The price that a customer is willing to pay has everything to do with how much value they ascribe to your product.

It has nothing to do with your cost of production and marketing.

The cost of production and marketing determines how much you have to charge for your product in order to not lose money, or in order to make a certain margin or realize certain returns from your business.

But it has nothing to do with the price a customer is willing to pay.

Unless, that is, you decide to make the production and marketing part of the story that adds value to the product you are selling. The fact that it costs more isn’t interesting, and isn’t likely to add value to your product. The story of why is interesting, if you make it so.

When customers complain, it can feel like a blow to the gut. You’ve put your heart and soul into growing and delivering your crops, and after that kind of effort, rejection really hurts.

But complaints result from one of two things: either you’ve got a problem with your product, or you’ve got a problem with your customers.

If customers complain about the quality of the product they get from you, you need to determine why they’ve gotten low quality produce from you. Did you pack rotten vegetables in their boxes? Do you lack the cooling capacity or procedures to get product cold fast, reducing respiration and increasing shelf life? Do you understand the commercial requirements for the product you are selling? Do you need to up your disease-control and insect-control game, or make changes to your soil management practices? Do you have what you need to maintain the cold chain – or at least a semblance of a cold chain – from the time your product leaves the farm to the time the customer takes control of it?

Or does the problem lie on their end? Did your farmers market customer leave their salad mix in a hot car for hours before it found its way to their refrigerator? Does your wholesale buyer adequately manage their stock rotation? At Rock Spring Farm, I offered a no-questions-asked refund or replacement the first time a customer complained about quality issues; but if customer-specific quality issues arose again, I turned into a detective to figure out the source of the problem.

If customers complain about prices, either you aren’t providing the value they expect, or you’ve got the wrong customers. Value – what a bundle of goods and services is worth to a customer – has little or no relationship to your particular cost of production; it’s a function of customer perception. You need customers who value local, organic, family-farmed vegetables (if that’s what you’re offering), and you need to provide them with a quantity and quality that matches what they expect. No small feat!

The price you need for your products is based on your cost of production and marketing. But the price you get for your product comes down to value.

And value is subjective. In my first year at Rock Spring Farm, I couldn’t get $1.00 per pound for our tomatoes at the Decorah, Iowa, farmers market – but I could sell exactly the same tomatoes for  $2.50 a pound in Rochester, Minnesota! The same tomato, sold in the same way, had much more value for my Rochester customers. Guess where I sold my tomatoes?

I also found that I could sell my salad mix at a higher price than my competitors in Rochester. Why? Because it looked better in the bag and lasted longer in the refrigerator than the other salad greens at the market. We consistently nailed the production on salad greens, and followed it up with great post-harvest handling. Same market, same crop, but with a significantly higher value.

If you aren’t getting the price you need for your products, you’ve got four choices:

1. Reduce your cost of production, marketing, and distribution, so that you can charge a lower price for your current value proposition;
2. Decrease your value proposition;
3. Increase your value proposition; or
4. Find new customers.

To make money farming, you absolutely must match your value proposition to your customers.

In marketing, it pays to match the range of products and services you offer to the breadth of the market you offer them to.

Think about a triangle, with the point at the top. The point represents a narrow range of products and services, while the base of the triangle represents a very broad market – that’s how a company like Grimmway (the giant carrot producer) sells carrots: they’ve got a very narrow product offering (carrots), and they market them to everybody possible.

If you broaden out the product and service offerings (the point of the triangle) while keeping the market (the base of the triangle) the same, you end up with a square – a broad range of products marketing to a very broad marketplace. An extreme example would be growing everything from radicchio to Burbank Russet baking potatoes, and selling the whole lot to everyone from urban foodies to Iowa corn growers.

When you market with a square, it’s just plain hard to stand out from the crowd. Because the definition of value and quality varies with different segments of the market, it’s almost impossible to provide a wide range of products that is perceived as high value to a broad marketplace – so you end up competing on the basis of price, instead.

And that’s not sustainable.

Now, invert that triangle so that you’ve got a very broad range of products and services, but you’re marketing to a very narrow market. Most farmers in the organic and local food movements are already doing this to some extent by marketing to customers with an elevated commitment to those values. But too many small growers continue to try to be everything to everybody who might be interested in the product categories they have to offer.

You need diversity, but too much diversity at both the top and the bottom of the triangle becomes too difficult to manage effectively. Think about how to narrow the bottom of that inverted triangle: instead of marketing CSA shares to an entire city, what about marketing to a select neighborhood, or to a select self-identified community? Instead of marketing through a CSA, wholesale, and farmers market, what about picking one segment, and doing it really well?

The transition from July to August isn’t easy. It’s hot, the battle with the weeds isn’t getting any easier, and you’ve still got to get the turnips planted.

But that’s your problem, not your customer’s.

