UK online florist is about to find out.
At the end of the most recent financial year, the brand reported a 19% decline in revenue, compared to the previous year. They also experienced a staggering £100.2 mil in operational losses, compared to £20 mil the year before.
In a bold move, Bloom & Wild has announced they're no longer focusing on gaining new customers. They've already significantly cut their marketing spend. Instead, they're putting all their efforts into customer retention.
And while this could save them some money in the short term, I'm wondering whether it's the best move.
On one hand, focusing on gaining more repeat business aligns with their brand value of "Care deeply." According to Bloom & Wild's website, they want to create genuine connections with their customers. This is a lovely value to have, but is it enough to carry the business?
In order for this strategy to help them financially, the brand needs to increase the average order value of each purchase. They also need their existing customers to buy from them more often.
The Ehrenberg-Bass Institute for Marketing Science pointed out that it's hard for brands to grow loyalty without their growing market share. The idea of double jeopardy says loyalty increases as a brand's customer base increases.
This means smaller brands not only tend to have fewer customers. Those customers are generally less loyal than customers of bigger brands. Sounds like neglecting growth could end up backfiring big time.
Don't put all your eggs in one basket. It's important to have a balanced approach in marketing. Of course customer retention is important. But you need new customers if your brand is going to survive.
The numbers don't lie. If you're going to pivot how you spend your money, make sure you look at the data. And if the current approach isn't working, it's time to try something else! Let's hope Bloom & Wild have a really clear understanding of the ROI they're getting on their retention initiatives.
As for whether this strategy is going to help Bloom & Wild recover financially, only time will tell.
- Charlotte, Editor ♡
