Rebuild Your Database Marketing Department: Part 5

Create The Strategic Plan For Year Two

You are ten months into your rebuilding project.

You know your team, their strengths, their weaknesses. You know what your company needs. You know the capabilities of your vendor team. You picked up all of the low-hanging fruit.

It is time to set your strategic vision for year two of your rebuilding project.

This requires you to collaborate with many audiences.

• You need input from your Executive Leadership Team.

• You need input from key employees in the company.

• You need input from your leadership team.

The strategic plan for year two outlines what you will be working on, what you need resources for, and outlines how the company benefits from the investment they will make in your team.

You have thoroughly measured everything about customer behavior --- this knowledge is the basis for the strategic plan.

You'll probably need a significant investment in systems in order to accomplish your goals. The strategic plan tells folks why systems must be improved, and is defended by facts about your customers. If you don't get "x", the company fails to generate profit totaling "y".

The strategic plan tells your team what they need to focus on in the upcoming year. The strategic plan tells your Executive Co-Workers what you will be focusing on. The strategic plan informs the company what your team will do to drive the bottom-line.

Rebuild Your Database Marketing Department: Part 4

Know Everything About How Your Customers Behave

By now, you're six months into your rebuilding project. Your staff largely resent you, your vendors think you're about to fire them, and leaders in other departments want you out because you've blocked access to the folks they used to manipulate.

You probably know something about the skills of your team. You probably have an idea of how your team can contribute to the success of the company. You probably need ammunition to fuel the objectives you're going to set next year.

It is time to know everything about how your customers behave.

If you don't have the internal staff necessary to do a good job, hire somebody from outside the company. Execute a thorough mining of your customer base. Understand everything about the loyalty of your customers, their future value, their propensity to shop via multiple channels or multiple advertising channels, their migration patterns through different merchandise divisions.

This information will become the basis for your objectives next year. The information will determine how you invest in systems, how you invest in advertising, how you invest in people, how you invest in advertising. It means everything. Get this done by month nine, if you can!

Know everything about how your customers behave.

Rebuild Your Database Marketing Department: Part 3

Put Up A Firewall

All around you, well meaning Executives, Directors, and Managers have their own agenda for your team. In fact, they've always had their own agenda for your team. It is one of the reasons you must rebuild your database marketing team.

You have that Director in the Information Technology department who thinks your KPIs aren't appropriate for your business. He's working behind the scenes with a select group of leaders to create the customer information infrastructure that he believes will drive the business into the 21st century --- and he will have his team answer the customer questions asked by management (hint, this happens all the time, folks).

You have the EVP of Merchandising who wants to dictate to your team the catalog and e-mail marketing targeting strategy. Heck, her job is on the line, and she's not going to let your team ruin her ability to keep her job.

Part of rebuilding a database marketing department involves letting your co-workers know that this is YOUR AREA OF RESPONSIBILITY!!

You don't tell your merchants what merchandise to source from China, do you? You don't tell the Information Technology folks which online order entry platform they must use, do you?

Conversely, nobody should dictate the work your team does except for you.

This requires you to walk a fine line. You must allow others to ask questions of your team, and you must allow your team to answer those questions independent of your leadership. And yet, you must make it clear to every person in your company that you set the agenda, you determine the priorities --- and if their request isn't a high priority, it won't get worked on.

You will communicate to the company what the top priorities are for the fiscal year. You will report, on a periodic basis, the successes and failures your team experience. You will set the agenda for the direction your department takes.

Too often, the database marketing department is being run by forces outside of the database marketing department. This leads to a rudderless ship, a fractured team working for the special interests of folks outside of the database marketing team. You'll never have a winning database marketing team when there are eight cooks in the kitchen, with seven coming from other kitchens!

Put up a firewall!

Rebuild Your Database Marketing Department: Part 2

The Vendor Conference

Now that you've put the fear of God in your team by demanding that they meet your high expectations (things like working a full work day or not tearing into each other), it is time to find out what everybody is made of.

In each functional area, invite the vendor that supports that area for a one day or two day conference. You pay the vendor for their time. You invite the staff that manage the functional area to participate --- everything is transparent, you don't betray trust by having a hidden agenda.

The conference is designed to illustrate what your staff know about their functional area. It is also designed to illustrate what your vendor knows about their area of expertise. Your staff are required to present their processes and results to the vendor. The vendor is required to present "best practices" to you and your staff.

More than anything, you get to see if your staff have what it takes to succeed. You get to see if your vendor is capable of being a "strategic partner". You get to benchmark yourself against competitors.

Don't be stingy --- invite every vendor you have, be it your co-ops, your e-mail vendor, the folks you outsource your database to, your catalog request fulfillment house, your paid search vendor, your statistical modeling joint, bring 'em all in.

It will probably take three or four months to get through your "conferences". Your staff are likely to rebel against you, suggesting that since you set such high expectations, they don't have time for this garbage. Your vendor is likely to not meet your expectations --- they may send the sales force instead of sending the CEO or EVP that you really need to meet (hint, that tells you something about the vendor).

