Posted by: Will – Priority Juggler on July 9th, 2007

For those that don’t know, sesame snaps are these sort of stick confectionery type things made by coating sesame seeds with caramelised sugar and letting the whole thing set (at least as far as I can tell). They’re probably not that healthy (though sesame seeds are pretty good for you) but by jove they’re tasty! In case you have no idea what I’m talking about, here’s what the packets of sesame tastiness look like:

“What the heck has this got to do with selling flowers on the internet?”, you may well ask. Good question. Bear with me and I’ll get there – honest. It all begins with a tale of woe. A few years ago, I picked up a packet and was looking forward to the four sweet snacky sticks within. I opened the packet up and, to my horror, I saw this:

The observant amongst you will have spotted there were only three sesame sticks in the packet, instead of the historic four. Had someone stolen my fourth sesame stick?! Wiping the tears of disappointment from my eyes, I looked more closely and found that, whilst there were only three sticks, they fully filled a wrapper that had previously taken four sticks to fill. How was such a thing possible? On closer inspection, I noticed a subtle change to the sticks…unlike the perfectly flat rectangles that I was used to, these new sesame sticks all had five little ridges running down the back of one side, meaning that each stick now took up more volume, thus allowing three sesame sticks to occupy the space previously filled by four.

So then I wondered “Do all the little ridges on the back of those three sticks add up to the fourth unridged stick that has been taken away?” The short answer was “No!”. I don’t recall if the price had also been lowered to reflect the reduced snacky content, but somehow I doubt it. Anyway, I put on my stiff upper lip, tucked into my diminished sesame snack and tried to get on with the rest of my life.

So how does this relate to flowers? Well, I was brooding over their Machiavellian plot today as I strolled to work, munching my latest pack of three (the sesame architects’ outrageous cheek did not lose me as a customer – that sesame sure does snap). I was thinking how it was actually quite a clever , if cheeky, move from them.

In addition to the obvious saving made by supplying less product for the same price, the real finesse was in the ridges on each stick…not because it tricked the customer into thinking less product was more (bad!), but because it meant that they didn’t have to redo all their packaging, throw away any existing wrapper stock or, presumably, have to significantly amend their production processes.

No doubt some boffin at their end sat down and calculated that the costs of remodelling each stick, reprogramming their packing system to insert three sticks into each packet instead of four, and the lost sales resulting from annoying existing customers would all be balanced out and more by the saving of c. half a sesame stick or 1/8th (12.5%) of the overall product cost. It’s amazing the lengths to which people will go to squeeze more margin out of their business.

And so to Arena and the direct opposite of this idea. Nearly all of our flower products offer a “Make Deluxe” option. What this means is that you get 25%-30% more flowers for c 20% more cost - basically, it’s like the “Supersize Me!” option from fast food outlets, minus the heart attack. The customer gets a better deal for his/her money plus an even more stunning bouquet, and Arena sells more flowers with the same fixed distribution and marketing costs, so it helps our margins as well as our sales. Everyone’s a winner!

Make deluxe has proven a very popular option, with high adoption since we introduced it. This may be because of the ease with which it can be selected, thanks to some neat usability programming from our ace developer Zach, and/or because we’ve priced it at the right “enticing but not off-putting” level.

So you would think that this feature could only be good news for Arena and our customers, resulting in pats on the back all round. But in fact it’s not been totally plain sailing. Here are some of the problems that have arisen:

• Suggestions that the standard bouquet must be rubbish (no, the deluxe one is just even better, in our opinion).
• Customers saying that the image we show on the website is probably the deluxe bouquet and that we then send out a smaller bouquet (we don’t – the image is the standard bouquet, the deluxe bouquet is bigger (we may build something so the image changes to show the bigger bouquet when you click Make Deluxe but that would take a lot of time as it would involve reshooting all our products!).
• The biggest problem we have re deluxe has nothing to do with the customer facing side of things though. It’s the operational side. We have nearly 100 different flower products. By adding the deluxe option, you double that figure. You can’t take a standard bouquet, once it’s made up by one of our florists, and just shove in more flowers to make it deluxe – that just wouldn’t work. So, in terms of our floristry team’s work load, it’s effectively a totally separate product from the standard bouquet. What this means is that it’s much harder to predict what we’ll sell on any given day, and it’s therefore much harder to plan the team’s workload. In an ideal world, we’d know exactly what we were going to sell on any day and would set about making it up hours in advance, so that everything ran in a nice orderly manner. But, with make deluxe, that isn’t possible.

The above problems, especially the first two, are hardly the end of the world and, to be clear, we’re absolutely delighted with the success of the feature. However, we did have to sit down at one point with sharpened pencils and do the maths just to make sure that it was actually worth doing – the question being: “Is the increased operational pain of carrying double the number of bouquets outweighed by the benefits of increased customer satisfaction (more choice) and the additional sales and margin that we make?”. The answer was and still is “Yes!”.

We learnt that, perhaps like with the sesame snaps’ ridges, a seemingly simple change when seen from the outside was not quite so simple and obvious once the specifics were considered. I’m not saying this is rocket science…it isn’t…I’m just saying that things like the ridges on the back of Sesame Snaps are more interesting than one might think (or at least they are to Arena!).

PS We have certain products with no deluxe option – most of our indoor and house plants simply can’t be “deluxed” up, as you just can’t add 25% more plant to a single plant. But also the top end of our flower range doesn’t offer the deluxe option either – the thinking behind this is that it would be a bit rich saying to someone who’s already spending £120 on a Luxury White bouquet or £100 on a Luxury Romance “would you like to make that deluxe?”. The likely response would be “At this price it blooming well better be deluxe already!”. Which, of course, it is!

 

Filed under: Floristry, General, Marketing on July 9th, 2007

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