Crunch the numbers

Well, it is baseball time so Spring sales can't be far behind. Just as you shouldn't panic if your home team gets off to a rocky start (Sox are 3-4, Yankees 3-3), you shouldn't panic at the sluggish start in the first couple of weekends in the green industry. OK, so what does that have to do with baseball? It's all about the numbers. My fascination with baseball began with a statistics game called Strat-O-matic. The game was based on the statistic averages from the previous season. Your skill involved understanding match ups and setting your lineup and pitching accordingly. With a roll of the dice the game began. Based on the information you had, you formed a game strategy. You had to adjust for the opposing pitcher, know who the top hitters were and understand the opportunities from one game to the next.

So it goes with retail this Spring. Match ups are tough as green retailers are going to faced with competition from higher food costs, gas costs are through the roof and the housing market is in deep doo doo (technical term from Alan Greenspan). Now more than ever you will have to play the odds. For me that has always revolved around making the most of your existing customer base. That is where the rubber meets the road, and consequently, where you will get the best return on your dollar.

To revisit a favorite formula we will take the way back machine to 1998 (or around there...). Most of my talks at industry events revolved around understanding the critical dollars per transaction, or average sale. Getting a handle on this key number should be the number one priority. The only way you can plan for growth is to create a way to make things happen consistently from one day to the next. Sort of like a baseball manager knowing you are not going to win all 162 games, but if you manage the basics you will win more than you lose.

You see it really isn't about hitting home runs all the time, but rather getting on base, moving the runner along and timely hitting. In retail that means getting customers into the store, selling them more, and getting them to come back. While it is fairly generic, lets see what happens when you 'crunch the numbers'.

Here's the formula --

1) take your total sales for the year and divide by the average sale - in our example we will use $1 million in sales with a $40 average ticket (highs and lows equal out over the long haul).

2) from there we can determine how many customer visits we had. we take the total transactions - in our case 25,000, and we divide that number by the average that any one customer shops your store in a single year. We will use a theoretical number in this exercise, but if you have a POS system you won't have to. When I surveyed retailers years ago it came out to around 2.875, or 8695(.65). We'll round up to 8700.

3) the 8700 represents your potential 'core customers'. In an 80/20 formula (80% of your sales will come from your top 20% customers) these 'core customers' are the ones to concentrate on.

4) next, we multiply the 'core customers' by your average sale. In this case 8700 X $40 equals $348,000 (based on a single transaction). If we multiply the $40 times the 2.875 then the customer is worth around $115.00 over the calendar year.

5) the goal then, is to increase the dollars per customer. The simple way to do that is to increase the average sale and improve the amount of times they shop in a year. When you apply the numbers to this it looks something like this: 8700 X $45 (just $5 more per transaction) you come up with 391,500, or an increase of around 11%. If you get them back 3 times (up from 2.875), the customer is now worth $135 per visit - around 15%.

6) put those two together and you end up with 8700 X 45 = 391,500 X 3 = 1,174,500, or an increase of around 12%. Of course these numbers are purely speculative, but the numbers don't lie.

Again, it isn't about knocking them out of the park, but rather the day to day attention to great customer service, promotions designed to increase the average sale and a mechanism to communicate with your core customers on a regular basis. With a customer acquisition cost that is roughly 26 times the cost of retention, shouldn't you be paying attention to your best customers?

Now your results may vary, but even if it took you a couple of years to realize such increases, wouldn't it be worth it?

I’m confused, how about you?

On the one hand there is actually a GF (gluten free) movement. It must be true because it has its own magazine. So when I was driving around town I passed my local garden center that had a sandwich board sign announcing it had Corn Gluten. Corn Gluten? Wasn’t that a bad thing?

I have to admit that I had no idea what Corn Gluten was. So my wife Ann says, rather matter of factly, “oh yeah, corn gluten is a natural approach to suppressing weed seed in your lawn.”

How did you know that? “Well,” she explained, “when you proof as many newsletters as I do, you learn a lot.” She went on to say how much she learns from the Natureworks (Northford, CT) newsletter. Sure enough, I had to look over a website post from Stringer’s (Memphis, TN) and found another reference to Corn Gluten.

