Once again, I enter Lauren Fetzer's office, as we prepare for her weekly Executive meeting.
Kevin: "What are you listening to?"
Lauren Fetzer (CEO): "'I Got A Man' by Positive K. It doesn't get much better than that, does it? Memories of college.
Lauren Fetzer: "Here's what we're dealing with today. Penny Parker has her own Twitter account, and I pretty much let her run with it, I mean, what damage can a Twitter account do with 37,000 followers, of which only 27 really pay attention to anything that Penny says? Well, the rest of my team seems to think that Penny is a few french fries short of a happy meal, they hate what she tells her followers."
Kevin: "Didn't you hire me to help you provide a data-driven roadmap to 2015?"
Lauren Fetzer: "Yup, and we get there by resolving small issues that folks perceive to be big problems. Even Patton had to figure out where latrines should be stationed."
We enter the Executive boardroom.
Lauren Fetzer: "Ok team, let's get down to business. Penny, how was business yesterday?"
Penny Parker (VP Marketing): "The website was 8% behind last year, our suite of mobile apps were 200% over plan, so in total, the direct channel was 5% ahead of last year. Retail comps were +4%, with Downtown Seattle leading the way at +11% and Alderwood bringing up the rear at -9%"
Bart Cox (VP Stores): "That's the best Alderwood has done in two months, folks. And Penny, while we're at it, why exactly did you tell everybody on Twitter that Alderwood is running double-digit negative comps. That's proprietary information, you can't share that!"
Ashley Zimmerman (VP Merchandise): "Yeah, and last week you told your followers that our Fall assortment delivery is delayed by a week due to problems at the Port of Tacoma. That's proprietary information, you can't share that!"
Connie Simpson (VP Finance): "Yeah, and what was up with your comment about us taking a bath on Streamline Yukon Hiker gross margins? That's proprietary information, you can't share that!"
Bill Bledsoe (VP Logistics): "Yeah, and you told your followers that you were giving a full refund to @butterbean411 because his shipment took nine days to be delivered. Now everybody who has a late shipment will want a refund, you can't share that!"
Penny Parker: "Kevin, help me out here. You analyze our comp customer segment. Those customer spent $82 last year, year-to-date, what are they spending this year, year-to-date?"
Kevin: "Your comp customer segment is spending $91 this year, year-to-date".
Penny Parker: "Customers are spending more this year than last year, hmmmmmm. Kevin, help me out here. What is the conversion rate for our average customer, and what is the conversion rate for customers who we know have a Twitter account?"
Kevin: "Your conversion rate last week was 8.2%, the conversion rate last week for customers with a Twitter account was 18.4%."
Penny Parker: "Where's the damage to the business, folks?"
Bart Cox: "Those are psuedo-metrics. Comp customer spend might have been $93 this year, year-to-date, had you not been out there blathering about company secrets."
Connie Simpson: "And you can't compare conversion rates between those two audiences, because the Twitter audience self-selects itself --- those are already our better customers. And why is it acceptable to share the fact we're taking a bloodbath on the Streamline Yukon Hiker? That gives our competition an advantage?"
Penny Parker: "What advantage? They browse our website every day, they knew the item was $129 and then was marked down to $99 and was marked down again to $79. Are you telling me that our competition is so stupid that they can't figure out that a 39% price reduction isn't damaging to the gross margin of that item?"
Bart Cox: "Maybe."
Ashley Zimmerman: "You just can't announce that we're having problems with product delivery. Aren't we supposed to be a multi-channel brand? We should do all things across all channels at the same time. We'll tell customers via e-mail and the website and stores on August 15 that the fall assortment is ready. The customer doesn't have to know that we were supposed to have the fall assortment ready on August 8."
Penny Parker: "Remember last February, I told our audience how awesome the spring assortment was, I featured key items in e-mail before they were available, we advertised key items online weeks before they were available. When the assortment was available, we had website comps of +80% for three consecutive days. Nobody complained about that."
Ashley Zimmerman: "Those comps happened because customers loved my merchandise."
Penny Parker: "Those comps happened because I told my customers that they had to love your merchandise."
Ashley Zimmerman: "Those aren't your customers, Penny. Without merchandise, you don't have anything to market."
Penny Parker: "And without my marketing efforts, how would anybody ever know you were even selling merchandise?"
Bill Bledsoe: "Don't we have guidelines for what employees can share with the public?"
