Today, a private meeting with Glenn Glieber.
Glenn Glieber: "You're aware that we lost $800,000 last year, Kevin."
Kevin: "You bet."
Glenn Glieber: "Explain something to me, Kevin."
Kevin: "What's that?"
Glenn Glieber: "We've done everything we were told to do. We were told that we had to be 'multichannel'. Our paper rep would come in here and tell us horror stories, he'd remind us that Lands' End cut back on circulation in 1999 and it killed them, then he'd sell us more paper. Our printer came up with all sorts of fancy technologies that allowed us to do great things and add pages at minimal cost. We have an e-mail program, and we don't 'over-mail' because our e-mail vendor told us not to or we'd have customers unsubscribing at huge rates. ResponseShop does our matchbacks, and even though business is declining, they keep telling us our catalogs match to more and more and more online orders, resulting in us using their services more and more and more. Think about that one for a minute. Our list rental vendor keeps telling us to maximize revenue by selling our list to competitors --- so we do that, only to have a third party opt-out service hammer us publicly for sending catalogs to customers who don't want them, causing us to honor their requests, to be a slave to their opt-out process. We have a loyalty program that does not appear to be causing any increase in loyalty whatsoever. Our loyalty program is based on free shipping, something all of the consultants tell us we have to do to make customers happy, but when we do it, we don't seem to make any customers happy. We were told to jump into social media, and we did that with absolutely no results --- we could measure the sales from social media on our hands and toes. We optimized our site for search, only to have Google change the rules every twenty minutes. The USPS killed us in 2007 and now they demand that we continue to put catalogs in the mail, because doing so benefits their business, not ours."
Kevin: "So you did what the marketing experts told you to do."
Glenn Glieber: "We sure did. And here's the thing, Kevin. None of it worked. These marketing experts, they don't have any skin in the game. They make these statements to benefit their business, not to benefit my business."
Kevin: "Then why do you listen to them?"
Glenn Glieber: "Their arguments sound so convincing, and so easy. They tell us that if we have a free-shipping based loyalty program, then we'll make customers happy and loyal. You ever see one of those fancy case studies, the ones with beautiful fonts and fancy colors and the grand proclamations of unfettered profit?"
Kevin: "Have you ever noticed that only positive case studies are published?"
Glenn Glieber: "What do you mean?"
Kevin: "Well, when you read a case study, you read about a success. Who is going to publish a case study outlining ten companies that failed? Who benefits from a negative case study? It's like somebody writing a case study about playing Roulette ... the person has a 'system' where betting on '27' worked for them ... the person won $12,000 by putting $400 on '27'. Never mind that every single person who bet on '27' the next thirty times lost money, this person won, and the way the person won was by putting $400 on '27'" If a person lost by betting on '27', the person will be told that he 'did it the wrong way', that he failed because he bet $350 on '27', had he bet $400, he might have done better".
Glenn Glieber: "And then the entire catalog ecosystem decided to pick a series of numbers, only to have green zero come up ... and the house cleared the table."
Kevin: "That's what our recession is all about, isn't it?"
Glenn Glieber: "So how do I get a customer to buy from a catalog?"
Kevin: "Is that the right question?"
Glenn Glieber: "Look, I'm not going to do what Anna Carter did. I am not going to discontinue my catalog marketing program. We love catalogs."
Kevin: "But does the customer love catalogs?"
Glenn Glieber: "Where is this all going, Kevin?"
Kevin: "Oh, it's going somewhere. Your business was built off of the Baby Boomer generation. And this generation is changing habits in a way that is not complimentary to your business model. They have unlimited choice, and for the first time, they don't have unlimited money. Twelve years ago, this customer was 43 years old, spending $3,000 a year across a dozen catalogers. Today, this customer is 55 years old, spending $3,000 a year across fifty catalog and online and retail brands. And remember, this $3,000 is really $2,000 after adjusting for inflation."
Glenn Glieber: "And now the Baby Boomer generation has to save for retirement, with no home equity and a 401k account that is two-thirds what it was in late 2007."
Kevin: "So given those facts, how can you grow your business?"
Glenn Glieber: "We have to find new customers."
Kevin: "Most of the new customers are likely to be younger than 45 years old, right?"
Glenn Glieber: "Gen-X has the most money right now. But I don't get Gen-X. That generation isn't motivated by the same things that Baby Boomers were motivated by."
Kevin: "Does it matter that you don't understand Gen-X? Shouldn't you have merchandising and marketing experts who understand that generation?"
Glenn Glieber: "Couldn't we just work harder to gain market share among Baby Boomers? Couldn't I do that for a few years, fix this business, then retire?"
Kevin: "How has that strategy been working for you?"
Glenn Glieber: "Baby Boomer kids, I get them, heck, we've all had kids. I understand what motivates them. I don't understand the technology they use, but I understand how to speak with them. These Gen-Xers, there aren't enough of them in their generation to fuel growth, and nobody knows how to reach them. That's going to create problems, isn't it?"
Kevin: "What's amazing is that your generation created what is called 'multi-channel', and then Gen-X is the generation most likely to straddle old-school channels like television and catalog and newer channels like the internet and emerging channels like mobile and social media. This is what you wanted, and when you got it, you didn't know what to do with it."
Glenn Glieber: "I think we wanted Gen-X to use all of the new channels to facilitate a purchase from the channels we managed, like catalogs. And when it didn't work out that way, we suffered. I suffered. My business suffered."
Kevin: "You can't wait for Gen-Y to arrive, either, they are a decade or more away from spending the kind of money that fuels a business. So if you want to grow, you're going to have to figure out how to crack that Gen-X nut, aren't you?"
Glenn Glieber: "Can I tell you something, Kevin?"
Glenn Glieber: "I'm going to bring in some private equity folks, have them look around, see if they might want to buy my business."
Kevin: "Really? Wow. Why private equity folks?"
Glenn Glieber: "You and I both know this business doesn't have much value. We've lost money for several years. Amazon isn't going to overpay for my business like they did with Zappos."
Kevin: "Does your staff know about this?"
Glenn Glieber: "No, and I haven't decided yet when I'm going to tell them. You know, I just don't have any answers left. We've tried everything, and nothing worked. Maybe somebody else can figure out how to make this business profitable, and I can at least retire with something to show for my efforts."
Kevin: "The private equity thing can be positive, or it can be ruthless. I think they'd really test the mettle of your folks."
Glenn Glieber: "Maybe it is time that my people have their mettle tested."