Survey - Choose One

Check this one out ... I ran this poll on Twitter last month.

You can only choose one of the following two outcomes for your business.

Outcome #1:  A customer purchases, and spends $100, and is not "engaged" with your business.

Outcome #2:  A customer chooses to not purchase, but is highly "engaged" with your business.

How would you vote?

I received twenty-one responses.

• 10 responses (48%) voted for Outcome #1.
• 11 responses (52%) voted for Outcome #2.

Here's the interesting thing about the poll:

• Those who wanted an unengaged customer spending $100 cash today thought that the other audience were complete idiots.
• Those who wanted an engaged customer who didn't buy anything thought that the other audience were ... wait for it ... wait for it ... COMPLETE IDIOTS!

The individuals who chose Outcome #1:

• Executives.
• Individuals With 20+ Years of Business Experience.
• Established Companies.

The individuals who chose Outcome #2:

• Professionals < Age 30.
• Startups and Companies < $10,000,000 in Annual Sales.

One Executive said:

• "You don't pay the bills with engagement."

And another (much younger) individual said to me:

• "Kevin, I hope you chose Outcome #2, because your entire business model is based on thousands of highly engaged individuals who never purchase from your business."

Another young professional said ...

• "Everybody knows you build your brand on Instagram. That whole channel is nothing but engagement. So it's obvious. The answer is engagement."

The three responses are the key that unlocks the question.

The type of business you operate determines the Outcome you wish to obtain.

A $100,000,000 catalog brand catering to a 65 year old customer in Maine makes no money on engagement. None.

An $8,000,000 online startup catering to a 34 year old woman in Santa Clara? The story might be different.

Agree? Disagree? Send me a message and say why you feel the way you feel (kevinh@minethatdata.com).

P.S.: I asked Twitter followers to "prove" that engagement is better. That didn't go over well. We have all the metrics and numbers and data points we could ever want, and we know less than we knew when we were blind.

Catalog Rant

Ok my friends, I'm going to blow off some steam here. I feel like the young lady below.

Here's the 411.

I order an item from a catalog brand within a Catalog Holding Company. As you remember, a Catalog Holding Company is a brand that owns 3+ catalog companies. This Catalog Holding Company is one that the 40% of our catalog-centric audience absolutely adores. Conferences and Trade Journalists and Vendors love this Catalog Holding Company. Many of you have purchased from this company. You probably know somebody who works for the Catalog Holding Company.

I ordered the item on August 9.

The item was "not available", but was backordered and would be available in early September.

Amazon has comparable items that are available via Prime and are cheaper and could be delivered to my remote rural home within 48 hours.

But I defended the industry. It's hard to help an industry if you choose Amazon, right? I paid more, and I elected to wait a long time for the item to be available.

On September 7, I receive an email (#automation) telling me that my item shipped.

The item will arrive in 5 to 9 business days.

Wait. What?

Five business days pass. 

My wife says "where's the item?". I get crabby ... "THEY SAID IT WOULD TAKE 5 TO 9 BUSINESS DAYS, LET'S GIVE THEM 9 BUSINESS DAYS!!!!". Think about this ... I'm getting crabby with my wife, who is on my side ... and I am defending a Catalog Holding Company.

Ten business days pass. 

Fourteen business days pass.

I decide that it might be a good idea to call the Catalog Holding Company. I check the tracking number. FedEx says that SHIPPING INFORMATION WAS SENT TO FEDEX ON AUGUST 31. That's it. No shipment, no receipt of product, nothing.

I visit the website of the Brand owned by the Catalog Holding Company.

No live chat.

I know, I know, live chat has been around since the Bush Administration. But I don't want to be one of those preachy social media customer experience gurus who spends all day pointing out what companies do wrong in exchange for 100,000 #engaged followers.

I call the 1-800 number of the Catalog Holding Company.

The voice on the other end is bathed in silence ... the kind of silence that suggests she is sitting in her living room watching ESPN or Kitchen Nightmares. I provide my order number. She tells me, and I quote ... "MY INTERNET ISN'T WORKING PROPERLY, SO I CANNOT PULL UP YOUR ORDER NUMBER RIGHT NOW".

