Jenny (00:29)
Today on the podcast, we are chatting all about three pricing strategies you can use on your farm to boost your farm's overall revenue without changing what you grow, how you grow it, your marketing, your sales outlets, your business tactics, or anything like that. But before we get into that, I have something to admit to you, and it's not something that I'm happy to report, but I'll just go ahead and say it. It's July.
And on my farm every year without fail, we have a big dip in our revenue this month. July is our lowest sales month of our growing season every year, which is okay. You know, one of the months has to be the worst in July just wins that not so prestigious award. So it's all right. But after tracking our sales super closely for the past, I don't know, million years or what it feels like I've discovered some trends.
Which is super handy for forecasting, crop planning, and all that stuff. Which speaking of, if you aren't already tracking your sales, please just start doing this. It can be so simple. You can use an app on your phone. You can use your point of sale system like Square or Squarespace. You could just use paper and pen. And to be honest with you, I use paper and pen to track our farmers market sales. And I honestly find that it works the best for our farm. So it sounds ancient and crazy, but it can be super simple.
So if you're not tracking your sales, where they come from and you know, your flower sales, I have a free sheet that you can download and use. It's super easy. Just go to trademark farmer .com forward slash free guides and scroll all the way to the bottom. And you'll see a little spot where you can opt in and get that free download. So go ahead, go to trademark farmer .com forward slash free guides, download it and start tracking your sales. It will set you up to be so much more prepared in the future.
to tackle things like this. When you have low sales months, you'll know that it's coming and you can take decisive action to boost your revenue, tackle challenges head on, and just get ahead of the game. Tracking your sales is super important for knowing what to expect throughout the season in your business. And trust me, there will be trends in your sales and in different aspects of your business and you'll discover them through tracking. But anyhow, you know, back to our poopy.
July sales conundrum and what we have done about it and what we are doing about it. So first off, I think that this is super common. Every business owner is going to have great sales months and not so great sales months, but this lull in July that we have, I believe is due to several different factors. The first one is school is out and everyone around here goes on vacation. Most of my customers either have.
young children and families or they're older folks who can afford to go gallivanting off in the summers. You know, plus many of my customers tend to have fancy corporate jobs that they have to travel for often for work. And it seems like they travel quite a bit over the summertime.
We also live in an area that is like vacation central. I live in the Finger Lakes region of New York state and it's beautiful here. There's all these giant lakes and a ton of wineries and craft breweries. And it's a very popular spot for New York city people to come up for the summer. And so everyone around here is just on vacation mode in July. So the first factor is just plain people aren't here to buy flowers. They're off doing other things. My regular customers are on vacation.
but even our florists or wedding florists that we sell to have a wedding lull this month, which I'm always surprised at because I feel like July would be a great month to get married. But anywho, people just aren't around. The second factor that I think contributes to our lower sales in July is that we really don't have any big showy focal flowers in July. Peonies are done. Dahlia's haven't quite started up yet. And I just don't have anything that's like really.
Beautiful. I mean, all flowers are beautiful, but you know what I mean? Something that's big and showy and exciting for my customers. I've got some zinnias, which are not my favorite, nor my customer's favorite. Actually, I would love to know, like, when I say that people get like offended sometimes I'm like, it's okay. If you love zinnias, I just don't love them. So reach out to me on Instagram or something, and let me know if you're team zinnias or team not zinnias. I would love to find some fellow people who just.
aren't crazy about zinnias, they're just not my favorite. But anyway, so I have those, which are fine. And you know, a handful of other odds and ends, but nothing that just screams like, wow, I'm amazing. Come buy me. And I really rely a lot on that wow factor of flowers, growing things that are different and unique that people can't get regularly through other sales outlets. And so that's a big selling point for me that I don't have a lot of in July. And I have thought about forcing some.
lilies or something in July to try to have a something else, but right now it's just not in the cards for me. So that's a decision I'm making not to pursue and I'm fine with that. And thirdly, you know, for that reason that we don't have any big showy flowers in July, the flowers I do have are a little less expensive. So instead of selling $25 bunches of flowers, I'm selling more $15 bunches of flowers.
So the price points are lower. All of these factors combined leave us with a pretty low key month. Like it's not like our sales stop because they certainly don't, but they aren't exactly where I'd like them to be. Like they are in April and May, which are our biggest flower sale months of the year. The demand for flowers in my area is just huge in the early spring time. We specialize in our really known for early spring flowers. And so that's something that we're sort of like known for, but.
