May 21, 2023

We Need Their Help

A quarter century ago at Eddie Bauer, we had what we called "QPM"s ... "Quarterly Planning Meetings". Everybody accountable for the catalog/online business at Eddie Bauer, in a room, presenting their plans.

Somehow the merchandising team were able to get off the hook in these meetings.

They'd talk about how the assortment was "trend right" while everybody nodded their heads affirmatively.

Then I'd have to present the marketing plan and woo-boo that didn't go well. First of all, it wasn't a marketing plan ... the true marketing team would sit along the wall not having to present anything ... my plan was essentially a Marketing Budget Experiment, and a poorly constructed one at that. It was the result of my team performing a month of bottoms-up segment plans with assumptions. Any criticism of any assumption and it meant another week of bottoms-up recalibrations.

Eddie Bauer LOVED these recalibrations. It was busy-work masquerading as strategy. Entire teams managing hefty spreadsheets, working together to come up with "a plan" only to have somebody say something strategic like "shouldn't marketing productivity be +3% instead of +2% ... isn't it time marketing stepped up to the table?"

And then we'd spend a week crafting another scenario.

After enduring six months of these things (i.e. two meetings and the run-up to these meetings) I created my own high-level assumption worksheet. This allowed me to run a series of scenarios behind the scenes, quickly, without having to worry about putting 16 people through a week of spreadsheet manipulations at a segment level.

I'd be able to see how much help I needed from our merchandising team. 

A simple 2.5% gain in productivity via rebuy rates and spend per repurchaser yielded compound interest over time. More customers purchased, compounding the number of purchasers in the future. Customers spent more, delivering short-term profit. All of it added up to "more" on a compounding basis.

This allowed me to shift focus in a QPM ... from somebody picking nits to placing the attention where it needs to be placed. Where does it need to be placed? Merchandise Productivity.

We need the help of our merchandising partners. I realize they're trying hard, but when business is not meeting expectations, the last thing we need is an Executive deflecting attention away from what we sell to how we sell it.

When your merchant partners are not helping ... you need to pick up a broom. Every company ... even failing companies ... have products that sell really well. Marketers are accountable for selecting the products that sell well ... and marketers are accountable for promoting new products today so that there are winning products tomorrow. Show the customer the stuff other customers like. This increases productivity as well.

Does that make sense?

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