Saffron Rouge takes a holistic approach to the beauty market, offering certified organic skincare and aromatherapy items over the Web. And CEO Jeff Binder is similarly holistic about his company’s business: Get the brand positioned properly, then apply metrics to make sure every marketing step is right, and he believes good things will happen—naturally.
Market position was the first decision he and his wife Kirstin made when entering the retail beauty products world in 2002 (that is, after naming the company after their daughter Saffron and adding “rouge” to suggest cosmetics.) They decided that they weren’t interested in the mainstream beauty business but in organic treatments, something they both had experience with as herbalists.
“Brands like The Body Shop have a position as natural providers, but their ingredients aren’t totally organic and the quality is inconsistent,” Binder says. “Chains like that have grown but they haven’t evolved. And while other small operations have made a business out of selling organic products to Sephora, the site itself is the queen of mass-market beauty online.
“We felt organics were up and coming. Organic products can be tested and certified by third-party testers in a way the ‘natural’ claim can’t. Our target audience demands quality and purity, and we’re carving out a niche in that space. Other retailers sell whatever they think they can make money on; we have a very focused offering”
The Saffron Rouge Web site makes explicit both the mission and the purity promise: The Guelph, Ontario-based retailer’s 600 products are free of genetically modified organisms, and use no pesticides, herbicides or fertilizers in their production. Neither their products nor their ingredients have been tested on animals. In fact, Binder says, the site is currently undergoing a redesign to bring that quality guarantee even more to the forefront.
Although Saffron Rouge’s product line is simple, that doesn’t mean its Web technology isn’t robust. Binder decided early in the company’s life cycle to build on a sturdy NetSuite platform that can give him a highly integrated view of what his visitors and customers are buying and how often.
This allows Saffron Rouge to segment its customers by both how recently they’ve purchased and their lifetime value. Customers who’ve gone inactive and are in danger of “falling off the bus” are e-mailed with special offers tailored to their last purchase. The top-spending customers are further segmented into platinum, gold and silver categories and offered occasional specials to thank them for their patronage.
With new customers, Binder has recently taken to sending both a thank-you e-mail for a first purchase and a thank-you snail mail letter. “We introduced the mail piece for new customers about a month ago, when I noticed that our first-timer e-mails were getting open rates of 20% to 25%,” he says. “That’s industry benchmark, but it bothered me. It meant that almost 80% of our new customers weren’t reading about our mission, our focus and our brands. That’s one of the most important messages we can communicate to new clients.”
Communicating is a theme that runs through the entire sales cycle at Saffron Rouge. When orders are packed, a trained customer care team examines the customer’s buying habits, chooses sample sizes of other products they might be interested in and includes them in the shipment, along with a note about their virtues and uses. Binder can’t say what impact this has on increasing sales, since the company has done it since the beginning. “The metrics are just too painful, even for a measurement guy like me,” he says. But he hears anecdotally that products that go out as samples more often than not return as orders the next time the customer visits.
It’s also important to get samples out to the users because Saffron Rouge isn’t selling well-known beauty brands such as Clinique or Estee Lauder. Rather, they offer exclusive, mostly European lines such as Dr. Hauschka skin care items, Primavera oils, Weleda beauty products, and the Lavera line of products for skin sensitivities.
The company sells mostly though its own Web site, but Binder has had a storefront on Amazon for about a year now. While that store sells well, he says learning to work with Amazon was a learning experience. “You don’t have access to the same level of metrics,” he says. “Success depends on how well positioned your products are in Amazon’s browser tree, and how well you fare with their search terms, since more than half the sales on Amazon come after a customer search.” Other factors include a merchant’s ability to win a prime spot on the home page or lead category page with special offers. And the item records for products on Amazon stores are huge, he says, requiring a lot of set-up time and constant maintenance.
Still, having a home on Amazon is “worthwhile, though not vital,” Binder says. “Amazon’s advantage is its prodigious customer base. We’re getting new customers all the time from that channel, clients who might not otherwise find us.” The move has been so positive that Saffron Rouge is now rolling out integration with 15 other Web marketplaces that use the same platform as the Amazon site. He expects that those new Internet shopping malls combined will eventually produce more revenue than the Amazon store has.
One factor important to Binder as Saffron Rouge rolls out into the Web malls is control of the customer experience. “When a user clicks on our marketplace store, they’ll be sent to our Web site to shop,” he says. “We control the message, the products, the imagery and the pricing.” And does he worry at all about diluting the Saffron Rouge brand by entering so many Internet shopping sites at one swoop? “A little. But the markets are solid channels and they’re here to stay. And I know my competitors are doing it, so if we’re not there, customers are buying from someone else.”
There are other new developments afoot at Saffron Rouge. The Web redesign alluded to will take what is now a very product-driven site and give it more of a personalized community feel, possibly including blogs or forums for customer-to-customer messages. The revamped site will also make Kirstin binder more of a presence, offering personal, straight-from-the-hip reviews of each product.
A Saffron Rouge catalog is also under consideration, if binder can make the metrics work out. “The returns have to be pretty high to justify the costs of cataloging,” Binder says. “But we found in a recent customer survey that although the majority of our customers prefer to shop online for beauty and aromatherapy products, a significant minority would like to shop a catalog, then go online to buy.”
That same survey indicated that 95% of Saffron Rouge’s buyers found its products very good to excellent, and almost 96% same the same of the company’s service. And 95% said they would recommend the merchant to their friends.
To Binder, that’s validation that he and Saffron rouge are properly centered in their market category and successfully communicating their identity. For all that metrics are important to marketing, they take a back seat to those tasks.
“Positioning is fundamental,” he says. “Either you’ve got to have some positioning advantage in your category, something that sets you apart from everyone else, or you’d better have $50 to $100 million backing you up. And even then you’d better be ready to apologize to your venture capitalists.”
