Utilizing BOTH Direct Marketing And Indirect Marketing in Agriculture
Small and Medium sized farms are BUSINESSES and must be run as a business. With the plethora of fantastically fun farmers’ markets springing up like wildfire, there is a sense of false security that direct retail sales, by being a vendor at a farmers’ market, is the best and most valuable avenue for generating business profit from your farm.
Smart farm businesses diversify their sales mix to add on other forms of profit generation to minimize the high risk of vending at farmers’ markets while still enjoying all the positive benefits that farm markets bring – direct consumer interaction, community involvement, business and branding exposure, and much, MUCH more!
Let’s start with some defining terms
According to Wikipedia, Sales promotion is one of the four aspects of promotional mix. (The other three parts of the promotional mix are advertising, personal selling, and publicity/public relations.) Media and non-media marketing communication are employed for a pre-determined, limited time to increase consumer demand, stimulate market demand or improve product availability. Examples include contests, coupons, freebies, loss leaders, point of purchase displays, premiums, prizes, product samples, and rebates
Sales promotions can be directed at either the customer, sales staff, or distribution channel members (such as retailers). Sales promotions targeted at the consumer are called consumer sales promotions. Sales promotions targeted at retailers and wholesale are called trade sales promotions. Some sale promotions, particularly ones with unusual methods, are considered gimmicks by many.
Sales promotion includes several communications activities that attempt to provide added value or incentives to consumers, wholesalers, retailers, or other organizational customers to stimulate immediate sales. These efforts can attempt to stimulate product interest, trial, or purchase. Examples of devices used in sales promotion include coupons, samples, premiums, point-of-purchase (POP) displays, contests, rebates, and sweepstakes
Direct Marketing
I think that it is fair to say that small and medium farmers and agricultural producers are BRILLIANT at direct marketing. Direct marketing is a form of advertising that reaches its audience directly through multiple channels including direct physical interaction – such as buying a booth at a farmers’ market, email, direct mail, etc. Businesses communicate straight to the consumer with advertising techniques such as fliers, catalog distribution, promotional letters, and street advertising. Direct marketing sends its message directly to consumers without the use of intervening commercial communication.
Indirect Marketing – E-Commerce and Digital Media
When farmers hear the words “e-commerce” or “web marketing,” they usually think of big business, fancy websites, and online shopping. When farmers think of e-mail, they sigh, and see it as another item in their long list of chores. To many, email can be as exciting as paying bills or doing taxes, and managing a website seems as realistic as winning the lottery.
However, farmers who dismiss e-commerce as an “impossible dream” are actually missing out on a tremendous business opportunity that can improve their bottom line. E-commerce is not for everyone, but farmers who already have a computer can save and earn more money by taking advantage of this existing resource (their computer) to harness technology for their marketing success.
The Rodale Institute’s Farm and Food Marketing specialists selected a pilot group of 15 farmers from Pennsylvania, Maryland, and New Jersey to study and implement web based marketing strategies. Farmers were selected based on their ability to use email and a demonstrated entrepreneurial attitude. The Web Based Direct Marketing Study showed that, with very little investment of time or money, farmers can use their computers to streamline and maximize their marketing efforts. The participating farmers found that e-commerce, web marketing, and other web based tools are technically and financially viable, can pay for themselves, and help the farmers reach their marketing and sales goals.
The Future of E-Commerce for Agricultural Businesses
In a prior blog post, Sustainable Marketing: Why Your Business NEEDS Social Media, we discussed the fast-moving world of business marketing.
In the food and farming world, the success of your sales from marketing is directly tied to the success of any one particular product and any one particular location, and is NOT tied to the strength of the organization themselves.
We want consumers to support YOUR ORGANIZATION – we want them to support YOUR FARM, regardless of any current or future product or farm market vendor booth location. Consumers – even those who shop at farmers’ markets – are particularly slow to understand that farmers are different from each other, that they are individual entities and businesses. For the most part, farms who sell retail through farm markets have their individual farm’s brand and name erased and replaced with the name of the farmers’ market. Most consumers know that they go to the farm market and buy things . . . . They are coming to the market itself not directly to you as an individual and separate farm business. This is one of the few downsides of vending at farmers’ markets – this watering down or minimizing of your farm’s individual brand under the banner of the larger market itself.
It is imperative that small farming and agricultural organizations utilize online media outlets to build a direct and loyal fan base specific to their individual brand and farm. Doing so will enable you to sell your product at a farmers’ market in the typical catch-as-catch-can consumer craze AND maintain your own specific branding separate from the market itself.
Outbound Marketing Techniques to Generate Profit
Outbound marketing techniques such as email blasts, anonymous booths at farmers’ markets are getting less and less effective over time for two reasons. First, your average human today is inundated with over 2000 outbound marketing interruptions per day and is figuring out more and more creative ways to block them out, including caller id, spam filtering, and more.
Second, the cost of coordination around learning about something new, shopping for something new, or engaging with new, independent media using the internet (search engines, blogs, and social media sites) is now much lower than physically going to a seminar at the Marriott, or flying to a trade show, or even visiting a farmers’ market.
Keep in mind that the percentage of those have an ability to purchase local products is 1/10th of 1% of all interested purchasers – and those who do, purchase haphazardly and generically at farmers’ markets without allegiance to any particular farms at that market. To rely solely on your booth at the farmers’ market as your only sales generator means that you’re NOT selling your businesses’ products to 99.99999% of your potential consumer base. You’re missing out! Additionally, studies show that while only 1/10th of 1% of all interested local food purchasers actually and physically buy local food from farms every week, 40% of folks wish that they could. Perhaps they had a business meeting and couldn’t attend the market that week. Regardless, those 40% of potential consumers must be reached by digital media to secure and generate physical sales when they are able to attend your farmers’ market and/or in another venue that is more suitable to that particular consumers’ needs.
In order to do this, you need to set your website and social media feeds up like a "hub" for your industry that attracts visitors naturally through the search engines, through the blogosphere, and through the social media sites. From this HUB, your loyal followers will then locate you at your outbound sales venues – like your farmers’ market booth – directly and specifically, regardless of the branding of the market as a whole and regardless of your customers’ personal schedules.
Inbound Marketing, using E-Commerce and the Web
Inbound Marketing is marketing focused on getting found by customers and building relationships with them. These relationships build loyalty. Loyalty builds future sales and support. Loyalty is the single most important competitive edge between small and medium scale farming operations. In traditional marketing (outbound marketing) companies focus on finding customers. They use techniques that are poorly targeted and that either interrupt people or hope that people haphazardly find them. These techniques are hit-or-miss and are very expensive.
Sustainable Marketing Solutions and Inbound Marketing flip outbound marketing on its head and instead creates content and an online culture around your products and services that potential customers want to see. Inbound marketing builds long-term relationships which, over time, attracts highly qualified customers, buyers, and investors to their businesses like a magnet.
Smart agricultural and farm businesses will use BOTH direct and indirect e-commerce marketing for the greatest potential for sales and profits!
Diversifying your Agricultural Sales Mix Blog Series
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