August 29, 2018

Love Vendor-Centric Marketing Management Systems?

If you are tired of Principles and employ a Vendor-Centric Marketing Management System, then give this article about Best E-Commerce Design a read (click here).

You can be successful running a vendor-centric Marketing Management System. Companies do it all the time. The challenge you have to overcome is simple ... sameness. If everybody is employing similar tactics, then the value of the tactics degrade. You need merchandise productivity that is far stronger than the average brand, and that's really hard to achieve.

But it can be done.

August 28, 2018

Field Marketing Team

I had the benefit of visiting an industry-leading vendor. During the day-long visit, and employee described all of the low-cost / no-cost customer acquisition activities they performed. At one point, the employee said something very interesting.
  • "It's our job to hustle and create awareness, awareness that leads to people paying us."
The vendor employee led a team that employed dozens of tactics ... tactics that might cost no money, might cost a small amount of money. But the employee recognized an important fact ... it was important to not spend much money on marketing activities in order to obtain customers who spend money on marketing activities.

When I worked at Eddie Bauer, this team was called the "Field Marketing Team". A VP led a team of Directors/Managers who were responsible for a dozen +/- stores. They'd run all sorts of local programs designed to create awareness and get customers into stores. They had virtually no budget. When you don't have money to spend, you have to become VERY creative. If the Field Marketing Team didn't "anniversary" one of their events, you'd see a 10% - 20% drop in comp store sales in a market ... and you'd have a lot of angry Store Managers.

In other words, Field Marketing works.

When I worked at Nordstrom, Field Marketing was integrated within the Marketing Department. Nordstrom spent < 2% of net sales on marketing ... an unheard of percentage in modern marketing where a catalog brand is likely to spend 30% of net sales on marketing. In other words, the Marketing Department had to HUSTLE to generate sales on a shoestring budget.

At many companies, the Field Marketing department morphed into Public Relations. And Public Relations morphed into Press Releases and #engagement via Social Media.

Hustle and Hard Work are key elements of a Field Marketing Team. In modern marketing, those key elements are sorely missing. Is it any wonder so many readers get confused when we discuss low-cost / no-cost customer acquisition programs?

August 27, 2018

Marketing Focus

The Merchandising Director is simply not happy. She feels like she's not getting any help. Then she tells me this:

"It's like the Marketing Department doesn't even work here. They have no time for us. They tell me they spend all of their time working with vendors. They tell me that I couldn't understand how difficult their job is."

Twenty years ago I took over the Circulation / Analytics Department at Eddie Bauer. In the Circulation Department, there were three teams.
  1. Housefile Circulation, Core Business.
  2. Housefile Circulation, Specialty Businesses.
  3. Customer Acquisition.
It took all of about ninety seconds to notice the difference in the teams. 
  • Housefile Circulation teams worked well with each other, and had good working relationships with inventory management and merchandising and creative and information technology.
  • Customer Acquisition didn't work well with anybody. They spent all of their time working with external vendors, where they rented and exchanged lists and attended dinners paid for by vendors.
Here's another difference.
  • Housefile staff had ideas for business improvement, and those ideas came from the merchandising, creative, and inventory management teams.
  • Acquisition staff had ideas for business improvement, and those ideas came from vendors.
The latter point is important. A vendor would invite the acquisition team to a Seattle Mariners game, where the acquisition team would spend three innings watching the game from great seats before leaving to attend a dinner. At the dinner, the acquisition team would be asked to arrange a meeting between the vendor and I. The following morning, I'd see a meeting request for a meeting with the vendor at 2:00pm. I'd accept. The vendor would introduce a handful of topics about our current relationship ... and then unleash "Thought Leadership" ... telling me what we should be doing (because "leading brands" are already doing those things) ... and not surprisingly, "what we should be doing" involved spending more with the vendor ... you know, vapid stuff like "Leading Multi-Channel brands leverage paid opportunities to grow synergies across channels that lead to a frictionless customer experience that our research indicates customers crave."

It's easy to get sucked into that world ... sporting events ... vendor dinners ... Thought Leadership. It's exciting, you feel like you are a credible Professional ... you feel like a "mover and a shaker".

The converse is not exciting. Nobody wants to sit down with a merchant and a creative professional and an inventory manager and have those folks beat you into mulch because you are "marketing to the wrong people".

