August 17, 2017

10 Questions

Question #1: You are not allowed to acquire a new customer next year from Google, Facebook, Retargeting, or if you are cataloger any of the catalog co-ops. Describe what your strategy is?

Question #2:  Your business lost 8% of sales last year. Your analysis shows that Merchandise Productivity fell by 10%. Describe how you address this issue with your Merchandising Team, a group of individuals who believe you are Marketing the brand to the "wrong customer"?

Question #3:  You do not execute an email campaign for an entire month via an A/B test. You learn that sales are identical in the no-mail group as in the mail group. Describe how you respond to the results of your test?

Question #4:  You learn that 33% of last year's customers purchase again next year, and the best observed metric since 1999 is 37%. Describe how much of your resources you allocate to customer acquisition efforts next year?

Question #5:  You measure that 30% of last year's retail buyers will purchase online next year. Meanwhile, just 15% of last year's online buyers will purchase in a store next year. What tactics do you use to protect sales volume in stores, or do you just close stores and continue paying debt on the stores you close?

Question #6:  You learn that you improved your conversion rate online from 4% to 4.2%, but sales did not change - you simply reduced the number of visits required for a customer to purchase something. You spent $100,000 to improve conversion rates but did not increase sales. How do you explain your performance to Management?

Question #7:  A person with no experience at email marketing whatsoever is promoted ahead of you, and is now responsible for email marketing. Describe your approach for working with this individual?

Question #8:  You A/B test and learn that you can increase sales by 18% by personalizing your website and email campaigns. Your Creative Director tells you that "it is important to provide a consistent brand experience across channels, and personalization does not allow for a consistent brand experience".  How do you respond to this comment?

Question #9:  Every vendor tied to the paper industry tells you that catalog marketing works, even if your customer is 29 years old and shops almost exclusively via mobile. How do you respond to the vendor community when they take you out to lunch to encourage you to embark on a catalog marketing program?

Question #10:  Your EVP of Marketing left the company to "pursue other opportunities and spend more time with family." Alright. This is the third EVP of Marketing to leave the company in five years. Describe why you would or would not apply for this position?

August 16, 2017

An Absolute Must Read

You have no choice but to read this article right now, courtesy of Brian.

Click Here ... I'll Wait For You.

Ok, you're back. Good!

What did you think?

Remember last year when I gave a talk in the Czech Republic and my thesis was that all of retail / e-commerce / catalog marketing was trending toward Sports? In other words, entertainment and the ecosystem around entertainment would come to commerce ... as part of a necessary evolution of shopping.
Don't believe me?

Who is Shop.org featuring in a few weeks?
  • Kobe Bryant.
  • Tyra Banks.
Neither individual will share best practices for email subject lines or non-branded paid search terms. They are there for one reason and one reason only ... to entertain you. And you'll spend the profit generated by 50 customers to attend and be entertained. You'll come back to the office and your boss will say "What did you learn?" and you'll regale your team with the myriad ways that Kobe Bryant inspired you to be great.

Remember that talk I gave in the Czech Republic last year? Evening DJs and a festive environment and food & beverage ... an entertaining environment ... one that caused 1,500 seats to sell out in eight minutes ... EIGHT minutes!

So back to the article. The Mall of America was criticized for their approach 25 years ago ... they ignore the moribund pundits who demand that you do things their way so that they get paid ... and now with 5,000+ store closures THIS YEAR ALONE the Mall of America is thriving. Did you read how they HUSTLE ... did you read about how hard they work? More annual visitors than DisneyWorld?

Your future is low-cost / no-cost customer acquisition.

You'll accomplish this not by paying Facebook another $100,000, but by hustling, by entertaining your customers. Fuse those concepts with great merchandise and fair prices, and you've got something.

August 15, 2017

Speaking of Competition/Partners ...

You probably saw this a few weeks back, right? (click here).

Sure, the buzzword "omnichannel" is thrown into the article for good measure, but the acquisitions have nothing to do with being omnichannel and have everything to do with having Partners possessing adjacent merchandise.

