June 29, 2009

Gliebers Dresses: A Visit With An Industry Leading Marketing Consultant

Chip Cayman greeted me with a monster smile and a booming voice.

"Well hello Kevin, how nice to finally meet you! I've heard so much about you over the years, the pleasure is all mine. Please, please, sit down. Is there anything I can get for you, an RC Cola maybe?"

Mr. Cayman looked every bit the part of a consultant that companies routinely pay $100,000 for a simple one-month 'deep dive'. He didn't hide his graying hair. Gray hair can be used to convey experience and leadership. His suit had to cost $6,500, heck, David Letterman would be proud of Mr. Cayman's attire!

Chip Cayman spent his formative years as a Management Consultant at The Richmond Consulting Group, a popular retail, online, and catalog consulting firm that partnered with private equity teams on difficult brand re-invention programs. He capitalized on the dot.com bubble by branching out on his own, advising countless online startups looking to convert big ideas into big paydays.

In the early part of this decade, Mr. Cayman became the leading expert in multichannel marketing, more popular than even Sucharita Mulpuru. He advised the best retail and catalog brand names on channel integration strategies. During the past five years, Mr. Cayman branched out into social media. His Twitter account has more than 27,000 followers. On any given day, readers can sift through insights ranging from "@ChipCayman RT @MarketingExpert247 The best brands cherish deep relationships with customers." to "@ChipCayman It is 5:42am, and it is a beautiful morning for a run. What a great day to be alive!"

Mr. Cayman has a thirty-year relationship with Glenn Glieber. The two have worked together through numerous downturns. One might say that Mr. Cayman "has Glenn's ear".

Chip Cayman: "I have to say, Kevin, I've read through your work, and it is quite impressive. I disagree with a lot of it, but nonetheless, it is intriguing and different. And your blog certainly turns the tables on long-standing industry best practices. Multichannel Forensics is what you call your methodology, huh? It's a clever name for segmentation coupled with a nameflow model, don't you think?"

Kevin: "Oh it's a little more than that. You know, I had an interesting meeting with Meredith Thompson (merchandising) a few days ago. She shared with me some multichannel merchandise results that were bothering her."

Chip Cayman: "You know, merchandising is the cherry on top of the multichannel hot sundae, Kevin. That cherry is the 'surprise and delight' that customers demand as part of a well-executed multichannel retail experience."

Kevin: "Who are the customers who demand this?"

Chip Cayman: "I don't have it with me right now, but in my briefcase (Tumi) I have a recent report from Neptune Research. They surveyed 1,112 likely multichannel shoppers, and those folks, by a whopping 2 to 1 margin supported an integrated multichannel experience that includes merchandise availability in all channels coupled with integrated promotional offers that can be redeemed in any channel, complemented by the same brand persona across channels. You take care of the customer, Kevin, and you take care of the profit and loss statement."

Kevin: "Most of the companies I study are lucky to have between ten and twenty percent of the customer file purchasing from multiple channels in any given year. Wouldn't it make more sense to focus on the eighty to ninety percent of customers who have a specific channel preference, and give them a customer experience tailored to their specific channel interests?"

Chip Cayman: "That's the same, tired silo based thinking that got companies in such trouble in the first place."

Kevin: "Name a tired, silo based company that got in trouble because of this thinking?"

Chip Cayman: "Oh, I'm under non-disclosure agreements with my clients. I couldn't possibly share that kind of information. But I will say this. Multichannel customers are the best customers, and the best customers are the most loyal customers, and the most loyal customers tend to be retained at high levels, and it is something like eight times more costly to acquire a customer than to retain a customer. So as you can plainly see, the logic speaks for itself. A brand is well positioned for the future if it offers integrated services across channels."

Kevin: "Like Circuit City and their 'buy online, pickup in stores' program?"

Chip Cayman: "It's a shame they're out of business, because that strategy really set the tone for integrated multichannel marketing in the last half of this decade. I don't think enough time passed to understand the true merits of that program. If Circuit City had the capital to outlast the economic downturn, they may have reaped the benefits of their program."

