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Educating Customers

Posted by: John Tozzi on June 28, 2010

George Siemon, CEO of the Organic Valley Co-op of 1,600 farmers, is not worried that consumers trying to save money will abandon organic milk and other products for lower cost non-organic foods. While sales growth did slow during the recession, Siemon says demand for organic products is connected less to the business cycle and more to how educated customers are about food. “Organics is an education issue, not a recession issue,” he says in an interview at Bloomberg’s offices in New York today.

“Educated women drive our business,” Siemons says, particularly new mothers who want to provide the healthiest food for their children. That demand is growing despite the recession, because consumer interest in organic food is growing — see Michelle Obama’s vegetable garden and the sales of Michael Pollan’s books. Organic Valley had revenue of $527 million in 2009 and is estimating $600 million this year. The co-op is both tapping into and perpetuating the movement that’s growing demand for its products. Siemons is confident that science will bear out the benefits of organic food, and a growing number of educated customers will allow more dairy farmers to switch to selling more profitable organic products.

Education is a part of marketing, but it’s something broader too. Marketing is creating awareness about a product or positioning a brand. But education is about teaching people something that benefits them — and also turns them into potential customers. Gary Vaynerchuk has helped educate thousands of wine lovers, which benefits his business even though most probably never bought a bottle from him. You can take free software workshops at the Apple Store or learn home improvement techniques at Home Depot. Bookstores host reading clubs and some bike shops offer repair clinics. All these things expand the universe of educated customers while delivering benefits to those people.

Part of Siemon’s strategy is to reach more consumers with information about organic food, including a barnstorming bus tour planned for this summer. “We have a society that is very distant from food and farming now,” he says. “There’s tons of educated, well-off people who are not trying organic food.” He might call them future customers.

Reader Comments

Robert Bilotti

August 29, 2010 12:30 PM

We teach a course for business owners and sales teams on this very topic.

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What's it like to run your own company today? Entrepreneurs face multiple hurdles new and old, from raising capital and managing employees to keeping up with technology and competing in a global marketplace. In this blog, the Small Business channel's John Tozzi and Nick Leiber discuss the news, trends, and ideas that matter to small business owners. Follow them on Twitter @newentrepreneur.

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