Data Management for Marketing Alpaca Products
Heartfelt’s project had a great year in 2014, although it didn’t always follow the schedule and activities we anticipated.
We began in spring 2014 seeking bids and negotiating with marketing and data consultants. We are thrilled to report that we were able to engage Ken Weiss and Ken Mannheim of Weiss Creative LLC in the overall design of our marketing message and strategy. These gentlemen bring a national perspective and an outstanding record of success in the alpaca industry to our project. They agreed to provide the “big picture” and to work with a local company, Igniting Business, on implementation of the marketing work. This national-local team allows us to bring expertise to the project that would otherwise be beyond our budget.
We spent the summer and fall making decisions about and developing the foundational materials for our marketing work. We now have a concise statement of Heartfelt’s overall message, and we have a new logo, a typeface, and a color palette that support this message. We researched 33 trade shows and have narrowed that list to three or four that appear to be the best fits for Heartfelt. Business cards and labels for our insoles have been designed, and work on a new website is underway. The overall marketing strategy has been articulated, and by mid-January we will have a calendar in place for implementing this strategy.
We also began work on the database side of the project in the spring with continued discussions with database experts about the best software solution for our goals. We spoke with and sought bids from seven experts, and settled on QuickBooks Premier with three additional applications from Baus Systems LLC that work with QuickBooks to generate and print barcodes. We hired Accounting Plus and worked with them during the summer months to set up QuickBooks for us.
That led us back into a research mode, and we examined and compared the terms and capacities of five flat-rate credit card processing services (Square, Amazon, Paypal, SecureNet, and PayAnywhere). Only Square currently offers the ability to upload inventory files, use a barcode reader, and download inventory files. After a phone consultation with Joan Benjamin, we decided to use the funds originally budgeted for QuickBooks training to purchase an iPad and Square Stand. We have now established a Heartfelt Square account and have uploaded an inventory file so that we can transition our sales and inventory data management on January 1 to couple Square with our Excel spreadsheet.
As described above, our results so far include the following:
- Contracting with marketing and database experts
- Purchase of equipment and software, including an iPad and Square Stand that were not originally budgeted
- Research on 33 trade shows
- Development of a QuickBooks file for Heartfelt
- Establishment of a Square account and inventory file
- Development of foundational marketing message, strategy, and materials
Perhaps the biggest lesson to date has been that there does not appear to be an off-the-shelf software solution for small, vertically integrated farm businesses. The Excel spreadsheet that we current use for Heartfelt’s record keeping has a worksheet to calculate the facilities, fiber and labor contributions of each member. When a product sells, those contributions are proportionately applied to the income from that product (i.e. we have been paying ourselves for facility rest, fiber and labor only as we have sales). What we discovered about QuickBooks is that, in order to replicate this arrangement, we would end up with a more complicated system that required us first to learn QuickBooks and then to go back and forth between QuickBooks and Excel in order to calculate what was owed each member. As a practical matter, this would mean that we would only know how much we were netting for each member at the end of the year rather than on an ongoing basis as we do with the current Excel spreadsheet. In addition to this barrier, we also discovered that QuickBooks would not support the number of descriptor fields that we needed for our products. If we are to monitor sales and act on that data, we need to be able to parse our products to see which variants of a given product are selling. And then there was the learning curve for QuickBooks to consider.
So before we invested more time in learning to make QuickBooks Premier do things it apparently wasn’t intended to do, we spent some time researching other options. One Heartfelt owner uses PayAnywhere to process credit card sales and knew that it had some inventory and reporting capabilities. That led us to look further at what credit card processing services had to offer. We knew from hard-won experience that traditional services are far too costly for a small, seasonal business, so we researched all of the flat-rate services we could identify.
What we learned is that Square seems to be in the lead in moving toward servicing small businesses rather than just individuals and micro-businesses. This was the only service that allows bulk inventory files to be uploaded, products to be categorized, variants of products to be included, and barcode readers to be used. We are still on a learning curve with the reporting capabilities of the Square software, but we can so far report that it allows reporting by category, item, customer, and date. The last two will be important as we analyze the results of our marketing efforts in 2015. The value of reporting by customer is probably obvious. The value of reporting by date will allow us to answer such questions as whether we do better with alpaca farm stores in the spring following shearing or in the fall when the stores are selling more product, and how much we sell at specific trade and/or craft shows.
Since we will not make the transition to the Square data management until January 1, we have yet to establish how smoothly sales data that we download from Square will integrate back into our Excel spreadsheet. Another question that will be answered in 2015 is whether we will still need to set up macros in Excel to get more detailed data on the sales of the variants of the individual products, but it is possible that this won’t be necessary with the Square reporting tools.
On the marketing side of the project, one successful strategy that we discovered is the placement of flyers in the show bags for alpaca shows. We did this for a handful of shows last spring to encourage farms to have Heartfelt make their fiber into insoles for sale in their farm stores. This proved to be an extremely cost-effective strategy that yielded a substantial increase in insole sales for 2014. We are feeding this information into the discussions with the marketing consultant and among the Heartfelt owners as the marketing calendar for 2015 is developed in the first two weeks of January.
WORK PLAN FOR 2015
Our work plan for 2015 will have three strands of activity:
- Implement and assess data management combining Square and Excel
- Implement and assess the marketing calendar using the new tools developed in this project.
- Develop template data and marketing files to share with other farms
With the extent of research we have done on data management tools, we are feeling at this point as though the “heavy lifting” is at last behind us. By combining Square and Excel, we have a solution that we believe to be far more replicable for other small farms and far more useable for Heartfelt. The cost of the Square solution–$400 for the iPad and $100 for the Square stand–is far less than the $900+ we spent on QuickBooks and the Baus software and much more affordable for the average small farm business. The learning curve for importing and exporting inventory lists to and from Square is a bit of an investment, but we will develop template files and instructions that we will share, minimizing that learning curve for others. Reporting tools in Square are far more user friendly that QuickBooks. While we regret the time and money we invested in QuickBooks and the Baus products, we do believe that the information we gained from those investments will have a good deal of value in saving other small farms from similarly lost time and money.
When we laid out our calendar for our marketing consultants this summer, they warned us that our timeline for the foundational decisions might be optimistic and that it was important to make sound decisions on those items so that they could then drive the rest of the work. This proved to be the case, so that we are two or three months behind where we thought we would be in implementing the marketing objective. As it turns out, the trade shows for the fall buying cycle are in the spring and summer months rather than the winter as we’d expected, so we will still have all of the materials we need in time for the 2015 shows.
Other than informal conversations with other alpaca breeders, all of our information sharing will happen during 2015. As discussed in our original proposal, we plan to share search strategies for finding trade shows, information compiled on trade shows, template marketing documents, marketing task schedules, and database template files and associated instruction manual. The timeline we originally proposed extended through March 2016, while our award extends only through December 2015. The MOPACA and national alpaca shows are both held each year in March. Because March 2015 is too early to report the results of our marketing efforts and March 2016 would require a no-cost extension, we will probably select a large fall alpaca show as a venue for sharing the results of our project. Sharing via a farm day at Curly Eye Alpacas is still viable since we can schedule that as appropriate. The National Small Farm Show is a fall event that may be available to us as a venue for sharing the results of our project in 2015. We expect the MOPACA newsletter will accept an article on the project. Finally, we will make our electronic resources available via our website.
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