Every one of these rules are made to be broken, these are not best practices, these are trends that some of the best companies follow, while others blatantly disregard on the way to unfettered profits. Think about each one. Please think.
Make A Demographic Decision: A decade of co-op infused customer acquisition nets most of us a customer file that is heavily skewed to a 55+ rural audience. This was not the intended outcome of the "multi-channel" era, it's one of the unintended consequences of doing what everybody else is doing. It's time to make a decision ... do we follow this demographic into retirement, do we sell, or do we chart a path to the future?
Frequency vs Pages: Twenty sixty-four page catalogs are generally better than ten one-hundred-and-twenty-eight page catalogs. The vendor community often skews us away from this solution, as do our creative teams. Do what is right for the customer, not what is right for our vendors or our creative team. By the way, your mileage will vary ... smaller catalogs must be merchandised differently than larger catalogs.
T-Commerce vs E-Commerce: Simplicity and organization made cataloging great. E-commerce is largely an algorithmic, IT-based drill-down shopping experience that lacks warmth. Tablets could change this. Apps like Catalog Spree represent the embryonic stages of a warmer shopping experience. The cataloger has a distinct advantage over the e-commerce brand in tablet commerce, in that it knows how to stimulate a warm shopping experience. The cataloger has a distinct disadvantage in that the demographic it is used to speaking to is much older than a tablet-embracing audience. Regardless, there is long-term profit to be had creating a shopping experience on tablets. And, unfortunately, the catalog shopping audience has yet to embrace tablets at the rate that younger audiences have, so there's an audience disconnect at play here.
Social = A Feature: I think we can put the concept of social media as a sales engine to bed. Catalogers will use social media as a feature, and won't bother to measure "ROI". You'll have a product, coupled with creative presentation and audience and social and whatever else ... the blend of those tactics yields profit, or it doesn't. Separating the return on each component will be a useless, feckless exercise, going forward.
Scorching The Earth: I can't tell you how often I meet with people, and we talk about different strategies, and I hear the following phrase ... "our vendor will charge us $5 per thousand to do that, so we aren't going to go down that path". Oh boy! The last decade was all about Scorching The Earth for profit ... both catalogers and vendors alike. One might fancy a day where both sides are more collaborative. Again and again, I see how vendors stop catalogers from moving forward and making progress by charging for anything innovative. Do the opposite! Vendors, leave a little profit on the table and try to move a client into their future, not into your prescribed future.
Fragmentation: We have at least three audiences. We have an old-school 55+ rural customer that must be mailed catalogs. We have a 40-54 audience that is in a state of transition. We have an 18-39 audience that shops in unique ways. Most of us spent the past decade asking all customers to shop like 55+ rural customers. If we want a diverse portfolio of customers in the future, we're going to have to fragment our marketing efforts in many different directions.
Pennies Count: I cannot believe how many people I meet who are perfectly happy letting $0.03 profit per customer evaporate. If you have 500,000 twelve-month buyers, and you're willing to let $0.03 profit per customer evaporate each month, well, then you're willing to let $180,000 disappear. Heck, that's salary for one or two employees plus benefits plus 401k plus a little profit to boot. Instead of lamenting the fact that we can't hire people, why not stop over-circulating, then re-invest the pennies in employees?
Optimize Annually: We spent the past decade doing everything possible to "maximize conversion rates" or to "boost response". How did that work for us? Most companies have the same annual customer metrics, regardless of channels or strategy ... the same 32% of customers repurchase in 2011 that repurchased in 2001, in spite of discounts and promotions and website redesigns and email campaigns and search and social and mobile and gamification and tablets and personalization and CRM and co-op optimized inactive names. I continually notice that the most successful companies I work with optimize over a quarterly, seasonal, or annual timeframe. These companies have a disproportionate focus on new customer acquisition.
Loyalty Is A Myth: Unless you are Apple or Amazon or Google or Wal-Mart or McDonalds or Starbucks or a handful of mega-brands, loyalty is a myth. I measure loyalty as the state where a customer has at least a 60% chance of purchasing from your brand in the next twelve months. Continually, I notice that 5% of a twelve-month file possesses this level of loyalty. Think of all of the loyalty initiatives you've employed over the past decade ... how many of them fundamentally changed customer behavior? Be honest! The modern cataloger attempts to find customers in a state of need, then meets that need at an acceptable cost ... if downstream purchases happen, all the better, but the modern cataloger doesn't demand loyalty from the customer, the modern cataloger simply demands profitability.
Cashing Out: I increasingly hear of folks setting up their business to "cash out". There is a big difference between crafting strategies that optimize profit, and crafting strategies to sell a business. Expect many catalogers to skew strategies toward the cash-out option, manufacturing short-term health in exchange for an opportunity for a pay day.
The Missing Middle: Fifteen years ago, it was common to have a twelve-month file with highly responsive customers, responsive customers, and infrequent buyers. Today, the middle is gone ... we're increasingly left with highly responsive customers and infrequent buyers. The middle became infrequent, because now the infrequents shop low-cost, free-ship online brands. Modern catalogers greatly over-spend trying to rebuild the middle, a largely fruitless endeavor. We need to shift behavior here, allowing infrequents to do what they're going to do, harvesting profit where possible, generating the remainder of our profit from low-cost acquisition and highly-responsive buyers.
Low-Cost Acquisition: This is the biggest trend I see out there. Think about my case. I could take out ads in trade journals, and I could pay to host a big, fancy booth at an industry conference. Or, I could invest time writing this stuff. Which strategy seems to be working better? In the past decade, cataloging became all about paying for low-cost names from co-ops. In the next decade, the trend is to find much cheaper names outside of the co-op world. Do you want to rent names for one-time use at $0.06 each, or do you want to do the hard work required to have customers consider your business when they have a purchase need without the requirement of a mailed catalog?
Back To Email: There will be tremendous optimization strategies around reducing catalogs among email responsive names in 2012 and 2013 ... we'll have to do this to manage expenses. We've been hearing about this for a decade ... in the past two years, I'm finally seeing the hypothesis bear fruit, and in the next two years, we'll see catalogers finally yield to this unstoppable economic outcome.
First Twenty Pages: If you're going to go to the effort to send something, you'll at least make the first twenty pages compelling. This isn't a new rule, as much as it is a new emphasis of an old rule. The best catalogs have a compelling twenty-page introduction.
End of Remail Catalogs: Your customer can gain real-time intelligence on any device, at any time. And yet, we send one main release and two remails of that release once a quarter. Maybe the 55+ rural audience doesn't notice. Regardless, we'll have to stimulate customer behavior by not being repetitive. Today, many of you mock me when I bring up this point, you tell me that you don't have the creative resources to manage new creative. Oh boy! Honestly, you can't afford to not have the creative resources to re-merchandise your catalogs and website and email campaigns, you are being out-competed!
Fruitless Hype: We give too much credence to things that don't matter. Just because your printer thinks that a QR code will be adored by a 62 year old customer doesn't mean that your 62 year old customer will adore QR codes. Should you try things? Yes! But ignore the hype. A cereal company can get 40,000 people to go from a QR code to their website, you can't ... you're 1/1,000 as big as the cereal company, meaning you'll get 40 people to go from a QR code to your website.
65% Gross Margins: Ok, this is the recycling of a very old rule, but it is even more relevant in the next decade. The way to be successful is to sell stuff that generates profit, right? The internet is all about the opposite ... getting funding that allows you to delay profitability, allowing you to create "scale" that drives prices and margins down, wounding the competition, causing scale to increase, causing prices and margins to surge down even further. Be honest, you can't win that game. Amazon can win that game. Wal-Mart can win that game. But you cannot win that game. You can win a game with proprietary product and great service and hefty gross margins that customers willingly pay.
