September 15, 2009

Gliebers Dresses: Order Attribution And Retention Attribution

Welcome to the weekly Executive Meeting at Gliebers Dresses!

Glenn Glieber (Owner): "... so there I am, sitting in the audience, waiting to see who Multichannel Merchandiser is going to name as the top fashion cataloger for 2009. There was some stiff competition, I'm telling you! And then he makes the announcement, 'Glenn Glieber wins the award for the top fashion cataloger of 2009!' Well, I just about fell out of my chair. I walked up to the stage, absolutely bursting with pride. The audience applauds. I really wanted to thank my customers for all of their support, because without them, none of this is possible. And then out of the corner of my eye, I see Sarah Wheldon coming toward me, and I'm thinking, 'I really like what she's done with her hair'. Then I'm thinking, 'why is she taking the microphone out of my hand?' And she turns to the audience and says 'I think you did a good job, Mr. Glieber, but I cannot believe that Anna Carter did not win this award, Anna Carter's catalogs might be the best fashion catalogs of all time.' She hands the microphone back to me, storms off the stage while the audience buzzes, and there I stand, absolutely at a loss for words."

Roger Morgan (Chief Operations Officer): "What did you say?"

Glenn Glieber: "I just sort of ducked-off the stage. I had to go back on in five minutes and give a talk about how to drive e-commerce sales through the use of print, because as we all know, print isn't dead. So I just had to regroup, go back out there, and perform."

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

Kevin (Me): "Yup, it's me."

Lois Gladstone (Chief Financial Officer): "Did Sarah Wheldon apologize to you?"

Glenn Glieber: "Well, she did an interview over on ResponseShop's blog, and apologized for the incident. But she hasn't contacted me personally to offer an apology."

Lois Gladstone: "What has happened to civility in this country? Everybody has a megaphone, and is busy shouting at everybody else. Our parents didn't raise us to act like this, did they? I had to address adults with a Mr. or Mrs. prefix. Now people can scream out loud at the President, or steal the stage from an owner who built the best fashion dress brand in all of New England, and beyond. What happened to manners?"

Roger Morgan: "Seriously!"

Meredith Thompson: "My parents would never have allowed for us to step all over other people when they are talking. There's just a certain level of respect you should have for others."

Pepper Morgan: "Kevin, did you bring your analysis with you on how our Retention Rates break down by the marketing activities that drive them?"

Kevin: "Yes I did. Now that Pepper is in her new job, she asked me to use a new tool that I've developed, called the 'Online Marketing Simulation', to decompose how retention rates are impacted by marketing activities. You see, ..."

Roger Morgan: "Aren't you just copying what Lucid Commerce has done? I read a Neptune Research report about them, that's some cool stuff."

Kevin: "Yes, what they are doing is neat, especially in the online space. Anyway, I was saying, if you ..."

Lois Gladstone: "How the heck would you ever decompose marketing activities? We send a catalog on Monday, we send an e-mail campaign on Tuesday. Both activities cause a customer to purchase online. How would anybody ever be able to split that order accurately between catalog marketing and e-mail marketing? I'd give e-mail marketing credit, it's free, and the customer probably wouldn't buy unless we gave her a discount or a promotion in the e-mail marketing message."

Kevin: "That's a interesting point. Online marketing folks call what you are talking about 'order attribution', and in catalog marketing, it is called 'matchback'. Anyway, that's not really what I'm talking about here. Pepper asked me to do something different. You see, Pepper ..."

Roger Morgan: "Last week I read a Woodside Research report about order attribution. They said that the debate isn't about first click or last click getting credit for an order, that these days, we need to focus our efforts on what they call 'holistic attribution', giving all channels credit. I mean, it's all about being multichannel, all of the time. Then you throw social media and mobile marketing in the mix, and my goodness, what a powerful toolkit, huh?"

Kevin: "Well, there might be some truth to that. Still, I think that ..."

Meredith Thompson: "Roger, why would we focus on clicks? The catalogs drive the majority of online sales anyway, so focusing on clicks to online ads is seriously misleading. If Pepper does a great job with creative in the catalog, causing somebody to go to Google and click on a paid search ad, then you are saying that Woodside Research wants us to focus on the click? That's foolish."