Your job is to gather information, information that will shape the future of your database marketing department.

Rebuild Your Database Marketing Department: Part 1

Set High Expectations.

You've been handed a department that you believe is broken. People don't get along. Your staff fail to obey "best practices".

You can fix this problem by forcing everybody to do everything your way. How often have you seen this happen? The new boss comes in with her own "system", and requires that everybody do things her way.

A weak leader demands that everybody do things a certain way. A weak leader tells you to put the shopping cart in the upper right hand corner of an e-mail marketing campaign. A weak leader demands you participate in every catalog co-op. A weak leader demands that a spreadsheet be formatted a certain way, with certain columns populated a certain way.

A strong leader sets high expectations.

Here are some of the things the new database marketing leader might do in year one.

• Demand that all employees work a full work week. Don't demand the location they work from.

• Demand that all employees get along, or they will not keep their job.

• Demand that all employees attend at least one industry conference, and implement at least one thing they learned at their conference.
  

• Demand that all employees submit a career advancement plan to you, and it is perfectly fine for the employee to tell you that he is happy where he is.

• Demand that the entire department spend the first six months of the year calculating the profit they contribute to the company on an annual basis, and then demand that in the second half of the year, the department increase total profit by ten percent.

These are simple objectives.

More important, you aren't telling anybody "HOW" to do them. You are simply setting expectations that create a winning culture.

And then, you're going to HOLD people to these objectives. If they don't follow them, they don't get a raise. If they fight against the objectives and act in a subversive manner, they don't work in your department anymore. You act consistently, showing favoritism only for the folks who enthusiastically embrace the objectives and improve profitability. This is hard to do, and it is painful. But you do it.

The first step in rebuilding a database marketing department is setting high expectations. The second step is to follow through.

In my first six months at Nordstrom, in 2001, my expectations drove eight of ten employees out of the company, via retirement, via quitting, via being let go. It nearly cost me my job. But the rebuilding process made 2003, 2004, and 2005 among the best years I've seen a team have.

Set high expectations. This process begins and ends with YOU, not with software, not by implementing a system, not by hiring the right people. It starts with your leadership.

Rebuilding Your Database Marketing Department

The Seattle Mariners have a huge payroll. They also have the worst record in the American League. It is time for the ballclub to "rebuild", to start over, to find a new way to be successful in the future.

In sports, the system of metrics make it easy to know when it is time to rebuild. Wins and losses, divisional titles, playoff wins, championships, player statistics, fan attendance, television and radio ratings all tell a compelling story. In sports, the "KPI's", if you will, make decisions easy.

Now let's fast forward to your database marketing team in the year 2008. What are the metrics that tell you that you need to rebuild your database marketing team?

It isn't easy to identify the metrics, is it? Are your e-mail marketing campaigns generating $0.12 per delivered e-mail? Is that bad? And if it is bad, is it the fault of your e-mail marketing manager? How would you ever know if your web analytics expert is doing a good job? How would you ever know if your catalog circulation manager is transitioning your customer file to one that no longer needs catalog marketing anymore? How would you ever know if that should be your strategy?

We really don't have outstanding metrics to evaluate the performance of database marketers, do we?

This week, we're going to talk about rebuilding a database marketing department. Enough of you share with me that you perceive your database marketing efforts are broken, so the topic is worth discussing. We'll explore people, data, metrics, and vendors, all in the search for a highly functioning database marketing department.

We are not going to explore software. You don't succeed because you chose Coremetrics over their competition. You don't succeed by outsourcing your database to Abacus vs. building it in-house. You don't succeed by working with Return Path vs. CheetahMail, or by choosing SAS over SPSS. You don't succeed by having perfect KPIs perfectly presented on a management dashboard for all to see.

You succeed when you create a great environment that allows brilliant people to thrive, to be creative.

We'll find that this analysis series comes up short. I don't have all the answers. I do want to inspire you to do better, to be successful.

Tomorrow, we begin.

Audience Development

Back in 1990 at Lands' End, our circulation department was called "Customer Planning and Development".

Now we read (thanks DMNews) that Circulation Managers are becoming known as Audience Developers.

I had numerous meetings at the recent ACCM conference with individuals about the evolution of jobs from "circulation" to "audience development".

Audience Development takes many forms.

• Renting or Exchanging names/addresses (with customer permission, right?) with competitors.
• Renting or Exchanging e-mail address (with customer permission, of course) with competitors.
• Developing audiences on Facebook, MySpace, Blogs, Forums, Twitter, etc. via audience participation, giving the audience something so that they have a relationship with you prior to having a need for your products/services.
  

Nine out of ten folks at ACCM offered blank stares when this topic was discussed. Lots of heads nodded with approval of the concept ... lots of head scratching over how to implement the concept.

Five or ten years from now, we'll be halfway through our transition from marketing to lists to developing audiences. Until then, this is a magical period where trial and error are the norm, a period where experimentation is highly encouraged.