This presentation was created for the 2023 PASA Virtual Conference
Marketing is critical to your business success and it can be manageable if you break it down into discrete parts, experiment to find the right mix and keep on top of it.
There are four components to marketing:
- The product or product mix.
- The price you at which you sell it,
- The place you sell or distribute and
- Promotion of your product/services.
A successful marketing strategy will blend these four elements to deliver a customer centric solution.
Watch the session or read through the blog below to learn more.
Product Decisions
Deciding what to grow can be a challenge.
The average CSA loses 50% of its clients year over year. And, market traffic declines over the course of a season. In the case of the CSAs “product” is the number one reason cited. But, what does that mean? Is it too much, too little, the wrong mix, or uncertainty about how to use it? Unless you have customer feedback it’ll be a wild shot in the dark. Test your assumptions by talking to customers. And, you should plan to continuously learn over time making sure to stay on top of trends in eating behavior. The recent low card trend caught many growers by surprise when there was a spike in demand for Cauliflower because people figured out how to use it in place of flour. If you’re in touch with customers and have your finger on the pulse of such things – you’ll be able to respond – maybe even guide
Assess options based on your passion and the potential for generating revenue. This means that you should really evaluate your options taking into consideration:
- Your interests
- Time needed
- Potential yield
- Demand
- Competition
- Regulations
- Your environment
Once you settle on the product mix it’s important to understand that the basic product you grow isn’t necessarily what the customer perceives. Product is more than the items you grow and understanding this can help you differentiate yourself. Let’s say your customer base in large part buys direct from you because they want to feel connected to their food and its source. Minimizing packaging and leaving a little dirt will actually elevate the experience and make them happier. Others may be more affluent and bougie. Adding some packaging, or an artisanal carry bag could cause more satisfaction. Really get to know the reasons for seeking out your product and get creative on delivering a “total package” that delights.
Place Decisions
Where you sell has a host of decision as well.
There many options to local producers. Do you homework and identify the right one(s) for your business. If you choose to sell at farmers markets, identify those that have a strong customer base and who support your efforts. Make sure the market managers have a mix of complementary vendors who create the right atmosphere for your business.
You may choose to sell through multiple channels. Many farmers will have CSA or online sales pickups at farmers markets. This gives you an opportunity to engage the customer and upsell additional product. Joining a coop can help your reduce cost and increase sales. And, wholesale clients like restaurants are great for generating your base revenue.
There so much to consider when making these decisions but as a base line look at the sales opportunity vs the cost of doing business (including your time) and seek out efficiencies that allow you to increase profits while decreasing costs.
Make sure you’re capturing customer leads in all your sales channels
Pricing Decisions
Pricing is tricky for most business owners – including food producers. There are many pricing models and it can get really complicated. Many pricing models are not really approachable or suitable for consumable products grown by local producers.
A lot of advice I’ve seen for farmers promotes the cost plus method because it’s the easiest to calculate. Here are my fixed and variable costs, I know I’ll produce roughly x amount and so I’ll add a % on top of that. Boom – easy. Price skimming is most suitable for breakthrough technology where copycat products follow into the market and steal away customers. Penetration pricing almost always causes a race to the bottom and boil it down to a really simple concept. But, you’re probably leaving profits on the table because cost plus it doesn’t account for the customers perceived value of your product. Competitive pricing is ok to make sure you’re not too high or too low but the focus shouldn’t be on the competition but in creating value. Value based pricing is ideal for artisanal – unique products.
You may want to consider a blended approach. Set your bottom to be at a certain margin. Look around at the competition. How do you compare? If you’re too high can you reduce cost of production/marketing? Can you add perceived value to justify that price? Your pricing needs to be set above the cost of goods sold, at the price where customers consider it to be a good value. Looking back. That perceived value can, or should be more than the turnips or cut of meat you’re selling.
Promotional Decisions
Many people equate marketing with advertising. As you can tell from the presentation it is far from accurate. In fact, even within the area of promotion advertising is only one element. Promotion is the act of getting your message to potential customers. If they are new to you as a customer this is considered acquisition and it is the costliest, time consuming part of promoting.
And with the shear volume of messages bombarding each of us every day, and technology filtering who sees our messages it’s become extremely difficult to reach new customers. As a food producer, unless you’re shipping far and wide, chances are your customer is within a fairly small geography. The good news? That means you can use offline methods, forge partnerships with local affiliates and other inexpensive communication efforts.
Getting customer acquisition right requires some experimentation. This is why it’s so critically important to measure your efforts and identify what communication channels and marketing messages work, or don’t. As you learn from your experiments double down on what works, discard what doesn’t. But, be careful not to judge your efforts too quickly. It takes several (21x) for someone to remember a message. So, a little persistence and patience is needed.
When you get a lead (a visitor to your booth or website) or a new customer its super important to capture their contact information so you can stay in touch.
Three things that are a must: A well designed website (cheap and easy to create on Wix or Squarespace), a professional email and email list that you reach out to routinely, and a social media presence.
A little more about social media.
Don’t let the excitement of likes and follows fool you. These are not measures of sales success. For quite some time, Facebook and Instagram had impressive abilities for businesses to reach hyper local audiences. This was very beneficial to small businesses who wanted to use social media for local advertising. In April 2021 Apple released a new privacy policy which required users to opt in or give permission for tracking location. Only 4% of users opt in. This has turned things upside down in social media marketing. Facebook groups are not impacted as much because they don’t require location data.
There are some ways to succeed with social but the time and effort required may outweigh the benefits. Its important to stay on top of the algorithms. You may notice a small percent of your following sees your posts. You need to put money behind the posts to gain more exposure. But, because TikTok is taking a lot of eyeballs away from FB and IG is rewarding their users higher exposure for Reels. Stories will reach your audience but only live for 24 hours.
In general, high-quality content that informs or entertains will get more exposure than a basic post. So like everything else, you’ll need to weigh the pros and cons depending on status of your social media accounts, your interest in and available time to devote to creating quality content. Personally, I look at social media as an awareness platform to educate and entertain my followers, not to drive sales.
What I would spend time on is customer retention. Regardless of the tools you choose your business will benefit from retaining customers year over year. Customers who are repeat customers tend to buy up to 30% more from businesses. Increasing your retention rate by 5% will increase profits by 25-95%. So a big chunk of your marketing efforts should be toward delighting your customers and making sure they remember to come back for more.
Then you can take these efforts one step further and expand your customer base through referrals. Find fun, creative ways to get your customers to recommend you to their friends. People will trust a referral much more than a marketing message from some source they don’t know. However, you can only do that if you have their contact information.
In summary, don’t kill yourself trying to be fancy or go crazy with marketing efforts. Find ways to reach potential customers with a message that resonates. sell a product they love at a price they think brings value. Get their contact info, keep in touch so they come back. Then rinse, repeat and grow!
If you'd like to learn more about Culineer and visit our website. Culineer is built to help you acquire, engage and retain your customers.