Did you know that 80% of my income in the past quarter was from companies looking to form Partnerships with Competitors? I'm really busy analyzing how customers respond to merchandise offerings. Folks are looking to figure out how to build a database of customers with adjacent merchandise interests. Professionals are taking charge of the Competition/Partnership agenda - not allowing Google/Facebook or Malls or Catalog Co-Ops to determine their future.

And make no mistake - over the next five years Google/Facebook are going to sort through the rubble and they're going to pick the next generation of e-commerce winners.

Have a plan for how you will move into the future - pick your Partners carefully!


August 14, 2017

List of Circulation Theory Articles

Surprisingly, the "Circulation Theory Series" was one of the most popular series of the past two years. Who knew?!

Here, then, is a list of the ten articles ... be sure to apply the articles to your business ... do the work and generate a ton of profit, ok?!
Bookmark this post and use it as necessary!

Email me if you need help applying the concepts via a consulting project (kevinh@minethatdata.com).

P.S.: You simply cannot predict what people will like or what works ... we're in the latter portions of 2017 and a series about Catalog Circulation and then a long (TL:DR as the kids say) post about sprint car racing (click here) are as popular as anything I've done in the past four years. Keep that in mind as you think about the content you're going to share with folks later this year.

P.P.S.: This is the most popular article of 2017 so far (click here). Again, you'd never predict that, would you?

P.P.P.S.: Yes, I monitor what you click on ... it tells me a lot about how you think about various issues. For instance, yesterday you didn't click on this much (click here) but you clicked on this one a lot (click here).

August 13, 2017

Lots and Lots of Marketing Examples!!!

Here's what is awful about digital marketing and analytics ... both strip creativity out of a business. As a result, most modern marketing is pure dreck, and marketing has to be pure dreck because anything interesting and creative is not likely to work and as a result will be removed from the digital ecosystem by misguided analytics tools (yes, I know, I am exaggerating ... for a reason of course).

But it doesn't have to be this way.

If you step out of the digital realm and actually spend real time with real people in the real world, you might just stumble upon marketing brilliance.

In my case, that happened last Wednesday night when I attended the first of four nights of the Knoxville Nationals ... a four day celebration of sprint car racing (I know, I know, you hate racing ... this is a good time for you to tune out and read about Blue Apron's struggles - click here - and we'll see you tomorrow).

About 100 cars compete over four nights in an effort to take home the $150,000 first prize on Saturday night. The racing happens in a "tournament", if you will, as the best cars advance to the big race and get to start at the front of the big race while slower cars are slowly weeded out of the "tournament" and when they get to race they race at the back and have to pass everybody to advance.

Ok, want to see some marketing examples? How about this car - owned by one of the most popular drivers?


What do you see on the car? Sponsors!! Folks are paying money to be on the car ... and for good reason. About 17,000 will be in attendance on Wednesday, Thursday, and Friday. On Saturday crowd of 25,000 were in attendance. Those folks will see this car go past them over and over and over again.

Got $50,000 to be on the side of a car for six months? Sure you do ... you spend that much money in the blink of an eye with Google/Facebook/Co-Ops/Retargeters/Affiliates on anonymous customers who will never buy from your business ... you do that every week for crying out loud! And you do it because it can be measured ... even if you measure no return on investment whatsoever!

As you walk up to the track, you see the National Sprint Car Hall of Fame.


Here's an interesting question ... do you have a Hall of Fame?

Seriously ... you have customers who have spent $10,000 with your brand. Do you have a Hall of Fame where you feature these customers for all to see? No? You just collect their money and give them 30% off plus free shipping? Why not treat these customers like the Legends they truly are? I know, I know, you have a "loyalty program" where customer earns "points" that are redeemed for "merchandise". Why not start a Hall of Fame and truly reward the customers who allow you to have a job? Seriously, why would it be hard to have a Hall of Fame?

Ok, now we get to the track ... and look at this ... the staff let you walk right up to the track and take a peek at preparations for the evening.



So here's a thought ... do you let your Best Customers enter your corporate office and do you given them a chance to take a peek behind the curtains? What would stop you from allowing your best customers to get off the highway and visit you? Show them what the Merchandising Team is working on for Christmas 2017. Right? Right??

