Customer Identification and Communication Education for Scale Specific Commodities

Final Report for ONE11-135

Project Type: Partnership
Funds awarded in 2011: $14,986.00
Projected End Date: 12/31/2013
Grant Recipient: Cornell University
Region: Northeast
State: New York
Project Leader:
Laura Biasillo
Development Specialist
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Project Information

Summary:

New farmers, small-scale operations and niche products are growth areas in Broome County and across the state and the country. The biggest challenge lies in marketing, being able to identify customers and how to communicate with them effectively. This project sought to address this challenge through a multi-layered approach: one-on-one technical assistance, input from customer surveys, and trying marketing concepts and observing the effect/impact. Pre and post meetings with the participating farms helped set a baseline for measurement in sales, marketing methodology and budgets and set goals for the project. Customer surveys conducted during two consecutive production seasons gathered valuable demographic data as well as information on where they get their information from and what types of marketing tactics would be best received. Various marketing methods were tried by the farms, including redesign of their logo and websites, starting or more regularly using their social media (facebook and/or blog), transferring their newsletter to an electronic format, and creating content for their marketing. Dynamic marketing plans were written for most of the farms. Participating farms saw the following impact from their participation:
– 10%-25% increase in sales directly attributed to more regularly using social media outlets;
– 11% increase in sales;
– 5-7% increase in new customers;
– 5% increase in sales by existing customers;
– Five of the seven farms reported they either more formalized a marketing budget or increased their marketing budget due to increased sales. The average increase was $1000. Two redirected marketing money from print to electronic and saw increased sales of 10%;
– Six farms worked on creating a marketing plan;
– Over 300 customer surveys were gathered throughout the project period;
– Increased understanding of, and comfort level in, various marketing methods. The farms who completed both the pre and post survey indicated an increase from moderate to considerable on a four point scale;
– Two farms went through a website and logo/brochure re-design. Two created a customer newsletter and one has started using it; One farm started a Facebook page and two have started using it more frequently; and
– Three of the partner farms added new product lines during the project (as requested by customer input on their surveys) and have seen success in sales to encourage the future of these products in their offerings.
While all the original goals in terms of percentages were not met, this project was a success. Farmers now have a better understanding of their customers, how they get their information and have increased their marketing skills, infrastructure and collateral. They have marketing systems in place that are sustainable and having seen the positive effects will continue using them. The research and information to come out of this project will be disseminated through various outreach channels to ensure other educators who work with direct marketers will be able to take advantage of what was learned can be applied.

Introduction:

This project set out to implement a multi-layered approach to address the challenge that many small-scale direct marketers face: lack of knowledge about their current and target customers, lack of tools to gather important information about these customers, and understand how to best implement marketing collateral to reach, retain and grow their customer base. Seven farms agreed to collaborate in this project representing a wide variety of direct marketing channels and enterprises. Their participation consisted on pre and post assessments to understand their skills, level of understanding of marketing and their customers, what they were willing to try and and where they wanted to take their business in the future. They agreed to help facilitate customer surveys, try different marketing tactics and participate in developing a marketing plan for their farm. The goals were to see increased purchasing by existing customers, gain new customers, increase amount of money spent on marketing and increase their social media presence which would hopefully lead to the above goals. Six participated in all aspects of the project.

Project Objectives:

This project accomplished many of our goals outlined in our original application. These included: writing marketing plans and establishing marketing budgets for participating farms, increasing the knowledge and understanding of each farm’s customer base (based on their product mix), increasing their knowledge and understanding of various marketing methods, increases in amount and number of sales, increase in amount spent on marketing infrastructure, increases in customers and the impact of social media presence on their sales. We set out to do 60 surveys per farm throughout the project, which would have equaled 420 surveys. The farms partnered with us in collection of the surveys, encouraging their customers to fill them out by offering prizes and advertising through their facebook, newsletters and more. We were only able to gather 300. This is still a great data set to show the increases from the customer sales, increase in knowledge and strides the farms made in marketing. We also encountered a challenge in time management in that so many of the production season and busy times of the participating farms overlapped we could not be everyone at once.

Cooperators

Click linked name(s) to expand
  • Lorraine Kemak

Research

Materials and methods:

A variety of methods were used during this project to engage the partner farms as well as their customers. Face to face interviews were used with the partner farms in the first and last quarters of the project for pre and post surveys to illustrate knowledge change. Paper surveys were utilized to gather information for the marketing plans for each farm. Web-based and paper surveys were utilized to gather customer input for each farm. We also used a very large printed map of the state and surrounding states for our u-pick farm. Customers were encouraged to put a push pin where they came from to show the reach of their customers and also help the farm focus their future marketing efforts – putting more money in areas where people were coming from that they did not currently have paid marketing. This happened in the third and last quarters of the project to ensure enough time for the farms to implement some of the marketing tactics and see their effect. Face to face was the best mechanism to gauge farmer comfort levels as well as delve deeper into their future plans, why certain marketing or communication tactics may (or may not) work, and the rich information to really tell their story. Web-based surveys worked well for many of the consumers who are tech savvy and time-crunched. Using Facebook and each farm’s newsletters/blogs to publicize this also helped encourage participation. Having a paper version helped for those farms who were not as tech savvy or their customers who perhaps weren’t as tech savvy. This also gave an opportunity to give the survey in-person and gauge the usefulness of the questions in gaining the information each farm was looking for. We got an average of 50 surveys per farm using this dual mechanism, with an original goal of 60 per farm. Each was successful in gathering the information applicable.
If we had more time, we considered holding a few focus groups for more in-depth information gathering on various topics, including psycographics (to help the farms better identify their target customer base), ideal product mixes and price points, and customer reviews of potential website and brochure designs and layouts to maximize impact.

