Sales falling, need new direction...

[Davek0974]

Hi all, after telling my boss how good this forum is, he has asked me to place an anonymous question here. A little background info...

It's a family business, my brother and his wife own & run it, I run the production department with 7 staff, there are a total of 44 staff here now, at our peak 6 years ago there were 105. We manufacture craft oriented greetings cards, craft products, scrapbooking products etc. we have a small showroom onsite but mostly we are mail order and internet based. My department is equipped for die-cutting, creasing, full colour printing, booklet making, foil printing, guillotining and shrink-wrapping. We have a 44,000 sq ft building which is half office/order processing/despatch and half production/warehouse.

Sales have been steadily falling for the last few years and due to the economic climate have recently taken a nose-dive as our products are hobby related and not essential. This is despite massive input of new product lines, designs etc. The decline is largely caused by a massive influx of cheap stuff - paper/card etc coming in from overseas, this did not exist before. This stuff is sold at stupid prices undercutting us UK manufacturers badly, usual story.

We are just trying to find new ideas or directions to head in as we have run out. We both come from trade printing backgrounds and are trying to stay away from that market as it too is falling and is now more cut-throat than it ever was.

Any ideas or suggestions would be much appreciated as always.

Dave

 

[marketingquotes]

Hi There,

It is a tough market; there is quite a bit of competion that is internet based and many companies are now using TV to boost their profile (moonpig, funkpigeon etc.) - so unless you can advertise on TV indeed you will see that the market shrinks.

Have you looked at social media as a route to market (twitter/FB etc.)?

Regards,

Marketing Quotes Support

 

[Davek0974]

Hi There,

It is a tough market; there is quite a bit of competion that is internet based and many companies are now using TV to boost their profile (moonpig, funkpigeon etc.) - so unless you can advertise on TV indeed you will see that the market shrinks.

Have you looked at social media as a route to market (twitter/FB etc.)?

Regards,

Marketing Quotes Support

Thanks,
Tv is way too expensive, we tried the shopping channels but even they are struggling now. Moonpig et al are not really competing as they are finished cards and our products are for people to craft themselves.

I will note the twitter/fb suggestion though.

Dave

 

[marketingquotes]

Hi there,

Another option is to maximise on your previous customers (as they say that 60% of new businesses comes from existing customers properly nurtured).

Do you have mailing lists/e-mail addresses for a marketing campaign?

Regards,

Marketing Quotes Support

 

[K-rado]

Most companies have to diversify/evolve numerous times over their life time just to stay in business never mind stay ahead of, or indeed up with the competition.
I assume that you looked at efficiencies savings, the most significant cost being your labour force. I also assume that you have looked at your product margins, e.g dropped products from your line that are less cost effective than others. This is an area where you need to concentrate on I think first and put all your efforts and energy into the product with the greatest margin. Have you looked into 3D printing? I have to admit that I know bugger all about it but it looks fantastic and could potentially open up a hole new market place for you. ( I am thinking scaled models for architects and town planners, inventors, exhibitions etc.) Just a few thoughts and hope it helps. Best of luck to you K.

 

[Parrot Hosting]

Dave

You don't indicate whether you have a pro-active marketing strategy. For example, sending out newsletters, special offers and that type of thing to existing customers to encourage them to get back in touch.

You could also probably do with a plan to develop new clients from the social media arena by having business fanbook pages. I'm not saying its the solution but, it would provide opportunities. also do you use eBay? there are a lot of traders on there who provide finished articles or components.

If you cannot undercut or match prices what can you ADD into your product/service to make a difference?

 

[CSBob]

I will note the twitter/fb suggestion though.

Due to the nature of your business I would honestly urge you to do more than just note it, but rather to look into it in real depth and perhaps even find an expert to work with. Specialist B2C products such as your own are, IMO, ideally suited to social media marketing, as you can "get the word out" to a large number of niche hobbyists with specific interests.

 

[Davek0974]

Hi there,

Another option is to maximise on your previous customers (as they say that 60% of new businesses comes from existing customers properly nurtured).

Do you have mailing lists/e-mail addresses for a marketing campaign?

Regards,

Marketing Quotes Support

Hi, yes we have a subscribed list of around 15000 customers, we email every two weeks and it only creates a small blip in sales. We have special offers, price reductions etc.

