September 30, 2020

The Lizard

A Virtual Chief Performance Officer frequently runs into a roadblock that I call "The Lizard".


I'm guessing you've run into "The Lizard" in your work.

You wonder how the heck this person ever got into a position of authority? He appears to have minimal mental capacity to balance competing ideas in his head. Maybe your analysis says that you have to have a robust pipeline of new customers to be successful, and he is a loyalty advocate. He's gonna "go binary" on you and argue that loyalty is the path to success, and he'll reject every acquisition-based argument you provide, regardless of facts. I mean, it's possible for numerous things to be truthful at the same time. You can improve customer acquisition efforts AND you can improve loyalty efforts.

The Lizard generally doesn't hold competing thoughts in his head at the same time.

The VCPO must become very, very clever dealing with somebody employing Lizard Logic (i.e. binary thinking).

The VCPO writes objectives for The Lizard that align with the binary thinking that The Lizard can handle.

The VCPO then writes objectives for everybody else, and separates accountability for succeeding at those objectives from The Lizard.

I realize this means that The Lizard might benefit from the work of other people, but that's life. Why do you want to have non-stop arguments with an individual who isn't capable of thinking beyond binary choices?

If your CEO is "The Lizard", well, you've got problems.

But if your Chief Marketing Officer is "The Lizard", well, that one is not difficult to work around. Set specific goals for the CMO that "The Lizard" agrees with philosophically, then work with everybody else to implement other ideas.

Get the data, analyze the data, then work around personalities that hold back company performance.


September 29, 2020

The Quiet Dissenter

Here's a person that you'll have to work around as a Virtual Chief Performance Officer. This person is the "Quiet Dissenter".

I'll give you an example, one I've shared on Twitter numerous times.

When I worked at Nordstrom, it was my job to author the catalog plan. I determined how much we were going to spend on catalog marketing, my team created a circulation plan for each individual catalog, the inventory team collaborated with merchandising and negotiated what they liked / didn't like about the plan, then we moved forward.

You'd think as a Vice President I'd have some clout regarding the very issue I was accountable for implementing. You'd be wrong. There were a group of individuals who were what I'd call "Quiet Dissenters".


These folks never said a word. They'd just review my work, then they'd implement whatever the heck they wanted to implement.

I learned my lesson the hard way. One of my own circulation analysts didn't follow my plan for 2.0 million in liquidations circulation for a catalog, instead selecting 2.7 million names. I didn't know she did this until a vendor mentioned the number to me. I asked her what she was doing? She pulled out a "circulation request form" she created. Are you ready for this? She offered this form to a group of "Quiet Dissenters" in the company, and they did the following:

  • They told her who to mail.
  • They told her what the circulation quantity should be.
  • She then changed the selection quantity and selection criteria based on her own whims.
I quickly learned that there were four "quiet dissenters" who were executing their own business ideas:
  • A merchandising VP.
  • A print production Manager.
  • My own Circulation Manager.
  • A paper rep from a paper company (yes, a person not even employed by Nordstrom).
I only controlled the Circulation Manager. She was fired within two weeks. If you are playing the role of a Virtual Chief Performance Officer, you need to recommend to Leadership that they eliminate the "cowboys" who do whatever they want whenever they want to do it. Now

Next, I threw down the hammer on the VP (a peer) and the Print Production Manager (who didn't report to me). This didn't go over well, and both parties ignored me at first. The VCPO should be ready for this, and should consistently advocate the same managerial advice regardless. 

It was easier to work around the print production manager. I just told him I would outsource his function to a third-party vendor (even though I had no authority to do that whatsoever) after he told me he would be "unable" to implement my plans. Unable. Riiiiiight.

A VCPO finds the roadblocks that prevent a company from performing at a high level, then helps employees create a process to work around those who create roadblocks. The "Quiet Dissenter" is a real challenge, because you have to dig deep to figure out specifically who is working behind your back to sub-optimize performance. But as a Leader, you have to get this part of plan implementation figured out. You need data analysis to prove your direction is credible, then you need the proper level of coaching to push the organization in a high-performance direction.



September 28, 2020

The Know It All

A few years ago I was asked to visit a company and present the findings of project work I recently completed.

Anybody in Consulting knows what this experience is like. You enter the building, and you make a judgment about the company based on the lobby and security procedures you are asked to follow. Heck, the very process of obtaining a badge says a lot about how willing the company is to allow your ideas "in the door".

You are escorted to a conference room. Certain people are there early, first to enjoy a bagel and cream cheese. Others are on the phone, holding impromptu meetings in front of everybody else. Frequently, there is a powerful Executive sitting front-and-center. People sheepishly hand this person documents, and s/he nods her head in approval or tells the individual the twenty-four reasons why the document is unacceptable.

You weren't hired by this person. But this is the person you are there to present to. This person is the "Know It All".


A Virtual Chief Performance Officer needs to figure out how to work around the Know-It-All.

