ROI Calculator: 5 Margin-Driving Capabilities Your Business Needs
Kiffin Wigert
Whether you’re right where you want to be, or a closer look makes you realize the work you still have to do, your internal digital tools have the power to push your ROI forward — or hold it back.
So what are the technological capabilities that need to be baked into any Ag retail business to drive more ROI? Here are a few actions your digital infrastructure should empower:
1. Improve accuracy when tracking and verifying CP program payments
If you don’t even have visibility over rebates you’ve received — or even more critically, the ones you’re owed — how will you know if money is leaking away?
Digitally, you need a platform that gives you real-time tracking capability. If suppliers have pushed aggressive targets, you need to be able to monitor when you’re close to reaching them.
Even more so than real-time updates, your internal platform needs to be accurate. When your supplier partners have your accurate sales numbers on hand, they can more quickly, reliably issue payment.
2. Reduce costs by CP portfolio purchases at best cost from wholesalers
A core tenet of return on investment: you either need to bring in more money on the back end, or save more money on the front end.
In the Ag input value chain, optimizing your product net costs will help you do the latter — and drive your business performance forward. To do that, you need full visibility over end-to-end net costs, plus net sheets that reflect updated, accurate data.
Armed with more accurate nets, you can optimize your purchase decisions with supplier partners, offer more fair pricing to customers, and improve margins.
3. Increase sales from improved price competitiveness and customer segmentation
Maximizing your margins and earning customer loyalty isn’t just about racing to the bottom to give them the lowest price. Instead, customized pricing is the key to both better ROI and better customer experiences.
With the right tools, you can build your sales strategy based on who you’re selling to. For example, you might offer different incentives or pricing to Farmer A, who has 400 acres, vs Farmer B, who has 12,000 acres. With that segmentation in place, retailers can increase sales — from all segments. When you understand your true profit per acre, you can protect the margin behind every deal.
[Related content: Download our white paper about 3 typical pricing strategies, and why customer segmentation could be the key to higher ROI]
4. Improve margins through price communication
By building on a customer segmentation approach to pricing communication, you have the opportunity to drive even more ROI. For example, you might offer different pricing to Farmer B with those 12,000 acres to increase product sales. But on top of that, you can also think about offering more value beyond just products to those customers. Consider higher-margin services, like precision ag or soil health consultations.
Communicating those prices (and your overall value as a retailer, beyond just transactional product sales) can be critical to driving higher margins in the long run.
5. Reduce price-list administration and rebate management time burden
If you’re still using outdated digital tools to manage your price lists or rebate programs, your team is likely spending way too many hours on non-ROI-driving activities. Your team needs the digital infrastructure that will allow them to spend their time on strategic decisions and customer relationships, not inputting or wrangling data.
When your internal technology is limited to only Excel, problems can arise with accuracy and timeliness. You need a platform that allows you to fix mistakes in real time and more efficiently manage rebate programs and pricing. Otherwise, end-of-year reconciliation becomes a massive time suck for your team — and a drain on your margins.
Calculate Your ROI
The Smartwyre platform was built with these five margin-boosting capabilities in mind.
With Smartwyre, you’ll drive more ROI by gaining:
Real-time visibility over data, so you can identify trends, be proactive, and make faster, more strategic decisions
Visibility over true profitability: understand the implications of every product and deal to maximize your margins
The ability to segment customers based on historical sales data and other factors, so you can build a more tailored sales strategy for your entire customer base
Data consolidation, so everything can be found in one place
Instant updates so you can understand your true profit per acre — as it stands today — and give the right price to the right customer
Tools to help you understand your true costs based on updated supplier pricing and nets, so you know exactly what you’re getting
How well is your Ag retail business performing in these ROI-driving categories?
