March 17, 2019

Personalization Is Not A Strategy

Ok, we weeded out a bunch of followers who apparently didn't like the concept of implementing your own Marketing Management System.

But it's terribly important.

Why?



Personalization is not a strategy. It's a tactic ... a darn good tactic, an optimization tactic. But personalization doesn't lead to growth ... well, that's not entirely true. Tiny growth is possible. A pure e-commerce brand might see "some" growth. For a retailer? Not so much.

If you are a New Marketing Leader, yes, you'll have personalization as part of your "Optimization" category within the Great Eight (click here). But "what" exactly are you personalizing? And "why" are you personalizing anything? What does your personalization effort support?

Those questions need to be answered ... the New Marketing Leader has an entire strategy of which personalization is a tiny component.


P.S.: Personalization is darn important ... I have clients who increase email response by 20% and various online endeavors by between 15% and 50%. However, top-line sales are rarely moved a ton by personalization. You need new customers or merchandise productivity to move the top-line. But you already know that, don't you?

March 14, 2019

Describe Your Plan, Part 4

https://www.datamann.com/datamann-seminar-april-2019/
Let's assume you inherit a business with the following dynamics:
  • +3% Overall Merchandise Productivity.
  • +14% New Merchandise Productivity.
  • -8% Existing Merchandise Productivity.
  • -6% New + Reactivated Buyer Comps.
  • 100,000 12 month buyers last year, 40% rebuy rate, 40,000 active buyers.
  • 55,000 new + reactivated buyers last year.
Tell me what is wrong with this business, and tell me what kind of plan you'd implement to fix this business?

March 13, 2019

Describe Your Plan, Part 3

https://www.datamann.com/datamann-seminar-april-2019/
Let's say you inherit this type of business:
  • -6% Overall Merchandise Productivity.
  • -2% New Merchandise Productivity.
  • -11% Existing Merchandise Productivity.
  • -20% New + Reactivated Buyer Comps.
  • 100,000 12 month buyers last year, 40% rebuy rate, 40,000 active buyers.
  • 47,000 new + reactivated buyers last year.
This is one of the most common situations the new marketing leader inherits ... EVERYTHING is broken.

What this business desperately needs is a Leader.

That's where you come into play.

You need to have a plan for every one of the Great Eight.


You don't have a choice ... this business is fundamentally broken. You will address all eight tactics, and you will communicate clearly to every employee in the company that every single aspect of the business is broken and is FIXABLE!!!!

You are going to be the hero.

Get busy fixing things!



March 12, 2019

Describe Your Plan, Part 2

https://www.datamann.com/datamann-seminar-april-2019/
Let's say you inherit a marketing team, and your business possesses the following dynamics:
  • +8% Overall Merchandise Productivity.
  • +9% New Merchandise Productivity.
  • +7% Existing Merchandise Productivity.
  • -18% New + Reactivated Buyer Comps.
  • 100,000 12 month buyers last year, 40% rebuy rate, 40,000 active buyers.
  • 50,000 new + reactivated buyers last year.
What does this tell you?
  • Your merchandising team is doing a fabulous job.
  • The prior marketing leader messed up the business, bad.
Your first job is to fix customer acquisition. Period. Your marketing strategy is the problem. You are the problem. And in a month or so, you'll be the one blamed for business not meeting expectations.

It's on you to fix this problem, asap.

You'll focus on the following.
  • Audience.
  • Awareness.
  • Acquisition.
  • Optimization (i.e. search and offline advertising).
Quite honestly, this business is being held back by one person ... and that person is you. It doesn't matter what your predecessor did, you run marketing now and if you don't fix this problem, everybody suffers.

Get busy!!

March 11, 2019

Describe Your Plan, Part 1

https://www.datamann.com/datamann-seminar-april-2019/
When you take over the marketing department, you need to have a plan. A plan is critical. And you leverage the "Great Eight" to execute your plan.

