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Host: Welcome to the 2X ecommerce podcast show where we interview founders of fast growing seven, and eight figure ecommerce businesses, and ecommerce experts. They’ll tell their stories, share how they 2X their businesses, and inspire you to take action in your own online retail business today.
Now, here he is, the man in the mix, Kunle Campbell.
Kunle Campbell: Hi, 2Xs. Welcome to the 2X ecommerce podcast show. I’m your host Kunle Campbell, and in this podcast we help ecommerce entrepreneurs, and online retail marketers uncover new ecommerce marketing tactics, and strategies to help double specific ecommerce growth metrics in your online store. Like conversions, average order value, repeat customers, traffic and ultimately sales.
If you’re an ecommerce entrepreneur, and looking for proven tactics and strategies to help you increase traffic, and conversions, and profit, you’re in the right place.
Two very experienced experts are here to share how their very seasonal hamper online business, Virginia Hayward, gears up digital marketing for the extremely busy Christmas season. I have Sam Hayward. He’s the sales director of Virginia Hayward, the Hamper Company, and Justin Walmsley, he’s the digital marketing manager of Virginia Hayward.
Welcome to this show Sam, and Justin. Could you introduce yourselves please?
Sam Hayward: Hi Kunle, it’s Sam Hayward here as you say. I’m a director of Virginia Hayward, which is a family business. 30 years old this year.
Kunle: Congratulations.
Sam: Thank you very much. I have a background when I was a chartered accountant, but have been working in the business now for 13 years on the sales side.
Kunle: That’s a long time. That’s an awful long time. Are you technically inclined? Do you … given that operations have been online for a while now?
Sam: Justin might answer that question differently, but I would say I’m reasonably technically minded. I can keep up with the conversations, and contribute occasionally.
Kunle: Good, good. Justin, would you mind introducing yourself please?
Justin Walmsley: Sure, my name’s Justin Walmsley. I’ve been at the company now for two and a half years, so going into my third Christmas.
Kunle: Okay, sounds good.
Justin: My background primarily is in SEO, and in search engine marketing tactics, so PPC, SEO, those types of customer acquisition tactics that we use.
Kunle: Great, we speak the same language, okay. I read something over on your website talking about 95% of your sales coming in only seven weeks, pretty much between November and October. Could you expand on that? That’s fascinating, because normally in ecommerce it would be about 50 or 60% for traditionally ecommerce businesses coming in, except for exceptions like toys. But this is quite peculiar, 95%. Could you just break it down a bit Sam?
Sam: Yeah, for sure. I mean, we do have a strange profile because a lot of our digital customers are corporate customers for a start, and the unusual factor about our business is that most of our customers only order from us once year, which makes marketing to them very challenging. But also means that stock control, cash flow, and other business challenges also are borne out of that.
It’s a fact that hampers really are a Christmas gift, much as we try to change that.
Kunle: Absolutely. Fascinating clients you have. We have John Lewis, there’s Waitress, Selfridges, Costco, Funky Pigeon Dot Com, Interflora, and the House of Parliament, the shop. How is business going from the wholesale … Could you give us an idea of the share of corporates versus consumer, in terms of the share of revenue in the business. How does that play out now?
Sam: We’re probably about 75% wholesale business, and 25% retail, and on the retail side of the business about 70% of our customers are corporate.
Kunle: Okay, okay. Do you recall your first online sale? How long has Virginia Hayward been online for?
Sam: That’s a good question. I think we first started transacting online in the late 90s. Certainly we’ve had a transactional website for longer than I’ve been in the business, which takes it back to pre-Millennium times.
Kunle: Okay. Have you had any memorable sales online in the online store?
Sam: We have. One of the first moments of surprise, was one of our first pay per click campaigns five or six years ago, where we received an order for about £120,000 within the first week of that campaign.
Kunle: No?
Sam: We thought life was easy at that point, but unfortunately that turned out to be the exception rather than the norm.
Kunle: When was this? 2000, early 2000?
Sam: No, that was … A little bit more recently than that, possibly 2006, 2007. James Bond is also one of our customers. I can’t tell you which one. One of them is one of our honoured customers.
Kunle: One of them, that’s fascinating, that’s really, really interesting. Great.
