feature story

keys to business success in 2005
For florists, the key to surviving and thriving in the near future is to become marketers, not sellers, and relationship builders.

by O. Stanley Pohmer Jr.


If it seemed as if 2004 was a less-than-stellar year for the floral industry, you’re right—it wasn’t a pretty year, especially for the florist/wholesaler channel. We had a lot of things working against us, especially the economy and the consumer mind-set wrought with uncertainty. We were anticipating a recovering economy and, while it did show signs of life, it was in spits and sputters rather than a sustained recovery. Add to that the higher energy prices and the increases in costs of consumer goods related to higher energy costs, and consumers had less disposable, discretionary dollars to spend. Wage earners (consumers) still had some uncertainty about job security, and people focused their spending on essentials, rather than the luxuries and pleasures of life.
When consumers get even a bit panicked, they hunker down and change the way they think about their spending behaviors. They become more price-value focused, key in on “needs” rather than “wants” and shop for bargains. Impulse purchasing becomes less dominant, and planned or destination shopping becomes more the norm.

THE POSITIVES
Yet the opportunity to prosper, even in our recent economic period of uncertainty, remains strong for the retail florist channel. Let’s review a few of the positives we have going for us:
• We have a product that consumers genuinely like. We don’t have to convince them of the benefits of flowers or change negative thinking about them as other product categories do.
• According to the Ipsos-Insight/American Floral Endowment Consumer Tracking Study, we’re dealing with consumers who are better educated, have higher income and are old enough to enjoy flowers.
• 61 percent of cut flower purchasers have household incomes of $50,000 and up, a much higher proportion than the U.S. population at large.
• 77 percent of cut flower purchasers have attended college.
• 74 percent of cut flower purchasers are age 40 or older. In fact, 36 percent of our purchasers are over age 55, and this age segment is the fastest growing.
So our consumers are older and better appreciate flowers, have the income to purchase them and are better educated, meaning they most likely have the social skills and opportunities to use flowers.

MARKETERS VERSUS SELLERS
So why aren’t importers/wholesalers/retail florists flourishing as a retail channel and the floral industry prospering if we have all of these positives to leverage? I see two challenges that are limiting our growth potential, both of which we, as an industry, control; we can’t blame our limitations or lack of success on consumers.
First, we are sellers, not marketers, as our competition for consumers’ minds, hearts and wallets are. What’s the difference? Selling is the activity of eradicating inventory that one owns or is in the supply pipeline. Marketing, on the other hand, is the process of identifying the needs and reasons that consumers purchase products and then communicating (or marketing) the solutions to these consumer needs, wants and desires. Despite all of the academic studies the Society of American Florists has conducted that show the intrinsic value and benefits of flowers, and the marketing success stories the Flower Promotion Organization has validated, we, as an industry, are still in the business of selling “stuff” at a price rather than positioning our products to offer the emotional and psychological benefits that flowers and plants provide. Are consumers really buying flowers, or are they purchasing all the benefits flowers and plants provide to them? Are we selling what consumers are really buying or want to buy? I think not.
At the 2004 Seeley Conference, an industry think tank conducted by Cornell University, the topic was the relevance of floriculture to today’s consumer. After many presentations from psychologists and consumer trend experts, and much discussion over 3 1/2 days, the overwhelming consensus was that our products are more relevant today than they ever have been—we just haven’t told consumers that they are; we haven’t effectively marketed our message and the benefits because our mind-set is selling, not marketing. It’s not the consumers’ job to “discover” the value and benefits of flowers and plants on their own; it’s our job to communicate these to them!

CUSTOMER RELATIONSHIPS
The second challenge we face is somewhat related. Because we’re in a “selling” mind-set, we are more focused on transactional, activity-based involvement with our customers rather than establishing experiential relationships with them. This may sound like a lot of psycho-babble, but it really is common sense that can change our whole interaction with consumers, especially retail florist consumers.
By the nature of their business, supermarkets and other mass marketers are in the transactional mode of selling; they are highly impulse driven. They haven’t yet demonstrated to their consumers the benefits or needs of purchasing flowers on a regular basis. Flowers and plants are not yet written down on their customers’ shopping lists every week along with milk, bread and other essential items. If consumers walk by supermarkets’ floral displays, see something that piques their interest, the products look appealing and they can envision a use or application for them, they may stop and consider purchasing the flowers or plants.
But a consumer who walks through a florist’s front door, picks up a phone to call in an order or goes to a florist’s Web site to see what he or she has available has already made up her mind that she is going to buy flowers; the flower shop is a destination, and the consumer is already aware of the benefits of the product the florist offers. Yet, too many florists just “take the order,” a one-time transactional activity, and lose this precious golden opportunity to leverage the purchase/interaction into a positive, experiential relationship with that consumer.

