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SAF Wednesday E-Brief
April 6, 2011
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In this issue ...
  • Negative Publicity Update: Theatre and Baker Rethink Ads
  • Senate Passes 1099 Repeal Bill, Sends it to Obama
  • Bipartisan Effort in House Attempts to Make Estate Tax History, for Good
  • Update on Colombian Trade Agreement
  • Colombia Government Plans To Stimulate Floriculture
  • Consumer Confidence Shaken, But Many Retailers Still Optimistic About Economy
  • Business Builders
  • Best Practices
  • Trends
  • Life at Work
  • Tip of the Week
  • Mark Your Calendar
  • Spotlight


  • TOP NEWS




    Negative Publicity Update: Theatre and Baker Rethink Ads
    By Jenny Scala

    A Utah theater realized the error of its ad and promised "more sensitivity" in the future.

    Two companies have decided against using “flowers” in promotions after SAF asked them to remove disparaging references, while a Canadian cookie company remains silent about its negative advertisement.
    • Hale Centre Theatre in West Valley City, Utah published a print ad that said the gift of musical tickets, “Lasts a lot longer than Flowers.” Three hours after SAF asked the company to avoid making negative references in future promotions, Mark Dietlein, the theatre’s president, CEO and executive producer, replied: “So sorry. It hadn't even crossed our mind that the ad would alienate anyone from wanting to buy flowers.” Dietlein added that the company “loves flowers” and buys them often. “We will be more sensitive in the future,” he said.

    • Dream Bakers posted an image on its website reading: “Need an ‘I’m sorry’ gift — instead of flowers send a brownie bouquet ...” SAF wrote the company’s owner, “consumers choose Dream Bakers’ Brownie Bouquets for many positive reasons. Therefore making a negative reference to flowers to make your products look good seems unnecessary.” Dream Bakers must have agreed. A new link for “I’m sorry” gifts appears on the site, and it makes no mention of flowers.

    • Cookies by George in Edmonton, Alberta, uses the slogan “Because You Can’t Eat Flowers.” SAF sent a note asking the company to reconsider the phrase. At press time, Cookies by George had not responded. The company also has an ad in the “Florists-Retail” section of the Yellow Pages in Winnipeg, Manitoba, that reads: "Thought about a tastier gift? Because you can’t eat flowers.” SAF asked Yellow Pages to reconsider its placing of the ad. “Florists begin to question the value of purchasing an advertisement in the Yellow Pages when they see a lack of credible standards,” SAF wrote Yellow Pages. At press time, Yellow Pages had not responded.
    SAF is the voice of the industry. To report negative publicity, contact SAF’s Jenny Scala at 800-336-4743 or e-mail jscala@safnow.org.

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    Senate Passes 1099 Repeal Bill, Sends it to Obama
    By Brian Gamberini
    Due to relentless pressure from small business owners, including many SAF members, the Senate voted Tuesday to repeal the expanded 1099 reporting provisions.

    The Senate passed H.R. 4, the Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act, by an 87 to 12 vote. (See how your Senator voted here.) The bipartisan bill now goes to President Obama to be signed into law, which is expected soon. The Administration put out an earlier statement that it opposed the offset used to pay for repeal, but did not issue a veto threat.

    President Obama has said repeatedly that the expanded 1099 requirements should be repealed, but he has never accepted either the House or Senate version of how to pay for it. The White House issued a statement yesterday calling repeal “the right thing to do.” Although the statement said nothing about the offset, it will be very difficult for the President to veto this bill.

    In the past year, members sent hundreds of emails, made phone calls and, most importantly, lobbied for repeal during Congressional Action Days last month. Speaking with a unified voice and joining other small business groups created this success, said Jeanne Ramsay, SAF’s senior director of government relations. “Your voices were critical throughout the debate,” she said. “Congress should have passed repeal sooner but the good news is they listened and finally did the right thing.”

