feature story

corporate
      
        giving

Tips for capturing corporate gift basket business
year-round.

by KELSEY E. LOWE-SMITH


Birthday, sympathy and new baby may be the bulk of your everyday orders, but these categories also present lucrative opportunities for capturing corporate gifts, and not just with flowers. More than 68 percent of gift basket companies reported an increase in corporate gift orders last year over 2003, according to Gift Basket Review’s “2005 State of the Industry Report,” and with a little knowledge of what customers want in gift baskets and how to market to them, you, too, can grow your corporate gift basket business.
“When do you go after corporate business? Every minute of every day of every week of every month,” says Thomas Catanese, CEO of Thomas Catanese and Company, a consulting firm and supplier that provides gift packaging for such notable companies as IKEA, Godiva, Walt Disney World, Hilton Hotels and Pepperidge Farm. Mr. Catanese, a former third-generation florist, has been in the gift basket industry for 40 years.

FOOD FOR THOUGHT
With approximately 13,000 gift basket retailers listed on the Internet alone, competitive retail florists must look for ways to set themselves apart while projecting professionalism. One way to do this is to avoid the stereotypical florist’s fruit basket. Although “fruit/healthy snacks” shows up at No. 11 on Gift Basket Review’s list of the 20 best-selling gift basket foods, the most salable baskets will also include candy and other ready-to-eat foods. “The real swing is over to ready-to-eat specialty foods and chocolate treats,” Mr. Catanese confirms.
More than two-thirds of respondents for Gift Basket Review’s survey listed chocolate as their best-selling food category. Cookies followed at a distant second, posting a significant jump from their 15th-place ranking in 2003 and knocking cheese to No. 4. Popcorn, snack mixes, meats, pretzels and fruits/healthy snacks, all absent from the “top 20” list in 2003, moved up for 2004. Foods ranking significantly lower this year were cocoa, fudge, biscotti, baked goods, beverages and jams/jellies/preserves.
At Virginia Donnolo’s Distinctive Florals and Gourmet Shop, a full-service florist owned by Douglas and Virginia Donnolo in Downingtown, Pa., the most popular basket theme, particularly among corporate clients, is the “Munchie.” Starting at $35, this open-and-eat basket typically includes cheese and crackers, hard candy, chocolates, chips and salsa and/or cheese sticks.
At least 75 percent of the Donnolos’ gift basket business is corporate, and gift baskets account for $200,000—approximately 28 percent—of the shop’s annual sales. Mrs. Donnolo says one of the keys to the success of this segment of the business is regularly sampling the shop’s offerings to customers. “When we’re busy and there’s not a lot of time to prep things for sampling, or when our walk-in business is slow, we’ll sample things like cookies, chips and salsa and cheese and crackers,” she says.
The shop also has two small convection ovens in which Mrs. Donnolo bakes scones, brownies, cookies and other goodies from the mixes that are for sale. She says this practice has increased sales of such items, which are available individually as well as in gift baskets.
Before sampling foods, however, it is important to note what types of permits or licenses are required in your area. The Donnolos have a food handlers’ license in accordance with their county’s laws about handling unwrapped foods. The business also has a winery within its store, which is a separate entity with separate owners who pay rent to the Donnolos. The winery opened last November and has been a valuable asset to the Donnolos’ gift basket segment.

PRESENTING QUALITY
Mr. Catanese, who has educated more than 10,000 gift basket retailers through 85 seminars and symposiums in the United States and Europe and through his consulting services, says his first piece of advice for those who want to approach the corporate market is to polish themselves as well as their presentations. “Presentation is a key to making the sale, whether it’s over the phone or in person,” he relates. “You must have a professional presentation of self and products, and never send a gift basket to a company blind. You must know the name and title of the person you are sending it to, or it will be lost.”
He suggests calling each company and finding out the name of the person who is responsible for ordering gifts, then sending promotional materials and photos along with a letter requesting 10 minutes of his or her valuable time to present an important service that the company might need.
The trick is to show your customers that your baskets are worth their money. Mrs. Donnolo says her shop has a full menu of designs, and 75 to 100 baskets are displayed at any given time. Of course, with 4,000 square feet, nearly half of which is sales area, there is plenty of space in the shop for such displays.
If you do not have the luxury of space, Mr. Catanese says it is important to have a minimum of eight to 10 sample gift baskets on display, and they should be rewrapped every few weeks to keep them looking fresh. He also recommends having an extra-large, fancy gift basket on display to get customers’ attention on a grand scale. In addition, a portfolio of images of baskets you have created is essential as is a well-thought Web site where you can direct your customers.
Mr. Catanese says the second-most important thing to presentation is quality. “One of the worst things a retailer can do is send out a basket with marginal products in it,” he says.
To ensure that none of your products reach the edge of staleness, Mr. Catanese advises writing the date the product was received backwards on the price label. So, for Oct. 1, 2005, you would write “50021001,” which means nothing to customers but reminds you and your staff how long the products have been on the shelf.

