I met Euan at the heart of Caledonian Packaging Ltd, a room full of boxes and machinery. The thick stone walls were once part of a village. Instead of the printing tools, you would have seen cows. Euan took over the business from his father decades ago. He showed me around the facilities and shared his wisdom on customer retention.
Offering
Caledonian Packaging Ltd found their niche by offering custom packaging. Growing startups often need support from experts. So instead of ordering 10,000 cutouts of the same box, they might start with a few. That’s where Euan and his team come in.
Their main focus is on cutting out the shape of boxes. The company sometimes prints on top of the boxes. Also, they can create custom physical cutting tools. To my surprise, customers own the tools. Boards, thus, sometimes move from one manufacturer to another.
Later down the line, larger-volume businesses switch to large-scale manufacturers. But Euan told me that some companies stick with them for 30 or 40 years! These include voltage switchgear manufacturers and shortbread bakers. Even though the majority of orders are plain boxes, most of them have advanced cutouts or inserts. Having such a clear focus allows the company to deliver urgent repeat orders within a few hours.
Retention
Due to the nature of the business, Euan places a strong emphasis on repeat customers. I asked him how he tracks customer lifetime value. He said they look into repeat orders. To me, it was quite a surprise because I tend to split funnels into smaller pieces. But, simplifying key performance indicators can also work sometimes. Seventy to eighty per cent of orders at the company are repeat.
I continued to learn why companies stick with Caledonian Packaging Ltd. Euan mentioned quality and reliability as the main reasons. They build a personal connection with their customers. Sometimes the company doesn’t even charge anything for small miscellaneous items. For example, if a long-lasting customer orders a single custom box, they might do it free of charge.
Lifetime Value
Euan told me they don’t reject customers if their order is too small. But the quote for such work would reflect the costing. For example, a cutting tool could be £200. Such a board with metal edges has an upfront cost. But it can bring the price close to 10 to 30 pence per box. Still, after tens of thousands of cutouts, the tool might need repairs.
Caledonian Packaging Ltd has some ways to upsell. They can offer fitments or inserts. Also, they can print on top of boxes. And sell smaller quantities to customers that lack storage space. Instead of cardboard, they may use polypropylene. Sturdier boxes could sometimes serve for decades.
Customer Trends
Euan surprised me by the demographics of the business. I thought it would be local businesses in Edinburgh. I thought proximity would be the competitive edge. In fact, the focus has been shifting away from Edinburgh. More towards the surrounding areas and the central belt of Scotland.
Learn more about Caledonian Packaging Ltd at cal-pack.co.uk and about Euan at linkedin.com/in/euan-scott-a1582813