Why farmers should direct market. I'm going to zip through this very quickly because I think you all have already drunk the Kool-Aid and you know why we need to direct market. But sometimes it's good to just encapsulate it so we know where we are.
And by the way, let me tell you, we are very open to questions. This is not just lecture style. We will have some interactive stuff. I've actually got some new stuff for us to play with, some new ideas.
And so there will be some interactive. So please, please don't be reluctant or shy about jumping in. But one of the main reasons to direct market, in my opinion, is for overall business stability. In general, a quarter of the retail dollar comes from each of four components.
They're listed here for you. Production, processing, marketing, and distribution. The problem is most farms get all their income from one of these. Which one? Production. Okay, and only one of these is subject to the vagaries of nature that makes every farmer feel like farming is different than any other business.
Because we have, as Alan Nation used to call, the four horsemen of the apocalypse, you know, weather, price, pestilence, and disease. It's what every farmer leans on the side of their pickup truck and whines about every day, right?
Which one of those four is most subject to those vagaries? Production. Production, right. When the locusts come, they don't eat the tires of the delivery vehicle. When the drought comes, it doesn't stop the internet access from working, right?
When the rain comes and you get way too much rain, it doesn't destroy the stainless steel in the processing. So, for no more reason than to create stability, stable income streams, here's the thing. The more dollars we load into non-production, okay, the more dollars we pull away from the vagaries of weather and price and pestilence and disease, and those become more stable income dollars.
That's one huge reason. As we know, we hear the middleman makes all the money. And these processing, marketing, distribution, that's the middleman hat, right? Well, if that's where the money is, I want to be one.
Okay? I want to be one. And so rather than whining about that middleman that makes all the money, why don't we just join him and enjoy the largesse? Okay? So there's a lot of reasons here. Number two, it's historically normal.
I mean, direct marketing, the idea of actually purchasing from within a local commerce was the backbone of secure food systems for many, many years. It attracts the best and brightest. All these other things, as soon as you start talking about messaging and, as Jenny was saying, sound biting and how do we compress complex ideas into simple little slogans, that kind of stuff, man, I'm not saying that it doesn't require a lot of whatever,
genius and imagination to know where to place the crossfins for the cows. But it is a different set, it's a different set of challenge, isn't it? It's a different set of imagination, creativity. It's a different skill set.
And so I'm really big on trying to attract smarter people into farming. I don't know how much gentler to say it, but we've actually had rural brain drain for a long time, right? You know, as the society has condescended toward rural, toward agriculture.
And basically, you know, if you're an A or B student, you're supposed to go, you know, become a lawyer, an attorney, work in IT, you know, sit in front of a Dilbert cubicle and press numbers into cyberspace for your career.
And that's supposed to be this wonderful thing. And if you're a C minus or less student, then, all right, well, then maybe agriculture is a path for you. And what I want to bring, I want to see us create cerebral, imaginative pathways where our best and brightest come back to the farm and be affirmed in it and be encouraged in it.
I think that's a noble goal. Another reason to direct market is that your clientele is portable. Many of us are working on leased farms, borrowed farms, shared farms, and our clientele, as long as you don't move 200 miles away, our clientele is portable.
They can move with us. So it gives us some wiggle room and flexibility to lease places, to create collaborative things, because clientele is portable. By direct marketing, you get your own built-in support group.
You know, farming is a lonely occupation. Right? You're out there in the field moving the cows, moving the chickens, running that tractor, making hay, whatever. Farming is a very lonely, lonely thing compared to other vocations, you know, where at least even in a small office, you know, you got the, you got the, yeah, you got people, you got the little, you know, sometimes the soap opera, right?
Sometimes it's Peyton Place. But at least there's community. There's people. There's things. I mean, our daughter works at a very small office. She's the agritourism director for a seven-county area.
It's a fairly small office. And it's just amazing how fast, oh, you know, we went down and saw a movie with, you know, so-and-so at work. I mean, work is becoming now kind of a catch-all for everything.
It's becoming life fulfillment. We'll talk about that more as we go. But anyway, your customers, when they come and they, I can remember, you know, our kids growing up and the customers would come and tweak their cheek and say, oh, our family just depends on your so much.
