May 29, 2013

A Different Perspective - Above The Water Line

Look at this little seal.  99% of the time, s/he is under water, snacking on salmon or an octopus.  But 1% of the time, s/he pops up and surveys the landscape.  

It's a whole different world up here, isn't it Sealio?

It's also a whole different world when you're promoted from Manager to Director, when it comes to thinking about Merchandise Forensics.

Let's go back to 1998, old-school, at Eddie Bauer.  I was promoted to Director of Circulation and Analytical Services.  One of my duties was to prepare all of the information for what were called "QPMs", or "Quarterly Planning Meetings".  Basically, you had about 35 of the highest level Executives in the company, gathered in one setting, to discuss past results and future plans.

Business was awful.

It was my job to share just how awful the performance of the online/catalog division was.

I was not ready for what I experienced.

Like the seal above, I got to peek "above water".

Above water, in that room, marketers were in trouble.
  • "What are YOU doing to fix our performance?"
  • "Why are you acquiring the WRONG customers?"
  • "What kind of PROMOTION will bring the customer back?"
  • "How FAST can we implement the promotion?"
  • "Don't you think MARKETING is DESTROYING the BRAND?"
As I answered the questions, a thought came to mind:
  • "Do not ever come into this meeting again without knowing what merchandise productivity is."
For fifteen consecutive years since, I've run what I call a "comp segment" analysis.  Here's a post from more than a year ago, outlining the general concept (click here).

Three months later, I walked into the next QPM with two facts.
  1. Comp Segment performance was down 15%.
  2. All employees at an Executive level were spending 20% less than the prior year on our merchandise.
The employee metric was pretty darn important.  You see, you can't blame the marketing department for causing employees to spend less on the very merchandise they are responsible for selling!  Having that metric, coupled with the customer metric, allowed us to shift the focus away from promotions, away from direct marketing, away from the website, and to what matters.

What matters is merchandise.

Are you a marketer?  You probably are, or you wouldn't be reading this post, would you?

Well, if you're a marketer, why do you let the merchandising team get away with beating you up over merchandise-related issues?

Be like the seal at the beginning of this post.  Peek above the murky waters.  Measure comp segment productivity.  Teach your company how merchandise productivity impacts overall business performance.

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