Let's say you take over Leadership of the Marketing Team. You run your comp segment metrics and you learn the following:
  • -4% Overall Merchandise Productivity.
  • -14% New Merchandise Productivity.
  • +2% Existing Merchandise Productivity.
  • -3% New + Reactivated Buyer Comps.
  • 100,000 12 month buyers last year, 40% rebuy rate, 40,000 active buyers.
  • 62,000 new + reactivated buyers last year.
You basically have a ton of data, right there alone ... you can figure out what your brand needs to do.

What is wrong with this business?

This one is easy, isn't it?

Your merchandising team is imploding the business via new merchandise. Obviously you'll have to dig in deeper and figure out "what" the real problem is ... but you are not dealing with a marketing problem, you are dealing with a merchandising problem.

As a new marketing leader, you probably don't have control over what the merchandising team is doing. But you have analytics on your side, and you can act accordingly.

Notice that new + reactivated comps are -3%. If merchandise productivity is -4%, then adjusted new + reactivated comps are really -3% - (-4%) = +1%. It means that marketing efforts are performing accordingly.

Also notice that you started the year with 100,000 twelve-month buyers, and 40% repurchased, yielding 40,000 active buyers. Couple that with 62,000 new + reactivated buyers, and you grew the customer file by 2,000 customers (100,000*0.4 + 62,000 = 102,000).

This means that new + reactivated buyers are not a problem (unless management wants a lot of growth).

You've diagnosed the issue:
  1. Your Merchants are harming the business with too little or unproductive new merchandise.
  2. Marketing is managing the customer file appropriately.
Within the Great Eight we have options.


I'd focus my efforts on Awareness, Welcome Program, Optimization Program, and New Merchandise. I'd calibrate my email marketing program to focus on the new merchandise that is performing well, working hard to get 'em to winning status. Awareness programs will be important because the annual rebuy rate is at 40%. Welcome programs will be important because we want to convert the customer to a second purchase quickly given that rebuy rates are low. Optimization programs are important because with sluggish merchandise productivity we have to save every penny we have to protect the profit and loss statement.

Now you have a foundation to begin your tenure as the new marketing leader. And you can align the rest of the company around your initiatives. Get busy!!







Repost Due To Delivery Problem From Yesterday

I am re-posting this today given that 75% of yesterday's deliveries failed for some wonky reason that my email provider cannot explain.


How about joining me in Nashua on Thursday, April 18?? Click here to register!!




I'm taking a different approach to my presentation. In the past few years, I've asked organizations to change. That simply doesn't work. You can't present a bunch of ideas to a Director at Orvis and expect the individual to change the organization. The ideas aren't the ideas of the Director at Orvis ... they're my ideas. Why would a VP at Orvis adopt the idea of a speaker with no skin in the game?

So this year the presentation is all about you ... yes ... YOU! You are reading this because you are likely a Marketing/Analytics Leader, or you want to be a Marketing/Analytics Leader. 

In the past year or two, there's been a huge influx of new Leaders ... the Baby Boomer generation has had thirty years to dominate commerce, and they are now passing the torch to younger Gen-X folks or older Millennials. This is a very exciting and challenging time in the career path of a young professional. It's also a disorienting time ... you are new and a lot of people around you have twenty or thirty years of Management experience. They have their ways of doing things, and they're going to impose their style of Management upon you.

This became clear to me a few years ago ... I sat in a room while a Young Professional shared six months of findings about how to grow the business (not only how to grow it, but how she already grew it without anybody else knowing what she accomplished) ... when her presentation ended, one VP whispered to another VP "she's young, she'll come around to how we do things around here". In other words, the seasoned leaders did not respect what this person accomplished (and hint - this person grew sales by 10% or more, something almost nobody else accomplished at the company in the past decade).

The hour-long session just plain angered me. How could these Leaders treat this woman so poorly, given how good she made them look?

It became clear that the new Marketing Leader needs a set of tools to "set the tone" ... to diagnose real problems (not the problems people perceive to exist) ... and then to align the organization around what really matters.

I went through this process ... I didn't have a formalized process in 1998 at Eddie Bauer and I paid the price for being new and disorganized. I did have a formalized process in 2001 at Nordstrom and while some folks hated my process, the process worked wonders. And yes, the process generated enemies ... but it was so important to have a process in place and to constantly point back to the process and say "this is what we are doing, and this is why we are doing it" ... and to not get distracted by noise, even if the noise came from those who could fire you!!

