Calyx & Corolla (C&C)'s key issue is to revise and reassess its long term growth strategy, that will allow the company a sustainable differential advantage within the flower industry. As a pioneer in the mailing of fresh flower market, the company now faces a critical moment as it moves into the growth stage of the business cycle and needs to redefine its strategy, build upon its success and maintain its profitability as competition arises.
Under these circumstances, we have defined a short term plan, whose objective is to increase sales and generate the necessary cash flow to fund the long term strategy. In a second instance, the long term strategy will be presented, aiming to fully develop a "Relationship customer" approach, with an emphasis on CRM tools.
Short term measures:
The company faces several obstacles to consolidate a strong growth pattern: seasonality of sales, high dependence to catalogue mailing and response rate/cost efficiency of its marketing approach. Additionally, a huge male segment has not been targeted by the company, leaving this gap to other competitors.
On one hand, short term measures will aim to strengthen and further explore Continuity programmes, which have proven to be good revenue stabilizers.
Secondly, a thorough analysis of the Catalogue tool needs to be assesed. FTD's advertisement spending is $0.21 per household, yielding a 2.04 return/expense. C&C successfully gets a 4.9 return from existing customer base; however its results with recipients and rented mailing lists are significantly low (refer to table below).
Markets of catalogues Catalogue Expense Avg. Revenue Revenue/
Catalogue Expense
Prior Customers 384.000 1.882.587 4,9
Recipients/Inquires 960.000 941.293 0,98
Rented Mailing-List 3.14 ...