Enhancing Farmer Value Through Retailer Rewards Programs Amidst Economic Challenges

Caught in a web of decreasing commodity prices, increased production costs, rising land values, and inflationary economic impacts, it’s no wonder some farmers feel a bit stuck.

Earlier this year, USDA’s Farm Income Forecast indicated a projected $116 billion net farm income for U.S. producers. This number is a decrease from the $156 billion in 2023, resulting in a reduction of 27%* for 2024 projections. Considering that 2022 had a record $186 billion in net farm income, it comes as no surprise that farmers today may not just be tightening their belts when it comes to purchasing decisions, they are considering how to punch new holes.

When our farmers face financial adversity, retailers also feel that pinch. What commonly may have been offered to entice short-term purchase decisions in the form of discounts becomes more difficult to continue at scale.

Uncertainty can be a strong hindrance to purchasing decisions in any business. When it comes to maintaining a profitable bottom line in an uncertain farm economy, customers may manage expenses in a way that creates significant shifts from prior years, such as timing, number of applications, less new technology adoption, or marginal nutrient placement. Thus, implicating the retailers’ revenue potential.

What retailers could do is continue to price war with the input business next door, chipping away at overhead to make room for decreasing profit margins, all in the name of locking in that immediate sale.

Or, instead of putting the long-term health of your ag retail company at risk, what if an additional option existed that provided both a benefit to the farmer customer and aided in the strength of the retail business’ bottom line while encouraging customer loyalty?

A Mutually Beneficial Boost

Such a system has been developed by GROWERS, a leading provider of agricultural technology to farmers, retailers, and manufacturers.

Tied to the idea that today’s modern consumer rewards programs provide the buyer with loyalty points and offers on future purchases, the GROWERS rewards program brings with it the opportunity to enhance customer loyalty through a system that carries that same feature.

The first-of-its-kind rewards program presents customers with the building of loyalty points for future purchases. The farmer, knowing they will need to make continued purchases on seed, crop protection, fertilizer, and application services, among many others, continues to see cost savings with each purchase they make. The reward that farmer customer receives goes directly into a digital wallet that retailers can access via the GROWERS platform, to only be used with your retail business. Best of all, the farmer doesn’t have to download an app to take advantage of this opportunity, assisting with the potential technology fatigue that the industry is currently experiencing.

Integrate with Ease and Boost Sales Advantage

The rewards program operates in a singular ecosystem of the GROWERS platform where the tracking, allocation, and redemption of points are seamlessly managed for the retailer and the customer. GROWERS has built the technology and infrastructure which operates in the background to enable retailers and cooperatives to create their own, branded loyalty program. This creates a seamless user experience for farmers, elevates the brand of the retailer, and increases the touch points with customers, all automatically.

Setting up the feature for easy adoption and immediate integration with sales is a highlight of this rewards program. After analyzing the historical purchasing behavior, customer data and sales goals, the rewards program is then customized to include various tiers, segments and spending hurdles to drive the results the retail business intends. Throughout this setup, the GROWERS team helps optimize the system with the retailer and provides best practices.

Once the program criteria are set, data export schedules are established to connect your ERP to the loyalty program or recommend manual processes, and just like that, your customers will automatically be notified of loyalty points and rewards balances.

Loyalty Pays

In the case of an industry as currently competitive as ag retail today, heightened with tight margins, loyalty reigns king. While some may choose to compete solely on price, reduce offerings, or dip further into profit margins, a more strategic response is to focus on customer loyalty systems and culture.

The ultimate goal of a rewards program is to use it effectively to steer the desired behaviors of a customer. When you take a flexible system like the GROWERS rewards program and cross it with the actions you would like to see your customers take, the opportunities are nearly unlimited to generate consistent value.

Do you want your customers to create a crop plan for 2025 in the fall of 2024? That can be a program hurdle that must be met to qualify for increased benefits. Do you want to encourage a late-season fungicide pass? Implement an incentive for custom application cost savings on future services.

When the customer redeems those rewards on future purchases, you’ve not only helped that farmer, but you’ve generated a valuable cycle of loyalty for the business. This innovative, win-win system will enable ag retail to compete in an industry met with uncertain economic challenges.

*Economic Research Service, U.S. Department of Agriculture, adjusted for inflation