We all diligently update our farm accounts with all the information that is required, either ourselves or perhaps with the help of a farm secretary or accountant, however, how much do we actually use this plethora of valuable data to help our business?
The best marketing strategies are usually based on insights into what has happened in the past. Perhaps you decide to re-run an event which previously received good feedback or create a new social media video based on a past one that got the most hits.
But did you know that your farm business’ accounts actually contains lots of valuable data which can be used to make smarter marketing decisions.
Steph from SUM-IT farm software has outlined 4 ways in which you can use data already sitting around in your accounts to grow sales and ultimately increase the profitability of your farm diversification.
Your accounts will likely help you identify your most profitable customers which can be used to give your marketing efforts a clearer focus.
For example, you may be able to filter your top 50 customers in terms of total income over the past 12 months. This is particularly useful for businesses who welcome repeat custom such as perhaps meat boxes, event venues or dog grooming.
For these businesses you could use this data to run a ‘thank you’ campaign to your most loyal or high spending customers. This could look something like sending a hand written thank you card in the post along with a voucher for 20% off their next purchase. This helps remind them that their custom is valued, increasing brand affinity as well as giving them an incentive to come back soon!
You could also introduce a loyalty scheme such as a simple stamp card customers can get stamped with every purchase, offering a freebie after a set number of stamps.
The financial data you have on each customer can also be used to create customer segments to tailor marketing messages. For example, you may run a bed and breakfast and create a specific segment for those customers that live within 60 miles and have spent over £500 in the last 2 years. You could then send targeted emails perhaps offering special last minute rates for ‘loyal locals’!
You could also use the data you have on your most profitable customers to try and find similarities and thus help you widen your reach and find more of your ideal target audience. For example, by analysing the data from the customers that have spent the most with you, you may find they are largely based in the same postcode perhaps or are predominately of a particular gender or age group. This knowledge will allow you to make your future marketing a lot more targeted and relevant to the people you want to attract.
It is also valuable to know your highest spending customers as these could be the perfect people to ask for a testimonial to help build social proof on your Google profile, website to social media.
If you delve into the last few years of your farm’s accounts, you should be able to easily decipher which months prove best for sales and which are the quieter months.
You may feel you instinctively know this but it is always worth looking at the data, especially if your business invoices customers and you may not actually received payment until a few weeks after.
If you identify that a particular period is proving quiet for you sales-wise, you can schedule targeted promotions or special events during these periods. For example, if you offer pick-your-own produce but find December-Feb is pretty dead in terms of new sales, you could introduce some Winter workshops such as ‘Pickling vegetables’ to encourage customers to visit your farm during your down-season.
This data is also useful to know when the best time may be to run sales promotions as it may not be fruitful to do these when sales are booming but may act as a much-needed incentive when sales are drying up.
As well as seasonality, you can use your accounts to identify poor performing products and help make a decision on these. For example, perhaps you run a farm shop and discover from your accounts that the Gin Lemon curd just isn’t proving as popular as you thought! You can use this knowledge to free-up shelf space or potentially try out new suppliers.
This financial data is also useful when you are reassessing your prices. For example, if you offer something like a petting farm or horse riding experiences, you may find that income during certain months is considerably lower. You could then use this data to perhaps offer off-peak pricing to balance demand and increase sales.
Similarly, you can use this data to identify ideal times for discounts or promotions.
Most farm businesses will be running multiple enterprises and will likely be separating them out in their accounts. But how many of you have stopped to really look at each of their gross margins?
This is such a key piece of information that is sitting in your accounts. You can use this to prioritise marketing spend on enterprises yielding the highest return on investment (ROI). For example, it may be that you discover that it is your pedigree beef herd that is actually offering the highest gross margin, despite it having a lower turnover. You may therefore want to consider investing more in this particular enterprise and pull back on other areas that may be getting more revenue but have a significantly lower gross profit margin.
You can then focus promotional activities on these areas with the best margins to maximize returns.
When analysing these figures, be sure to include the full reality of its associated costs such as admin time and all staff costs.
Another example may be comparing the services you offer, such as if you run a dog training centre, you may discover that hiring out the paddock offers a higher gross margin than 121 training so you may want to run a campaign letting everyone know you offer this.
On a side note, professional photos are such a valuable way to show-off your products or services so perhaps you want to invest in some photography this year. This knowledge of your most profitable areas can help guide which areas you focus your photography, and other marketing resources, on.
When you have carried out a new marketing activity such as perhaps a promotional event, magazine advert or an email campaign, do you always go back and look at the sales data?!
Often we are just so focused on what to do next or fire fighting what is happening now, we often don’t look back and analyse the success (or not!) of different marketing techniques.
It is always good practice to go back and look at the sales data and monthly/weekly profit post each marketing campaign. This will go some way to help identify whether putting an advert in those series of magazines for example, did make a tangible difference to your bottom line. This will help you make wiser business decisions going forward instead of simply ploughing on repeating the same activities just as you always have.
It is important to note however that some marketing practices may not result in immediate sales and may not impact your profit figures straight away. Often, customers have to hear about your business on multiple occasions from various avenues before they make a decision to visit/purchase.
Knowledge is power (but only if you know how to use it!)
Hopefully this article has given you a bit of an incentive to look under the bonnet of your accounts. Surprisingly to many, your accounts isn’t just a stressful set of numbers you have to begrudgingly have up-to-date each year! It can prove to be a very valuable and often under-used tool for assessing what is working and what is not in terms of your marketing efforts. If you dig just a little deeper it can be the source of new marketing ideas to try to even out cash flow and attract more of your ideal target audience.
So next time you load up your accounts, why not take just a few minutes to look at some of the reports such as 12 monthly cash flow, gross margins per enterprise and most profitable customers.
If you are not sure where to start, you could try initially asking your bookkeeper, farm secretary or accountant to take a look with you.
Some accounts providers such as SUM-IT software have accounts programs designed specifically for farmers with in-built reports such as enterprise gross-margins to help make the analysis a lot simpler. They also offer personalised support to help you get more from your accounts data.
If you would like a professional marketer to take an overview of your business and help you plan a more strategic and profitable marketing campaign, Flame Marketing are perfectly placed to do this. Just get in touch with Hayley and her team for an initial chat.
