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CUSTOMER SPOTLIGHT: MYFAVORITECITY.COM SELLS GIFTS FOR EVERY LOCALE
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With more than 15 years experience at technology companies like HP and AOL, Dave Deasy had a broad perspective on the small business marketplace. When he decided he was ready to go it alone and founded his own small business, Dave had extensive know-how in sales, direct marketing, and e-commerce to apply to his new startup. Yet, even a business-savvy entrepreneur runs into bumps on the road to success.
Over the past year, Dave used his expertise and skills to carve a unique niche in the small business marketplace. Dave's company, MyFavoriteCity.com, offers city-specific gift baskets, so Internet shoppers can buy localized gifts from anywhere in the country.
Headed into its second holiday sales season with just one year under its belt, MyFavoriteCity.com is still writing its success story. This month we review the strategies one entrepreneur has used to make it through year one, while boasting rapidly rising sales and great prospects for year two.
Success Strategy #1 - Research Your Market
Thanks to his work at AOL and HP, Dave was familiar with different small business segments, and he was particularly interested in the gift basket business.
"I started to research [the gift basket business] a little bit, and found that although there are thousands of people in that business, they mostly cater to small geographic areas and don't really utilize the Internet."
Dave saw an opportunity to take the traditional gift basket business to a national scale, leveraging the Internet for new and effective marketing methods. As Dave explains, he wanted to tap into the power of the Web and all the ways it offers to market a business.
Success Strategy #2 - Find a Niche and Serve It
With so many gift basket companies out there, how would Dave make his company stand out?
"I noticed people would always send things from the city they live in." Dave observed that localized gifts are fun to give and receive, but hard to obtain. In most cases, the customer had to put together all the items for the basket on their own, and then send it out.
Dave decided to step in with a solution to the problem: "I saw an opportunity to create a national-scale company for these localized offerings," says Dave. MyFavoriteCity.com would source and assemble gift baskets full of products and memorabilia from specific cities - allowing web shoppers to send and receive city-specific gifts from around the country.
Success Strategy #3 - Measure Your Growth
Dave's company has taken a measured approach to growth, executing against a very specific business plan. At key milestones along the way, Dave checks his company's growth against the business plan, ensures that he is hitting sales targets and developmental goals, integrates learning, and keeps on going.
For the first few months, Dave worked on the business on evenings and weekends, first writing a detailed business plan, then putting the first phase of the plan in place. The business started as a small test site and side business but quickly grew into a full time operation.
In October 2003, MyFavoritcCity.com officially opened for business with a "soft launch" or test site. It offered five products representing two cities. "That ran for about a month, and we had good early results," says Dave. With the test site performing well, MyFavoriteCity.com expanded for the 2003 holiday sales season. "We had a real successful November and December, and that gave us the confidence to continue forging ahead."
Today the company is focused on expanding the number of cities in its product line, growing its product offerings, and building internal operations to support sales growth. And of course, gearing up for the next holiday sales season, which is almost upon us.
Success Strategy #4 - Maintain Flexibility
One key to MyFavoriteCity's first year of success has been its ability to remain flexible and respond quickly to change in the following key areas:- Staffing - Dave has a part-time staff of five to source, package, and ship the gift basket products. During peak sales periods, Dave can expand the team in key areas — such as fulfillment — and then shrink down during less active sales periods.
- Outsourcing - With Dave managing his Yahoo! Store, there's little need for additional IT staffing. He does turn to a professional designer for logo design and small graphic enhancements to his web site, but hasn't needed to hire anyone for full-time web management.
- Infrastructure - By using Yahoo!'s e-commerce platform, Dave reduces IT costs and preserves investment capital for marketing initiatives that will help build his business long-term. "For a small business that didn't want to invest in technical resources and take on several hundred or thousand dollars in hosting fees, it's been a great a solution."
- Overhead - MyFavoriteCity.com has a bricks-and-mortar office and warehouse but no retail store. With all of its sales online, it doesn't need the constraint of a retail storefront. Dave has considered opening kiosks in malls and airports, where city-specific gifts would have natural sales appeal. In contrast to a single bricks-and-mortar outlet, these sites would require limited capital investment and allow for low-risk market testing.
Success Strategy #5 - Get Your Brand out There
Even with a background in big business marketing, promoting MyFavoriteCity.com has posed some unexpected challenges. Yet, as Dave explains, marketing is "one of the most critical parts of the business," says Dave. "The quick learning as a small business is that you have to fight a lot harder to get that brand recognition out there."
"In some ways [online marketing] was easier than I thought and in some ways harder than I thought," says Dave. "In terms of paid advertising and buying keywords in search engines — buying the keywords has worked pretty well. Actually a little better than I thought."