I’m going to start out with the fact that, the obvious thing, hampers are a seasonally inclined gift or item, a product. Could you give us an idea of the build up from an appreciable standpoint Sam? Then afterwards Justin, could you also give us an idea of the build-up from an advertising and a digital marketing standpoint of how you start, when you start to market, and how it builds up to momentum till December, please?
Sam: Okay, well if you were to look at our business calendar if you like, January is spent clearing up the previous Christmas. Customer service issues do arise in January, which we try and sort out as promptly as we can. We’ll be having a look at putting in place our strategic plans, both from an IT perspective, and also operationally during the month of January, we’ll be starting to think about our ranges, and potential commercial considerations along those lines at that time.
January to March, April time is spent spending a lot of time with suppliers. Looking for new range development, putting together new ideas for what we might do the following season in terms of product. Then we actually start to put those together. We buy the componentry, and we start packing hampers in earnest at the beginning of August each year.
We’ll pack for five months solidly right the way through to Christmas. The marketing side of it I’ll pass over to Justin.
Kunle: Okay.
Justin: Sure. Post-Christmas is quite a busy time, as I’m sure you can imagine. We go through all of the website metrics, all of the sales metrics. They are both online and offline sales. From that we put together an analysis, a seasonal analysis, and from there that then informs our strategy going forward for the next 12 months, or certainly for the next Christmas period.
That will normally finish by the end of January, early February, and from then really we start cracking on with the campaigns, actually sort of to put some meat on the bone to start to generate the content and the campaign materials that we’ll need.
Kunle: Okay.
Justin: If there’s any technical considerations from a new technology perspective then we’ll be getting our website developers to quote and cost, and obviously start to perform that development on the website. So that come the season again for us, starting in September, the website has got all of the bells and whistles that it will need to take us through that Christmas period.
The majority of the year for us is working up until the 1st September, which for us is we find that the season really starts. Both online and offline activities will start up from the 1st September. Brochures will start to be delivered. They’ll stand to land with our corporate customers to begin with, and moving into our private customers.
Also, we start to build up our web presence, so we’re looking at the PPC campaigns starting to just tick over a little bit more. We keep them a little bit silent … Not silent, that’s the wrong word. We calm things down throughout the off season for us, but we start to build things up slowly in September, really moving up until November where things like PPC, SEM tactics really start to take effect.
But it’s good to have the presence. If there’s any issues, we can start to iron them out early in the season, so that we’re not hit with an issue in peak season for us which would be extremely detrimental – we have to be absolutely aware.
Kunle: Interesting, quite interesting. From the months of about January to August, September there’s a lot of background planning from a marketing standpoint, from a marketing and IT standpoint. Then from October through to December you’re out there.
You push yourself up based on the momentum you’ve built over from January to … from actually February to August or September, because January is all about analysis. That’s very, very fascinating.
Are there any key channels that you use from a digital marketing standpoint? Any key cost and acquisition channels you want to share with the audience, in terms of that’s quite vital, and when you start planning it? When do you start planning the most important, or in order of priority what are you top three customer acquisition channels from a marketing standpoint? When do you start to put them in effect, to start to get the levers going towards the last quarter of the year?
Sam: Well I’ll start by answering that in terms of giving you an outline, and perhaps Justin could add in but it’s important [inaudible 00:09:34] acquisition channels. Natural search, our search engine position is critical to the customer flow through the website.
Obviously that’s an ongoing challenge for the business, continually trying to boost our natural search position through judicious link building, and through careful use of content. That would be the first, and most important channel from our point of view.
Kunle: Is it internal or do you outsource the content creation to other companies to manage the content for you? To produce, and outreach the …?
Sam: We have done both over the years, but currently we’re following an internal strategy on that front. Both Sarah and Alison who work on our content creation brand management, and PR are looking to produce relevant content, and to put it in the right sort of places.
Secondly we … and Justin’s already alluded to this, we have a pay per click campaign which continues throughout the year. Very low levels in the earlier months of the year to keep our relevancy up, and then that’s obviously heightened in the last quarter as our conversion rate improves on that channel.
The third main area would probably be affiliate marketing, which we found has been an interesting growth area over the last few years.
Kunle: What network are you on?
Sam: Justin?
Justin: Yeah, we’re actually on a couple of networks. We’re on Affiliate Windows, and we’re also on Webgains.
Kunle: Okay. Which is more productive and effective? Where are you finding more gains?
Justin: Affiliate Windows is our primary affiliate platform.