Kevin: "Meredith felt frustrated that you suggested she feature a successful pay-per-click dinner dress in the catalog, only to have it fail in the catalog channel. Does the same merchandise have to be featured in every single channel?"

Chip Cayman: "If possible, yes. You want the customer to have access to as much of your assortment as possible. The customer demands this, Kevin. Have you ever been in a McDonalds restaurant and tried to purchase a McRib sandwich in the store, but not been able to buy the sandwich at the drive-through window? It doesn't make sense, Kevin. The items has to be in both channels."

Kevin: "But McDonalds allows for regional differences. You can get the McRib sandwich in Austin and not be able to purchase it in Boise. Doesn't that create a bad customer experience, too? Why is channel integration a must, but geographic integration can be and is encouraged to be optional?"

Chip Cayman: "Because certain items sell better in different geographies. You wouldn't sell a snow shovel in Miami in November, would you?"

Kevin: "And similarly, certain items sell better in various advertising and physical channels. So the multichannel brand should be allowed to pick and choose the channels, merchandise, targeting strategy, level of personalization, and promotional offers that best drive corporate profitability, right?"

Chip Cayman: "Interesting. Speaking of multiple channels, do you follow me on Twitter?"

Kevin: "Yes, I follow both your Twitter activity and the articles you post on your blog."

Chip Cayman: "See, that's the next big thing. We're going to see multichannel integration in social media. Your entire lifestream will be integrated by a service. You'll be able to sample my comments on Twitter or my blog articles or whatever comes next, and you'll be able to use a service that integrates all of this activity. That's multichannel power being applied to social media, Kevin. The online folks are really hyped about multichannel integration."

Kevin: "Gliebers Dresses tried everything, and they cannot gain any social media traction."

Chip Cayman: "They don't speak with an authentic and transparent voice. You cannot say '@GliebersDresses Today we're taking 15% off of sundresses, visit the website', and expect magic. It just doesn't work that way."

Kevin: "Then what should Gliebers Dresses say?"

Chip Cayman: "Give people great content, give people something of value, participate in the discussion out there, and everything will take care of itself. It's about them, Kevin, it isn't about you or Gliebers Dresses. Fill one of their needs, and they'll take care of two of your needs."

Kevin: "It seems like that's what everybody says. And yet, for 99.9% of people and brands, the strategy simply doesn't work."

Chip Cayman: "That's because 99.9% of companies and individuals are failing to practice social media the right way."

Kevin: "What is your secret?"

Chip Cayman: "I scour Twitter every night. I have a goal to follow 100 new individuals every day. 85% of those who I follow decide to follow me. That's how you build an audience."

Kevin: "What percentage of your 27,000 followers would you consider to be your 'core' audience, the folks who truly interact with you, folks who would purchase your services?"

Chip Cayman: "Probably 1%, about 300".

Kevin: "So the other 26,700 followers don't really matter --- they're not following you because of your great content, they're following you because you decided to follow them, and you're following them not because of their great content, but because it is a strategy to get people to follow you?"

Chip Cayman: "That's how you make social media work, Kevin. You participate, then others follow you."

Kevin: "You believe that Gliebers Dresses should follow 100 people a day, every day, for a year, hoping for the reciprocation of 36,500 followers. And then out of those 36,500 followers, 1%, or 365, will become core followers who truly care about Gliebers Dresses. And then, what, 10% of those will purchase something ... 37 customers ... and those 37 customers spend $150 each, yielding $5,500 of incremental annual revenue? Is that correct?"

Chip Cayman: "That's one way to make it work. Put outstanding content out there that people crave, use the 'following' strategy, and you'll have a formula for success."

Kevin: "You told your Twitter followers last week that you were enjoying a Brown Sugar Cinnamon Pop Tart for breakfast, toasted no less. What does that have to do with outstanding content?"

Chip Cayman: "I have 27,000 followers. Kevin, you have something like 700. Your content is fact based, you tell people that Anna Carter might close down their catalog division. Whoopeedee-Doo! Social media is all about being authentic. When I tell people who I am, they are more likely to connect with me."