For paid search, Dave uses Overture and Google and feels confident that these two outlets cover almost all of the market. "We also list in Yahoo! Shopping and in the Yahoo! Directory. We've done some limited things with a few other search tools, but the lion's share really comes from the paid search and the second biggest chunk from Yahoo! Shopping."
Preparing for a Second Successful Year
As the holiday sales season starts up, Dave and his team have positioned themselves to grow, adding products and preparing marketing programs to maximize sales in the peak gift-giving season of the year. We'll look forward to good news for MyFavoriteCity.com's sales and growth as the company heads into 2005.
Related Links
MyFavoriteCity.com
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PRODUCT NEWS: INTEGRATED UPS SHIPPING
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Case Study:
A Cosmetics Company Saves Time With Integrated UPS Shipping
Over the past three years, mineral skincare and makeup products have grown increasingly popular. During this surge, Kristen Bell, founder of aromatherapy cosmetics company Aromaleigh (aromaleigh.com), has seen a huge upswing in her business.
While increased business seems like great news, it often strains operations. This was the case with Aromaleigh's shipping and fulfillment system. Back in 2002, the company shipped between 140 and 200 packages per month. Today, Aromaleigh sends close to 1,200 packages per month — almost 50 per day.
When Aromaleigh first became a Yahoo! Small Business merchant in 1998, Kristen shipped via UPS. As her shipping volume increased, label making became a bit cumbersome. In 2001, Kristen switched to another shipper. Earlier this year, Kristen heard about the integration of UPS OnLine Tools® into Yahoo! Merchant Solutions. Interested in the new shipping services, Kristen upgraded to a Yahoo! Merchant Solutions Standard account.
Now, at the Aromaleigh online store, shoppers select their products, enter their address information at checkout, and select a UPS shipping service level. Customers immediately see the cost of the product and the selected shipping service, as well as the guaranteed number of days for delivery.
Using information entered by the customer, Kristen can generate shipping labels from the Yahoo! Merchant Solutions order management system (without ever leaving the same browser window) in as few as two clicks. After an order is fulfilled, the customer automatically receives a confirmation email with all the order details and a UPS tracking number. The integrated order management and shipping system ensures that customers have all of the information they need if questions arise, and reduces time-consuming customer inquiries.
Giving consumers the ability to track packages and see precise rates based on their shipping choices lends credibility to Kristen's business, makes the Aromaleigh e-commerce store more customer friendly, and positions the company as a reliable online merchant. In addition, with an accurate system that eliminates disparity, the company saves money it may have once lost when it offered only a flat shipping rate based on the dollar amount of a purchase.
With integrated UPS services, Yahoo! merchants can save time and improve business processes. For example, with the new service, Aromaleigh can process two shipments per minute, where it once took the company five minutes to process a single order. Add up all those minutes, and you save a significant amount of time. And for Kristen, more efficient processes mean more time to apply to a true work/life balance.
"Buying extra hours has very special meaning for me," she says. "I am a mother of a two-year-old, and I was absolutely thrilled when integrated shipping came out. I knew it would allow me to spend more time with my family, and having more time to put into my professional and personal life is important."
Related Links
Learn more from UPS
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PREPARE FOR HOLIDAY SALES SUCCESS PART 3 of 5:
MARKETING PROGRAMS
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Beginning in August, we've been looking at ways to prepare your business for the holiday sales season. Now that you've gotten your site content ready for holiday sales, how will you spread the word? If you don't want to be sitting on inventory surpluses this January, now is the time to start creating demand for your products, letting current and prospective customers know what you're selling.
This month, we look at marketing methods you can use to boost traffic during the critical holiday sales period.
Learn From Last Year
Before you look forward, it's important to glean all the information you can from your previous sales seasons. If you've been in business more than one year, consider what programs have been most effective during the holidays.
As you're putting these marketing programs in place, make sure to plan how you will evaluate each program's success. You need to know whether your marketing spending is paying off, so you can invest in successful programs and stop spending on initiatives that don't give you adequate return on your investment.
Send Holiday Wishes...and Discounts
Use direct email or holiday newsletters to offer exclusive offers or discounts to current customers, encouraging them to revisit your site and boost your holiday sales. Direct email includes the added benefit of making it very easy for existing customers to forward information about your business to other qualified leads. When you launch your holiday marketing email campaign, ask your returning customers to tell their friends about your offers.
Make a List and Check It Twice
Depending on the size of your business, you can simply email your existing customer base or purchase a list of prospects to reach a wider audience. Prospect lists typically include a database of potential customers who have opted to receive news and special offers. You may have to work with the data to hone in on leads that are particularly relevant to your business. Alternately, with a tool like Got's Campaigner (formerly Got Marketing), you can build your own permission-based list, manage contacts, add prospects, and develop your direct email content.