We cannot afford to do mail shots any more, the cost is prohibitive for its return rate, our customer database is around 40,000 although not all active of course.

We used to mailshot a lot and the return rate was around 30% orders, the last one was many years ago and only returned around 10% so we stopped it there.

 

[marketingquotes]

Hi There,

A database of 150,000 is a fantastic resource - I am sure given the right campaign you can certainly do more that make a blip on your sales.

Shall we get a couple of marketing companies that are active in the greeting cards/craft market to put some ideas together for you to look over (completely free).

Regards,

Marketing Quotes Support.

 

[Davek0974]

Hi There,

A database of 150,000 is a fantastic resource -.

15,000 not 150,000!

 

[Davek0974]

Shall we get a couple of marketing companies that are active in the greeting cards/craft market to put some ideas together for you to look over (completely free).

Regards,

Marketing Quotes Support.

If its completely free and no-strings then of course, it would be much appreciated, thanks.

 

[marketingquotes]

Hi There,

Even so, 15K is still a great resource that you can utilise -

Regards,

Marketing Quotes Support

 

[Davek0974]

Hi There,

Even so, 15K is still a great resource that you can utilise -

Regards,

Marketing Quotes Support

It certainly is, we also have a forum and a company blog page as well.

 

[deniser]

Hi, yes we have a subscribed list of around 15000 customers, we email every two weeks and it only creates a small blip in sales. We have special offers, price reductions etc.

We cannot afford to do mail shots any more, the cost is prohibitive for its return rate, our customer database is around 40,000 although not all active of course.

We used to mailshot a lot and the return rate was around 30% orders, the last one was many years ago and only returned around 10% so we stopped it there.

I'm with you there. We have been getting an ever lower response each time to the point where the cost of sending it out exceeds the extra sales. It's difficult when the list gets older to know who is still an active customer or who is even still using that email address and who isn't (even when bounces and unsubscribes have automatically been weeded out) and with a list running to tens of thousands there is no way we can do this manually.

 

[Davek0974]

When we did mail shots, we limited it to customers that had ordered in the last year or so, still quite a big job though.

We have cut costs as much as possible at present, we had redundancies last year (6), natural wastage made up the rest. We have cust stock levels down to the point where we are almost running JIT now! This makes it harder for my dept as the jobs get smaller but rotate faster, this is not very cost effective though due to set up costs etc.

We have got capped electricty rates (currently £2000/mo) and the rates are not too bad as its not a retail area really. Short of losing more staff which is already causing headaches when holidays/sickness happens, im not sure we can lower costs much further. We are also holding less production stock but again this causes problems in supply sometimes.

It just seems that people have gone off of our line of expertise.

Dave

 

[K-rado]

It just seems that people have gone off of our line of expertise.

Dave

Surely all the more reason to evolve? research/explore other markets, look at the strengths and expertise of all your work force. I am not saying stop all operations now but look at a transitional period to introduce something new. you never know, there may be more profit in it. K.

 

[deniser]

Can you sublet part of your building to get some extra income?

 

[deniser]

Surely all the more reason to evolve? research/explore other markets, look at the strengths and expertise of all your work force. I am not saying stop all operations now but look at a transitional period to introduce something new. you never know, there may be more profit in it. K.

I think that's what Dave is saying in his original post. The question is what is the "something new"?

 

[RadiusBPO]

Dave what do you actually do? Your profile site is a metal working site, is this the correct one or is there another??

 

[Davek0974]

Surely all the more reason to evolve? research/explore other markets, look at the strengths and expertise of all your work force. I am not saying stop all operations now but look at a transitional period to introduce something new. you never know, there may be more profit in it. K.

Oh we have been trying to brainstorm stuff, the staff are fully involved too but we are now stuck in that we have to come up with ideas that can be produced with current equipment i.e. we can't venture into a new product if it will entail buying new machinery etc.

Dave

 

[Davek0974]

Dave what do you actually do? Your profile site is a metal working site, is this the correct one or is there another??

Sorry, that is MY self-employed trade (home business). I cannot post the company details here yet as i have been asked to keep it anonymous.

Sorry if that makes it difficult to help, but our competition would be most interested to know the details, i am sure you will understand.

