A young woman leaning on a farm gate

How to choose early customers for your agricultural innovation

We often discuss approaches to building customer empathy and validating product design, for example when we are helping our own customers or in events such as Ag Innovations Bootcamp.

One of the recurring questions is “are we working or testing with the right customers?” Often the answer is a clear “yes”, but not always. The cost to a business of developing an innovation based on feedback from the wrong customer can be enormous.

If you develop products or services for the agricultural sector, it is worth revisiting how you identify and choose your early customers.

Why early customers are important

At first glance, early customers are only those who first discover and adopt your service. But it’s often not that simple. They may arrive through your network. They may be hard-won with shoe leather, or by “growth hacking” your value proposition.

Early customers will influence your product in important ways:

  • Great product design comes from customer empathy. You build a deep understanding of your customer’s context, goals and needs. You must understand the real problem you are trying to solve for the customer, and its value to them.
  • You test your product or service prototypes with your early customers. These may be deliberate prototypes or your first MVP (Minimum Viable Product) release.
  • Early customers show traction. Your investors or your organisation look to adoption as proof of a viable business model.

Who are my early adopters?

Everett Rogers coined the term in his book The Diffusion of Innovations (1962). His theory about adoption of innovation used the results of 508 sociology studies. Much of the early work on diffusion focused on agricultural technology in the 1920s and ’30s. This was a time of widespread innovation in genetics and mechanisation.

Rogers defined five categories of adopters for an innovation:

  1. Innovators: willing to take a risk on innovation for its own sake.
  2. Early adopters: adopt technology that solves problems and provides status.
  3. Early majority: influenced by early adopters, they wait to adopt useful and valuable innovation.
  4. Late adopters: with some scepticism adopt after the majority.
  5. Laggards: see no value in change.

These are often seen in the diagram made popular in Geoffrey Moore’s Crossing the Chasm (1991).

Diffusion of innovations graph

Image attribution: Andre Ivanchuk

The percentages shown may not quite match your market, but studies show the shape of the curve and overall proportions generally apply.

Early adopters must be the initial target. Innovators love innovation for its own sake. They don’t represent the problems and needs of your larger market. You will end up solving the wrong problems. The early majority await evidence of success from early adopters.

How you can identify an early adopter

We like the way that Justin Wilcox defines early adopters in the light of the problem you are trying to solve (Focus Framework, 2016). It’s a practical way to think about what makes your early adopters distinctive.

Laggards Don’t have the problem you are trying to solve.
Late majority Have the problem, but don’t know it yet.
Early majority Have the problem, and know they have the problem, but are not yet paying to solve the problem.
Early adopters Have the problem, know they have the problem, and are already paying to solve the problem.

“Paying” to solve the problem doesn’t mean they are buying another product or service. They may be investing time or effort. They may be hiring staff or using a consultant. They may be “making do” or “using number 8 wire” (as we say in New Zealand).

What techniques might your early adopters be using to solve the problem? Those very techniques might be the indicators that help you identify the customers.

As early adopters know they have the problem and are trying to solve it, they may respond to an appropriate call to action. You might test if you can position your solution in a way that early adopters will recognise and respond.

Finding early adopter farmers and rural professionals

One you’ve worked out how to recognise or filter an early adopter, where do you look? These suggestions come from our team and Ag Innovations Bootcamp attendees:

Listen online: Tune into farming-oriented groups in Facebook or hashtags on Twitter. The best Facebook farming groups are often closed – you need to be a farmer or show you won’t spam the group to join. Use these groups to understand interests, events, and to ask good questions.

  1. Build your network: Create a diverse network of rural professionals, influencers, and others. Make sure you help others and give as well as take. Members of your network will help you meet potential early adopters.
  2. Hit the road: Attend the events that your early adopters are also likely to attend. There are many farming-focused events, conferences, and field days. Going along to listen and learn at farm open days is a great way to meet others.
  3. Learn the language: Agriculturalists I know are willing to speak with anyone trying to improve farming’s lot. Listen to them to build the language and questions that will help you influence customers.

