How to grow & diversify your business by training your customer base – an interview with Event Décor Direct

Every entrepreneur dreams of the moment they’ll make it to the Inc5000, a signal of success and industry recognition. We’re interviewing B2B Inc5000 companies to crack the code of HOW to get on the list (and ideally stay on!). This series will hopefully become the playbook to your success too. Today, we’re interviewing Andrew Walker, CEO of Event Décor Direct.

NXT: What exactly is Event Décor Direct?

In a nutshell, we’re a vertically integrated B2C and B2B manufacturer and distributor for professional wedding and event décor products: canopies, backdrops, lighting, foam flowers, carpets, chair covers… you name it.

NXT: How and why did you start?

We started in the depths of the recession. Previously, I owned a company called Pool Tables Direct, and we were the #2 pool table seller in the US. But nobody is going to buy a pool table during a recession… so I eventually winded down that business.

My business partner, James Lester, was in Canada and was helping his mother decorate weddings. She had a very successful wedding decoration company in Ontario, and he noticed an opportunity to go into the events industry.

He came up with the idea to do “Event Décor Direct”, a direct Internet business model in the event industry. I eventually went to Canada and built Event Décor Direct in Canada.

I hand-coded the original site, took calls, did the marketing, packaged the boxes and shipped them out. I was focused on making one sale at a time. Then, I slowly started to hire employees, and now we have about 60.

NXT: Was it a difficult transition for you to go from one industry to another? 

Not at all, I get excited about business in general. I enjoy creating the business models that have a series of sustainable inputs and outputs. I also surround myself with very intelligent people who all work towards a goal.

We have several projects that we’ve done outside the event décor industry:

  • We own crystalkayak.com, which is a single product – a clear see-through kayak – and one of our videos just went viral.
  • We invented an illuminated beer tap handle, which is patented in 118 countries.
  • We also just developed a wireless, magnetic charging system for assisted mobility devices, for wheelchairs and electronic shopping carts. We are getting a lot of excitement from government agencies and manufacturers. The goal is to have this charging station at every hospital, public facility, and even stores that have electronic shopping carts.

These are all projects that we are able to do because we’re passionate about business, and we’re always innovating different ways to make current systems better.

NXT: As an operation though, how did you go from selling pool tables to event décor?

Once you understand the different moving parts of a successful e-Commerce company, it’s easy to take that skill set and apply it to any vertical.

I identified the wedding event vertical to be very appealing for a couple of reasons:

  1. It’s relatively recession-proof. People will still throw parties and have weddings, regardless of the economic climate.  Events can be a great way to boost morale or drum up new business.  And you probably don’t want to delay your wedding for too long.  Yes, of course there will be some decline in the business but it won’t go to zero overnight.  And that was a big pain that I went through when I was selling a highly discretionary “nice to have but definitely don’t need it” item like pool tables.
  2. We also identified a unique opportunity to diversify our business model by getting into the education market. Many customers were asking us how to use our products, such as putting together a wedding backdrop kit. We realized the need for education and certification within the industry. Therefore, James and his mother took their extensive knowledge and turned it into the world’s leading academic curriculum for the wedding event industry.

NXT: How is that part of the business doing?

We formed the Institute of Wedding and Event Design (iWED, for short). It is growing 100% year over year for the past 5-6 years. We have teaching teams that travel all over the US and host 5-day seminars where we teach people to build, run, and excel in the wedding and event industry.

We’re changing lives by educating hundreds of students, where many of them go on and start successful businesses.

And of course, these are the businesses that fuel our growth. They naturally turn to us for their event décor. And as they grow, we grow!

So we’re creating a whole ecosystem by training and nurturing our own customer base since we can cross-market these 2 business models.

NXT: What does this mean for your core business?

This enables me to crush our competition in the PPC market, because most of our competitors have single-channel business models. When they spend $1 to acquire a click, all they can do to recoup that investment is to sell their product line.

By having a two-channel business model with Event Décor Direct, not only do we have a diverse offering of products where we sell chair covers and everything else needed in weddings, but we can also cross-promote iWED to that customer.

And that’s how we win in the PPC market. Same cost per click but much higher – and more recurring! – revenue on the back end.

NXT: How are you able to offer such diversified products for Event Décor Direct, unlike most of your competitors?