 

[K-rado]

I think that's what Dave is saying in his original post. The question is what is the "something new"?

Bring his product to life using 3d printing. I am not suggesting that they print their whole product using this system, but if you print a high res image, eg a flower, then why not print it in 3d?

 

[Davek0974]

Can you sublet part of your building to get some extra income?

We have brushed upon this thought but i dont think the landlord would be interested until renewal time which is not too soon.

 

[SamStones]

Don't know if this is of any interest to you:

http://www.johnpye.co.uk/6800.html

 

[Davek0974]

Don't know if this is of any interest to you:

http://www.johnpye.co.uk/6800.html

That's an interesting site, thanks

 

[KidsBeeHappy]

Hi Dave

Where do your current sales come from;
-retail?
-wholesale?
-online?
-other?

A lot of the advice (get social networking etc) is all a bit generic, and may or may not work. But it will depend on where you currently sell. If 80% of sales are wholesale then social networking alone is unlikely to make a huge difference.

 

[Davek0974]

Hi Dave

Where do your current sales come from;
-retail?
-wholesale?
-online?
-other?

A lot of the advice (get social networking etc) is all a bit generic, and may or may not work. But it will depend on where you currently sell. If 80% of sales are wholesale then social networking alone is unlikely to make a huge difference.

Good point, i would estimate...

35% Mail order
35% Online
25% Wholesale/Trade
5% Other including our showroom


Dave

 

[deniser]

The problem is that a lot of craft shops have closed down. In our area we have lost 3 or 4 who have been replaced by one giant Hobbycraft.

I do like their magazine though with craft projects in it so you see the result and go out to buy the stuff. It's usually seasonal. Do you do this?

 

[office man]

You are right to seek directional help, its perhaps not a 'new' direction that you need rather than an alternative parallel direction.

As previously said; you have a great resource in the 15,000 customers that have purchased from you in the past - the trick is to finding out how you can still enjoy their custom;

What else doe people who buy your products buy?

Are there an consumables to suit their hobby that you don't currently sell?

perhaps there could be cutting mats, knives, glues, paints, storage trays.....(i am simply guessing here) the products/lines are alien to me but not to you.

Be creative there must be something EXTRA that you can offer???

PS there is not a single business person that doesn't come across price issues from time to time and when the foreign imports get compared to your products it's always going to seem like you can't compete you have to get this mentality out of your head and start thinking more positive.

Hope this helps.

 

[Davek0974]

The problem is that a lot of craft shops have closed down. In our area we have lost 3 or 4 who have been replaced by one giant Hobbycraft.

I do like their magazine though with craft projects in it so you see the result and go out to buy the stuff. It's usually seasonal. Do you do this?

Many of those smaller outlets were our customers, we do supply hobbycraft but they sell much more than we make so do really compete directly.

Yes we do a quarterly magazine.

Dave

 

[Davek0974]

You are right to seek directional help, its perhaps not a 'new' direction that you need rather than an alternative parallel direction.

As previously said; you have a great resource in the 15,000 customers that have purchased from you in the past - the trick is to finding out how you can still enjoy their custom;

What else doe people who buy your products buy?

Are there an consumables to suit their hobby that you don't currently sell?

perhaps there could be cutting mats, knives, glues, paints, storage trays.....(i am simply guessing here) the products/lines are alien to me but not to you.

Be creative there must be something EXTRA that you can offer???

PS there is not a single business person that doesn't come across price issues from time to time and when the foreign imports get compared to your products it's always going to seem like you can't compete you have to get this mentality out of your head and start thinking more positive.

Hope this helps.

Hi, yes there is a wide range of allied products but unfortunately we already stock those.

Yes i can see where you are coming from re the being creative angle, trouble is I think we have just about run out of creativity

Finding out what else our subscribers buy would be useful but we cant figure out how to go about it without seeming prying or begging etc.

Thanks for the input
Dave

 

[Esk247]

Ask your current customer base for their feedback and perhaps a survey through one of your emails? maybe with the chance for them to win some treats too.

It's good to approach the problems head on and find a work around rather than burying your heads in the sand, the problems will only get worse, you may need to develop your brand identity more, give the appearance of strength, reliability and trustworthiness etc.

