August 27, 2006

Four Questions with Allen Abbott, EVP and COO, Paul Frederick MenStyle

This week, I am pleased to share a recent interview with Allen Abbott. I believe you will find his insights to be enlightening, as he freely offers his perspective on many different issues facing multi-channel retailers.

Allen is Executive Vice President and Chief Operating Officer for Paul Fredrick MenStyle, a men’s fashion apparel direct marketer located in Fleetwood, PA. Allen has been involved in retailing for 30 years, 20 of those as a direct marketer. He has held senior marketing and management positions at Bloomingdale’s by Mail, Exposures and Day-Timers. Allen holds a B.A. in History from Lafayette College and an M.B.A in Management from Rutgers University. He resides with his wife and two sons in Orefield, PA.

Allen has been a speaker at various Direct Marketing Association events during his career. He has also served as a guest lecturer on direct marketing topics at Northwestern University and New York University.

Let's begin our interview session with Allen.

Question #1: You have the perspective to analyze how Direct Marketing has evolved over the past twenty years. What are the biggest changes you have witnessed, and what has surprised you about the evolution of Direct Marketing?

It is hard for me to define exactly what the “biggest” changes have been, but one common theme among all large changes has been that they have been enabled by technology. The Internet, of course, has been the most visible one, since it has totally changed the dynamics of both marketing and customer service. But there have been other changes in technology that have been enablers in the printing, pre-press, photography and database areas. One of the more surprising developments to me was how slow traditional data processing service bureaus were to adopt new technologies to help improve their business models. Many of them held on to the “we run the machine, you pay” models long after the price of both hardware and storage had plummeted, limiting, I believe, their ability to grow with their customers.

Question #2: Your business sells through a catalog channel and a website channel. Does a true multichannel retailer have to have an online, catalog and retail presence, and what is the brand impact of having or not having a retail presence?

When CRM became the new buzz word several years ago, I and a friend of mine, who runs a list and Media Company, banned the term from our businesses. Our thought was that you don’t really manage customer relationships, since most customers don’t really believe that they have a relationship with you. What you really do is offer great products and great service as efficiently as possible, and hope that consumers respond to you often enough to grow a profitable business.

I feel somewhat the same about the term “multi-channel retailer” as an industry buzz word, because it can take your focus away from what really matters – managing your brand. Certainly adding retail to the mix both raises your visibility to the consumer and offers opportunities to scale your business. It also requires a totally different skill set and additional resources. The question of adding retail to our distribution mix has never been a philosophical one for us. At this point we still see a lot of opportunity to grow the business within the set of skills we already possess.

Question #3: Direct Marketing and Brand Marketing can be at odds with each other. Direct Marketing is often focused on selling merchandise to a customer today, whereas Brand Marketing sometimes focuses on building a long-term relationship with a customer. How might a Direct Marketer apply best practices in Brand Marketing, to insure both the short-term and long-term health of the business?

I believe we sometimes confuse the concept of brand marketing with that of image advertising. My definition of brand value is the sum of every contact point you have with a consumer times the value of those contacts. Since the value of a contact can be positive or negative (think Vioxx), your brand value can also be positive or negative. Part of that brand value is certainly determined by the quality of your advertising, but that is only the beginning. The quality of your product, your customer service and your order fulfillment are equally important in determining the value of your brand. A clear, consistent brand message is critical to a positive brand value and a long term customer commitment, whether you are an image advertiser or a direct marketer.

That said, I do believe direct marketers have learned from image advertisers, and vice versa. Direct marketers are paying much more attention to the consistency of their imagery and copy across different media then we did even five years ago. In the late 1990’s catalog companies were launching websites that had almost nothing in common with their catalog execution. Today, we are paying much more attention to assuring that the imagery and copy we present on our websites are consistent with what we use in our catalog. On the flip side, more and more image advertising now carries some type of call to action for the consumer, whether it is an 800 number on an automobile ad or a URL offering recipes on a food advertisement.

Question #4: What things fascinate you about the organizational behavior of companies? During your career, what dynamics have you observed that yield a profitable business with satisfied customers and happy, loyal employees?

Whenever I am considering working with a company, I always visit their headquarters to get a read on what the business culture is like. If I see one of those lovely framed photographs with an inspirational message from Executive Greetings, I immediately turn around and leave, since it indicates to me that the company is incapable of developing any unique culture whatsoever, and probably lacks imagination in general. I also enjoy talking to random people in the company to see how they feel about their work. When a junior account manager can give me five extemporaneous minutes on how she is going to help me improve my business, that is impressive.

The dynamics surrounding successful businesses are fairly similar in my experience. First, you have to have a precise business mission that can be clearly explained to your employees, hopefully in ten words or less. I visited a database company last year whose stated mission is “100% customer advocacy.” That is extremely powerful to me, because it leaves no doubt in an employee’s mind about how he/she is to behave. Second, you have to have a compensation system that is 100% compatible with your company’s business goals. If the catalog manager and the web marketing manager spend 20% of their time debating about who gets credit for the order, performance will suffer. Third, and I think this is a subtlety that many people miss, you have to give your employees a reason to show up for work. It is not just about the money, and an employee who feels that he/she is challenged in their job and taken seriously in the company will perform at a higher level than one who comes to work just to follow someone’s instructions. Finally and somewhat related to the prior point, a performance appraisal system that supports your business objectives is a must. At Paul Fredrick, I read every salaried employee’s self-appraisal, as well as their supervisor’s appraisal, before the two actually meet. I am looking to see that both individuals have a similar position on how the employee’s goals were met during the past year, as well as that goals for the new year are both clearly measurable and support the overall company goals. If you have motivated employees with a clear business mission, you have a better chance of pleasing your customers.

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