I know, I know, this is auto racing, and you are an aspirational brand. 

When you go to a big race, you have to eat dinner. This is where the staff "cross-sell" you on food. Stuff your Primary Care Physician would vomit all over the floor if she knew you were eating ... like a Pork Tenderloin sandwich with cole slaw. Look at that old-school bun ... not a mass-produced piece of sponge, is it?


Yup, that's what $9 buys you ... on top of your $47 ticket and on top of the $10 you paid the local church to park in their parking lot. A whole ecosystem exists, allowing you to spend your money.

What is your cross-sell / up-sell program? 

Did I mention it cost $47 to get in?

Not if you are under the age of 18. And not if you want to sit in bad seats. Tickets for adults drop down to $25 for less-than-optimal seats ... and are around $15 for kids under the age of 18. Hmmmmmm. So they have a strategy to lock-in teenagers ... you bring a car-full of four and you train those under age 18 to like this event ... so that they'll pay full price in their 20s and 30s and 40s and forever. 

This brings me to your brand. What is your strategy to lock-in a younger generation? Do those under 18 pay full-price? Do you have strategy like the cell-phone companies have to lock-in younger customers?

Speaking of younger people ... they don't consume information the same way as you or I, do they? And at the Knoxville Nationals, they have programs that appeal to younger customers. For instance, on Wednesday they had an hour-long radio show (internet radio and SiriusXM) that was also published as a podcast ... featuring popular drivers (the woman on the right is the only woman to ever win a World of Outlaw's Sprint Car A-Main, FYI ... today she's co-hosting the interview session).


Yes, they were broadcasting live via internet radio. And if you couldn't listen live, you could listen via podcast. And the races ... they were broadcast on internet radio and if you couldn't listen live you can watch in September on tape delay on a national cable channel called MavTV. So if you couldn't be in Central Iowa on a Wednesday night in mid-August, well, you had choices, didn't you? These choices "spread the word" ... low-cost / no-cost customer acquisition.

What is your media strategy? Do you own your own media channel, and make use of the channel to spread the word at low-cost / no-cost?

And if you were part of the studio audience in attendance at the podcast, you received swag at every commercial break.


Yup, that's a hat being tossed at the audience ... now be honest, how much would it cost your brand to give away five hats to be tossed to the audience? Be honest! Again, you pay retargeters $$$ to hound customers who have no intention to ever buy again all across the internet ... but you don't have money for five hats?

I know, I know, you don't offer "swag".

Moving right along ... the drivers played games with kids who got into the races on discounted tickets. Here's a famous driver playing with kids/fans.


Which brings me to an interesting point ... when is the last time your Merchandising Team ever spent any time with the General Public? Imagine what your Merchandising/Product Team might actually learn if they spent as little as five minutes with the General Public?? And I'm talking about in person, not via social media. Social media is easy. It's not as easy to spend time with real people in the real world.

Even announcers spent time interacting with the public ... this is a famous Network TV racing announcer hosting a booth ... where he spoke with fans.


When is the last time anybody on your Marketing Team spoke with a customer outside of social media?

I performed an informal and unscientific survey of fans ... about half were wearing a t-shirt that supported their favorite driver. About HALF! What a merchandising opportunity!


I know, I know, this doesn't align with the direction of your brand.

But these folks spent $47 to get in, $10 to park at the church parking lot ... they spent $9 on a pork tenderloin sandwich, and they spent $28 on a t-shirt for crying out loud. Might there be a comparable situation in your world where you might sell merchandise that complements the hobby preferences of your target/aspirational customer? 

Sponsors? There were plenty.


That's called a 50/50 ticket. You pay a dollar. Fifty cents goes to a local charity, and the rest of the money is pooled ... one ticket is selected at random (hint - it wasn't 607553), and that person wins the $25,000 that remained. All brought to you by KRCO Radio. Now how much could it possibly cost to get your brand on the 50/50 ticket at your local racetrack? Or high school basketball game? Instead of wasting $300 with Facebook, why not support your local community?

I know, I know, you are an aspirational brand, you don't do raffles and you don't sponsor raffles. And yet, your favorite email vendor sponsors all sorts of activities (click here).

