June 30, 2014

Homework Assignment: Restoration Hardware

You've probably heard all about the stink that Restoration Hardware generated by sending out a 3,300 page catalog that weighs a full twelve pounds. You can't avoid the criticism on Twitter, that's for sure! And the mainstream media love to cover a story that generates page views and/or ratings.

Here's your homework assignment for today.

Question: The Restoration Catalog marketing effort is allegedly carbon neutral. When you tweet your displeasure about the catalog on Twitter, you are consuming electricity. Is the electricity you use to voice your displeasure carbon neutral? If not (i.e. you are burning coal to tweet your displeasure), how do you feel about that?

Question: If this lone catalog generates more sales and more profit for Restoration Hardware than their previous catalog strategy, did the marketing strategy perform well?

Question: Would you rather receive one 3,300 page catalog per year from a company, or 33 100 page catalogs per year from a company?

Question: For those who think catalog marketing is irresponsible and a waste of ecological resources, please describe the energy source used to shop via e-commerce (or Amazon) and/or mobile? Or describe the energy source you use to drive to a retail store to purchase something? Can you demonstrate that your shopping habits are carbon neutral?

Question: If you do not like this marketing strategy, please describe a substitute tactic that Restoration Hardware could use to illustrate tens of thousands of skus available to the customer? In other words, develop an alternate marketing plan, and, demonstrate that your alternate marketing plan will cause Restoration Hardware to sell more than they sell via this catalog.

Question: Describe how you would measure the success or failure of this marketing effort? Make sure you use the phrase "holdout test" in your response.

Profit per New Customer

It's common for folks to measure cost per new customer. Total Marketing Cost = $10,000. Total New Customers = 130. Cost per New C...