Kevin: "That's a good point, too. In the Online Marketing Simulation, we focus on ..."

Lois Gladstone: "Wait a minute, are you hawking a new product, is that what this is about? I haven't heard about this new product. If what you're doing is so innovative, wouldn't somebody at ResponseShop be selling this product to us? Or wouldn't somebody at ResponseShop have licensed the product from you, if it is so great? I'm just saying, you know?"

Kevin: "Technically, no, I'm not hawking a new product, because you aren't paying for it and because Pepper asked me to do this analysis for you. If Pepper hadn't asked me to do this, I wouldn't have brought it up. Now, let's review slide number one, a slide that shows ..."

Roger Morgan: "Let's just get to the point, here, folks! I have a conference call with Neptune Research at 10:00am to go over contact center cross-sell and up-sell best practices."

Kevin: "Basically, the analysis indicates the following. We have a 54% annual retention rate, as of last month ..."

Lois Gladstone: "It's going up because of our loyalty program, isn't it?"

Kevin: "The 54% annual retention rate is decomposed as follows: 20 points will happen no matter what. If you don't advertise, 20 of the 54 percentage points happen, because customers have developed a reasonable level of brand loyalty."

Pepper Morgan: "Not many companies know that rate, do they, Kevin? That means 37% of our business (20/54) happens without any advertising, that's our 'organic percentage', right Kevin?"

Kevin: "Yes, that's right. 20 points are organic. Another 12 points are because of catalog marketing. 8 points happen because of discounts, promotions, and free shipping. 4 points happen because of paid search marketing, 3 points happen because of e-mail marketing, 2 points happen because of natural search, 2 point happens because of affiliate marketing, 1 point from call center cross-sell and up-sell programs, 1 point from e-commerce cross-sell and up-sell programs, and 1 point from our loyalty program."

Lois Gladstone: "And you came up with this by allocating orders to the advertising channel that drove the order?"

Roger Morgan: "That is the current industry best practice".

Kevin: "No, I did this the opposite way. I used the Online Marketing Simulation to estimate what would happen in the future if you took each of these marketing activities away. If you remove an activity like affiliate marketing, then I simulate how those customers will behave in the future. Or if you remove the catalog, then I can simulate how those customers will behave in the future. Interestingly, if you take away a marketing activity, then orders that used to be credited to the old marketing activity are re-allocated to other marketing activities. It's a very interesting and new way to ..."

Roger Morgan: "If ResponseShop isn't doing this, then I'm not sure I buy into this program yet. I think it is really important to not be on the bleeding edge of something."

Pepper Morgan: "Folks, we're going to take marketing in a new direction here at Gliebers Dresses. We're going to finally understand what it is that drives our business, and incorporate it into our marketing decisions. Do all of you want for this business to be more profitable? Well if your answer is yes, and I think it is a 'yes', then we need to start acting upon marketing decisions that not only give us a return on investment today, but promise a return on investment tomorrow. We are going to begin to use a new set of tools to hold us to a new set of accountability. This is going to ..."

Glenn Glieber: "Ok folks, that's enough for today. Great meeting! Ok, on to our next topic. I'd like to ..."

Lois Gladstone: "I still cannot believe that Sarah Wheldon cut you off, Glenn, during your big moment in the sun."

Roger Morgan: "It's completely unacceptable."

Meredith Thompson: "It's like our world has lost all semblance of civility."

4 comments:

  1. It sounds like Sarah Wheldon and Kayne West would hit it off. The Gliebers Dresses saga never ceases to amuse me!

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  2. derek.newman4:30 PM

    Hi Kevin,

    I must take umbrage with Meredith Thompson's comments in Gliebers Dresses: Q&A With Meredith Thompson dated September 10, 2009.

    Kevin: "Here's a self-serving question. One of our readers wants to know why Gliebers Dresses ignores so many of my recommendations?"

    Meredith Thompson: "I don't think we ignore them..."

    I count 8 ellipses from Kevin in the interview above and thus I rest my case.

    Cheers

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  3. Jesse, I think they would hit it off!

    ReplyDelete