    It was almost a year ago (April 29, 2010) when Dan Lungren (R-Calif.-3) introduced a bill in the House to repeal a then little-known paperwork reporting provision in the health care law. SAF immediately began educating legislators about the negative impact on growers, wholesales and retailers. Soon after that, Sen. Mike Johanns (R-Neb.) became the lead sponsor of repeal in the Senate.

    “The new provision promised to be a paperwork explosion,” Ramsay said.

    Starting Jan. 1, 2012, small business owners would have been required to send an information return to the IRS (and to the vendor or service provider) for purchases of any goods or services that exceed $600 in a calendar year. Under the new law, businesses would have been required to issue the 1099 forms to a host of corporations, including airlines, hotels, restaurants and companies performing services such as lawn care, snow removal and building repairs.

    On top of that, the law would have required business owners to issue the forms to office supply stores and to all vendors for flowers, ribbon, vases, wire and foam, for example. The challenge was even greater given the requirement to obtain the tax identification numbers (TINs) from all vendors. The provision added penalties and fines for failing to correctly file the forms on time.

    The Congressional Budget Office estimated that the provision, tucked into the health care law, would raise about $19 billion for the Patient Protection and Affordable Care Act by capturing previously unreported, but taxable, income. While the provision does not relate to health care, the idea behind the expansion was that, when third parties report a business’ income to the IRS, compliance increases.

    Soon after the expanded 1099 requirements were announced, public outcry was predominately negative, leading to bipartisan support for its repeal. The House passed H.R. 4 in early March by a vote of 314 to 112, with 76 Democrats in support.

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    Bipartisan Effort in House Attempts to Make Estate Tax History, for Good
    By Drew Gruenburg
    A bipartisan group of lawmakers introduced a bill March 30 to permanently repeal the estate tax.

    In the House, Kevin Brady (R-8-Texas), introduced the “Death Tax Repeal Permanency Act of 2011,” H.R. 1259 with eight cosponsors.

    The new bill builds upon legislation passed last December, which reduced the tax rate and increased the exemption level for two years. “The ‘Death Tax Repeal Permanency Act’ aims to finish the job by making it permanent,” said Jeanne Ramsay, SAF’s senior director of government relations.

    The law allows for an exemption of $5 million per person and a top rate of 35 percent. SAF supports these modifications, as they would help small business owners devote their resources to running their operations instead of planning for the estate tax.

    Unless Congress acts, on Jan.1, 2013, the tax will return to its pre-2001 levels of 55 percent on estates of $1 million or more for individuals and $2 million or more for married couples.

    “We are pleased with the action taken by Congress last December,” Ramsay said. “But more work needs to be done to ensure the voice of small business is heard.”

    SAF will continue to support permanent estate tax relief and closely monitor ongoing repeal efforts on Capitol Hill.

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    Mother's Day Fresh-cut Preserved Florals

    Our preserved gardenias, orchids, callas, carnations, hydrangeas, ferns, roses and lavender make lovely Mother's Day, bridal, prom and special occasion arrangements, corsages and keepsakes.
    MORE


    Update on Colombian Trade Agreement
    By Drew Gruenburg
    At press time, SAF had learned that the U.S. and Colombia were about to announce that an agreement had been reached on a free-trade deal. This is after several weeks of intensive negotiations centered on labor conditions in Colombia. The agreement was signed five years ago but had never been ratified by Congress. This new development paves the way for Congress to begin a path towards ratification, although no timetable has been set.

    Once ratified by Congress, the deal grants duty-free status to all flowers coming into the United States from Colombia. At this juncture, Congress still has not taken any action to extend the Andean Trade Preference and Drug Eradication Act (ATPDEA).

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    Colombia Government Plans To Stimulate Floriculture
    By Katie Hendrick

    President Juan Manuel Santos proposed eight stimulus initiatives to help Colombian floriculture.

    The Colombian president has proposed eight stimulus initiatives specifically for floriculture, an industry that produces nearly 200,000 jobs.

    “We know that well beyond the production and exports, the flower industry over many years has been a model of innovation, ecology and social responsibility,” President Juan Manuel Santos said last Thursday at the general assembly of Asocolflores, the association of Colombian flower exporters.