We started the business with nothing but a $1,000 AMEX card. When I built the website myself, I was always making sure that we would rank well with Google by having lots of product pages. If you want your site to rank, you need to build content and have “meat on the bones”

Initially, I listed products from drop-ship partners. As soon as a product would seem to be taking off, we’d look into sourcing it directly from overseas manufacturers. So we’d start building our own inventory. That’s the only way to make real money because your margin is much higher.

NXT: Why did you go with the drop ship strategy at first?

When you rely on other companies’ inventory, you’re either buying from them at a low price/quantity, or you’re paying them to ship the items in your name. It’s a huge industry, but the margins are very thin and it’s difficult to compete online with a pure drop-ship model.

Drop-shippers gave us the flexibility to offer a wider range of products and identify the winners. And then, we used our slim profits to strategically invest in the inventory that would have the highest turnover.

We never went into debt and would only order stock as profit came in. Which meant that sometimes we’d go for long stretches without any of our own inventory (even for 3 months at a time) so we’d be leaning on our drop-ship partners much more.

But eventually, fulfilling sales with our own inventory meant higher profits, and the company accelerated from there.

NXT: How long did you drop ship for?

We’re still drop shipping, but it’s not very common now. In the first 3 years, we were drop shipping a whole bunch, I would say we started to ship inventory that we manufactured around the 5-6th year.

NXT: Was it difficult to find manufacturers?

Not particularly, our first employee used to be our correspondent at a bead and crystal supplier in China. That was about 7-8 years ago, and she’s our eyes and ears over there. We have an office, and a consolidating warehouse in Southern China. This has been a huge advantage over purely US-based companies.

NXT: On the Inc. 5000, it says that you design, manufacture AND distribute products? How are you able to keep the engine running?

I think of us as an idea factory here! I run 12 companies/projects (as you can tell from the crystal kayak and other projects), so it’s a high-paced and exciting environment. We also manufacture in the USA, because our sewing floor is always innovating.

We can actually grow WAY faster and bigger than we currently are. I think our biggest limiting factor is that it’s a challenge to get capital. I see us as a $50 million company with 200 employees.

NXT: Why is it difficult to get capital for this type of business?

During the recession, there were regulations put in place on the financial industry, which ended up hurting small businesses.

It’s very hard to get traditional funding from banks, and it’s also a huge pain. But we’ve finally established ourselves to a point where we have a part-time CFO who’s whipping our books into shape.

NXT: Who are your ideal clients today?

Our first core customer group is independent wedding decorators. Secondary group of customers include banquet halls, convention centers, and hotels. And our last group are party rental companies.

But we sell to all kinds of customers, including city schools, nightclubs, restaurants, and any store that has a storefront window display.

NXT: How did you get your first customer? What kind of marketing did you do in the beginning?

PPC is the foundation of most of my companies. If I don’t have a successful PPC model to begin with, I’m not going to pursue it.

I don’t want to be one of those companies that rank organically well for a few keywords but get crushed when Google changes their algorithm. I want to pay for the traffic, and I’ll take that traffic and convert it to a sale.

My way is to build the website and get it ready to go, turn the traffic on, and watch the conversions.

NXT: What makes a good PPC campaign?

On the broader spectrum, you have to be a consumer and think like one. A good marketer understands consumers.

As a consumer, I love to shop, and I love a good deal. Let’s say I search for “wedding backdrop”. I want to be presented with a lot of options so that I get engaged, and this is the same for our customers.

To do well in PPC, you want to make sure your customer is landing on a page with a good selection, you want to make sure you’re priced competitively, the check-out process is smooth, and your website is easy to read with as much product information and many customer reviews as possible.

Ask yourself this, “If YOU were the customer, would you want to check out?”

NXT: What was your lowest CPC? What’s an average ticket price for your website?

It was probably 2 cents per click! But that was way back in the day and Google definitely won’t allow that anymore.

Average ticket price is $455, mainly because we’re doing B2B and working with event decorators. If a consumer is shopping, their average ticket price is between $30-60.

NXT: How is your marketing different now?

Our secret sauce is in our PPC strategy (Google and Bing), where we work with an agency called Metric Theory. Google is getting so complicated nowadays that if you can’t handle it in-house, you better have a 3rd party helping you out.

