Client: Farm Credit Canada (FCC)
Category: Customer-Appreciation Event
Event: FCC's "Very Important Producer's' MarketPlace
Entrant: Farm Credit Canada
Client Company Name and Description
Farm Credit Canada (FCC) helps farmers and agribusiness grow and diversify by offering our customers a variety of customized loan products and business services. Supporting primary producers is FCC's main focus through all three lines of our business - farm finance, agribusiness and alliance partnerships.
Our vision is to be visionary leaders and trusted partners - putting the power of our people's specialized knowledge and innovation to work for farm families and agribusiness across Canada.
Our corporate mission is to enhance rural Canada by providing business and financial solutions to farm families and agribusiness.
A federal Crown corporation that is financially self-sustaining, FCC lends to all sectors of agriculture across Canada. Funds are raised through domestic and international capital market borrowing programs. Profits are reinvested in agriculture, developing products and services to benefit the industry. FCC's healthy portfolio of $10 billion and 11 consecutive years of portfolio growth are a reflection of our customers' success.
Operating out of 100 offices located primarily in rural areas, FCC continues to expand to meet the changing needs of the agricultural industry. The corporation's dedicated employees are passionate about the business of agriculture.
FCC has chosen to differentiate itself on the basis of the customer experience. This decision was based on three key reasons:
As a marketing team, our goal was to create a memorable hospitality and networking event that would:
Location/Date: This unique hospitality and networking event is held the evening before the opening of the Pacific Agriculture Show, British Columbia's premiere three-day agricultural industry equipment and services tradeshow and sale. FCC has hosted this event in February 2004 and February 2005, with plans to continue to do so trough 2006. The FCC VIP MarketPlace event is held at the Ramada Inn and Conference Centre, 36035 North Parallel Road, Abbotsford, BC, Canada.
Audience: One hundred and twenty-five Farm Finance or Agribusiness client/key prospect guests and their partners, primarily local farm business operators and the executive of local food processing operations. Together, they represent over two hundred and fifty million dollars in current business. Five local grocery store buyers and twenty-five FCC staff and executive were also in attendance.
Overall Summary: Farm Credit Canada's key competition is made up of five extremely large, well-funded national corporations, Canada's charter bank. With more products and services; significantly larger budgets, and the ability to ensnare customers with necessary products like deposit accounts, credit cards, home mortgages and bank machine cards, these competitors can easily overpower FCC for key customer acquisition. The banks' weakness is their lack of differentiation in the minds of the majority of consumers when considering competing services or products.
Strategic, Company-Wide Objective: FCC is the David of the Canadian Banking Industry, and the Goliaths are actually five companies with portfolios nearly 20 times larger. Because FCC's primary shareholder is the Government of Canada, it is not allowed to offer services, such as operating lines of credit, deposit accounts, or home loans, due to the fear of unfair advantage. While competitors offer multiple services to lure in customers - and steal some from FCC - FCC is only able to provide hard lending for assets such as equipment. Thus, FCC continually needs to make sure its clients survive in the farming industry while at the same time it needs to retain those customers and differentiate itself from chartered banks. Thus, its main company-wide challenge was to create a sustainable, competitive advantage based on customer advocacy.
Unlike our main competitors (Canada's five extremely large chartered banks) FCC is limited to providing financing to only one industry - agriculture. FCC's slogan is "Agriculture. It's all we do." While agriculture as a whole is not seen as a key strategic market for our competitors, key high value agricultural sectors such as poultry, dairy and value-added processing are being targeted as relatively profitable with low risk.
FCC has a relatively higher cost to market than the competitors because the Canadian government mandates FCC to provide all key services across Canada in both of the country's official languages, English and French. This means ensuring we have bilingual staff available at all events; produce all materials in both languages; provide language training for all senior management and national staff and a number of other significant expenses.
While we do provide term financing for agricultural operations, we cannot provide the full spectrum of banking services and products to our customers (ie: operating lines of credit, deposit accounts, home, personal or car loans; investment banking, etc). This is due to the fear of unfair advantage, since our primary shareholder is the Government of Canada, which also regulates the banking industry. So while the banks do compete directly with us; we do not pose a serious threat to their overall operations.
The 5 large Canadian banks often raid FCC's client base for our top customers by bundling key banking services with their term debt and offering them similar terms and conditions at a slightly lower interest rate. They are able to identify our key customers by examining their direct loan payments to FCC, which are transacted though their automated banking systems.
