Are You Pricing Yourself Out of Business?

Nobody likes to see price increases, whether it’s at the gas pump or your favorite local florist. But the reality is, they are an inevitable part of doing business.

Why do you raise your prices? Two reasons:

1) Acquiring Transactions – You may be in a price war and need to adjust your prices to stay competitive.

2) Profit Margin – You may not be bringing in enough per transaction to maintain profitability (the answer here could be a series of thoughts from sales to operations to become profitable, but in this case we’ll focus on sales).

What can also happen – and does so more than any of us admit or even know – is that we raise our prices and in turn hand our customers off to the competition.

Here’s a true story I would like to share to explain how a company is adversely affected by pricing decisions:

I had been going to a new fresh juicing company in town. Everyone there was so nice, the product was exceptional, and the nutrients are unmatched. Being a small business owner myself in a community that I love, nothing makes me happier than the opportunity to support local businesses. I wanted so badly for this company to succeed because they’re doing everything right…except for the cost of their products!

They had a great selection of menu options available to suit everyone’s taste. The problem wais that each product came in a nice 12-ounce glass bottle that they sold for $13 – A BOTTLE! It would be hard to imagine that those prices would suit anyone’s taste!

I appreciate the fact that they use healthy, all natural ingredients, but it’s hard for most people to justify spending $13 on a 12 oz. bottle of juice. You can get a nice lunch at nearly every restaurant in town for those prices.

Unfortunately, it doesn’t look like there’s a way to affordably form a new habit. At over $12.99 a bottle, they’ve effectively inspired me to start juicing on my own! On one hand I really would have liked to become a regular customer, but on the other, if I purchase least one bottle a day, it’s well over $60 a week with no break in sight! Customers expect to be rewarded for loyalty – especially if they feel the price is unrealistic. I found I can do the same thing myself for about $3 a bottle. I enjoy it and can get creative with it too. How much is it worth for the convenience of not having to do it yourself?

So What Can They Do to Retain Customers?

Rewards Club or Frequent Customer Discount Program

One great way to keep customers coming back is by offering a rewards club or frequent customer discount program, but the incentives have to be easy to obtain and the customers have to feel the value. In this case, the business does have a reward club, but the reward is so underwhelming that it doesn’t seem worth it to me. They offer $10 off after each $200 you spend – that’s not even enough for a free bottle of juice!

Recycling Incentives

I obviously like this product and I’m thinking about how I can get it more affordable so I can feel good about going there regularly and not break the bank. I asked if they had a recycling reward for bringing back my glass bottles. Their policy is that they will donate five cents for each bottle to a local charity. I liked the charity donation aspect, but five cents isn’t much of an incentive. It would probably take at least 50 cents or $1 to encourage me enough to bring in a glass bottle.

Bulk Pricing

Bulk pricing is often a good way to offer lower prices, so I inquired about a case price. They explained that it wasn’t possible since the product is made daily and would lose freshness if stored for too long.

Unique Freebies with Perceived Value

T-shirts are an excellent example. You could create a contest with different color shirts can only be obtained by achieving higher levels of loyalty – for example, everyone starts with a white shirt, but can earn a yellow shirt with $200 spent, a red shirt for $500 spent, and the exclusive blue shirt for $1000 spent. Not only is this a fun way to entice customers, but it’s free advertising for you when they’re out wearing your shirts around town.

The 3 most valuable points for business owners to take away from this story:

1) How could this go wrong? Understanding the numbers is critical. If you’re going to create an incentive or rewards or even a coupon, always ask yourself if you would be enticed to shop again because of your offer. If not, why would someone else? You must get customers excited for your incentive to serve its purpose.

