A steady uptick in business-related orders and corporate special requests when you're a consumer-focused startup is a gift horse to look in the mouth, especially when your business is in the discretionary-spend gift-giving market. This is exactly the position New York City-based flower delivery startup Ode a la Rose found itself in this spring. Launched in early 2012, the startup originally had an exclusive focus on consumer gifting market (such as sending personal gifts to family, friends, or significant others, often to mark a milestone or significant occasion). Online floral sales is a big, blooming $2.3 Billion market (according to research from IBISWorld) and fresh cut flowers is an estimated $13 Billion market. Big markets which rely on the whims and pocketbooks of fickle, emotional consumers. And big markets which suffer when consumer confidence is low. Gifting flowers online is also highly competitive: the number of startups out to disrupt the online floral trifecta of 1-800-Flowers, FTD and Teleflora is 77 according to AngelList, while Crunchbase puts the number at 93 startups in this vertical.
A shift in customer focus away from consumers exclusively may just be a bigger blooming business opportunity for a floral startup.
The Promotional Products Industry has seen a steady uptick in revenues in recent years (it reached approximately $20 Billion in revenues in 2014). The employee recognition or incentives program market presents an even larger market opportunity: $46 Billion, according to a comprehensive study on these programs way back in 2012. As the study notes, companies routinely spent 1%-2% of payroll on programs designed to thank, reward and incentivize employees. And these programs aren’t new – many are legacy programs from the turn of the century when employees were rewarded for their length of service – an indicator this may be a more reliable client base and sustainable revenue source for a startup.
Since focusing more on corporate clients, Ode a la Rose has had to make a few operational adjustments, beyond hiring a corporate sales manager. The primary features they have had to launch for these new corporate programs include branded packaging prominently featuring each client's corporate logo, and personalized online corporate shopping sites. These changes align with Advertising Specialty Institute trend reports. Corporate end-buyers routinely look for gift items that are attractive, durable or useful, in addition to having the company's logo prominently placed on the item or packaging. For each of these individual e-commerce sites Ode a la Rose offers preferred pricing, access to spend reports, and a custom product catalog featuring bespoke flower arrangements not available for public purchase. The technology features were designed to help corporate end-buyers centralize and control their business gifting spend as well as enforce branding guidelines for promotional items. What Ode a la Rose has yet to see is an adoption by corporate clients of its innovative mobile, photo and video features which have made the startup's offering standout in the crowded consumer floral market.
As the business expands into the corporate domain, Ode a la Rose does not intend to abandon its original and primary customer base. The focus on consumers after all, has been the source of the startup's innovative and imaginative offerings – innovation which may find its way into the corporate gift-giving market in the future. Consumers may not be the most reliable source of revenue but they are definitely a reliable source for trends and new, innovative ideas from technology to product to marketing.
So what advice would Ode a la Rose give to other startups expanding their customer base? Olivier and Louis, the founders of Ode a la Rose offer this advice:
- Listen to your clients. Your clients know better than anyone else what services will work best for them. Most of the time your customers will be happy to share their ideas, just as long as you remember to ask. Chances are if one client likes a particular benefit, other clients will too, but you won't know until you do your research.
- Adapt to their needs, even if the solution is challenging. Even if a request sounds difficult to implement, especially with the limited resources of a startup, don't ignore it. If it's an easy fix, anyone can do it. It's implementing the tricky ideas that will set your company apart from its competition, because not everyone will be willing or able to commit the same resources to the project.
- Don't lose sight of your primary customer. It's ok to vary your products or services to reach a new type of client, as long as in doing so you don't neglect your existing customer base. These are your bread and butter and the foundation of your business, so be careful to maintain these relationships when adding resources elsewhere.