I know, you think the ads on the wall look "tacky".




Now, you're not going to be able to tell this from the images, but a competing track in Washington State (Skagit Speedway) sponsored a portion of turn 2. Think about that for a moment ... would you ever let a large competitor advertise in your catalog or on your home page? No? And yet, this track happily takes the $$ and lets a competing track advertise. 

Heck, one of the sponsors is located right across the street. They gave away a piping-hot pizza to a fan in section Q or wherever during one of the breaks. How much does a piping hot pizza cost?




I know, I know, you aren't a fan of this stuff.

Did you know that the track has a mobile app with live updates as the races proceed? Fans all across the world can keep track of what is happening ... and I know this because on social media folks from Australia were talking about what was happening.


And did you know that they created a hashtag so that fans can communicate with each other (and the track can monitor what is being said)? And the hashtag advertises a major sponsor ... Five Hour Energy Drink ... do you have a hashtag that also supports a major sponsor of your brand?


After the event, the sanctioning body produces a YouTube video of the event (click here). Do you have YouTube videos of your big events?

And here's one last tidbit for you ... after the races were over, I drove to my hotel ... and guess who had business cards on the front desk of the hotel?


Yes, even Uber is indirectly capitalizing on the Knoxville Nationals. Via the promo code, they're tracking results.

I know, I know, this doesn't align with your view of the world.

I woke up the next morning, and somebody is outside of the local Culver's Store trimming hedges at 7:30am, making sure the store looks perfect for visiting fans attending the Knoxville Nationals.


People are working their rear-ends off to make this a great event ... even adjacent brands are working hard (Uber / Culver's) to make sure that fans have a good experience.

I mean, these folks are BRILLIANT marketers. They have a system in place, and they absolutely HUSTLE to make the event as great (and profitable) as possible.

Meanwhile, here's the kind of headline we're reading about in our industry (from my flight back to Phoenix from the Midwest).


Kinda makes you think, #amirite?

Do you understand what I'm trying to communicate to you?

I am not asking you to participate in auto racing.

I am asking you to DO SOMETHING, to TRY!!!

We desperately need low-cost / no-cost customer acquisition programs. We need awareness programs. We keep paying Google/Facebook (and for catalogers we pay catalog co-ops) all this money, and we know how that works for Google/Facebook. Can you take the ideas outlined here and apply them to your business?
  1. Do you have an event (not a sale event) that is the anchor of your year, an event that is the centerpiece of all of your marketing activities, an event that the customer truly cares about? Has the event become a tradition?
  2. Do you sponsor local activities in your community?
  3. Does anybody sponsor your business?
  4. Do you have a solid cross-sell / up-sell program that isn't driven by algorithms but is instead driven by adjacent products?
  5. Do you have your own media network that creates awareness at low-cost / no-cost?
  6. Do your Merchants / Product People / Marketers actually interact with real customers in the real world?
  7. Do you have employee "stars" who interact with real customers in the real world?
  8. Do you have a Hall of Fame featuring your best customers?
  9. Do you let customers in "behind-the-scenes"?
  10. Do you have a program that allows potential customers < age 18 to participate with your "brand" so that they become potential future customers?
  11. Do you have a hashtag for your big annual event, and is the hashtag sponsored by somebody so that you are generating revenue from your social media efforts?
P.S.:  Sponsorship doesn't have to cost an arm and a leg. Here''s a simple low-cost example from Wells Fargo Bank ... a "brand" trying to rebuild their reputation. You have a few thousand dollars you can spend ... I mean, Wells Fargo is spending nothing here.



P.P.S.:  If you made it this far, you deserve a reward. I have two decks of MineThatData playing cards to give away, swag for you ... the loyal reader. But I only have two decks of MineThatData playing cards. Two. Email me at kevinh@minethatdata.com, and if you are one of the first two to email me, you get a deck of MineThatData playing cards.

August 10, 2017

They Don't Want To Change!

Several years back, I visited a client. This company possessed a 90% Organic Percentage ... high by any standards. Essentially the company could discontinue all catalog marketing activities and sales would decline by 10% and ad-to-sales would decrease by 30% and the whole business would be wildly profitable.

