Farm Management Minute: Will you become a marketing legend?
March 6, 2015
In spite of some poor decisions later in his career that tarnished his image, it can be debated that Pete Rose is one of the most prolific hitters in baseball history. Over his 24 year career, Rose is baseball's all-time leader with 4,256 hits. Despite the fact that less than 4 percent of these hits (160) were home runs, he is number six all-time in runs scored with 2165; which shows that you can score without hitting home runs.
So what does this have to do with farming? Well, it is a great analogy for marketing: because if you can become a baseball legend without hitting home runs, you don't have to hit home runs in your marketing to become a marketing legend! So, what kind of marketer are you?
Three factors that tend to cause people to strike out with their marketing are greed, fear and ignorance. Greed and fear tend to be part of human nature. If you have the opportunity to sell a bushel of corn today for $3.50, greed kicks in and you want $3.60. If you sell it tomorrow for $3.60, then the fear kicks in and you immediately worry that it will go up to $3.70 tomorrow and you will have left money on the table. This is also where the ignorance comes in to play, because if you don't know what it cost you to produce that bushel, how do you know if you were profitable at any of those prices?
It is extremely important to know your cost of production and calculate a breakeven price. I have wondered for years how you can even begin to market if you do not know your breakeven price, although I know that a lot of you have done it. This is like swinging at a pitch with your eyes closed. But, if you know your cost to produce a bushel of corn was $3.25 and you sell it today for $3.50, you just hit a single and sold grain at a profit. Knowing that you sold at a profit should help alleviate the fear of the price going up after you sell, because if you have more to sell, you should be hoping it goes up. If it goes up to $3.70 and you make another sale, then you just hit a double. As long as you keep selling grain at a profit, you are going to stay in the lineup and get more at bats. Or in farming terms, you will be profitable and will get the opportunity to farm another year.
If you are one who swings for the fences every time, because you may have hit a homerun doing that once or twice in the past, I would remind you that in Major League Baseball in 2014, there were only 4,186 home runs and 37,441 strikeouts. So don't gamble. Instead, focus on getting on base and you can become a marketing hall of famer!
At the South Dakota Center for Farm/Ranch Management at Mitchell Tech, we are not baseball or marketing exerts, but we can help you to become a better marketer by assisting you in tracking and knowing your cost of production and help you to tie this in to your marketing and cash flow plans. If you would like to talk to one of our hitting coaches, contact us at 995-7196 or firstname.lastname@example.org.