June 2, 2021 | Datavana
Ep21: Charlie Cole, CEO at FTD
Traffic x conversion rate x average order value = revenue.
"Traffic x conversion rate x average order value = revenue." Charlie’s equation is an effective measure when forecasting e-commerce sales outcomes, especially when you’re in the business of selling living, breathing products, like flowers.
In episode 21 of our Datavana Podcast, Charlie Cole (CEO of FTD) talks with his good friend and host Jaime Muirhead about FTD, how Charlie got started in Data, FTD under Covid and what lies ahead for the future. Staying afloat in tough times means having high quality data to feed insights for forecasting and growth. “Any good forecast in e-commerce all starts with marketing.” The data must be visible and it’s integrity strong for analysis to effectively corner the market through great marketing around the funnel.
Charlie and Jaime also break down handoffs, seasonality and profitability, deliverability tracking, and technology strategies. “Not every technology needs to differentiate you from your competitors. Some just need to work."
The Data Potential.
"When I looked at the data, I knew I could fix that. I could fix the e-commerce blocking and tackling. I could fix conversion funnel optimization. FTD both historically and present have relationships with 9,000 different florists around the US. How e-commerce and these florists co-mingle, and the idiosyncrasies between us; the routing logics, the product selection, the product profitability, that was where this is still to be won or lost. Data got me excited about the job. And Data made me realize that we could get the flywheel going from a ‘taking orders’ perspective - getting orders are important. Ultimately, how we flow those orders and what type of orders we take on behalf of our florists is really where I think we're differentiating ourselves from the market."
Forecasting by Data.
"It's just a super fun business to geek out on, right? Because yes, you have to forecast properly. There's seasonality, there's sourcing challenges, right? Because like a Peony grows one place in April, one place in May, one place in June. So you have to have a vast farming network, which we do. It's by far the funnest data challenge I've ever had, because I really think we're just getting started. I want my florists to be able to open a maps application, literally with a pen, draw a shape around the cities and towns that they want to deliver in and us to. Auto-Populate a forecast, and then say that if you expand this delivery area by a mile, then the forecast goes up by this. So I think that's where we can absolutely kind of shock this industry with the adoption of data and data analytics the way that we want to."
Product Tracking Methodology for an improved experience.
"I'm most proud of data integrity and data visibility at different parts of the funnel. And so we are doing just maniacal monitoring of things that happen upstream. So the way it works is we take an order. We send it to a florist and that florist by contract has two hours to accept or deny that order. And so just because a florist denies that order doesn't mean the order's dead. It means it goes to another florist and then the cycle kind of continues. So it's probably the thing I'm second most proud of over the last year. The first thing I'm most proud of is our relationship with our florists and how we've kind of helped repair that. I think that's the thing that's going to have just the most outsized lifetime value for our company."
Digital Transformations: Automation
"We have a 1992 instance of JD Edwards for our ERP. So like these are the sorts of things that people love to use the cliche, ‘It can't be worse’. I'm telling you, I can't imagine that there's a worse tech stack for a company as good as we are. And I'll give the team a lot of credit because they’ve figured out how to manage through this, right? They're not letting their systems be a burden, they're figuring it out. It's just so fun to picture a world where we can free people up from manual data entry and data polls and old systems that don't allow you to onboard florists. There's just so much opportunity out there just by getting through this initial phase of transformation. And I think we're all starting to see the light game of the summer because we're starting to roll some stuff out and it's life changing."
How E-Commerce Can Support More Local Businesses.
"You mentioned the next couple of years. My hope on behalf of FTD, especially coming out of COVID is that you start to see less e-commerce and more local commerce. And what I mean by that is, ‘do I really need to get anything outside of the Seattle DMA?’ Is there anything I can't get from a local grocery store, local hardware store, a local library, local coffee shop? And I think that for us, one of our competitors went out on one of the quarterly reports and said, ‘We want to be the Amazon of gift giving’. I'd like to be the anathema of that. I think we can be like the gift of giving that focuses on local partnerships. And so if you extrapolate that vision with B2B companies, they want to send something meaningful to their customers. So imagine we're sitting here in Seattle, we have clients in Boston, I would much rather support the local Boston community and partner with a florist there. And then maybe we start to partner with coffee shops, their bakeries, restaurants, whatever it may be. So I hope to see that because there's also major positive environmental ramifications by staying local as well. If there's ever been a time for all of us to rally around our local communities, it's coming out of the Covid."
- Regression Analysis Forecasting. According to Charlie, being great at analyzing digital marketing performance is paramount for all forecasting models, and Charlie says it starts with marketing and customer traffic flow. "Predicting SEO rankings, paid ad click-through rates, and how correlation, spends, and advertising works its way out the bottom funnel. For any good forecast in e-commerce; doesn't matter if it’s my business, or if you're selling Bricks… it all starts with marketing. Because that's one of the things I always like to remind myself is e-commerce is a really simple equation: Traffic times conversion rate, times average order value equals revenue. That's the entire business! And so first we have to do traffic really well. And then we have to then start to do the landing page optimization piece to then that'll give you conversion rate and average order value"
- What Makes FTD a B2B2C Company. Charlie explains that a large portion of FTD is probably 90% a combination of B2C and B2B2C. He states the reason for the interesting dynamic is due to the fact that most transactions occur via 3rd party sources. "We send flowers, right? Basically B2B2C, for example, members will go through USA portals and then buy flowers that we will fulfill. Even B2B2C is a bit of a misnomer, right. Because a lot of those transactions still happen on our properties, but they're done via partnerships. So that's kind of like a weird one. So the majority of it. And B2B is a huge opportunity."
- Automating Florist Processes To Improve The User Experience. FTD currently employs a traditional and manual onboarding process for new florist sign ups. Charlie shares that the biggest challenge they are currently working on is automating the induction process to make the journey more user friendly and usable. "So we've been trying to make it a much less static environment and try to make it easier. As opposed to having like, ‘give us an arm and a leg just to give us the beautiful chance to earn their money.’ We just gotta make it easier for people to use this. If you and I spun up a website right now, we could be live on Google Ad-Words in 15 minutes. It's just that simple. And I don't have to talk to anybody. I mean, it's just super easy and automated. And I think that's where we should really strive for, is just to make it easy to use this, which doesn't sound like that novel idea, but in this industry, it really is."