Photo credit: Sole Food Street Farms
Successful customer relationships are at the heart of successful businesses. Informing customers and nurturing these relationships during the transition period (and before!) is crucial for a smooth transfer.
Many farms sell their products through a variety of sales channels. Indirect sales occur when sales are Business-to-Business (B2B), and the customer is a buyer from a store or distributor, rather than the end consumer. Direct sales channels occur when a farm is selling directly to the person who consumes the products (B2C), and may include Farmers’ Markets, CSAs, farmgate and online sales.
Your approach to transitioning customer relationships will depend on factors such as the sales channel, the people involved, the role of relationships within the business model itself, the transition timeline, and the way you communicate with customers.
QUESTIONS TO CONSIDER:
What are the existing sales channels and who needs to be engaged during a transition?
- Farmer’s market: Market manager, other vendors, market board board, BCAFM, payment processor
- CSA: Delivery person, distribution venue, if your CSA pickup is another retail outlet
- Farmgate: Farm workers, if they work at the farm store and interact with customers
- Retail/wholesale: Sales rep
How do you market to and communicate with the customer base for each sales channel?
- Direct communications: In-person, phone, text, direct email
- General communications: newsletter campaigns, social media, snail mail, online sales platforms
Photo credit: Grey Arrow Farm
Transitioning Direct Sales Channels
Because a direct market customer base is more likely to be founded on personal relationships between the farmer and consumer, extra care should be taken in the transition process.
Step 1: Gather Customer Information
The entering farmer must get this info from the current farmer, who will understand their customer base. The information likely lives in the current farmer’s head (rather than a spreadsheet with customer segments!), so the entering farmer should plan to do the heavy lifting, asking probing questions and taking notes.
The goal is to dissect the customer experience. The current farmer can guide the entering farmer with information such as, “This is what I grow and why, this is who buys my food, what they spend, and what they eat.” Maybe the current farmer knows that the third Saturday in August is the busiest of the year, or that if they added a specific type of crop they might attract a new customer segment, but that crop doesn’t grow well on the land. The current farmer has a lot of wisdom to share, and sometimes may not even realize how valuable a certain tidbit will be to the entering farmer’s success!
Let’s say Farmer Jane and Customer Lisa are first cousins. Lisa lives in town, 15 minutes from Farmer Jane. Lisa has been buying produce from Farmer Jane’s Farm for the past 27 years because shopping there once a week gives them a chance to catch up and Lisa wants to directly support their cousin. This personal affinity and desire to support their family member was the main variable that drove Lisa to purchase from their farm. Farmer Jane doesn’t know that when they stop running Farmer Jane’s Farm, Lisa will start shopping at their local grocer instead of driving out to the farm to buy from the new farmer.
Losing one customer due to personal affinity may not be the end of the world; however, what if 50% of the customers stop shopping there after transition for this or similar reasons? How would this impact your business plan’s financial forecasts or even your ability to apply for farm classification, something you count on to be able to farm this land?
If the incoming farmer does not ask these kinds of questions, they will not be aware of their need to adapt their strategy to keep current customers or start looking for new ones. Having a very good understanding of who your customers are, how they were acquired and their relationship to the outgoing farmer will ease the transition process and hopefully help to mitigate any losses through this potential shift in customer base.
QUESTIONS TO ASK!
Below are a few questions an entering farmer would want to ask the current farmer, and surely there are many more!
- What is the age range of your customers?
- What would you consider to be the average age?
- How many families are you aware of that order from you?
- What do your customers eat?
- What are your most popular products?
- Is there a month that’s busier?
- What shouldn’t I do?
- Is there anything you’ve wanted to add to your product list or diversify into but didn’t have time or energy to do?
Step 2: Build Relationships and Set Expectations to Increase Customer Retention
Because personal relationships are so important to many small-scale farms, a transition plan should make use of every opportunity to build strong personal relationships between the entering farmer and the farm’s customers. That may mean taking the entering farmer along for deliveries to restaurants each week, co-hosting CSA pick up days or working markets together, ensuring that the entering farmer’s name and face appear alongside the current farmer on marketing materials, and having the current farmer make personal introductions wherever possible.
For example, as the current farmer and entering farmer are working markets together, and regular customers come by, the current farmer could strike up a conversation about the upcoming transition, introduce the new farmer to the customer, and reinforce how much value the customer brings to the relationship, so the customer will be motivated to be loyal to the entering farmer. The entering farmer in turn should put effort into building their own relationships with existing customers. Change is hard for customers, and a personal touch will help assure them that the quality products – and relationship – that they’ve come to expect will continue to be available with the entering farmer at the helm.