It's the best possible problem a company can have.

One problem.

The Chief Merchandising Officer.

This individual said something very interesting.
  • "If we discontinued the catalog, then what the heck do I do?"
I responded that his job would not change ... one bit. He would still be responsible for merchandising strategy. The individual stared at me and offered this tidbit.
  • "But how do I do my job if I don't have a catalog to merchandise?"
There you go.

I'm not convinced people "don't want to change".

I am convinced people (me included) don't know "how" to change.

If you offer your Executive Team an idea and you don't teach your Executive Team how to change, your Executive Team may not change.

Think of it this way ... if you were an analyst who used SAS for twenty years and then somebody demands that you use R and Python immediately, how would you respond, especially if the company keeps their SAS license? Be honest!

It isn't that people don't want to change ... people may not know "how" to change. Provide a roadmap for "how" somebody changes, and the likelihood of change may "change"!

August 09, 2017

Company Culture

The three large retailers I worked for had a fundamentally different Company Culture.
  • Lands' End = Align influential Executives around your idea.
  • Eddie Bauer = Align every employee in the company around your idea.
  • Nordstrom = Use good judgment.
Which culture do you think I enjoyed the most? You're right ... it was Nordstrom!

Which culture do you think gave me stomach cramps? You're right ... it was Eddie Bauer!

When you tell me that you cannot pursue concepts like the Organic Percentage, you seldom tell me that your Company Culture prevents you from pursing the concept.

Every company approaches solutions differently, based on the history of the company, the urgency of the challenges faced by the company, long-term employees, and the Executive Team.

If your ideas aren't going anywhere, which wall are your ideas bumping into?
  • History of the Company?
  • Urgency of the Challenges faced by your Company?
  • Long-Term Employees?
  • Your Executive Team?
It's bad enough you have to bump into one of these challenges, but frequently your ideas bump into 2-3 of the challenges. If you don't have 10-15 years of corporate experience, you haven't seen enough to know how to navigate these problems.

It's been my experience (especially in consulting) that Long-Term Employees are the biggest challenge to getting your ideas implemented. Long-Term Employees are protectors of the culture.

I was in a meeting a while back - and are you ready for this? The ANALYST was a long-term employee, and the ANALYST completely dictated the direction the company pursued. The Executive Team would come up with an idea, and the ANALYST would say "that has no chance of working, we tried that seven years ago and it did not work." Over and over and over this happened, to the point where nobody did anything different ... not only that, but nobody wanted to do anything different because nobody wanted the ANALYST to berate them. Only ideas that were guaranteed to work were pursued. How many of those exist?

There are a lot of moving parts to getting ideas implemented. Evaluate how your company culture (and your role in it) hurts your chances for implementation. 

August 08, 2017

Finding Cheese At The End Of The Maze

Sometimes I keep thinking I talk about the same topic over and over and over and don't get anywhere. Here's an example ... I wrote this about comp segment analytics ... in 2008 (click here). And yet, the very method that I use to illuminate nearly every problem I run across ... a method at least 20 years old ... that method is used by how many of you? Show of hands?!

But there's a reason that we have to say the same thing over and over and over again.

It's because people (people like you and I) have a hard time working together and agreeing upon things.

Allow me to provide an example.

I wanted to get rid of discounts/promotions at Eddie Bauer. We A/B tested discounts/promos for 6 months, and learned that customers spent $0.00 more over time when offered discounts/promotions. Pull 20% of gross margin dollars out of the equation, and you had a formula for disaster if discounts/promotions continued to be pursued.

I was a Director at the time (late 1998).

I had to convince my boss (DVP Marketing) that this was a good idea. That was easy - my boss was as kind and logical and rational a person as you'd ever find.

Next, I had to convince his boss (SVP Marketing) that this was a good idea. I met with him "before work" once a week, because he was busy during the work day. I shared test results with him. He didn't agree with the test results ... and he was a "data-driven" employee before being "data-driven" was deemed the way to go.

I could have quit there. I didn't quit there. I went to his boss (EVP of Global Brand Direction), who liked the idea of removing discounts/promotions because it was "good for the brand".