We would not be able to be healthy if we didn't get your food. Thank you for doing this. You know what that does for a kid, you know, for the farmer, all right, to have that kind of emotional support.
It's like having, you know, it's having AAA for, or whatever, AA, AAA, whatever. You got it, whatever it is, all right? But you got your support group, okay? And in a vocation that's inherently lonely, direct marketing is really good.
And especially if you're a Stockman Grass Farmer reader, it's even more lonely because even your farm neighbors think you're crazy. Right? I mean, our farm neighbors still call us Typhoid Mary and, you know, bioterrorists, you know, because we have unvaccinated chickens that run around in the fields and they're going to commiserate with the red-winged blackbirds and take our diseases.
I mean, they've got to be diseased because they're not vaccinated, right? And they're going to take that to, you know, their Tyson chicken houses. They're going to lose their farm. And every child in Bangladesh is going to starve to death because we let our chickens commiserate with the red-winged blackbirds that didn't vaccinate them.
I mean, this is the thing. And so when we're outside that orthodoxy, it's even more lonely. And so our customers become, people say, you know, who's encouraged? I say it's our customers. Our customers are our support group.
They're the ones that, you know, and over the years, we've had, you know, we've had tough years. You stay in it long enough, you will have a tough year. We've had people come in and just, you know, stuff a bill in my pocket, say, you know, I know you've had a tough time.
Just take this. And they leave and you open it up and it's a $100 bill. I mean, we had a customer once. He came and it was fairly early on there. And he said, look, you've written a book now. You need to have a higher profile of success.
Driving this $500 car, it's just no good. You need a better car. He said, I'm getting ready to trade mine, and I'm either going to give it to you or the Salvation Army. And Teresa said, well, bring it down.
We didn't even ask him what it was. And so the next time he came down to pick up chickens, you know, he drove down and he said, car's out front. You want to take it around? And so we went around front, and it was a Lincoln Town car.
And we drove it around the block. We parked it back in the front. And Teresa said, went around to Clinton, his name was Clinton Miller, and she said, where do I sign? And we bought that car from him for a dollar and drove it for two years.
And man, I mean, that thing had a trunk the size of a pickup truck. I mean, you know, it was, but anyway, that's emotional support. Okay, that's good. And then another one of, you know, a thing that I've really come to believe is that you really don't have a viable business until you generate two salaries in the business.
Okay? That's a kind of a hard saying, but if you know the cycles of life, you know that as you age, your energy wanes, your creativity wanes, and you just don't have the get up and go. Mentally, I'm 20.
But when I get up in the morning, I don't feel 20. You know, if it ain't hurting, it ain't working. I mean, it's a different thing. And so all really successful, especially legacy businesses, don't just have one person at the helm.
And in farming, I mean, what do you do if you're sick? What happens if you break a leg? What happens if, you know, two people are a big deal? So I really believe that if we want a viable farm business, we have to set our sights and have a vision, a trajectory out there that we're going to get to two salaries as fast as we can get there.
Because a one-salary business is a very vulnerable, fragile business. And marketing, jumping into all that processing and marketing and distribution, what that does is that it increases the pie big enough so that there is a place to assimilate a second person.
All right? That's a big deal. Now, there are reasons why farmers don't want to market. It's hard work. It requires creativity. It involves people. And most of us farmers, we're farmers because we don't like people.
So realize, over these two days as we do this whole marketing thing, remember, we're here to talk about marketing. Some of you sitting here, the idea, and when Sherry gets up here, you'll be blown away.
I mean, Sherry thrives on making a cold call to a chef. Now, I'd rather you pull out my toenails, okay? I don't like, I like to go places where kind of where people are already kind of in it, you know, and want you to come.
I don't like to nose my whatever, nose into a trough where I'm not really welcome. So that's different in temperaments, okay, different personalities. So as we talk about this marketing, the thing I want you to understand is you are here because you realize that marketing is important for your business.
