CASE STUDY

The Bouqs Company Leverages Custora’s Event Propensity Models to Increase Customer Loyalty

From being featured on O, The Oprah Magazine’s 2013 Wow List to earning the “highest quality” superlative in Harper’s Bazaar’s survey of flower delivery services, The Bouqs Co. is already well on its way to achieving its goal of disrupting America’s $27 billion per year flower industry.

 Founded in 2012 by college friends John Tabis and Juan Pablo Montúfar, The Bouqs Co. is an online retailer that specializes in delivering flowers and plants grown on sustainable farms in places like Ecuador and Colombia to customers across the United States. By working with their farm partners directly, The Bouqs Co delivers fresher, longer lasting arrangements at an incredibly competitive price point.

The Challenge: Creating Predictable Year Round Demand in A Highly Seasonal Industry

Despite The Bouqs Co’s precipitous growth, the company has faced unique pressures to grow customer revenue year-round. Competitive pressures are high in the low-margin floral industry and extreme seasonality creates a need to smooth out demand during other parts of the year. In addition, given The Bouqs’ unique business model of sourcing flowers directly from farmers, ensuring some amount of revenue predictability is paramount.

 The company does have two powerful mechanisms in place to weather these challenges: its subscription and special events scheduling services. Customers who sign up for a Bouqs subscription receive regular deliveries on a cadence of their choosing, anywhere from once a week to once every two months.

 Similarly, the company’s scheduler tool allows customers to place orders ahead of time for special occasions throughout the year — including large-scale events. Based on Custora’s CLV models, the predicted one-year profit of customers who utilize the scheduler is six times higher than that of its average customer.

 In short, while The Bouqs knew that the customers who signed up for the subscription or scheduler service offered the greatest lifetime value to the company, it was struggling to figure out which customers these services would resonate with — leading to wasted marketing efforts and spend.

The Solution: Leveraging Event Propensity Modeling to Find the Audience Most Likely to Bring in Recurring Revenue

 To surmount this challenge, The Bouqs turned to Custora for help. Using our event propensity models — designed to forecast the likelihood of high-value customer actions such as app downloads and store credit card sign-ups — The Bouqs was able to pinpoint the customers who displayed the highest propensity to engage with its subscription and scheduler offerings.

 The group predicted to sign-up for the scheduler amounted to just eight percent of the company’s customer base, highlighting an important opportunity for The Bouqs to optimize its marketing strategy. Rather than blanket its customer base at large with subscription- and scheduling-oriented messaging that would be irrelevant to the interests of over 90 percent of its customers, The Bouqs could now focus on delivering highly personalized messages to select, high potential users.

“We’ve always known that subscriptions and special occasions are two important drivers of our business. Now, with Custora’s predictions, we’re able to more accurately pinpoint which customers are likely to sign up and target them effectively. We've begun automating this with targeted weekly messages.”

 

Phil Irvine
Director of CRM

The Results: More Efficient Communication with the Customers Who Matter Most

By utilizing Custora's predictions, The Bouqs was able to personalize communications to customers who demonstrated a high propensity to sign-up for the subscription or scheduler products. In the process, the company reduced extraneous ad spend and full-file email sends, creating significant gains in efficiency for its marketing team.

 For the scheduler communications, customers in the high-propensity group who were served a personalized message ended up being nine times more likely to sign up than the control group. What’s more, in the seven days after The Bouqs’ preliminary marketing push, customers from the predicted high-propensity group accounted for nearly 90 percent of the company’s scheduler sign-ups, underscoring the remarkable accuracy of Custora’s event modeling.

 “We’ve always known that subscriptions and special occasions are two important drivers of our business,” says The Bouqs Director of CRM Phil Irvine. “Now, with Custora’s predictions, we’re able to more accurately pinpoint which customers are likely to sign up and target them effectively. We’ll be automating these efforts come the New Year with targeted weekly messages.”

CUSTOMER STORIES

Like this? Check out more Custora case studies.