Six Levers for Driving Channel Priority in Agriculture

Last week, I shared Building a Go-to-Market Strategy in Agriculture. It generated a lot of feedback about direct-to-farmer dynamics and how to build a distribution approach that works.

However, a few comments focused on a different question came in: once you have the distribution channel, how do you get the most out of it?

An individual from a biostimulant company had a question many are challenged with: But, how do you actually get a distribution channel to actually prioritize your products?

It’s a great call out cause it can be a conundrum.

Distribution agreements tend to get celebrated, but they are just the beginning. It reminds me of a venture capital raise — the raise gets celebrated, but the real work begins once the money is in the bank. Distribution is the same, once the agreement is signed, you're at the beginning of the harder work: generating demand, training sales people, staying top of mind, supporting end customers, and earning renewed interest year after year.

This piece builds on last week's article and looks at execution after you have secured market access. I don't pretend to have all the answers, but below are a several considerations that should begin to improve your odds.

A retailer can carry your product, like your brand, give you warehouse space and time with their people, even make you the exclusive provider in a segment, and your product can still sit idle in the warehouse.

You have to activate the channel sales rep by sales rep, grower by grower, season after season.

There are several levers worth working on.

Distributors, retailers, and dealers are economically driven. As I covered last week, those economics have to be weighed in the context of the partner's larger business though. A $5,000 sales opportunity at a high margin percentage is uninteresting to a dealer sales person chasing $500,000 equipment sales. Reps and sales managers usually have bonus potential tied to overall sales performance, so the margin on your product has to justify the effort. That’s all basic, but needs to be called out.

Ways to improve the incentive:

Each of these needs to be navigated thoughtfully. For example, some retailers don't take kindly to direct offers to their staff. Some head office contacts have little influence over what happens at the location, so head office spend can be wasted. The key here is understanding the channel partner.

Margin alone doesn't win you priority, it often just gets you in the door.

A new product first has to compete for mindshare against everything else the channel sells. A biostimulant at an ag retail has to fight for learning time, training time, and conversation time with the farm customer against seed, fertilizer, and crop protection. Those categories are easier to sell and better understood, which is why a 10% margin sale on a familiar product is often more attractive than a 30% margin sale on something that requires explanation.

Your job is to make the sale less difficult. That starts with messaging for the channel.

Crisp, concise product messaging is something I underestimated when I was in retail, and still have to remind myself of. Reps need clean, easy-to-relay messaging or they will lack confidence or can be confused, and that doesn’t get your product talked about or keep it staying top of mind. Confusion is the worst place for your product to be.

Beyond messaging, reps need support. Where the product works, why it works, how it works, the problem it solves, tools to identify the problem, and confidence that problems will be addressed if they arise. Who do they call? What can they expect (reimbursement, replacement product, a loaned piece of equipment to finish the job)? I cover some of this in detail in The Four E's of Positioning and The Biostimulant Playbook.

If a retailer is going to invest time learning and talking about your product, they will expect margin, support, and end-customer demand generation from your team. If you don't invest in supporting them, they won't invest in supporting you. Aligning expectations early is critical, both for the staffing you'll need on your side and for what the retailer or dealer should expect on theirs.

Relationship Risk and Making the Sales Person the Hero

Clear messaging is only one component. You trust and understand your product. But the distributor sales person probably doesn’t. At least not initially.