For 40 years, FCC was allowed to market and sell its services to only the primary producers. In 2001, our mandate was revised to include lending and business solutions to the entire agricultural industry, from input suppliers to food processors. However, there is still a myth in the industry that we are limited to primary production only, thus we are not even considered for many of the larger business lending opportunities.
The BC agricultural marketplace is made up of a variety of ethnic and cultural backgrounds. Many of these customers are first or second-generation immigrants and relatively traditional agricultural backgrounds. While many are successful entrepreneurs and business operators, they are most comfortable in traditional small town, rural environments and situations.
Many of the more traditional farm operators will not attend any type of hospitality event if it interferes with their production cycles. For example, Dairy Operators must milk their cows between 5 and 7 pm daily and therefore are unlikely to attend the usual dinners/receptions.
FCC provides financial services to producers and businesses throughout the entire food chain - from input supply to primary production to food processing and packaging. Consequently, any FCC-hosted event must recognize each of these target market's unique differences; introduce them to other FCC customers and clearly demonstrate FCC's role as a catalyst in the industry.
We wanted to leave each guest with a strong emotional response to the evening as well as some kind of permanent reminder of the event. We began by examining our current store of approved promotional items and quickly realized that the standard golf caps, shirts, cups and other trinkets and trash did little to differentiate FCC or provide to our customers. Adding a logo to the standard high-quality promotional materials often made them far more costly than was reasonable, especially given the unique lifestyles of our clients and the belief that most business operators don't like to advertise to whom they owe money.
Finding affordable promotional items often meant purchasing large volumes through distributors for companies that employ child labor at below poverty wages. As a socially responsible company, committed to the success of Canadian producers and local businesses, we felt more than a little uncomfortable scouring the Internet for $5.00 hats. We needed to find something that was uniquely Canadian, demonstrated our place within the industry, was impossible to reproduce, but cost effective and that would appeal to a diverse group of clients from all ethnic and cultural backgrounds.
FCC staff from across the country has often purchased local agricultural products from their clients and delivered them as a way of saying thank you while visiting Corporate Office partners. Whether it was a bottle of VQA wine from the Niagara, fresh maple syrup from Quebec, jams from the Okanagan Valley or smoked lobster from the Atlantic, these gifts never failed to delight both the recipient and his or her family. Agricultural producers in Canada, like their American counterparts, are fiercely proud of the high quality of their products. The field staff often indicated that the producer that had provided the item was thrilled that his or her products were selected as a gift and that they were being so well received.
FCC saw the unique situation of the seller, the buyer and the recipient of a gift all getting significant value from the exchange as key to our solution. The Very Important Producers Marketplace was created as an interactive hospitality and networking event that illustrated the symbiotic relationship between these different types of customers and FCC. It also clearly demonstrated our role in providing the capital to develop and expand new opportunities in the Agriculture and Food sectors.
The FCC VIP MarketPlace event was held between 6 and 9 pm on the Wednesday evening prior to the opening day of the major industry trade show in the region (Pacific Agricultural Show). We knew that all of the attendees would be attending or exhibiting at the show the balance of the week, but would be free the evening before the opening.
Targeted Food Processors and Cottage Industry Operators were invited to participate as vendors by their FCC Account Manager. If they agreed to attend or were interested in additional information, a formal registration package of details was forwarded to them in person or by mail. This process took place approximately 4 months before the event.
Approximately one month prior to the event, 120 invited guests and their partners received an "Enjoy the Taste of Success" invitation by mail, followed by a personal call from the customer's Account Manager approximately 2 weeks prior to the event to confirm their attendance.
FCC staff greeted the over two hundred and eighty seven guests that arrived at the hotel between 5:45 and 6:15. Each guest was provided an empty paper gift bag, menu and vendor guide along with a paper wallet imprinted on the outside with "Performance should have its rewards…." and the inside with "Is Cash OK?"). Neatly tucked inside the wallet was $20 in VIP MarketPlace "bucks", which was redeemable at any of the Customer Vendor tables around the room.
Creative food service that linked the primary producer to the value added processor was relatively simple - we worked with the hotel catering team to source the locally available produce, supplies and ingredients from key customers in attendance that evening. At interactive buffet and sampling stations scattered throughout the venue, guests were able to enjoy fresh ingredients in a variety of dishes, while learning about the producer or company behind each of the featured menu items.
