Today, I am meeting Lauren Fetzer, CEO of Fetzer's Footwear, at Eagle Heights, a barren prairie on the southern end of Madrona Island. As usual, Ms. Fetzer is listening to her iPod Touch.
Kevin: "What are you listening to?"
Lauren: "Walking on Broken Glass by the Eurythmics" That's how I feel when I'm dealing with my creative team, you have to tread lightly with them."
Kevin: "Why are we meeting here?"
Lauren: "Look around, there aren't any trees here. There were trees at one time, but they were harvested a hundred years ago. Now, they have a hard time getting started again. In November and December, the windstorms down here are brutal. So the landscape changed, it evolved."
Kevin: "What would it take for a tree to grow here again?"
Lauren: "Well, it would have to really want it."
Kevin: "What does that mean?"
Lauren: "A friend of mine has a saying. She says 'you have to want it' when it comes to success. I couldn't agree more with any other statement than that one. The tree would have everything working against it. The soil is sandy now, so if it did grow to a reasonable height, the winds in November and December would uproot it. The tree has to want it!"
Kevin: "It wouldn't be a best practice to start growing here, would it?"
Lauren: "Absolutely not. But if the tree made it, and the odds are against the tree, it would pave the way for a forest. Nobody would ever recommend that the tree take root here, would they? No, the experts would find the perfect environment, they would take soil samples and they would measure everything so that they could find the best place to plant the tree."
Kevin: "And they would be successful, wouldn't they?"
Lauren: "Define success? The tree would grow, but it would be one of, what, a million trees? Is that success? Who wants to be part of a forest?"
Kevin: "What does this have to do with Fetzer's Footwear?"
Lauren: "Have you ever taken part in strategic planning, Kevin? I assume you have."
Lauren: "Strategic planning is not a spreadsheet exercise, Kevin."
Kevin: "Meaning what?"
Lauren: "Penny Parker, you've met her, she is our VP of Marketing, she has all of these fancy spreadsheets and metrics. Her life is a series of campaigns. She'll line up two hundred different campaigns for next year. She'll figure out how to optimize every single campaign, to squeeze an additional eight percent out of every single campaign. Then she sits back with this big smile. She adds up eight percent on top of eight percent on top of eight percent and thinks she has the answer. All we have to do to grow the business is be perfect across two hundred consecutive campaigns, and if we're perfect across each and every one of two hundred campaigns, our business will grow by something like thirteen percent. She has the metrics to prove it, she opens up this big spreadsheet and puts it up on a plasma monitor and everybody gazes as all of the metrics, and she is manipulating one cell and twelve other cells all improve. Wow. She's really optimizing the business, isn't she?'
Kevin: "Why the attitude?
Lauren: "Well, for one thing, her strategies never work. Who can be perfect two hundred times out of two hundred? If you do your best, you might improve the performance of one hundred and fifteen campaigns, and you'll inadvertently fail eighty-five times."
Kevin: "That's still improvement, right?"
Lauren: "It's fools gold. Her answer is to simply execute more campaigns, if you have more campaigns, you'll have more sales, and if you have more sales, your business will grow. Paid Search, Email Marketing, Affiliate Marketing, Organic Search, Print Ads, Banner Ads, Re-Targeting, Radio. Now we have thousands of campaigns, and our marketing team and analytics team believe they can optimize each and every one of thousands of campaigns, squeezing an additional four percent and six percent out of each one. It's funny, Kevin, nobody in marketing ever says that they expect campaigns to perform less well. Every single metric in every single spreadsheet points north, showing improvement. Fools gold."
Kevin: "Maybe you hate metrics and spreadsheets? There's lots of people who feel that if you test and optimize your business will experience unfettered growth. They are frustrated by people like you."
Lauren: "We had this consultant in a few weeks ago, maybe you know him, his name is Chip Cayman. He had this document that said if we grew to a hundred stores, our sales would essentially quadruple, his spreadsheets showed that multichannel customers are worth nine times as much as single channel customers, he showed how the website would benefit from a national store presence. Nice presentation, classic stock photos that he paid $6 each to obtain, great math, an opportunity to rack-up ten or twenty million dollars of debt that a spreadsheet suggests will be paid off with profits from the stores in ten years."
Kevin: "So what is the problem?"
Lauren: "He didn't want it."
Kevin: "He didn't?"
Lauren: "Not even close. He wanted somebody to love his spreadsheet, his math. He didn't give a rat's behind about the relationship between a customer and an employee ... it is a humbling experience to serve a customer who wants to buy shoes in a store. No spreadsheet solves for a human being wanting to help another human being."
Kevin: "Why are you telling me this?"
Lauren: "Tell me I am right."
Kevin: "So what if you are right? You are the CEO, it doesn't matter."
Lauren: "It means everything. Penny hates it when I ride her on this topic, she calls me a 'HiPPO'"
Kevin: "A hippo?"
Lauren: "Highest Paid Person's Opinion. She has all of this science, and she believes that if I just listened to her science, everything would be fine. Then I tell her that she 'has to want it'. I tell her to have a passion for our business, not a passion for spreadsheets and optimization. And she just stares at me, she says the spreadsheet tells the whole story. But listen to me, Kevin. She's been optimizing year after year after year, and somehow, our annual retention rate, the percentage of customers who bought last year and will buy again this year, that never budges, it always stays the same. Well don't you think that if she was right, if we listened to her and her glorious metrics, that the annual retention rate would improve? See, that's the problem. If all of that math and optimization were right, business would improve. It doesn't improve. She doesn't want it, she wants science."
Kevin: "So what does wanting it look like?"
Lauren: "Wanting it means being willing to take a risk. There are no risks in spreadsheets, only numbers. Wanting it means innovating. Wanting it means moving beyond campaigns. Campaigns are nothing more than glorified begging, you are trying to manipulate the customer into buying something."
Kevin: "Isn't that what a marketer does? Don't marketers manage campaigns?"
Lauren: "Marketers tell stories. See, that's what matters. A marketer that doesn't try to tell a story is a marketer that doesn't want it. Here's the neat thing. If you tell a story, and if you are consistent with that story, and then the sales naturally follow."
Kevin: "Or they don't."
Lauren: "And if they don't follow, it is self-evident that the story didn't resonate with the customer. Then you try another story. The marketer must have an instinct for getting from Point A to Point B. Look, we're all getting killed by Zappos. They tell a story. Their story is flimsy, of course, but it is a story. They ship you product fast, they have every sku imaginable, they have perceived free shipping, and their employees will chat with you via social media. That's a story. There's no optimization and spreadsheet manipulation and campaign management there, heck, where was the best practice for that business model before they invented it? Coming up with that story, a marketing story supported by merchandise, that's hard work, Kevin, it isn't easy. That's what I call 'wanting it'. We have to want to beat Zappos so bad that we come up with a better story. When people don't have a better story, they revert to campaigns and optimization and spreadsheet manipulation."
Kevin: "So the tree trying to grow on this prairie needs a different story?"
Kevin: "Seems like it would be easier to simply transplant this tree in the forest on the other side of the island."
Lauren: "Yes, it's easier to manage by spreadsheets and metrics and campaigns and optimization. That's not what I am looking for. We need to break through, we need to tell a story that is more compelling than the story that Zappos tells. We need to want it more than them."
Kevin: "Yup, you're just another dumb HiPPO."
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