I still am not really clear on what CG (not GF) is and how it works. I consider myself fairly knowledgeable, so if I haven’t heard more about it, how many of your customers are confused as well. Not to confuse the issue, but confusion is not my point.

The point is there are some really good newsletters (both traditional and virtual) out there and they have quite a following. I can tell you statistically that the Natureworks newsletter averages over 35% for opens, and has a 25% click through rate. Nancy DuBrule, the owner and spiritual leader of the cult that is Natureworks, has a very loyal following built over the years by her ability to connect with her customers.

I can tell you with some certainty that the Natureworks customers know CG from GF.

Just another example of how “content is (still) King”. So, with that said I thought I might suggest a few (e) newsletters for you to subscribe to:

www.naturework.com

www.stringersgardencenters.com

www.forestlakegreenhouses.com

www.mostardi.com

This is not a judgment of what is good or bad, (all are managed through Sunrise Marketing), but rather a suggestion that you subscribe to as many newsletters as you can. This will give you a good feel for what you like (and don’t like). Notice I said newsletter. Despite the fact that e-newsletters are a hot topic, Natureworks paper newsletter has twice as many subscribers.

Care to share? I encourage you to post your thoughts, whether it is on Corn Gluten, great sites, or great newsletters you’ve found along the way.

That Tomato Lady

First of all, a very happy Easter to all; May your spring be wet, but not too wet… warm, but not too hot. We could all use a good spring and the prospects for many more to come. Visiting with my daughters this weekend I had an interesting exchange with Cara, our daughter studying Journalism at University of Missouri.

First of all, you have nothing to complain about weather-wise compared to those poor folks in Missouri. This past week they had over twelve inches of rain! Makes those rain barrels seem silly, doesn’t it?

Well, we picked up the rental car in Phoenix and started the long trek back to the desert. We started talking, and believe it or not, she didn’t know that dear old dad writes a weekly blog. So we got to talking about blogs. It turns out I didn’t know that she wrote a blog. She was a little more reluctant to have me read hers than the opposite.

All that set aside for another day, we had an interesting talk about life beyond college. The conversation ranged wildly, but for the sake of this post I will confine it to communes. (I guess it was because Woodstock was playing on the radio). It wasn’t that she was necessarily enamored with the sixties, but rather a sense of finding peace in a simple lifestyle.

“I want to grow my own vegetables, have a few chickens and sell excess produce at the farmer’s market. I want to be ‘that tomato lady’. You know,” she explained, “that lady that grows those killer tomatoes.”

Which led us to Fritz; Fritz was my grandfather and her great-grandfather who, in true German fashion, had a rather prolific vegetable and fruit garden in the backyard of his 1950’s tract home in California. Fritz and Anna were from the old country. The backyard featured blackberries, raspberries, tangerines, climbing roses, pole beans, plums, apples and ‘killer’ tomatoes (and much more).

In a scene right out of the Godfather - the first one, where Marlon Brando keels over in his veggie garden after chasing his grandson around with an orange peel grin – I have memories of a six year old tied to those summers growing up in Sunnyvale (true story). It was in that sunny garden that I was exposed to grafting fruit trees (his friends included a rather talented Swiss arborist), drying fruit and of course growing tomatoes. It was there that I learned an ‘organic’ approach to pest control – a sharp knife applied to those giant green tomato worms.

As we fast-forward to the rental car, I wondered what would inspire the next generation to value a simpler time where you ate tomatoes still warm from the sun, and squeezed lemons into a juice glass.

You see, I think Cara’s fascination is not necessarily horticultural, but rather the sense of community that comes from those that share similar interests. Isn’t that the whole appeal of blogging, facebooks and Bonnaroo?

Of course I have a tendency to generalizing, but I am starting to form an opinion that the garden center of the future is going to be formed more by the ‘kindly and knowledgeable’ garden guy/gal than by branded pots. At the risk of dumping just another buzz word on you, advertisers are now enamored with ‘authenticity’. Whether it is an experience, a relationship, or in this case a tomato, people can tell the difference between the real deal and a poser (sorry).

Building on last week’s post – inspiration – I would like to stress the importance of distinguishing yourself from the competition (it is easier to think of it as a box-store for now) with inspiration and information. You might shudder at the thought, but your presence in the marketplace might be enhanced with your presence in the marketplace.