I'll spend two hours sharing with you the process and diagnostics necessary to get you, the New Marketing Leader, set up for success.

This talk will be about you. No more sharing of tactics that you'll disagree with and say "Thank You, Next". This time you are responsible for doing something. I have faith that you are ready to do great things!

March 10, 2019

Now Keep It Moving

How about joining me in Nashua on Thursday, April 18?? Click here to register!!

I'm taking a different approach to my presentation. In the past few years, I've asked organizations to change. That simply doesn't work. You can't present a bunch of ideas to a Director at Orvis and expect the individual to change the organization. The ideas aren't the ideas of the Director at Orvis ... they're my ideas. Why would a VP at Orvis adopt the idea of a speaker with no skin in the game?

So this year the presentation is all about you ... yes ... YOU! You are reading this because you are likely a Marketing/Analytics Leader, or you want to be a Marketing/Analytics Leader. 

In the past year or two, there's been a huge influx of new Leaders ... the Baby Boomer generation has had thirty years to dominate commerce, and they are now passing the torch to younger Gen-X folks or older Millennials. This is a very exciting and challenging time in the career path of a young professional. It's also a disorienting time ... you are new and a lot of people around you have twenty or thirty years of Management experience. They have their ways of doing things, and they're going to impose their style of Management upon you.

This became clear to me a few years ago ... I sat in a room while a Young Professional shared six months of findings about how to grow the business (not only how to grow it, but how she already grew it without anybody else knowing what she accomplished) ... when her presentation ended, one VP whispered to another VP "she's young, she'll come around to how we do things around here". In other words, the seasoned leaders did not respect what this person accomplished (and hint - this person grew sales by 10% or more, something almost nobody else accomplished at the company in the past decade).

The hour-long session just plain angered me. How could these Leaders treat this woman so poorly, given how good she made them look?

It became clear that the new Marketing Leader needs a set of tools to "set the tone" ... to diagnose real problems (not the problems people perceive to exist) ... and then to align the organization around what really matters.

I went through this process ... I didn't have a formalized process in 1998 at Eddie Bauer and I paid the price for being new and disorganized. I did have a formalized process in 2001 at Nordstrom and while some folks hated my process, the process worked wonders. And yes, the process generated enemies ... but it was so important to have a process in place and to constantly point back to the process and say "this is what we are doing, and this is why we are doing it" ... and to not get distracted by noise, even if the noise came from those who could fire you!!

I'll spend two hours sharing with you the process and diagnostics necessary to get you, the New Marketing Leader, set up for success.

This talk will be about you. No more sharing of tactics that you'll disagree with and say "Thank You, Next". This time you are responsible for doing something. I have faith that you are ready to do great things!




March 07, 2019

The Great Eight

We spent the past two weeks talking about the events and influences that shaped what I call "The Great Eight".

My Influences:
  • Audience = CMO Nordstrom.
  • Awareness = Duluth Trading Company.
  • Acquisition = Jim Fulton and Eddie Bauer Home.
  • Welcome Program = Eddie Bauer Home, B2B Brand With A Great Program.
  • Anniversary Program = Nordstrom Anniversary.
  • Optimization Program = IBM/Lands' End, Client With Brilliant Website Personalization.
  • New Merchandise = Bankrupt Client.
  • Winning Merchandise = Failed Retail Brand.
The influences result in a style of performing work, a style that is fundamentally different than the style used by any other professional. Not only fundamentally different, but in theory useful. Once you know the importance of new merchandise, you approach marketing very differently, don't you?

Now, I'm not asking you to blindly follow The Great Eight. Instead, I'm asking you to create your own version. Look back on who your influences were. Who was the expert who shaped what you've become? Document the influences, and a story will drop into your lap. The story becomes your Marketing Management System, your own unique way of doing things. Don't borrow taglines from the vendor community, that's not your system, that's their system! Your system is unique to you.

Your system gives you a competitive advantage.

Document your influences. Create your own system. And when you get your opportunity as a Marketing Director or Marketing Executive, be sure to implement your system from Day One.