Insourcing: So many of you have outsourced just about everything. You have an email vendor, a search vendor, a database vendor, a merge-purge vendor, a couple of co-ops, a list vendor, a paper rep, a print vendor. And as a result, all you have are fragments of insight and knowledge. If you spent the past decade pushing everything out to low-cost vendors, you'll need to spend the next decade pulling your intellectual property back into your organization ... a process I call "insourcing". Outsourcing is great for the short-term profit and loss statement. Insourcing is great for the long-term profit and loss statement.
What Is Advertised Is Not What Is Sold: I continue to see email and catalog holdout tests where items sell at the same rates, regardless whether they were advertised or not. The best catalog marketers are going to crack this nut, figuring out what you have to advertise so that you can sell everything else.
Retail Is A Debt Dungeon: The bricks 'n clicks dream of the management consulting world is dead. Retail consumes the financial resources of a direct-channel business, and is largely a one-way street (online customers shop retail stores, retail buyers do not necessarily shop online). Furthermore, the concept that catalogs drive retail sales has largely been debunked. Sure, catalogs drive traffic to stores ... but not like they drive traffic to a website. I'm not saying you shouldn't have a retail store. I am saying that when you have a retail store, you are not a traditional direct marketer ... the financials and marketing strategies fundamentally change ... your customers fundamentally change ... and you fundamentally change.
Catalog Circ Reductions Fund Free Shipping: This is a huge trend, based on your inquiries. Free shipping or low-cost shipping are the future, and somebody is going to have to pay for this ... that somebody is the co-ops, who currently enjoy $0.06 per rented name, and marginal online housefile buyers, who will see a greatly reduced contact strategy in the future. Co-ops, however, have a huge opportunity here!! They have a database with nearly every household in the United States. They will have the opportunity to segment customers based on promotional preferences. Would you pay $0.15 per customer for access to customers that adore full price merchandise? If you're running a free shipping promotion, would you pay $0.20 per name for customers who crave free shipping and continue to purchase after the initial transaction? Co-ops have a huge opportunity here. So do you. Regardless, the trend will be toward circ reductions that fund other activities.
Brain Drain: Do you know how hard it is to hire talent? You'd think with a nine percent unemployment rate and a 22% under-employment rate that it would be easy to find talent. Not so. Talent is headed out of the catalog marketplace, into all that is hot and trendy (mobile, social). We combated this trend by outsourcing all of our key functions to the vendor community. Do not be surprised to see non-competitive catalog brands sharing resources in the future ... a circulation team can be shared among non-competing brands, for instance. Heck, brands already share their most valuable asset ... customers ... with each other, so why not back-of-the-office functions?
Ecosystems: The 1990s were characterized by ecosystems of catalogers exchanging lists with each other ... the health of all brands were interconnected. The 2000s were characterized by an algorithmic ecosystem, be it the co-ops feeding you 55+ rural names or Google feeding you those searching for products right at this moment. Social ecosystems are not designed for commerce, and mobile is simply an extension of e-commerce into new devices and locations outside the home (though a third of mobile activity happens in the home). The ecosystems of the 2010s will be defined by social collaboration across catalogers, forced by private equity, or fostered by industry leaders with the forethought to share resources with non-competitive catalog brands. I want to end on this point, because you need to seriously think about this topic ... the power of two $50,000,000 non-competitive catalogers openly sharing ideas/resources to benefit the growth potential of each business. Why wouldn't PC Connection and Cuddledown of Main share resources, they aren't competing with each other? How could either business possibly lose by knowing how each business approaches problems? Could the circulation team at one brand do the work for the other, under dire financial situations?
Ok, time for your thoughts, go ahead and use the comments section to give your $0.02.
Showing posts with label Catalog Marketing. Show all posts
Showing posts with label Catalog Marketing. Show all posts
August 24, 2011
April 26, 2011
BREAKING NEWS: Catalog Presentation Download
Why don't you click below and download this catalog presentation I've been sharing as I make my way across the country.
In the presentation, I discuss trends I'm observing and the impact these trends will have on catalog marketing, moving forward. In particular, I spend considerable time on how mail/holdout tests will be used to ultimately save ad-dollars, allowing catalogers to compete with companies offering free shipping 24/7/365.When you're done reading the presentation, please forward it to a friend/co-worker/colleague.
Contact me for you own customized project.
January 27, 2009
Your E-Mail And Catalog Contact Strategy, And Profit
If you read the multichannel marketing literature, you're unlikely to find any discussion about how marketing channels truly interact with each other.And that's a shame, because the interactions are where all of the magic happens!
Folks who test different combinations of catalog mailings and e-mail campaigns observe interesting results.
Take a look at the table in this post. Seven different combinations of catalog mailings were tested against five different combinations of e-mail campaigns, yielding thirty-five different test groups.
What do the results tell us?
- The organic percentage can be directly calculated ... the $20.00 generated at 0 catalogs / 0 e-mails divided by the $99.00 generated at 24 catalogs / 52 e-mail campaigns. The organic percentage is 20.2%. This is soooooooooo important!! If this company does nothing, customers will still spend 20.2% of the volume they spend if all direct marketing activities are executed. For most catalogers and e-mail marketers, results are over-stated, because organic demand is being falsely attributed to marketing activities. Ask your co-op or database provider to calculate the organic percentage for you, or ask your database marketing expert to calculate this metric for you.
- Notice that demand does not increase in a linear manner. Each additional catalog, and each additional e-mail campaign yield an ever-decreasing amount of additional demand. This rate of diminishing returns is not well known in the direct marketing community, and causes direct marketers to significantly over-invest in marketing.
- Notice that e-mail is able to re-capture demand that is lost as catalog mailings are reduced. This "re-capture" is not well known in the direct marketing community, and causes direct marketers to significantly over-invest in catalog marketing.
- E-Mail marketing is actually very productive at small quantities ... thirteen contacts are much more productive, on a per-e-mail basis, than are fifty-two contacts.
- As catalogs and e-mail campaigns are increased, profit begins to shift. Notice that the most profitable combination is 12 catalogs and 52 e-mail campaigns. However, if you only delivered 26 e-mail campaigns, you need 16 catalogs to maximize profit, and if you don't execute e-mail marketing, you need 20 catalogs to maximize profitability.
- "Profit Shift" is a very important concept. As more and more "free" or "nearly free" marketing channels become available, the profitability of traditional, expensive marketing channels (like catalog marketing) becomes worse, requiring less investment in traditional, expensive marketing.
July 20, 2008
The Failure Of The Catalog/Multichannel Marketing Model
"The internet is the wild west. I keep advertising, only to send my customers out into the wild west. And they never return." Catalog Merchandising Executive, 2007.
When we conduct the post mortem on the failed experiment known as multichannel marketing, we'll look at this quote as being a key piece of the puzzle.
Back in 2001, it was a good idea to be "multichannel". We sent catalogs to customers, like we always have. Our analytics suggested that customers used our catalogs to shop on our e-commerce enabled websites. Woo-hoo!
And then Google took command of e-commerce. Ever since then, we've been leaking customers and prospects.
This manifests itself in the phrase I hear nearly every day ... "catalog customer acquisition performance continues to get worse".
Many smart people correctly point out that catalog marketing "creates demand". In other words, many customers do not intend to buy anything, but will buy something if advertised to. The catalog creates demand for an item. Paid search, in general, does not create demand --- it simply intercepts demand that is looking for a home.
Our industry mistakenly went down the multichannel path, believing that this form of demand creation was good. And in a pre-Google world, it was really good!
Today, demand creation is usurped by demand interception.
Go to Quantcast, and view the profile for Orvis. Notice that customers who interact with Orvis also interact with companies like RiverBum. To my knowledge, RiverBum does not have a catalog or stores.
So here you have the good folks at Orvis, doing the multichannel thing, sending paper out into the catalog ecosystem. They do a good job of creating demand for dry attractors.
But the customer isn't 100% sold on buying dry attractors on the Orvis website. He goes to Google and conducts the following search: Dry Attractors. Lo and behold, look who comes up #1 ... RiverBum!
