Calculating Indicators for Your FMPP/LFPP Proposal
Posted On: February 27, 2017
By Dar Wolnik, FMC Senior Researcher | email@example.com
Dear FMPP/LFPP project markets,
While working for the last few years to test and create resources for market measurement for FMC’s Farmers Market Metrics (FMM) program, we are also regularly called on by our members and by state leaders to assist with choosing metrics for project work. One flurry of calls always revolves around the FMPP/LFPP grant-writing season.
Since 2016, some actual indicators have been included with the Request For Applications (RFA) for FMPP/LFPP offered through USDA/AMS. Those indicators are happily aligned with the refined metrics that our FMM pilot networks are using. In this post, I’m going to take just one of the outcomes written into the RFA (Outcome #2, shown below) and break it down into a few general steps, to come up with a realistic number for your project. There are other ways to get the numbers you need and I’d love to hear them. This version is just one way I usually walk folks through this for a market-level project.
From the USDA FMPP/LFPP Project Request For Proposals (RFP):
Outcome 2: To Increase Customers and Sales of Local and Regional Agricultural Products. For projects that do not already have a baseline of sales in dollars or an initial customer count, one of the objectives of the project must be to determine such a baseline in order to meet the requirement to document the value of sales increases or percent change in customer count by the end of the project.
I often suggest that people start on the “wrong” end (with the number of shoppers that you’d like to end the project as the increase).
That would first mean calculating how many more visitors that the market could actually handle per season. To find the right number for your market across a season, think about the type of vendors the market has (how well they could handle increased attendance), as well as your market staff’s ability to welcome and orient new people on a weekly basis. What number is too high and might overwhelm the market? Do you have enough parking or access to transportation to make that number happen? What type and how much marketing are you planning on doing to attract those visitors? How many added visitors per hour would become regular customers and what would that mean in terms of dollars to your anchor vendors? So be realistic but aspirational: In other words, try to get a healthy number of new visitors but don’t estimate thousands, as that is unlikely for most markets to attract regularly. Even if you did attract them, would you and your vendors be able to offer the proper amount of customer service to turn them into regular, return shoppers?
You might calculate the number of added visitors that your market wants to attract (to then create regular, return shoppers from) based on a community partner willing to help attract those new visitors. Lets say that a community center is willing to introduce their attendees to the market, and may even shuttle folks there. How many people use the center weekly? How many of those do you hope to attract to an event at the market (and can fit on that shuttle) and then how many of them do you think you can retain?
Let’s set a goal for a market with an average of 20 vendors to add 75 new shoppers each year, which becomes 225 over the 3 years of the project. To get those 75 new shoppers each year, you might set a goal to have twice that number come to the market: 150 new visitors will come to the market using project funds to be properly introduced (around 450-500 oriented visitors gained over 3 years) to gain 225 new shoppers.
Next, calculate the impact using a dollar amount per shopper. Many markets reports show that the average shopper currently spends between 10-30 dollars per visit (let’s just say $20) with a 25-week span of markets per year means 225 new shoppers spending an added $500 per shopper each year- that is, if every one of the 225 shoppers became weekly shoppers. But many visitors may not start by coming every week, so reasonable projects adjust their estimate of impact: in this case, the market might say it expects to add 225 regular shoppers over the project who will each spend 20 per visit and come 10 times per year. So 225 shoppers will spend $20 each in 30 visits = a dollar impact of $135,000 over the 3 years. Not bad for a single market.
Next, think next about how many vendors you have and what that would mean to your individual vendors, especially an anchor vegetable vendor. What if your market has only 4 anchor veg vendors? Those new customers would likely increase those businesses to a large degree; maybe 50% of that increase might go to them so an individual vendor could increase their sales by $15,000 or more. (We arrived at that amount because 50% of $135,000 is $67,500 and ¼ share of that is $16, 875.)
Maybe you’d also project that those vendors will increase their product diversity to satisfy those shoppers. That may mean that your vegetable vendors could add 5-7 new seasonal items and may even need to add another staff person who helps on the farm and at the market to handle that increase. So four new employees can be hired because of this increase in shoppers. Pretty cool huh?
Or maybe you’d use it to entice more vendors and so your goal is that sales increase will add two new summer season vegetable vendors who will benefit from most of those new sales because the other anchor veg vendors are selling out quickly on most market days. Those two new vendors could be rewarded by 30,000 each in sales over those 3 years just from these new shoppers because of this project.
You may notice that USDA also suggests in the RFA that if you don’t know how many shoppers you already have that your project should add actual data collection if you are successful in getting this funding. In Year 1, you’d also put some funding to do a few visitor counts and maybe also do a survey to find out how many of those entering buy something and how much they spend. Those numbers may end up readjusting your written goal for the project because you find out that your average sales per shopper is higher than my estimation above or because your visitors really use your market to shop and not chiefly to meet friends or to listen to the music (both of which can be very desirable metrics for certain types of markets, maybe just not yours) and so when your market does add visitors, a higher percentage become regular shoppers.
So don’t panic: the numbers for these simple indicators should be based on some reality, either your own or drawn from market projects like yours that have measured their impact. Or, from you and your partners calculating the impact of this project based on your town’s demographics. In any case, setting achievable but measurable goals is vital to your project, both in the review process and in the (hopefully) funded reality of the project span. To help markets build appropriate ways to measure projects and whole market impacts, the Farmers Market Metrics team continues to learn from markets examples, to assist with the choice of numbers and to build tools with its partners to measure those impacts realistically.