2) Why would someone do this to them? Do what, leave? Although this is what I did, it wasn’t meant to hurt them, it was merely because I did not feel comfortable spending that much for a 12-ounce bottle of juice. Since it is my personal feeling, I don’t want to confront the owner (I will, but for this example, let’s leave it alone). You see, it’s worse now, because I have purchased my own juicer and no longer need their product. But the owner will never know why I didn’t return and never have a chance to make some changes to retain customers like me. It’s a shame because some kind of incentive could have kept me a customer for a long time. An aggressive incentive program would have kept me engaged. It’s important that I felt rewarded as I accelerated the purchases.

3) The biggest secret…Be Unique! Higher costs can often be offset without losing customers by making the transaction unique. This is very delicate but can be done. In the flower industry where I came from, I always made the point that if the product could be created in a competitor’s store or a supermarket, then it did not belong in my showroom. Make it cool and hip to shop in your store – add an item with perceived value like a free gift or chance to win a prize with each purchase.

Raising prices while also raising excitement

Nobody likes to see price increases; whether it’s at the gas pump or your favorite local store. But the reality is that they are an inevitable part of doing business. The good news is, we are always happy to try to help find unique solutions to make YOUR customers happy and keep them coming back for more. This is how this industry runs, and it’s my goal to always connect opportunities together with the talented team at Bloomerang – getting and keeping business and securing YOUR future in all that you do!

For the Retail Florist: One Thought Before You Start Your Day

Every morning after I arrived at the shop, one of the first things I did was taking a moment to remind myself that NO ONE NEEDS OUR PRODUCTS, they CHOOSE to use our industry and services in order to communicate through the language of flowers.

For example,

Someone is out too late the night before…

A Birthday is being celebrated…

New Baby arrival…

Just because….and so much more!

Our products convey a message with style and meaning. In most cases, the card message is more important than the actual bouquet. However, should you miss the delivery time or not be able to deliver, the value quickly goes to zero.

The point of this message is to drive home the fact that in most cases, the service supersedes the item ordered.

These days, we have Amazon, who has stretched the expectation of delivery and services to 7 days a week. I see an Amazon Prime vehicle almost every Sunday. This is a game changer happening before our eyes. It’s important that we recognize this and keep the expectations of the consumer satisfied by meeting the challenge of service expectations. The expectation is “I want it NOW.” We as an industry are faced with growing challenges from fuel surcharges to affordable products and now the potential of minimum wage going to $15 an hour. This is all becoming reality very quickly - what are we doing?

For 30 years I simply did what others wouldn’t. I was open 7 days a week for all 30 years, never missed a day, never had a delivery cutoff, and coined the phrase YES WE CAN in our shop. It was our motto and our goal to answer every request, “YES WE CAN.”

Committing to excellent service and a POS system called RTI, I was able to take my small family owned florist and turn it into an industry leader. I had no special education, just a passion to succeed. I was a floral designer too, but I was average at best, so I hired the best designers and shared my passion with them.

You see, as an owner, you have the chance to set the expectation by being the example. You will be surprised how staff will gravitate to you. Everyone wants to do well at their job but showing what it takes is important. Good employees will quickly realize how easy it is to be a Yes We Can florist the entire staff steps it up.

Today we are seeing great change ahead so it’s time to regroup, start planning, and prepare to tackle the challenges facing us ahead. The key is service and efficiency - are you ready?

SEO and Your Car: The True Art of Optimizing Your Web Presence

When it comes to online marketing, the term “SEO” gets thrown around quite a bit. Most people know that it stands for Search Engine Optimization but few people really know its purpose, or how to properly utilize it to their advantage.

Simply put, SEO is the process for increasing the quality and quantity of traffic that visits your site through organic search engine results.

Defining it is the easy part but explaining it and executing it correctly are a bit more difficult. The best analogy I have is comparing SEO to your car.

In order for your car to run properly, you need cooperation and coordination between numerous different elements. You need the tires, the brakes, the engine, the exhaust system, the lights, and everything else working together in order for your car to perform properly. If they don’t, your car won’t run and you’re stuck with a bunch of parts.

