From: Pepper Morgan [mailto:email@example.com]
Sent: Wednesday, August 4, 2010 9:37 AM
To: Kevin HillstromSubject: Any Interest In Helping Us?
It's been a long time since we chatted!
I just wanted to let you know that Brandon Templeton, our CEO, was fired on August 1. We were surprised that he was fired, we were not surprised why he was fired.
He wasn't a big fan of our "catalog" mindset, and he was so confident of the future of marketing that he decided he was going to go "all in" during the month of July. He decided that we would not mail our early July sale catalog, and that we would not mail our late July fall preview catalog, and would instead focus our marketing activities on social media and the new iPad and Android apps that Roger created.
Needless to say, sales tanked, and our parent company freaked out. By the end of July, sales were 50% below plan.
Of course, our team viewed this as a validation of the catalog business model. Meredith was absolutely energized by the results, she crowed in meeting after meeting about the importance of what she calls "spread merchandising", the idea that catalog spreads tell an important brand story.
I viewed this in a different way, and my way of viewing this appears to be a bit unpopular. I told the team yesterday that 50% of our sales did not disappear, and that company profit in July was on plan. Lois claimed that we held on to our sales because of her free shipping based loyalty program, but there is more to it than that, isn't there?
I mean, we basically stopped marketing to the customer, and 50% of the sales still happened. We know that free shipping gives us a 10% bump, so this means that customers kept shopping because of e-mail marketing, because of search, because of our apps, because of our social media strategy, because of our loyalty program, and because of brand loyalty.
Do you have other clients who identified this dynamic, where you stop mailing catalogs and you still keep 50% of your business? And if that is the case, what is their response? Do they increase online marketing spend? Do they spend more money in offline marketing? Do they increase their social media presence? Do their apps actually drive sales increases? How do they staff themselves in order to capitalize on this type of outcome? What happens to the 72 year old female shopper who mails her order in an envelope, with a stamp and a check? Would you be willing to share what you know with us via Skype, I'll pay you for your time out of my budget? Are you available next week?
I hope you are enjoying summer. Sonora is off at summer camp at Lake Winnipesaukee, so I'll see here again around August 15.
Meredith and I were talking the other day that we miss having your thoughts in our Executive meetings. We didn't always agree with what you said, but we agree that you made us think. Roger, on the other hand, well, he probably wouldn't be happy that I'm contacting you. He thinks he can run this place, he's making a bid for the CEO job, and he strongly believes in a multichannel mix of traditional marketing and online marketing, coupled with MBA-style business experience. He's asking the parent company for an opportunity to run the business on a temporary basis, he wants an opportunity to demonstrate his skills.