Jinny Suh at FTD talks Rebates??

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LJVF

LJVF

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Can someone explain who, what where, when, why and how? :confused:

Seems that this woman did a residency at FTD. Her project included researching their financials to figure out who their most valuable and profitable customers are (florists). She concludes there is a problem with FTD's rebate system.

[youtube]iuayFDl2f9o[/youtube]
 
Am I to understand her correctly that she is saying that the top ten revenue producing florists netted losses for FTD due to the rebates received on wires out? So she suggested they tweak their system so they can make a profit off that top ten? Therefore, even asking the big senders to bend over?

Maybe the class that would have helped her the most is an audit class. Further research would have found that the other thousands of filling florists were more than making up for losses on the top ten.

The accent is difficult to understand, am I correct in what she said?
 
Well....she did not unearth anything they did not already know...Yes, the Top 10, and my guess would be the Top 50 are money losers, based solely on the rebates paid out, but the catch is they need those orders to fill their channel...cuz the filler fools demand the volume.
 
Darrel,

It's pretty obvious that when a company is paying $7-10 rebates per order to top senders while earning around 7% of the transactions, each order incurs a 'loss'. If the average order is $55 (and I believe that's high for an OG), the WS's fee/income per order would be $3.85.

A company like Blooms Today, with an estimated volume of 400,000 orders annually, would cost FTD millions.

The conundrum is that to keep the real profitable florists in the system, FTD needs order volume - and rebates to large senders are the fastest way to 'buy' it.

The brick & mortar Mom & Pops actually generate the income in the florist sector - through their purchases of POS systems, CC clearings, directory advertising, etc...

Let's face it, without incomings, would most florists choose to purchase their business services through FTD?
 
Amazing, totaly amazing. A student doing a residency at FTD discovered this problem, not an employee, CEO or marketing manager of FTD. Just goes to show that they are not in touch with the needs of their florist.

Wow the ones with the most revenue are the ones who have a negative bottom line.

Somebody needs to hire this young lady.
 
CHR said:
Darrel,

It's pretty obvious that when a company is paying $7-10 rebates per order to top senders while earning around 7% of the transactions, each order incurs a 'loss'. If the average order is $55 (and I believe that's high for an OG), the WS's fee/income per order would be $3.85.

A company like Blooms Today, with an estimated volume of 400,000 orders annually, would cost FTD millions.

The conundrum is that to keep the real profitable florists in the system, FTD needs order volume - and rebates to large senders are the fastest way to 'buy' it.

The brick & mortar Mom & Pops actually generate the income in the florist sector - through their purchases of POS systems, CC clearings, directory advertising, etc...

Let's face it, without incomings, would most florists choose to purchase their business services through FTD?
Click to expand...

Oops....never occurred to me that the top 10 would be OGs! Duh! Is it Friday or Monday?
 
inferno63 said:
Oops....never occurred to me that the top 10 would be OGs! Duh! Is it Friday or Monday?
Click to expand...
Some of the Top 10 are OG's, and some are not...some of them are just the biggest RealFlorists out there...
 
Building on what CHR said, it sounds like she only looked at part of the equation (although we can't know for sure).

The most appropriate way to do this study would be to include the profit from the fillers that the incoming orders from each top sender supports. For example, if someone sends 100,000 orders a year, and the average filler gets 1,000, then they should include the profit from 100 average fillers.

This type of analysis, called an ABC analysis, where you analyze the profitability of different customers is very difficult to do accurately.
 
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Shhhhhhhhhhhhhhhhhhhhhhhh!

Let's not discuss this DIRTY LITTLE SECRET which most of us have already known about, and for the past 25 years now.

What surprises me most, is the fact that, they allowed the student to uncover their secret to begin with, and then, make that video.

Then again, this is what COST SHIFTING has always been about anyway.

In their PONZI SCHEME, the BIG SENDER REBATES loose them money, as was pointed out.

On the flip side, the majority of MOM and POPS run after the incoming WS orders since for them, it's the path of least resistence, albeit, THE MOST EXPENSIVE as well as being THE LEAST PROFITABLE, if at all.

The WSs buy that CRACK from OTHER DEALERS, cut it, and then resell it to their STABLES filled with their DEPENDENT USERS.

Nice GIG they got going for themselves, YA THINK?

Wonder if this might rank as the SECOND OLDEST PROFESSION?
 
Is she authorized to disclose FTD's trade secret? If not, I wouldn't be surprized if FTD issued C&D to Youtube and sued the hell out of her.

She has no idea what she is doing. Too young and naive. Usually a summer intern must sign a non-disclosure agreement before s/he can work on R&D or Finance department in a company (our company did).
 
goldfish said:
Is she authorized to disclose FTD's trade secret? If not, I wouldn't be surprized if FTD issued C&D to Youtube and sued the hell out of her.

She has no idea what she is doing. Too young and naive. Usually a summer intern must sign a non-disclosure agreement before s/he can work on R&D or Finance department in a company (our company did).
Click to expand...

This is the "how" part of my question.
 
Question is...who is the male voice? And who made the video?? And even better, why was it put up on UT?
 
Bigted said:
Building on what CHR said, it sounds like she only looked at part of the equation (although we can't know for sure).

The most appropriate way to do this study would be to include the profit from the fillers that the incoming orders from each top sender supports. For example, if someone sends 100,000 orders a year, and the average filler gets 1,000, then they should include the profit from 100 average fillers.
Click to expand...

I believe that's exactly what she has done, or at least something similar. Otherwise, her conclusion is self-evident as Cathy said; there is no need to use a statistical software like SPSS, which she mentioned at the end of her interview.

It is very interesting to hear that, according to her statistical analysis (I think she mentioned "Quartile Analysis"; but I'm not very certain), she concluded that the top revenue generators are producing negative profits to FTD. She also mentioned that the VP "kind of" knews this and FTD is planning to devise a new rebate strategy.

I am hearing that TF spies in FC are now popping a champaign now.
 
After a little digging, I discovered that this video clip originated from Northwestern University. There is another student who researched FTD.com as well.

Attached is a pdf file.
 

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  • 2007 Residency Summaries.pdf
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goldfish said:
She also mentioned that the VP "kind of" knews this and FTD is planning to devise a new rebate strategy.
Click to expand...
I'm sure they'd like to, but alas they too have los control of the monster they helped to create and have no idea as to how to get rid of rebates without losing the game...
 
LJVF said:
After a little digging, I discovered that this video clip originated from Northwestern University. There is another student who researched FTD.com as well.

Attached is a pdf file.
Click to expand...

Here's the summary of another student's research from the pdf file.

Viktoria Villarreal
Viktoria worked in FTDç—´ online consumer division, FTD.com, which is an internet and telephone marketer of flowers and specialty gifts. During her residency, she developed a methodology for evaluating lifetime value of customers acquired through various marketing channels which is currently being utilized in facilitating decisions on marketing investments. Viktoria worked across a number of departments including accounting, IT, business intelligence (analytics), and marketing in order to gather appropriate data to construct a lifetime value model template. While working across these departments, Viktoria was able to increase efficiency among departments by eliminating duplication of work and helping individuals align project goals. Additionally, through her data mining, Viktoria uncovered a number of consumer insights that top management had been previously unaware of. At the end of her residency, Viktoria presented project results to the VP of FTD.com and shared recommendations for actions going forward.
Click to expand...

Very Good! I would LOVE to know more about this. I think FC should send a spy to Northwestern, hang out with this student, and get more info. Is there any good-looking 20 something guy in FC?
 
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