Shaping Customer Perceptions
Is the Price Right?
Have you ever wondered how two shops on the same street charge significantly different prices for a dozen roses and still have equal sales? The shops get their roses and containers from the same wholesaler. Shop #1 charges $49.99, and Shop #2 charges $79.99. Consumers pay both. Which shop would you like to be?
It’s clear that price is often the most important factor in consumer purchases. People often drive across town to save just a few cents on gas or groceries. Products where price is the main concern are known as “commodities”. These services often have little brand loyalty, and consumers see minimal differences in quality. Common examples include appliance repair, carpet cleaning, and dry cleaning—services often chosen based on price or convenience.
But there are also products and services that fall between commodities and brand-sensitive purchases. Items like convenience store products, bookkeeping services, and haircuts are often selected based on price by some, while others prioritize brand name or reputation, like when choosing a doctor, dentist, perfume, or clothing.
Where Do Flowers Fit?
For some consumers, price is most important, and they typically buy flowers from street vendors or grocery stores. However, for most customers, brand and quality matter when sending flowers as gifts. Florists only come into play when consumers want a more premium option.
That doesn’t mean price isn’t a factor for these consumers—it still plays a role. But when people call or come by your shop, they have already put quality above price. The question is, how sensitive to price are they? It varies. Some care little about price and value the outcome of the gift more, while others will not spend more than $50. The majority of your customers will spend $79 to $99 if you are willing to recommend products in that price range.
You Are Worth It
Too often, feelings get in the way of profit when it comes to pricing. For example, you may know that 10 stems cost you about $15 and you charge $60 for an arrangement, but this might skew your pricing logic. You might feel compelled to add more greenery, put them in a nicer vase, or even throw in an adornment to increase the perceived value for the customer.
But who are you really helping here? Not the customer, who has already ordered the arrangement. Certainly, not your profit, which decreases when you “stuff” the arrangement with extras. The customer likely won’t notice the added value, or worse, might come to expect more added items at no extra cost. Customers make decisions primarily on what they perceive as a good value and what is aesthetically pleasing to them.
You might think using “cost plus” pricing is the best strategy. While that strategy works in many cases for florists, it shouldn't be your only approach. You are dealing with products dictated by nature and availability. Prices fluctuate, and you are not under an obligation to price your flowers according to a standard markup. For example, If roses cost 51 cents apiece one month and 81 cents the next month, you don’t normally adjust your retail price.
The same logic applies when it comes to the value you add to an arrangement. If you create an attractive design priced at $60 retail, there’s nothing wrong with pricing it at $69 or even $79 if it’s likely to sell at that higher price. Don’t be afraid to increase the price as long as customers are happy and pleased with the arrangement.
The best pricing strategy is to understand what your customers expect to pay and what they are willing to pay. You can actually influence this in the way you merchandise and the way you offer products on the phone.
Direct the Decisions
Setting prices is just one part of the process. The next step is to guide customers toward the most profitable choices. Restaurants excel at this through a technique called "menu engineering."
In menu engineering, restaurants remove dollar signs so customers focus on the product rather than the price. They highlight their most profitable items by using larger fonts, graphic boxes, or special labels like “Chef’s Special.” They also list high-profit items first and may even hide less profitable items at the bottom or on the back of the menu.
While customers may come to a restaurant for a steak or lobster, they often end up ordering appetizers or dessert because of how the menu is designed and how the staff encourages those choices.
Know Your Margins
Instead of guessing at what items are most profitable for you, take the time to track your margins. This can reveal some surprising opportunities to increase your profit.
For example, customers shopping for sympathy arrangements may not immediately think of a standing spray, but you can guide them toward this product by highlighting its beauty and impact compared to a funeral basket. Many customers will see the standing spray as more impressive and be willing to pay more for it.
Happy Customers
Retailers in all industries shape customer perceptions to drive sales. While there are many factors in the floral industry that you can’t control, influencing customer perception is something you can control, and it directly impacts your financial success.
The key is understanding your customers’ expectations and guiding them toward products that offer the best profit margins. By focusing on perceived value and building brand loyalty, you can influence purchasing decisions and boost your shop’s profitability.
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