Stepping up when things go south
Friday, December 18, 2020
At the start of 2020, B2B promotional products firm EverythingBranded.com was embarking on the year fresh from a restructure, with renewed focus and vigour.
The 10 year-old Leicester-based business was forecasting £1m growth in annual sales to £24m and had just agreed refurbishment plans for its newly opened Las Vegas office, employing 10 in sales with a further 12 in training or ready to start.
And then, in case you missed it, the Covid-19 pandemic happened.
Within a week of the government’s lockdown announcement in early spring the business had £611,000 worth of cancellations and postponements, amounting to a 97% drop in sales, with enquiries dropping from up to 300 per day, to fewer than 20.
“It was total decimation,” states EverythingBranded founder and owner, Paul Rowlett.
“Business had been going really well, we’d reduced headcount before Christmas from 162 to 128, which helped the bottom line massively, and things were looking really good for the year.
“But then with half our business related to events, trade shows and the hospitality sector, which effectively came to a stop, I had no choice but to shut the US-office for the time-being, cut us right back to 22 staff in the UK and come up with a plan,” he explains.
Not one for navel-gazing, the entrepreneur who once featured on Channel 4 series Secret Teacher, looked for an opportunity.
Rowlett’s first move was to use his network to access PPE products, including 1.5 million bottles of hand sanitiser, and ship them to the UK to pre-sell to clients, providing some continuity of income and buying him some time to figure out a plan.
“It really made me examine the weaknesses in the business,” explains Rowlett. “December and January are always dead for us, so I was thinking about how we could fill that gap.
“I’d always had an interest in the B2C market, but my focus was always very much on growing EverythingBranded, developing our US operation and the expansion into Europe planned for next year.
“I realised that moving into B2C made sense because it was aligned with the existing business and we had the domains already. Custom gifts linked into the EverythingBranded group. It suddenly made perfect sense.”
With more than 150,000 B2B customers in the UK and around 60,000 in the US, Rowlett says it was a route to market “just sitting there, ready.”
So with more than half of his workforce furloughed, the remaining EverythingBranded team in Leicester knuckled down to keep UK and US business coming in, boosting its marketing efforts, while three or four focused solely on developing its new B2C arm, EverythingPrinted.com.
With a catalogue of around 3,000 customisable gifts, aimed primarily at the 25-40 female demographic, and group headcount back up to a healthy 78 full-time, EverythingPrinted.com launched on 1 September ready for the busy Christmas market.
“We are marketeers for custom gifts, in a nutshell,” says Rowlett of the EverythingPrinted brand. “The business was really built with automation in mind, so the customers are selecting gifts and artwork on our platform, which is talking directly with suppliers in the background.”
Rowlett and his team had negotiated favourable terms with a clutch of digital printers and suppliers that allowed the brand to launch with a raft of discounts and although the business took off straight away, it hasn’t hit anticipated forecasts.
“Unfortunately we were about two or three months late to the party for this year,” says Rowlett.
“We are doing daily orders and enquiries are building, but with the amount we have had to put into social channel ads and having employed three dedicated marketing people for the brand, we are actually losing money on it currently,” he adds.
Rowlett explains that the current “burn rate”, the amount it costs to ‘buy’ a customer through social media such as Google Ads, is very high.
“We are spending a lot on our social media presence and it’s costing us around £25 per fresh, organic customer.
“Our average order value is £21 and we’re losing around £14 on every customer at the moment. But the lifetime value of those customers may be three or four orders, which means over the next 18 months or so we could make money on them.”
Rowlett says that while he believes his firm’s quick response in the PPE market has enabled the core business to stay its financial course this year with no loans or backing, he concedes that he was not quick enough off the mark in launching EverythingPrinted.com.
Rather than continue to “throw money at it” this year, he says, EverythingPrinted will begin a “big push” in Q3 2021. In the meantime it will maintain a marketing presence and is also set to launch five core products offered through a partnership with a Lincolnshire printer.
He says: “With this market we are going up against the big players, which is ambitious and at the moment they simply have a bigger budget than us. So for now this year on EverythingPrinted, our marketing spend will drop except for Black Friday.”
Rowlett explains: “We are focusing on refining the business model, adding new products and building the database. We’ll be ready to hit it hard next year. We will use multiple channels: influencer marketing, radio and TV. We’ve already been working with Leicester TV on competitions and merchandise launches.”
While group turnover is on track to hit £24.5m this year, despite the chaos inflicted by the global pandemic, EverythingPrinted is around 40% down on a forecasted first-year turnover of £227,000.
Commenting on the progress of the new venture, Rowlett says he is extremely proud of what the team managed to create under such tricky, and let’s be honest unprecedented, circumstances.
“We have built a great customer-facing platform and we now have a 52-week business that I would hope by next Christmas, will start to produce a good turnover to fill the void,” he explains. “Through all this, we’ve managed to build a brand, launch it and employ three dedicated staff to manage the marketing on it.”
Rowlett, who recently became a new father, says the growth strategy for EverythingPrinted in 2021 is clear and that plans to refine its supplier list and manage its own shipping are key factors.
“We can definitely save money by bringing in our own shipping account. I would say that’s something I’ve really learned from this. You need to take control of your deliveries because otherwise it really eats into your margins.
“Also, when you rely on a supply chain in this market, some of them might not have the technology to give you tracking and when you are looking at a profit of £2 or £3, you have to chase the tracking. Essentially it means you have full control of the customer service.”
With the core B2B business back up to speed, plans are afoot to reposition as a ‘360 marketing solution’ incorporating its new digital marketing agency, EverythingDigital.com, the existing B2B and B2C offerings and from next year a new fulfilment arm: you guessed it, EverythingFulfilment.com. The latter is set to launch in Q2 of 2021, Rowlett states.
Rowlett also has plans to open another office in Leicester for a dedicated marketing division of up to 14 people. Meanwhile, the US office, travel restrictions permitting, will reopen in January with plans to grow it to a 20-strong site across the B2B and B2C platforms.
“We have room to grow and enough people to manage that, so there’s no reason we can’t be successful in this field, in the US as well,” he states.
Although EverythingPrinted is still not making a profit, Rowlett says it is generating steady sales, including reorders, and continues to gain traction with subscribers through its social channels growing in the 10s and 20s every day.
“I guess this year is a year of reflection. I was forced to look at my business and work out its weaknesses. Should I have done it two years ago? Probably. I take full responsibility for the fact that it took a pandemic for me to look at these issues and work out how to fill the gaps,” Rowlett says.
“But now we have proof of concept, we’ve generated the custom and it is growing all the time. I can’t be more proud of the way the team has made this happen.”
Inspection host Paul Rowlett
Size Turnover: £22m; Headcount (group): 58
Products and services Personalised gifts
Inspection focus Launching a new brand (during a pandemic?!)
Don’t make excuses. If you are not putting the hours in, you can’t expect to make it work. You have to put the effort in and even though it may not pay off immediately, keep focused on the long-term plan.
Take control of your deliveries. To get into this market, you need to keep courier and delivery costs to a minimum. Set up a proper shipping account otherwise one-off delivery costs will eat into your margins.
Customer service is key. That’s what this business is all about, even more so now, and if you have other aligned businesses make sure the customer service is the same standard throughout.