Industry Changing 30% of floral wire orders are placed on the Internet Internet orders are less than 5% for the average florist
Today’s Discussion Maximizing Revenues and Profits Through E-Commerce
Overview Customer Acquisition • Advertising • “Cost” side Customer Retention • Advertising to existing customers • Much more likely to buy from you • “Profit” side
The Basics Starting point: Need a good website or “Store” Leverage existing customer traffic to create awareness of URL / Web presence • In-Store P-O-P (Free w/FOL) • Inbound phone calls • Outgoing deliveries • Gather email addresses Use current advertising to promote URL • Newspaper, Yellow Pages, Catalogs, etc.
Customer Acquisition Online Advertising Primary online advertising programs • Shopping / ‘Portal’ Programs • Affiliate Program • Online Yellow Pages • Search Programs
Customer Acquisition Shopping / ‘Portal’ programs Yahoo!, MSN, AOL • Can be very expensive • Advertising / ‘CPM’ model Shopping comparison engines • NexTag, Shopping.com • Requires datafeed of product info
Customer Acquisition Affiliate Marketing Program • Facilitates revenue share relationship between Merchant • and the sites (“Affiliates”) linking to the Merchant. • As a Merchant: allows a network of Affiliates • to provide traffic and orders • - low cost order source, tracking & single payment • As an Affiliate: you receive % of sales revenue • - by promoting (non-competitive) brands on your site • e.g. Blue Nile, Mikasa, Omaha Steaks • LinkShare and Commission Junction are the • primary providers
Customer Acquisition Online Yellow Pages • 40% of all Online YP users make a purchase. • 7% of all Online YP references are for Florists. • Superpages 38% • Yahoo! YP 20% • Smartpages 12% • AOL YP 10% • Switchboard 8% • Yellowpages 5% • FTD provides Online YP advertising - • 50% off retail rates.
Customer Acquisition Search Marketing • 76% of web users use Search User Percentage Search Engine (Source: Nielsen/NetRatings)
Customer Acquisition Two primary types of Search results 1. “Natural” or “Algorithmic” Search • Site optimization (metatags / titles) • Can utilize specialty firm 2. Pay-for-Placement (‘Sponsored’ results) • Overture (Rank = CPC bid) Best place to start • Google (Rank = CPC bid + “relevance”) • Others: FindWhat, LookSmart
Customer Acquisition Sample Search Result: “Natural” vs. “Sponsored”
Customer Acquisition Pay-for-Placement Requires active management • Competitive category: $2 - $4 per click! • Conversion rate drives CPO • CPC / Conversion Rate = CPO • Must have clear understanding of your CPO • threshold and ability to track
Customer Acquisition CPC Search Program Tips 1. Use keyword in title 2. Use local/regional Keywords Jay’s Flowers-Toronto’sFlorist Same-day delivery available – Order Now www.jaysflowers.com 3. Use concise simple language, include call to action Balloons, Bears and more! 4. Test and monitor results frequently 2-3 different creatives for each keyword Higher conversion rates during lunchtime spike
Customer Retention * Satisfy Customers at Every Transaction * Communicate with Customers Regularly * Relevant, Timely and Targeted
Customer Retention 60-20-20 Rule of Response 60% - List / Audience 20% - Offer 20% - Creative
Customer Retention RFM – Know Your Best Customers Recency– The newer a customer, the more responsive they will be Frequency – The more often a customer buys, the more likely a good customer Monetary - The more they spend, the more likely that they’ll continue to buy
Customer Retention Email Marketing – Most cost effective form of advertising Create customer database with email addresses • Collect email address on every transaction • Give a compelling reason - Use promotions to compile lists • Follow guidelines and laws • - Opt in /opt out capabilities • - DMA as a reference Keep history of customers’ transactions FTD provides a cost effective solution for Email Marketing thru Constant Contact
Customer Retention Types of Email Marketing 1. Holidays – Showcase lead products 2. Reminder Service - Customer Initiated - Transaction Based * FOL provides a reminder service and online address book for your customers 3. Non Occasion ‘Specials’ Always make the customer feel special!
Customer Retention Direct Mail Marketing More expensive and slower than email Bulk mail saves expense Holidays will give larger response rates Target Best Customers - RFM Keep your customer list clean
Customer Retention 5% Improvement in Retention Rates Could Boost Profits from 25-100%
Customer Retention Retention efforts can pay for acquisition efforts and add profit Lifetime Value • Customer based • Profit/Loss of adding a customer • Plus Profit of all their subsequent purchases • Equals Lifetime Value This is how some can spend for acquisitions
Thank You! Q&A