You might not be the salesperson. There's a big difference between marketing and sales. And so marketing is the strategy. Sales are the execution. Sales grow out of a marketing strategy. And so you don't have to be the one knocking on doors.
For some of you, when I talk about knocking on doors, you get cold chills and want to run out that back door. I get that. Totally get that. And we are going to talk a lot about sales, but we're mainly focused on marketing as a strategy.
And anyone can do that. Extroverts, introverts, people who don't like to make cold calls, whatever it is. Sales is not marketing. So you very well may come from this school, go back home, and you're going to find a salesperson.
But from here, hopefully, you will take back a marketing strategy, all right, so that you can get on the same page with your sales person or team or whatever. You with me? So don't break into a cold chill that you're going to fail this two-day, whatever, time if you don't become a lover of knocking on doors and picking coals on.
I mean, we've all read, you know, Zig Ziegler, you know, who made millions selling fuller brushes door to door. You know, some of us can't even imagine doing that. And encyclopedias and all this stuff that used to go on door to door.
Zig Ziegler was a master, you know, and he loved it. But most of us are not like that, so it's hard work. Another reason why farmers, another one of our kind of emotional barriers is that we fear rejection because we're so emotionally invested in a product.
Unlike a lot of things, products and services, you know, you're part of a team, you're part of a thing, you know, okay, so we're making, you know, gummy bears or whatever, okay? Yeah, it's not a great big personally invested field.
But for us as farmers, we're loving those animals, loving those tomatoes, loving that T-bone steak, right? We're loving that into health, production on our place or a place that we've been blessed to be a part of.
We wake up every morning and we see the dew on the grass. We see the sparkling of the sunshine on the dew and the garden spiders in the fall. And we're so emotionally vested in this that the fact that everybody in the world is not clamoring to our door is emotionally tough.
Okay? It is. And we have to recognize that. And that's why sometimes it's important to have a collaborator salesperson and us not do the sales because we do get, oh, you don't want my chicken. I stayed up with them at night.
I kept the rats away. I played Beethoven's Fifth. I set out in the field with a shotgun because the fox was coming for three days and then finally got the guy. We're so emotionally invested in it that it's a bit of a bit of a...
That's real. That's real. Peer dependency, okay? We farmers, you know, we don't like generally our peers to dislike us. We like to be affirmed by our peers. And when you start direct marketing, by definition, you have to differentiate yourself.
You have to explain, well, here's what mine is. And people start taking umbrage with that. Alan Nation used to say, if you have an idea and you go to your neighbor and you present your idea and your neighbor thinks it's a great idea, don't do it.
But if you go to your neighbor and you have your idea and the neighbor says, that's the stupidest thing I ever heard, that's probably your answer. And finally, the fear of sounding self-promoting. You know, we farmers, we're a pretty kind of self-deprecating lot, aren't we?
I mean, have you ever gone to a party and somebody comes up and introduces themselves and says, hi, I'm Mitch Kavanaugh or whatever. And I'm just a heart surgeon. I'm just a heart surgeon. No, no, they don't say I'm just a heart surgeon.
I'm a heart surgeon, right? We farmers, we can always say, I'm Joel and I'm just a farmer. I'm just a farmer. It's too bad. But this is our mentality, right? Because we've been marginalized, blue-collared, condescending to, right, through the culture, right?
And so when we start marketing and say, man, I got the best, you know, in our mind, down in our soil, man, I feel like a huckster, right? We do, you know, self-promoting. We're just not, the farmer's psyche is not set up.
It's not conducive to self-promotion. We work. We work. We put our head down. We work, right? You carry your water, you move your cows, you pull your weeds and your beans, you work, right? And we love it.
It's not bad work. We love it. But we're not, our vocation, the agricultural career path does not promote selling and we got the best and coming, you know, it doesn't promote circus theatric self-promotion.
And that's an emotional hurdle that we have to think about, which again is a reason why sometimes a partner is better. I'm betting on that. I'm dealing with the parents. Yeah. Yeah. That's great. That's great.
Yeah. Yeah. Yeah. Healing the planet, one bite at a time. It's on every one of our little bags. Yeah, yeah, that's good. But that's part of messaging. It's part of coming out of that hole that we've kind of been put in.