Kunle: I used to be an affiliate on there. Quite fascinating. The three key areas are SEO and content, PPC and affiliate marketing.
I’m going to sort of dig deeper in each of them. From an SEO and content marketing standpoint, are you seeing a convergence of PR with SEO and content marketing? If so, how significant is it? Is it really tied in, or do they still work independently?
Justin: From my perspective I think you probably know the answer Kunle, but er been huge from a conversion sense than it’s a joint process for both SEO and PR these days. I think that the two go hand in hand very well.
If you take SEO like three, four years ago now, you could be a geeky, techy guy sat in an office somewhere, and the tactics that you would be employing wouldn’t have much of a human element to it. Whereas now the SEO landscape has changed so much with Panda and Penguin that you really do need the human element to go out there, and build the links via a strong outreach strategy. That inevitably revolves around the people, and building those relationships.
Kunle: Exactly. Because prior to the Penguin and Panda … From my observations in the PR industry, some PR agencies are verging more towards media. They’re into TV, and experiential type marketing, and others are more inclined to focus on digital. There are some hybrid PR and SEO companies starting to emerge, which is quite fascinating.
As you just rightly said, people are most important. How are you going to hit those audiences? How are we going to reach out big platforms to distribute our content? That’s where the leverage point starts to happen, okay, and it starts to just snowball. It’s a momentum.
The other question I had, is in regards to PPC. Prior to this interview I was having a look at your stats. I just put into the Google keyword tool Christmas Hampers, and then I looked at the seasonality, and in September you expect to have just under 10,000 searches for the phrase, ‘Christmas Hampers,”
Then that doubles to 22,000 in October, and then that triples to 60,000 in November, and almost doubles to just under 100,000 in December. How do you cope with PPC, and that’s just one key word? I can imagine what the generic word ‘Hampers’. That could be quite substantial over the year, so how do you prep up with competition?
Some of your customers actually sell hampers online with their PPC campaigns. How do you balance your presence online with your wholesale, and competing with your clients in the PPC space in terms of conflict of interest?
Justin: Sure, so from a customer segmentation perspective we don’t do that through PPC, through the paid channels at all. We’re quite happy … We’re not specifically targeting wholesale customers via PPC, in fact nor as we specifically excluding them.
Our strategy provide is if you’re typing in ‘Christmas Hampers’ we really need to be appearing within the top three to four positions, regardless of if you’re a wholesale customer, if you’re a huge corporate, or if you’re just Aunt Sally looking to buy a hamper for her nephew. We’re really happy to attract as many, or acquire as many customers as we can through that channel.
With regards to the increase in search volumes throughout the season, as I said, for nine months of the year we pretty much keep things calm, we remain on PPC so we always have our PPC presence that helps with our quality score. One of the worst things that we believe that you could do is to switch off your PPC account. Let it go totally, totally die off for nine months of the year ready to start again. We believe that Google would like to see an all year round presence.
With that in mind we’ve reduced the cost per click so that we are not over bidding, which obviously means that we drop down the rankings a little bit. The page search rankings a little bit, but it means that we build on that quality score, and that when the season really does take effect for us, we’re not the newcomers in the PPC world. We can reasonably quickly start to up the cost, and become competitive without having to start from scratch.
Kunle: Very, very interesting. From a conversion standpoint, do you … I’ll rephrase the question. There have been two significant PPC features that have been introduced over the last two years that seem to have a significant effect on bottom of the funnel traffic. One is remarketing, and the other is product listing ads.
Do you have an active strategy in both, or are you purely in the text based search for more mid funnel, or top of the funnel traffic?
Justin: No, we like to use the paid tactics across all sort of channels to be perfectly honest. We first adopted remarketing last year, so just using Google’s double click campaigns, just as a sort of dipping our tail in the water so to speak. That proved to be a good choice, and a good strategy to employ. We’ll certainly be retargeting again this year.
We see that more when we’re looking at the analytics, and when we’re going through page search channels, the assisted conversion reports that we get from the backend of Google Analytics are really important for us. Seeing how those types of channels, and the multi-touch points that our customers have, for us is really crucial.
When we first put in retargeting last season, although we weren’t seeing direct conversions from retargeting, and from the banner of the display ads, we certainly saw an uplifting touch point, and how that played a part in the conversion channel for paid to search traffic.
Kunle: What’s the average in terms of touch points?