March 06, 2019

Winning Merchandise

I'm at Eddie Bauer, and folks from the "brand marketing team" enter my office.

They want to mess around with the catalog.

"If we can just add eight pages of new stuff to the catalog we can really reach out to younger customers and protect our brand."

They got their eight pages.

Those eight pages performed at less than half the productivity as the rest of the catalog.

Guess who's fault it was that the catalog didn't perform well?

At Nordstrom, retail folks wanted to put stuff in email campaigns that had no reason to be in email campaigns. The stuff got in the email campaigns. Those campaigns performed 20% worse than the baseline average. Retail folks weren't blamed for sub-standard performance.

I first learned about the importance of Winning Merchandise at Lands' End. We reviewed every catalog ... marketing, creative, inventory, merchandising, finance. One of our analysts put together a compelling story ... if two catalogs were equally merchandised, the catalog with winning items at the front of the catalog significantly outperformed the catalog with the same winning items in the back of the catalog. All things being equal, show the customer the winners, now.

I worked with a large retail brand. A new Leadership team took control over this brand. This Leadership Team HATED the winning merchandise being sold. "Outdated". "Frumpy". They killed the winners.

Guess what?

The demand that would have been generated by winning items disappeared.

New items did not succeed. Customers just vetoed them. And customers had no winners to buy. So customers just stopped buying. Not 100% of demand, but the 15% required to collapse a brand.

I had more than twenty-five years of data to prove that winning merchandise mattered deeply. But one consulting project a few years ago caused the concept of Winning Merchandise to be included in The Great Eight. A retail brand, destroyed because Winning Merchandise were sent to the curb.

Don't kill your winners before they deserve to be killed.

Your winners contribute a disproportionate share of profit and customers.

My Influences:
  • Audience = CMO Nordstrom.
  • Awareness = Duluth Trading Company.
  • Acquisition = Jim Fulton and Eddie Bauer Home.
  • Welcome Program = Eddie Bauer Home, B2B Brand With A Great Program.
  • Anniversary Program = Nordstrom Anniversary.
  • Optimization Program = IBM/Lands' End, Client With Brilliant Website Personalization.
  • New Merchandise = Bankrupt Client.
  • Winning Merchandise = Failed Retail Brand.

March 05, 2019

New Merchandise

This is where twelve years of consulting work come into play.


I spent eight or nine years trying to solve problems from a marketing standpoint. What a fruitless endeavor that was, my friends.

I wrote more than a million lines of code trying to figure out a marketing solution to merchandising problems. I probably wasted six years trying to find marketing solutions to merchandising problems.

It was a disaster.

I had a client that went bankrupt while I was working with them. I structure my projects so that the client pays half up-front, half upon project completion. This client didn't pay the final portion of the project because they went bankrupt during the project. That project showed that the brand (out of business halfway through the project) had a serious new merchandise issue.
  • Comps on existing merchandise were positive.
  • Comps on new merchandise were seriously negative.
That project cost me a lot of $$$.

That project still pays me to this day. Why?

Because that project caused me to shift the focus of my work from marketing to merchandising.

If a company went bankrupt because their merchandising team committed the capitalistic version of malpractice, was it possible that other companies could be saved before hitting the wall?

Absolutely.

In response to losing a lot of money due to bankruptcy, I wrote this (click here). One of the reviewers hated the booklet, so please don't buy it.

From that point forward, half of my work has been merchandise-centric. Not centric-enough for merchandising folks and pundits. More than "centric-enough" to identify if new merchandise is a problem.

New merchandise is a huge problem. In 80% of my projects, there is a serious merchandising issue holding the company back. It's almost always a new merchandise issue that eventually becomes an existing merchandise issue. From there, the marketing team is blamed, and the blame leads to all sorts of reckless behavior ... from overspending on Google/Facebook to 40% off plus free shipping to surveillance via retargeting to just about any marketing mistake you can possibly think of.

This keeps the blame game away from those who've earned blame ... merchants ... and more importantly, Leadership.

In more than three decades of work, there isn't a more seminal moment than the moment when a bankrupt client did not pay me. The moment was life changing ... career altering.

The moment became an integral part of my Marketing Management System ... the Great Eight.


