From feed mixers to hoof blocks, the discriminating dairyman has more choices now than ever.
New and improved products are being presented to dairymen all the time. Sometimes the benefits of a new product are easy to see; other times it is not so apparent. How is a dairyman supposed to separate the wheat from the chaff?
A dairy is just like any other business today. However, very few dairies have a purchasing agent or someone trained to deal with a savvy sales presentation. Most buying decisions rely heavily on a relationship with a specific company or service supplier. The key to making the right purchasing decisions is less about knowing the right people and more about asking the right questions.
The decision to purchase something should start with value, not price. Value is the combination of the cost of the product or service and the benefit gained from the purchase. Cost is easy to calculate, but sometimes the total cost is hidden. Total benefit of a new product may be difficult to define. Questions that can help you define value are:
• How will this product work for me? Get the baseline costs and benefits.
• What will I have to change to make this work? It doesn’t do any good to buy a new mixer if it won’t work with your current tractor.
• What will happen? Ask for specific, measurable indicators that you are receiving value (i.e., more tons per acre, less fuel per hour, etc.). Ask if there is any research to support product claims.
• How will this be implemented? Knowing who is responsible for implementation and how long it will take will help define the total cost.
• How does it compare (costs and benefits)? Matching up competitive products for an apples-to-apples comparison is nearly impossible. If possible, list the features and benefits and make an informed decision based on your needs.
Once the value has been defined you can proceed to the next step – understanding how this fits into the goals of the business. The worst decision any manager can make is one that does not get the dairy closer to meeting its goals. Goal-oriented questions are more personal and should be considered with staff, partners and possibly the bank.
• How does this fit our needs or plans?
If the decision cannot be tied directly to a business need or goal, it needs to be reviewed carefully.
• Does this change the plan?
Occasionally technology comes along that may cause a review of the master plan.
• Is now the right time?
Some decisions may depend on cash flow, workload or the availability of other resources like land or water.
If you are comfortable with the value and how it fits into your plan, now it is time to make sure you will not be alone after the deal is signed. These questions can only be answered by the decision maker.
• Who am I buying from? Make sure you know about the company that actually makes the product. Knowing the reputation of the company can be very important in a tough decision. Ask for references, don’t just read the testimonials.
• Who will provide support? This is not always the same as who you are buying from. Knowing who will provide support can be the difference between a seamless transition and being stranded with a half-finished project.
• Do I feel good about this? Any good businessman should not ignore his gut entirely. If you do not feel good about the decision, there is probably a reason. Go back and make sure that all of the questions are answered to your satisfaction.
There is no shortcut to investing in the right technologies and products to keep your business competitive. If you do you homework, these tough decisions will seem much easier. PD
Chuck Laney
President of Lauren AgriSystems
claney@lauren.com
