For farmer-owned, farm-supply cooperatives across the state, the steady transition of Alabama farmland into subdivisions and shopping centers has gradually changed their customer base—from farmers who buy production supplies at wholesale prices to homeowners, gardeners, hunters and others looking for a broad range of other, non-farm products.
Most Co-op managers have responded to the shift by adding retail products and services fitting the needs of the local community; but, to improve their competitive position in the marketplace, it’s essential they understand their evolving target market’s expectations in terms of customer-service quality and then adjust their business approach to meet those expectations, Auburn researchers have determined.
And in making that determination, Alabama Agricultural Experiment Station (AAES) agricultural economists Norbert Wilson and Deacue Fields, and former Auburn ag economics graduate student and former Alabama Farmers Cooperative (AFC) employee Thomas Hall have identified a tool managers of Quality Co-ops and similar rural retail operations can use to find out which aspects of customer service are most important to their customers and gauge how effectively they are fulfilling those expectations.
The tool is a 29-question survey the researchers adapted from one major retailers in highly-populated areas used to assess their performance in delivering the services their shoppers value most. The survey is based on a retail service quality scale defining five dimensions of service quality: physical appearance, reliability, personal interactions, problem-solving abilities and policies.
"Our study was to establish whether this scale could be applied to farm co-ops located in rural areas," Wilson said. "Our results suggest, yes, it is readily applicable, and also easy to use."
For their study, the Auburn research team modified the large-merchant survey to gather data on the demographics of Co-ops’ broad and diverse customer base, and how customer characteristics influence the types of service quality different customers value most. And instead of five service-quality dimensions, they grouped those aspects into three dimensions: customer service/personal interaction, appearance/accessibility and policies/reliability.
The survey was mailed to randomly-selected member-patrons at various Co-ops around the state. There are 44 farmer-owned cooperatives with about 80 locations statewide; all are members of AFC, which provides products and services to its Co-op members in Alabama and the Florida Panhandle.
Survey results indicated, overall, Co-op clientele deem customer service/personal interaction the top factor in service quality.
"This was especially true among homeowners," Wilson said. "When they go to a Co-op, they want individual attention from employees, and they want those employees to be friendly, courteous, prompt and knowledgeable.
"They also expect high-quality merchandise they can count on being in stock when they need it as well as hassle-free returns or exchanges."
Jamie Creamer is a communications and marketing specialist 3, Ag Communications, with AAES.