Guests were encouraged to network with other key clients and FCC executives, sample all of creative menu items, and to visit all of the vendors in order to sample their products. The twenty dollars was for them to "Enjoy the Taste of Success" by selecting a small gift from another FCC customer-vendors who processes farm gate products into value added items like wine, chocolate, gourmet cheeses and jams.
Customers all enjoyed an evening of locally grown and processed food and refreshments supplied by producers like themselves, while they strolled through an elegant private farmer's market. They selected a gift or gifts of their choice, learned of the breadth of successful products that other FCC customers produced and networked with the potential buyers for their specific products. They also got a chance to sample dozens of products from across the region. May of the wives in attendance indicate that they loved the idea of shopping with someone else's money. Every attendee circled the room at least twice, visiting and sampling all of the vendor's products in order to make sure that they selected the right items to take home.
The vendors, all of whom were FCC clients and prospects as well, received a no-risk opportunity to market their products to hundreds of new consumers in the region, while being assured of sales since the VIP dollars provided had to be spent that night. They were also provided with the wallets and money and FCC staff looked after their displays while they took a stroll around the room and sampled the other vendors' wares.
FCC was able to provide each guest with unique and highly personal custom gifts and support our value-added processors at the same time. Vendors were thrilled to provide raw ingredients for the evening's catering menu at a fraction of their market value since they knew the investment would be well worth the expected benefits. By working closely with the hotel and our clients to control input costs, FCC was able to provide an elegant catered function for an extremely reasonable price. The hotel made a number of key supplier connections as well and has continued to source many of their key ingredients from local producers. Both targeted customer groups clearly saw that FCC is committed to their success.
Metrics / Measurable Results:
| Stated Objectives | Measurable Results (2004) |
|---|---|
| Get 75 percent of invited guests to attend the event for at least two hours | 98 percent of vendors and 90 percent of invited guests attended the event for the full three-hour duration. |
| Renew 95 percent of the attending client's business for at least one year following the event. | In our highly competitive environment, we only lost $0.8 million or 3 customers to the chartered banks this last year and fortunately, these were the smaller customers. |
| Expand lending with target group by a minimum of 5 percent of current principal net due (PND). | Forty-four of the customers attending have expanded their loan portfolio with FCC over the past year. Even after regular payment reductions, the portfolio to those who attended grew by $40 million or 17.7%. |
| Educate 80 percent of attendees that FCC provides business and financial services to the entire agricultural industry - from primary producers to food processors and sellers | All attending guests were fully educated to FCC's role in all aspects of agricultural production, from input supply through primary production to value-added food processing. |
| Educate the top 10% of the attending customers that FCC is approachable and "not like your bank" by introducing them to FCC's CEO. | The participants in the agricultural industry see the large corporate bank executives as largely invisible and completely inaccessible Though the event lasted longer than the planned three hours, over 25% of the invited guests had a chance to meet and chat with FCC's CEO, John Ryan. This meeting with our CEO clearly demonstrated FCC's customer focus and approachability. |
Country Life magazine, the regions premiere agricultural newspaper, published a story and photo about FCC's event and new product launch March following the 2004 event.
We repeated the event in 2005 with the same goals and a plan to target the event more strategically by inviting a smaller but higher value group of customers and focusing more effort on new business acquisition.
While we cannot measure the success of the retention and attraction efforts in actual disbursed loans until February 2006, our initial results and subjective feedback from attendees are encouraging. Total attendance in 2005 was more manageable with 275 guests, slightly lower than the 316 we had in attendance last year.
In 2004, 104 customer connections attended in 2004 representing $227 million PND which had an average of $2.18 million per connection. For 2005, 96 customer connections attended representing $285 million PND with an average $3.0 million per connection. This clearly shows we were more focused in our targeting efforts. In addition to the connections above, we also had in attendance $19.3 million in new customer prospects. To date, 100% of FCC customers who were in attendance at the event have been retained.
Budget: $20,000 was budgeted for the 2005 VIP event.
| Food and Beverage - Ramada Hotel | $12,109.07 |
| Imprinted Customer Gift Bags | $37.20 |
| Professional photography & printing | $224.74 |
| Entertainment (Jazz Trio) | $375.00 |
| Airfare/Hotels/Misc. for CO staff attending event | $1200.00 |
| AV rental and support | $300.00 |
| Customer gifts for 250+ clients attending | $5426.00 |
| TOTAL SPENT | $19,772.01 |
Event Producer / Agency: This project was completed in-house by FCC.