March 13, 2000
Growing A Little Shop Of Flowers
To find your best customers, you have to treat them as individuals. Software can help you do it
When most of your business comes from a small percentage of customers, doesn't it make sense to pamper the most valuable ones like hothouse orchids and "weed out" the less profitable ones that can choke your growth?
That's what Carla Emert, owner of the Troy Flower Shop in Troy, MO, decided when she took stock five years ago and asked herself: Do I want to just run this business? Or do I want to grow it?
It's what the Stamford, CT, consulting firm Peppers & Rogers calls "one-to-one marketing" knowing and treating each customer as an individual. "It does not mean that every single customer needs to be treated uniquely," says partner Martha Rogers. "Rather, it means that each customer has a direct input into the way the enterprise behaves with respect to him or her." The information you gain through online orders and payments makes one-to-one marketing possible.
For her part, Emert gauged 20% of her customers make up two-thirds of her business, so she designed a business plan in which she spends the bulk of her marketing budget on them. The "fertilizer" she uses is a software package that captures purchase data (with customers' permission) and segments her customer base.
The software consolidates buying habits at the point of order entry, remembering each order, the occasion, and the amount. This gives Emert the data she needs to highlight her top accounts. She then uses a "picket-fence" strategy, isolating her best customers and those with the most potential for targeted marketing initiatives.
Over time, Emert has expanded the population of customers behind the "fence." Emert finds out what customers like by talking to them on the phone or reviewing responses to direct mail, monitoring certain aspects of their purchase behavior. She then customizes her products and services, for example, ordering a uniquely colored rose from a particular farm, or providing special packaging if requested.
"By understanding our customers' needs, what they want, and what they expect, we can build a trusting relationship," she said.
The shop doesn't use traditional advertising as much anymore because customers are referring new customers at the rate of about 15 per day. Emert's customer base reached 7,000 in 1999, up from 5,500 in 1998, and from 4,500 in 1997. She says she's also seen two years of record revenue growth a 25% increase each year.
"The one commodity even Bill Gates can't buy more of is time," she said. "By developing our existing customer base, we are not wasting time and money with
- by Mark E. Dixon