Over the past few years, I have started implementing some pricing strategies along with some other things that have really helped boost our revenue in July and get more cash in the door, increasing our sales during this doldrum month. And that is what we're going to be talking through today. So in the past, instead of just changing my pricing, which is what we're going to talk about today, I have just tried to do other things to bring in more cash during the month of July. When we used to do on -farm workshops,
I would do a pick your own flower workshop, a flower arranging workshop, and a couple other just like farm tour type things here on the farm to get some more cash in the door during July. And that worked great. A few years ago, I decided to stop doing on farm workshops. And so that's not something we do anymore, but just an idea. If you're looking for something to do on your farm, to bring in more sales during a month that is a little bit lower.
But now I really rely more on pricing strategies to try to increase our revenue without actually doing more work on the farm.
So on my farm, there are three pricing strategies that we regularly use depending on the time of year, what's in season, and where our sales are at. And they are close pricing, distant pricing, and what I call same, same pricing. I am sure that there are actually official words for this, but I don't know what they are. And these are my words that I used to describe them. And so let's get into that.
First of all, to understand close, distant, and same pricing, we need to learn about a value ladder. A value ladder is when you have several different price points for your products. Typically, you have one low -priced item, a medium -priced item, and a high -priced item. So an easy example would be if you go to farmers markets, that could look like a $12 bunch of foliage, a $20...
bunch of dahlias and $30 for a mixed bouquet. So we have that low price point at $12, medium at $20 and $30 for the high price point. Having a value ladder is beneficial for a few different reasons. It gives someone the chance to try you out at the low price point. Your low price point can be added on to a medium price point as a upsell. And you have a price point that basically meets everyone's needs.
So if someone has never purchased from you before, but they're curious about the flowers that you sell and what you have, they will probably go for that lower price point to sort of like try you out and test the water But again, if you have somebody who is looking for a gift bouquet to give someone,
they probably are gonna wanna spend something a little bit more so it's more showy, they're showing their love, people tend to spend more money for other people than for themselves, so they might go for that $30 mixed bouquet. So you kind of have something for everyone when you have this kind of value ladder. And then with your value ladder, you can change the actual prices to persuade people to buy more of a certain product.
using these three types of pricing strategies, the close pricing, distant pricing, and same pricing. And I'm going to go into all these and how you can use all these different pricing strategies on your farm. So we're going to start out by talking about close pricing. Close pricing is when you price your value ladder tightly so your most expensive item is not that much more expensive than your middle of the road item.
So this could look like your $12 bunch of foliage, $20 bunch of dahlias and $25 for a mixed bouquet. So the $25 mixed bouquet is only five bucks more than that bunch of dahlias, which kind of makes it look like a steal. And especially if you have dahlias in that mixed bouquet, people who want dahlias might think, this is a no brainer for only five bucks more. I can get the mixed bouquet and there's dahlias in them. So I get the best of both worlds.
Now, obviously you have to make sure you aren't just giving flowers away for free here. You should definitely still be pricing to earn a profit on every product and every price point you make. But the point here is that this is a strategic way to get customers to spend more per transaction with you. And on that same note, if you have a low price item, like a 10 or $12 bunch of foliage with just a few stems in it, if they buy a bunch of dahlias for $28, they might be more apt to.
add on that cheaper bunch of foliage with the Dahlia. So they're buying two items, they're spending more money with you, and you can upsell that cheaper bouquet or a bunch of whatever. I usually do foliage on my farm. So you can get in more revenue. Now for distant pricing, you're going to price your value ladder more distantly. So your most expensive item is much more expensive than the other items.
making the low and mid -priced products look like a steal. For example, this would look like a $15 bunch of foliage, a $25 bunch of dahlias, and then a $50 mixed bouquet. So that $50 mixed bouquet is a lot more expensive than your other items that are ranging between $15 and $25. When people walk up to your farmer's market booth or land on your website and see a list of options or wherever they're buying,
They'll see, wow, $50 for a mixed bouquet. That makes that $25 a bunch of dahlias seem a lot more affordable. So they're more apt to purchase the middle of the road product, which would be, you know, that $25 a bunch of dahlias.
So essentially what we're doing here is we're just making your other items look much more affordable by putting a really high price point on something that is really valuable.
And to clarify here, we are not just taking the same five STEM bunch of dahlias and randomly charging either $20 or changing it to $25. Like maybe you can do that, but what I mean here is you set your prices and then build the product to that value and that price point. So what we do on our farm is just change the STEM counts of the bunches when we're selling retail to make sure that people get their values worth.
So a $20 Dahlia bouquet would have like five stems in it and a $25 Dahlia bouquet would have like six stems in it. And a $40 mixed bouquet is obviously going to be bigger or fancier in some way than just a $25 mixed bouquet. So I just want to clarify that point here. When you're working with these pricing strategies, you're building your product, your bunches or your bouquets to the price point. Now let's talk about same, same pricing.