Penny Parker: "Of course we do. But what I am doing is different. I'm not tweeting about how great my Crab Benedict was at the Rocky Shore Cafe this morning. And I'm not tweeting that we made $1.7 million of pre-tax profit last quarter. I'm tweeting the Fetzer's Footwear lifestyle. I am giving our customer an insider's view of our company, helping our customer feel a bit closer to us. I don't sell shoes on the same web page that I sell Ad Words on like Target does. I sell Fetzer's Footwear, good, bad, or indifferent. Customers don't trust tweets that are like '... another great meeting, we have the best employees'. Customers follow us because we sell a realistic life experience congruent with their life experience. Heck, we have 37,000 followers on Twitter, Nordstrom only has 31,000 followers, and they sell, what, a billion dollars of shoes each year or more? Come on, something is working here."
Connie Simpson: "Is it working? What is the ROI of your Twitter antics? Why don't you prove to us that you drove a million in sales last quarter because of your comments? Heck, we have a morning dashboard that proves that Bart Cox is failing in his efforts to revive Alderbrook, he gets nailed for that every morning. Who holds you accountable for your comments? Show me the ROI of your Twitter activities."
Bill Bledsoe: "That's a good point, Connie. I get hammered each time our call center and distribution center expenses exceed 10% of sales ... it's a simple, easy-to-understand metric. Kevin, what is the simple, easy-to-understand metric that proves that Social Media is paying the freight?"
Ashley Zimmerman: "That IS a good point, Connie. My merchandise sales are tallied at a divisional level. If a division is failing, I know it first thing every morning. Lauren, you look at me and you ask why sandals were down 4% vs. last year, and I have to explain myself. We are all held to certain levels of accountability. So yes, Kevin, what is the metric that proves that Penny is contributing to the bottom line?"
Kevin: "Don't let anybody tell you that there is a metric that proves that Penny is contributing to the bottom line via Social Media. Social Media is, by definition, not measurable. Oh sure, you can measure followers or click-through rates or coupon redemptions, that's all measurable. Say a customer purchased via a coupon from Twitter. How do you prove that the customer wouldn't have ordered anyway? The majority of Social Media metrics are faux metrics, providing the illusion of accountability. The metrics are not of the family of metrics that the rest of you are measured by, and that's just a reality of life, sorry to say."
Bart Cox: "Then Penny should stop tweeting company secrets, because we can't prove that her comments generate ROI."
Penny Parker: "No, I should tweet more, because my tweets may be responsible for a two or three percent increase in sales."
Lauren Fetzer: "Ok, I've listened to enough of this garbage. Bill, did I ever ask you to prove to me that warehouse robotics would generate a positive return on investment? You know you can't prove that our customer retention rates are better because of robotics. And yet, you lobbied for them and I gave you a ton of capital to get that done, right? How much capital does it cost Penny to tweet her comments to our customers? And Connie, you wanted a new ERP system installed last year. Did I ever once ask you to prove how much more customers would spend because we linked our Human Resources system to our Finance systems? Do you honestly believe that because HR can talk digitally to Finance that a customer in Spokane says 'oh goodness, that's neat, I'll buy an extra pair of shoes because of their neat back-end systems integration process'? Bart, you ordered 275 mannequins last week, did I ask you to prove to me that the ROI on the mannequins would offset the cost? Did you ever think that Penny might view your purchase as being stupid, that your purchase won't possibly sell another pair of shoes? And Ashley, come on girlfriend. If you think our customers cannot live without your merchandise, go work for somebody else, and we'll be able to prove your value in comparison to the merchant we hire to replace you."
Ashley Zimmerman: "Why are you siding with Penny?"
Lauren Fetzer: "I'm not siding with any employee, I am siding with the customer. I always take the side of the customer. If we have 37,000 customers who are riveted with what Penny has to say, she must be doing something right, and I'm willing to take a leap of faith that her low-cost method for engaging with customers is a risk worth taking. Most of you weren't here in 1995 when I told a store-based brand that we had to move online. Bart, you remember those days. You used to mock me, you'd ask if I sold 9 or 10 pair of shoes a day, then you'd laugh and walk down the hall and tell me to enjoy 'fun time'. Now the website is four times as big as our stores are, and you don't mock me anymore, do you? We can all see the future. The future clearly isn't about our website. The future is some fusion of social, mobile, our website, and our stores. And we can't predict what that will look like, can we? So we have no choice but to let Penny experiment. We're not going to legislate her comments by committee. If I think she is out of line, I'll whop her upside the head and get her in line. Otherwise, give Penny room to innovate. We just wasted a perfectly good hour of time, and we are no closer to having a plan for what our business will look like in 2015, are we? Go get bus, go invent the future. This meeting is adjourned."
Ashley Zimmerman (to Connie Simpson): "I think Lauren got up on the wrong side of the bed this morning. Take her out to drop off some crab pots and calm her down!"