Again, where would you rather spend your time?
  1. Vendor-paid sporting events and dinners at Ruth's Chris Steakhouse.
  2. A meeting with merchants, creatives, and inventory managers where you are told you don't know what you are doing.
I've been in the industry for nearly 30 years. During this time, there's been a gradual slide across the industry.
  • More time with vendors.
  • Less time with employees.
Not surprisingly, you look at the profit and loss statement and you see a slow-moving train wreck in process.
  • 30% of company net sales (often 40% to 60% of gross margin dollars) paid to Search Agencies, Catalog Co-Ops, Facebook, Paper Reps, Printers, the USPS, Retargeters, Affiliates, Comparison Shopping Engines, Social Media Agencies, Email Service Providers, and Influencer Programs.
The more vendors you have, the more focus you must give to the process of feeding vendors. You become disconnected from reality.

Twenty years ago, the relationships between marketers and creative were pretty strong. As a result, you had more Customer Awareness programs ... you had Low-Cost / No-Cost Customer Acquisition Programs.

Today, the relationship between marketers and vendors is strong. As a result, you have a lot of programs where you pay vendors.

Today, marketers are largely running Vendor-Centric Marketing Management Systems. Is it any wonder it is so hard to grow customer acquisition via Low-Cost / No-Cost Customer Acquisition Programs? Your focus as a marketer needs to be on your co-workers, your customers, and your bottom-line ... not on the bottom-line of your vendor partners.

P.S.:  I get it ... this is the part of the story where I get a dizzying array of "UNSUBSCRIBE - CONTENT NO LONGER RELEVANT" from various vendor employees. That's fine. I'm here to increase profitability among my client base.

August 26, 2018


Most readers love to employ a Vendor-Centric Marketing Management System. If you don't believe me, read all the vendors the Internet Retailer Top 500 leverage just to run a website ... modern commerce has been overwhelmed by the Vendor-Centric Marketing Management System.

This means that there are myriad opportunities to do things that are not promoted by the Vendor-Centric Marketing Management System folks.

Look at your own data - you'll quickly see that the first eight weeks after a first purchase are THE MOST IMPORTANT timeframe in the life of the customer. There's no arguing this ... just look at your own data. I've yet to have a client where this isn't the case.

So if we know this is a fact, then ask your 1,493 vendor partners to bend their tools in your favor. Ask them to innovate ... ask them to provide solutions designed to get the first-time buyer to buy for the second time in a rapid manner. Pay them bonuses when they do an above-average job of quickly converting customers with unique solutions that they design for your specific situation.

And Attention All Vendors:  The first eight weeks following a first purchase are the most critical eight weeks in the customer life cycle. Period. You have a HUGE OPPORTUNITY to make your clients happy while padding your bottom line by modifying your products to capitalize on this critical customer window. Be creative. Be innovative! Help people, ok?!!

August 22, 2018

Customer Awareness and Prospect Capture

If there is one thing that Google ruined, it is Customer Awareness.

Seriously ... ask a professional what their Customer Awareness program is, and you'll frequently hear "Search Engine Optimization".

No, that's not Customer Awareness. That's stepping in front of somebody else who created a Customer Awareness program.

Somebody has to create demand. Google's job is to re-direct demand to either the highest bidder or to the party that plays the optimization game the way Google wants it to be played. 

Demand Creation and Customer Awareness go hand-in-hand.

Digital is HORRIBLE at creating demand. Well, that's not true. Instagram when applied properly to the right audience by the right people works wonders. But most forms of digital marketing are fabulous at steering demand that has already been created.

Offline marketing is great at generating customer awareness ... ask Uber and Facebook as they eschew their digital prowess and instead use TV to apologize for all of their problems.

Break your customer acquisition efforts into two pieces.
  1. Customer Awareness.
  2. Prospect Capture.
It's likely you are investing close-to-nothing in Customer Awareness and are instead spending your money on Prospect Capture. It's also likely you aren't spending nearly enough on Prospect Capture.

My Marketing Management System prioritizes Customer Awareness and Prospect Capture.

Most Marketing Management Systems prioritize Customer Loyalty. This type of system can work if your annual repurchase rates are north of 50%. But if your annual repurchase rates are under 40% (as they are for so many e-commerce and traditional catalog brands), you need a credible Customer Awareness and Prospect Capture program.