When someone says they can help grow your business and improve your SEO, be prepared for a long sit-down conversation. It’s more than just POINT, CLICK, RESULT. Every step to create the experience must be addressed. I’ll explain…

You see, once you created a website, I hope you complimented your brand. If your business brand is high-end and elegant, that is a tall order you must consider with every build in your website and the overall look. Once your website is complete, you now need to create interest and open the back door to your business or practice - that means, getting to know the team and learning the company culture. The Facebook page should be the behind-the-scenes look at the business/practice, the people, and the more personal side of the company.

You must remember, everything you post reflects your brand. This is where your agency comes in. It’s our job to keep your posts in-line and straight-up with your brand and develop posts that complement your brand as well.

Running parallel with your social and website efforts should be your attention to your Google My Business. Don’t underestimate the power of Google my Business which also DOMINATES Google map results. Are you still with me? Welcome to SEO, we are not done yet…

Now the PPC

Pay Per Click marketing is the fuel for your tank. Look at the natural growth like solar panels, now gas is immediate POP, energy, FUEL. Now you are ready to move.

Okay, let’s now disconnect form the automobile comparison…

You see the parts and by now you should be able to understand that it’s important that all these verticals are synced. If (and when) they are, when you apply Google advertising you compete with a QUALITY SCORE. If your pages on your website are correctly optimized when you connect Pay Per Click from Google and/or Bing, they will lead people to the content being searched. If the content is laid out well and informative speaking to the searched term, you will see a favorable QS (Quality Score) and that will lower your cost per click.

I hope this made it clear.

Next steps….

Hire a company that can understand and explain SEO to you like this. Don’t show them the directions (I like to think of this as the directions) no one will argue but most will say, “of course.” How can they not?

A lot of frustration I experience is when I see hard working individuals or well-established business owners and/or anyone looking to improve their online presence come across a young, fast-talking individual who uses these terms with very little understanding the connectivity needed to make it all work together. They talk about all the pieces (parts) with little knowledge of the necessary values you need to understand when building this solution.

The reality is, SEO is a ongoing process you must maintain like you would anything else that is growing, or developing. You maintain your body as well as your car and/or your home against the elements. When you do, you have a result that reflects the efforts you put forth.

By now you know my name, having over 20 years experience using Google every single day in one way or another, I can tell you I have watched the evolution from impression-based listings (in the very beginning) which evolved into the Pay Per Click model that has trumped it all.

In 2004, many people were just starting to realize search was real and they got very excited when they saw themselves rank naturally (organically) and quickly came to the realization they don’t need to pay for ads because they already show up at the top.

I stated and was questioned by all, ”Pay Per click will be the future. You will PAY TO PLAY.” I was met with resistance. Keep in mind, the first iphone wasn’t till 2007. Yes, how quickly we developed. Just around the corner was the phone, then maps, then location services and now Google Adwords hardly look like ads anymore. As a matter of fact, with Google extensions and snippets you can control EXACTLY what your client will see. Unlike organic where you can only hope in many cases, what is displayed.

So here we are today. Are you ready to take the wheel? Are you ready to keep developing strategies to keep up with the evolution of technology? Are you able to do that AND run your business?

Remember the Yellow Pages? Most people shifted their marketing dollars to online agencies to manage for them using online opportunities. At Bloomerang, we don’t just focus on the web promotions, we like to connect with your store front, your office and whatever else you do. We use discovery hours to learn your business and develop an executable plan that will work for you. Have any questions? Call me or leave a comment below - I am happy to elaborate anytime.

What Happens to the Floral Industry if Minimum Wage Rises to $15 an Hour?

One of the “hot button” topics we keep hearing about is one that is poised to do substantial damage – not only to the floral industry – but for many small businesses across every industry. Raising the minimum wage to $15 an hour may sound good in theory, but in reality, it could be the most devastating blow to small business yet.

I speak from experience for the retail flower industry, but the truth is, you can apply this to any service-driven business because, like florists, they also have a very small margin to work with. Since there is no structured understanding of what a floral designer is, it is all up in the air as to what fits well and what the owner’s vision is - beauty is in the eye of the beholder for sure.