In person interaction is a great way to build relationships, but it would be hard to keep every single customer informed one on one. Using channels such as newsletters and social media will help keep a wider range of customers engaged in your transition story. As well, these channels can help you gain valuable information.
- Does the direct customer base have personal contact with the farmer / farm owner?
- How much of the farm’s customer base has been gained through nurturing personal relationships (vs. quality, location, brand, certification)? In other words, is relationship building an important part of the farm business’ unique value proposition (UVP)?
- How important is relationship building / direct communication to the farm’s existing business model?
- What should a “transition story” try to communicate to the direct customer base about the new farmer, business, practices, quality, timeline? What does setting proper expectations look like during this process?
*IDEA* Send out a customer survey before you start the transition process to gain insights. For those customers that communicate by phone, call them up and ask them the questions. This should be led by the incoming farmer but supported by the outgoing farmer, as they will likely need to facilitate initial conversations or provide contact information.
Why? To get new market data! A new farm owner can’t assume that all of the farm’s customers will stick around after transition, so updated market information should be gathered. Services like Google Forms and Survey Monkey, or even a simple email with some questions to fill out, can help you to quickly gather the data you’ll need to make informed decisions. Below you’ll find an example of a customer survey.
QUESTIONS TO CONSIDER!
- How often do you buy from Farmer Jane?
- What do you buy?
- Where do you buy it?
- When did you start buying from Farmer Jane?
- Why did you start buying from them and why have you continued (if this has changed)?
- Do you have any concerns about changes in product quality, delivery or customer service that may keep you from purchasing products from Farmer Jane’s farm?
Photo credit: Lady’s Hat Farm
Farmers’ Markets are an important sales channel for many small scale, diversified farms. In addition to transitioning the relationship between the entering farmers and consumers, the current farmer must also transition the relationship with the farmers’ market itself. A proactive approach to bridging the relationship with the entering farmer and the market is key to a successful transition.
Every farmer’s market decides who their vendors are, and have policies and rules around vending at their market, so it is important to confirm the policies for your market. Most markets take vendor applications annually, and choose their vendor mix based on needs, so that the market will have a wide range of diverse products to meet the needs of farmers’ market shoppers. Some markets are very competitive, especially in Vancouver, and new farms will struggle to get a vendor table unless they have an interesting product or an established farmer exits the market.
Photo credit: Sunrise Gardens
Generally, as long as a farm business name stays the same, a new business owner should not affect whether an established farm would continue on as a vendor; however, if the entering farmer is considering a name change, that could have an impact.
Discussions with the market manager about a potential transition should happen early. Once there is a clear transition plan for the entering farmer to be involved at the market stall, and eventually take over the farm business entirely, the current farmer should start conversations with the market manager. It’s important to communicate timelines clearly. If, for example, the current farmer and the entering farmer plan to work alongside each other at the markets for a season, and the full transition, where the current farmer is no longer involved in the market, will happen at the end of the year, conversations should start prior to the start of the season. This way, you can involve the market in your discussion on how the entering farmer could continue to be a vendor to increase the possibility that the entering farmer will continue on as a vendor.
MINI CASE STORY – DEERFOOT FARM, OKANAGAN
Deerfoot Farm is a 56 acre farm in the North Okanagan, selling vegetables and pasture-raised chickens at local Farmers Markets. When Tessa began to lease land on Deerfoot’s property, she was also offered the use of the chicken barn and a list of customers. Upon taking over the chicken operation, Tessa wanted to change a few things about how the business was operating; for example, she switched the chickens over to certified organic feed and pasture-raised them, which increased the price by $2/lb.
While the current farmer-landowners were concerned that their loyal customers would no longer be able to afford their chickens, Tessa was willing to take the risk. She knew she may lose some customers due to the price increase resulting from an increase in her cost of production. To counteract this risk, Tessa did her own marketing and expanded her activities at other places in order to get new customers that would pay that price point. For example, she found that her local CrossFit Gym was a great place to acquire new customers!
If there is a change happening, there will be change in how things are marketed; some customers will stay, some will fall off and some new ones will be found. Being clear and up-front about price increases is important. When asked about transitioning into the local Farmers’ Market, similarly Tessa found that communication is key. She found it was important to ask for input from the Market Board on how best to proceed, being respectful of the old ways of doing things and clear about the farm’s current and future plans.
Deerfoot Farm’s market stand. Photo credit: Tessa Wetherill