August 19, 2009

Gliebers Dresses: CMO Candidate #1

We're ready for the group interview of CMO candidate #1, Duncan Berkshire, DVP of Brand Marketing for Blast Candy Bars. Let's go to the Executive Meeting.

Glenn Glieber (Owner): "... and Candi, I have no idea who started this 'Save Gertie The Pig' campaign on Twitter, but it ends today. You've got to get these people to stop re-tweeting this message. I mean seriously, we had something like 1,300 followers on Monday, and now in just two days we've added 9,000 followers, every one of them passionate about saving Gertie. Folks keep phoning the call center, pleading with our associates to Save Gertie. You know, the only way this thing got on Twitter is from somebody in this room, because Dorothy sure doesn't interact with social media. Candi, end it, now, or at least tweet that you'll Save Gertie if they buy four dresses and enroll in our loyalty program."

Meredith Thompson (Chief Merchandising Officer): "Kevin, is that you?"

Kevin: "Yup, it's me."

Candi Layton (HR and Chief Customer Officer): "Kevin, we're about to begin the final part of our CMO interview with Duncan Berkshire, the group interview. We've all had a chance to interview Mr. Berkshire individually, so let's not waste any time and get on with this important part of the Gliebers Dresses culture."

Lois Gladstone (Chief Financial Officer): "Duncan, can you describe for us a situation where management demanded that you grow sales, and you were able to act in a nimble manner to immediately grow sales?"

Duncan Berkshire (Group Interview CMO Candidate): "In 2006, Blast candy bars were struggling to maintain market share. We started a new marketing campaign, with the tagline 'Have a Blast!' I worked with grocery executives. I increased slotting fees for better product placement. The strategy paid off, as sales increased 2.8% in the ninety days following implementation of our global branding strategy."

Lois Gladstone: "Was the strategy profitable?"

Duncan Berkshire: "We really focused on driving sales. We let the finance folks calculate the ROI of brand marketing activities."

Pepper Morgan (Interim Chief Marketing Officer): "Let's say that Glenn wants to increase the November catalog from 124 to 140 pages. How would you quantify the sales impact of a decision like that?"

Duncan Berkshire: "You might consider putting together a few focus groups, and ask if this type of strategy makes any difference in the eyes of the customer."

Pepper Morgan: "Do you believe that you can mathematically quantify the change from 124 to 140 pages, prior to putting the catalogs in the mail?"

Duncan Berkshire: "I think the math is irrelevant without understanding how customers might respond to a change of that nature."

Candi Layton: "Gliebers Dresses has always stood for Quality, Value, and Fashion. How would you capitalize on our strengths to better communicate what we're famous for?"

Duncan Berkshire: "My question for all of you is this ... are you truly known for quality, value, and fashion? Seriously, have you asked your customer if that is what you're known for? You use your catalogs to tell the customer you're known for quality, value, and fashion. Gliebers Dresses isn't what Gliebers Dresses says it is. Gliebers Dresses is what the customer perceives Gliebers Dresses to be."

Meredith Thompson: "Show me where you can purchase fashion at our level of quality and value?"

Duncan Berkshire: "Again, it has nothing to do with what you actually are, it has everything to do with what the customer perceives you to be. For instance, how do you get your message out to potential new customers?"

Pepper Morgan: "We go to ResponseShop, an industry-leading co-op, and we pay them six cents a name for one-time use, and they use some geeky math formula to decide the potential new customers that should hear our message."

Duncan Berkshire: "Exactly. Now it is two months later, and you want to communicate your value proposition to potential new customers. What do you do?"

Meredith Thompson: We go back to ResponseShop, and we pay them six cents a name for one-time use, and they use some geeky math formula to decide the potential new customers that should hear our message, many of whom heard the message last time. This is an industry best practice, everybody does this! We use what they call a 'harmony model' to identify prospects who have purchased merchandise that is 'in harmony' with the merchandise we offer."

Duncan Berkshire: "Exactly. Are you renting the same names, or are you renting different names?"

Pepper Morgan: "Oh, we don't get to know anything about the names we're getting access to, that information is controlled by the analysts at ResponseShop."

Duncan Berkshire: "Exactly. See, your strategy for communicating quality, value, and fashion to potential new customers is to let a math whiz who doesn't even work at your company dictate who hears your message. You have no marketing strategy for how you will evangelize your brand to new customers, and you have no communication strategy for educating customers about your quality, value, and fashion proposition. If you are from outside the catalog industry, like I am, the strategy sounds highly suspect. Why would you ever let a math whiz at ResponseShop dictate your communication strategy?"