So this is when you just price everything the same. Now you have no value ladder. Every bouquet at the farmer's market is the same. Every wedding package you offer is the same or whatever you're selling. So this could look like a $20 bunch of foliage, a $20 bunch of dahlias and a $20 mixed bouquet all being sold right next to each other for the same price of 20 bucks. Or I know that some people do this. They only offer one.
product and it's the same price. Like you only bring mixed bouquets to the market and they're all $30 or something like that. This is great because your revenue becomes pretty darn predictable. Like, you know, you can bring a hundred bouquets and if you sell them all at 25 bucks each, you know, you're going to be bringing in $2 ,500 worth of product. And that's just like easy math, simple, which honestly, I guess that doesn't really matter that much, but it's.
Easy, it's simple, and it makes it so your customer does not need to do a lot of thinking to purchase. You want to make the buying process for your customers so clear and so easy that they have no questions, no qualms. Everything is straightforward. There's no confusion. Anytime you introduce any kind of confusion into your marketing or your pricing, you're going to automatically lose people.
So the clearer your marketing, the more effective your marketing. And we implement this same, same pricing strategy in the spring time a lot. So in April and May, when we have a ton of ranunculus, we pretty much just bring ranunculus to our farmers markets during those months. it's pretty much 90 % of what we sell. Like we might have a few tool ups and a couple other odds and ends, but generally our customers go absolutely nuts over our ranunculus and we sell tons of them. And.
Honestly, it's not even really worth growing any other flowers that time of year for us. So that's just how we do it.
Every Renunculus bunch that we bring to that farmer's market is priced the same. It makes it so people don't have to hem and haw about which price point or get in their head subconsciously about it. It's all the same. So they're basically forced to make a split second decision as to whether they should buy or not. And I think that this can be really effective at just getting people to just buy. And to be honest, we have never really used this strategy at any other time of the year, other than the early spring.
In early spring, the demand for flowers is so high and the variety we offer is so little that it just never made much sense for our farm to use it any other time of the season. The rest of our growing season, we're still offering a lot more variety. So we have focal flowers, we have filler flowers, we have mixed bouquets. And although we don't bring very many mixed bouquets, we only bring a very small amount to our farmers market every week.
And basically only because it's a part of our pricing strategy and our value ladder. But that's about it. So let's get back to our July revenue doldrums. Something that we are trying that's new this year is doing that same same pricing in July. So let me explain. After analyzing our sales trends, like I said, over the past million years, it seems like we don't necessarily only sell
a ton less flower bunches and bouquets in July. It's that we are selling less flower bunches and bouquets in combination that we are selling them at a lower price point. So for example, if I sell a hundred bunches at the farmer's market a week and they're $20 each, that's $2 ,000 in revenue I'm bringing in. If I sell a hundred bunches at the farmer's market a week and they're only $15 each, that's $...
$1 ,500 in revenue. So it doesn't seem to matter week to week, the type of flowers we necessarily have. I think that does play a part in the certain times of the year. You know, like I said earlier in the podcast, we don't have any big showy flowers. So we don't have a lot of higher price bunches of flowers, but the people who are coming to the farmer's market to buy flowers in July, they're just coming to buy flowers. And it seems like the people that are there, they're just buying whatever we have.
So instead of selling those $15 bunches of zinnias, we'll just make bigger bunches of zinnias with more stems and sell them for $20 each to boost our revenue. So that is a big new thing that we have been trying this season and have actually been having a lot of luck with it. It is such a simple concept. We literally just raised the value of the items we're selling. We didn't necessarily even raise our prices.
Cause we didn't, we're just offering bigger bouquets and bunches with more stems for a higher price point. And they are continuing to sell well for us, which is fantastic. So that is going to be a big boost for us this month with our revenue. Now, if you just listened to all this and you're like, okay, great. But how do I know which strategy to use for this month or whatever low sales month you have, let's talk through that.
To decide when to use this pricing, whether close pricing, distant pricing, or same pricing, it really depends on your goals and your customers. So as far as your goals go, if you want to sell more of your medium priced product, use distant pricing. So for example, if you do weddings, if you're a farmer florist and you sell bulk buckets of flowers, a la carte,
floral packages and full service weddings, that's your value ladder. So your low priced item would be your bulk buckets of flowers. You know, you're probably selling them for anywhere from a hundred to $200 a bucket. Then your a la carte packages where people just come pick up from the farm. You're not going and setting up anything. You're not doing any full service. That's your middle of the road product in your value ladder. And then the full service weddings would be your high priced product for those packages.
And let's say that you want to sell as many a la carte packages as you can. You can price your full service wedding packages really, really high. So it makes those a la carte packages look way more appealing for people who want to work with you. That could mean that your full service packages start at something like $7 ,000, but an a la carte package starts at $1 ,000. And I'm just throwing numbers out here. You guys like.