Alright.

A minute passes.

"THERE'S YOUR ORDER! YOU JUST NEED TO LOOK UP THE TRACKING NUMBER, AND THEN YOU CAN SEE WHERE YOUR ORDER IS. HERE'S YOUR TRACKING NUMBER."

She reads me the tracking number.

I already know the tracking number! I've been tracking nothing for fourteen business days.

I ask the person on the other end of the phone to look at the status of the item.

She says "THAT DOESN'T LOOK RIGHT."

I tell her "I agree"!!!

She says "WELL JUST WAIT A FEW DAYS AND IT WILL COME. HANG IN THERE."

I tell her that I've waited 14 business days.

CLICK.

Hello?

Hello?

Hello?!

She hung up on me!

I go back to the website, and I type a message to customer service. I use up my 200 characters (or whatever the quantity was) pretty fast. I describe that I haven't received my item, that the tracking number shows that no item has been shipped, and that the customer service rep had internet problems and then hung up on me.

That was three business days ago.

No response from the Catalog Holding Company.

The Catalog Holding Company has had my $90.94 since September 7. Good for them.

*********************************************

Here's one of the comments I frequently get from CEOs and VPs at catalog brands.

• "It's just too hard to compete against Amazon, sales declines are not our fault."

Nonsense.

Sales declines are ENTIRELY our fault!!!! We either failed to be strategic, or we failed to execute properly. Or both.

On what planet should a customer sit for two months waiting for an item to ship when Amazon can flawlessly deliver an item in a few hours in an urban environment and within 48 hours in a rural environment?

Meanwhile, the Catalog Holding Company is going to distribute my $90 to vendors ... because most catalogers measure demand, not net sales ... meaning catalogs are about to be unleashed upon the Hillstrom household regardless of customer service failures.

• The paper rep will be happy.
• The printer will be happy.
• The USPS will be happy.
• The merge/purge vendor will be happy.
• Co-op vendors will be happy.
• I'm not happy.

The Catalog Holding Company will not get paid. I will eventually obtain my refund.

Friends, I am tired. I get feedback from you ... "please demonstrate that you are on our side - prove to us that you love the catalog industry and are trying to help us".

It's hard to be on the side of an industry that is on the wrong side of the customer experience.

Why does it take 5-9 business days to ship an item, dear Catalog Holding Company?

Why did you fail to execute delivery of the order, dear Catalog Holding Company?

Why did your customer service rep not have reliable internet access, dear Catalog Holding Company?

Why did your customer service rep hang up on me, dear Catalog Holding Company?

Why don't you have live chat, dear Catalog Holding Company?

Why don't you respond to customers who respond with a customer service request on your website, dear Catalog Holding Company?

Why did you take my money but never deliver my item, dear Catalog Holding Company?

Why do you complain, dear Catalog Holding Company, that Amazon is wiping out your business?

I try to stay away from this stuff - but these errors are magnified when Amazon executes so well. And how I can I help you in our consulting projects when I tell you how to market to the customer only to have the customer service experience fail the marketing experience?

Thoughts? Send them along at kevinh@minethatdata.com.

Thanks,

Kevin

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Merchandise Development

Can we agree that in baseball, the players are "the merchandise"? That's what we are paying to see, right?

Did the players on the field just show up there, unannounced? Or was there a development process the players went through?

A baseball star plays in High School. From there, the player might play in College, or be drafted and begin a professional career in a Rookie League. If the player does well, the player moves on to Low-A. If the player does well, the player moves to High-A. If the player does well, the player moves up to Double-A. If the player does well, the player moves up to Triple-A. If the player does well, the player is called-up in September (or when there is an injury). And if the player does well, the player becomes a Major League Baseball Player!!

In other words, in Sports, there is a clear development system for players (merchandise).

Tell me what your development process is for new merchandise you launch?

You don't have a development process? You just provide a few links on your website and/or a "new products" link and then hope for the best?