    Santos’ initiatives include educating foreign markets about Colombian flowers, improving shipping and making credit more accessible to farmers. The government did not indicate how much money it will invest.

    Additionally, the Ministry of Agriculture, which has already directed nearly $520,000 to growers impacted by an especially harsh rainy season, will continue to help rebuild the industry.

    “The initiatives point to a message that I have said but now want to reiterate,” Santos said in making the announcement. “The flower producers have had, have, and will continue to have the support of the national government. It is a sector that we admire for its contribution to formal employment, for their dynamism in foreign trade and because it shows the world the best image of Colombia.”

    Since the new administration came to power in August, Asocolflores has “had an outreach plan — including personal visits and presentations — to broach the socioeconomic importance of Colombian floriculture and its influence on 48 municipalities throughout the country,” said Augusto Solano, president of the association. Solano is most encouraged by the government’s eagerness to promote the “Colombia, Land of Flowers” brand name in markets beyond the U.S., where Colombia currently supplies nearly 70 percent of the country’s cut flowers.

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    Consumer Confidence Shaken, But Many Retailers Still Optimistic About Economy
    By Ira Silvergliet
    As SAF prepares to distribute its Economic Outlook Survey covering the first quarter of 2011, we review some of the economic events and trends that have occurred in the past few months.

    The Economy
    2010 ended on a high note, with factory productivity up, low inflation, shoppers spending and companies hiring. Holiday sales, including those in the floral industry, were up, compared to 2009, spurring feelings of optimism as consumers, business owners and economists looked ahead to 2011. Consumer Confidence rose in January to 60.6 (from 53.3 in December) — its highest level in eight months. A Gallup poll revealed there were twice as many economic optimists than pessimists going into the new year.

    But, alas, that optimism has been challenged. By the end of February, oil prices reached near record highs, with political unrest in the Middle East hinting at oil disruptions. March brought a three-tiered disaster to Japan: earthquake, tsunami and nuclear crisis.

    Americans didn’t ignore these global factors as they pondered their economic futures. The Conference Board’s Consumer Confidence Index fell in March to 63.4 from a revised 72.0 in February (a three-year high), reversing five straight months of increases. Nine in ten Americans said they already felt the sting of gas prices; Of these, more than half plan to cut back on discretionary driving and almost all plan to reduce other discretionary spending immediately, according to an Ad Age survey.

    By late February, Gallup’s Economic Confidence Index showed 44 percent of Americans rated current economic conditions as “poor,” and 65 percent said the economy was “getting worse”. This assessment was the most pessimistic in the past two years. Gallup also found an underlying sense of uncertainty among the public. Its survey found that Americans worry more about the economy than 13 other issues measured, with 71 percent indicating they worry about the economy "a great deal". The economy has been rated the most concerning issue since 2008. (Health care led the list from 2002-2007.) The only issue the public worries about more this year than last was energy.

    What else contributed to Americans’ unease? The economy of Greece was on the brink. Home prices remained depressed and foreclosures high, while costs of materials for manufacturers rose.

    The Job Market
    The year began with an increase in unemployment, as employers released temporary holiday workers. Still, there were signs that hiring was beginning to pick up, and public concern was lessening. Firms indicated they planned to hire at the highest level in 12 years, according to a survey by the National Association for Business Economics. Jobless claims fell to a three-year low at the end of February, the third weekly decline in a month. Small businesses shared in this trend, according to a survey from Paychex Inc., which found that hiring was up for businesses with fewer than 100 employees — the highest it’s been in two years, actually. Job creation, however, declined in late March, reverting to January’s level, after it had been at multi-year highs the previous two weeks.

    Sales
    2010’s holiday sales rose at the fastest rate in six years. In January, spending rose for the seventh straight month, according to the National Retail Federation, which predicted that retail sales would rise 4 percent for 2011. Rhino Reports found combined retail spending was at the peak levels experienced in late 2007 and early 2008.