In a complicated world, people continue to seek peace and quiet wherever they can find it. Maybe the seeds for that future tomato garden can find their start at your local, authentic, grass roots, tree-hugging, green loving, inspirational garden center.

Here’s a hint – you can’t connect unless you’re out there (virtually or otherwise) talking with your customers.

Green, it's the new pink!

When I came up with the idea for the 'Grow Green' marketing campaign I wanted to help retailers get in front of the environmental movement that is sweeping through the media these days. The irony is that for many green industry retailers the 'green' movement is finally catching up to their life long passion for nature. However, communicating all this can really be a challenge. Where do you start?

The short answer is to lead by example. Now more than ever you have the opportunity to really connect with your community. Whether you are initiating a neighborhood recycling effort, or organizing a tree planting project at the local grade school, this is the time to educate and inspire.

Your marketing and advertising needs to present you and your business as a resource for your community. Your years of experience and community connections should help you position your business in a very positive light.

Easter is next week. It is a time of rebirth where hope, literally, springs eternal. With April comes the first day of spring, as well as Earth Day and Arbor Day. You should schedule promotions that connect with the community. For the next generation of customers you and your business might be the only chance for them to learn such basic skills as planting a tree or clipping a hedge.

That's the message that needs to be in front of your customers... and all those who should be your customers. Document the events and use your marketing tools, such as your website, or maybe even a blog to spread the word.

One person can make a difference and each decision you make has an impact.

This past week Ann and I took our 'carbon footprint' from a size 14 to a more manageable size 9. That's right we swapped our SUV for a hybrid. Going from 12 mpg to over 50 makes a lot of sense (and cents)! Like your customers how we shop is in some ways a statement. So when we tool around in our Prius we can feel good about using our Whole Foods shopping totes to pick up some organically grown apples. True story. But a good picture is worth a thousand words:


That's right - Toyota Prius, Whole Foods Shopping Bag and 'Keep the Hive Alive' t-shirt. It's part of the Haagen Daz - HD for HB promotion calling attention to the challenges being faced by honey bee populations. Hey, we're consumers just like your customers. Help your customers feel good about shopping you and your business. With any luck they might spread the word about you on their blog!

Content is still King

Whether you know it or not, you are in the content business. Wrong, you say, we sell plants. Wrong! Supermarkets sell plants, box stores sell plants - plants have become a commodity. So if you are still selling plants, you are missing the bigger picture. You see the reason why people come to you is (I know, you've heard it before) to either solve a problem, a seek escape. Either way they need your help. Your help is the years of experience, plant knowledge, design ideas, etc. that make you different from your competition.

OK, you say, but where are the ten things that will make my website better?

I am getting to that...

The experience you possess doesn't amount to anything unless you are able to share it. However years of patterned behavior (newspaper ads) has put too great a distance between you and your customers. You see advertising and marketing is the process of telling your story. I know we all get caught up in the 'story' part, but the 'story' is an encapsulation of what your business is all about. Unless you are encouraging a response from your customer (what ad does that?) you are just talking to yourself.

Alright already... what does that have to do with my website?

Here's what it has to do with it. Websites are one of those rare opportunities to create a marketing message that 'interacts' with the audience. You publish information on your website and people can point and click, mouse and move, email and better yet even buy stuff.

So if your website is still being managed by that friend of a friend, or buddy, or best customer or whatever, it is time for you to get involved. What separates a good website from a 'so-so' one? You guessed it - content!

So without any further ado... first the soft stuff:

1) Content. The reason why people will come to (and come back) to your website is how fresh it is. Is it current? Up to date? Does it have information, or access to information, that might be helpful? Use your site to establish yourself as the expert. Think about contributing an article or editorial to your site. Think of it this way - you can talk to one person at a time, or you can put it out there for tens of thousands to read.

2) Interactivity. Does your website create opportunities for visitors to interact with you? Can they ask questions? Get directions? Make yourself easy to contact. In many respects you are your business. Initiate an "ask your name here". Respond quickly to questions. Add a sign up form for follow up e-mails.

