April 24, 2016

Setting Expectations

The vast majority of businesses we work for have low annual repurchase rates. The average across my client base is 37% ... if you had 100 customers who purchased in 2015, only 37 will purchase again in 2016.

As long as annual repurchase rates are under 60%, the number one goal of any credible marketer must center around finding as many new customers as humanly possible ... and at as low a cost as is humanly possible.

This is an expectation that the new VP/Marketing (or you) must set on DAY ONE.


I know, I know, your CEO is in year five of trying to grow customer loyalty and has demonstrated that the net promoter score is 10% better than five years ago. Show the CEO that annual repurchase rates are not improving. You have to do this on DAY ONE. You don't want to be ripped in a meeting six months from now because your co-workers were not aware of your strategic plan. If your co-workers hate your plan, they should hate it from DAY ONE. And in two years, when business improves, they'll take credit. That's how the world works.

In other words, once you know the annual repurchase rate, and once you see that it is below 60%, and once you see that it is likely to be closer to +/- 37%, you tell every single person you meet that your "program" is all about CUSTOMER ACQUISITION. It has to be. It's the only way you are going to grow.

When you are told by the CFO that omnichannel customers are worth 9x as much as single-channel customers and you should be focused on finding omnichannel buyers, ask your CFO how (over the past ten years) that strategy has worked? Wall St. loved the idea until sales didn't grow - now they think Nordstrom lost their way (click here). Go back to the metrics you asked for, and show every single employee who questions your direction how the prevailing industry deck of "best practices" failed your company. You only get one chance to set the pace ... do it from the get go.

When the new General Manager of the Milwaukee Brewers (age = 30) took the job, he immediately communicated to anybody who would listen that this was the start of a rebuilding project, and that his job was all about finding A/AA/AAA talent that will, in the future, fuel the major league club. Now, fans don't like hearing this .... at all ... it means there is going to be a lot of losing in the short term. But the GM put his program in place, and he communicated what the program is, so expectations are being met from DAY ONE. Nobody should be surprised.

Sit down with your CEO. Tell her your plan, from DAY ONE. Make sure that nobody is surprised.

Sit down with your CFO. Tell him that your plan might be a bit expensive in the short-term, until you find ways to acquire new customers cheaply. Tell him that the glut of new customers you are going to add to the business will generate profit in years three, four, and five. Tell him that you are rebuilding your marketing program, from the ground up.

Sit down with your Merchandising Executive. Tell her that you are going to exploit her best-selling existing items to find new customers. Tell her that you are going to exploit her best-selling new items to find new customers. Tell her you need her partnership to quickly identify trends and best sellers, so that you can change strategies on the fly. Tell her that you are going to make her look good by causing her to sell more stuff. Do this from day one.

Sit down with your Operations Executive and Information Technology Executive. Tell them both to stay the heck out of your way! They are not marketers, you are a marketer! Put them to work finding new customers - then at least they are doing what you want them to do as opposed to the all-too-frequent strategy of these folks working behind your back as pretend-marketers. At too many companies, the operations and information technology folks think they are marketers. They are not marketers. So either put them to work on your mission, or tell them to get out of the way. Then get ready to duck, because they're going to challenge you anyway.

Sit down with your Human Resources Executive. Tell him that you will be in the market for customer acquisition talent. Tell him to start harvesting competing companies for talent, especially in the e-commerce, social, and mobile world. You don't want to be caught off-guard when somebody quits. You want to be prepared to change the structure of your organization when you find somebody with skills that your company does not possess.

Sit down with your Creative Director. Ask her to show you the creative that sells best. Beg her for assistance helping you find new customers. Creative people are stepped on every day, just like you are. Build a partnership. You need all of the adjacent marketing help you can get (except for operations & IT, who already feel like they are marketing experts).

Set expectations with your Executive Team from DAY ONE.

Then remind your Executive Team how you are performing vs. expectations. Communicate clearly, and communicate constantly. At EVERY MEETING.

P.S.: Regarding setting expectations ... make it clear that in the short-term you will hound the living daylights out of the co-ops for better performance (if you are a cataloger ... Google /Facebook and associated vendors if not). But in the long-term, you are going to find low-customer customer acquisition tactics that work digitally or offline. Make it clear that you do not know what these tactics are (but have 10-20 tactics from other companies available to show your co-workers, so that they know what you are talking about), but you and your team will learn over the next 2-3 years and what you learn will help you walk away from expensive co-op names. Yes, this means that you will begin walking away from the catalog. Yes, this means that your co-workers are going to be mad at you before you complete your first day of work. But that's what is required of a leader who clearly communicates his/her program to co-workers on DAY ONE.

P.P.S:  Yes, your co-workers and Executive partners are going to be angry with you. They aren't used to a marketer putting his/her foot down. Always go back to the metrics for the past ten years, and ask each grumbling co-worker if they embrace tepid performance? If the answer is no, then tell them to get on board or they should get the heck out of your way. If you are not comfortable doing this, you shouldn't attempt a marketing rebuild. I am not asking you to be mean. I am asking you to be firm. I am also asking you to be humble. Your plan has a better than 50/50 chance of not working. Make it clear to everybody that your plan may not work, and if it does not work, it is your fault. Communicate clearly. Communicate often.