As you already know, Gliebers Dresses is a fictional story about a catalog brand, and the executives tasked with pushing the cataloger into the 21st century. If business fiction is not your thing, then move along, there's nothing to see here.
Glenn Glieber (President and CEO): Welcome to our weekly meeting, folks! Let's get started, I'm sure we have a meaty agenda to dig our teeth in to.
Lois Gladstone (Chief Financial Officer): Yes, let's get started with a brief discussion of the Spring 2013 marketing plan. As you already know, I am proposing a catalog marketing budget of $4,000,000 for Spring 2013. Now, if you ...
Roger Morgan (Chief Operating Officer): Whoa, Lois, hold on for a minute. Our budget in Spring 2012 was $5,000,000, so you are proposing a 20% decrease. Let's hope you are going to reinvest that money somewhere. We can't have a sales decrease. I'd like to see us reinvest the money in social media, mobile, and local, or as Woodside Research calls it, "SoLoMo".
Meredith Thompson (Chief Merchandising Officer): Lois, we can't decrease the budget. If we stop mailing catalogs, customers stop buying from us. Then I end up in an overstocked situation, we have to liquidate my merchandise, and that damages the profit and loss statement. Let's boost the catalog marketing budget up to, oh, I don't know, say $6,000,000. That will grow the brand.
Pepper Morgan Pressley (Chief Marketing Officer): Hi everybody, I'd like to take a moment to introduce myself. My name is Pepper Morgan Pressley. I am the Chief Marketing Officer at Gliebers Dresses. It is my job to set the marketing budget, that is what I am accountable for. We mail housefile customers down to break-even, this allows us ...
Roger Morgan: It allows us to continue to operate as if time froze in 1994. Now let's get back to talking about reinvesting money in our future. As we all know, we're headed toward an omnichannel world, and that means that we need to ...
Meredith Thompson: My customer isn't omnichannel. She wants to watch one channel on television, and that channel is CBS.
Lois Gladstone: Our expenses are out of alignment with net sales. Best practices dictate that we trim expenses, so that we can better manage the profit and loss statement.
Meredith Thompson: And if we trim expenses, we cut back on sales. That means that next year, we'll have to trim expenses, and after we trim expenses, we will cut back on sales. Eventually we'll have nothing left.
Lois Gladstone: We'll still have Roger here, talking omnichannel.
Roger Morgan: This whole local initiative is so exciting. Woodside Research says that by 2017, local marketing will account for a significant fraction of the marketing mindset.
Pepper Morgan Pressley: I'd like to take a moment to introduce myself. My name is Pepper Morgan Pressley. I am the Chief Marketing Officer at Gliebers Dresses. It is my job to set the marketing budget.
Dr. Gene Feldman (Vice President of Global Brand Direction): I had a dream last night. I was in a boat with five other people. It was my job to use the oars to row us across a choppy lake. But every time I tried to row the boat, somebody else grabbed the oars from me. This was so frustrating, because other people kept interrupting my area of accountability. Eventually, I had to make a decision. I had to take command of the situation. I threw all five people overboard, and I started paddling myself. Oh, I was so happy! I paddled away to freedom, while everybody else kept dunking each other in an effort to see who could be first to get back to the boat.
Glenn Glieber: Feldman, what the heck are you talking about?
Meredith Thompson: We're talking about understanding our customer, my customer. My customer isn't scanning QR codes with her Android device, she's thumbing through a thoughtfully constructed catalog while resting in bed, watching quality, family-oriented programming on CBS. My customers love Tom Selleck.
Roger Morgan: And our future customer is forging a whole new shopping experience that we don't understand. Well, at least I understand it. Or at least I understand what Woodside Research theorizes about the new shopping experience.
Pepper Morgan Pressley: Roger, you are obsessive, neurotic, and obtuse.
Roger Morgan: I am not obsessive!
Lois Gladstone: I'm going to hold firm here, folks. We're spending $4,000,000 next spring.
Meredith Thompson: I think the number should be $6,000,000. Let's make a statement.
