How Lorraine Lea reinvented party plan selling for the digital age

How a digital overhaul has helped this Australian business change its customer set and shake up its business model

For Australian linen and homewares brand, Lorraine Lea, decline had set in long before the COVID-19 crisis hit.

The 30+ year old business had found great success through much of its existence using a party plan sales model, but in recent years had struggled as consumers turned to online suppliers. Then COVID-19 hit and Australia went into lockdown, and Lorraine Lea’s revenue threatened to go into freefall, dropping by more than 40 per cent in March.

Thankfully, CEO, Anne Petracca, and her team had started developing a plan way back in 2016 that would not only enable the company to manage through this unexpected crisis, but put it back on a path to sales growth and geographic expansion.

“Back then we identified that we were at a crossroads,” Petracca tells CMO. “Our party plan business was losing relevance in the market, thanks to the shift to digitisation and apps and the way consumers were shopping. We knew then for us to maintain relevance, we needed to shift and start to do business very differently.”

Petracca also knew Lorraine Lea was using an ERP system that was 20 years old and stifling making changes to the business. But rather than just tacking a new website or app onto old systems and process, Petracca and her team set about completely reinventing Lorraine Lea’s business model and delivering this through a new ecommerce engine and backend system built on Pronto Woven.

However, this change meant essentially walking away from in-home parties as its primary sales mechanism – something that would be a big change for the company’s 1000 independent salespeople.

“This was not about just opening up a website,” Petracca says. “This was about providing our independent salespeople with their own personalised site, so when customers came to the website it was personalised with their photos and messages.”

This step was essential to ensuring customers could be associated with specific salespeople, and that they could be properly rewarded for the revenue they brought in.

“From day one we started to communicate and seed the idea and bring them on that journey,” Petracca says. “A lot of it was about building trust and being very transparent on what we were trying to do.”

In a case of extraordinarily good timing, the new business model and site was ready to go live three weeks before lockdown started.

“Had we have not had the new website, Lorraine Lea would currently be closed,” Petracca says. “We were down 46 per cent or so in March, so we were really starting to think ‘what’s going on?’. But we knew we had some good people who were young and savvy who already understood social media and how to integrate that into the business. So we just really partnered with top people in the field to draw on their experience to help us educate our other stylists.”

That process of education meant working with salespeople had to quickly familiarise themselves with the outreach channels that were still available to them. With home parties effectively banned, the company turned to Facebook as a platform for hosting digital catalogue events.

The strategy appears to be working well. Petracca says Lorraine Lea has seen an average increase in sales of 38 per cent over the past three months – a remarkable change not only due to the initial decline it witnessed earlier in the year, but also in light of the fact revenue had been declining for several years before that.

A new customer mindset

Furthermore, Petracca says the switch to online selling has also appealed to a new generation of salespeople, with its independent salesforce growing to just under 1600 now, compared to 1000 at the start of the year.

While part of this growth came through people seeking an additional income stream to assist them through lockdown, the online model has also attracted people who might have otherwise been unwilling to go into people’s homes to run parties.

“There has always been a fear factor that has held people back from joining a traditional party plan company,” Petracca says. “Moving to an online model, we actually introduced a whole new level for our business, of what we call a ‘stylepreneur’, and that is enabling someone out there to sell Lorraine Lea product purely online.”

The online model has also enabled Lorraine Lea to revamp its marketing by shifting away from monthly promotions to flash sales and weekly offers, including one-dollar shipping campaigns.

“They were promotions we had never ran before, because our old system never gave us the capability,” Petracca says. “And what we learned was flash sales are far more effective than a monthly offer.”

None of this would have been possible, however, within the introduction of Pronto Woven. But while the software’s functionality has been vital in enabling Lorraine Lea to build what it needed, Petracca says it was the implementation process and the working relationship with Pronto Woven which proved most critical.

“Part of the challenge was we were taking our business from this traditional party plan model and reshaping it into something that was very different,” Petraccca says. “We were constantly having to think about ‘what the does future need?’, not ‘what do we need now?”.”

According to Pronto Woven’s manager and head digital strategy, Chris Stolke, an agile approach allowed the Pronto Woven to experiment with different processes and workflows throughout the implementation process.

“Without it I don’t think we would have achieved a result,” he says. “Agile helped us build every feature without Lorraine Lea knowing what the feature needed to be, because they couldn’t always explain it to us, and we couldn’t have written a specification for it. And there were numerous times when we shifted and changed. If it wasn’t iterative, we would have struggled a lot.

“The biggest challenge for us was to get our heads around th way Lorraine Lea worked with their stylists and getting the incentives right. And the other challenge was then taking that understanding and then trying to transcend the complexity. The end experience needed to be simple, but to achieve that we had to do a lot behind the scenes.”

With the system now well bedded down and generating results, Petracca says the company has been able to focus its attention beyond managing through COVID-19 and is even starting to think about the possibility of international expansion.

Read more on how businesses are pivoting digital strategy:

Follow CMO on Twitter: @CMOAustralia, take part in the CMO conversation on LinkedIn: CMO ANZ, follow our regular updates via CMO Australia's Linkedin company page, or join us on Facebook: https://www.facebook.com/CMOAustralia

 

 

 

 

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