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.

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