I visited a company a few years ago where the Know-It-All was the Chief Merchandising Officer. He knew everything. He knew why marketing failed (repeatedly, in his mind). He controlled the meeting ... even though the CEO brought me in and was (in theory) leading the meeting. His merchandise was not a problem, the problem was the people in room who were not doing their job supporting him. I had data showing that his new merchandising strategy was a problem ... a big problem. He wouldn't accept facts. I'd state a fact, he'd just get louder with theory and ideas and concepts ... no proof that what he was doing was working or would ever work. If backed into a corner, he'd lie. He pointed fingers.

He'd say stuff like "I've seen people like you come and go". Great! Nice observation.

There is no reason whatsoever to argue with this person. You won't win the argument, and worse, you'll just get frustrated.

You have to work around this person.

The amazing thing is that these people are frequently NOT the CEO. They're usually a C-Level team member, and they intimidate the CEO because the CEO doesn't have the subject matter expertise the bully / know-it-all possesses.

The Chief Performance Officer needs to encourage the CEO to write acceptable goals and objectives for the know-it-all, assuming that the CEO doesn't want to fire the know-it-all (and by the way, what stops a higher-level individual from firing a belligerent subordinate???). If new merchandise is the issue, write a simple goal and objective and give the CEO a tool to manage the Chief Merchandising Officer.

Goal:  Grow sales from new merchandise by 10% in the first six months of 2021.

  • Exceeds Expectations = +15% sales growth from new merchandise in the first six months of 2021.
  • Meets Expectations = +7% to +14% growth from new merchandise in the first six months of 2021.
  • Missed Expectations = < +7% growth from new merchandise in the first six months of 2021.
If the Chief Merchandising Officer misses expectations, there must be consequences for the CMO, correct?

Make the "Know-It-All" prove s/he knows it all. Analyze new merchandise performance, demonstrate what needs to happen, write a goal that makes it clear how performance must change, and then hold the person accountable if performance does not change.


September 27, 2020

Four Personality Types You'll Have To Work Around To Be Successful

Yes, this is a broad generalization.

But part of a Virtual Chief Performance Officer role is getting employees to understand that there are factions within a company that actively block progress on doing anything new/different. These are the people you have to work around, because honestly, you are never going to convince them to do anything different.


This week, we'll talk about each personality. The personalities create friction, they hurt your performance while maximizing their performance. It doesn't really matter how effective your ideas and/or analytics are if these people stand between you and implementation. You have to work around them.





September 24, 2020

Saks Article

Here's an article that is making the rounds on Twitter this week (click here).

It's hard to know what you can "trust" on Fast Company. I sat in a meeting a few years ago where a Product Manager saw a great idea, hopped on the phone, called her assistant, and said "Contact Fast Company and get us an article about the concept." In other words, it is conceivable that somebody in PR thought it would be a great idea to have a President/CEO write an article that made the President/CEO look brilliant.

As far as Twitter was concerned, it was "Mission Accomplished". I started receiving feedback.

  • "You'll like this, it's a really nice piece of thought leadership and is spot on."
If you go back and read Hudson's Bay Company financial filings, you'll see that Saks comps were generally positive (+/- 3% or 3.5%) through 2018 and the first half of 2019 before wobbling in the six months prior to COVID devastation. But for the most part? Not bad!

That being said ... if the best you can hope for under the blueprint of the article (pre-COVID) is a two-year bump of +3.5% comps followed by wobbling and flat comps for six months, then question the blueprint.

There's a tone in the article.
  • "If you aren't as innovative as we are, the whole industry is going down because we all share traffic and you aren't holding up your end of the bargain."
This stuff is NOT EASY ... you don't take a giant retail company and just start posting +10% comps.

And internally, there are always forces that DO NOT WANT TO CHANGE. At all. They don't want to innovate. The article talks about the cycle within fashion companies of inventory management and markdowns and the drag on profitability ... well, if you've ever worked in an old-school fashion company, you know darn well that you hire people to maintain the red tape required to manage a new assortment that ultimately has to be marked-down and liquidated. You perpetuate the very dynamic you deride. That's part of the problem of trying to convert a bus to an RV while the bus is rolling down the highway at 65mph.

So, yeah, good article if you like retail theory.

If you are trying to implement the thoughts in the article, that's tough. Ask the President/CEO who wrote it. He's had five years to implement his ideas and prior to COVID he did post two years of positive comps followed by faltering / flat comps for a half-year, proving that even when you are in charge of the very strategies you advocate for an entire industry you still might not be successful.

September 23, 2020

The Next Run of the MineThatData Elite Program

These once-every-four-month runs come up quickly, don't they?

It's time for the next run of the MineThatData Elite Program! I'll run my typical metrics on your business, and, as always, I run bonus metrics on an aspect of your business. In this case, I'm going to do something unusual:

  • I'm going to provide you with a statistical model that evaluates the first-time buyers most likely to be responsive to a Welcome Program.
In other words, if you have all sorts of new customers and you want to understand "who" is likely to move forward and become a good customer, I'll tell you that (provided you offer the right product data and have reasonable channel-based data from a first order).

