October 08, 2009

Gliebers Dresses: The DMA Edition

Welcome to the weekly Executive Meeting.

Glenn Glieber (Owner): "All I have to say is that you don't do anything inappropriate with your employees. You're responsible for their well-being, you're paying them, their lives are in your hands. You don't use employees as your own private dating service."

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

Kevin: "Yup, it's me."

Lois Gladstone (Chief Financial Officer): "Have you heard about the kerfuffle within the Direct Mailing Association?"

Roger Morgan (Chief Operations Officer): "You know, the civil war between the ousted board member and the CEO?"

Pepper Morgan (Chief Marketing Officer): "It's shameful on both sides, considering they keep spamming our inboxes with their infighting. Aren't they supposed to be offering us best practices in e-mail communications? Doesn't the DMA jack up annual dues and then offer us these white papers on how to treat customers via e-mail marketing?"

Roger Morgan: "How much do we spend a year on annual dues with the Direct Mailing Association?"

Pepper Morgan: "We spent $13,500 in 2006, $15,000 in 2007, $16,500 in 2008, and we'll spend $19,000 in 2009."

Lois Gladstone: "That's $64,000 that could have been spent acquiring new customers, or better yet, spent on loyalty programs to keep our existing customers. Can somebody tell me what the ROI is, I mean, how much profit have we made as a result of this $64,000 investment?"

Roger Morgan: "Oh heavens, that's nearly impossible to calculate, isn't it? I mean, my team attended close to a dozen Direct Mailing Association conferences over the past four years, and we learned so much at those conferences while saving hundreds of dollars per conference because we are a member. So right there alone, we've made up some of the investment."

Meredith Thompson: "Actually, it's easy to calculate, isn't it? We lost $64,000, and then we spent another, what, maybe $15,000 on DMA conferences, so we're out $79,000, and then they charged us maybe $3,000 less than non-DMA members to attend the conferences, so we're out $76,000 total. Then we subtract the profit we made because we learned something at the conferences. Did we learn anything that we applied to our business? I don't know, it is hard to say, isn't it?"

Roger Morgan: "No, I don't buy that logic. The DMA advocates on our behalf. Who knows how much profit we would have lost if they weren't actively lobbying for us in Washington? And I love having access to their white papers, that really expands our thought leadership. You cannot put a price on that. We're trying to assign ROI to things that aren't easily measurable."

Lois Gladstone: "In the time when the DMA advocated on our behalf, we've had telemarketing legislation that basically killed that channel, we've had CAN-SPAM that essentially crippled classic e-mail marketing, and we've had a 35% postage increase --- heck, we haven't been profitable since the postage increase have we? Hmmmm."

Pepper Morgan: "And doesn't the Direct Mailing Association help all mailers, not just catalogers? I mean, what do they do when the banking industry demands concessions, concessions that cost us more money? How do they advocate in a way that helps one set of organizations but penalizes catalogers? I say we get out of the DMA, save our pennies, and spend our own money on our own customers."

Lois Gladstone: "I agree. We should not give up gross margin dollars to a trade organization that doesn't deliver a return on investment."

Pepper Morgan: "We should switch to the upstart Alliance of Catalog Merchants Association. I think their dues are only a few thousand dollars a year."

Roger Morgan: "Come on, people, nobody joined that organization. How many members do they have, eighty or maybe ninety? The DMA is where the critical mass is, that's where we need to be, we need to have a unified voice. If the catalog industry is so angry with the DMA, then why wouldn't the entire catalog industry just leave the DMA and support the Alliance of Catalog Merchants Association? Nobody in the catalog industry is really upset or angry, if they were, they'd do something about it. Don't you think the DMA would change if every cataloger left? To be honest, I'd be perfectly comfortable funding both groups. But let's not give up on the DMA."

Lois Gladstone: "I heard the President of the DMA earns something like a half-million dollars a year salary, and has health care benefits. Isn't that insane? Nobody here earns anything over $350,000 a year. They're simply out of touch. And didn't they let go of something like half of their employees when the economy collapsed? How do you do that? It's bad signalling, I'll tell you that. It's gross!"

Roger Morgan: "Lois, you did the same thing. You came in here with a gaudy salary when compared with what I pay a person to work in our distribution center, and you demanded that we shed twenty percent of the workforce to stay alive. How is that any different? And then you buy a new BMW and park it right in front of the front door of the building for all to see. What kind of message does that send to a distribution center employee?"

Meredith Thompson: "Who's side are you on, Roger?"

Roger Morgan: "I'm not on the side of hypocrisy, I'll tell you that. Our industry loves the argument, the gossip, the grumbling, the blasting of the big salary. All of it distracts us from the core issues we're facing. Heck, I'd rather gossip about a huge salary than to strategize about what the death of the mailbox truly means."

Meredith Thompson: "Somebody should give Roger a happy pill. Kevin, what do you think?"

Kevin: "Maybe the hardest thing for an industry to do is to change from within. Change from outside doesn't look right, it seems foreign and unfamiliar, so it isn't embraced. And change from within sometimes focuses on solutions that are congruent with the thought process generated from within, making that style of change less likely to be successful. I think Roger makes an interesting point ... it isn't fun to spend time thinking about the real issue here, the death of the mailbox. Maybe that's what the Direct Mailers Association is doing. Maybe they are trying to find a path into the future, while protecting the past --- and the past includes a nice salary. I don't know, I don't have inside information."

Glenn Glieber: "I think I've had enough of this talk for one day. We're wasting too much thought on an issue that doesn't really matter. The DMA isn't going to help me sell dresses in November. I want to know what we're doing to sell dresses in November? Anybody have any bright ideas for how we're going to sell dresses in November? Now let's get back to the agenda. We need to decide what color we're going to paint the lunchroom. Who wants to go with taupe?"