Feb 11 , 2011
FNA implements MPower Member Cash Back Program, signaling major change in enhancing member value
SASKATOON--Farmers of North America (FNA) has recently taken an important step towards a new approach that will ultimately result in more market power for farmers who choose to be part of the FNA business alliance and together pursue the mission of 'improving farm profitability'.
Farmers who participated in any of FNA's "MPower" eligible programs recently received over $300,000 in cash rewards in the form of a prepaid MasterCard. This is in addition to the over $120,000 the year before from the MPower program. These payments reflect only a very limited number of programs in the first stage of MPower rewards.
This cash reward is the result of additional savings that are available to FNA Members only. MPower allows FNA to deliver programs more efficiently, allowing easier equitable management of things like foreign exchange, freight and order volumes, getting more mileage out of the Membership dollar. This new system is something that FNA is making an important part of its growth strategy moving forward.
"In the past, FNA's price transparency has created a lot of tension with some of our suppliers and disrupted relationships", comments spokesperson Bob Friesen. The reason is that FNA Members access products at the cost it takes to make them available and not what the market will bear. This has been a problem for some suppliers who will not work with us because the other people they supply have margin targets they're trying to reach. "As a business alliance of farmers, we continue to look for ways to maximize Members' profitability, while at the same time, trying to develop strong relationships with suppliers", says Friesen.
Undercutting the competition results in lower prices across the board and so the investment of each Member in making that lower-price product available is realized by every farmer. "We're thrilled that farmers are saving money, but strategically, if we're trying to increase our bargaining power with the big input manufacturers by increasing our Membership size, we need to find a way of maintaining the value available within the Membership", comments Friesen.
With the introduction of the MPower Cash Rewards System, FNA will be able to maintain its low-price model, but will pass on all the additional savings to Members in the form of a cash reward on their MPower prepaid MasterCard, which acts to preserve Member value, not just bring the price down for everyone.
FNA believes this will take the business alliance to a new level. "We think that the best way to improve farm profitability is to increase our Membership numbers and the empowerment of those Members", explains Friesen. "If we can give suppliers the confidence that we won't publicly disclose the final price, we'll be able to generate even more value for Members. As Membership grows, those Members gain more and more market power".