Logistics?
  • Cost for First-Time Participants = $1,800.
  • Cost for Existing Participants = $1,000.
  • Five Years of Data, One Row per Item Purchased, Through September 30, 2020.
  • Data due to me by October 15, 2020.
  • Payment due to me by October 15, 2020.
  • Analysis completed by October 31, 2020.
Contact me (kevinh@minethatdata.com) to be included in this important run of the MineThatData Elite Program!

September 22, 2020

Second New Product!!!!

Here we go with a second new product for Fall 2020:


HILLSTROM'S GOALS AND OBJECTIVES:
  • COVID mucked things up in many ways. One of the key challenges is coming up with a credible plan for 2021 and beyond.
  • The Goals and Objectives project calculates the impact of COVID on your customer file. Did you improve the loyalty of your customer base? Did all of your gains come from new customers? Did your customer file fundamentally shift and now you are managing a changed brand? The Goals and Objectives project will answer these questions for you.
  • Based on what we learn, I'll share with you what your Goals and Objectives should look like for 2021. Need to grow by 20%? I'll set Objectives to get you to that point. Need "x" loyal buyers in 2021? I'll set Objectives to assist your thinking.
  • Goal/Objective setting is a big deal in a corporate environment ... used to set bonuses, used to point all employees in the right direction to yield a positive outcome. We'll strip COVID issues out from general customer inertia and set reasonable Goals and Objectives so you can have as much success in 2021 as possible.
  • Cost = $9,900.

A new product, designed to help you with our new world. Contact me right now (kevinh@minethatdata.com) for details or to get started.


P.S.:  Think of this as one component of a Virtual Chief Performance Officer project (click here). A piece. A highly actionable piece, but yes, it's part of what you get with the VCPO project.

September 21, 2020

New Product! Something Very Different: Virtual Chief Performance Officer

Yesterday I wrote about various issues in Sports ... where folks went against the grain and had success. In particular, there was one article (click here) that really resonated ... where the golfer had a Coach working with a Statistician to craft game plans, training plans, and a path forward for improved Performance.

The impetus for this came from several projects this summer, projects that were (quite honestly) very different than the work I completed in the past.

  • The Executive (or Analyst) wanted a fusion of Analytics + Coaching + Organization (happened multiple times).
  • Creation of a Video Series for an Online Education Brand on how to perform the work I routinely do, combined with how to work with Business Leaders to get stuff done. I've spent the past two months working on the Video Series, realizing the analytics were ultimately a minor part of what needed to be taught. As I prepared to create the videos, it was obvious that Coaching was the primary goal of this project.
All through the COVID-infused Zoom-based Summer, it became clear that something was missing, something that Professionals are looking for.
  • A fusion of Coaching and Analytics and Organization, leading to improved Performance.
In other words, the world changed and we need to change with it. Coaching and Performance are becoming very important, and you can't just be an "Analytics" person ... you have to bring more to the table than the ability to "Analyze" something.

So let's fuse it all together!

I'm calling the product the "Virtual Chief Performance Officer" or "Virtual CPO". You'll hire me for various issues, and I'll act as a hybrid Coach / Analyst / Organization / Performance mentor. I'll analyze the business issue (if necessary), but after that we're looking at how to improve your performance.

Example:  You are a CEO, and you have a business challenge. Sales are down 10% (while everybody else is up during COVID) and you suspect your Chief Merchandising Officer is the problem. Worse, your Chief Merchandising Officer is a "handful" ... s/he won't change. Here's what the project might look like:
  • Analysis of New/Existing Merchandise Trends over the past four (4) years.
  • Routine Zoom calls to discuss how your team might work better together.
  • Coaching/Mentoring of key staff to work more effectively with difficult individuals.
  • Setting of Goals and Objectives to achieve better Performance.
The key here is to fuse Coaching, Analytics, and Organization, leading to improved Performance.

If this is of interest to you (and hint - it should be ... it's the top ranked request I've received during the summer), contact me at kevinh@minethatdata.com and we'll talk through details.
  • You could be a CEO who needs help, a Chief Marketing Officer, or a skilled Analyst needing assistance, it doesn't matter, we'll structure something appropriate for your unique circumstances.

P.S.:  I hope to release a parallel podcast / video series to complement the Virtual CPO project offering. More details on the series in upcoming posts.

September 20, 2020

People Don't Like It When You Go Against The Grain

There's nothing more interesting in my work than when I tell a client they need to implement a Welcome Program. A few years ago I spoke at a conference and the contempt from the audience could be felt from my vantage point at the podium.

  • "Walmart doesn't do that and they're kind of successful so I don't think we're taking advice from a blogger in Arizona, k-thx."
I'm frequently asked what I read. I read a lot of content from the world of sports ... why, you ask? Because in sports you get to publicly see people who go against the grain, get absolutely blasted/pummeled by the pundits who know everything and have a Twitter account to demonstrate their brilliance, and then overcome everybody and have success and then their ideas are quietly adopted by the same pundits.

