Questions for The Hornware factory – answered by Peder from the Hornware factory in March 2019
- How much does it cost to require a new customer?
It’s very hard to answer this because of the various target groups which are on both the B2B and B2C markets. Furthermore, it also depends on how we get into contact with the customers – physically (Fairs, in the shop etc.) or online (SoMe, Adwords, shopping, SEO etc.) An example could be a customer reached through Google Shopping, which in average costs 115,92 Dkk per 3 months.
- How big a percentage of your customers are ”return customers”?
Very hard to estimate since the customers shop from different platforms, and at the moment we are not able to track customers and their journey on our various platforms. Furthermore, the GDPR restrictions are not helping us out, and many customers shop through a guest-login. We do have returning customers – both German tourists, local residents and online shoppers.
2.1. What do you do to increase the amount of returning customers?
We aim to make our service the best possible, so the customers trust us and feel safe buying from us. We also try to become better at communicating and marketing our company and products.
- How many customers buy from you more often than 3 times per year?
Unfortunately, I don’t know
- You are loosing a lot of money on not automating parts of the production. Why have you chosen not to focus on this part?
We do spend a lot of money on the parts of the production process which can be automated, but there are parts that can’t be automated, since the employees constantly have to evaluate the quality of the horns and see the faults in the raw materials. It is by no means cheap to automate and make the production more efficient, so we always calculate the investment compared to the individual products and the amount in which they are produced.
- When looking at the current situation in society, shouldn’t you have more focus on CSI?
CSI consist of many things, and we do our utmost to follow UN’s 10 principals. We are not fair trade certified, since most of our production is in Denmark. We could do more to describe and inform about the horn’s journey from the cattle farms to our factory. At the moment we are working on a link-building, where the domain name will be ko-horn.dk
- Your range of products are quite different than others in the market. How do you use C2C (viral marketing) in your marketing?
We don’t work with this area.
- Have you been looking into your price elasticity? Your products seem to be less expensive than expected. Maybe you could benefit from the idea ”higher prices, less products”. What are your thoughts on this?
Our margins per product vary considerably. Usually we look into B2B and B2C margins, where on the B2B we have low margins for the customers, while on the B2C we have higher margins. The B2B prices sets a limit as to how much we can charge for a product, since the B2B customers cannot sell product to other customers if the purchase price is too high. This is the reason why we are trying to narrow the product range for the B2B customers and instead increase the product range for the private customer. Hereby we only use our own sales channels and will reach higher price elasticity and margins.
- What is your ROI in the various marketing channels?
Good question, which is basically impossible to answer, since we have so many platforms. Marketing cost is much more than just the price of an add, but more a question of time since most of the adds are for free. We are able to say that it costs 115 dkk for a period of 3 months on Google Shopping per customer.
- How large is the waste per horn in percentage?
Between 65-80% – we calculate the % of the weight, but for some products the wastage is higher than on others. We do not keep records of the wastage per product.
- Which companies do you see as your biggest competitors? National and International?
Direct competitors are Vietnamese (VietHorn) and Indian companies, which produce large quantities of spoons and jewelry made from horn. Another competitor is European importers, who are customers of VietHorn and the Indian companies.
- Which brands are you most pressured by in the marked?
Often it is not brands as such, but just less expensive products.
- When the customers buy from your webshop, how do they receive the products? (e.g. packaging – do you do anything special to make the experience of receiving your products extraordinary?)
We are very much aware of the customer experience in receiving the products, and we aim for “the old-fashioned-experience”, where the customer experiences that we have taken the time to wrap the products carefully in silk paper wrapping and boxes, and the right amount of storytelling to go along with the product and experience. You can see the boxes online if you are interested.
- Which company do you use for the freight to B2C and B2B customers?
In Denmark we use GLS and PostNord and internationally we use UPS
- How is the sales distributed between your jewelry? Which do you sell the most and least of?
We sell most bracelets, hair accessories and some safety pins for scarfs. We do not have an overview of the total sales of jewelry since we have it divided between the shop, online sales, private fairs and B2B sales. All these sales are not listed on the same location in our warehouse, and we therefore do not have one list with all the jewelry sales. If I made one complete, it would not be give you the correct image of sales channels and sales for the various target groups.
- How is your marketing budget divided between the various activities? Where and how often do you advertise for the company and/or specific products? What is the size of your marketing budget?
We use the most money on advertising towards tourists in Aarhus and Vestjylland (Western part of Jutland). Then comes online marketing like Google Adwords and Google Shopping. Facebook is the smallest of our online costs. We use much time internally in the company to update and make our own “free channels”.
- Who is in charge of your online presence and how much time is spent on it?
We do that ourselves, and we do not spend enough time on it. The goal for 2019 is to spend more time on SEO and linkbuilding.
- What has the strategy and overall thoughts for your online platforms been so far?
Our strategy is that we have no strategy, since we keep trying new things to see what works. Our SoMe is specifically used to build a customer base and keep it updated about our company and our work. In general, we are skeptical regarding sales and SoMe, since we cannot see SoMe generating a lot of sales. Facebook is our channel for business related news and Instagram is where we focus on products and lifestyle.
- How long have you had your current logo? What is the history and the value behind the logo and company name?
The logo we have had since 2008. The company name is Danish and a little old-fashioned. Seen from an international perspective we ought to change it, but especially because we have solid roots in Danish cultural heritage, we have chosen to keep the name. Before the company was called “Hornvarefabrikken Husflid” and we changed it to Hornvarefabrikken in 2008. The logo had to relate to the word “Horn” in our company name in the simplest way possible.
- Do you consider “economy of scale” in the production of jewelry?
All our jewelry is handmade, so economy of scale would be hard. We can make some of the smaller jewelry faster though. The time spend to produce the jewelry varies a lot depending on the size and form of the jewelry.
- Who is your primary target group? And which specific target group do you have for the jewelry?
Women 40+ for the most products. Women are also the target group for the jewelry, and we try to make products which will attract the younger women.
- Do you have an overview of where in the country most of your sales come from?
The areas around Lemvig, Holstebro and Ringkøbing-Skjern. Mainly due to the fact that it is local customers, but also because of tourism. Apart from that we naturally send many packages to Copenhagen, but in general we ship to all parts of Denmark.
- Where do you see Hornvarefabrikken in 5-10 years from now and what is your goal for turnover?
In 5-10 years from now our online sales has increased and our physical stores will be more of a pop-up-shop concept in the times of year when the customers are ready to shop and spend money. The shop in Bøvling will be better at communicating and creating the authentic experience in regards to history, production and sales. This shop will be the most important sales channel. In 2024 we will sell for 6 million Dkk – the B2B sales will be lower, while the B2C sales will increase.
- How often do you go to the physical store in Aarhus?
1-2 a month, but often outside of usual working hours, since we are there to update and restock the store, which is better done when there are not customers.
- Which work related tasks do you spend most time on?
The production takes up much of our time, and we have 3 people working in this area full time. Next there is sales, where we also are 3 people selling from the shop and online.
How about design, customer care etc?
Not enough, since Sara does not have time during the day to design, and therefore have to work evenings and nights, and spend the days producing orders.
Is this the area where you want to spend the most time?
Sara must spend time on designing, but she does not have enough time since she also has to produce orders.
In which areas of the company would you like to spend more time?
In design. We would like to make more products in lesser quantities. We would also like to spend more time on our online presence and activities.
- Do you have patents?
No, we don’t and we won’t get any. We would rather spend the money on developing new products than protecting the designs.
