Search Term Value Thanksgiving

[duanermb]

Agree with Ryan on this one for sure.

It's all about lifetime value of a client vs. the value of a single transaction.

That philosophy is a great motivator on a personal level as we deal with customers. Don't think of them as a $20 bouquet, think of them as $5-10k worth of lifetime purchases. Treat them like a $10k customer

Ryan

Great philosophy, in any market conditions, but perhaps even more important now.

Somewhat related to the comments: Through a downturn in the markets, we can either run and hide or really shine and power through. This relates to all businesses in these times, including where I work for a manufacturer full time, and my wife's flower business. Invest, provide greater value for your customers and shine through the downturn. It may cause some pain now, but those competitors who have dug in, reduced services, reduced customer value will be weaker when the market turns back. Service and value at all costs.

Now is the time to steal market share and grow our businesses.

 

[bloomz]

I was taught to look at them as if they have a $500 bill stuck to their forehead.

I haven't been in this biz that long, but I also haven't seen, other than corporate customers, any $5-10K customers.

But I'm willing.....

Now is the time to steal market share and grow our businesses.

Boy Howdy do I agree with that!

MOF I'm counting on that.

 

[kt4ye]

...but how can "we" (defined as a small mom & pop right up to 1-800 & FTD) calculate the lifetime value of a customer over 20 years...

...when the lifetime value of many of our businesses may not even be 20 months????

Wouldn't "we" be "banking" on creating a current liability in exchange for a long-term asset?

An asset which may in fact have little or no value?

Just thinking is all...

:faint:

And good thoughts they are!

The key, it would seem, is CUSTOMER RETENTION. IF it costs, say $25 to GET a customer, we'll lose money on the first transaction. But IF we can ECONOMICALLY retain that customer, then it may not take all that long to go from LOSS to BREAK EVEN to PROFIT. Certainly less than 20 months.

I've been using a figure of 1.7 purchases per year for the American public. (I picked that up some years ago -- can't recall where.) Using that assumption, it is essentially impossible to "turn the corner" and make a profit from advertising.

BUT I'm using the WRONG parameter. The CORRECT parameter to look at is the number of times per year that a FLOWER BUYER purchases flowers.

I do not know what that is, but it has to be more than 1.7.

As an experiment, I bought a bouquet from Pro Flowers. It came in the day I specified. Everything was in good shape. The Shipping box was well designed and built. The flowers lasted as long as my own "grower direct" flowers normally do.

BUT after they were delivered, I have received about five Emails soliciting more orders with special offers, etc.

THAT is where the "big boys" have an edge.

I am learning that Email marketing is not for the faint of heart. Especially when we consider that in addition to accumulating a database, we must categorize it, develop creative pieces that are appropriate for each category or segment, send them out when they are supposed to go, and most importantly TRACK the results and ANALYZE the results.

I'm worn out just thinking about it. My first Email blast went out yesterday. 7000 emails for less than $100. Try THAT with USPS mail!

Fun!

Bill

 

[duanermb]

Bill hit the nail on the head.

I'm worn out just thinking about it. My first Email blast went out yesterday. 7000 emails for less than $100. Try THAT with USPS mail!

Fun!

Bill

First of all, YOU HAVE 7000 EMAIL ADDRESSES! Congrats on that for starters.

Secondly, I agree that the big boys have a tremendous advantage in that they have a marketing guy do up an email, and send it to hundreds of thousands of people. Cost per email, not 1.4 cents, more like .001 cents.

I have found it difficult to maintain our email campaigns, but it's definitely worth while, and must be somewhat regular in nature, without being spammy.

 

[LJVF]

And good thoughts they are!

The key, it would seem, is CUSTOMER RETENTION. IF it costs, say $25 to GET a customer, we'll lose money on the first transaction. But IF we can ECONOMICALLY retain that customer, then it may not take all that long to go from LOSS to BREAK EVEN to PROFIT. Certainly less than 20 months.

One thing I've learned over the years is that it's very difficult to break a customer out of old habits. You can blast away emails (which I'm finding do work btw), give away rolodex cards, pens, calendars, etc..., but there will always be a segment that will always revert back to the ways they know best. When these people want your info, they'll once again go back to google and click on your paid keyword. Like the old saying goes, sometimes it's hard to teach an old dog new tricks.

 

[theRKF]

Slight hijack alert:

I'm writing an article on email marketing for florists. If anyone has questions or topics related to email marketing that they would like covered, please PM me.

Cheers,

Ryan

 

[Dazeal]

One thing that was not discussed is drop ship businesses vs non-drop ship ppc. When proflowers or 1800flowers pay that much, they make it up in the shipping price and sometimes make money. For example: Customer pays $15 to ship proflowers, PF has a 80% fed-ex discount, and are shipping 3 zones away, with a DIM weight of 9. It cost PF $8 to ship, $6 for the click and they made $1 profit.... not counting the floral profit they have worked out with Sun Valley and Dos Gringos for example.

I used to own a floral drop ship business that failed due to bottle necking in Miami. My backers dropped me when 100+ orders sat at the Miami airport and didn't get delivered on MDay. I was Pissed to say the least. When I called, i found out the floor manager was caught taking money from someone at butterfieldblooms (FTD's drop ship biz) and was fired. FTDs flowers made it on the plane. My flowers, 1800flowers and Calyx and Corolla's flowers never went out. See in Miami, when a fedEx plane is full on Mday, the rest sit their overnight and go on the next plane out.

Anyway... these big drop shippers make money in their delivery charges which can justify higher ppc. Plus, like someone already said, there has been times where PF has lost money, but knew they could gather more customers at one time, say VDAY, and get them later in the year to make up for that loss.

So paying a lot higher ppc twice a year, say VDAY and MDAY, than a regular who pays lower because they are more consistent might work out in the long run, if you can keep that customer for X amount of days. JB, take out a loan and let us know how it goes.