3) Images. Let's face it - a picture is worth a thousand words, but a great image is priceless. Websites need a careful blend of information and eye candy. People are inspired by beautiful photos of beautiful gardens. How do they get there? See answer number 2. With the number of stock photo websites it is easier than ever to get access to great imagery and graphics. Check out links on the Sunrise Marketing site.

4) Fast. People might read blogs (well, you are), but scan websites. They see with their mouse. Careful use of bullet points, bold fonts, color, but be careful with underlining (can be confused with links), can help your readers get to the good stuff. Keep your visitor moving, make the navigation simple and easy to understand.

5) Links. Just as important as sites that you link to are the sites that are linked to your site. Take an inventory of suppliers that feature a 'find a retailer' locator and make sure you are listed with website address and email information. When you are able to cross link within your site it helps your standings with search engines. A word or two about internal links. Links to your pages establish a level of relevancy to the value of your site. So, create as many links (that make sense) to other pages on your site as possible. Another simple way to link back to your site is through the 'signature' on your email. These are the name and details that you can add through your email system. Don't overlook a link back to your website.

OK, here are some of the techy stuff...

6) Keywords. Create a list of words and phrases important to your site. The best way to find out which words are important you can take a look at the source code of sites you like (on your browser go to 'view'; 'page source'. Within the first paragraph or two will be a listing of keywords, descriptions and meta tags. Take your list and then run them through a tool such as WordTracker, the Google keyword tool or Yahoo Overture Keyword Selector Tool to see what the volume of search activity is and find alternative phrasing to add to your list.

7) Searchability. Key words are important in tags, but the important part is to make sure that the keywords you select are represented in the content of your page. That means the title of the page; plants.html rather than annuals.html; (nobody searches for 'annuals', they want 'plants.' They should also appear in the headlines (specified headlines) of the page and of course in the content of the page. You can also increase the relevance to keywords by titling your images - echinacea_plants.jpg rather than per_18.jpg. Alt tags - photos and graphic descriptive terms (another code item).

8) Structure. Make sure your site is easy to navigate. Think like a visitor to your site. Just as you would lay out your store to make it easy to shop, you should build your site so it is easy to use. Another point out structure: create as many pages as possible (within reason). An example would be to have 'plants', but also individual pages for 'perennial plants', annuals, flowering shrubs, trees, shrubs, etc. You can also establish pages for specific plants like 'Endless Summer', 'Knockout' roses. Getting to them leads to...

9) Blog. This is one to think about down the road. You see spam filters are going to continue to impact deliverability. The answer is rss (reader subscriber service) feeds. Ultimately people can 'subscribe' to feeds that will automatically update them when you publish a post to your blog. Of course you can also post video feeds, audio tracks, etc. When you think about it you can create your own tv and radio ads directly to your customers. You have to think about building visitors and readership now! This will create the most important way for you to reach your customers in the future (not that far off). Look for the little 'subscribe to posts' link on the lower right hand column.

10) E-Mail Newsletters. A monthly email using a tool such as Constant Contact will keep your customers in the know about your latest business news and will drive traffic to your website and blog. More about blogs at another time. Make sure you create as many opportunities for readers to link back to your site.

Of course, there are probably a hundred other ideas that you could come up with. Of course one of the benefits of a blog such as this is I can hear from you. What do you think?

One of the those 2 AM moments

First, I would like to say that I am not making this up. This evening we had dinner at Chili's. In the middle of the meal Ann (my wife) turned and said "you'll never guess what I woke up thinking about the other night." OK, I give.

"I was thinking about the future of garden centers."

The rest I will have to paraphrase. In the nutshell her concern was how customers were going to relate to shopping at a typical garden center. You know, tables all lined up with plants by category, pots on pallets; everything all lined up in a row.

"How do they expect people to figure it all out?"

She went on to describe what she thought a garden center should look like. More of a showroom with display beds designed and set up for customers to get a better idea of how there home landscape 'could' look. The old concept might of worked for people who saw gardening as a hobby, like building model airplanes, but what about the rest of us?

Then there was a dooooo, doooo, dooo, doooot (substitute the Twilight Zone theme music) moment.

You see I spent Wednesday and Thursday with a group of landscape professionals at a meeting sponsored by Willoway Nursery. One of the other speakers was an old friend Kip Creel from Standpoint Marketing. I have known Kip for a few years now and I felt fortunate to be able to sit in on his talk.