August 19, 2018

National Mail Order Catalog Day

Did you know that Saturday was National Mail Order Catalog Day?

Notice that the article was two years old. And referred to catalogs as junk mail. And they were being positive.

We have Amazon generating $3,000,000,000 to $4,000,000,000 for Prime Day. Nordstrom wrapped up their Anniversary Sale, generating Christmas-level business in the second half of July (which, by the way, is hard to do).

A quick scan of Twitter showed maybe three or four dozen tweets, world-wide. A mention from Catalog University (click here). A mention from Lands' End Business.

Those in the catalog industry know and understand a fundamental truth ... the industry struggles with Awareness Programs. It's hard to acquire customers when you don't have a credible Customer Awareness Program. Heck, the industry cannot even capitalize on a day dedicated to it.

And it's hard to have a credible Customer Awareness Program when you don't value Creative Professionals. Creative Professionals do work that does not translate to immediate ROI (like, say, Google can). That doesn't mean you don't hire Creative Professionals, or hire the right agency to do your work. Ask Duluth Trading Company what the ROI is on Creative Advertising.

August 12, 2018

Marketing Systems with Catalog Craig Paperman

Yes, this is business fiction. Some of you would prefer that I write about stuff that makes you profit the way you want to earn profit ... so if that's you, skip the rest of the article and read this pdf about branded content and native ads (click here).

Kevin: Craig, you look like a bird just made a nest in your gutters, are you ok?

Craig:  I'm fine.

Kevin:  No you aren't.

Craig:  I just finished reading all sixteen of your Business Principles (click here). A few weeks ago I thought this work was vapid. I'm more convinced of it today.

Kevin:  I remember - we talked about your Marketing Management System (click here). You run a vendor-based Marketing Management System.

Craig:  I agreed with you at the time. But then I thought about what you said and I found your comment offensive.

Kevin:  Why?

Craig:  You made me sound like I am a pawn, a simpleton. That's not who I am.

Kevin:  All I said was that you run a vendor-based Marketing Management System.

Craig:  I have my own ideas!

Kevin:  Undoubtedly.

Craig:  Just last week a popular vendor nuked their RSS feed and I was blessed to reread all of their posts from 2018. That really got the ideas flowing.

Kevin:  Your ideas or their ideas?

Craig:  They talked about sending postcards to customers based on browsing data. They talked about sending catalogs to customers based on browsing data. They talked about letting the co-ops know every single thing my website visitors are looking at so that the co-ops can monetize that information in a way that theoretically benefits my business. They talked about mail/holdout tests that proved we should all mail more catalogs to customers. They said the pendulum is swinging back to print. They really got me thinking.

Kevin:  Alright.

Craig:  If the pendulum is swinging back to print, and if their thesis is correct, then I'm literally sitting on a pot of gold.

Kevin:  Good. So what are you going to do about it?

Craig:  I'm going to call my sales rep at that vendor and we're going to test some of their products.

Kevin:  Sure, test and learn.

Craig:  But I'm the boss.

Kevin:  Huh?

Craig:  I make the decisions. Me. I'm the decider.

Kevin:  How did you get to the point where you made your decision?

Craig:  Why does that matter?

Kevin:  If we had to attribute your decision to an activity, what activity led to your decision?

Craig:  Again, why does that matter?

Kevin:  Because you aren't thinking for yourself.

Craig:  I'm the decider.

Kevin:  You decided something because a vendor made a mistake and you were presented with a series of articles you already read earlier in the year.

Craig:  I suppose you are right.

Kevin:  You are running the very essence of running a vendor-based Marketing Management System.

Craig:  No, you're not following. I am the decider.

Kevin:  You wouldn't have made your decision had the vendor not made a mistake with their RSS feed. And what was your first instinct, once you read the content?

Craig:  I wanted to call the vendor and test their ideas.

Kevin:  If you are running your own Marketing Management System, you think about what you and your team can do to improve business - that's your first instinct. If you immediately think you can improve business by quickly calling a vendor, then you are running a vendor-centric Marketing Management System.

Craig:  I don't know why this is important to you.

Kevin:  Do you trust your vendor partners?

Craig:  Absolutely!

