May 15, 2023

Farm Market & Agritourism: Build a value ladder and they will climb

What is a value ladder? Here is a definition on www.mightynetworks.com: “A value ladder is a marketing term to describe a relationship between a brand and a customer in which, as a brand adds more and more value to a customer, the customer is willing to spend more. In some cases, this may be a growing relationship of trust that leads to one final high-ticket sale.”

How can we build a value ladder for our customers in our market? Let’s say a customer comes to your market to buy some apples. How you and your associates interact with that customer can move the customer along the value ladder. Is anyone asking the customer questions such as “What apple variety do you like?”

“How are you going to use the apple?” If it’s for baking, the variety of apple the customer chooses may or may not be appropriate. A good associate will remember what that customer purchased, so when the customer returns to the market, the associate can ask them if they enjoyed the apples.

Step one is engaging a customer, building a rapport with that customer, and helping solve a problem by connecting the customer with the appropriate product.

You have also established a value for the customer that is more than the price of an apple. The customer gained some knowledge, and good customer service and (hopefully) had an excellent outcome with the product they purchased. We have started a journey along the value ladder, and the higher up the ladder the customer travels, the more money they’re likely to spend.

The other thing that was gained from that customer experience is a level of trust. Trust is critical for the value ladder experience. If there isn’t any trust, there isn’t any movement along the ladder. When the customer trusts you, the customer places value on your business. They are glad you are there. They want you always to be there.

During the pandemic, conventional food system supply chains were disrupted, and consumers started distrusting their traditional shopping outlets and started looking for alternatives. Maybe your market saw some of those customers come through your door. This is the opportunity to move these new customers along the value ladder. The level of engagement you can offer is much greater than what conventional shops can usually offer.

Your market layout can offer a similar experience of moving a customer along the value ladder just by how they move through the market.

I visited a market owned and managed by an orchard known for its apples and peaches. When you enter the market, you are “forced” to move to your left and move clockwise simply because if you turn right when you come in, you are at the checkout counters. When you enter, you see what you expect: apples, peaches, etc. From there you enter the deli area, facing prepared foods, the bakery, and other specialty food items. Continuing the clockwise movement through the market you enter a coffee bar with high-top tables. You then pass their hard cider offerings, almost as an impulse buy, to the checkout counters. I defy anyone to come there and just purchase apples.

I regularly hear discussions around “how do we get more customers?” Getting new customers is nice, but it’s expensive. Let’s focus on keeping the customers we have coming through our market doors and moving them along the value ladder. Those customers who are high up the value ladder will bring you new customers, simply by word of mouth.

— Brian Moyer, Penn State Extension

Photos: Chris Koger