That being said, there will no longer be an opportunity for someone to just drive, or just sweep floors and clean buckets. If minimum wage goes up, those jobs go away and the Floral Designer is forced to take on more duties because in addition to designing, they’re also covering the work that the minimum wage helpers used to perform.

I am sure you can see where this is going, right?

If minimum wage goes up $4, $5, or $6 or $7, what does that mean for the designer making the industry average of about $20/hour? Now they go to $25 an hour (or more)? YIKES!

So how do we hire? It’s hard work, it takes experience…That is your answer.

The greatest challenge I find florists facing today is finding people to get the work done, to go out on the weddings and to know how to create a wristlet that doesn’t fall apart during prom or a wedding.

My prediction is florists will no longer focus on growth.

The florist filling orders for the larger gathering operations who secure transactions nationwide and expect local florists to fill them like 1-800 Flowers, FTD, Teleflora, Just Flowers, From You, will only be able to fill “cookie cutter” design options.

In other words, florist will have to create the system to pump out and mass-produce the work while the companies selling the products will need to sell according to what the retail florists can mass produce.

Smaller boutique shops will be the norm and creative designs will only be based on what the retail florist in the area creates. More focus will be on the Google my Business offerings or websites will be treated more hands-on by the retail florist.

The industry needs to come together. No longer can a florist offer hundreds of creations to design and we all need to start working smarter (and harder) in order for our industry to survive. There are a lot of questions that need to be answered, so now is the time to start practicing, talking and creating a solution as an industry.

Do You Have a Customer Retention Program?

Summertime is the perfect time to do some housekeeping and focus on your valued customers. A great place to start is by implementing a Customer Retention Program. We created this program over a decade ago and it has consistently proven to be very successful for our clients.

What is a Customer Retention Program (CRP)?

The Customer Retention Program (CRP) is an effort to recognize and revitalize accounts that were once active, but have not had recent activity.

Through the CRP, we obtain valuable feedback regarding whether or not we exceeded our customers’ expectations. We simply reach out to our customers via a phone call to let them know that we care and are looking for a better way to serve their floral and gift-giving needs in the future.

NOTE: This is not telemarketing!

These calls are not sales calls, although it is not uncommon to have customers place orders with the sales associate at the time of the call because they’re impressed by the personal touch. In fact, the valuable information we obtain has led to developing some of our very best accounts.

How does the CRP work?

First, we identify the criteria and focus on customers who have placed five or more orders over the past three years, as well as customers who do not have any order activity in the past 18 months. You can export this data into a spreadsheet.

Next, identify and sort the list. Give your employees a list and review a script with them. We thank our customers for the orders they have placed with us and ask how we can improve their experience with your shop. We have a detailed script you are welcome to use if you would like, just email us and we will be happy to send it to you.

Remember, if a customer has ordered five or more times, there must be some value in the relationship. It is important to understand that there may be a reason that they did not order in a particular year, but it is still worth giving them a call. What is most important here is not to question them, but to thank them. If they decide to order, do not offer them a discount. The last thing you want is for this to come across as a sales call.

When you're speaking to the customer, it is important that notes are taken for later reference. You may find out that someone could have had an unfavorable experience and you now have a chance to save the relationship.

This is an excellent way to clean up your account database so when the time comes to market for the holidays, you can start from a clean list.

People shop with companies they trust. Forming a relationship is the ultimate goal of every marketing plan. If you concentrate on retaining customers and enhancing the shopping experience, chances are customers will trust you with all their floral and gift giving needs in the future. Remember to promote across town or across the USA in all your ads. You are one-stop shopping, don’t keep it a secret.

This is just another step in changing for the better and taking back our industry for the local florist!

Would you like some help starting your own Customer Retention Program? We're here to help get you up and running - we even have a detailed phone script that you're welcome to use and modify to fit your needs. Give us a call or send us an email and let us know how we can help you.