June 21, 2016

Business Stinks / Employee Orders

Yup - you are the marketing/analytics expert, and you are sitting in a meeting with this guy, and he says "it's your fault business is so bad".

It is not your fault that business is so bad.

I've told this story a half-dozen times, but the story is particularly relevant at a time when pundits utter nonsense about "economic headwinds" or the impact of "the election".

It was 1998 at Eddie Bauer ... the online division was running -15% ... stores were running -20%. Bad, bad business. And eventually, it became time to assign blame ... it was "marketing's fault".

So, I ask my team to run a query.

  • Sum all demand from the 30 employees who have a Vice President title for Spring 1998.
  • Sum all demand from the same 30 employees with a Vice President title for Spring 1997.
  • Index the change, year-over-year.
The results?

The 30 employees with a VP title spent 20% less in Spring 1998 than in Spring 1997.

I could hardly wait for the meeting to start!

It only took ten or fifteen minutes for one of the merchandising wizards to openly suggest to the room of VPs that marketing had once again "damaged the brand".

I pulled out the results of the query.

I shared with everybody in the room that everybody in the room was spending 20% less this year than last year.

I reminded everybody in the room that "the economy" couldn't impact their spend, because they were all being paid the same or more than the prior year.

I reminded everybody in the room that marketing could not impact their spend ... they all received every catalog as part of a seed program ... they all received every email campaign as part of a seed program.

I informed the room that the only reason an employee would choose to spend less is because each employee, Executive employees mind you, found the merchandise less compelling this year vs. last year.

Well, you've never heard a room go so quiet.

Then the meeting resumed. But from that point forward, marketing was not blamed for bad performance in an Executive meeting that I attended.

Maybe you've had a bad spring, and you want to blame Trump v Clinton or you want to blame your marketing team for mucking things up. Do yourself a favor. Find out how much your salaried employees spent this year vs. last year. If spend is down 15%, then the answer to your woes resides in the building ... go ask your co-workers why they are spending less.

Run the query.