COCA-COLA'S EXAMPLE
Effective marketers are relationship builders. Take The Coca-Cola Company, for example. It doesn’t look at the transactional sale of selling a can of soda a dollar at a time; rather it looks at the lifetime value of selling more than $6,000 of this product over a consumer’s purchasing life, and everything the company does, at every touch point with that consumer, reinforces this longer-term viewpoint. Coke’s message is clear, concise and consistent (its only deviation was with “new” Coke, and it was a dismal failure because the company deviated from the core message it had established over time). Coke’s signage, tagline, product quality and marketing efforts (even its drivers’ uniforms and the colors of its trucks) all support the lifetime value proposition it has worked so diligently to perfect.
And while McDonald’s Corporation isn’t known for its food quality, the product it offers and the experience it provides are consistent. McDonald’s isn’t in the food business; rather it’s in the business of providing fast, easy food solutions to kids—and their parents.
The challenge most florists face is how to populate their stores, whether that’s through their front doors or some electronic means. And once you capture those customers, do you just satisfy the transactions, those single purchase activities, or do you nurture and develop experiential relationships with those customers so you become their provider of choice for the rest of their lives?
Are you leveraging all of the touch-point possibilities to develop those relationships? From the professionalism and attitude at the end of the phone line and in the store, to the appearance of your employees and their desire to get customers back again and again, to the service and attitude of your delivery team, to the follow-up that includes thank-you notes, mailings, e-mail newsletters and reminder services—all of these are opportunities to help develop the long-term relationships, the lifetime values.
Some say that you should try to develop this kind of relationship with every customer. But the reality is that you probably don’t have the time and resources to do so. The key, as the Coca-Cola folks try to do, is to identify the 10 percent of the users or purchasers who consume or enjoy 75 percent of the product, and service the heck out of them. These loyalists become not only your most important consumers but also your most vocal advocates, praising you to others. And it’s proven that accolades and referrals from existing customers to others are much more credible than any other form of advertising you can invest in.

CHANGING MIND-SETS
So we really have two interrelated challenges. One is changing from a selling to a marketing mind-set, selling the benefits and solutions our products provide, not the products themselves. The second is focusing on the experiential relationships to maximize the lifetime value of existing and new customers rather than on the transactions themselves.
Both of these require major changes in the way most of us think about what we do for a living, the way we manage our businesses and the way we communicate and market to consumers. These are not simple operational or cosmetic changes; these are core, fundamental cultural and attitudinal changes that need to be embraced by you and every employee in your company in everything you do at every touch point with your customers.
In just four short years, the florist channel share of the cut flower business shrunk from 55.4 percent of the dollars and 28.1 percent of the transactions to 48.7 percent of the dollars and 20.9 percent of the transactions, with increased share going to discount retailers, some to supermarkets, a little to warehouse clubs and some to Internet providers (note that the Internet isn’t the major player many give it credit for being; in the cut flower category, this channel accounts for only 6 percent of the dollars and 1.9 percent of the transactions).
That said, no channel has more opportunity to reposition itself with consumers than the retail florist channel. Only 13.7 percent of U.S. households purchased any product from a florist in 2003. Some may say that’s dismally low, but I view this as a potential for you to penetrate 86 percent of the U.S. households!
There’s a business adage: “If you always do what you’ve always done, you’ll always get what you’ve always gotten.” It’s a tough, competitive world out there, and retail florists and their channel partners have had a tough go of things over the past few years. But while there’s so much opportunity and potential for growth for the retail florist, we’ll never be able to capture and enjoy it doing the same things we’ve done before. Maybe it’s time for a change in the way we think, the way we market and the relationships we have with our consumers.

O. Stanley Pohmer Jr. is CEO of Pohmer Consulting Group, Minnetonka, Minn., and executive director of the Flower Promotion Organization, www.flowerpossibilities.com.
 


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