We work with Radd Interactive for SEO, Pepperjam to run our affiliate marketing, Criteo to run our re-targeting, Listrak to build our email marketing, and Social Annex for our social rewards and loyalty program.

NXT: Have you ever done any outbound marketing? How do you “win”?

We have never done any outbound sales until about 2 weeks ago, and this was our first time since the company started 10 years ago. One of our employees actually became fired up about initiating an outbound strategy, so we let her run with it!

We have always been very focused on nurturing inbound traffic, and we have set up all kinds of automated cadences to market to these customers regularly.

For example, when we see somebody abandon their cart, we shoot them an email. When somebody spends X amount of dollars and hasn’t purchased anything in 6 months, they automatically get an email with a coupon.

NXT: What does a typical engagement look like?  

When customers find us through their course of shopping, they will add some stuff to their cart and usually leave to go to another site. Once we get a notification about cart abandonment, we shoot the customer an email about our free shipping for orders over $500, and a coupon for that specific product they chose. They will usually check out because we end up being cheaper than our competitors.

I am always shocked when companies don’t have a ‘Request A Quote’ as one of their payment options. Anything you can do to get an order through the door is worthwhile, because the important thing is to acquire that customer. This helps solidify the order, gives them the confirmation order and gives us the opportunity to capture a lead for future outreach.

NXT: How do you stay top of mind with your customers?

I personally put together an email campaign every Sunday night for Monday morning. We have thousands of products so it makes it easy to do product features and discounts. I feel bad for companies that are only trying to sell one product. For example, how many times can you talk about insurance, or a crystal kayak?

We run a sale every Monday morning, and I select anywhere from 15-50 products that I will put on markdown. At the end of the email, I do a “customer spot light” and talk about one of our customers – people love this!

We started doing this every week 8 to 9 years ago, and our revenues became a lot steadier.

NXT: Do you have any best practices for email marketing?

Listrak knows when someone didn’t open the Monday promo email, so we’ll take another stab on Thursday with a “24 hours left” notice.

In the beginning, I toyed around with different sending days but quickly established that Monday was the day to get things going. (We tried for Tuesday, but I realized that we were losing out for sales on Monday!)

NXT: What do you wish you knew when you started?

If I knew how difficult it would be to raise capital, it might’ve discouraged me because I thought this company would be much bigger by now. But I’ve done everything that I possibly can, and wouldn’t do anything different.

NXT: What worked in the past but not anymore?

We used to do our own PPC in the past, but since Metric Theory took over they’ve cut my spending in half, while doubling my sales!

We also finally pulled the trigger on SEO about 3 to 4 years ago, and our organic traffic has gone up significantly.

NXT: What are your main priorities right now?

We’re improving our in-house video and photo facility to showcase how our products can be used in real life, because the more real life uses you can show your audience, the more you can sell them the idea of tangible goods. This also means boosting our social media engagement.

Fresh content is important, because the media and blogs are hungry for high quality content.

Another priority of ours is having more products in each category, because we have the traffic on our website. But getting the capital to expand is a little difficult, so we’re working on that.

NXT: What does it take to run a successful eCommerce business?  

It’s about seeing all the moving parts, and being able to prioritize what’s important for the business by anticipating threats and challenges that could hurt the business model.

I have been doing this for 20 years, and saw 2 of my companies’ business models implode, which was a great learning experience.

Another thing is to make your work place a cool environment; everyone is stoked to be at work and gets along great here! I love empowering people, because I want to hire people that can manage themselves. It not only takes pressure off me, but it empowers the employees.

 

A huge thanks to Andrew Walker for this interview. Event Décor Direct’s products are “field tested” and are designed for the rigors of commercial use. Andrew Walker has been involved with the eCommerce business since he was 18 years old, and now manages 12 (and probably counting) projects in Event Décor Direct’s headquarters in Florida.

Event Décor Direct

Tessa BoardStudios.com

Tess is a Business Development Associate at Board Studios Inc, an animation production agency that helps B2B companies simplify and communicate more effectively. She's passionate about B2B business models & marketing, and spends a lot of time working on partnership development, content marketing, and scouring for the best business books for BookVideoClub.com. Her blood type is an authentic caffè macchiato.

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