Kevin: "Would you advise that Sarah Wheldon (marketing) tell her followers that she just ate a bowl of oatmeal, and then came out of a meeting where she talked about the dress code at Gliebers Dresses? Would that make Gliebers Dresses more authentic? And would that translate to increased sales?"

Chip Cayman: "I'm just saying that if Gliebers Dresses makes social media about others and not about Gliebers Dresses, everything else will take care of itself."

Kevin: "Gliebers Dresses is struggling to stay afloat. What other strategies are you suggesting they employ to turn the corner?"

Chip Cayman: "It's all about loyalty, Kevin. I spend a lot of time with the new CFO, Lois Gladstone, we go way back, you know. Years ago, I showed her how loyalty drives profit. Look at Starbucks. They got customers to spend $5 a day, every day, on a cup of water augmented with beans, dairy, caffeine, and sugar. Gliebers Dresses simply needs to find the complement to this strategy in the world of fashion dresses, and everything will take care of itself."

Kevin: "But you don't buy a new dress five times a week. You're lucky to need a new dress twice a year, maybe three times a year."

Chip Cayman: "Yes! So the secret is to figure out how to get the customer to buy a dress three times a year instead of just two times a year. Then the business grows by 50%, and everything is fixed. This is a loyalty issue, Kevin."

Kevin: "Isn't this a merchandise issue? Customers aren't going to buy three times a year unless they love the merchandise?"

Chip Cayman: "If you think Starbucks brews coffee better than everybody else, you're nuts. They know the secrets to customer loyalty, and they exploit those secrets at unprecedented levels. At some level, it has absolutely nothing to do with the merchandise. If you want coffee, stay at home and drink Folgers. Loyalty = Merchandise + Mania. Most companies ignore 'mania', don't they?"

Kevin: "Gliebers Dresses is going to employ a 'buy four dresses, get free shipping for the rest of the year' program. Is this program part of the mania?"

Chip Cayman: "Absolutely! It's a low cost entry point into customer loyalty. The program will create buzz, which will cause loyal customers to spend more, and the buzz will cause more new customers to shop at Gliebers Dresses, which will fix the acquisition problems that you, Kevin, are trying to fix."

Kevin: "Your strategy, then, is this ... increase customer loyalty via free shipping for 4x+ dress buyers, which creates buzz. The buzz percolates through a social media program predicated on following others and providing outstanding content that spreads across Twitter, causing more followers and more buzz. The new followers are then greeted with a wonderful multichannel experience that causes them to want to shop more often, online or via affiliates or paid search or even via social media. The blend of strategies yields a more loyal customer, driving sales increases and profit."

Chip Cayman: "You got it!!! Now you're not going to steal that strategy and cannibalize my business, are you?"

Kevin: "No."

Chip Cayman: "Good. Because I know a lawyer that could make your life absolutely miserable. I've got a guy in Jersey that could silence Donald Trump."

Kevin: "What if your strategy doesn't work? What if Gliebers Dresses follows your strategy to the letter, but customers still won't buy the merchandise?'

Chip Cayman: "That happens, and it means the strategy wasn't truly executed in the spirit intended."

Kevin: "I see. Mr. Cayman, thanks for your time, I appreciate it."

Chip Cayman: "Kevin, thank you. Keep plugging along with that Multichannel Forensics stuff. It's interesting the way you illustrate how customers interact with our businesses. It's different, that's for sure."

4 comments:

  1. Kevin, just a 'thanks' for this series ... there is much truth here, and it's a fun read. It does seem like much social media consulting involves a lot of talk about authenticity and how all things are connected and "then something magic happens" that's supposed to drive sales.

    Part of the answer in my view is not to conflate ongoing corporate communications and reputation management with marketing. Presence in social media is one part of improving the environment for sales...and recruitment...and investment...and customer service/satisfaction... but there's little of it you can tie back directly to sales with any kind of reliability.

    And as you say, marketing can focus on the part of the market you want that you can find on any individual social media site...not on the site itself. Strategy before tactics...

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  2. Somebody has to make multichannel marketing fun again!

    Your second paragraph says what needs to be said. Thank you!

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  3. Kevin, I'm enjoying the series, this one totally cracks me up :)

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  4. Thanks for the comment, the series seems to be well received!

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