Research results and discussion:

The majority of farms who participated were not strong marketers. Their participation helped them focus on their customers, better understand what information they needed to purchase their products more regularly (or in larger quantities) and how to integrate easy marketing and communication tools into their “tool box”.
We collected over 300 customer surveys which helped gather demographic data on those buying local, how consumers get their information about buying local, and what would encourage them to purchase more from local farms. This data is available in the attached tables. It confirmed data about demographics of those purchasing (women ages 46-65) and that recipes, tips and common vegetables/cuts of meat would encourage more frequent or larger purchases, but also had some interesting data; that they spend between $11 and $20 and that having credit card availability does not have an effect on their purchasing decisions. It was also interesting to see word of mouth (58%) and email (50%) were the methods of marketing that customers pay the most attention followed by social media (35%) and radio (30%). Visiting the farmers’ market was the number one way customers got information about buying local (71%) and their specific farm (60%). Data specific to each farm was also gathered.
Each of the farms were asked to focus on social media as one of their marketing tactics. This was always more regular posting, but it could be pictures, recipes, holding contests, offering coupons, etc… Overall there was a 10% increase for participating farms in the number of inquiries/fans/followers/comments in social media outlets. One farm actually started a facebook page, while others started utilizing it more regularly to post pictures of their products, updates on what was coming, recipes, specials, etc… Each saw between one and five new likes per week, leading to the increases in sales by new customers. This also can be attributed to the 10%-25% increase in sales directly attributed to more regularly using social media outlets.
None of the participating farms had existing marketing plans, so the CCE Educator worked with six of the seven on creation of a marketing plan template which could be populated with data and updated in the future as plans changed or to evaluate how a year performed according to expectations. A sample plan is attached. Participation in this part of the project helped the farms focus on the bigger picture as well as a historical picture of their farm to really focus on the effect of money and effort being spent on marketing and sales.
Each of the farms also saw increases in their sales through implementation of information gathered from their customer surveys. This could have been additional products, maintaining more an online presence and/or communication with their customers, as well as focusing on the communication/marketing channels their customers use most. This can be expressed in a variety of ways:
– 10%-25% increase in sales directly attributed to more regularly using social media outlets;
– 11% increase in sales;
– 5-7% increase in new customers;
– 5% increase in sales by existing customers; and
– 7% increase in more regular sales by customers.

Research conclusions:
  • The customer surveys and feedback addressed above had a great impact on the farms trying new ideas. The farmer interviews and debriefing sessions showed an increase in the level of knowledge of their customers, various marketing methods and most importantly that they felt their participation (and time spent in the project) was worth it. The summarized debriefing for all farms is attached. The immediate impact of this project on the primary audience of direct marketers will be best seen at the end of this production season as what was learned can be implemented. For the secondary audience of extension educators the information can be disseminated this fall and winter for implementation starting in 2014.
Participation Summary

Education & Outreach Activities and Participation Summary

Participation Summary

Education/outreach description:

The original plan was to do outreach through the following channels: CCE Educator conferences, various grower conferences and through various publications like Small Farms Quarterly, Country Folks and Smart Marketing. Once we got into the project we realized that getting into many of the conferences as a presentation, like NOFA or the Empire Fruit & Veg Expo required not only more advance planning than the project period, but also funding to support it by the sponsor organization. The publications accept pieces on an on-going basis, but preferred something when the project was finished so it would speak towards results. Pieces are currently being drafted to be featured in Smart Marketing and Country Folks. Small Farms Quarterly chooses their own NESARE projects to feature so we are at their mercy to decide and feature this project.

We held several workshops for producers during the project period which were very well received. One was specifically on best practices for agri-tourism farms and direct marketers where we discussed several of the concepts in this project, including how customers get information and working with the media, using Facebook and customer service. The farms were very engaged in discussion during the workshops and got the most value from their peers experiences. Most left the workshops feeling prepared to implement concepts they had learned and understood the importance of keeping the customer in mind as opposed to what the farm would prefer. This is especially true when it came to customer service and using Facebook. Many farms are not as comfortable with that technology or don’t feel they have the time to dedicate to regularly keeping it up. But after hearing from other farms about their experiences many felt it was worth it.
This project will be part of a track at the 2013 Agriculture In-Service for CCE Educators on marketing options for those in the 3-10yr mark in farming.