Roger Morgan (IT and Operations): "Duncan, how many chocolate chips are needed for the perfect chocolate chip cookie?"

Duncan Berkshire: "I have no idea. But I really like those Otis Spunkmeyer cookies, hot out of the oven, with a tall glass of cold chocolate milk."

Glenn Glieber: "Oh boy. OH BOY! That sounds so good. What's the name brand, Otis Spunkmeyer? Are they available in the freezer section? Dorothy's got to get those for me."

Meredith Thompson: "But we aren't letting ResponseShop control our message. We have a website with secure e-commerce transactions. Our website exudes quality, value, and fashion."

Duncan Berkshire: "And how do you drive traffic to the website?"

Meredith Thompson: "We have existing customers, we have the prospects that ResponseShop decides to mail on our behalf, and we have all of those customers who click on keywords."

Duncan Berkshire: "And who decides if your keywords even make it to the first page of a search engine?"

Pepper Morgan: "Obviously, our paid search program is optimized against our primary competitors and the long-term value of various keywords. A decent amount of our traffic, however, comes from natural search."

Duncan Berkshire: "Exactly. Who controls that traffic?"

Lois Gladstone: "The search engines control the traffic."

Duncan Berkshire: "Exactly. Mathematical algorithms from the search engines control your website traffic. Mathematical algorithms from ResponseShop control your catalog traffic. What, exactly, do you control?

Roger Morgan: "Duncan, what city are Longaberger Baskets made in?"

Duncan Berkshire: "Dresden, Ohio."

Meredith Thompson: "We control the merchandise we offer. We control the price. We control how the merchandise is creatively presented to the customer. We control our e-commerce platform. We control the quality of the paper in our catalogs. We control the contact strategy to existing customers. We control the versioning of our e-mail program. We control our expenses. We control everything, don't we?"

Duncan Berkshire: "Exactly. The job of a catalog brand marketer is to control the traffic. You have no control over your traffic, algorithms decide everything for you. You trust algorithms to evaluate whether prospects cares about quality, value, and fashion. The catalog brand marketer clearly communicates quality, value, and fashion in a way that resonates with the customer, so that the traffic that comes to your website is already pre-qualified, is already wanting what you have to offer. We'll have to invest money to do that. If you decide to hire me, that's what you are getting. You are getting an 'algorithm-free' approach to driving qualified traffic to your brand. Who are you going to trust, geeky math algorithms, or me and my decades of experience growing the Blast Candy Bar empire?"

Kevin: "Duncan, what role should a Chief Marketing Officer play in helping a catalog company find the optimal mix of channels?"

Duncan Berkshire: "I believe the CMO is responsible for teaching all employees how customers are interacting with emerging channels. The CMO must demonstrate that customers are shifting behavior from existing to emerging channels. The CMO must create a roadmap that helps employees see that there is nothing to fear as customers change behavior. And then, the CMO must make darn sure that s/he protects the profit and loss statement, working with the finance team. I don't think the CMO needs to be able to calculate a profit and loss statement, but he should fully lean on the CFO for that responsibility. This is not a time for careless mistakes. I mean, I look at your business, and I'm thinking there isn't much difference between your business and the newspaper industry --- the only difference being you monetized your algorithm-based online traffic, whereas the newspaper industry gave away their online content. And let's go a step further. Your online competitors don't charge for shipping and handling, you appear to make several million dollars a year in shipping and handling revenue. You're going to need to have a plan in place to deal with this issue --- there is absolutely no reason why any rational customer will, in the future, choose your merchandise over a competitor when you require her to pay an additional $14.95 to have the merchandise shipped to her in 5-7 business days."

Glenn Glieber: "I'm afraid we'll have to cut off these fascinating insights right here, folks, we need to get Duncan on a plane. Thanks everybody for the stimulating discussion. Now on to our next topic. Pepper, I'd like to add four pages to the January catalog. Now I know we cut four pages out of the January catalog last month to fund Candi's customer initiatives, but I'm starting to think that was a bad idea. Can you recommend how we might merchandise the four additional pages to make the biggest splash, coordinate with Meredith on the strategy, and then work with Lois to add the expense to the profit and loss statement? Thanks!"

2 comments:

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  2. Anonymous10:07 PM

    Kevin,
    This candidate starts off challenging customer perceptions, which is a valuable point. But he lacks details when he says he would offer algorithm free marketing. And disregarging the CFO in his Blast Candy Bar success is scary. While sales increase 2.8% based on promotion and 90 days is ok, how permanent was that bump and how did it impact ROI overall?
    However, as he answers Roger Morgan's inane question he is probably in like Flynn.
    K

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