    By February, retail sales had their biggest gains in four months, capping eight months of advances, according to the US Commerce Department. Spending rose steadily through early March before turning south in the third week.

    What’s Next?
    Some economic optimism still remains. According to Small Business Trends, 44 percent of small businesses expect their sales to improve “somewhat” in next 3 months and another 13 percent expect them to improve “significantly”.

    Additionally, more than half of American consumers expect to spend the same (40 percent) or more (14 percent) in 2011 than they did in 2010.

    Look for industry-specific statistics in an upcoming issue of E-Brief, once results come in from SAF’s Economic Outlook Survey.

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    BUSINESS BUILDERS


    More to Like: SAF's Social Media Hub Targets Consumers, Media
    By Jenny Scala

    SAF launched the Flower Factor blog, a "one-stop place for floral information" for media, consumers and industry members, last week.

    Consumers and the media have a new friend in their social media network: Flower Factor, a lifestyle blog from aboutflowers.com.

    SAF is harnessing the expertise of professional florists and offering ways to use flowers in home decorating, entertaining and enhancing relationships on the new site, which launched March 31.

    “It’s an engaging destination that will capture the attention and imagination of the media, influential bloggers and consumers,” said SAF Consumer Marketing Committee Chairman Steve Frye, of Baisch & Skinner, Inc. in St. Louis. “Our hope is it will inspire people to make flowers a more regular part of their everyday lives and to consult the expertise of their local florist.”

    Social media has fast become the go-to resource for the media. According to analysts at communications firm Cision, the majority of reporters use social media for research, with 89 percent saying they turn to blogs, 65 percent to social networking sites, such as Facebook and 52 percent to micro-blogging services, such as Twitter.

    Flower Factor features conversational-style posts from a dozen contributing bloggers, including florists and expert party planners, and serves as a social media hub, linking to SAF’s six online consumer resource centers, including www.nationalfloristdirectory.com, Facebook, Twitter and YouTube.

    SAF enlisted the spokeswomen from SAF’s Flower Factor public relations program, member florists and its own marketing team to contribute to the blog.

    Dubbed “The Fleurtations,” the spokeswomen include entertaining expert Jeanne Benedict, interior decorator Kelli Ellis, and relationship expert Christine Arylo. They share their philosophies on the importance of flowers and florists.

    “Having The Fleurtations speak on the industry’s behalf gives our floral message third-party credibility needed to get the media’s attention,” said Jennifer Sparks, SAF's vice president of marketing.

    As a direct result of the 2010 Flower Factor public relations program, The Fleurtations’ floral advice has appeared in more than 1,000 articles nationwide, including Real Simple magazine, Meetings & Conventions magazine, Chicago Tribune, GetMarried.com and BridalGuide.com.

    For specific floral design and trends information, the hub turns to member florists. Contributors include:
    • Carol Caggiano, AIFD, PFCI
    • Tim Farrell, AAF, AIFD, PFCI,
    • Lisa Greene, AAF, AIFD, PFCI
    • Mandy Majerik, AIFD, PFCI
    • Shelby Shy
    • Brian J. Wheat, AAF, PFCI
    • J. Robbin Yelverton, AIFD, PFCI
    Another major feature at the hub: a photo album through Flickr Photostream, flaunting SAF’s expansive collection of floral images and pictures submitted by members.

    The site will also host online events, such as a Twitter wedding party and holiday home makeover, designed to grab the attention of influential bloggers.

    “It is truly a one-stop place for floral information for media, consumers and floral industry members alike,” Frye said.

    SAF’s Flower Factor social media hub is possible thanks to SAF retail dues and voluntary contributions to the SAF Fund for Nationwide Public Relations by wholesalers, suppliers, importers and growers. Since the PR Fund’s inception in 2001, PR Fund programs have generated more than 967 million consumer impressions. Visit www.safnow.org/prfund or call (800) 336-4743 for information on how to support this important industry initiative.