Orvis creates demand for dry attractors. Google intercepts the demand, and funnels it to RiverBum. The customer places the order at RiverBum. The circulation manager at Orvis looks at the metrics, noticing that response continues to decrease.
Catalog marketing still works ... especially for the folks at RiverBum, folks who are not executing multichannel marketing the way the pundits told Orvis to execute it.
Sure, you can criticize Orvis for failing to capitalize on an obvious search opportunity (they don't appear in the top ten for the term dry attractors and did not appear in paid results either). But that criticism misses the point entirely.
The point is that traditional multichannel marketing, executed via catalogs and stores and websites, is a leaky bucket that can never be fixed in a world dominated by Google. No matter how effective you are at catalog marketing, no matter how hard you work to optimize page counts and stimulate demand via enticing copy and manage trim size and use recycled paper and send remails and remails of remails, you will constantly send customers to Google. And Google will send customers to your competition.
E-mail marketers ... you're in the same boat.
This is the grand failure of the catalog/multichannel marketing model, a failure nobody in our industry wants to talk about. When we get away from over-thinking catalog productivity, when we focus on executing the nuts and bolts of online marketing, we begin to view the world differently. And maybe, we can stabilize the leaky bucket problem we face.
When we conduct the post mortem on the failed experiment known as multichannel marketing, we'll look at this quote as being a key piece of the puzzle.
Back in 2001, it was a good idea to be "multichannel". We sent catalogs to customers, like we always have. Our analytics suggested that customers used our catalogs to shop on our e-commerce enabled websites. Woo-hoo!
And then Google took command of e-commerce. Ever since then, we've been leaking customers and prospects.
This manifests itself in the phrase I hear nearly every day ... "catalog customer acquisition performance continues to get worse".
Many smart people correctly point out that catalog marketing "creates demand". In other words, many customers do not intend to buy anything, but will buy something if advertised to. The catalog creates demand for an item. Paid search, in general, does not create demand --- it simply intercepts demand that is looking for a home.
Our industry mistakenly went down the multichannel path, believing that this form of demand creation was good. And in a pre-Google world, it was really good!
Today, demand creation is usurped by demand interception.
Go to Quantcast, and view the profile for Orvis. Notice that customers who interact with Orvis also interact with companies like RiverBum. To my knowledge, RiverBum does not have a catalog or stores.
So here you have the good folks at Orvis, doing the multichannel thing, sending paper out into the catalog ecosystem. They do a good job of creating demand for dry attractors.
But the customer isn't 100% sold on buying dry attractors on the Orvis website. He goes to Google and conducts the following search: Dry Attractors. Lo and behold, look who comes up #1 ... RiverBum!
Orvis creates demand for dry attractors. Google intercepts the demand, and funnels it to RiverBum. The customer places the order at RiverBum. The circulation manager at Orvis looks at the metrics, noticing that response continues to decrease.
Catalog marketing still works ... especially for the folks at RiverBum, folks who are not executing multichannel marketing the way the pundits told Orvis to execute it.
Sure, you can criticize Orvis for failing to capitalize on an obvious search opportunity (they don't appear in the top ten for the term dry attractors and did not appear in paid results either). But that criticism misses the point entirely.
The point is that traditional multichannel marketing, executed via catalogs and stores and websites, is a leaky bucket that can never be fixed in a world dominated by Google. No matter how effective you are at catalog marketing, no matter how hard you work to optimize page counts and stimulate demand via enticing copy and manage trim size and use recycled paper and send remails and remails of remails, you will constantly send customers to Google. And Google will send customers to your competition.
E-mail marketers ... you're in the same boat.
This is the grand failure of the catalog/multichannel marketing model, a failure nobody in our industry wants to talk about. When we get away from over-thinking catalog productivity, when we focus on executing the nuts and bolts of online marketing, we begin to view the world differently. And maybe, we can stabilize the leaky bucket problem we face.
October 10, 2007
Mailbag: Kill The Catalog
"You frequently talk about what will happen when catalogs go away. Maybe you don't understand cataloging. When we don't mail a catalog, nothing happens online."
I get this feedback a lot. Multichannel Forensics will clearly tell you what the relationship is between catalogs and a website.
Catalog = Isolation, Website = Transfer: This situation suggests that you mail a catalog, customers buy the product online, then the customer uses the telephone for future purchases. In this situation, your catalog means everything to you. Don't kill it!!
Catalog = Equilibrium, Website = Equilibrium: This scenario is what multichannel pundits talk about. Catalog drive e-commerce sales, e-commerce activities drive catalog sales. Everybody wins. Don't kill the catalog!!
Catalog = Equilibrium/Transfer, Website = Isolation: This is when you start to think about killing a catalog. The catalog sends customers to the online channel. Once the customer goes online, they stay there, and don't order over the phone anymore. Ordering over the phone is a proxy for catalog effectiveness. When customers shift their behavior online, and stay online, start seriously thinking about the future of cataloging. Could you match your catalog sales by shifting spend from catalog advertising to online and search marketing?
Catalog = Isolation, Website = Isolation: When this happens, then you have two separate customers, one that likes catalog, one that likes the internet. The customers don't cross-shop channels. In this instance, you can do whatever you feel is appropriate for your catalog and online channels. If your catalog is unprofitable, you probably won't hurt your online channel ... but you probably won't recoup the sales you lose by not having a catalog.
The key is to run the Multichannel Forensics analysis, and let your customers tell you what your strategy should be! Don't listen to me, don't listen to the gobbelty-gook that vendors and pundits toss at you. Simply do the Multichannel Forensics analysis, and let the data guide your thought process.
In the first two examples, you'd never kill a catalog. The catalog "is" your brand.
I get this feedback a lot. Multichannel Forensics will clearly tell you what the relationship is between catalogs and a website.
Catalog = Isolation, Website = Transfer: This situation suggests that you mail a catalog, customers buy the product online, then the customer uses the telephone for future purchases. In this situation, your catalog means everything to you. Don't kill it!!
Catalog = Equilibrium, Website = Equilibrium: This scenario is what multichannel pundits talk about. Catalog drive e-commerce sales, e-commerce activities drive catalog sales. Everybody wins. Don't kill the catalog!!
Catalog = Equilibrium/Transfer, Website = Isolation: This is when you start to think about killing a catalog. The catalog sends customers to the online channel. Once the customer goes online, they stay there, and don't order over the phone anymore. Ordering over the phone is a proxy for catalog effectiveness. When customers shift their behavior online, and stay online, start seriously thinking about the future of cataloging. Could you match your catalog sales by shifting spend from catalog advertising to online and search marketing?
Catalog = Isolation, Website = Isolation: When this happens, then you have two separate customers, one that likes catalog, one that likes the internet. The customers don't cross-shop channels. In this instance, you can do whatever you feel is appropriate for your catalog and online channels. If your catalog is unprofitable, you probably won't hurt your online channel ... but you probably won't recoup the sales you lose by not having a catalog.
The key is to run the Multichannel Forensics analysis, and let your customers tell you what your strategy should be! Don't listen to me, don't listen to the gobbelty-gook that vendors and pundits toss at you. Simply do the Multichannel Forensics analysis, and let the data guide your thought process.
In the first two examples, you'd never kill a catalog. The catalog "is" your brand.
September 10, 2007
Transition
Those of us who have been in the catalog industry since 1995 know that we are going through a period of significant transition. We may not always acknowledge this fact. But it is happening.
To use broad generalizations, Baby Boomers fueled rampant catalog sales growth in the 1980s and 1990s. Gen-X brought us e-commerce and e-mail marketing. Millennials are fueling social networking, and in many cases are ignoring "traditional advertising".
If you are a cataloger with a target customer this is sixty years old, you might be insulated from this period of transition, only impacted by increasing paper and postage costs.
If you are cataloger with a target customer that is forty or forty-five years old, you are going through a significant transition. A generation of print-responsive customers are being replaced by a generation of e-commerce customers. In the next ten years, your print-responsive customers will be a minority of your business.