Want examples?


Bryson Dechambeau won the US Open golf championship this weekend by six (6) shots (that's like winning the Super Bowl by 6 touchdowns), overwhelming the competition by out-driving everybody. He changed his entire body over the off-season, after implementing an unusual form of analytics to attack a golf course (click here). Predictably, pundits / purists HATED all of it. Too bad ... he's on top of the world of golf now and pundits / purists are figuring out how to play catch-up. I mean, read the darn article. He hires a statistician and a coach, and those two work together to figure out how to decimate the competition by leveraging what Mr. Dechambeau is good at. Do you do that with your statistician? Do you even bother to work with data scientists? Do you have a COACH? Seriously - how many Executives have a COACH that they work with?


The Las Vegas Aces of the WNBA are in the playoffs. And while every team under the sun is adopting the analytics-based view that you must shoot 3 point shots, this team is doing the opposite. Oh, they're applying analytics alright, but they are shooting 2 POINT SHOTS instead (click here). They're also doing stuff that is unheard of. Instead of passing the ball after a rebound to a point guard, they're just dribbling the ball up the court (quickly), creating an immediate fast break opportunity as a typical point guard instead fills a wing position, allowing the team to immediately attack a defense. They get a ton of easy two-point shots that are made at a higher percentage, causing the expected value of a two-point shot to exceed the expected value of a three-point shot ... plus you get fouled a lot driving to the basket, allowing you to make free throws at 75%.
  • Short Two Point Shot = 65% chance of making the shot * 2.0 points = 1.3 expected points.
  • Two Free Throws = 75% chance of making a free throw * 1.0 points * 2 shots = 1.5 expected points.
  • Three Point Shot = 40% chance of making the shot * 3.0 points = 1.2 expected points.
Multiply that out over a hundred possessions and you end up an extra 10 points a game. Oh.


Down here in Arizona, the Cardinals are off to a 2-0 start, running an offense mastered by a head coach that has roots in the Air Raid system used in college ... a system that PRO PEOPLE ABSOLUTELY HATE (click here). Now armed with a 2nd year quarterback and arguably a top-five wide receiver, the offense has sprung to life. Granted - this may not last the whole season ... but it could also get better, yes, better. And when pundits and purists are wrong, they don't step up to the microphone and tell you they were/are wrong, they just move on ... quietly.


Last year the world of Pickleball was rocked by a new Championship Team (click here). What was unusual about the winning team (watch the video here)?
  • It was a mother / daughter team.
  • The Mom was +/- 40 years old.
  • The Daughter was 12 years old.
Yeah, 12 years old. I charted every point from the Championship Match. They played an aggressive, assertive, offensive style of high-speed pickleball that you typically only see from beginning players ... adapted to the highest possible level of skill in the sport. They basically reinvented the game on the fly and beat the world in the process. And going forward? They want to play faster, more aggressively, and more offensively. Anybody who has ever played pickleball knows how terrifying the prospects of that are.


All examples demonstrate people who went against the grain and succeeded. Sure, tons of people go against the grain and fail miserably ... and those examples get shoved in our faces daily as DON'T DO THAT examples that allow pundits / purists to maintain control over an industry. Ask Ron Johnson (click here).

These folks do things differently. They've got people who analyze things differently. They have coaches who implement ideas differently. 

It's almost like a Coach / Statistician / Analyst role might be an important new role in a company looking for a different path into the post-COVID future we're all trying to figure out?

Hmmmmmmmmm.


September 17, 2020

E-Commerce In A Box Breach: Magento

Click here, folks

You cannot criticize these breaches, because the minute you do that somebody hacks you and then what?

Try your best to manage your "box of vendors". When your vendor has a problem, customers don't care about "Magento" ... they care about you and will hold you accountable.

September 16, 2020

Goals, Objectives, and Uncertainty

There's a lot of bad analytics that are about to lead to a lot of poor Goals and Objectives for 2021.

Think about it this way. Here's a company, and here is their new customer counts by month in 2020.

  • 14,493 = January.
  • 15,065 = February.
  • 33,772 = March.
  • 40,612 = April.
  • 25,904 = May.
  • 17,653 = June.
  • 12,856 = July.
Curious, you go back to 2019 and look at customer counts by month.

  • 13,895 = January.
  • 15,540 = February.
  • 20,365 = March.
  • 22,779 = April.
  • 19,684 = May.
  • 17,154 = June.
  • 12,950 = July.
Interesting!

What is the lift by month, 2020 vs. 2019?
  • +4% = January.
  • -3% = February.
  • +66% = March.
  • +78% = April.
  • +32% = May.
  • +3% = June.
  • -1% = July.
What is a reasonable Goal for the first half of 2021?

Say you plan on spending 20% more in 2021 than you spent in 2020. Say that thirty percent of your new customers come in without the need for advertising. Well, you now have enough data to create a baseline and to start working your way toward considering the uncertainty of your business next Spring.