All right. Yeah, most farmers, we don't like people. Okay, and then I just put down some of these just to remind us that there are goals that can get in our way, I think, as we head down this path. And beware of these goals.
I call them anti-goals. They actually hurt us from being able to go where we want to go. One is I want to have the highest priced product. Alan and I used to argue about this a little bit. And I'm not a pure capitalist, okay?
I'll just say that. I love capitalism, but I'm not a pure capitalist. And if my dad were alive today, he was an economics business dude. And if he were alive today, some of our tension would be about, he'd always say, well, price it, whatever the market will bear.
Well, no, I want to actually put Tyson's out of business, and I'm not going to do that with the highest priced product. So we price it, and we figure out efficiently how to grow it with a margin that makes it work so that we can scale it, duplicate it, and that's just, you know, so we can heal more land, touch more land, and that sort of thing.
All right. I want to be the bigger. I want to be the biggest or whatever. That gets in the way. I want to franchise. Nothing wrong with franchises. Man, franchises have been very, very successful. But don't aspire there.
What we want to do is have a prototype. At our farm, our question, every time we have an idea and we're going to launch something or do something different, our first question is never, how big can it be?
It's always, how small can it be? Because if it doesn't work small, it won't work big. There's nothing about getting bigger of a dysfunctional or a malfunctioning prototype. There's nothing about making it bigger that will make it better.
We talk about that a lot with interns and apprentices and things. If you think that adding an educational component to your place is going to solve your inefficiencies, think again. It's going to compound your inefficiencies.
Okay, so I want to do everything the customer wants. You can't do everything the customer wants. You are never going to please every single person all the time. And by definition, we're going to talk a lot about finding our tribe and what is the core, what's the soul of what we're doing.
And if we think, if we're so thin-skinned that we can never have a customer complaint, we're not going to be successful marketers. Because no matter what you do, you're never going to please every single person all the time.
And you can't create a product that pleases every single person all the time. I want to make a lot of money. That's not a good one. And I want to sip wine on the beach in the Cayman Islands. That will get you derailed every time.
So let's jump in now to some of these cornerstones of direct marketing. The first one, I would say, is diversity. And if you don't remember anything, remember this. It's easier to find 100 people to spend $1,000 with you than 1,000 people to spend $100 with you.
The cost of marketing is customer acquisition. Every customer costs something to acquire. And once you have a customer, especially if it's a loyal customer, they want to buy more. The one-stop shop works.
Why? Why does Walmart work? Well, you can get your oil change, get diapers, bananas, and TV dinners all in one place. Okay? Now, we're not going to be a Walmart, but what I am suggesting is that the closer we can come to a one-stop shop, the better off we're going to be.
Because if we can take an existing customer that's $100 a year and we can turn them into $200 a year with another product or a value-added product or a totally complementary product. Because remember, the person that makes the sale owns the customer.
The person that makes the sale owns the customer. So if you collaborate with 10 farmers in your area to present a pretty well-rounded cornucopia of options to your customer, and you can take that customer that was just buying beef, and that customer can now buy squash, watermelon, pumpkin pie, and radishes.
The cost of customer acquisition was handled at the first sale. Alan used to always say, you never make money on your first sale. Stompman Grass Farmer, we never make money on the first subscription.
We only make money on renewals. Why? Because of turnover rate and because of the cost of acquiring that first customer. So we're constantly thinking about diversifying our portfolio, owning that customer.
So if all you're doing right now is grass-finished beef, think about either you producing or collaborating with somebody or bringing somebody into the program where you can offer chicken, pork, okay, apples, vinegar, all right?
Because the cost of customer acquisition is that high. Which brings me to the next point, is that you can't do it all. Nobody can do it all. So you're going to start to put together complementary people.
Now, every single one of us has strengths and weaknesses. If you're familiar with the business program Strength Finders, okay? Strengths Finders, some of us grew up with grandma, grandpa, whatever, telling us, you're pretty weak here.
You need to work on that. Now, I'm not talking about character development, like telling the truth. But I'm talking about we have different strengths and weaknesses. Some people tend to be more analytical.