My Influences, To Date
  • Audience = CMO Nordstrom.
  • Awareness = Duluth Trading Company.
  • Acquisition = Jim Fulton and Eddie Bauer Home.
  • Welcome Program = Eddie Bauer Home, B2B Brand With A Great Program.
  • Anniversary Program = Nordstrom Anniversary.
  • Optimization Program = IBM/Lands' End, Client With Brilliant Website Personalization.
  • New Merchandise = Bankrupt Client.

March 04, 2019

Optimization Program

Two things really stand out here, one recent, one old-school. Let's begin with the old-school example.

Twenty-five years ago at Lands' End we had about 50 catalog in-home dates. As we've learned in the past few months, you can have 50 in-home dates as long as the vast majority of customers get a handful of mailings and only the very best-of-the-best get fifty. But when half of the customers are being clobbered with 25ish contacts, well, a funny thing happens.
  • Every catalog circulation decision, evaluated independent of every other catalog circulation decision, looks profitable.
  • When you try to optimize the decision on an annual basis, you realize you made a TON of bad decisions.
We were going to implement an optimization algorithm, one that determined the most profitable strategy. This tactic required each business unit to work together for the benefit of the profit-and-loss statement. It meant that a customer might not get six Home mailings ... instead the customer might get two Home mailings but the company would be more profitable. 

Understandably, if you were in the Home divisions you'd be upset if you had to contract your business in the name of "Optimization". As a result, the program was not implemented. A few months later I interviewed for a job in Dallas with IBM ... they were going to take their knowledge combined with our proposed strategy and create a product to help catalogers optimize their businesses.

That business still exists today ... and the vast majority of catalogers still don't trust 'em. That's what happens when you use math that takes control away from Business Leaders.

Speaking of math that takes control away from Business Leaders, I sat in a meeting where the Online Marketing Manager explained how she worked with a vendor to boost conversion rates by about 25% (sometimes much higher) by optimizing/personalizing the merchandising assortment customers saw when they visited the home page or key landing pages. She made her company Brinks Trucks worth of coin. She wasn't even looking for credit, she just wanted to do what was right for her business. She gets done with her presentation, there's a smattering of applause, and then one Exec leans over and whispers to another Exec ...
  • "She's only been here six months. Eventually she'll figure out how to fit in here."
My goodness ... this young lady just made sure that the Exec would earn a six-figure (or better) bonus payout and the Exec ... well, she sure missed the point of the whole exercise.

Optimization isn't about fitting in.

Optimization isn't about pleasing everybody.

Optimization is about NOT WASTING RESOURCES. If you can get 20% more customers to buy something, you're not wasting money on Google & Facebook, are you?

Optimization is all about generating more profit/cash, cash that you get to fatten the wallets of shareholders (I know, you don't like that) ... or more importantly, cash that you get to use to grow your business via new initiatives. If you waste money today, you have less money to spend on something clever tomorrow.

It's been my experience that Optimization requires collaboration and compromise. Not everybody is thrilled with collaboration and compromise. In fact, the only person thrilled with optimization is the person doing the optimization.

And yet, it's a fundamentally critical part of your Marketing Management System. If you don't have a credible Optimization Program, you aren't a credible Marketer.



My Influences, To Date
  • Audience = CMO Nordstrom.
  • Awareness = Duluth Trading Company.
  • Acquisition = Jim Fulton and Eddie Bauer Home.
  • Welcome Program = Eddie Bauer Home, B2B Brand With A Great Program.
  • Anniversary Program = Nordstrom Anniversary.
  • Optimization Program = IBM/Lands' End, Client With Brilliant Website Personalization.
 


March 03, 2019

The Anniversary Program

I had to confirm that the numbers were truly that stunning. But they were. Oh yes, they were that stunning.

I came to Nordstrom via Eddie Bauer and Lands' End. You couldn't sell anything in July or August at those two companies.

But upon arriving at Nordstrom, I looked at daily sales numbers (that was my job, of course).
  • We sold as much merchandise on July 25 as we sold on November 25.
Turns out that if you never discount and can count the number of sales you have on one hand, you can do Christmas level business in late July by offering 20% off on the newest fall styles.

