For 2005, Dow has replaced the traditional grower rebate programs with a system that rewards clients for past loyalty rather than enticing them to make chemical decisions based on package deals.
“We did a lot of talking with farmers and retailers, discussing what was wrong with the way industry approached grower rebates and offers,” said Dave Anderson, Dow manager of business planning in Calgary.
He said the chemical business had become so confusing that the financial incentive to buy certain products was actually disappearing.
“What we heard was that the rebate game was so complex and so complicated that most producers were not able to even differentiate between the different offers,” he said.
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“Farmers should be able to choose what works agronomically for their farm. We felt that Dow had a broad portfolio of products to meet all the needs, so we could eliminate the offers from our entire line.”
Anderson said the chemical industry has traditionally offered deals that focused on bundling and matching products. Dow’s new approach is to look at what individual producers have bought in the past and then make the client an offer based on that history.
The new system should not affect product choices in the current year nor does it necessarily favour big farms, as industry programs have done in the past.
“We right now have some very attractive offers going out to relatively small farms. It’s more of a loyalty-driven selection than a size-driven selection. We definitely do not want it to be an incentive that will influence agronomic decisions or product combinations.”
He described it as an up-front offer with few strings attached.
“For example, the flat out discount on Vantage Plus could range from 50 cents a litre to $1.25 a litre, based on the previous history of doing business with us.
“On top of that, some producers will see straight discounts from two percent up to four percent on the entire line of Dow products. Some of the specific offers may require a minimum purchase, but a lot of them have no such requirement.”
