavor and they told us some of the health benefits.”
These type questions are great for getting the information you need to find out what the potential customer’s reasons are for buying.
Many times you can start new information questions with who, what, when or where.
“What’s been happening…?”
“Could you…..?”
This is better than simply saying “tell me more.”
Asking questions should be natural and not feel to the prospect that it’s an interrogation. If that begins to happen then the prospect closes up and you can’t get a sale if you don’t know what result they are looking for.
That’s the old type of sales. The dog and pony show where you sit and recite all the features and benefits of your products. You wow them with how great your grass fed beef is and why they should buy it.
However, if the customer tells you what they want out of your grass fed beef and you can show them that it fits the bill…they sold themselves.
That’s a long term customer.
Depending on your sales ability, you can get a lot of sales and never get a long term customer. Pressure and talking up your products will get sales. But you should be looking for a long term relationship.
Long term relationships don’t start with one-sided conversations and pressure. They start with a two-sided conversation and agreement.
Use new information questions to help you find out what the customer requires to purchase from you.
You’ll find these customers buy again and again.
As the old saying goes:
Nobody likes to be sold, but everybody likes to buy.
Until next time…
Posted by David on March 2, 2011 under Marketing, Tools to Increase Farm Sales |
Since the type of “selling” I embrace means not just ramming products down my potential customer’s throat, but more of a search to find where my products might fit for them, I must be an expert interviewer…very good at asking questions…the right kind of questions, to understand the situation. I want to help the prospect make an informed decision about purchasing my farm products.
Over the next few days I’m going to outline several types of questions that must be included in every interview. Each type of question has a distinct purpose. Each are designed to get the specific information you need to determine if a sale can be made.
They have somewhat of a sequence also. For instance one question I’ll be covering is the commitment question. You wouldn’t get very far starting your interview with a question asking for a commitment! The prospect is in no position to make much of a commitment at the beginning of an interview. Except maybe to listen and answer questions!
The first question we’ll cover:
Confirmation questions.
Confirmation questions are used to make sure you have accurate information or understand what type of problem they would like to solve by purchasing your farm products.
An example of one these type questions might be:
You mentioned on the phone you were looking for 100 % grass fed beef, is that still the case?
You mentioned you want to purchase more local foods when I spoke with you at the farmers market, is that correct?
Notice you are confirming what you already know and verifying it to be correct. The prospect could answer to the first question; “Oh no we were interested in pork” The other side of a confirmation question is it can expose inaccuracies in your information.
Imagine in the first scenario you take off telling them about grass fed beef and they want to hear about pork!
Use these type questions to establish that you are all on the same page in the beginning of the interview.
Some more ways to ask confirmation questions.
Are you still looking for ways to buy more local foods?
Is pesticide use a major concern for when buying produce?
You are trying to determine what is going right now with confirmation questions. They help frame the interview around the current situation that is of interest to the prospect.
Use confirmation questions to get the interview started on the right subject and based around where the prospect is focused. There is no need to discuss things that have no interest to the prospect.
This conveys that you realize their time is valuable and you have no desire to spend time interviewing them about products they don’t want to discuss.
Practice this and watch your ability to focus on what they want to hear help you acquire new customers
Until next time….
The Secrets of Selling Your Farm Products Revealed