 

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Chess player considering strategy

Is this the year you take your agribusiness digital?

Is this the year you take your agribusiness digital?

It’s the time of year when people of all backgrounds make new year resolutions, institute new habits and reflect on their journey. It’s not uncommon for business leaders too, to reflect on business performance and goals for the future.

Here’s a question for your business planning during the quiet days at the start of the year:

Are you ready to take your agribusiness digital?

You’re thinking that your business is already digital. You have an ERP and a CRM, a web site and a mobile app. Your IT team has already virtualised your core business systems. What else is there?

You already use technology in your business. You may even use it well, though many agribusinesses are saddled with 10 to 15-year-old software and significant “technical debt” that acts as a drag on business agility. Taking your agribusiness digital however, implies something more significant: transformation.

Gartner defines digital transformation as the creation of new business designs that blur the boundary between the digital and physical worlds. More than just digitisation in support of business processes, it is making use of technology to change your:

  1. Customer engagement model;
  2. Connection with the ecosystem of your partners; and/or
  3. Core business model.

Most agriculture and food businesses, rural supply, and advisory businesses have grown over many years, starting life and establishing business models well before the connectivity, data flows and analysis of today were envisaged. Would your business look the same if it were started today?

1.      Customer Engagement

With the internet and mobility connecting most people on the planet (and likely your customers), how could your business leverage technology to substantially change how you engage with your customers, streamlining their experiences and introducing greater perceived value?

A short story of two pizza companies

Dominos’ Pizza (DXP) and Papa John’s Pizzas (PZZA) both had a market cap of around US $600M at the start of 2010. Both companies still sell pizzas with take-out and delivery options. Dominos invested early and continuously in technology innovation for customer engagement, radically changing the way that pizza is ordered, and delivery is tracked. The value proposition for customers was a different, improved, and easier experience in ordering pizza. A benefit for Dominos was an increase in average order value and a massive switch from phone to internet orders. Arguably, Dominos has set the customer engagement bar that other pizza franchises have followed, and in the process grown its market cap to over US $12B, while Papa John’s followed incrementally, and has grown to US $3B.

2. Connected Ecosystems

What transformative opportunities could your business leverage by effectively connecting its digital information with suppliers and supply-chain partners? Common data standards, APIs, principled and secure sharing of data open the way for you and your partners to gain new insights and radically change business logistics.

Seven of the top 12 largest companies in the world by market capitalisation: Alibaba, Alphabet (Google), Amazon, Apple, Facebook, Microsoft, and Tencent – are ecosystem players, sharing data and common services with their supply chains and partners. At least one of those companies may have been too connected on occasion! We recommend principled and secure sharing.

Benefits of an open platform

Newspaper “The Guardian” developed its open platform in 2009 and has been evolving it ever since. The platform provides APIs for developers and for partners. Many sites and mobile services use the Guardian API to deliver timely news, and the Guardian benefits with referrals, ad placements, and the ability to understand how and when people consume its content. Partner integrations allow the Guardian to crowd-source additional data for its services (such as location tagging), and to position its brand beside influential partners.

3. Changing Business Models

Many of our agricultural and service businesses, or their forerunners, started life 80 or 100 years ago. The fundamentals remain, but models of communication and distribution, use of information and analysis have all changed dramatically. Our business models – how we create and monetise value – have changed more incrementally.

Digital transformation offers agricultural sector businesses the opportunity to reframe their business models for the new and evolving business environment.  Ford has started to redefine itself as “a mobility company and not just as a car or truck manufacturer”. GE is seeking to make analytics the new “core to the company”. Certainly, if you were starting a personal transport company today in the face of Uber and Lyft, it would not look like an existing taxi company.

How might your business leverage technology and connectedness to create value in different ways?

 

Considering your digital agribusiness options for 2019?  Contact us for a free initial discussion.

Consider using one of our digital agriculture strategists, Andrew Cooke or Julian Gairdner to facilitate a workshop our help with your thinking.