Even more fascinating is the fact that in ten years, your e-commerce and e-mail business will be going through a "transition", thanks to dramatically different shopping behavior exhibited by Millennials. We simply can't envision how this generation will shop when they are forty years old. It is highly unlikely they will embrace catalogs or e-commerce as we know it today. They will probably create their own version of internet shopping.
Regardless, direct-to-consumer shopping will be very different from what we know today as "e-commerce". We'll be reading articles from today's e-commerce and e-mail experts about how "E-commerce isn't dead, it's still highly relevant ... Amazon is spending $400 million on an online marketing campaign featuring Gwen Stefani".
I lived through catalog transition during my time at Nordstrom. I watched a $400,000,000 telephone-based business collapse. I watched an e-commerce business grow from zero to a half-billion dollars. I actively participated in the tough decisions that result in marketing dollars being reallocated to e-commerce and "multichannel". I mourned as the catalog talent pool, my friends, were replaced by e-commerce, "multichannel" and "consumer intelligence" skill sets. My team artfully and willingly transitioned their skills to remain relevant in a post-catalog world.
And I rejoiced in my own renaissance!! I was able to re-brand myself as a subject matter expert in forecasting how customer behavior changes over time, across products, brands and channels. As it turned out, this transition was tremendously positive for me. My experiences going through the "transition" are so very important to the work I do for clients today.
If you are experiencing the transition of a career that was built on paper, this Vanity Fair article (forwarded by loyal reader Jennifer Thornton) should resonate with you: "Is This the End of News?".
The author artfully describes the transition he is experiencing in the news business, using common-sense language and everyday situations to describe how the internet, and differences in generational habits, are putting pressure on his career.
I felt the best part of the article was the way the author recognized all of the changes in his field, and is taking a chance on influencing the way news is presented to folks in the future. He may be right, he may be wrong. At least the author is positively using the transition of the news industry to try something different.
Time for your thoughts. Do you agree with the premise that cataloging is going through a significant transition? If you agree, how are you rolling with the punches?
To use broad generalizations, Baby Boomers fueled rampant catalog sales growth in the 1980s and 1990s. Gen-X brought us e-commerce and e-mail marketing. Millennials are fueling social networking, and in many cases are ignoring "traditional advertising".
If you are a cataloger with a target customer this is sixty years old, you might be insulated from this period of transition, only impacted by increasing paper and postage costs.
If you are cataloger with a target customer that is forty or forty-five years old, you are going through a significant transition. A generation of print-responsive customers are being replaced by a generation of e-commerce customers. In the next ten years, your print-responsive customers will be a minority of your business.
Even more fascinating is the fact that in ten years, your e-commerce and e-mail business will be going through a "transition", thanks to dramatically different shopping behavior exhibited by Millennials. We simply can't envision how this generation will shop when they are forty years old. It is highly unlikely they will embrace catalogs or e-commerce as we know it today. They will probably create their own version of internet shopping.
Regardless, direct-to-consumer shopping will be very different from what we know today as "e-commerce". We'll be reading articles from today's e-commerce and e-mail experts about how "E-commerce isn't dead, it's still highly relevant ... Amazon is spending $400 million on an online marketing campaign featuring Gwen Stefani".
I lived through catalog transition during my time at Nordstrom. I watched a $400,000,000 telephone-based business collapse. I watched an e-commerce business grow from zero to a half-billion dollars. I actively participated in the tough decisions that result in marketing dollars being reallocated to e-commerce and "multichannel". I mourned as the catalog talent pool, my friends, were replaced by e-commerce, "multichannel" and "consumer intelligence" skill sets. My team artfully and willingly transitioned their skills to remain relevant in a post-catalog world.
And I rejoiced in my own renaissance!! I was able to re-brand myself as a subject matter expert in forecasting how customer behavior changes over time, across products, brands and channels. As it turned out, this transition was tremendously positive for me. My experiences going through the "transition" are so very important to the work I do for clients today.
If you are experiencing the transition of a career that was built on paper, this Vanity Fair article (forwarded by loyal reader Jennifer Thornton) should resonate with you: "Is This the End of News?".
The author artfully describes the transition he is experiencing in the news business, using common-sense language and everyday situations to describe how the internet, and differences in generational habits, are putting pressure on his career.
I felt the best part of the article was the way the author recognized all of the changes in his field, and is taking a chance on influencing the way news is presented to folks in the future. He may be right, he may be wrong. At least the author is positively using the transition of the news industry to try something different.
Time for your thoughts. Do you agree with the premise that cataloging is going through a significant transition? If you agree, how are you rolling with the punches?
August 12, 2007
Career Advice: Joyce, The Online Marketer
This is another composite, reflecting a situation I see repeated in our multichannel organizations. At the end of the story, please offer Joyce career advice.
Joyce is a 31 year old Director of Online Marketing at a multichannel retailer. She is responsible for Paid and Natural Search, Affiliate Marketing, Portal Marketing, E-Mail Marketing, and Shopping Comparison Marketing.
Joyce quickly rose through the ranks at her company. Hired right out of college, Joyce chose the E-Mail vendor, Web Analytics vendor, and Search Marketing vendor at a time when her company barely understood the online channel. The infrastructure she put in place is industry-leading.
However, almost nobody in her company understand her true contribution to the organization. She is routinely battered by store managers who want to run their own e-mail marketing campaigns. In fact, many store employees are running their own e-mail campaigns via gmail and hotmail accounts, campaigns that are not CAN-SPAM compliant. Some store managers and employees run their own personal blogs and websites, selling directly to customers.
Her catalog marketing partners are highly critical of her team, suggesting her team lacks the experience and analytical rigor necessary to manage the ad budget given to Joyce. The catalog marketing director routinely picks on Joyce, mocking $0.29 sales per e-mail results that are just one-fifteenth that of a catalog mailing.
Joyce reports to the Chief Marketing Officer. The CMO is a traditional marketer. He understands television, newspapers, radio, and magazine ads. He has a consumer package goods background, and knows how to "launch brands". He doesn't understand why Joyce has to manage six thousand keywords, doesn't understand why she has to bid more for some words than others. He doesn't understand why Joyce wants to launch a blog, he doesn't understand why a blog might help natural search results ... "our PR department speaks to the community, not you" was his response to a recent request for blogging tools and resources.
Joyce depends upon the Information Technology team for website improvements. Joyce has cost-justified various site improvements, improvements that could improve the profitability of her division by twenty percent. The Information Technology team appears to "pick and choose" the projects they want to provide support for, and because IT doesn't report to Joyce, she cannot directly influence what they should work on.
The CMO recently asked Joyce if she would be interested in a "Vice President of Direct Marketing" position, one that would combine all catalog marketing, direct marketing and online marketing responsibilities. Joyce knows that she would be responsible for managing a catalog marketing program she doesn't understand. Joyce knows that it is likely that catalog marketing leadership will leave the company in protest over this promotion.
Still, Joyce knows that she needs to expand her knowledge of marketing, if she wishes to influence her organization.
What should Joyce do? Should she accept the promotion? Should she decline the promotion and focus on online marketing? Should she quit the company, and work for an organization more appreciative of the value online marketing brings to the organization?
Joyce is a 31 year old Director of Online Marketing at a multichannel retailer. She is responsible for Paid and Natural Search, Affiliate Marketing, Portal Marketing, E-Mail Marketing, and Shopping Comparison Marketing.
Joyce quickly rose through the ranks at her company. Hired right out of college, Joyce chose the E-Mail vendor, Web Analytics vendor, and Search Marketing vendor at a time when her company barely understood the online channel. The infrastructure she put in place is industry-leading.
However, almost nobody in her company understand her true contribution to the organization. She is routinely battered by store managers who want to run their own e-mail marketing campaigns. In fact, many store employees are running their own e-mail campaigns via gmail and hotmail accounts, campaigns that are not CAN-SPAM compliant. Some store managers and employees run their own personal blogs and websites, selling directly to customers.
