By Darby Simpson
This article first appeared in the August 2019 issue of Acres U.S.A..
So you’ve made the all-important decision to direct market some or all of your farm’s products in order to capture every possible dollar of profit. In my opinion, this is one of the fastest ways to improve the profitability of your business.
There are endless methods, tools and tips on the production side that can help aide the bottom line. However, nothing will get you to profitability faster than selling a pound of ground beef for $10 or bacon for $13 and keeping every penny in your pocket.
While there are many wonderful benefits of selling directly to the end user, direct marketing is not easy. It involves extra work. Some of this added effort is nothing that you would ever envision until you begin the experiment.
The single biggest key to success in direct marketing is this: If you do not have the right mindset before you begin, you will most likely find it a futile venture and will throw in the towel. In the end, it will not matter one bit how great a producer you are in the field, because if you do not have the proper mentality on the business side, you will fail — maybe entirely.
The focus of this article is to motivate you to do just that: to get into the proper mindset to be successful! With that, let’s take a look at three simple lessons I’ve learned over the past ten years selling our beef, poultry and pork straight to the consumer.
CONSUMER EDUCATION
Consumer education is probably one of the most overlooked facets of direct marketing. You know the value of your 100-percent-grassfed-and-finished beef — the years of effort required to produce it and how nutrient dense it is. The mistake we all make is that we assume our suburban soccer mom customers also know these things.
If you do not take the time to gently and graciously teach your customers about the products you wish to sell, DO NOT expect them to pay you the premium price you are asking for (and deserve). You have to demonstrate to them the value of what you raise in terms of taste, nutrition, environmental impact and benefit to the local economy.
Every consumer comes to us with a varying degree of knowledge about the food we raise. They might be a seasoned veteran asking a few key questions to establish that you meet their personal standards and expectations. Conversely, they might be totally new to local food and have a million questions or have made a lot of assumptions (like that all local food is the same). Those new folks require a lot of passionate, yet gentle and genuine, conversation.
It is not uncommon for me to spend 10-15 minutes answering questions for a new “real food” consumer at the farmers’ market, only to have them spend $10 or less — and sometimes nothing at all. What I’m saying is that you have to be okay with that. They are seeking information and answers; you are but a link in the chain along their newfound journey into better food.
I’ve also spent countless hours answering emails and chatting on the phone, sometimes with no tangible financial results. And since we can expect to replace about 15-20 percent of our customers on an annual basis, this educational process is never-ending. It is tiring, but it’s absolutely necessary if you want to pursue this sales path.
RELATIONAL MARKETING
All that chatting with your customers leads to relationships. You get to know them on a first-name basis. You watch their young children grow into young adults. You know their preferences and food allergies. And oftentimes you find yourself having a ten-minute conversation at a farmers’ market in a high school parking lot about nothing to do with food or farming.
Do not underestimate just how relational people are. In a society where nearly everything is online, where the pace of life is fast and where few things are genuine, people are starved for the human interaction we are hard-wired by our Creator to want and desire. Rubbing elbows with a real farmer — someone who is usually viewed as a salt-of-the-earth human being and is widely respected — means a lot to that customer.
They want to know you, your family and your farm. They become emotionally invested in the success of your business. And you should likewise view them as what they are: a partner in your business, not just another “customer.” We need to maintain good relationships with our business partners. That means taking a genuine interest in them and chatting them up when we can afford to do so.
In my speaking and workshop teaching engagements, one point I always stress is that we as farmers need to relate to our business in a different way than our customers. As famers, we should never romanticize our own farm, because that idyllic mental image wears off fast and will let us down. However, when it comes to our customers, I believe we should encourage the romanticism. It is a strong emotional connection we should not deny them.
This is one way they participate in the journey together with us. The elation they receive when a photograph of a newborn calf is shared on social media is undeniable. They believe — and rightly so — that as a financial supporter of your farm they helped make that moment happen. No amount of money spent on advertising can buy you the level of devotion obtained in that moment.
PROFESSIONALISM
Now, just because we have a good relationship with our clientele does not give us license to have junky-looking products. We are competing with the Whole Foods and Trader Joe’s of the world, after all! If you want consumers to vote for you with their wallets, you need to accept this fact.
What does this mean? It means you must have vacuum-sealed, professionally labeled packages (custom, if possible) with weight and price printed on them. If your processing facility does not offer these services, then I would suggest looking for one that does. Sure, they may charge more — but so can you, by leveraging those added-value packaging options against your competitors.
I cannot tell you how many times I’ve seen other farms still using white butcher paper because they don’t want to spend the money on the “fancy packaging.” Or they make people wait in line while they individually weigh every package on a scale, input the price and do the math (slowly) on the order. People who direct-purchase from those of us in the regenerative ag movement do have more patience, but it will eventually run out and they’ll walk away. Do you want suburban soccer moms to pony up $6 a pound for your pasture-raised whole chicken? Then act like a pro and get in the game! Professional packaging, quick transactions, strong customer service and a high-quality product is required to compete.
Think of it like this: Assume you walk past a booth and see products wrapped in butcher paper without good labeling, with slow checkout times and a grouchy farmer behind the table. Would you stop in there? I wouldn’t buy from them if I were a consumer, so why would anyone else?
Every package we sell has all of the above included, and if it gets damaged (busted seal, freezer crystals forming, etc.) then that product gets donated or sold at a deep discount. Who is going to pay $12 a pound for pasture-raised chicken breast in a bad-looking package? Would a local grocery store try and pull that off? Of course not! And neither should you.
THE BIG PICTURE
As a direct marketer, it is my opinion that only about one third of the battle toward being a successful entrepreneur in the small-scale farming space revolves around production and actual “farming.” The balance of the fight resides in running the business, having phenomenal customer service, building a brand image and having a very defined farm philosophy that customers can easily understand and get behind.
We also have to remember to keep a smile on our face when dealing with our customers (partners), remembering that at the end of the day this is retail sales we are talking about. This also means figuring out the logistics of how we get our products into customers’ hands (delivery, farmers’ markets, subscription service, bulk sales, restaurants, stores, etc.).
And we have to make certain we charge appropriately for our time by tracking expenses, inputs, costs and labor, doing the math in a spreadsheet for each individual enterprise.
If you do not take the time to do this, you will have no idea if you are charging appropriately for your time. When we are direct marketing, this is all the more important, since we have to cover the costs of the value-added processing, products, marketing fees, etc. And if you do not make certain to charge appropriately for your time, your farm “business” will fail.
Darby Simpson runs a grass-based farm in Central Indiana with his wife, Brandy. He has farmed full time for nearly the past decade. He is passionate about teaching fellow farmers and offers podcasts and other free resources, along with online courses, at Grassfed Life (grassfedlife.co). You can connect with him by email at darby@grassfedlife.co.