Pepper Morgan Pressley: I'd like to take a moment to make a statement. My name is Pepper Morgan Pressley. I am the Chief Marketing Officer at Gliebers Dresses. It is my job to set the marketing budget.
Meredith Thompson: This is too important for just your input, Pepper.
Pepper Morgan Pressley: And you think merchandise isn't too important for input? I think we should all talk about the failed vintage polka dot jersey dress line. How could we do better? How did we miss the trend? Maybe we could all chime in on what the strategy should be for next year. How 'bout it, folks? Roger, why don't you go first?
Roger Morgan: You know, it's interesting, Pepper. Woodside Research says that ...
Meredith Thompson: Wait a minute, wait just one darn minute, Pepper. How dare you tell me how to do my job? I'm the Chief Merchandising Officer. I decide what the merchandise is.
Lois Gladstone: That's so true. Everybody hast to be accountable for their area of expertise. Everybody should be responsible for their own swim lane.
Pepper Morgan Pressley: You want to talk swimlanes, Lois? Roger, you know how to pick, pack, and ship merchandise. Spending $10,000 on Woodside Research reports and following a few people on Twitter doesn't make you an omnichannel marketing expert. And Meredith, if we follow your prescription for success, we'll be out of business in nine months, because we'll spend too much money mailing catalogs. Lois, if we cut back as much as you want to ...
Lois Gladstone: Pepper, why are you taking potshots at all of us?
Pepper Morgan Pressley: I am accountable for setting the budget. Roger is accountable for robots in the warehouse, robots that have about as much personality as he has. Meredith is accountable for fashion. And Lois, come on, your accounts payable team cannot even pay bills on time, but you want to tell me how to do my job? Spend some time educating them that when a vendor demands payment within thirty days, you pay them within thirty days.
Lois Gladstone: We don't pay bills on time so that we can hold on to cash longer and earn interest, that's a strategic decision on my end. Maybe it's time you become more strategic, Pepper.
Roger Morgan: Strategy. It's important, no doubt. But is is also important for modern marketers to amplify the viral coefficient. If you amplify the viral coefficient, you essentially generate a whole bunch of free marketing, and that makes everybody happy.
Glenn Glieber: I love free marketing!
Pepper Morgan Pressley: What the heck is going on, here? Viral coefficient? Amplification? What does any of that have to do with setting the budget for Spring 2013? We need to let our metrics decide how much we spend. If a customer is forecast to generate profit below break-even, we don't mail the customer. If a prospect pays us back in twelve months, we take a risk and we mail the prospect. We need to let this whole process be data-driven, folks. The customer decides what our budget will be, and the customer ultimately decides based on her love of our merchandise.
Lois Gladstone: Data-driven strategies are boring strategies.
Meredith Thompson: You don't manage fashion in a spreadsheet, folks.
Roger Morgan: So boring! We're not obtuse robots letting spreadsheets tell us how to manage a business, we're Executives at a major company. Let's be strategic.
Pepper Morgan Pressley: Let's be realistic! If we come at this from a data-driven approach, we should be spending $5,325,000 next spring. That's what happens when you let the customer decide, based on customer productivity.
Roger Morgan: Boring.
Glenn Glieber: I just did a back-of-the-envelope calculation. If we average Lois and her $4,000,000 number with Meredith's $6,000,000 figure, we come up with $5,000,000 for the budget. That was our budget last year. Let's go with that for Spring 2013. How's that for a compromise?
Roger Morgan: The wisdom of the crowds!
Pepper Morgan Pressley: Oh boy.
Buy the Kindle version for just $0.99 !! I worked with a new Chief Marketing Officer. This poor dude was in OVER HIS HEAD! He had...
RFM is great for targeting one catalog to one customer. However, RFM is tough to manage in a multichannel environment. This becomes clear ...
Look at the first four rows of our life table (values of 0/1/2/3). These are the first 12-15 weeks after a customer buys for the firs...
It's common for folks to measure cost per new customer. Total Marketing Cost = $10,000. Total New Customers = 130. Cost per New C...