What do people think when they see your logo? or name? do they know instantly what you do? do they understand what your company is about?

have you done price analysis against competitors in the same market? are you competing fully on the web?

Lots of questions, it needs a top down review of all your procedures and marketing efforts. Then you will be able to plot a way forward to prevent any major damage to your company image and ability to trade in the future.

 

[Davek0974]

Thanks esk247

Some years ago we were the largest manufacturer of this product range in the country, our products have been widely copied over the years because we were the innovators, the first ones on the market. Nowadays we struggle to find a product that is worth taking to production because it's already been done in some form or another.

Basically the range of goods we are accustomed to making have gone out of fashion I guess, but we can't seem to find a new or even the current trend anymore.

I'm getting some good feedback here though so keep it coming.

Dave

 

[Holidayislandgroup]

I agree with a lot of the ideas above. However, considering the nature of your business, have you considered an arts/design competition using your kits. Provide a decent prize and/or link with a local arts establishment. May end up bringing some good traffic to the sites and influx in product purchases.

Hope it helps

 

[owas]

Just an idea, and may seem way far out. As a parent, my daughter loves doing crafts things, and its a great way for us to spend time together. Why not put a website together, as sort of on-line magazine, with each week having different ideas, of crafts to make, and sell a basket with all the bits needed where they can buy all the stuff needed.
Have you thought of or do you sell to schools and educational places?

 

[maxine]

Think Esk247 is spot on with asking your customers.

If you have the opportunity of running a face to face group meeting with some existing customers then that might be better than just email surveys or telephone surveys as people really get into the spirit of helping and volunteering more info than they would through other methods. Possibly worth getting someone else in to facilitate it so that you don't unintentionally influence the discussions and can get objective and constructive feedback and ideas.

Maybe do the same with different groups a) those who still buy and why they buy b) those that used to buy and don't anymore c) those that don't buy to see if they would if something else was on offer.

I would also be doing some credit checks on other organisations to see what their turnover and profits are like to see if you can find the companies that are doing well and then do some research into why that could be as it may spark off some ideas (I'm not saying to copy them)

I think you need to determine whether the problem is decreased demand or poor marketing. If it is decreased demand through natural lifecycle then throwing money as new marketing methods will just delay things but won't innovate.

I wonder if there are some less obvious niches you could explore like people doing homecraft cards with family photos or photos of their pets or something like that?

 

[Davek0974]

There's some excellent stuff coming in here, thanks.

I'm going to book a chat this week with the powers that be to digest the responses to this question, it's been very interesting so far and I'm sure there is more to come yet.

I feel the fall in sales is partly lack of marketing but only partly as we do advertise heavily in all the leading craft magazines, and more so a shift away from what we do which is probably going to be harder to fix I.e. We can't just run another campaign to fix it.

I really like the idea of brainstorming with groups of customers etc, we do have a room where we used to hold classes so it could be arranged easily, I will certainly put this idea on the table.

Thanks all so far.
Dave

 

[RadiusBPO]

Do you do beads?? Here in Paignton we have 2 bead shops. TWO! The profit in them must be huge.
Also you have all these customers who love crafts, why not dedicate a section of your site to helping them sell their crafts. Think Etsy.

 

[John Thomas]

You need to open up new avenues for sales and you need to start doing it now. Your existing business is not going to recover, so trimming costs will do nothing more than delay the slide and fall.

35% of your business is now online. Can you grow this side of the business? Come up with new ideas for your website maybe? Bring in new customers.

Are you selling primarily to the UK? If so, can you duplicate the web side of your business in other European countries? A German site? A French site? Yes, it would cost money, but it would open up new markets, and that is what you need.

 

[accountancyextra]

Start with your products. It's no good find better ways to market stuff nobody wants, so, make sure they want it before you do anything else. If they don't want what you make, ask them what they do want (as per a previous poster) and work out how you can deliver it. Only then should you move onto marketing. The most successful companies constantly evolve to match the marketplace they are trading in.

Don't neccessarily blame the economy either. We work with a number of clients who manufacture or sell in the hobby industry. I can think of at least 4 whose sales have been increasing by over 20-30% per annum in the last 3 years. They tell me that the home/ hobby market is on the increase not decline....but each one has made sure they had the right products in the right places and have then marketed them effectively.