I'd likely build a baseline that is +2% to your counts for 2019.

Then I'd split off the 30% of that total that you know you'll acquire no matter what (i.e. organic).

Finally, for the 70% of remaining new customers, I multiply that total by the square root of a 1.20 factor ... accounting for a 20% increase in ad spend.

I'm left with this table.


I'd begin with a baseline forecast of 116,605 new customers in the January - June timeframe. After applying advertising spend differences, I'm left with 119,062 as my forecast for next Spring.

You write your Goal/Objective based on the 119,062 seasonal forecast.

And if your belief is that COVID will cause next year to be a highly unpredictable year, make sure you build cushion into the Exceeds / Meets / Misses framework.
  • Exceeds Objective = 135,000 or more new customers, January - June.
  • Meets Objective = 105,000 to 134,999 new customers.
  • Missed Objective = < 105,000 new customers.
You also write two objectives ... one for the first half of the year, one for the second half of the year. This allows you to mitigate uncertainty. If the first half of the year is 20% worse or 20% better than your expectations due to a COVID vaccine, you deal with that, then you write a fair objective for the second half of the year.

Sound reasonable to you?




September 15, 2020

BOARD and Customers

Before you set an objective, you try to understand what is happening to customer behavior. The analyst creates a set of facts that form the foundation for "how" 2021 Objectives will be written.

Say your Omnichannel-fueled business, pre-COVID, was struggling in the retail channel but was acceptable via e-commerce. Your analyst creates a set of "truth" that everybody follows. Take a look:
  • 2018 In-Store Buyers:  58% buy from the brand next year, 46% buy in Stores, 22% buy via E-Commerce.
  • 2017 In-Store Buyers:  61% buy from the brand next year, 50% buy in Stores, 20% buy via E-Commerce.
  • 2016 In-Store Buyers:  63% buy from the brand next year, 54% buy in Stores, 17% buy via E-Commerce.
  • 2015 In-Store Buyers:  64% buy from the brand next year, 56% buy in Stores, 14% buy via E-Commerce.
The "truth" is that your in-store retail buyers have been leaving your brand for the past four years (see the rebuy rates for the overall brand).

The "truth" is that your in-store retail buyers have been shifting to e-commerce for four years (see the rebuy rates for in-store retail buyers moving into e-commerce).

Now, if your Executive Team doesn't agree on the facts (and that happens, folks ... sure does happen in politics, doesn't it?), then no Goal/Objective is going to matter. It's not worth your time to set a Goal if the Employee doesn't agree that the Goal helps the company achieve and Objective. Have a discussion with the Employee, if the Employee digs in for no good reason, move on from the Employee. If the Employee gives a credible counter-argument based on actual customer data, LISTEN to the Employee and potentially CHANGE the Objective you wish to write.

Then COVID mucks up everything, creating uncertainty. So please, write an Objective that offers flexibility to account for uncertainty.

Need help with this stuff? We'll talk about that soon.

September 14, 2020

BOARD: Making The Right Decision

Yesterday we talked about the fusion of PetSmart and DoorDash.

If you were writing Goals and Objectives for 2021, you'd ask yourself "DOES THIS SOLVE OUR PROBLEM?" Wouldn't you? You are an "O" dominated brand (omnichannel business strategy with e-commerce linked to stores) leveraging a "B" strategy (e-commerce-in-a-box) to compete against Amazon ("A").

Does this "B" strategy solve the problem?

You'd first ask "what is our problem"?

If the problem is "nobody is buying from our stores and we can't just let those stores sit there", then the solution does not solve the problem. No. The solution buys you time to think. Therefore, the Goal/Objective you write for staff reflects your perspective. You might want 10% of e-commerce orders to happen via DoorDash while retail sales hold flat ... that might be your Goal for the year.

  • Exceeds Objective = 15% of e-commerce sales via DoorDash, retail comps grow by 3% or more, respond to DoorDash customer interactions with stores/e-commerce for a modified strategy by July 1, 2021.
  • Meets Objective = 10% of e-commerce sales via DoorDash, retail comps between 0% and 3%.
  • Missed Objective = < 10% of e-commerce sales via DoorDash, retail comps decrease.
If the problem is "our customers are buying from Amazon now", you have a different Goal/Objective structure, don't you? You now care about "who" is buying. You want to protect your existing customer base and get product to the customer before Amazon can get product to YOUR customer.
  • Exceeds Objective = Convert 20% of existing customer base to a DoorDash delivered e-commerce order.
  • Meets Objective = Convert 10% to 19% of existing customer base to a DoorDash delivered e-commerce order.
  • Missed Objective = < 10% of existing customer base converted to a DoorDash delivered e-commerce order.
If you are just executing a test to see how this works, you don't even bother writing a Goal/Objective for your team.

Does that make sense? You are trying to link BOARD with Strategy via Goals/Objectives that tell employees how they will be rewarded.

So start thinking about BOARD, Strategy, and Goals/Objectives. I'll help you through the process if you need assistance.