STAYING PROFITABLE
Like other segments of your business, there are a number of ways to price gift baskets. Mr. Catanese suggests the following formula.
• 65% = consumable/gift products (at retail)
• 20% = container (at retail)
• 10% = labor
•   5% = packaging products (at retail)
He says that while it is a common practice for retailers to mark up specialty foods 100 percent (a double, or keystone, mark-up), marking them up 125 percent to 150 percent (2.25 times and 2.5 times, respectively) ensures profitability.
Ellie Ramsey, owner of Blossoms and Treasures in Carmichael, Calif., which was recently named by Gift Basket Review as one of the top 50 American gift basket businesses in revenue and one of the “Fast 50” (fastest growth in a three-year period, achieving more than 500-percent growth), says the key to keeping gift baskets profitable is to buy products wholesale. “When I call florists in other areas for gift baskets, most of them say, ‘I have to go to the grocery store.’ You wouldn’t run to the grocery store and buy a vase every time you have a flower arrangement,” she points out.
While it’s true that many suppliers require minimum orders, Ms. Ramsey says that shouldn’t discourage florists from buying in volume. Her shop occupies a modest 900 square feet and is located in a town of about 50,000 people, but she has kept her business growing by sharing orders with other shops. She currently is vice president of the Northern California Gift Basket Co-op, a group of about 15 gift basket retailers in her region. In addition to monthly meetings in which the “friendly competitors” share ideas, they take advantage of volume discounts by splitting orders.
Ms. Ramsey, whose corporate gift baskets average $100 and account for 75 percent of her overall gift basket sales, says it is important not to get carried away when shopping at gift shows. She has a rule that if she can’t use an item in at least four types of baskets, she won’t buy it.

MARKETING MAGIC
No matter how good your presentation and quality are, they don’t mean much without a plan for getting noticed. And knowing who your top customers are is one of the keys to making sure they remember you year-round.
Identify your top customers in the categories of corporations, individuals and organizations/civic groups, Mr. Catanese suggests, and have a strategy for doing something extra for those people at least three times a year.
“These are your core profit and sales makers,” he explains. “Certainly you need to be nice to all of your customers, but these people could be giving you up to $10,000 a year.”
He adds that in addition to these key businesses and individuals, your VIP list should include the mayor of the town, the head of the town council, the police chief, the fire chief and any politicians in the community who may need your services at some time in the future.
One low-cost way to make your top customers feel special and to keep your business’ name in their minds is an e-mail newsletter that provides them with valuable information such as the history of Valentine’s Day or upcoming holiday dates to remember.
Mrs. Donnolo says she and her husband started one of their most effective promotions two years ago. “Before we leave for the Fancy Food Show, we print postcards and put mailing labels on them to our corporate clients and even some individuals who have ordered several baskets, and we send the postcards from New York, wishing them a happy summer and letting them know that we’re at the Fancy Food Show shopping for things to customize their gift baskets,” she says. These postcards, which bear Manhattan postmarks, create excitement among customers who are eager to see the new merchandise. “People ask where the new stuff is when they come in,” she confirms.
Another way to market to corporate clients is to take part in charity events. Mr. Catanese suggests doing three major charity events each year, but not just by donating gift baskets. “What you want to do is get on the committee, because then you can meet the movers and shakers in the organization,” he explains. “You could be the gift and raffle chairperson, and you could create gifts that can be raffled off, but that doesn’t mean you have to donate everything.”
He suggests asking the organization’s members to donate wines, specialty foods, gift certificates, etc. that will go into each gift basket. This way, people can see your business’ name and creativity, but your business won’t bear the cost of all of the gift components. He also suggests helping different charities every year to get the most exposure.
This type of thinking is what Mr. Catanese says will advance florists in their gift basket businesses. “As much as American florists think they’re in the flower business, they’re not,” he says. “They’re in the gift-giving and emotions business. They just happen to be selling more flowers and plants than anything else.”

For more information about Thomas Catanese and his company, call (610) 277-6230 or visit his 125-page Web site at www.thomascatanese.com.


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