Kevin:  Do you believe your vendor partners are being 100% honest and trustworthy when they tell you that the pendulum is swinging back to print when our industry is shutting down print factories and vendors publicly state in their 10-K statements that print is in decline?

Craig:  Well there's a lot of moving parts out there, that's for sure.

Kevin:  You can have great success running a vendor-based Marketing Management System.

Craig:  See, you agree.

Kevin:  But you aren't necessarily a leader if you run a vendor-centric Marketing Management System.

Craig:  That's nonsense. I'm the decider.

Kevin:  A leader doesn't execute what vendors tell her to execute. A leader executes what is right for her business.

Craig:  Are you telling me that print-centric solutions in a digital world aren't the right thing to do?

Kevin:  They might be the right thing to do.

Craig:  Thank you.

Kevin:  But you are just doing what vendors want you to do. Our industry is infected by professionals who simply do what vendors tell them to do. And do you know who wins when professionals do what vendors tell them to do?

Craig:  Russia?

Kevin:  Vendors win.

Craig:  We all win.

Kevin:  You win when you create your own system, your own Marketing Management System. You win when you have your own set of beliefs and then your beliefs are validated by customers spending more because of the tactics you employ. You win when your staff leave your company and borrow your system and merge it with their beliefs and create their own system.

Craig:  I believe in print. I have to depend on vendors to execute my wishes.

Kevin:  You can believe in print, that's fine. But why aren't you telling your vendor partners the products you need instead of implementing the products your vendor partners want you to implement?

Craig:  Um.

Kevin:  That's the difference. If you were running your own Marketing Management System, you'd be telling vendors what to do. If you are running a vendor-centric Marketing Management System, the vendors tell you the products you must use and then you pay the vendor for the products and services they told you to use.

Craig:  Wow.

Kevin:  Wow what?

Craig:  Wow, you really twist words to make an argument. Is that part of your system?

Kevin:  #OhBoy.

August 05, 2018

Gliebers Dresses: 468.5750

If you don't like business fiction, then go ahead and read this article about how RFID turbocharges the retail experience (click here). 

Now if you want to see something really interesting, I simply don't have enough digital space available to unpack everything I see and hear in this video (click here).

This is the oral history of the budgeting update of July 2017.

Meredith Thompson (Chief Merchandising Officer): July budgeting is a really important part of the multichannel planning process at Gliebers Dresses. By accurately forecasting what our business will look like in Q4, we get a head start on proper inventory management.

Pepper Morgan Pressley (Chief Marketing Officer): We run budget updates four times a year. It's exhausting, thankless work.

Roger Morgan (Chief Operations Officer):  I love working weekends. It's fun to crunch the numbers and see where our business is headed. Best of all, I get to use a lot of different applications from our vendor partners. They all give different answers, and based on the answers I triangulate what our sales forecast will be and I provide the results to Marketing and Merchandising and Finance.

Pepper Morgan Pressley: I ignore the work Roger authors. He's not accountable for forecasting. His job is to use the forecast to staff our call center and distribution center properly.

Meredith Thompson:  I ignore the work Roger authors.

Roger Morgan:  I ignore the actual budget, to be honest. My job is to properly forecast where the business is headed to that I can staff the call center and distribution center properly.

Pepper Morgan Pressley:  So it's Sunday, and we need to get the forecast entered into the financial spreadsheets that Lois maintains. Meredith and I agree that the budget for Q4 is net sales of twenty million dollars. But there's a problem. We can't get into the spreadsheet. The password doesn't work.

Roger Morgan: I'm trying to see what Pepper and Meredith authored for net sales, but I can't get into the spreadsheet - the password isn't correct. But honestly, it doesn't matter, because I'm forecasting sales of twenty-six million for Q4, and that's the number I'm going to work off of anyway.

Lois Gladstone:  It was my annual trek to the NASCAR race in Loudon. We park RV for the weekend, and then we partake in the activities. No drinking and driving in my household.

Meredith Thompson:  I don't think the password had changed in five years. Roger demanded we use OMNICHANNEL as the password - across all spreadsheets. He thought the password would get us to think of ourselves as one interconnected ecosystem. Even after we were hacked in early 2017, he didn't change the passwords, he just improved our systems.

Pepper Morgan Pressley:  I keep tying OMNICHANNEL and the spreadsheet keeps rejecting it. Are you kidding me?