September 13, 2020

BOARD: PetSmart and DoorDash Pushing Risk Away

You probably know that PetSmart offers same day delivery via DoorDash (click here)

In the BOARD model, you have an omnichannel-dominated brand (that's the "O") being pinched by three factors.

  1. Lack of Store Traffic due to a decade of omnichannel mismanagement (the whole retail industry is guilty of this).
  2. Even less Store Traffic due to COVID.
  3. Business shifted into E-Commerce that is under attack by rising fees from UPS and FedEx.
One might surmise that it must be cheaper to deliver merchandise via DoorDash than to deliver it via UPS / FedEx ... and if that is the case, how little is DoorDash paying human beings to run their cars into the ground?

PetSmart pushes the risk of UPS / FedEx gouging to DoorDash.

DoorDash pushes the risk of expenses to the "gig worker" driving a 2006 Toyota Avalon.

Who does the "gig worker" push risk on to?

At some point, you as a Leader have to evaluate where your business is headed. 2021 is not going to be a normal year. Heck, 2022 might not be a normal year. You have to have a vision (likely to be incorrect) on where you think the future is headed, and then you have to invent the future yourself. You write solid Goals and Objectives for your team so they know where you are headed and how their bonus will be earned given your direction. That process ... writing of Goals and Objectives ... likely includes something about unloading the riskiness of your business on a third party ... that's the "B" part of BOARD (e-commerce in a box). In the case of PetSmart, a floundering "O" dominated business offsets UPS / FedEx risk by employing a "B" solution (DoorDash) to make store square footage usable.


September 09, 2020

BOARD and 2021

2021 is just around the corner.

This means you are probably going through some level of Strategic Planning as we speak. Sure, you are sitting in your home office for Zoom Meeting #11,320 since COVID hit, and sure, you've spent several hundred dollars so it looks like you have a library with credible books behind your head while you meet via Zoom, but that's not what this is about.

Remember BOARD?

  1. B = E-Commerce in a Box.
  2. O = Omnichannel E-Commerce.
  3. A = Amazon E-Commerce.
  4. R = Recurring E-Commerce.
  5. D = Different E-Commerce.
You probably need to think about where you fit in that continuum in 2021 (and beyond) ... and then start thinking about what that "means".

For instance, say your business was +23% due to COVID, but the gains have been fleeting in recent months. Say you are in Omnichannel E-Commerce, you have a catalog that dictates when and how you market to customers, and you are dependent upon USPS / UPS / FedEx ... so you can expect to pay more in the fututre.

What does that mean in regards to your future?

How do you set up a Goal / Objective for your marketing team for 2021 to keep them pushing your business forward?

How do you know how "variable" your business "could" be next year?

How much "lift" do you get in 2021 due to the COVID-bump of 2020?

This is the kind of project work I've been doing in the last few months. It's not the same kind of work I've been doing since founding MineThatData in 2007, that's for sure, but this is the kind of work that is needed given where we are right now.

We'll talk more about this next week ... and in the mean time, if you are struggling with these topics, start thinking about having Zoom meeting #11,321 ... where you and I talk about how we set up Goals and Objectives for 2021 given a fusion of BOARD and COVID.

September 08, 2020

BOARD and Penzeys Spices

There's no doubt that Penzeys spices is the "D" in BOARD.

  1. B = E-Commerce in a Box.
  2. O = Omnichannel E-Commerce.
  3. A  = Amazon.
  4. R = Recurring E-Commerce.
  5. D = Different E-Commerce.
When you publish a daily newsletter and you go on the offensive against one political party, you are DIFFERENT. Nobody teaches you to alienate half of your audience to the point that the audience takes to AM radio to encourage looting one of your stores because of your comments.

I don't think the marketing community understands just how different you have to be to qualify as "D" in BOARD. Penzeys clearly has "B" characteristics ... but an extreme marketing strategy that offsets everything else. They're on Amazon (click here), but again, when you have the conviction to say unpopular things that offend so many potential customers, you are the definition of "Different".

Now, let's pretend that you alienated half of your customers ... they aren't coming back ... and you greatly enthused a ton of new customers who came to you thanks to a combination of COVID and Consternation (politically).

How do you forecast what your business will look like in 2021?

How do you write Goals and Objectives for 2021 for your Marketing Team, for your Operations Team, for your Stores Division, given where the world is headed?

You'll need to understand (and quickly) how much COVID / Politically Angry (or happy) customers are to come back following the November election, and then you'll have to use instinct to respond, right?

Your Goals and Objectives are tied to risky.

Your DIFFERENT business model means employees are less accountable ... because your employees don't control the risk you've introduced into the business model.

Goals and Objectives are darn important. Get your team aligned on a common framework for 2021.

September 07, 2020

"BOARD" and Orvis

We've discussed our BOARD framework.