When you’re greeting a customer at farmers market, or writing a newsletter for your CSA, or engaging with your employees, don’t forget to smile. It’s a good life, people, and we’re all lucky to be here. Smiling reminds you, and everyone around you, that that’s true.

The basket of goods and services you provide to your customers has more in it than the explicit stuff. It’s not just the vegetables and the delivery and the newsletter - it’s the box you put the produce in, the label you put on the box, the invoicing system you use, and more.

People who buy your fruits and vegetables aren’t just buying produce and a newsletter, they’re buying everything that goes into buying that produce, from the way you present it to the story you tell about why and how you got into farming. Farmers market customers are buying clean and fresh farmers in addition to clean and fresh vegetables, and wholesale buyers buy a communication and delivery schedule in addition to their produce.

You can one-up the competition by doing exceptionally well at adding real value with service and consistency where your customers don’t even know that they expect it. At the wholesale level:

• Provide a clean, well-designed, and organized invoice, including your contact information;
• Use an email service like MailChimp to schedule availability notices at the same times every week (you can do the same with faxes);
• Promptly document credit requests for products that don’t meet expectations;
• Verify your customers’ overdue payment status every month, and let them know about anything that’s missing - including applying a credit to an invoice.

At farmers market:

• Clearly identify prices for your products where customers can easily see them (putting the price for radicchio on a chalkboard behind the stand does not make it easy for customers to identify the vegetable or its price);
• Be prepared with at least one “week-night” preparation for every product on your stand, and make sure your helpers have the same knowledge;

For a CSA:

• Provide a straightforward sign-up process (this doesn’t have to be an online shopping cart - Fair Share Farm in Missouri requires members to come to a sign-up event - the process just needs to be linear and clear in its description of options and process.
• Let members know what to expect in their share before you deliver it - at the same time every week;
• Make box return easy by providing instructions for unfolding boxes;
• At delivery sites, keep the boxes off of the ground to keep them clean and sanitary.

You’re always selling more than what you’re selling, and the extras are part of the price that your customer pays for their produce.

You know that guy at farmer's market who sits on the tailgate of his pickup truck, looking down at the ground with his arms crossed? How much effort are you going to put into going up to him and buying his vegetables?

Nobody's obligated to buy from you. Wal-Mart has organic and local produce now. Yes, you work hard. Yes, you take good care of the earth. Yes, you suffer through droughts and floods and plagues of locusts, but that just doesn't matter. Your competition isn't asking for a break, and that means your customers aren't going to give you one.

I try to patronize local businesses, but I'm often greeted with an attitude that makes me wonder why anybody would shop there - the appliance store that charges an extra trip charge because their repair guy didn't bring the right parts, the clothing store staffed by young women who can't be bothered to talk to me, the Mexican restaurant that can't be bothered to bring a margarita in under fifteen minutes. These people are coasting, and coasting doesn't work forever (even if you keep going downhill, you eventually run into the ocean).

The small farmer needs products that have real value. Local and organic don't make up for salad greens that go bad in just a few days, dirty carrots, or bruised tomatoes. If you aren't providing fresh, flavorful, beautiful vegetables that actually last in the customer's refrigerator, you're coasting. And when things get tough - when produce departments change hands, or wallets tighten in a downturn - the customer is going to pick a produce supplier who's pedaling. And if not that, they'll just pick somebody cheaper.

In the CSA community and online, much has been made of the growth of box plans that resemble traditional Community Supported Agriculture programs in packaging and marketing, but don’t provide the same retail-level pricing and community support that formed the core of the original CSA concept.

To me, this all comes down to a marketing issue. In favor of a short acronym, we’ve all dropped the Community and Supported aspects of the concept from the every-day language we use to describe this way of marketing vegetables, with the result that CSA has (in the same way that Kleenex now means anything you use to blow your nose) come to imply any delivery of vegetables in a box.

CSA needs a new name. Or maybe it’s an old name that harkens back to some of the original writings on the subject of Community Supported Agriculture, such as Trauger Groh’s Farms of Tomorrow. In any case, it needs to be short and snappy, and it needs to say something about those two core values of community and support.

The new name, and indeed the movement as a whole, will need to find a way to draw the line of who is in and who is out – the lines aren’t as clear as you might think. At one end of the spectrum you’ve got programs that never reference the term CSA and make no representation about actually producing the food, such as Chicagoland’s Irv and Shelly’s Fresh Picks, and farm-based companies like the Pacific Northwest’s Full Circle that have added on to their own production to such a degree that the farm’s own produce doesn’t represent the cornerstone of their distribution program any more.

But you also have farms that supplement their own production from area growers, as well as others that offer add-on programs to supply out-of-region items like fruits and coffee to their members. For some of these farms, the add-on items include an implicit connection to a social-justice movement or even directly to the producer; for others, it’s just a box of good fruit.

The organic movement went through this definition process about 30 years ago, when organic certification began to define who was and who wasn’t organic long before the government got involved. I think it’s time for Community Supported Agriculture to do the same.