With his approval, I went back to my staff and told them to remove discounts/promotions.

An individual who reported to me didn't like my decision, so this individual went to the SVP of Marketing and told the SVP what I was doing. Then the individual (a data-driven Manager) waltzed into my office and said "We're not doing what you told me to do, because I went to the SVP and he said he told you not to execute your strategy." It's always nice to have your staff work against you ... that's probably what the SVP thought of me, too.

So my staff won't do what I want them to do, and the DVP will allow it and the SVP will not allow it and the EVP will allow it. What next?

I presented my findings to our Executive Team, unannounced (I'll bet the SVP liked that).

Guess what?

Our CEO didn't like my idea. 

Here's the scoreboard, for those of you keeping score at home.
  • My Staff = No.
  • Kevin = Yes.
  • DVP Marketing = Yes.
  • SVP Marketing = No.
  • EVP Global Brand Direction = Yes.
  • CEO = No.
What did I do?

I instructed my team to remove discounts/promotions to all customers who have purchased in the past "x" months ... I went halfway. I pleased everybody.

My data-driven Manager was again frustrated - he went to the SVP and complained again. This time the SVP backed me, because I didn't pull discounts/promotions from everybody. And that was all it took ... the Manager had to implement my tactic, and did implement the tactic.

A year later, we had the most profitable year in the history of the online/catalog division, a history spanning more than fifty years.

Nobody complained when we had the most profitable year in the history of the online/catalog division.

Why share this example?

Well, if you are a data-driven employee and you have great ideas and your Executive Team won't listen to you, you have options. You can fight the good fight, finding Executives who do agree with you and working hard with those individuals to evangelize your idea. You can find a way to get past "no". You can take a risk ... you can implement a tactic that your CEO specifically told you to not implement ... sure, you might lose your job, but you also might make your company a ton of profit.

This brings me back to the opening paragraph.

I've been telling many of you the same thing over and over and over again for a DECADE and you still don't implement what I'm sharing with you. I could quit. Or I could keep fighting, over and over and over again for a DECADE to teach you ideas that have been proven to work.

So how about you? Do you keep fighting for the ideas you believe in? Or do you blame the dumb Executive for not adhering to your data-driven strategy?

Please, keep fighting!

Ahead Of Time

When I worked at Lands' End, we had clear Goals and Objectives, issued before the fiscal year began. Our performance was measured against Goals and Objectives. We knew ahead of time what mattered.

When I worked at Eddie Bauer, we had clear Goals and Objectives, but we weren't held accountable for performance against the Goals and Objectives. So nobody really cared about Goals and Objectives.

When I worked at Nordstrom, we frequently began the fiscal year without Goals and Objectives. That's a problem, because by February 1 (the beginning of the fiscal year) we were already doing work that would impact the business in Fall. In other words, our Goals and Objectives only impacted the latter half of the year (unless they were written in a clever way).

This drove me nuts. So I gave my boss (the Chief Marketing Officer) Goals and Objectives for my team for the upcoming year ... in November or December of the prior year. I'd tell my boss that "this is what we're focusing on". By the time late February arrived and we didn't have Goals and Objectives, guess what? My Goals and Objectives became real Goals and Objectives. And you know what? We were already several months into implementing the work necessary to meet/exceed our Goals and Objectives.

This brings me to you ... you want to know why your Executive Team won't adopt your work?

Odds are your Executive Team has Goals and Objectives. They may have written them on their own, or the CEO may have written them. Regardless, they're working on fulfilling their Goals and Objectives. If your idea doesn't align with their Goals and Objectives, well, you know what might happen to your ideas, right?

Get out ahead of the issue. It's August. Start aligning the stars right now. Clearly communicate to Leadership what you'd like to accomplish in 2018 (or sooner). Ask your Leadership Team to write what you want to accomplish into your Goals and Objectives for 2018.

Ok?

 

August 07, 2017

Paper People

I'm walking through the lobby of a conference center, and a paper rep stops me. She has something she wants to tell me.
  1. "I guess I don't get to have a career anymore because of the things you say."
She then goes on to tell me what her incentive structure is.
  1. She earns a larger bonus when she gets my clients to spend more money annually on paper.
Do you think that the paper rep is going to evangelize the magic of the Organic Percentage to her client base?