  • B = E-Commerce in a Box.
  • O = Omnichannel E-Commerce.
  • A = Amazon.
  • R = Recurring E-Commerce.
  • D = Different E-Commerce.
Now let's pretend we were a classic "O" as in Omnichannel E-commerce ... a company like, say, Orvis. We all know this is not the place we want to be, noooooooo way. Government chose winners and loser and Government chose Target and Walmart. Your Orvis store might have been told to close. And even so - your stores were destined to crumble anyway, that's where apparel-based retail was headed. Don't believe me? Ask Macy's or J. Crew.

But you can't just place somebody in a bucket ... maybe it doesn't work that way. If I were an Executive at Orvis, I'd fight back.

  • They sell on Amazon (click here).
  • They clearly have a marketing team that views e-commerce, in part, as an "E-Commerce-In-A-Box" solution ... do a CTRL / SHIFT / I if you don't believe me, you'll see Bazaarvoice / Adobe / Google / Doubleclick / Coherent Path / Criteo / Rakuten ... among many 3rd parties. 
  • They'll tell you they have a form of recurring income via Orvis Visa (click here) ... they get monthly interest from the customer.
  • They'll tell you they are different ... go to a fly fishing school event in Beaver Creek, CO or dozens of other locations (click here).
You can make a credible argument that they approach business from every aspect of BOARD.

The anchor of their situation, of course, is the "O" in omnichannel (a stifling catalog/retail history based on what is currently happening, with many benefits under perfect circumstances). It dictates "how" they market. It dictates "what" they market". It dictates "who" they compete against. It dictates the "choices" they make if they decide to be Different or to employ Box-based solutions.

So if you have Goals and Objectives for 2021, how would you craft them?

How would you lead your Organization, knowing you are saddled with a legacy "O" but have enough other components to demonstrate you might be able to see the future, or adapt to the future? 

Where would you invest resources?

Where should marketing focus?

In upcoming posts, we'll talk more about Goals and Objectives, especially as they relate to the BOARD framework. It's going to be important to craft a plan for 2021 that is flexible while Leading your company toward a viable, growth-oriented future in a world where forces are attacking you from all angles.

It's time to go on offense ... enough playing defense. Become a predator! You don't have to be prey, even if you are saddled with a heritage in "O".

September 03, 2020

Where Does This Fit? How About "BOARD"??

Ok, so I'm getting feedback from you about BOAR ... pretty good stuff, I can see that you're t.h.i.n.k.i.n.g. and that's the point of this whole endeavor. Not right/wrong ... thinking!

Which brings me to an email I received on Thursday from Butcherbox (not a client).


You can go into Google Chrome and look at Developer Tools (in Chrome = Ctrl Shift i) and you'll learn that there are elements of "B" in the BOAR model. You can make a case, based on the BOAR model, that they are applying a lot of elements of the E-Commerce-In-A-Box model. And in this case, that's a weakness.

When I bought from them (November 2018), they had a feeble welcome program. I bought something, their "box" of solutions sent me a total of one (1) email campaign in the next month. One! Then they reminded me I was getting another box ... just taking for granted that I'd buy from them again. I opted out.

I got a comparable offer ... free meat for life ... in May 2019. So why would I, with a recency of 22 months now, be responsive to the same darn offer again??

This is a failure of the "E-Commerce-In-A-Box" model. Many successes, of course, it gets you up and running and running efficiently, but you're stuck implementing vendor-centric "winback programs".

Bleck.

The time to convince me to stick around was December 2018, before I left!!!! Welcome Program!!!!

And I get it ... you don't want to execute a Welcome Program, you want to execute a "winback program" that vendors help you implement ... help you implement easily.

We need to modify the BOAR framework, don't we?

So let's add a letter. We'll add the letter "D".

  • B = E-commerce-in-a-box.
  • O = Omnichannel e-commerce.
  • A = Amazon commerce.
  • R = Recurring e-commerce.
  • D = Different e-commerce.
Different!!

Doing different things.

Doing things differently.

We'll fold the "D" into what we discuss next week, and we'll start thinking about the BOARD framework for 2021 and your goals and objectives for 2021, because all this stuff starts to fit together ... or better fit together if you're gonna experience long-term success.






September 02, 2020

Where Do The Sales Go?

In a BOAR model, traditional e-commerce is being nibbled down to nothing ... I suggested that e-commerce is being "burned down". By that, I mean the 1995 - 2009 version of e-commerce is ending ... likely "has ended".

This doesn't mean e-commerce sales will decrease. Quite the opposite. The business model changes, and that means sales flow in different directions.


E-Commerce In A Box (B):  You can build a new business from scratch, you can stitch Shopify and Mailchimp and others together and create a brilliant Instagram presence and guess what? You can cannibalizing sales from the OAR portion of the BOAR model. Viewed independently, these brands are irrelevant. Viewed collectively, these brands are a force. Shopify stock was < $50 at the start of 2017. Shopify stock is north of a thousand dollars today. If that sounds like a missed investment opportunity, trust your instincts. E-Commerce In A Box (B) as a collective is a competitive force you're likely not studying, for if you were studying it, you would own Shopify stock.