Oh, we promoted the living daylights out of this. You can promote the living daylights out of something if you limit the number of events you have. There's a reason sports and entertainment focus on Anniversary Events ... some sports use media to promote a big event (Wrestlemania for instance), and then via FOMO the customer spends $59.99 (oh wait, high definition is $69.99 ... ok, sign me up). Look at what the NCAA does with Men's Basketball ... a four month lead-up to the announcement of 68 teams, and then you fill out your own bracket to see if you can outperform millions of other people (which means you likely pay attention to the games which gets everybody paid, one way or another).

I was in a meeting at Eddie Bauer back in 1998, when business was awful. We had something like 30 week-long promotional windows. There were (are) only 52 weeks in the year. I remember our CEO telling the folks in the room ... "we've only got room for a few more events before they all lose their luster." 

Oh, they'd already lost their luster.

There's a reason the NFL doesn't host a monthly "playoff" leading to a monthly "champion".

And in business, there's a reason you create an Anniversary Program ... an event so big and so crazy that your customers have no choice but to shop.


My Influences, To Date
  • Audience = CMO Nordstrom.
  • Awareness = Duluth Trading Company.
  • Acquisition = Jim Fulton and Eddie Bauer Home.
  • Welcome Program = Eddie Bauer Home, B2B Brand With A Great Program.
  • Anniversary Program = Nordstrom Anniversary.

February 28, 2019

Welcome Program

Why did I graft a Welcome Program on to my Marketing Management System?

Well, there are two reasons.

Recall my Home example from Eddie Bauer? Our analysis showed that Home customers "added on" to a first purchase within a few months of a first Home order. And then ... the Home customer went dormant.

That makes sense ... you don't buy Home products on a monthly basis, do you?

So by combining an Acquisition Program and a Welcome Program, we helped the Home division have the best year in their history at Eddie Bauer way back in 1999.

The idea kind of got away from me for maybe fifteen years. Then I saw the program implemented by a B2B brand. Holy cow!

This company leveraged outbound calls to first time buyers. Special email programs designed only for first-time buyers. Personalization based on the merchandise purchased in a first order. All of this stuff blended together into a tasty bowl of Welcome Program Soup!!!

When I punched client data into my Monthly Response Simulation, I noticed something very interesting:
  • Regardless of client, the most impactful timeframe in the development of a customer is in the first three months following a first purchase.
Just like that, my worldview was changed. The Welcome Program became an integral part of my Marketing Management Program.

My Influences, To Date
  • Audience = CMO Nordstrom.
  • Awareness = Duluth Trading Company.
  • Acquisition = Jim Fulton and Eddie Bauer Home.
  • Welcome Program = Eddie Bauer Home, B2B Brand With A Great Program.
See how all these diverse topics interact with each other? You graft ideas on to your own Marketing Management System, and before you know it you have your own way of doing things, your own program, your own system. That's what the New Marketing Leader needs to sell to all employees when taking over a marketing department. Then the New Marketing Leader needs to execute well, correct?

February 27, 2019

Acquisition

It's 1995, and I'm sitting in the office of a person named Jim Fulton ... at the time he was the Marketing Manager of the Kids Division at Lands' End.

In the early 90s at Lands' End, we had what I coined "Battling Business Units". Each business unit (Kids, Home, Mens Casual, Mens Dress, Womens Casual, Womens Dress) battled for the love of the same customer. Each business unit mailed the same customer ... grossly overspending to trade dollars back-and-forth between Battling Business Units. This caused Lands' End to be less profitable than it could be.

So again, I'm sitting in Jim Fulton's office ... he has thousands of lines of custom SPSS code that create multi-year customer forecasts. To be fair, he borrowed the forecasting idea from a company called Fingerhut, a company who had comparable reporting in the mid 80s ... if I remember correctly, their forecasts were called "Nameflow Models".

He shows me one of his findings ... he shows me that if a "Battling Business Unit" wanted to optimize profitability when housefile spend was sub-optimized, the Battling Business Unit could excel at Customer Acquisition. In other words, if everybody was Battling for the same customer, a Business Unit could help the overall brand by finding new customers that fed the entire ecosystem.