Justin: It really does depend upon the type of contact that any individuals had. If they are a customer, or if they’re new to us. If they are new to us, they’ve never seen us before, you’d normally be talking around sort of four to five different touch points before they convert. However, existing customers, they normally convert reasonably quickly within a two to three …
Kunle: Direct.
Justin: Yeah, absolutely direct as well.
Kunle: I have a question. This is quite fascinating. I was just thinking about it. In terms of the touch points you’re recording, do you find that by December when the sense of urgency’s quite high, the touch points actually start to reduce because people don’t really have that wider window to not make a decision?
Justin: It’s something that we don’t have any analysis on. Well we do have the analysis for it. It’s a report or it’s a KPI that we’re not actually monitoring. However, I would be inclined to agree with you, that yes we do see an uplift in sales obviously the closer to Christmas that we get, and we will start to see conversion rates increase across all channels the closer we get to Christmas.
Yes, the past lengths and the interactions that people have will be much shorter, or at least their time to purchase will be shorter. They may come back one or two times, however they will do that in a smaller window.
Sam: That’s reflected Kunle in some of their other shopping habits too. They will not shop around between different suppliers to the same extent, and they’re perfectly happy to accept an alternative to the original hamper that they wanted to buy in the first place if it’s out of stock.
You do see a more pressing requirement for the customer to convert their sale during that month.
Kunle: During that month, exactly. It’d be interesting to also see what conversion rates are month for month. Okay, yeah, so I’m going to go into a question about affiliate marketing, and SEO. It’s kind of like a mishmash question.
It’s in regards to how you tend to with the issue of Google Penguin. I’m finding a lot of websites, and online e-tailers are starting to quote unquote ‘Clean up their affiliate links.’ Are you finding any issues with affiliate links, and getting any potential penalties, or are you letting it just pass?
Justin: Sure, so it’s a question actually, it’s something that the team we all discussed approximately four months ago now, in that a large proportion of our backlit profile is made up from affiliate links. It has got us thinking. I mean unfortunately the affiliate market has become saturated in very poor quality websites, low authority websites that are almost fly-by-night websites as I call them. It’s very quick to get set up, and they can be incredibly detrimental to websites’ backlink profile and presence.
It’s something we have been looking at; when we looked at our …
Kunle: We’re losing you, but you’re back.
Justin: It’s all right. When we looked at our affiliates, we went through, and we looked at the sales that had been generated by the affiliates over the past three year period, and off the back of that we decided the affiliates that we wanted to keep. Off the back of that we actually went through and culled quite a number of our affiliates, just because they’d been on the network for a very long time.
They were sending links to us, and they were poor quality websites, so we took a fairly harsh retail approach to it, in that if they hadn’t provided a sale with us within the past three years then they weren’t worthwhile being an affiliate for us.
One of the other tactics that we did look at was to contact all of them via the platforms, and ask them to not follow us. However, as you know from battling removal processes and things like that, I’m sure the outcome of that would have been fairly fruitless, absolutely.
Kunle: You just have to disavow I guess eventually?
Justin: Yeah, absolutely, disavow a domain level as opposed to a link level, or remove them from your affiliate programme.
Kunle: How significant is affiliate marketing revenue to the online operations of the business?
Justin: Sam, is that a question you’d like to answer or?
Sam: Yeah, fair enough. It’s a growing part of the business. It’s taking a growing share, but the overall share is a very small one actually. Over the last couple of years we’ve doubled our affiliate income, which has been good, but it’s come from quite a small base.
We do see it very much as a growing element though of our marketing mix. Justin often refers to the growth of the savvy shopper who will look for cash back, or …
Kunle: Absolutely, the voucher codes.
Sam: Absolutely. Or who’ll shop using voucher codes. In that respect we have seen them take an increasing part of our business, which we’re very happy about. We get reasonable retention from those customers, and they obviously continue as direct customers to the brand, even though they’ve come through a different channel to start with. That’s seen as a very positive part of the marketing mix.
Kunle: Quite interesting. My previous guest, Gary Ingram, he runs The Diamond Store, and he takes an opposing view to this, and he tried the voucher code thing, and obviously because I guess it’s a quite luxury item, and he can sell over the year. He had to pull out all voucher code sites to make it exclusive I think, but it’s interesting in terms of the growth here with your business.