In the future, retail and e-commerce will become much more like professional sports. There will be a development process for new merchandise - almost like a tournament - with email and social and key landing pages weeding out the merchandise that works from the merchandise that doesn't work. The new merchandise that works is promoted to expensive offline/digital advertising, saving the retail / e-commerce brand a ton of money.

Practice

In sports, practice is terribly important. Baseball players take "batting practice" before games. Football players practice all week before playing a weekend game.

NASCAR drivers hop in a simulator (so do Formula One drivers). The simulator prepares the driver for things that may happen on the track.

Seattle Seahawks fans know all about the intensity that Russell Wilson brings to preparation. In college at Wisconsin, he once played a video game so that he could see where the play clocks were located at Spartan Stadium in East Lansing. That sure came in handy when he rallied his team to a late-game touchdown.

So in the sports industry, practice is a critical element of success.

How do you, the retail and/or e-commerce professional, earn simulation time or practice time?

Do you have a simulator so that you can understand what happens when you double the paid search budget? How about when you close a store? Do you simulate what might happen before you spend tens of millions of dollars on omnichannel digital systems integration? Do you simulate not participating in Cyber Monday promotions? Do you simulate what happens when you don't open your store at 8:00pm on Thanksgiving evening?

No?

Why not?

Show of hands ... how many of you have a favorite vendor partner who sells a simulator that allows you to try a hundred unique strategies to see how the strategies might interact with each other - so that you can figure out if you are making a smart decision before you just go out there with 35% off plus free shipping?

Retail and e-commerce must become more like professional sports. If the analytics community resents a "gut feel" approach to Management, then the analytics community should create a simulation environment that allows Management to practice different strategies.

Lands' End #sigh

I don't like it when people are fired or "resign" - as we observed earlier today at Lands' End (click here). I don't like it when Macy's goes through a sales decline & folks lose jobs. I don't like it when the public jumps on people who take risks ... if you don't innovate, you are criticized, if you innovate and it doesn't work, you are criticized.

I have a soft spot for the company - as I do for every company I've worked at. And there are too many good, solid people who work there. Hopefully, they pick a path forward that is right for their business, and their business will improve - just as I hope your business gets even better.

Look to JCP as an example - their sales crumbled 30% - then they changed course and sales grew at inflationary rates going forward - sales did not bounce back. It's hard to grow, regardless whether you have the right/wrong strategy. It's hard work.

Thanksgiving and Christmas

In sports, promotions are frequently assigned at the start of the year. June 19th is "Bobblehead Day" ... September 9 is "Bark at the Park Day". The promotions offer something on top of the price the customer pays to attend the game. And some teams leverage "dynamic pricing", so that the games that are most popular have the most expensive prices. Want to attend the game when your team is about to win the pennant, and it's a few days before the game will be played? You're going to pay.

In e-commerce and retail, we do the exact opposite.

Think about Thanksgiving and Christmas. "Black Friday" comes to mind. It's the biggest "game" of the year in retail. Does retail charge you the most on that day, comparable to a sports team? Not even close. Retail makes darn sure that retail will make the least amount of profit possible by offering every conceivable discount and promotion under the sun. I know, I know, you'll say that the customer won't shop if you don't offer the promotion. But why does the sports fan happily spend more to go to the games that are most important, including playoff games and championship events?

E-commerce is no better. Think about Cyber Monday. Are you able to charge the customer the most for this big Thanksgiving/Christmas shopping event? No? Your favorite vendor or trade journalist demands that you offer huge discounts? Yes!

In the future, retail and e-commerce are going to have to become more like professional sports franchises. Today, during the biggest events, we ask customers to spend less (#doorbusters) ... the bigger the event, the less we ask the customer to pay. In sports, we ask "fans" to spend more ... the bigger the event, the more we ask the fan to pay.

Is it any wonder that the NFL / NBA / MLB are swimming in money, while retailers fight for their existence?

Of course, this means that retail and e-commerce must create events that cause customers to want to spend more. We're not good at this, are we?