Partners in Name and Domain
PC FLOWERS & GIFTS INC., Stamford, CT, has developed a method of turning Web-based sources of leads into partners, using a business model that gives both it and corporate affiliates an incentive to nurture customer relations.
Often the “partnership” between two Web companies is limited to a banner ad with a link to the ad sponsor’s Web page. Compensation consists of either a flat space-rental fee, or perhaps a one-time consideration (based on the consumer’s initial order) given to the owner of the gate site.
Under agreements between PC Flowers & Gifts and its partners, consumers who explore PC Flowers & Gifts through an affiliate’s site-MasterCard, for example-are linked to a jointly branded site-http://mastercard.pcflowers.com (or whatever the partnering company is).
If the customer bookmarks the site, all subsequent visits are credited to PC Flowers & Gifts’ partner, which receives a 10% commission for flowers shipped directly from the grower; a 7% commission for flowers and balloons shipped from an FTD florist; and an 8% commission for any gourmet foods or gift baskets sold.
Names captured from orders become the joint property of PC Flowers & Gifts and the partner in question. While PC Flowers & Gifts will not rent its list, it can’t control what its partners do-although the company takes pains to explain its policy about guarding names, and recommends that partners follow suit.
While all of PC Flowers & Gifts’ jointly sponsored Web sites contain similar presentations, president/CEO William Tobin plans to add customizing capabilities within the next two to three months. Customizing will allow a partner to make offers that tie in with featured products or services.
Tobin is very protective of his company’s brand, and has strict requirements regarding the types of sites he partners with. “They have to be mother and apple pie,” he says. Sites that contain even faint whiffs of explicit sexually oriented content, exploitation, racism or controversy have been denied partnership agreements.
Underperformance will get a partnership terminated as well. Given the expense Tobin incurs with each site-cutting checks, printing activity reports, and site maintenance-a site has to show adequate returns. But the decision to cut is made on a case-by-case basis.
“I had some huge partners that [generated no business] for six to eight months, but I knew they were allocating resources and trying to figure out how to get traffic,” Tobin says.
One “partnership” that opened up opportunities for PC Flowers & Gifts was with Fingerhut Corp., Minnetonka, MN, which recently purchased a 19.8% stake in the company.
“For every dollar they gave me, [I got] 10 in resources,” says Tobin. The agreement gives his company access to 3.5 million square feet at fulfillment and call centers in St. Cloud, MN, as well as a chance to parlay Fingerhut’s jewelry, cosmetics and specialty foods lines into additional marketing possibilities.