    Try this:
  • Visit www.aboutflowersblog.com. Post comments about the floral trends you are seeing. On your Facebook page, link to your post, so friends and customers can share.
  • Have an idea for a great blog post topic? Contact SAF by e-mailing jscala@safnow.org.
  • Need photos? Visit SAF’s Flickr Gallery at www.flickr.com/flowerfactor. And submit your own!
  • Become a friend of www.facebook.com/AboutFlowers and share its posts and links with your customers.
  • Check your shop’s contact information and website in SAF’s Florist Directory. To update your listing, contact memberinfo@safnow.org.
  • Put The Fleurtations to work for you by posting their videos about the benefits of using flowers and professional florists in entertaining, decorating and enhancing relationships on your websites and social media pages. Choose from more than a dozen videos from SAF’s www.youtube.com/SAFaboutflowers.

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    BEST PRACTICES


    How to Prepare Your Supply Chain for the Unthinkable
    Harvard Business Review
    Companies are always shocked when low-probability events such as an earthquake or a tsunami disrupt their supply chains — as has happened after the tragic events in Japan two weeks ago — because of two fallacies. One is the mistaken belief that no corporation can prepare for such events; they can't even be predicted. The other is the persistent feeling that supply chains represent a cost.   Read more.

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    TRENDS


    Email Optimization: Improve Response with 5 Insights from 10,000 Tests
    MarketingSherpa
    Email tactics may shift over time, but the psychology of email remains. Email optimization goes beyond best practices and addresses the psychological reasons why some subscribers respond to marketing emails, while others delete them. Find out which factors help your email marketing, which hurt it, and how you can focus your messages to improve results.   Read more.

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    Daily Deals Try to Entice Customers into Buying Blitz
    USA Today
    It's been an effective marketing strategy for as long as there have been retailers. But today, analysts say, that theory is driving a sales-crazy marketplace in which retailers, desperate to survive tough times, are finding increasingly creative ways to lure consumers who consider 20 percent off as the new full price.   Read more.

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    LIFE AT WORK


    How to Deal with the 5 Worst Kinds of Employees
    American Express OPEN Small Business Forum
    Bad employees. They’re lazy, they have a bad attitude and, if you’re a manager, they probably work for you. No matter how great of a leader you are, you’re bound to come across difficult employees. Here’s how to deal with them.   Read more.

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    TIP OF THE WEEK


    Holiday Prep: Post Easter, Passover, APW Web Ads

    Holiday arrangements in your window? Marquis signs up-to-date? What are you doing to usher in the holidays for your online customers? Post SAF’s spring holiday web ad banners on your website, Facebook page, blog, etc., now and point them to the items you want to promote. Switch them daily to increase your visibility with search engines.

    New ads have just been posted for Easter, Passover and Administrative Professionals' Week. The free ads are available exclusively to SAF members. Download them at www.safnow.org/webads.


    Each SAF Spring holiday web ad comes in several different sizes. Use the widest version as the top banner for e-mail reminders to people who purchased a holiday arrangement last year.

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    MARK YOUR CALENDAR




    On the Horizon

    SAF Growth Solutions: A Mini-Conference for Florists
    June 22-23, 2011
    Dallas

    SAF Palm Springs 2011 - 127th Annual Convention
    Sept. 14-17, 2011
    Westin Mission Hills Rancho Mirage, Calif.

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    SPOTLIGHT


    Forecast Sales and Boost Profits


    Paul Goodman

    If you have people standing around or your dump is on overload, your sales projections may be out of kilter. Learn how to cut your losses and boost your bottom line with better sales forecasts. Order the SAF DVD Better Forecasts: Better Florists featuring floral industry financial adviser Paul Goodman’s webinar presentation. You’ll learn how to:
    • Forecast day-to-day and holiday sales.
    • Put your forecasts to work and reduce your cost of goods sold.
    • Use sales forecasts to increase productivity and cut labor costs.
    SAF Members Save Nearly 70 percent
    SAF Member price: $49.95 (Non-members: $149.95)

    Order the DVD now!

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