And he had thousands of lines of code to create the simulations that proved his point.

Did anybody listen to this person? Absolutely not!!!

I listened.

Later that year I landed at Eddie Bauer. Once I got through the Byzantine structure of having to access data on a mainframe using COBOL, I created my own Forecasting algorithm. Once I had my own Forecasting algorithm, I (too) learned just how critically important Customer Acquisition was to a business.

I got to test my theories three years later. When I became Circulation Director at Eddie Bauer, I became responsible for the plan for the Home division. Home customers had low annual repurchase rates (25% - 32%, +/-). It didn't matter how many times we mailed these customers catalogs, they weren't going to buy anything. So I changed strategy. We created lean, thin catalogs with best merchandise, thereby increasing the productivity of the catalogs. Then, we shifted Circulation out of housefile mailings and instead focused on two key areas.
  1. Customer Acquisition (specifically Pottery Barn customers).
  2. The Three Months following a first purchase (more on this tomorrow).
Within a year, the Home division was growing and had the best year of profit in the history of the division.

Looks like Jim Fulton was right ... and while his ideas weren't embraced at Lands' End, his ideas were grafted on to my Marketing Management System, allowing the Home division at Eddie Bauer to have the best year in their history just four years later.

So far, we've covered three elements within the Great Eight.
  • Audience (via my boss, the CMO at Nordstrom).
  • Awareness (via Duluth Trading Company and a groaning audience at a conference).
  • Acquisition (via the Customer Acquisition Simulations created by Jim Fulton).
I might talk about the Great Eight as if it were my idea ... but that's not true. I grafted ideas from smart people on to my own Marketing Management System.

Tomorrow we'll talk about Welcome Programs.



February 26, 2019

Awareness

I presented a paper at a conference. I referenced the fact that you can't get away from Duluth Trading Company advertising. 

And it's somewhat true ... the target TV-watching audience can't get away from it!!

As I shared examples, I could tell that the audience wasn't on my side. You know this feeling if you are a presenter ... you hear groans, you see people shaking their head back-and-forth to simulate a "No" motion. You see people whispering to other people ... "he's an idiot and my company paid for me to listen to this joke of a presenter". Ok, that didn't happen. I don't think it happened. Whatever.

I paused, then mentioned to the audience that I could tell that they "hated" Duluth Trading Company. The "no" motions changed to "yes" motions. I asked the audience why they hated a company that tripled in size in the past decade while leveraging catalog marketing, the very tool that the audience loved. One person volunteered an answer.
  • "Their advertising is stupid. They assume that men are dumb fat morons."
What does that comment really mean?
  • It means that the person who said the comment was not part of the Audience that Duluth Trading Company targets, and it means that the form of Awareness (TV ads) did not align with the preferred Awareness technique advocated by the Professional (Catalogs).
In modern marketing, Audience / Awareness / Acquisition is all part of what is called a "Marketing Funnel". The person at the conference preferred tactics (boring catalogs) that were further down the funnel, tactics closer to the sale process.

For me, Awareness became important late in my career. Even though examples were all around me for five decades, I was blind to the importance of Awareness until I saw Duluth Trading Company excel at Awareness. Then it clicked. Now I'd advocate spending money in ways I'd never have advocated through most of my career.

I grafted the lessons of Duluth Trading Company onto my Marketing Management System. I don't care that the majority of my readers don't like what they do ... if anything, it should motivate my audience to do something unique and clever on their own ... creating their own Awareness programs, right?

Right??

February 25, 2019

Audience

My Marketing Management System relies on thorough knowledge of your core Audience.

I can remember the moment when Audience became important to me. I was sitting in the office of my boss ... she was the Chief Marketing Officer. My company (Nordstrom) was about to shut down the catalog division. I was trying to defend the rural customer in North Dakota who didn't have access to a Nordstrom store, a customer who adored the merchandise offered in the catalog. When the catalog went away, the merchandise offered in the catalog was also going to go away. Those customers, customers who loved the catalog, were not going to be served anymore.

I wanted my boss to have a solution for these customers.