I’m going to move into customer service which is quite an important part of the business I would have thought. I read another blog post which is quite good from your blog in regards to … at a particular time of the year you start to bring in new hires for the customer service team, and I would think it’d be the October September period. Could you shed some more light on that please?
Sam: Yes, of course we can. We have a reasonably small contact centre team, and we have two full-time members that look after customer services throughout the year, as well as doing other things, it has to be said.
The customer service team does build up significantly. Probably more towards the middle or end of November actually, because although we’re busy selling in September and October, a lot of the parcels won’t actually be dispatched until December, and therefore although we have an order book, a customer services’ requirement is quite slim until we get into the early part of December.
Kunle: For the corporates?
Sam: For both. For individuals and corporates actually. As a brand, and as a business we really value customer service highly. We’ve been through a rebranding process during the course of the year, and one of the first parts of the navel gazing process we went through, was to decide really whether we were offering a product or a service as a company.
The overwhelming conclusion was that although we offer both, really the service we offer to our customers is actually more important than the product itself. A lot of our customers who are organising corporate hampers are doing so as a one-off, it’s not part of their regular job. They are organising staff gifts for the rest of their colleagues, and it’s something they really do want to ensure goes as smoothly as possible.
Proactive and interactive customer services from our point of view is absolutely critical to ensuring that that does work for them.
Kunle: It’s quite interesting. I just would have to reiterate it. Ultimately you’re offering a service, as compared to a product. My question has got to do with, is the approach to customer service for the corporates slightly different to the approach to the consumer market, which predominantly comes from the website?
Sam: No, not really. As a business I think we take every single inquiry … I mean it could be that a corporate has sent out 100 hampers to 100 different addresses. One of those hampers being broken, or lost, is treated in exactly the same way as it would be in terms of Justin’s example of Aunt Sally sending one to her nephew. If that parcel gets lost, that’s just as important to us.
Each individual inquiry that comes in, either via the telephone or via the email channel, is dealt with in the same way, proactively and quickly hopefully, and we offer a no-quibble type service to our customers.
Kunle: That’s interesting. Are you seeing a connection between the service you provide, and repeat business?
Sam: Definitely. Because the service we provide is the primary driver for it. The hampers themselves innovatively put together, and we think that they hit the mark in terms of the aesthetics of them, and the price points, and the value for money. But actually that’s easy for any of our competitors to replicate really, and they can always be within one year of whatever we’ve done the previous year in terms of product development.
Actually, it’s the service, it’s the customers knowing that we will deliver year after year, and from that side of things, although our private retention rates are much lower, our corporate retention rate is about 70% a year which we’re very proud of. That comes from the service that those customers are getting.
Kunle: Phenomenal. You’re echoing on Tony Hsieh of Zappos in Delivering Happiness, his book which, they focus on service, they focus on making their employees happy. Happy people, and in turn happy employees actually serve happy customers. They’re happy to customers. He’s all about culture, and customer service. He purports that customer service is the Holy Grail of ecommerce, and I guess you’re in the same line.
Let’s talk about email marketing. How fundamental is email marketing, particularly to generating repeat sales for the ecommerce business? What I see quite often is, well when people tend to send out email shoots there’s a disproportionate amount of sales coming in from email as compared to other channels. All the other channels kind of funnel in the customers initially, and then email tends to nudge them all through the funnel.
What’s your experience with customer retention and emails?
Sam: Yeah, having an email strategy is absolutely critical. One of the main building blocks of our retention strategy. We actually tend to use it more as a retention tool than an acquisition tool. We’ve found over the years that actually generating a return on investment from cold email lists has been very difficult to achieve. Where we have bought cold email lists, they tend to work better when they’re supported by hard copy marketing as well. So an email is fine, or a series of emails are fine, if they’re backed up with a brochure, but generally speaking e-shops themselves … I can’t even think of a single campaign where we’ve generated a positive return on investment from that.
Emails are critical in terms of communicating with our existing data base. We use that tool regularly, we use it seasonally obviously, because we try not to intrude too deeply within our customers’ vision during out of season times.
We will touch base with them maybe around Fathers’ Day, Mothers’ Day, and Valentine’s Day, but otherwise we try and keep our powder dry to run a fairly coherent, and quite repetitive campaign in the last quarter of the year. Where we’re able to promote voucher codes, and early bird offers. Able to let them know about flash sales, able to remind them that we can still deliver. Those are all communicated largely via e-shops which are supported by our social media.