Her catalog marketing partners are highly critical of her team, suggesting her team lacks the experience and analytical rigor necessary to manage the ad budget given to Joyce. The catalog marketing director routinely picks on Joyce, mocking $0.29 sales per e-mail results that are just one-fifteenth that of a catalog mailing.
Joyce reports to the Chief Marketing Officer. The CMO is a traditional marketer. He understands television, newspapers, radio, and magazine ads. He has a consumer package goods background, and knows how to "launch brands". He doesn't understand why Joyce has to manage six thousand keywords, doesn't understand why she has to bid more for some words than others. He doesn't understand why Joyce wants to launch a blog, he doesn't understand why a blog might help natural search results ... "our PR department speaks to the community, not you" was his response to a recent request for blogging tools and resources.
Joyce depends upon the Information Technology team for website improvements. Joyce has cost-justified various site improvements, improvements that could improve the profitability of her division by twenty percent. The Information Technology team appears to "pick and choose" the projects they want to provide support for, and because IT doesn't report to Joyce, she cannot directly influence what they should work on.
The CMO recently asked Joyce if she would be interested in a "Vice President of Direct Marketing" position, one that would combine all catalog marketing, direct marketing and online marketing responsibilities. Joyce knows that she would be responsible for managing a catalog marketing program she doesn't understand. Joyce knows that it is likely that catalog marketing leadership will leave the company in protest over this promotion.
Still, Joyce knows that she needs to expand her knowledge of marketing, if she wishes to influence her organization.
What should Joyce do? Should she accept the promotion? Should she decline the promotion and focus on online marketing? Should she quit the company, and work for an organization more appreciative of the value online marketing brings to the organization?
August 11, 2007
The Reminder E-Mail
It's 5:47am. I'm walking my dog, a dog that wants to investigate every newspaper lying in every driveway.
Each newspaper was wrapped with an advertisement from a large retailer. The ad tells the newspaper reader to eagerly anticipate a catalog that will be mailed to select customers in the near future.
This reminds me of all the e-mail campaigns you see, campaigns reminding the customer that an important catalog is going to be mailed in the near future.
Pundits sometimes like these e-mail campaigns, suggesting they provide an effective 1-2 punch in generating response. They call these "integrated multichannel marketing campaigns".
I'll grant you that these campaigns probably work.
But what does this say about you, the humble employee?
What, exactly, are you "selling"?
You are selling the customer the dream that better advertising is coming soon.
It may be in the best interest of the customer, and it probably is in the best interest of the brand, to execute these multi-step advertising campaigns.
But how do you, the employee, benefit from telling your co-workers and your customers that better advertising is coming soon?
E-mail will always be a second-class citizen in the minds of employees and customers when it is used to communicate that better advertising is coming soon. The employees executing these campaigns deserve better. These employees need to work on campaigns that are as close to selling directly to the customer as possible.
Each newspaper was wrapped with an advertisement from a large retailer. The ad tells the newspaper reader to eagerly anticipate a catalog that will be mailed to select customers in the near future.
This reminds me of all the e-mail campaigns you see, campaigns reminding the customer that an important catalog is going to be mailed in the near future.
Pundits sometimes like these e-mail campaigns, suggesting they provide an effective 1-2 punch in generating response. They call these "integrated multichannel marketing campaigns".
I'll grant you that these campaigns probably work.
But what does this say about you, the humble employee?
What, exactly, are you "selling"?
You are selling the customer the dream that better advertising is coming soon.
It may be in the best interest of the customer, and it probably is in the best interest of the brand, to execute these multi-step advertising campaigns.
But how do you, the employee, benefit from telling your co-workers and your customers that better advertising is coming soon?
E-mail will always be a second-class citizen in the minds of employees and customers when it is used to communicate that better advertising is coming soon. The employees executing these campaigns deserve better. These employees need to work on campaigns that are as close to selling directly to the customer as possible.
August 08, 2007
Career Advice: Jane
This character, "Jane", is a composite of numerous individuals I've met during the past three years. At the end of this brief career description, you are encouraged to offer "Jane" career advice.
Jane is the Director of Circulation for a multichannel cataloger. She worked her way up the corporate ladder, from an entry-level merge/purge analyst in 1992, to a housefile circulation analyst in 1995, to a housefile planning analyst in 1997, to a circulation manager in 1998, to her current position, which she was named to in 2002.
During the past five years, Jane has helped her organization go through a significant transition. In 2002, just twenty percent of transactions occurred online. Today, sixty-five percent of purchases occur online, and half of the online transactions are driven by Jane's catalog mailings.
Earlier this year, Jane's boss, the Vice President of Marketing, left the company to pursue other interests. The CEO decided to name the Online Marketing Director as the new Vice President. This angered Jane. The new VP of Marketing had just six years of total experience, though all of it was in e-mail marketing, paid search, affiliate marketing, portal marketing, and shopping comparison site management.
Since the promotion, the new VP of Marketing and Jane are not getting along. The focus of marketing has clearly shifted toward the online channel. With catalog marketing appearing to be less effective, the new VP asked that Jane give up catalog advertising dollars, so that the dollars could be allocated to online marketing activities, regardless whether the catalog marketing activities drive online sales or not.
Jane mentioned that her "file forecast" indicates that if this strategy is employed, the online channel is likely to lose sales, not gain sales. The VP of Marketing chided Jane for her comments, pointing out that online conversion rates are at a two-year high of 3.294%, thirty percent of all site visitors come from paid search, and that online sales are up thirteen percent over last year. Conversely, "telephone" sales are down seventeen percent vs. last year.
Jane also inquired about taking over the Online Marketing Director position. The new VP of Marketing informed Jane that catalog marketing skills are not relevant to the needs of the Online Marketing Director position.
If you were in Jane's shoes, what should the next step be in her career?
Jane is the Director of Circulation for a multichannel cataloger. She worked her way up the corporate ladder, from an entry-level merge/purge analyst in 1992, to a housefile circulation analyst in 1995, to a housefile planning analyst in 1997, to a circulation manager in 1998, to her current position, which she was named to in 2002.
During the past five years, Jane has helped her organization go through a significant transition. In 2002, just twenty percent of transactions occurred online. Today, sixty-five percent of purchases occur online, and half of the online transactions are driven by Jane's catalog mailings.
Earlier this year, Jane's boss, the Vice President of Marketing, left the company to pursue other interests. The CEO decided to name the Online Marketing Director as the new Vice President. This angered Jane. The new VP of Marketing had just six years of total experience, though all of it was in e-mail marketing, paid search, affiliate marketing, portal marketing, and shopping comparison site management.
Since the promotion, the new VP of Marketing and Jane are not getting along. The focus of marketing has clearly shifted toward the online channel. With catalog marketing appearing to be less effective, the new VP asked that Jane give up catalog advertising dollars, so that the dollars could be allocated to online marketing activities, regardless whether the catalog marketing activities drive online sales or not.
Jane mentioned that her "file forecast" indicates that if this strategy is employed, the online channel is likely to lose sales, not gain sales. The VP of Marketing chided Jane for her comments, pointing out that online conversion rates are at a two-year high of 3.294%, thirty percent of all site visitors come from paid search, and that online sales are up thirteen percent over last year. Conversely, "telephone" sales are down seventeen percent vs. last year.
Jane also inquired about taking over the Online Marketing Director position. The new VP of Marketing informed Jane that catalog marketing skills are not relevant to the needs of the Online Marketing Director position.
If you were in Jane's shoes, what should the next step be in her career?
August 05, 2007
Multichannel Investment Options
In most multichannel businesses, there is one person responsible for combining all advertising investment opportunities.
At traditional catalogers, this person was the Director of Circulation. These days, the person could be the Director of Circulation, it could be the Director of Online Marketing. This person plays a critical role, one of the most important in any multichannel business.
Each organization has an annual budgeting process. This process is usually initiated by the finance division. The finance folks determine key dates when information is to be shared within the organization, with the executive team, and with ownership/board-level individuals.