Or do you think the paper rep is going to ask her client base (i.e. you) to spend more money, in spite of what is most profitable for your brand?

This reminds me of a sales rep from Forrester Research, back in 2006. He'd call me once a month and ask me to spend $35,000 on whatever it was he was selling. I'd say "no", that I didn't need his research to tell me what to do. He called and called and called. And I said "no" over and over and over.

Then he stopped calling. I was relieved, but only momentarily. One day I noticed he was in the office of the IT Executive (a person who had overlapping responsibilities to me). He actually got in the building! I told this person that we didn't need his nonsense.

A week later, he's in the office of my boss (Chief Marketing Officer). How'd he get there? I told my boss we didn't need his useless research telling us to promote an omnichannel future.

I thought I quelled the problem.

I was wrong.

The sales rep got to our online division, and got to our credit division. The sales rep got ten Executives in a room and DID NOT INVITE ME ... I got invited because my boss (the CMO) wanted me there because, and I quote, "I (Kevin) would have to implement what the sales rep and the Executives agreed to and I would pay for Forrester's data from my budget." #ohjoy

At this point, the Forrester Sales Rep spewed a ton of what a former boss called "Lizard Logic" - seductive language about omnichannel strategy that sounds right but is useless to the business and only gets the Sales Rep paid.

Why tell these stories?

Because the "sales reps" ... from your paper rep to your printer to your four co-ops to your list agency to your merge/purge vendor to your database vendor to your boutique catalog agency to the USPS ... they all have an incentive to get you to spend more, and they will meet with any Executive at your company until they find the weak Executive, and then they will dive in an exploit that relationship. They are paid to find the weak Executive.

I had a postal employee tell an audience at a conference I spoke at to "ignore what I said, because I didn't have actual research and he had survey research that proved that paper is valuable." Which is fascinating, because I have actual research ... actual data from more than a hundred catalog brands! But the postal employee lied in front of a large audience to get the audience to spend money so that the postal employee could get paid.

Remember this one (click here)? If you are an analyst trying to push a profitable agenda that uses less paper and you share facts with your Executive Team and they don't listen to you ... well ... maybe they are listening, but the paper rep is spending more time with your Executive Team than you are. Since I see this happen all the time, I just thought I'd pass it along, so that you can craft a strategy for getting your Executive Team to do what is right for your company as opposed to what is right for a paper rep.

August 06, 2017

I Can't Convince My Executive Team To Do Anything Different

For two weeks, I shared what I called "Catalog Theory" ... which really isn't theory but instead is a proven method for optimizing profit from print.

I received a positive comment or two - and as is typical, I received a standard array of "our Executive Team won't change" comments from readership. That's common when I post a series of articles about a specific topic, FYI.

Early in my career, I was rather harsh when it came to Executives ... when I worked at Lands' End I was so appalled by the growth in Executive positions that I renamed the "Company Pyramid" a "Rhomboid", a three-dimensional figure about to tip over from the weight of the disproportionate number of Executives recently hired.


Ha ha funny stuff and all ... until I got to Eddie Bauer and became a Director and noticed that I was one layer away from stock options and cars and parking spots and most important, fat bonuses. Then my opinion of Executives changed. I WANTED TO BE ONE!

When the dream became a reality (Nordstrom), I learned quickly that bonuses aren't just free money tossed in the direction of the Executive. Bonuses are EARNED. And you earn a bonus two different ways.
  1. Increase Sales.
  2. Increase Profit.
Here's the interesting thing about bonuses. Bonuses highlight conflict. When I was at Nordstrom, I ran into this problem in 2003. I had A/B test data that showed that we could reduce catalog mailings and be more profitable. Five problems.
  • If I cut back on the number of catalog mailings, sales declined. We couldn't have a decline in sales if we wanted to keep our jobs.
  • If sales declined, I'd have to liquidate merchandise we already planned to sell. You cannot let that happen - that's an unprofitable way to run a business.
  • I didn't have a proven replacement for the sales I'd lose via catalog mailings.
  • The profit component of my bonus was maxed, meaning that I could increase profit significantly and my bonus wouldn't grow - but I could grow sales and my bonus would increase. In other words, my personal financial incentives were opposite of what was best for the company.
  • There was a share of the employee base who were intrinsically motivated by anything "catalog" related. In other words, they could see catalog sales grow by 1% and online sales grow by 31% and they'd champion catalog sales growth of 1% because they "loved the catalog". Doing something opposite of what they wanted meant that those employees wouldn't do the things my team wanted to do - I'd alienate a lot of people by reducing the importance of their "passion".
If you want to understand why Executives do things that run contrary to the "right" thing to do, then spend time understanding how Executives get paid and understand what motivates an Executive.