Kunle: Interesting. I was actually going to go into your fresh food page right now, but how does this connect with social media, in terms of your email marketing, and customer retention?
Sam: We try to reflect them with say messages on both mediums, so we try and ensure that the social media, both what we’re tweeting, and what we’re putting onto our Facebook page is reflecting the same message that is coming across via e-shops. Occasionally we’ll do extra supplementary bits on Facebook, or little competitions, or other things that may not appear to our whole email data base.
Generally speaking we have struggled via social channels, certainly to generate meaningful revenue streams. We have managed some customer interaction via that, and it is a great medium for competitions and the like. But, overall whether it’s due to our seasonality, or whether the demographic of our customers isn’t quite right, being so corporate, social is something that we feel that we ought to be involved in. We are participating in, and trying to do as well as we can, but it’s been quite a difficult channel for us.
Kunle: I’d like to ask Justin about the view from a multi-distribution perspective as to social media. Is it part of a touch point?
Justin: It is part of a touch point. However we see it very low down … Well we’re looking at all the touch points, and the statistic conversion part, and conversion parts we do see it. We do see some levels of interaction, but as Sam said, it is very, very low.
One of the other issues that we struggle with, and probably most retailers would struggle with through social profiles, is customers that are only interested, almost similar to a savvy shopper, that they’re interested in the competitions. They’re seeing what they can get from a company, as opposed to having real brand loyalty, or following that brand by their social channels for informative purposes.
Yeah, so as Sam says, we do struggle to see a positive return on investment from a social, but we are active, and when we’re looking at the marketing mix as a whole it does play a part. It is an area that has its own strategy that we put together, that would be missed if we were to stop doing it.
Kunle: Absolutely. I can’t quite recall who put it in this way, and he said, “Your social media channels are basically what the telephone used to be. That they’re a channel to reach out to you, only that it’s public, and on the Internet.” It just shows that you exist as a business, and when updates come all through the year, people know you exist. When they’re in that buying phase, along with your remarketing I believe it plays a part in the brand awareness with customers.
Typically social conversions are less than 5% in a whole direct social conversion, so yes I do see where you’re coming from. Okay, that’s quite interesting. Very, very interesting guys.
I have a curved ball question here for you. How important is traffic, and which would you rather have, would you rather have more traffic, or would you rather improve conversions of your existing traffic? If you were to keep traffic exactly as it was over the last year, would you want more traffic, or would you want to improve your conversions?
Sam: That’s definitely a question for Justin, Kunle. I can’t wait to hear what he says.
Justin: I think it’s a great question. I’d probably rephrase that very slightly, and for us I believe we’d have the ability to do that, in that we’re pretty proud of our conversion rates. As I say, we’re pretty proud of our conversion rate, we don’t really see conversions being a huge issue for us.
To answer the question, traffic is more important to me, however I’d caveat that by saying quality traffic is more important. Relevant traffic. Absolutely anybody can go out there, and get a huge amount of sessions and visits going to your website, but if they’re not relevant or quality traffic then the conversion rate will ultimately deficit as a consequence.
Kunle: Exactly. Good answer. Okay, sorry … yes, hello. I just got cut off. Just to go back to customer service, I see on your website you have a 96% gold trusted FIFO status. That’s pretty difficult to achieve. How did you achieve it, and how’s that impacting on conversions, and your business today?
Sam: Well in terms of how we achieved it, I think that’s the easier part of that question to answer in terms of, I believe that we have a proactive customer service approach, we photograph our products fairly, we try to ensure that the customer gets exactly what they want, and when they want it.
That has taken a lot … There are a lot of controls in place to make sure we’re producing the right products. Where we have a problem we always upwardly substitute for the customer, and hopefully that ensures that we receive a positive response from those who do respond to the FIFO email after they’ve received delivery of their hamper.
A lot of people don’t respond to the FIFO. Our percentage of responses on FIFO is actually about 10% of business, and the reason for that is that a huge majority of our customers actually send the product they bought from us to someone else. They may not have even seen the hamper, so they rely on the phone call or the thank you letter that they may have received from the recipient, but may not have seen the product themselves, and therefore don’t perhaps feel as comfortable filling in a feedback form as they might otherwise feel.
How much of an effect that has on our conversion in terms of trust for our customers, or new visitors to the site, is very difficult to say. But we do believe that that badge does have an effect, it does have a stamp of trust about it, confidence about it. We are very proud of it, do work hard to ensure we respond to any negative comments that appear on our FIFO feedback.