You're probably gonna wanna price things differently than that. I don't know, maybe, maybe not, but I'm just giving you examples here. The right pricing for your farm will depend on a lot of things, your branding, your customers, what you wanna do, what you wanna sell, but this is just an example. Now, on the other hand, if you want to sell more of a high -priced item, you can use close pricing. So if you want to sell a lot of $25 mixed bouquets,
Make your flower bunches at your farmer's market, you know, your straight bunches that you sell 20 bucks. So it's a no brainer that if they want a bouquet with both flowers and foliage, then they'll buy the $25 mixed bouquet. Because if they bought things separately, if you had a $12 bunch of foliage and a $20 bunch of dahlias, let's say, and they bought both of them to make their own mixed bouquet, that's going to be $32.
So it's cheaper for them to buy the $25 mixed bouquet. You could also make it even closer than that. If you are selling bunches of dahlia, I know I keep coming back to bunches of dahlia for some reason, but we sell a lot of bunches of dahlia in the fall. So probably why it's in my head, but you know, you could even make a pretty big bunch of dahlia or zinnias or whatever for $20 and then make your mixed bouquets like $22.
You know, they're probably going to look at that mixed bouquet and say, I got way more variety with that, so I'm just going to spend the extra couple bucks to get the bigger bouquet. And so there you go. In summary here, I highly suggest that you create some kind of value ladder with a low, mid, and high priced product, and then decide whether you want to price them closely or distantly, or you can price them all the same.
And another important factor with this is that you can just experiment and see what works and resonates with your customers. Now this or some of these pricing strategies probably could not apply to things like wholesale or florist pricing because those people are used to buying bunches with certain STEM counts. Like this may not resonate with them. You know, Renunculus always come with 10 STEM bunches.
peonies five STEM bunches, Dally is five STEM bunches. If you want to change your price point on certain things, then you'd change the STEM counts and you might be met with some resistance there. But if you're selling retail in any capacity, like at a farm stand or farmer's market, a subscription program, and even for weddings and events, you can experiment and try new things and see what your customers do and how you can change their buying habits.
And we use all of these strategies on our farm just depending on the time of year, what kind of products we have, like what's in season, what we want to push more of, what we want to get rid of. And it really helps. Like I said, just to reiterate, during ranunculus season, when we only have ranunculus, pretty much, people go nuts over them. We just price everything the same. And then in August, when we have a lot of variety that we want to get rid of, we tend to do more.
pricing to sell more of our higher priced items. And then in September, when we have a ton of Dahlia Bunches that we want to move, those are our middle priced item, we'll do distant pricing with an expensive mixed bouquet or something to try and sell a lot more of those medium priced point Dahlia Bunches.
So keep this in mind as you go through your season, are you going to use a value ladder? Are you going to utilize close pricing, distant pricing, same, same pricing? Are you going to have a lower price item so you can upsell products? My advice would be to write down some prices and some products that you can build to that price point that makes sense for you during different parts of your season and on your farm and each of these, you know, different buckets and test it out.
So test out close pricing, distant pricing, and same -same pricing. And the most important part of this, don't forget to see what happens and keep good records. You have to keep good records. Like you might think, yeah, I have a pretty good feeling or a pretty good handle on like what's selling, what's not. But when you have the concrete numbers, you can just look at it and you know instantly you have data and you should be basing.
Your decisions that you make in your business on that data, making data driven decisions is so important to the success of a thriving and profitable flower farm. Like you're literally just going to be shooting in the dark. If you don't know your numbers, it's so important. And like I said earlier in this podcast episode, I have a totally free resource for you. Just head over to trademark farmer .com forward slash free guides, scroll all the way to the bottom of the page and you'll find a link to sign up for a free.
farmer's market sales record sheet. There's an actual sheet that you can download. You can use that template. There's also an example of how I fill it out so you can see exactly how it's done. And I just make it super simple. We count everything that we're bringing to our farmer's market. We write it all down on the sheet. And then at the end of the farmer's market, when we have stuff leftover, we just write down exactly how many bunches are leftover. So we know how many bunches we sold. And of course we write down the price points. And so.
We know what our revenue is overall, but then we also know how much money we made off of the foliage or the Zinnia bunches or the Lysianthus bunches or the mixed bouquets or whatever. And you know, if you are just bringing mixed bouquets, obviously that's going to be a lot simpler, but it's really not that complicated. And I would make a commitment to go ahead, do that now, go download the sales sheet and you could just use it as an example of farmers markets aren't your thing. Like if you have other sales outlets.
Just use it as an example, but make a commitment to track this stuff so you can boost your flower farms revenue and your bottom line. So I hope this was helpful. Thank you for joining me for this episode of the six figure flower farming podcast. And don't forget to go to trademark farmer .com forward slash free guides to get your free record keeping sheet. And I'll see you in our next episode.