Information learned and resources designed are also being integrated into an online curriculum being designed by the Farmers’ Market Federation of NY and the Farm Viability Institute called: Marketing for Profit: Tools for Success. The last module of the curriculum focuses on how to put all the pieces together after designing a marketing plan, gathering customer information and working on branding and promotion to create a functioning plan that will be a living document. This module will be given by the CCE Educator who led this project in February 2014. To date the modules have been in webinar format and more than 100 have actively participated and another 100 have viewed on their own time. The modules will be housed here: http://moodle2.cce.cornell.edu/course/index.php?categoryid=45.
Click on the last of the modules listed in right sidebar. The password is “toolsforsuccess”.

Project Outcomes

Project outcomes:
  • The economic impact of participation for the partner farms has been better than expected. Individually each farm/business experienced ups and downs in sales with each of their market channels; some increasing while others decreased, not always with equal percentages. Additionally several farms saw an impact on their costs, including marketing and staff.

    Through the customer surveys we saw an increase in bi-weekly purchases from 16.73% to 24.35%, a 7.6% increase in number of purchases! A large part of this came from a conversion of those making monthly purchases.

    Five of the seven farms made an increase in marketing budgets/Redirection of marketing funds/creation of marketing budgets. They also reported they either more formalized a marketing budget or increased their marketing budget due to increased sales. The increases ranged from 10%-25% from redirected marketing money from print to electronic or more frequent and/or targeted social media messaging. One farm who traditionally mailed a customer newsletter has started a transition to email and has decreased their marketing costs by $2000. This can now either be spent on increased media time (television) or simply decrease their expenses.

    Across the board there were increases in sales when new communications mechanisms were tried or new market channels were attempted. The original project proposal anticipated the following results:

    5% increase in sales for those farms who participated in this project by current customers. The average increase in sales was 11%. (This has been taken from all the marketing plans data provided by the farms). This translates to over $14,000 in additional sales for six of the farms. (The seventh farm dropped out of participation in this project during the second year so no data is available).
    5-7% increase in new customers and a 5% increase in number of purchases by existing customers;

    All these increases have been attributed to better marketing of their products as well as the availability of the products on a year-round basis.

    It should also be stated that those farms have also seen increases in their 2013 sales due to the adopted sales and communication mechanisms. That effect is still unknown, but for one farm they have been able to almost triple their CSA membership since 2012, another is seeing increased restaurant sales, a two added new product lines specifically due to customer input and a fifth saw a 25% increase in sales when she used social media (facebook and her blog) to talk about her products, how they can be used, etc…

    It should not be understated that all the partner farms were affected by Tropical Storm Lee and the flood of September 2011 so the fact that they were not only able to bounce back after losing everything but not show a loss is a testament not only to their resiliency but also their dedication to marketing and the project

Farmer Adoption

All seven of the partner farms were open to trying marketing suggestions during the project. The key to success of adoption was assessing the impact of their efforts in the marketing ideas tried combined with the customer surveys during the project. At the end of this project, five have adopted those suggestions in one form or another. The adoption rate was quite high but I believe the reason is that what was suggested was chosen and designed to be as user-friendly for them as possible. For example, one farm is not as comfortable with technology and doesn’t have someone who could implement a social media presence so this was not suggested. However, they were a perfect fit to attempt the CSA market channel as they currently were operating in a wholesale channel and were looking to transition out. They started a CSA in 2012 and sold 25 shares. They decided it was a success and worth continuing to replace their wholesale channel so in 2013 they started their second season and currently have 65 shareholders. They have been able to branch out to many who never would have come to their farmstand or otherwise purchased their products.

The biggest challenge in the adoption for the farms will be in maintenance and this gets back to ease of implementation. One farm decided they wanted to start gathering customer contact information so they use a e-newsletter to communicate. It took them many months to figure out a system that would work in terms of types of information they wanted to gather from their customers as well as “mine” what they had from the past and start gathering on an on-going basis. Making an easy system can be used via a mobile device at their farmers’ market stand will be key to their ability to easily gather this information when they are swamped with customers. An example template is attached of their customer spreadsheet that will become a google form once implemented.

Assessment of Project Approach and Areas of Further Study:

Areas needing additional study

There were several topics that were identified for further research by both the cooperating farms as well as the CCE Educator. These included:
– Psycographics of consumers who buy local, organic, local meats, veggies, etc.. A whole new industry is starting around figuring out what indicators exist around those who buy local, organic, etc… More research needs to happen to bring it down to applicability to the farm and community level so it can be replicated and get traction behind it.
– Best practices on how farms tell their story/market themselves — Farmers need to figure out how to efficiently tell their story/market themselves. They don’t know which type of storytelling works best, or the frequency at which these stories should be told, etc…

– How to efficiently track sales of multiple types of products – This is both for producers who sell both vegetables and meat as well as those selling different types of livestock. This could help them see trends in purchasing habits to better package/bundle their products together and/or identify where to focus energies in planting/breedings.

Any opinions, findings, conclusions, or recommendations expressed in this publication are those of the author(s) and do not necessarily reflect the view of the U.S. Department of Agriculture or SARE.