Roger Morgan:  Who would change the password from OMNICHANNEL to something else? Who would be so reckless?

Lois Gladstone:  I have my own set of custom NASCAR headphones, pre-programmed for my favorite drivers. I like to listen to Ryan Newman. He swears when he drives. He's on 468.5750. It's a priority frequency for me.

Meredith Thompson:  I'm looking for Lois, and guess what? She's not helping out on a Sunday afternoon in mid-July. She's not in the office. Where the heck is Lois?

Lois Gladstone:  We make a lobster mac 'n cheese that is to die for. That's our go-to dish for the July race in Loudon. About ten of us all make something to bring to the pot luck. Except for Savannah. She always brings store-bought coleslaw. That's just lazy.

Meredith Thompson:  Now, I'm not proud of this, but I asked Roger to use the security cameras installed across the corporate campus to see if Lois was at work.

Lois Gladstone:  Pot luck ended around eleven in the morning. Then the rains came, and we had to wait out the rain delay in the rig. That's when we attacked the wine cooler.

Roger Morgan:  I looked through all video available since Friday night. It turns out that Lois didn't even bother to show up for work on Saturday OR Sunday.

Meredith Thompson:  I began thinking the worst. Maybe Lois was kidnapped, or had a heart attack.

Roger Morgan:  I began thinking the worst. Maybe Lois didn't share the same passion for our omnichannel mission that the rest of us shared.

Pepper Morgan Pressley:  I saved the forecast to a USB drive and set the drive on Gladstone's chair. She could enter the forecast manually on Monday. Then I got in the car and headed home.

Roger Morgan: Then I saw Pepper leaving the building via Camera #17. I never thought that Meredith and I were the only two people who cared about our omnichannel mission.

Lois Gladstone:  After a multi-hour rain delay, we headed to our seats. They fired up the engines. I put my headphones on, and listened to Ryan Newman as he gave instructions to his team.

Meredith Thompson: Now, I'm not proud of this, but I asked Roger to hack into our cloud-based calendar system to see if Lois made an appointment for Sunday afternoon.

Lois Gladstone:  Green flag, we're racin' at Loudon!!

Roger Morgan:  When Meredith asked me to access our cloud-based calendar system, I was concerned. I mean, I had to slow-play this a bit, acting like I had never done it before. I could tell Meredith was impatient and wanted me to get in faster, and trust me, I could have gotten into the system in seconds if I wasn't acting like I was a noob at this.

Meredith Thompson:  Everybody knows Roger monitors our calendars. How else did he know to show up at Pepper's wedding a few years ago?

Roger Morgan:  Sure enough, Lois has an appointment in her calendar ... it says 468.5750. What the heck is 468.5750?

Meredith Thompson:  468.5750? It sounded like a clue to solve a mystery in an escape room.

Roger Morgan:  That's not an IP address.

Meredith Thompson:  Or maybe the Russians had hacked our financial system? It's possible. They hacked our election and took the Presidency away from Hillary.

Roger Morgan:  I don't know why Meredith started grumbling about an election from two years ago, but if she wants to go at Trump, well, it's go-time!

Meredith Thompson:  Roger starts saying that nobody hacked anything. Well that's been debunked.

Roger Morgan:  Oh, her theory is bunk alright.

Meredith Thompson:  And paper prices are through the roof because of our trade war with Canada. Our President decided that his ego is greater than the profit our business should generate.

Roger Morgan:  Unemployment is at record lows.

Meredith Thompson:  And everybody is working for $11 an hour.

Roger Morgan:  Our tax rate dropped significantly.

Meredith Thompson:  We don't generate enough profit to pay taxes.

Roger Morgan:  Meredith likes to cherry pick liberal arguments that fit her agenda.

Meredith Thompson:  We can't sell jeans to Europe anymore now that importers are on the hook for 37% with the EU. Well done. Well done!

Roger Morgan:  I had to end this argument. You can't convince somebody that something is good for them in the long run even though there is short-term pain. So I started talking about Woodside Research. That changed the mood quickly.

Lois Gladstone:  Ryan Newman complains that he doesn't have forward bite. His crew chief recommends changes for stage two.

Meredith Thompson:  Now, I'm not proud of this, but I asked Roger if we could just go into Lois Gladstone's office and see if we could figure out if she left the password to the spreadsheet on her desk.