In most companies, this investment process drives a series of discussions that can be exhilarating for some and frustrating for others. For most, the discussions are "circular" in nature.
The Circulation/Online Marketing Directors go through a process where they use internal analysis tools to forecast what they think sales will look like next year, for the marketing strategies they are accountable for.
In catalog circulation, changes in online/catalog customer files are measured, catalogs to be offered are determined, circulation cutoffs based on short-term and long-term profitability are established, resulting in a set of "rules" that are followed. A series of spreadsheets are crunched, resulting in a sales total across all channels, and profit estimates based on the investment totals.
A similar process occurs within the online marketing advertising channel. Traffic forecasts, conversion rate estimates, average order size guesses, keyword bidding projections, online marketing costs and affiliate strategies result in an estimated number of purchasers, yielding a sales total across all channels, and profit estimates based on the investment totals.
Catalog and online figures are combined, and presented to the executive team.
This is where things go haywire!
In most situations, the estimates yield sales and profit totals that are not acceptable to the executive team.
The executive team will immediately question the accuracy of the work done by the circulation/online marketing experts.
Assuming that the work was done accurately, a new series of questions arise. "What happens if we spend more money in e-mail marketing? What happens if we spend more money on paid search? What happens if we decrease portal advertising? What happens if we increase affiliates from 1,000 to 1,500? Are the catalogs driving more or less business to our online channel? What happens if your circulate to a -10% profit cutoff level verses break-even? What happens if you shift catalog acquisition out of Abacus names, into list rental and exchange names? What happens if we have six targeted versions of an e-mail instead of three? What happens if we no longer offer free shipping?
These questions set off a round of chaos that is very frustrating to the foot soldiers who do the actual work. Typically, the questions are answered in a sequential fashion.
In other words, the executive team learns what happens if free shipping is dropped. Then, they learn what happens if six targeted versions of an e-mail are offered instead of three. Then they learn what happens if all remail catalogs are dropped from the plan. All choices are explained in isolation.
As a result, there is a ton of busy work done by the foot soldiers, and a ton of anxiety felt by executives. The teams work together on an iterative process that ultimately results in one sales plan for the next year. Often, this sales plan is the result of a time deadline ... in other words, the plan must be completed by, say, November 25th. All work done by November 25th is put into the plan, scenarios not completed by November 25th are excluded.
One way to start getting out of this rut is to provide your executive team "options".
In other words, if you are the online marketing director, you can present five different options, based on different investment scenarios. This gives the executive team something to think about. The executive team can center their questions around one or two options that seem to yield the best outcome.
Similarly, the catalog marketing director can offer five different investment options. There can be scenarios with deep cutoff levels, scenarios with shallow cutoff levels, scenarios with a lot of customer acquisition, scenarios milking the top of the customer file with remails.
These scenarios are advantageous for many reasons. Maybe most important is the fact that the foot soldiers get to see which scenarios the executive team like best. Next year, the budgeting process will be smoother, because the foot soldiers know what the executive team want to see.
Multichannel investment options are an area you seldom hear about in trade journals or vendor-based publications. Yet, when you talk to executives, directors and analysts, you continually hear this as being an area of frustration.
Over the next five years, you will see a continued focus on improving the annual budgeting process. Online marketing leaders who invest time honing skills in this area will have a great opportunity to move into C-level management positions.
At traditional catalogers, this person was the Director of Circulation. These days, the person could be the Director of Circulation, it could be the Director of Online Marketing. This person plays a critical role, one of the most important in any multichannel business.
Each organization has an annual budgeting process. This process is usually initiated by the finance division. The finance folks determine key dates when information is to be shared within the organization, with the executive team, and with ownership/board-level individuals.
In most companies, this investment process drives a series of discussions that can be exhilarating for some and frustrating for others. For most, the discussions are "circular" in nature.
The Circulation/Online Marketing Directors go through a process where they use internal analysis tools to forecast what they think sales will look like next year, for the marketing strategies they are accountable for.
In catalog circulation, changes in online/catalog customer files are measured, catalogs to be offered are determined, circulation cutoffs based on short-term and long-term profitability are established, resulting in a set of "rules" that are followed. A series of spreadsheets are crunched, resulting in a sales total across all channels, and profit estimates based on the investment totals.
A similar process occurs within the online marketing advertising channel. Traffic forecasts, conversion rate estimates, average order size guesses, keyword bidding projections, online marketing costs and affiliate strategies result in an estimated number of purchasers, yielding a sales total across all channels, and profit estimates based on the investment totals.
Catalog and online figures are combined, and presented to the executive team.
This is where things go haywire!
In most situations, the estimates yield sales and profit totals that are not acceptable to the executive team.
The executive team will immediately question the accuracy of the work done by the circulation/online marketing experts.
Assuming that the work was done accurately, a new series of questions arise. "What happens if we spend more money in e-mail marketing? What happens if we spend more money on paid search? What happens if we decrease portal advertising? What happens if we increase affiliates from 1,000 to 1,500? Are the catalogs driving more or less business to our online channel? What happens if your circulate to a -10% profit cutoff level verses break-even? What happens if you shift catalog acquisition out of Abacus names, into list rental and exchange names? What happens if we have six targeted versions of an e-mail instead of three? What happens if we no longer offer free shipping?
These questions set off a round of chaos that is very frustrating to the foot soldiers who do the actual work. Typically, the questions are answered in a sequential fashion.
In other words, the executive team learns what happens if free shipping is dropped. Then, they learn what happens if six targeted versions of an e-mail are offered instead of three. Then they learn what happens if all remail catalogs are dropped from the plan. All choices are explained in isolation.
As a result, there is a ton of busy work done by the foot soldiers, and a ton of anxiety felt by executives. The teams work together on an iterative process that ultimately results in one sales plan for the next year. Often, this sales plan is the result of a time deadline ... in other words, the plan must be completed by, say, November 25th. All work done by November 25th is put into the plan, scenarios not completed by November 25th are excluded.
One way to start getting out of this rut is to provide your executive team "options".
In other words, if you are the online marketing director, you can present five different options, based on different investment scenarios. This gives the executive team something to think about. The executive team can center their questions around one or two options that seem to yield the best outcome.
Similarly, the catalog marketing director can offer five different investment options. There can be scenarios with deep cutoff levels, scenarios with shallow cutoff levels, scenarios with a lot of customer acquisition, scenarios milking the top of the customer file with remails.
These scenarios are advantageous for many reasons. Maybe most important is the fact that the foot soldiers get to see which scenarios the executive team like best. Next year, the budgeting process will be smoother, because the foot soldiers know what the executive team want to see.
Multichannel investment options are an area you seldom hear about in trade journals or vendor-based publications. Yet, when you talk to executives, directors and analysts, you continually hear this as being an area of frustration.
Over the next five years, you will see a continued focus on improving the annual budgeting process. Online marketing leaders who invest time honing skills in this area will have a great opportunity to move into C-level management positions.
July 23, 2007
Vice President of Business Intelligence And New Business Development, American Girl
A fundamental shift in the job requirements of analytical individuals is occurring across Corporate America. The shift is not positive for E-Mail Marketers, Catalog Circulation Marketers, Online Marketers, Business Intelligence Analysts, and Web Analytics staff.
Read this job description, found on the Marketing Sherpa Job Board, for a VP of Business Intelligence and New Business Development at American Girl.
This position proactively leads the identification and development of actionable consumer insights, market and competitive understanding. This person will translate information gained through the Analytics Services and Consumer Insights areas into actionable implications and assist in the application of these insights into the American Girl strategic plan. Requirements: *Bachelor's degree, Master's degree (MBA) preferred *Minimum of 10 years of experience working in Consumer Products Industry to include Consumer Research and Analytical Services or significant experience in consulting with a major consulting firm. *Direct Marketing Analytics experience at a multi-channel company preferred *Experience contributing to the strategic planning process preferred *Familiarity with multiple channels of distribution, with special emphasis on direct mail and branded retail preferred *Significant P&L experience preferred *Consulting for a major consulting firm preferred.