Executives aren't dumb robots motivated by money and gut instinct, as is popularly discussed by some in the analytics community. There are many reasons why the "right" decision is avoided ... and the Executive isn't likely to share those reasons with employees.

Learn what motivates an Executive. Build relationships. Ask questions. Have your Executive Team spell out for you exactly what "success" looks like. This allows you to understand if your ideas have a chance of being implemented.


P.S.: I realize a lot of you don't want to hear this message. When I shared my post last Friday (click here), I received a series of "unsubscribes" from one specific company. It's obvious what I discussed was opposite of what that company wanted to hear. Or maybe the employees were tired of hearing the same message and then not getting anywhere. Whatever. We're at a point in time where we need to do something different ... and based on my observations, we're not great at collaborating with our co-workers. If something needs to change, then maybe we start by learning what motivates our co-workers?

August 03, 2017

Wrap-Up on Circulation Theory

I spend a lot of time reading ... and when you do that, you obtain a biased view of the world based on the content you read.

So I wanted to test my theory that what I read biases what I learn. For instance, I pay attention to Internet Retailer and listen to what they have to say. They like to talk about Amazon, don't they? And for good reason. So I counted the number of times they mentioned Amazon on original / non-vendor tweets (excluding retweets) between April 22, 2017 and July 21, 2017.

Here are the results.


Whole Foods got in there because they were purchased by Amazon. I recoded any mention of "Prime Day" as "Amazon", for good reason, boosting the Amazon total. But take those 40 tweets +/- out and the story isn't different.

If I pay attention to what I read, I'll make a ton of mistakes that hurt my client base. Internet Retailer has to talk about Amazon, because that enables Internet Retailer to get paid. We "get" to talk about Circulation Theory ... it gets you paid! You don't get paid when you ponder what Amazon is doing.

I spent two weeks discussing Circulation Theory because the secret to keep doing what catalogers love doing is embedded in the ten posts on the topic. If you've executed mail/holdout tests and page count tests, then every secret discussed in this Circulation Theory discussion is available to you.

Yes, you!

You get to be the person who charts a path to the future.

You get to be the person who generates disproportionate profit amounts compared to the marketers who managed your brand in the past.

You get to free up ad-dollars to spend online and in mobile, allowing your company to "keep up".

You will attract online/mobile customers who have different merchandise preferences. Your merchandising team will observe the results and, as a consequence, they'll offer more of what an online/mobile customer wants ... enabling your conversion rates to improve, allowing your company to move into the future must faster.

You get to do all of this.

Yes, you!

Analyze your test results ... structure them into the framework outlined in this series of ten posts. Then go make magic happen!

What questions do you have? Any? What should I discuss in a future week of Circulation Theory?

Need help? Contact me (kevinh@minethatdata.com) and we'll structure your information into this framework and see what it means to your business.


P.S.: I know, those of you who are Executives will tell me that your CEO/Board won't let you do anything different. And those of you who are Managers/Analysts will tell me that your Executive Team won't let you do anything different. It is TIME to do something different. I spent two weeks showing you how to make your company a fortune. If Leadership won't let you cut back on frequency, then cut back on pages ... go deep with a small page count as a test and see what happens. If Leadership won't let you cut back on pages or frequency, then make all of the changes you want with mobile-centric customers and just tell your Executive Team or CEO/Board that this is what you are doing, end-of-story. Or don't do that. But it is TIME to do something different. So do something different, ok?