My boss had a solution. She said:
  • "We don't want those customers. We have plenty of market share that we can earn from our core customer audience."
Oh, I was angry. "We don't want those customers???" It wasn't the first time my boss told me she didn't want customers. How could she possibly not want customers?

The key word, of course, was "those" ... as in "those customers". Customers who were outside of our Audience.

My team prepared reports that showed we only captured "x" percent of the wallet of our core audience. The Management Team decided that it was better to try to earn more spend from our core Audience than it was to cast a wider Audience net.

Guess what?

My boss (as usual) was right. She knew her Audience. She defined the Audience for the rest of the company. And she was able to get those customers to spend more (something I had not previously observed).

The vast majority of my client base does not understand who their Audience is. Oh, they give answers ... "she's a convenience shopper". But they don't define the Audience, they don't define what the Audience spends, and they don't define how much of that spend they can earn.

If your audience is "Fashion Forward Women earning $100,000 a year or more in Suburban or Urban areas" and you know these women spend $7,500 a year in your wheelhouse and you are already capturing $500, then you know that you have just under 7% of the share of wallet of your core customer. You have room to grow. Now you implement programs within the remainder of the Great Eight to get 10% of the share of wallet of your core customer.

Mind you, you aren't trying to get the customer to spend more ... the customer CANNOT spend more. But the customer can reallocate. You want dollars that go elsewhere.

So that's the moment in my career that Audience became important. When in your career did the idea of "Audience" become important in your Marketing Management System?

February 24, 2019

Your Own System

Early in my consulting work, I visited a company. This company hosted a day-long strategy session. My job was to present customer findings, helping the merchandising and marketing and creative folks understand why customers were not achieving their potential.

After I shared my findings, the Marketing Professional gave a presentation about the future of marketing at that company. I prepared myself for an hour-long discussion of the innovations this person planned on implementing.

The presentation lasted maybe 10-15 minutes.

The Marketer essentially read from a white paper from a research brand, and even with that level of corporate malpractice the Professional sampled ten points of nonsense down to one point that he planned on implementing in the upcoming year.

It was the most tepid presentation I've witnessed in the twelve years I've been a consultant.

The Marketing Professional did not have his own system. He was reliant upon a third party for ideas. He had no confidence, no answers ... he had no clue. The research brand he paid, however, they knew how to monetize his lack of confidence.

The New Marketing Leader must have their own system ... a set of practices and concepts that seamlessly fit together and have been used previously to generate success. The New Marketing Leader communicates the system with enthusiasm, causing skeptical co-workers to buy into the system.

Tomorrow I'll address areas in the Great Eight, sharing with you the moments over more than three decades in my profession that shaped the system I advocate.



February 21, 2019

Borrowing From Others

In football, pro teams liberally borrow from colleges, and colleges happily borrow from high schools. Read this article for details (click here).

I arrived at Eddie Bauer in the mid-1990s. The marketing team had a group that performed competitive analytics. An analyst straight out of college waltzed into Gap and documented everything Gap at Bellevue Square did, in plain sight. Promotions. Floorset changes. Pricing of key competitive items. I recall the times the Store Manager saw our analyst coming and banned him (and his camera) from the store.

I also remember the times when the young analyst lined up a conference room with the promotional strategies used by all of our competitors. He had the blueprint, the DNA of every company on the wall. We borrowed the stuff that fit with our way of doing things.

I frequently talk about the Great Eight.


A key element of a credible Optimization Program includes borrowing from others. If Stitch Fix uses regression and neural networks to determine what a customer is likely to purchase next, and you compete against Stitch Fix, then you have every opportunity to liberally borrow their ideas and import 'em into your Marketing Management System. It doesn't guarantee that the ideas will work, but it most certainly guarantees that you'll come up with a Marketing Management System that is unique and fully your own. As a new Marketing Leader, the last thing you want to do is fail because you clung to the failures of your predecessor.

Borrow from others. Combine what they do with what you do best. Allow your own Marketing Management System to evolve and thrive. Teach your ideas to everybody who will listen.


Personalization Is Not A Strategy

Ok, we weeded out a bunch of followers who apparently didn't like the concept of implementing your own Marketing Management System. ...