Again, as an opportunity to demonstrate to not only the person that’s made the comment, but also those reading it, that we are really here, we really do listen to what our customers tell us, both good and bad, especially the bad. I believe that does have a mark, or does have an effect in terms of increasing our conversion in the future, or at that time.
Kunle: Interesting. How long have you been on FIFO for?
Sam: I think probably four to five years, probably. For quite a long time.
Kunle: Wow.
Sam: Earlier into that than not. It would be quite a long time.
Kunle: Interesting. That’s good. Okay, the next set of questions have got to do with sales and revenue. I was having a look at your financials in the Company House, which is obviously public. From the looks of things you appear to be a 10.6 plus million business a year.
My question is, and from what you said prior about 30, 40% is online, so how do you intend to grow to a 25 million, to double your business in sales in essence over the next … Where do you think the growth is going to come from if that was a target for the business?
Sam: That’s a really good question. We’ve been very fortunate through quite difficult economic times over the last few years, as the hamper market as a whole has grown. As we move forward perhaps a little bit more optimistically than we have been in the last few years, I am hopeful that the corporate base of customers that we have will be more inclined to reward their staff, and to incentivise their staff, and customers, through an increased amount.
We are hoping that as we move forward over the next two or three years that the market will continue to grow, and that for corporates they will see that as something that they will wish to do, and we hope to be in the right position from a marketing point of view to take advantage of that.
We obviously would continue to look at the market for any opportunities in terms of competitors if that became relevant. It probably isn’t at the moment, but there is only a small niche of companies that work in this sector, and we do talk to each other. I try to talk to our competitors, and we have a good open dialogue with them where at all possible, and we try and share some best practise and fraud information, and other bits and pieces that would mutually be beneficial to all of us.
That’s really how we look to grow. We’d like to improve our search engine optimisation, we are developing a new website in the next year that will enable us to be a lot more comprehensive in our offerings to our customers, and a lot more … use our data more intelligently potentially to improve our marketing.
You can never really stop. It’s once you stop you go backwards, so we’ll continue to try and follow best practise, we’ll invest heavily in marketing, and try to provide the best service, the best product, and to do it in the most efficient way that we can to enable us to grow.
Kunle: Okay, am I right in concluding that you reckon more of the growth would come from corporate?
Sam: Yes, but we don’t necessarily market it as well as we can to a massive personal population. That tends to be a more … Justin’s alluded to this as a more fickle part of our data base. We tend to find that customers drift in and out of buying hampers. They don’t tend to have the same retention rate as the corporates, and they’re not on the same scale, so there’s a lot more … It’s harder marketing. You can hit things right from a corporate market point of view, and actually you can convert a lot of hampers very quickly.
Kunle: Average order value.
Sam: Is massive yeah.
Kunle: 10,000 to £100 is significant.
Sam: We’ve seen with some of our customers who’ve moved from say … some of them would have been more like 50/50% between corporate and personal five to ten years ago, and now much more 70/80% personal, and they have grown their businesses whilst doing that. There’s something for us to learn from that too.
Kunle: I will be using you guys to send out hampers to my clients for sure. Okay.
Sam: Well thank you Kunle.
Kunle: Cheers. Multi-channel ecommerce, Amazon. Amazon has grown. Some businesses exist only on Amazon. Just Amazon sellers. I see you sell through Amazon. Is it an FBA, Fulfilled by Amazon agreement you have there, or arrangements you have there, or do you just use it as a shop front for some of your hampers?
Sam: The answer to that has been. Actually all three types of Amazon account we have used in the last 12 months. We have under the different brands, we have three P accounts using it as a shop front. That’s partly by history, and by acquisition. We’ve inherited those. We used Fulfilled by Amazon last year as a marketing channel which was perhaps less successful than the vendor central model which we also use.
Kunle: Okay, interesting. Do you see any growth in Amazon?
Sam: We do.
Kunle: You do?
Sam: Yeah, we do, and again it’s another marketing channel, and we’re looking to explore, and to use as many channels as we can to get the hampers onto the market.
Kunle: Absolutely. Because for some industries it’s just not workable. In the jewellery industry for instance it’s 25% commission, so people are just put off. Jewellers are put off on Amazon.
Okay. Final set of questions. What does ecommerce success mean to you as a business?