Notice how this position focuses on using the insights of the Analytical Services and Consumer Insights areas. Notice that this person will come from the Consumer Products Industry, or will have Consulting experience from a major consulting firm (preferred).
In the past five years, our zeal to be "multichannel marketers" caused us to scatter in a dozen different directions --- all honing our skills in different specialties, becoming experts at a tiny fraction of what matters to our customers. We failed to develop a global view of our business. Our leaders don't have confidence in having a web analytics expert do anything else than study web analytics. Our leaders don't believe the e-mail marketer can also drive a social media plan, or can manage television advertising campaigns.
To thank us for diving headfirst into a niche, becoming a subject matter expert, our companies are looking to hire leaders who know how to position eight varieties of Cheerios among potential customers, or know how to articulate opportunities to what is know as individuals in the "C-Level Suite".
If you're an individual working at a catalog, online, retail or multichannel organization, and you have less than ten years of corporate experience, this is a really good time to change course.
Instead of being the expert at working with CheetahMail to get e-mails delivered through AOL, or being the expert at getting CoreMetrics to help you accurately measure the effectiveness of various landing pages, or being the catalog circulation expert who measures the LTV of Abacus-sourced new names --- become the person who is the expert at knowing how EVERYTHING FITS TOGETHER, telling a story that helps executives know what they need to do to be successful.
Right now, your business leaders don't believe in you. They believe in a person who knows how to build a business plan for Cool Ranch Doritos, who knows how to speak to executives. This is the third job description of this nature I've run across over the past four months.
One person, working a division that is now being led by one of these "newly qualified leaders", told me that the new leader (with qualifications similar to this job description) communicated that the circulation folks "knew nothing of actual customer behavior".
Ouch.
It's time to stop talking about RFM, HTML vs. Text, Black-Lists, SEO, PPC, CGM, DMPC, Conversion Rate or Landing Pages.
It's time to stop talking about subject line testing as a "strategy".
It's time to stop talking about paid search as a "strategy".
It's time to stop talking about getting e-mails through GMail as a "strategy".
It's time to stop talking about working with Abacus or Millard/Mokrynski as a "strategy".
It's time to actually create actionable business strategies that merchants and executives understand, and can act upon. More important, it's time for us to be able to articulate our strategies in a way that executives and merchants understand.
If we fail to do this, the folks who manage the "Twinkies" brand will do this for us. I've been impacted by this evolution in job description. I don't want for you to be impacted.
Your thoughts?
Read this job description, found on the Marketing Sherpa Job Board, for a VP of Business Intelligence and New Business Development at American Girl.
This position proactively leads the identification and development of actionable consumer insights, market and competitive understanding. This person will translate information gained through the Analytics Services and Consumer Insights areas into actionable implications and assist in the application of these insights into the American Girl strategic plan. Requirements: *Bachelor's degree, Master's degree (MBA) preferred *Minimum of 10 years of experience working in Consumer Products Industry to include Consumer Research and Analytical Services or significant experience in consulting with a major consulting firm. *Direct Marketing Analytics experience at a multi-channel company preferred *Experience contributing to the strategic planning process preferred *Familiarity with multiple channels of distribution, with special emphasis on direct mail and branded retail preferred *Significant P&L experience preferred *Consulting for a major consulting firm preferred.
Notice how this position focuses on using the insights of the Analytical Services and Consumer Insights areas. Notice that this person will come from the Consumer Products Industry, or will have Consulting experience from a major consulting firm (preferred).
In the past five years, our zeal to be "multichannel marketers" caused us to scatter in a dozen different directions --- all honing our skills in different specialties, becoming experts at a tiny fraction of what matters to our customers. We failed to develop a global view of our business. Our leaders don't have confidence in having a web analytics expert do anything else than study web analytics. Our leaders don't believe the e-mail marketer can also drive a social media plan, or can manage television advertising campaigns.
To thank us for diving headfirst into a niche, becoming a subject matter expert, our companies are looking to hire leaders who know how to position eight varieties of Cheerios among potential customers, or know how to articulate opportunities to what is know as individuals in the "C-Level Suite".
If you're an individual working at a catalog, online, retail or multichannel organization, and you have less than ten years of corporate experience, this is a really good time to change course.
Instead of being the expert at working with CheetahMail to get e-mails delivered through AOL, or being the expert at getting CoreMetrics to help you accurately measure the effectiveness of various landing pages, or being the catalog circulation expert who measures the LTV of Abacus-sourced new names --- become the person who is the expert at knowing how EVERYTHING FITS TOGETHER, telling a story that helps executives know what they need to do to be successful.
Right now, your business leaders don't believe in you. They believe in a person who knows how to build a business plan for Cool Ranch Doritos, who knows how to speak to executives. This is the third job description of this nature I've run across over the past four months.
One person, working a division that is now being led by one of these "newly qualified leaders", told me that the new leader (with qualifications similar to this job description) communicated that the circulation folks "knew nothing of actual customer behavior".
Ouch.
It's time to stop talking about RFM, HTML vs. Text, Black-Lists, SEO, PPC, CGM, DMPC, Conversion Rate or Landing Pages.
It's time to stop talking about subject line testing as a "strategy".
It's time to stop talking about paid search as a "strategy".
It's time to stop talking about getting e-mails through GMail as a "strategy".
It's time to stop talking about working with Abacus or Millard/Mokrynski as a "strategy".
It's time to actually create actionable business strategies that merchants and executives understand, and can act upon. More important, it's time for us to be able to articulate our strategies in a way that executives and merchants understand.
If we fail to do this, the folks who manage the "Twinkies" brand will do this for us. I've been impacted by this evolution in job description. I don't want for you to be impacted.
Your thoughts?
July 19, 2007
Multichannel Retailing Week: Catalog Circulation
This morning, an article arrived in my RSS reader, promoting the power of catalog marketing.
You can't argue with the fact that more paper is being deposited into our mailboxes than ever before. Does the incremental increase in paper drive an incremental and proportionate increase in sales in the telephone, online and retail channels? Vendors don't answer that question for you.
Your catalog circulation expert knows the answer to that question. In fact, the catalog circulation expert knows the answers to more questions than almost any other marketing individual in your company. Ask the online marketing executive if natural search results in an increase in store sales, and see if you get an answer you can trust. Ask the e-mail marketing executive if e-mail campaigns cause customers to order merchandise over the telephone, and see if you get an immediate, confident answer. Ask the web analytics individual if an abandoned shopping cart resulted in a store purchase, and see if you get an honest answer.
But ask the catalog executive how effective catalogs are at driving sales to the telephone, online and retail channels, and you'll get an earful. You may not understand a geeky word that the catalog circulation expert says, but you'll at least get the inkling that this person has measured the concept, and markets to a combined ROI across channels.
So if the catalog folks have all this "tribal knowledge", why are they largely being under-utilized at many multichannel retailers? Why would multichannel retailers make the decision to eliminate traditional circulation teams and list vendor relationships in favor of an outsourced solution from the folks at Abacus?
Today, I am seeking your feedback on this topic, your thoughts on catalog marketers and catalog marketing.
If you work at a catalog/online retailer, or a catalog/online/retail organization, please share your thoughts about what you think about catalog marketing, and about the folks who do catalog marketing in your organization.
How do you view these individuals? What value do these individuals bring to your company? Let's not cloud things with my opinion --- let's get your thoughts on the topic. Please discuss!!
You can't argue with the fact that more paper is being deposited into our mailboxes than ever before. Does the incremental increase in paper drive an incremental and proportionate increase in sales in the telephone, online and retail channels? Vendors don't answer that question for you.
