GROWING LOYAL CUSTOMERS
By Vern Grubinger
Vegetable and Berry Specialist
University of Vermont Extension

Truth be told, I’m not much of a marketer. As an extension educator, my colleagues and I  ‘give away’ our products, which are information and advice. We can afford to, since you already paid us. When a ‘customer’ thanks me, I often reply: “your tax dollars at work!”  In addition, as someone trained in production, I’ve tended to overlook marketing and focus on the growing of crops. Unfortunately, some farmers feel that way, too. But more and more, we both realize that just being good at production will not necessarily keep a farm in the black. You’ve got work just as hard, and maybe harder, at selling your products at a fair price.

That’s were marketing comes in. It’s not hard to do it well, if you like people, and have some creativity. If you don’t, I suggest that you get some help from a partner, an employee, or a consultant.

Marketing is an attitude and an orientation that puts the customer first. By ensuring you are doing what the customer wants, needs, and expects, you will have repeat business. In order to market any product successfully, you must have a product that is desired by your target consumer; you must develop an effective marketing plan; and you must make good use of promotional opportunities, from advertising to displays and packaging.

According to folks at the University of Wisconsin, there are six common marketing mistakes that business entrepreneurs often make. The first is the failure to develop a suitable competitive advantage. The second is to focus on the product or service instead of the benefit of the product. The third mistake is a failure to define the target market. Mistake number four is underestimating the competition. The fifth marketing mistake is having an excessive optimism about the idea, product, or service so that shortcomings or pitfalls are not recognized. The last mistake is the establishment of prices without knowing the effect on the demand.  As a consumer, I would add a seventh mistake to this list, and it’s a big one: some businesses treat their customers as an inconvenience.

An understanding of why customers buy as they do is important in the establishment of a marketing plan. The reasons people shop at a particular store are generally: convenience, variety of selection, quality of goods, courtesy of sales people, integrity and reputation for fairness in dealings, services offered such as credit or return of goods, and prices.

Marketing experts tell us that loyal customers can be more profitable, especially over their lifetime, than customers who switch stores on a regular basis. Therefore, it makes sense to identify and nurture your best customers, while trying to increase the loyalty of the rest of your customer base.

Modern food retailers usually treat all customers as if they were equally important (i.e. profitable) to the company. Customers who only purchase a few items are treated the same as customers who purchase the majority of their food in one store. But some retailers understand that as little as 30 percent of their customers may account for as much as 80 percent of their sales. Obviously, all customers are not created equal! Food retailers need to think about how to manage their biggest asset, customers, by rewarding the best customers for their loyalty.

This may be an area where small stores, farm stands, CSA’s and farmer’s markets have a distinct advantage over their giant competitors. Smaller operations often already enjoy a more intimate relationship with their customers that can be enhanced and solidified through attention to customer needs and service.

One way to strengthen your relationship with customers is by providing information. Tell your customers about the products you sell. If a crop was grown on your farm, be clear about that. If they aren’t, be honest, and feel free to name other local farms or firms you buy from. People also like information about how to use products: recipes, storage information, and tips for easy preparation. And finally, seize the chance to tell a good story about your product and your business. Through signage, brochures and/or product labels, you can weave a tale of pride, care, value and heritage that will enhance the product’s desirability by allowing the customer to feel ‘connected’ to the product as well as your farm.

Despite consolidation in many industries and the seemingly ubiquitous presence of chain stores, small store size and local ownership are attractive for a growing segment of shoppers across most demographic groups. Evidence of this trend is found in the move by some major retail chains to build smaller stores, incorporate local and regional products, and to become more involved in supporting activities in each store’s local community, among other things.

Among consumers, recent events have caused more concern about the origin, handling, and safety of the foods they buy. Locally owned and operated food stores can alleviate some of these concerns with their familiar faces, product knowledge, local sourcing, and customer service. Small business operators may also be able to respond quicker to changes in consumer tastes and demand. All of these facts should encourage small retail outlets to pay attention not just to product quality but also to customer service and customer recognition in order to achieve the ultimate marketing goal: customer loyalty.
                                                                                                                                                                                                                                12/03

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