Roger Morgan:  Lois keeps passwords in a drawer, but I had to slow play this one as well.

Meredith Thompson:  So guess what? We enter her office, and there's a thumb drive sitting on her chair.

Roger Morgan:  I'm acting like I don't know where anything is in her office, and Meredith is just rambling and mumbling about this thumb drive.

Meredith Thompson:  The Russians put it there, I'm convinced of that.

Roger Morgan:  I decided to fire up her laptop and plug the thumb drive in.

Meredith Thompson:  I just about lost my mind. You don't access a random thumb drive. What if there is a monitoring system on that thumb drive, and then the Russians know all of our business secrets. Then what?

Roger Morgan:  The only monitoring system at Gliebers Dresses is the monitoring system that Woodside Research helped me install. It's a complex system. Woodside Research helped us get a lot of PR out of that system. It acted a lot like free marketing.

Glenn Glieber (CEO / Owner):  I love free marketing!

Meredith Thompson:  While Roger was telling me how secure his monitoring system was, I noticed a box on Gladstone's desk. It was some stupid NASCAR race frequency headset. And there was a yellow sticky attached to the box. There was a number on the yellow sticky. The number was 468.5750.

Roger Morgan: I'm rifling through the drawer where the passwords used to be, and I'm not finding a thing. Oh oh.

Meredith Thompson:  I said, "Roger, do you think this number means something?"

Roger Morgan:  This has to be the third or fourth time that Lois moved her passwords on me.

Meredith Thompson:  At this point, it all starts to click. Lois is missing, her calendar says 468.5750, and she has a 468.5750 sticky next to a set of NASCAR scanner headphones. She's leaving us clues. I bet the Russians have her and she's telling us how to get to her. This is bigger than a forecasting spreadsheet. This is a takeover of our political system AND our commerce system!!!!

Roger Morgan:  I log on to Gladstone's laptop, and I cannot get past the password screen. OMNICHANNEL simply doesn't work anymore. What is going on?

Meredith Thompson:  I'll tell ya what is going on. This is an international conspiracy of epic proportions, that's what is going on!

Roger Morgan:  Left with few options, I type 468.5750. And I'm in. I'm IN!!!!!!

Meredith Thompson:  Roger starts running around Gladstone's office in counter-clockwise ovals, cheering like he just won the NASCAR race in Loudon.

Lois Gladstone: I was pretty happy because Ryan Newman finished 6th in the NASCAR race in Loudon!!

Meredith Thompson:  As Roger took his victory lap, I began to realize that maybe Roger was in on it all along. Yes, that's what is happening. Roger is a Russian spy. Otherwise how do you explain the fact that he has monitoring systems and knows how to get into our calendars and knows where Lois keeps her passwords? Now I'm truly frightened.

Roger Morgan: Well if 468.5750 gets me into her computer, why wouldn't it get me into the forecasting spreadsheet?

Meredith Thompson:  What happened next is truly chilling.

Roger Morgan:  With palms sweating, I typed 4 6 8 . 5 7 5 0 into the spreadsheet password window. I hit enter.

Meredith Thompson:  It was like the security of the free world was at stake as he hit enter.

Roger Morgan:  And BOOM ... there it was ... I was IN!!!

Meredith Thompson:  He got in. That's the moment I was sure that Roger was a Russian agent.

Roger Morgan:  I asked Meredith where the updated forecasting spreadsheet was, so we could merge the information into the official spreadsheet?

Meredith Thompson:  I had no idea where the updated forecasting spreadsheet was.

Roger Morgan: I realized that Pepper probably had the forecasting spreadsheet. But she left the building an hour earlier.

Meredith Thompson:  Roger suggested we ransack Pepper's office looking for the spreadsheet. I didn't want to make waves, I mean, what happens if Roger truly is a foreign agent and I get in his way? 

Roger Morgan:  Meredith and I headed down to Pepper's office. I don't think we've ever gotten along so well, to be honest. Though it concerns me that she asked me to hack into multiple systems. She was behaving like a foreign agent in some ways.

Lois Gladstone:  When I returned to the office, it looked like the cleaning staff had rifled through my drawers, everything was a mess. I'll need to talk to Roger about firing the cleaning staff.

The Milkman

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