Your catalog circulation expert knows the answer to that question. In fact, the catalog circulation expert knows the answers to more questions than almost any other marketing individual in your company. Ask the online marketing executive if natural search results in an increase in store sales, and see if you get an answer you can trust. Ask the e-mail marketing executive if e-mail campaigns cause customers to order merchandise over the telephone, and see if you get an immediate, confident answer. Ask the web analytics individual if an abandoned shopping cart resulted in a store purchase, and see if you get an honest answer.
But ask the catalog executive how effective catalogs are at driving sales to the telephone, online and retail channels, and you'll get an earful. You may not understand a geeky word that the catalog circulation expert says, but you'll at least get the inkling that this person has measured the concept, and markets to a combined ROI across channels.
So if the catalog folks have all this "tribal knowledge", why are they largely being under-utilized at many multichannel retailers? Why would multichannel retailers make the decision to eliminate traditional circulation teams and list vendor relationships in favor of an outsourced solution from the folks at Abacus?
Today, I am seeking your feedback on this topic, your thoughts on catalog marketers and catalog marketing.
If you work at a catalog/online retailer, or a catalog/online/retail organization, please share your thoughts about what you think about catalog marketing, and about the folks who do catalog marketing in your organization.
How do you view these individuals? What value do these individuals bring to your company? Let's not cloud things with my opinion --- let's get your thoughts on the topic. Please discuss!!
June 18, 2007
The Day E-Commerce As We Knew It Died
Of course, e-commerce didn't die today.
But symbolically, e-commerce changed today, with the ousting of Yahoo! CEO Terry Semel and a New York Times piece about the end of rampant e-commerce sales growth.
Both stories point to the maturation of the online channel.
To me, the New York Times article is particularly delicious, drawing the ire of Shop.org and various e-commerce bloggers (here, here and here), all quick to defend their channel at the first hint of criticism or sales slowdown. To be fair, the criticisms are valid and even enlightening --- but it was fascinating to see how defensive some of the responses have been.
Those articles and comments look an awful lot like the musings of catalog executives between 1999-2003. Catalog folks were defensive, quick to defend the catalog channel when e-commerce pundits predicted doom for anything not associated with the online experience.
In reality, the data used in the study has been readily available from Forrester Research for years, and publicly traded companies have repeatedly talked about this slowdown over the past year, so this news isn't news.
Over the next three years, our profession will see a separation in talent. As e-commerce growth becomes harder and harder to achieve, management is going to need e-commerce folks who are skilled, maybe "gifted" at driving sales.
For the past decade-plus, multichannel e-commerce executives benefited from the efforts of their catalog and retail leaders. The catalog executive mailed catalogs, the customer shopped on the internet. The online executive received hefty bonuses, the catalog executive was fired.
The retail executive spent decades building a brand, the online executive received credit for sales cultivated through years of positive retail experiences. With e-commerce maturing, it will be up to the e-commerce executive to stand alone, to drive incremental sales increases without the benefit of seasoned leaders in other channels pushing free, incremental sales to the online channel.
There are hundreds of really good, really talented online executives at multichannel companies. These folks honed their craft, while learning how to get things done politically, while learning offline marketing skills that transfer to the online world.
These online executives will have a tremendous advantage. These are the folks who will continue to drive true incremental sales increases over the next three years, while other online businesses flatten-out, or flounder.
June 18, 2007. The day e-commerce as we knew it died.
But symbolically, e-commerce changed today, with the ousting of Yahoo! CEO Terry Semel and a New York Times piece about the end of rampant e-commerce sales growth.
Both stories point to the maturation of the online channel.
To me, the New York Times article is particularly delicious, drawing the ire of Shop.org and various e-commerce bloggers (here, here and here), all quick to defend their channel at the first hint of criticism or sales slowdown. To be fair, the criticisms are valid and even enlightening --- but it was fascinating to see how defensive some of the responses have been.
Those articles and comments look an awful lot like the musings of catalog executives between 1999-2003. Catalog folks were defensive, quick to defend the catalog channel when e-commerce pundits predicted doom for anything not associated with the online experience.
In reality, the data used in the study has been readily available from Forrester Research for years, and publicly traded companies have repeatedly talked about this slowdown over the past year, so this news isn't news.
Over the next three years, our profession will see a separation in talent. As e-commerce growth becomes harder and harder to achieve, management is going to need e-commerce folks who are skilled, maybe "gifted" at driving sales.
For the past decade-plus, multichannel e-commerce executives benefited from the efforts of their catalog and retail leaders. The catalog executive mailed catalogs, the customer shopped on the internet. The online executive received hefty bonuses, the catalog executive was fired.
The retail executive spent decades building a brand, the online executive received credit for sales cultivated through years of positive retail experiences. With e-commerce maturing, it will be up to the e-commerce executive to stand alone, to drive incremental sales increases without the benefit of seasoned leaders in other channels pushing free, incremental sales to the online channel.
There are hundreds of really good, really talented online executives at multichannel companies. These folks honed their craft, while learning how to get things done politically, while learning offline marketing skills that transfer to the online world.
These online executives will have a tremendous advantage. These are the folks who will continue to drive true incremental sales increases over the next three years, while other online businesses flatten-out, or flounder.
June 18, 2007. The day e-commerce as we knew it died.
May 31, 2007
More On Abacus, Google, And Customer Biodiversity
Please click on the image to enlarge it.One of the most popular pieces I've written this year was Tuesday's discussion about Abacus, Google, and Brand Implosion.
Almost nobody chose to leave a comment. But you're reading this article, you're forwarding this article to friends and co-worker. When you come to the site to read it, you're interacting with the site much more than usual.
Interest in the article made yesterday the busiest day on the blog in the past eight weeks.
Why is this article interesting to you, and why is the topic so divisive among the catalog marketing community?
Why is this topic of interest to me? To me, it all boils down to "customer biodiversity".
Online marketers excel at using customer biodiversity to their advantage. They drive traffic through a massive network of affiliates, often numbering in the thousands or more. Online marketers utilize portal advertising to reach larger audiences. Brilliant online marketers cultivate traffic through natural search, at close to no incremental cost. Most online marketers use paid search across hundreds, thousands or more keywords. All of this guarantees a diverse audience of potential and existing customers. Some strategies work, some fail. The marketer manages a complex ecosystem of marketing strategies and customers.
Retail marketing is all about a complex interaction between "who you hang out with" and "target customer demographics". Nothing happens when you put a physical presence in front of the wrong target demographic. The right demographics and the wrong shopping center or wrong set of competitors cause problems. Combine the right demographics, competitive biodiversity, and a modern shopping environment, and cash registers sing.
Catalog marketing, however, is being threatened by a lack of customer biodiversity. The entire left side of the diagram represents potential customer biodiversity for catalog marketers. In the past, the list broker was the gatekeeper of biodiversity. S/he managed hundreds of outside lists, s/he even fueled the growth of compiled lists because s/he wanted to do "what is right for the client". In the process of doing that, s/he ceded market share to the compiled lists. This hastened the decline of the list broker, and accelerated the rise of the compiled list vendor. In 1990, one list broker ensured customer biodiversity by simultaneously managing a hundred relationships with competitors. Today, the same service can be provided by one statistician creating a statistical model at a compiled list vendor.
There was a lot of discussion about postal rate increases at last week's catalog conference. Obviously, this is an important topic in the short term.
Long term, there must be a significantly increased focus on customer biodiversity. The success of a multichannel business is predicated on the ability of the retailer to align with the target customer across a wide variety of potential sources.
My experiences tell me I want to spread my marketing efforts across a thousand affiliates, several large portals, natural search, paid search focusing on several hundred or more keywords, e-mail marketing, RSS and applicable Web 2.0 marketing, several compiled lists, several dozen or more rented/exchanged catalog lists, catalog requests, and other prospect lists. This gives me a portfolio of opportunities to manage.
I do not want one statistician who knows nothing about my brand culling prospects out of a compiled list as my primary source of new customers. I'd love for this statistician to be a piece of the puzzle, not be the entire puzzle.
Your turn, what do you think?
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