Making the most of marketing fees

With profit margins feeling ever tighter and the economic uncertainties of a pandemic, the marketing fees that go along with branded plants may feel like an unnecessary — or even risky — investment. What are you getting for those extra costs? And can you turn them to your advantage?

Let’s start with what a brand does. A brand offers an implied promise that its products are better than the generic.

“Let’s take Proven Winners because I think their name is very telling,” says Bridget Behe, a professor at Michigan State University and retail marketing expert serving the horticulture industry. “The customer is buying into the promise that these are winning or well-performing.”

Brand marketing, when done right, conveys that brand promise to the consumer. A brand’s marketing also raises awareness of the product and creates demand in the marketplace.

While we are covering the basics, let’s also review the types of fees that are associated with branded plants. In addition to the marketing fee, there may also be a royalty fee. Sometimes these are rolled together into one “program fee.” The royalty fee is the portion that is passed back to the breeder, in compensation for their work in identifying, selecting and trialing the new genetics.

“It’s important that if you’re going to create a better plant that performs better for the consumer that we’re compensating the people that are doing the work to make that happen,” says Natalie Carmolli, PR and marketing specialist for Spring Meadow Nursery, part of the Proven Winners brand.

In some cases, the breeding work may be done by the brand, who also typically conducts plant trials and stock buildup. In all, it can take five to seven years, if not longer, to fully ready a new introduction.

Breeding before branding

The investment into breeding is key to the brand promise that lines like Endless Summer and Proven Winners offer. New is nice, but “new and improved” is even better.

Those improvements are meant to benefit growers as well as consumers.

“In order for a product to go into one of our brands, it has to be something that everyone through the system has the ability to be successful with. Certainly, it has to have a consumer benefit at the end, but as importantly or more importantly, it has to be something that a grower can be successful with,” says Alex Charais, marketing and communications manager for Bailey. “It has to look good in a pot. Our genetics approach has to have some measurable benefit to the grower, whether it’s lower input costs, maybe less pruning, less disease management, and that’s where trialing comes into play for us.”

Breeding advancements are why Tim Kane, marketing and inventory manager at Prides Corner Farms, is all in when it comes to brands and marketing fees.

“It’s an absolute necessity, and actually growers that think otherwise have just got their feet so far in the past I wonder how they can manage. The branded plants give you such an advantage. It’s the cost of doing business, and it’s also the thing that helps stimulate you selling the material,” Kane says.

Photo courtesy of Proven Winners

Pulling back the curtain

So why aren’t all growers on board with branded plant lines and marketing fees?

Matthew Chappell, professor of horticulture at the University of Georgia and state nursery extension specialist, sees both sides of the issue in his dual roles. He says part of the problem comes from a lack of understanding on the growers’ part of what goes into a national marketing program and what it takes to run one smoothly. He puts the responsibility on the brands to bridge that gap with better transparency into how fees are being spent, so that growers do not see it as a profit center for the brands.

Natalia Hamill, brand and business development manager for Bailey, gives some insight by comparing the launch of two recent Endless Summer hydrangea varieties. Her story shows the difference a coordinated and well-executed marketing campaign can make.

With BloomStruck hydrangea she says, “We had a great plant,” but she admits that she and Charais, both new in their roles at the time, had not yet fully developed the marketing programs, grower communications and supply chains that were needed for a strong launch. By her estimate, it took six to seven years for sales numbers to meet the potential the company felt the plant offered.

In contrast, by the time Summer Crush hydrangea was ready to hit the market, all their tools were at the ready.

“It was a really very focused, multilayered approach to launching that plant. When Summer Crush hit the retail market for the first time in spring 2019, every plant that every grower [wanted to sell] was sold,” she recalls.

According to Charais, some of the components that go into a successful campaign include print, digital and outdoor advertising, social media, public relations and consumer-facing websites that include dealer locators. These programs are shared with growers to promote to their customers, along with point of purchase materials and other retailer marketing tools. The brands also put resources into consumer education, under the theory that a homeowner who knows how to grow the plant will be more successful, and more likely to buy again. For example, Proven Winners sponsors the YouTube Garden Answer channel, which Carmolli calls “outrageously successful.”