Brilliant stuff - but the thing I kept hearing was a shift from gardening to landscaping; and the fact that the next generation was less likely to become 'gardeners', but rather they saw the landscape as an extension of the home. He went on to describe the shifting market and the opportunity that the future held. Then comes the spooky part - he went on to describe that the garden center of the future would be more like a showroom with the garden center moving towards helping customers with design solutions. (OK, maybe I added that part)

So with that I scrapped the original blog story and went with this one. Landscapers are going to find stiff competition in the future and they might be surprised at where it might come from. It could be that local landscape design center. Will that be your business, or a new player in the market?

I'll keep saying it - stop selling plants, sell design. People want to buy the result of a beautiful landscape. They want the peace and quiet, the increased value to their property and a place to get together with friends and family. They don't want to have to learn latin to understand plants, they will shop where someone can make it a fun, creative experience to landscape their future.

Marketing your landscaping business

It is a bit of a chicken and egg situation. As a small business you might not think you have the resources to advertise your business, and if you don't advertise your business you will never big enough, etc...

Although I have a tendency to over simplify things, let's consider the basics. Most owner operators never have enough time for truly marketing their business. You might plan to tackle it during the winter, but you really need the income generated by snow removal... but how do you get that business without letting people know about it. The answer is to either clone yourself, or to develop a system for generating leads and closing sales.

In retail there is the three legged stool - a coordinated approach of direct mail, in-store signage and a company website. Is it really that much different in marketing your landscape business?

You prospect for customers, filter the leads through your website, provide brochures and close the sale with qualified customers. At the job site you utilize yard signs to provide neighbors with phone numbers and your website address.

Like anything else, it is a numbers game. The typical response to direct mail with a purchased list is anywhere from .5% to 3 or 4%. You can improve the odds with a good list, a good offer and the proper timing. You measure the response with either website traffic or phone calls to the office.

As the saying goes, you need to crack a few eggs to make an omelet. Or is it, kiss a few frogs? Either way, you can calculate how many mailers to send out by determining your goals for new business. Perhaps you can only handle a dozen or so new jobs, or maybe you need hundreds of responses. It is still comes down to simple math.

Let's say you send out 2500 mailers to a select neighborhood or zip code area. With a 3% response you would generate 75 leads. In sales there is the rule of nine - if you can create up to nine points of contact without incurring a no, you have a great shot at closing the sale.

So here goes... 1- the mailer, 2- a visit to the website, 3- an email from the website, 4- a brochure goes out, 5- a phone call and 6- a sales call.

With this process the prospect has been able to see your work (on the website), get a sense of your business (through the professionalism of the mailer and website), and feel more confident through your screening process. By the time you schedule a sales call they should be sold on you and your business.

Easy right? The trick is to use the technology and marketing tools to do most of the work for you. An email from a website can generate an auto responses. A phone call call push the customer to a website or produce a brochure mailed to the customer. All one to many strategies. While many small businesses opt for a website with the goal of attracting new business, you might consider it a tool for processing prospects.

Want to take a closer look? Visit our website for our new Landscape Marketing Kit and let me know what you think.

Martha speaks.....

Are you ready? The March 2008 Special Gardening Issue from Martha Stewart Living has hit the mail boxes. Subtitled the return of classic style this issue has several feature items that should be of interest to gardeners, and more importantly, garden center owners. The fact of the matter is that when Martha speaks people listen; and when it comes to Martha the 'I's have it - information, inspiration and influence. A quick check of the magazine will reveal three major areas for retailers to concentrate on:

1) Seed Starting - while in and of itself not a big deal, but when you combine it with consumer's increasing appetite for fresh, safe fruit and vegetable alternatives to store bought, it could be an opportunity.

2) Safer Solutions for Rose Care - again, not that you are beaten over the head with it, but the article concentrates on "how to control them (pests and diseases) using as few chemicals as possible." Four whole pages on pest and disease identification and solutions featuring Neem, pyrethrums and beneficial insects such as ladybugs, lacewings and praying mantis to name a few.

