4 Steps to AgTech Go-To-Market Success
By Katie Gregario
Fundamentally, company strategy is typically classified as either Business-to-Consumer (B2C) or Business-to-Business (B2B). While both B2C and B2B business models have commonalities, there are an equal number of differences, if not more. These differences are especially evident in sales and marketing strategy and execution. Agriculture technology (AgTech) breaks from this norm and often requires appealing to farmers as consumers and business owners. Consequently, AgTech companies need to deeply understand their customer—who they are, as well as how, why and when they buy—to be successful.
These four steps outline how an AgTech company can win in the marketplace:
1. Identify Your Target Customer
There are few, if any, products or services with universal demand and/or adoption. AgTech is no exception. Accordingly, it is essential to understand the characteristics of your target customer to build an appropriate foundation for sales and marketing success.
Ideally, prior to the development of your product, you have identified a pain point and are offering a solution for it. For your go-to-market strategy, deeply understanding the characteristics of who experiences this pain point is a critical first step. Market research in the form of focus groups and surveys can help identify the ideal target customer.
When creating your ideal customer personas, be sure to use both B2C and B2B attributes- focusing not only on the demographics and psychographics of farmers but also on aspects of their operations. For example, at The Climate Corporation (Climate) we started with the hypothesis all corn and soybean farmers in the US would use our product. However, with market research we refined our target segmentation across attributes such as operation size and previous adoption of other advanced technologies among other elements.
For companies like CropX, which offer customized irrigation prescriptions for pivots and drip hardware through sensors and software, focusing on farmers with irrigated crops is an obvious starting point. However, which crops, what regions and what size of operation to prioritize are some of the questions the company is currently addressing.
2. Present a Clear and Compelling Value Proposition
Once you know whom you are selling to, the next step is to articulate how your product or service benefits this target audience. The more clearly and simply the value proposition can be stated, the better.
It is important to note your product or service may offer many benefits to farmers and their operations, but highlighting the benefit(s) your customer is willing to pay for is critical to a compelling value proposition.
Typically, B2B benefits are more compelling than B2C benefits. For example, while Climate Pro offered several benefits to farmers including increased yield, decreased cost and saved time, farmers did not place a high enough value in paying for a solution to save them time.
In my experience, AgTech solutions most often miss the mark with value propositions by emphasizing technical attributes over benefits. One of the areas in which this is most prevalent is with the various imagery services—from drone to aerial to satellite—which call out the resolution and frequency of their offering’s images above all else. While it might seem high resolution and frequency are benefits, they are merely a description of the product. Instead, communicating what a user can do with the imagery and how the product enables the user to do something better, faster or easier is the ultimate goal. Put another way, farmers may not actually care what the technology itself can do, what matters is what it can do for them.
3. Understand the Purchasing Process for Your Customers
After identifying whom you are selling to and what unique selling proposition your product provides them, the next step is to decide how and where to offer your product or service for purchase.
When making business model decisions, a broader understanding of the agriculture ecosystem’s unique and complex realities is essential. In particular, there are three distinct aspects of the general agricultural purchasing process to be aware of:
- First, on average, farmers have a handful of trusted advisors, including agronomists, insurance representatives, retailer sales representatives, bankers, family members and employees. Who an owner turns to for advice on a particular subject or decision will depend on the topic as well as the nature of the relationship between the farmer and the advisor. In some cases, these relationships go across generations with sons and grandsons maintaining relationships set up by fathers and grandfathers.
- Second, agriculture’s seasonality impacts when a particular good or service will be used and, therefore, purchased. For many products this means there is a small window of opportunity each year for which they need to optimize.
- Finally, channels dominate the distribution of agriculture goods and services.
Understanding the influence and nuance of these associations is critical for AgTech go-to-market success. In particular, because of the ecosystem’s characteristics, understand market penetration will take time. At Climate, we worked with the resources readily available to us for year one of Climate Pro. Over time, Climate worked to launch its product earlier in the season and shifted distribution from the crop insurance to the retail channel.
4. Align Your Sales and Marketing Organization and Tactics to Your Strategy
How and where you offer your product or service for purchase should inform the sales and marketing capabilities and resources you require to execute your go-to-market plan.
One of the key decisions AgTech companies should make is whether to use a channel or direct sales model. Channel sales and marketing demands different resources and tactics than direct sales and marketing. In my experience, most AgTech companies elect to start with channel sales due to the dynamics of the agricultural ecosystem. However, there are examples of direct and hybrid approaches. Whatever your decision, initially, I recommend pursuing one strategy—either channel or direct sales to help focus resources. Over time, you can diversify as appropriate.
Driving demand for your offering should also be customized to your strategy. Develop hypotheses for methods to drive awareness and adoption and allocate spend and resources across a variety of tactics. Collect data on the results to see what is most effective for your solution and optimize activities and spend accordingly.
It is important to recognize what works for one company or one product may not work for another. When we went through these steps at Climate, we discovered the tactic that delivered the best ROI for Climate Pro was different than the one that drove adoption for our Total Weather Insurance product.
Summarizing AgTech Go-To-Market Success
There is no shortcut to AgTech adoption. Instead, AgTech go-to-market success requires focus and investment. Finding your niche is hard but essential. Delivering a solution to a problem with a meaningful benefit requires a deep understanding of your target customer. Reaching these ideal users with the right message at the right time means knowing how, where and when buyers make purchase decisions. As a result, instead of being all things to all people, you can tailor your solution to those operations and individuals most in need of your offering thereby optimizing your sales and marketing efforts, spend and ROI.
Katharine Gregorio has over a decade of experience in food and agriculture with Cargill, The Climate Corporation, Monsanto, and the U.S. Government. She is currently an advisor to Finistere Ventures and CropX.