How to Increase your Farm’s Average Order Value
In 2009, Bartlett Farms began selling raw milk to their community, building the foundation for the Farm to become a staple for locals. Sticking to their values of providing high-quality, sustainable goods to their community has enabled the Farm to build a consistent customer base willing to pay a premium for their products.
Peter of Bartlett Farms has learned to increase their Average Order Value (AOV) by communicating the health benefits of their products, pricing at a premium and offering attractive fulfillment options (direct-delivery to the doorstep). Now, the Farm maintains a profitable 6-figure business through their direct Sales of milk and protein.
Listen to Peter’s podcast episode:
1. Communicate the Value of your Farm Products
Why should Buyers choose to shop from your Farm versus choosing commodity products? To earn the loyalty of Buyers, your Farm marketing must communicate the value of your products. Identify your ideal customer and speak to them, specifically offering your product as a solution for what they desire.
Peter Bartlett knows that many mothers want food that is free of chemicals and promotes healthy growth of her children, instead of producing issues such as lactose intolerance. As the Farmer, Peter communicates the health benefits of raw milk in regards to her growing children.
Buyers may be interested in products that can improve their health and wellbeing, while others may want to simply support local business. When your Farm offers a solution for Buyers who are seeking local products, they will shop from your store. Educate Buyers via email, social media, newsletters and in-person to build lasting relationships.
Your products are better than conventional alternatives, and the key to building loyalty is by marketing your Farm as an obvious choice for customers. Buyers want to know where their food comes from, what is in it and how it will benefit them. Share these key details with Buyers, and they will appreciate the value of your products, making them “worth more” in their eyes.
Marketing starts with communicating the value of the product itself. You can invest in fancy packaging or pursue clever marketing tricks, but at the end of the day, the quality of your product is going to make more of a difference in how it sells.
- Farmer Peter
2. Price your Farm Products at a Premium
When Buyers understand the value of your products, then you can price it at a premium. Be sure to incorporate your costs into the price to ensure healthy margins. You will quickly run out of business if you price too low in an attempt to compete with commodity alternatives. You cannot compare apples to oranges - your product is different from the commodity goods, just as raw milk is different from anything you can get at a grocery store.
Build your costs into your pricing model. Include delivery, packaging and labor costs into the price to cover your bills, without making Buyers pay additional fees. If you tack on a $3 milk bottle deposit fee, Buyers will be turned off (lowering your conversion rate), versus just incorporating bottle replacement costs. There will be less shuffling of money when everything is built into your core pricing model.
Know your costs and consider how much it will cost for you to be profitable and support a viable income for your family. Build value with pricing tiers. Offer different prices for each available Bundle Box or Subscription. This will provide Buyers with options when purchasing, allowing them to choose a product that fits their needs and budget. Bartlett Farms sells Subscriptions in sizes ranging from basic starter plan (small), family plan (medium) and large family plan.
3. Maintain a Simplified Inventory
Buyers will be quickly overwhelmed if presented with too many options in your Farm store. To increase your average order value, assemble Bundle Boxes, versus making everything available ala carte. You know the best pairings, popular items and package sizes local Buyers typically purchase. When selling proteins, you want to move the whole animal to make profit. Buyers may want specialty cuts, but you can entice them by only offering those mixed in a box with primary cuts. This eliminates the stress of maintaining a lot of individual items that you would have to track, price and hope to sell.
Your products are unique to those at the local grocer, so you must offer something of value that other producers cannot (such as your local Farm brand, health benefits, sustainable harvested products, non-gmo). Peter Bartlett listens to what those in his community desire when talking to them at Markets, deliveries or pick-up locations. He can see potential market gaps that he can fill with valuable products for his community. This attracts new customers and pleases existing ones.
Adding eggs and proteins to the Bartlett Farms store increased the Average Order Value of his bundles, and increased Sales, because his Farm could become more of a one-stop-shop for Buyers. Regardless of any new products you may add to your store, remain consistent in your brand and values, and actively listen to your customers (don’t fall for the ‘hype’ of a farm bureau agent).
4. Utilize Bundle Boxes and Subscriptions
Move more products and increase your AOV with Bundle Boxes. Buyers will be pleased to access more products in a convenient experience that reduces decision-making and leads to a quicker checkout experience. With better purchase options comes premium pricing.
Know what sizes your customers will look for when assembling Bundle Boxes. In a college town, you may not sell huge bundles to students. However, in a residential area that caters to suburban families, bundles do very well. Ultimately, Bundle Boxes will drive more revenue for your Farm, increase turnover of your inventory, and reduce dependency on cold storage.
Bundle Boxes offered as Subscriptions will help secure more recurring cash flow for your Farm business, and give Buyers peace of mind with consistent access to your products. Offer add-on items to allow for customization of Subscriptions without the stress. If purchase options are tailored to your community with convenience in mind, they will trust your Farm, securing future purchases.
Conclusion
Communicate “why” your products are better than commodity alternatives when it comes to increasing the value of your Farm products with prospective Buyers. Actively listen to what Buyers in your local community desire to fill market gaps, build trust and increase loyalty. Communicating the value of your sustainably raised, local products, will enable your Farm to charge a premium price. Once Buyers see the value purchasing from you, your Farm can build a trustworthy, local brand, while maintaining a high AOV that supports a profitable business.
Barn2Door offers software for Independent Farmers to create and promote their brand, sell online and in-person, and save time managing their business. If you’re curious to learn more, watch this 5-minute video.