3) Container Gardens - Get ready for the triple play. Another version of the "tall and spikey, round and full, and cascading". Martha covers a fundamental rule of garden design: plant in odd numbers (she concentrates on threes). There are many plants shown in examples. Here are a few to watch for:

3a) Oxalis vulcanicola 'Zinfandel'
3b) Begonia 'bonfire'
3c) Euphorbia hypericifolia 'Diamond Frost'

So there you have it, three major trends for retail garden centers in 2008. The big three are: the environment, container gardens, food safety (or premium veggies).

Make sure you check out the following programs from Sunrise Marketing:

1) 'Perfect Patios & Dream Decks - container gardens designed & delivered'

2) 'Grow Green' - a complete marketing and merchandising kit with options for direct mail, signage and web support.
3) Novalis mailers and signage solutions - particularly the 'Knockout Rose'

That's all for now. Your thoughts?

Welcome to my blog...

Well, it was bound to happen sooner or later. Welcome to my blog.. I have officially moved from not knowing how to spell blog (is it one g, or two?), to making a couple of posts. I hope to use this forum to share ideas on marketing, our green industry (my company, Sunrise Marketing, concentrates on marketing for the horticultural industry), and the future of independent garden centers.

Sunrise Marketing sends out the "Idea Book" around four to five times a year. It is a bit like painting the golden gate bridge - as soon as you finish, you have start over again. By the time our catalogs are in the mail, I usually have about three to four new marketing ideas that come to fruition. So, as you can imagine, it is hard to keep up. That is where this blog comes in. As I compose this entry I have just finished the winter trade show season. Beginning with the MANTS show in Baltimore, moving through Columbus for the CENTS show and ending this past week in Boston at the New England Grows. In that four and half weeks I have launched more than one new idea!

1.) Grow Green - a marketing kit for retailers. In this age of environmental awareness it is important to remind customers that we were the first 'green guys'. This signage package allows retailers to get in front of the issue and position their garden center as a source for solutions to the problem.

2.) Perfect Patios & Dream Decks: Container Gardens Designed and Delivered by XYZ Garden Center. I went up to the New England Grows show on setup Tuesday and working with our art director Hector Soto (inside joke) we set up the complete potting station and signage system. It went well. Click here for the photo. In fact, the program was selected as a Retailer Choice Award winner. Woooo Hooo!

3.) Landscaper Marketing Kit - We recently completed a package of direct mail pieces, yard signs, referral cards, brochures and companion website. Watch our site for more details.

Anyway, I think you get the idea of why subscribing to my blog is a good idea. I love this industry and I love marketing. I look forward to your feedback!

New Ideas for GWAA Members

It was an eventful Friday at the New England Grows trade show in Boston. While preparing for a 2:00 pm talk to retailers I was approached by Maree Gaetani from Garden Writers of America (GWA). Maree found out around 7:00 am that her speaker for the 1:00 lunch presentation was sick in the hospital with food poisoning. It was fortunate for both of us that she spotted the Sunrise Marketing sign and stopped by to talk. Long story short I had a great time sharing ideas with the group.

Often there are circumstances where opportunities pop up where you least expect them. Somewhere between 10:00 am and the 1:00 pm talk I was racking my brain to come up with something helpful. How could I help writers market themselves?

Although you might not think of writing as a business, it is; and in any business you have a product, a buyer and a seller. The key is to know what you are selling and who you are selling to. In the case of garden writers, like other writers for that matter, the product is content. Whether you are hired to give a talk, write an article or take a photo, that is the sum of the transaction. As a writer you have experience that is manifested in words.

The next challenge for the GWA group is to find an audience. This is where it gets exciting. Traditionally you are left to struggle to connect with garden clubs, magazines and publishers. In the course of the talk it became clear there were other options. In my experience one of the challenges that many of our garden center clients face in populating their websites is the lack of content. Light bulb! Writers have content - retailers need it. At that point a marketing representative from Spring Meadow, a wholesale grower, offered that she needed content as well.

The long and the short of it is there are opportunities out there. They not be where you would normally look for them, but in this day and age, you might have to consider different avenues. It is ironic that this is my first complete post with a blog using blogger.com. It was one of the ideas raised in the GWA talk. The other was using Constant Contact for e-mail marketing. I am hoping that I can continue the dialog with the GWA members. It was a fun group of around 30 interested people.

By the way the 2:00 pm talk to 3 people was great too!