Add Value With Coupons, Free Shipping, and Other Offers
When you're looking to move winter inventory, free shipping on orders over a certain dollar amount can make the gifts fly out of your warehouse. Yahoo! Merchant Solutions customers can use the built-in Coupon Manager to create redeemable coupons for free shipping, percentage discounts, or even set dollar amounts off an order. Note: To prevent overuse, set an expiration date that is relatively soon and limit the terms of use to one discount per customer.
Cross-selling and Merchandising
Cross-selling is the practice of suggesting complimentary products at the point of purchase. For example, if a shopper has added a holiday bathrobe to their cart, you might suggest matching slippers as an additional purchase. Yahoo! Merchant Solutions' automatic cross-selling feature makes it easy to create relationships between your products and, as an added incentive, allows you to set discounts on cross-sold items when they're purchased together.
Related Links
Got Campaigner
Creating Coupons
Setting up Cross-Selling
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MARKETING INSIGHTS:
PAID SEARCH 101
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Gone are the days when you could simply build a web site and count on visitors naturally finding you online. There are simply too many sites on the Internet to rely on people serendipitously tripping across your site. But with today's paid search options, that's not a problem. With the right management, paid search programs can offer a very effective means of reaching highly qualified leads.
Pay-for-Performance Search
Overture Precision Match and Google AdWords are two programs that typify "pay-for-performance" search options. Both solutions offer you a way to identify search terms relevant to your business, create advertising listings that correspond with these terms, bid on your search terms, and have your paid listing appear when a search engine user types in your keywords.
If someone uses one of Overture's partner search engines or goes to Google to perform a search that includes your keywords, your advertisement appears in a special "paid listing" area of the search results. When the prospective customer clicks through to your web site, you are charged a small fee. This type of search advertising is known as "pay for performance" or "cost per click" because you pay only for results. Rather than pay a blanket fee to place an ad, you are charged only when the searcher clicks through to your web site.
With Overture, your listings appear in the search results of Overture partners, including Yahoo!, MSN, CNN.com, AltaVista, and InfoSpace. (Overture is a Yahoo! company.)
Shopping Portals
As the largest comparison shopping destination on the Web, Yahoo! Shopping offers consumers an easy way to find the right products at the best prices. Yahoo! Shopping is essentially a unique search engine, made up entirely of product listings, which makes it simple for shoppers to find, compare, and buy specific consumer items. With its huge shopping audience, Yahoo! Shopping offers another effective means of targeting highly qualified leads.
Yahoo! Product Submit is the listing service that fuels Yahoo! Shopping search. To participate in Yahoo! Shopping, a merchant must create listings and categorize their products through Yahoo! Product Submit. Like Overture and Google AdWords, Yahoo! Product Submit works on a pay-for-performance model. However, unlike those auction-based advertising services, Yahoo! Product Submit rates are based on business categories.
Internet Yellow Pages and Local Search Tools
Local search tools like Overture Local Match, CitySearch, Yahoo! Yellow Pages, or Yahoo! Local offer a means of targeting customers who are searching for businesses like yours, within your specific geographic region.
Many local search indexes are based on local yellow pages listings or are sourced from data providers like BellSouth and InfoUSA, the same companies that maintain data for your local print yellow pages. That means that you and your competition may already be listed!
If your business focuses on a local audience, it may pay to beat the competition to a higher profile listing on the search results page. Most local search services offer some form of premium listing that will improve your business's rankings, display your ad with bolded text or graphics, or otherwise call attention to your listing when a potential customer searches for terms relevant to your type of business.
Return on Investment
Most paid search programs include built-in tools to manage your keywords and track your program performance online, so you can gain insight into the relative value of your search terms. Increase your return on investment by spending time with your search terms and carefully monitoring their performance. For example, you may discover that two words that mean the same thing perform quite differently because one is very common and one is not. In contrast, you may discover that one less frequently searched term has a particularly high conversion rate, suggesting that people who use that search term are more highly qualified.
Last, but not least, remember that the actual process of converting leads to paying customers — no matter how qualified the leads — is up to you. When a person searches on a particular search term and clicks through to your site, they must see relevant content or products as soon as they arrive at your site. If not, they will leave. So, if you want to make sure your paid search listings are worth the investment, make sure that your site delivers!
Related Links
Overture Precision Match
Yahoo! Product Submit
Yahoo! Yellow Pages
Yahoo! Local
Overture Local Match
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FEEDBACK: We welcome your comments and suggestions for future editions of Insights.
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