Choose the right marketing help Whether you're just getting into marketing or are to the point of studying options spreads and volatility, sometimes it pays to get some help or at least a second opinion.
Marketing advisory services and risk management consultants are widely available. But how do you know what fits for your operation? And just what do you get for the money?
Soybean Digest contacted more than 20 services and collected information on their costs and the services they provide. The result? We found prices range from dollars a month to thousands per year, and services range from weekly newsletters to on-site consultation to passing over full power of attorney and letting a consultant do everything for you.
Because of the wide variance in services offered, you'll have to do some homework to find out which program is right for you.
Don and Adam Christensen say they didn't get the right service on their first try, and learned they needed more help than the first service offered.
Until 1998, the Christensens owned a dairy farm near Hamburg, WI. In that year, however, they sold the operation and moved to Belmont, WI, to try their hand at crops and beef cattle.
"The move really warranted the need for a consultant because we were starting a totally different business," says Adam.
"We needed an educator," explains Don, when comparing his new operation to dairying where they "just got the milk check and that was that."
The Christensens tried an advisory newsletter the first year, but didn't feel the level of service was quite enough. "We did okay, but we didn't think they understood our market well enough," says Adam. "We're only 30 miles from Dubuque, IA, and the fundamentals of being so near a river terminal are much different than many other locations."
As a result, they signed up for a more personalized and one-on-one program offered by Russell Consulting Group. Despite the substantial price difference between the services, they like that they can turn to the same service when they're studying the economics of buying new equipment, considering a real-estate deal or plotting out a marketing strategy, and they're in touch often with the consultants.
"This past week we were considering buying a planter and had the options narrowed down to two," says Don. "After consulting with Moe (Russell), we reviewed cost vs. efficiency, depreciation, expected years of use and so on. We determined that one of the planters would generate an 18% return, which made the decision for us."
A benefit of hiring an advisory service for the Christensens is its ability to bridge a generation gap.
"This service gives us a buffer," says Don. "I'm 52 and Adam is 25, and the younger guy tends to be more gung ho, while the older one wants to be more secure. Each needs to bend a little and some outside advice can help with that."
The Christensens discovered they needed more service since they were new to marketing. They had also nearly doubled their operation in the past few years and didn't have time to do a ton of research themselves.
Services like those offered to the Christensens are classified as "full service" or one-on-one consulting in the table on pages 32-33.
A few other comparisons between services include: - Online presence. Most services are available online and most distribute advice through e-mail or through a Web site. A substantial number also are available through DTN/FarmDayta. Web sites are a good way to get initial information on an advisory service to see if it's a good fit for your operation.
- Consulting. Possibly the biggest reason for a price difference is in the amount of consulting you need. If you want someone who is available daily or weekly, expect to pay more. Some advisors are more like business managers. They'll look at all facets of an operation and design a business plan as well as a marketing plan.
- Newsletters. Most services offer newsletters or market updates, though the way they're delivered varies. Some come out several times a day and are only available through e-mail or fax. Others are delivered through standard mail.
- Seminars. We didn't capture information here on which services hold seminars, but many do. Advisors often travel frequently, especially in the winter months. They hold seminars as a way of introducing farmers to their services or as another component of their consulting programs. Often after hearing a consultant in person, you can come closer to a decision on whether the service offered is right for you.
- Trial offers/member benefits. If you don't need full-service consulting, a daily or weekly newsletter or advisory service may be the way to go. Several services have trial offers where you can receive their advice free of charge for a limited time period. This can help you determine which service best fits with your needs.
Some services are offered as member benefits through other organizations. Check with your associations and see if they offer this type of benefit.
- Expertise. Talk with someone at the advisory service about the strengths of the product offered. For example, some focus more on cash sales, while others offer both fundamental and technical futures market analysis. Many offer advice on crops and livestock, but they may stress one over the other or even one crop over another.
- Brokerage. Some services offer commodity brokerage, which can be a benefit in that you only deal with one firm for all your marketing needs. Often these firms offer advice at a lower cost because the brokerage income offsets the advisory service costs. Other services are completely independent and don't derive revenue from other services, in part because they feel it taints their advice.
One consultant stresses, "By not being tied with any brokerage, it gives me the freedom to use whatever strategy I feel is the best."