A portion of the marketing fee also typically goes toward marketing programs aimed at growers, including cultural information.

“While the end goal is to reach the consumer with a great message, it all starts with the grower and making sure they’re supported well from the beginning,” Charais says.

Why would a grower want to support marketing going to other growers? According to Hamill, the answer lies in a robust supply chain to support the demand the brand is creating through consumer marketing.

“One of the worst things is for somebody to want a plant and not be able to find it. If we’re encouraging consumers about a particular plant or brand, the supply chain has to be in place,” Hamill says.

The strength of the brand comes from the shared effort of that supply chain, according to Charais.

“Remember there’s not just one company that’s growing and representing that brand, but that there’s a coalition, if you will. Simply put, that’s where the power of the brand really resonates. If you try to forge that road on your own as either a grower or as somebody trying to market your brand without strong strategic partners, it’s really hard to get off the ground,” Charais adds.

National brands in a regional market

Carmolli thinks “the objections [to marketing fees] are really simple — it’s ‘I don’t want to spend extra money on a plant.’”

But for Ed Tankard at Tankard Nurseries on Virginia’s Eastern Shore, the reasons are more complex than that. A lot of his objections have to do with national programs not working at his local level.

“I don’t really relish the idea that someone from another area of the country is doing marketing for my region or market segment,” he says.

Feeling a demand in his region for native plants, he wants to be able to keep his plant choices tailored to the local climate.

He also suggests that perhaps a national approach does not send resources where they need to be and may be promoting poor performing plants.

“We’re not interested in including the newest vogue plants until they have proven themselves,” he adds.

Chase Johnson, vice president at Johnson Nursery Corp. in Wilmington, North Carolina, admits he also feels the push from national brands to grow their entire line, but says, “It isn’t a pain point for me. I get that perspective that the brands are trying to go national, and they are. But I feel like they’ve given us enough power…to say to certain [customers], ‘Here’s what you want to focus on.’”

Nickel and diming on pots and tags?

Where Chappell thinks the brands lose buy-in and trust among growers is the upcharge on branded pots and tags.

“Most growers look at it as, ‘I’m paying a tremendous amount,’ not just in the royalty fees, but what really gets the grower is they’re paying more for the tag and pot. Those are the two things that really annoy the growers. Not that they have to use [branded materials] — it’s that there’s an obvious, tremendous mark up on the tag and the pot. They see it as a bit of a rip off. I think a lot of growers would just rather pay a higher royalty fee,” Chappell explains.

But Johnson thinks that cost cuts down on competition.

“We believe in the product enough that we want that product to stand out. Of course, if it were cheaper it would be better. But it does allow those of us that really believe in it to stay in it, and those who are on the fence to stay out. The exclusivity is appealing to us,” Johnson says.

The bottom line

In the end, it may not really matter what you think about plant branding programs, Behe says.

“I would encourage [growers] to take a longer perspective and try to put themselves in the end customer’s shoes. Not everyone makes a choice based on a brand, however, there is a significant market segment for most products that prefer a branded product. If [growers] focus on the customers’ perception of the product and the market potential of the individuals who prefer a brand, that’s where they can begin to see a profit potential,” Behe says.

Carmolli is also focusing on the consumer when she designs marketing programs.

“[Growers] don’t want to pay a marketing fee, but it’s not going to help them to grow a plant that no one knows about and nobody’s asking for,” Carmolli says. “We want people to not just happen to pick up a plant, we want people to go and to ask them for a plant because they know it’s going to do really well. We want [plant buying] to be purposeful for the gardener, and I think that’s what the marketing fee really provides.”

Next month, we will continue this topic by looking at what you can do to reap the most out of your investment into branded plants, including pricing, merchandising and marketing strategies.

About the author: Helen Newling Lawson is owner of Spot On Communications, specializing in content marketing for the green industry.