Some people tend to be more engineer type. We have introverts, extroverts, messies, cleanies, organized, disorganized. We've got people that are planners and people that are spontaneous. And that's all good, all right?
And in farming, almost always, we see people migrating to certain themes. You don't normally see a person who is equally passionate and good at raising both plants and animals. We tend to gravitate either toward livestock or toward plants, and in plants, we even gravitate between annuals like gardening versus perennials like orcharding.
Okay? So there's enough to go around here that it can occupy everybody's ambition and passion and talent. But it's also so diverse that we can't be experts in all these fields. And the truth is, almost no successful business works by itself.
When we do the business school, Steve and I spend a fair amount of time on this element. So I'm not going to belabor this point. Just I want us to understand that sometimes the weakness of our business is that we simply don't have enough on our platter to offer to be able to leverage the customer that we have.
This is one of the big problems with exotics. Some of you are old enough to remember back several years ago when MUs and ostriches were the, you know, that was the big deal. We're all going to get into, you know, alpacas and llamas, and then it was bison.
And the problem, the problem with all those exotics is that they are, well, everybody wants to try ostrich once, right? But are you going to eat it every Sunday afternoon? No, okay. And so this was the problem.
Bison, you know, anything that's a bit exotic, the reason it's exotic is because it's a specialty. It's a once-in-a-while kind of thing. Okay? And so complimentary people. Now, this also is included in talent.
All right? And so you say, well, my lands, I'm not even making a living on a farm. How am I going to get a salesperson? That's why I've got commissions written there. Commissions allow you to tap into somebody else's talent without getting into a wage thing.
Again, we spend a lot of time on this in the business school, so I'm not going to belabor it here. Just realize that of our 20 people, not a single person is an hourly wage earner. I don't believe in it.
Okay? You either do salary with clearly defined objectives, or you do a hybrid salary plus bonus, or you go completely to piecework, or you go subcontractor. Okay? But this hourly thing is for the birds.
And so, you know, my favorite story is that beautiful lady sitting in the back, Sherry, our daughter-in-law, see, we hand-picked her for Daniel. We had a series of criteria here. We sat down and what we were looking for, said, what do we really want here?
Well, we want a gal that can go square dancing on Friday night all gussied up and Saturday morning enjoys gutting chickens. That's what we're looking for. And we got her. Well, when they got married, Sherry's poking around, you know, well, what can I do?
And I mean, at the time, there were, what, four or five salatin women, and now there's another one, you know. And so you got to kind of poke around and see where you're going to find a spot at this trough.
And we had just started the buying club idea about a year before they got married. It was fledgling. It was totally prototype. It was very, very small. And she said, yeah, I think I'd like to take that over.
Well, the problem was, you know, we didn't know if she could sell. For all we knew, she just wanted to get to just eat chocolate bond bonds and get paid by the hour to knit. And so we said, well, how about we put you on commission?
And to her credit, her self-confidence, yeah, yeah, I'll go on commission. And so no guaranteed pay. Are you with me? No nothing. In other words, she doesn't sell doesn't cost anything. And that was because we can't take the risk of hiring somebody on a prototype of fledgling deal and guarantee some sort of a $10,000, you know, maybe it's going to be a part-time deal, you know, maybe, but still, how do you know if it's going to work?
You know, and then you got tension. And then, of course, if she turned out to be a dud, then you got to fire your daughter-in-law, and that doesn't help the family situation very much. And so we started down, and within 10 years, she ran this up to almost a million dollars in annual sales, and she's going to talk to you about it this afternoon.
But what I'm getting at is that was a partnership that allowed us to tap into somebody else's talent without the risk of a paycheck. So the only way, the only way that it was going to cost us anything was it was going to make sales go way up.
Well, that's not a cost. That's a benefit. All right? So as long as you know your margins and as long as you have this cost of commissions plugged into your price, you can have as many partners out here as you want.
So we have several people who sell and they're all on commission. Worldwide, salespeople are always on commission, pretty much, right? Why? Because that's an easy way to measure performance.