Sam: Justin, do you want to have a go at that?
Justin: Sure. If I were summing that up, I’d say ecommerce success would be a year round profitable business that was customer focused that breeds exceptional brand loyalty, and then generates repeat business. Customer centric. Yeah customer centric, really profitable business.
Kunle: It’s all about the people.
Justin: It’s all about the people. It’s all about our customers, and the employees here.
Kunle: Okay, okay. From a seasonal standpoint, what is one marketing channel you advise ecommerce entrepreneurs to take seriously? This is from like entrepreneurs going into a similar business in terms of seasonality, where there’s seasonality involved? What would be the single? I know it’s a tough one to keep up, but where would you advise say a £1million or £2 million revenue businesses at the minute, or £5 million revenue businesses looking to grow to focus on?
Sam: I would. That’s a difficult one. I would answer a slightly different question, and I would say that I think a broad mix of marketing channels is critical for any business. The most important thing thereafter is to be able to measure, and to understand where your customers come from, and to be able to direct revenue over a longer period of time, including remarketing costs, against that stream to be able to fully understand where you are marketing profitably.
Kunle: Good answer. Justin, do you have anything to add there?
Justin: I suppose from my standpoint I’d look at it a little bit more at a basic level. I think Sam’s answer was great but I’d suggest, or my piece of advice would be to don’t underestimate Google, and the power and influence that it can have over your business.
That would be the channel that I’d be looking at, and the advice that I’d give to people that were starting out or trying to grow …
Kunle: Exactly, because they’re more a bottom of the funnel channel. When you look at the Facebooks and the Twitter it’s just about awareness, and top of the funnel.
Okay, very, very good answers there. Are there any books, resources, tools, you’d recommend just to owners looking to become like you guys, hit the £10 million revenue mark? Do you have any resources or books?
Justin: From a marketing perspective for me I keep in touch with the SEO and SEM blogs, Search Engine Land, Search Engine Watch: places like that. In consultancy, smart insights, and I take pride in keeping up with Google Webmaster guidelines as well. Making sure that we’re monitoring when those change. But from a sort of business perspective perhaps Sam’s ready some probably very influential books I’m sure.
Sam: I possibly haven’t actually. I just rely on Justin to be honest.
[laughing]
Sam: He’s the marketing resource I need.
Kunle: Okay, great. Before you say your goodbyes, can you give our listeners one parting piece of advice, please, each of you?
Sam: Mine would be that in difficult times try to hold onto your marketing budget. I think if you stop marketing your business potentially will stop growing.
Kunle: Good answer. Justin?
Justin: I think mine would be listen to your customers, not only verbally but listen with regards to analytics. What are they doing on the website? Where are they getting the most from your website? Where are they not getting any value from your website? So listen to them both verbally and via their actions.
Kunle: Two very, very good answers there. Marketing, be persistent with marketing, and also tracking and reporting, and looking at your customers. Seeing what your customers are doing. It’s really keeping an eye on the marketing which should be persistent. Very, very good. Good answers that connect.
Okay, so finally guys, if anyone wanted to reach you, what would be the best way to do that? Are you on Twitter? LinkedIn? Do you hang out in any social media channels? What would be the best way to get in touch with either of you?
Sam: For me personally the best way of getting hold of me is on my email address which is sam.hayward@virginiahayward.com.
Kunle: Okay.
Justin: Yeah, and for me you can get in touch with me at my email address here which is justin.walmsley@virginiahayward.com. Alternatively I’m pretty, I use LinkedIn a lot, so if you just search for my name on LinkedIn I’m sure you’ll be able to find me through there.
Kunle: Fantastic. Thank you so much for being a part of the show, and sharing with me and my audience about seasonality, and digital marketing. I really appreciate your coming on the show. Thank you guys.
Sam: Thank you.
Justin: Thank you.
Kunle: Cheers. Bye.
Justin: Bye-bye.
Kunle: Thank you all for listening. To get hold of the show notes, and all the reference links that we talked about over the show, be sure to go to 2Xecommerce.com. If you enjoyed listening to this episode, please do not forget to leave us a five star review on iTunes as it helps push us out there.
See you in the next episode, and have a good one. Cheers. Bye.
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Host: Thanks for listening to this episode of 2X ecommerce. To get more actionable insights, and ecommerce growth axe that’ll help you 2X your online retail business.
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