Omnichannel E-Commerce (O):  Lauded as the future in 2014 (ask Macy's ... the embrace of the model cost a lot of Macy's execs jobs), the "O" in the BOAR model is being fundamentally transformed by multiple concurrent forces.

  • Government-Chosen Pandemic Winners = Target, Walmart, Home Depot, Lowes.
  • Government-Chosen Losers = Any Retail Brand selling apparel, dying now that Zoom owns your meeting structure.
  • Losers (and any brand embracing omnichannel retail strategy prior to COVID) closing stores, which help e-commerce in the short-term but harm the ability for e-commerce to grow sales in the long-term because there won't be enough new retail customers to fuel e-commerce in the future. Store closures will yield short-term gain and long-term pain. I hope I'm wrong here.
  • What To Do With Empty Stores?  Best Buy is converting several to distribution hubs, thrilling omnichannel software vendors and absolutely nobody else.
  • If you are not a Government-Chosen Pandemic Winner your sales are going elsewhere, they are flowing OUT of the (O) portion of the equation. You are the Prey in the Predator / Prey model.
Amazon (A):  A third or more of e-commerce, marketplace sales going bonkers, delivery vans bypassing USPS chaos (real or imagined), bypassing UPS / FedEx package surcharges. They took control over the future. In a Predator / Prey model, only the (B) portion of BOAR is not Prey. Everybody else is Prey. Amazon thanks you for taking your one-down stance in respect of their dominance. FYI - the FAA is allowing Amazon to test delivery via drones. They're two steps removed from being throttled by the USPS / UPS / FedEx.

Recurring (R):  Taking a lot of business. A dollar of clothing at J. Jill goes to a recurring payment at Zoom. No need for business apparel, plenty of need to pay Zoom. Classic Predator / Prey situation. You double-pay for internet access (your ISP and your mobile phone provider) ... that $200+ a month had to come from somewhere, again, classic Predator / Prey situation, with your business being the Prey. By the way, if there were ever a case where the Predator / Amazon situation "could" be threatened, it is in the "R" portion of the equation.


The reader (that's you) is likely saying "Hey, we have a standalone e-commerce business or an old-school catalog business, where do we fit?"

You don't fit. That business model is being burned down ... 80% to 90% of e-commerce sales fit into BOAR.

Which means that every aspect of BOAR is a Predator in some way and you are Prey.

This is where you (the reader) say "we're fine"!!!!

As a traditional cataloger, for instance, you align much more closely with "O" than any other part of the equation. Your catalog is controlled by the USPS, you have vendor forces that are pushing you into expensive solutions while you are the Prey that B/A/R are feeding off of.

Say you are a standalone e-commerce brand ... you are part of the old-school Google / homemade e-commerce solution / classic ESP ecosystem. You cobbled together all of these solutions on your own. The "last mile" of delivery solutions you cobbled together are going to extract $3/$4 per order out of you this fall as their way of capitalizing on the pandemic. You lack the e-commerce-in-a-box flexibility of "B", you are being cannibalized by "A", your customer makes choices between your merchandise and myriad digital options in "R". You, too, are being forced into the "O" bucket over time (think Warby Parker for instance) and you, too, become Prey for the first time.

You'll say, "We're L.L. Bean, we're different." Nah. You've got stores. You've been in the "O" camp for a decade.

Simply put, here's where the sales are flowing.
  • Out of classic e-commerce ... as classic e-commerce is forced into an omnichannel business model.
  • Out of classic o-commerce ... the omnichannel business model is being obliterated by government pandemic-based winners/losers, with store closures throttling e-commerce growth. That being said, many traditional e-commerce brands are thriving due to a COVID-bump.
  • In to e-commerce-in-a-box (B).
  • In to Amazon (A).
  • In to Recurring e-commerce (R).
When your COVID bump ends sometime in 2021, the BOAR model really takes over. Plan today for what tomorrow will look like.

September 01, 2020

Store Closures: Microsoft

Last week we learned that Microsoft would close all of their stores (click here).

Yesterday I discussed how e-commerce as we know it is burning down, being replaced by what I call BOAR.
  • B = E-Commerce in a Box (Shopify / Big Commerce / MailChimp / Etsy / Marketplaces).
  • O = O-Commerce ... Huge Omnichannel Brands (Target, Walmart, Best Buy). The pandemic is burning down what is left of o-commerce, which was failing in the first place ... leaving just huge omnchannel brands left to dominate.
  • A = A-Commerce ... Amazon. You pay them to ship merchandise that they ship in their own vans. Less exposure to risk from UPS / FedEx / USPS. A giant chunk of e-commerce.
  • R = R-Commerce ... Recurring Revenue E-Commerce (Netflix, Microsoft, heck, even Stitch Fix / Subscription services could fit here).
Microsoft exits any semblance of unprofitable o-commerce in favor of r-commerce, where they have a digital relationship with 1.2 billion customers.

Times are changing.

The Lizard

A Virtual Chief Performance Officer frequently runs into a roadblock that I call "The Lizard". I'm guessing you've run in...