February 26, 2012

Dear Catalog CEOs: Segmenting Customers and Opinions

Dear Catalog CEOs:


Maybe this has happened to you before.  It's July, and business is off by 10%, it had been on plan all year.  So you ask your team the following question ... "what happened, and how do we fix the problem?"


This is where the finger pointing begins.


Your catalog expert tells you that housefile is off by 6% and prospect lists are off by 16% and that he thinks that the creative was awful and the price points featured on pages two and three were too expensive.  He tells you that he's going to call the co-op representative and he'll yell at her to provide "better names".


Your online expert tells you that conversion rates were down 5% and traffic was down 5%.  She thinks that Google has made huge changes that are hurting your business, that you're struggling with long-tail keywords, and that email didn't have a strong enough promotional message.


Your creative leader thinks that marketing did a poor job of targeting the audience for the catalog, and that the merchandise is too old and stale.


Your merchant leader thinks that marketing did a poor job of targeting the audience, she thinks the creative was awful, and she thinks the merchandise was appropriate and consistent with prior years.


Your call center leader noticed on Twitter that six customers complained that they didn't receive a catalog, so it has to be the USPS that screwed up, because Facebook likes increased from 1,223 to 1,493 in July.


Do you have an answer to your question?


Times have changed.  There are 88 moving pieces these days, maybe 1,088 moving pieces.  You need more "proof", and fewer "opinions".


It's hard to get the proof, isn't it?


So a starting point is to ask your staff to prove their opinions.  When they don't have the data they need to answer your question, they offer you a credible opinion.  Ask them to see the data that validates their opinion.


Odds are that your team doesn't have the data to validate the opinion.  But this represents an important, teachable moment.  If the merchandising/creative team thinks that marketing targeted the wrong customers for an email campaign, have them prove the hypothesis.  If marketing thinks that price points are too high, have them prove that high price points consistently lead to sub-optimal business performance.  If the call center leader thinks that Facebook "likes" increased, then have the call center leader prove that "likes" lead to sales increases.


Too often, I don't see this from Leadership.  Too often, we cobble together the opinions that make the most sense, assign some blame, and move on to the next topic.


Start asking your team to validate their opinions with actual data.  And if they don't have the data needed to validate an opinion, have them call me!!

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