Tactic: Awareness Programs

You probably have a Customer Acquisition Team and a Customer Retention Team.

The Acquisition Team focuses on Google and Facebook (and if you are a cataloger you have an over-dependence upon catalog co-ops). That's it. It's people looking for ways to spend money to find customers.

A credible Marketing Management System divides Acquisition into two critical pieces.

1. Awareness.
2. Capture.

Awareness is about teaching prospects who you are and why the prospect should care about you.

Capture is "capture" ... when demand has been created, you are there to capture it ... via Google, or Facebook, or a catalog via the co-ops.

I want you to spend a few minutes this morning thinking about what you do to create Awareness. And you cannot use the following words / phrases.

• Social Media.
• Facebook.
• Google.
• Retargeting.
• Catalogs (if you are a cataloger).
• Public Relations.

If this exercise stumps you, you do not have an Awareness program. And if you do not have an Awareness program, you have a tactic to begin executing on Thursday Morning ... you will create your very own Awareness program, and you will begin the process of educating the public who you are and you will convince people to care about you.

Yeah, I know, that sounds like hard work.

It's work we've abandoned since Google came on the scene.

Link To The Entire Hillstrom's Marketing Management System Series

For those who want all the slides together in one place, please click here and download the entire presentation. Next week I'm moving on to adjacent topics, so this is a good time to collect the information if you are interested.

Thanks,

Kevin

Tactic: New Merchandise and Email Marketing

Here are the recent email campaigns from a brand most of you know:

• Hundreds of New Items Added to Clearance!
• I've Traveled Over 100,000 Miles With This Bag - $125 Today Only
• Flash Sale
• 30% Off Site-Wide Ends Tonight
• Catch This Sale Before It Floats Away
• Sink Or Swim 30% Off Ends Tonight!
• Need New Luggage? We Can Help, Luggage Is 30% Off Today Only
• Finally This Best Seller Is Back In Stock - It's Also Up to 40% OFF Today Only.

Admit it ... this is a tepid pile of mediocrity. They're excited about new items added to clearance? That's a catastrophe! That means that the merchandising team just dumpster-fired stuff they previously cared about, and you are supposed to get excited about that. Then 30% off, then 30% off ends, then it's 30% off again, then after you've bought stuff at 30% off they offer you a best seller at 40% off (if it is a best seller, why discount it more deeply than everything else)?

Instead of spending three weeks (above) begging customers to purchase something at a discount, why not promote your new merchandise at full price coupled with a credible story? What do you have to lose? It's common for 1 in 700 recipients to buy something from an email campaign, so there's essentially zero risk. Zero! If you fail and 1 in 800 recipients buy something, almost nothing has happened. If you succeed? You've learned something.

A credible Marketing Management System cares deeply about New Merchandise, and cares deeply about the intersection of Marketing and Merchandising. Make every one of your email campaigns about promoting (via story - not discounts) the new merchandise that your Merchandising Team cares deeply about. Period. Educate your customers, don't gravel for business.

Again, you have nothing to lose. 1 in 700 buyers is not success.

Show Me The Tactics!!

I've spend a month sharing my Marketing Management System with you.

There's common feedback when you do this stuff.

• That won't work at my company.
• What you are discussing is too theoretical.
• Show me a tactic that will work at my company.

Starting tomorrow, I'll discuss some tactics, ok? It'll be related to this Principle.

Love Vendor-Centric Marketing Management Systems?

If you are tired of Principles and employ a Vendor-Centric Marketing Management System, then give this article about Best E-Commerce Design a read (click here).

You can be successful running a vendor-centric Marketing Management System. Companies do it all the time. The challenge you have to overcome is simple ... sameness. If everybody is employing similar tactics, then the value of the tactics degrade. You need merchandise productivity that is far stronger than the average brand, and that's really hard to achieve.

But it can be done.

Field Marketing Team

I had the benefit of visiting an industry-leading vendor. During the day-long visit, and employee described all of the low-cost / no-cost customer acquisition activities they performed. At one point, the employee said something very interesting.

• "It's our job to hustle and create awareness, awareness that leads to people paying us."

The vendor employee led a team that employed dozens of tactics ... tactics that might cost no money, might cost a small amount of money. But the employee recognized an important fact ... it was important to not spend much money on marketing activities in order to obtain customers who spend money on marketing activities.

When I worked at Eddie Bauer, this team was called the "Field Marketing Team". A VP led a team of Directors/Managers who were responsible for a dozen +/- stores. They'd run all sorts of local programs designed to create awareness and get customers into stores. They had virtually no budget. When you don't have money to spend, you have to become VERY creative. If the Field Marketing Team didn't "anniversary" one of their events, you'd see a 10% - 20% drop in comp store sales in a market ... and you'd have a lot of angry Store Managers.

In other words, Field Marketing works.

When I worked at Nordstrom, Field Marketing was integrated within the Marketing Department. Nordstrom spent < 2% of net sales on marketing ... an unheard of percentage in modern marketing where a catalog brand is likely to spend 30% of net sales on marketing. In other words, the Marketing Department had to HUSTLE to generate sales on a shoestring budget.

At many companies, the Field Marketing department morphed into Public Relations. And Public Relations morphed into Press Releases and #engagement via Social Media.

Hustle and Hard Work are key elements of a Field Marketing Team. In modern marketing, those key elements are sorely missing. Is it any wonder so many readers get confused when we discuss low-cost / no-cost customer acquisition programs?

Marketing Focus

The Merchandising Director is simply not happy. She feels like she's not getting any help. Then she tells me this:

"It's like the Marketing Department doesn't even work here. They have no time for us. They tell me they spend all of their time working with vendors. They tell me that I couldn't understand how difficult their job is."

Twenty years ago I took over the Circulation / Analytics Department at Eddie Bauer. In the Circulation Department, there were three teams.

1. Housefile Circulation, Core Business.
2. Housefile Circulation, Specialty Businesses.
3. Customer Acquisition.

It took all of about ninety seconds to notice the difference in the teams. 

• Housefile Circulation teams worked well with each other, and had good working relationships with inventory management and merchandising and creative and information technology.
• Customer Acquisition didn't work well with anybody. They spent all of their time working with external vendors, where they rented and exchanged lists and attended dinners paid for by vendors.

Here's another difference.

• Housefile staff had ideas for business improvement, and those ideas came from the merchandising, creative, and inventory management teams.
• Acquisition staff had ideas for business improvement, and those ideas came from vendors.

The latter point is important. A vendor would invite the acquisition team to a Seattle Mariners game, where the acquisition team would spend three innings watching the game from great seats before leaving to attend a dinner. At the dinner, the acquisition team would be asked to arrange a meeting between the vendor and I. The following morning, I'd see a meeting request for a meeting with the vendor at 2:00pm. I'd accept. The vendor would introduce a handful of topics about our current relationship ... and then unleash "Thought Leadership" ... telling me what we should be doing (because "leading brands" are already doing those things) ... and not surprisingly, "what we should be doing" involved spending more with the vendor ... you know, vapid stuff like "Leading Multi-Channel brands leverage paid opportunities to grow synergies across channels that lead to a frictionless customer experience that our research indicates customers crave."

It's easy to get sucked into that world ... sporting events ... vendor dinners ... Thought Leadership. It's exciting, you feel like you are a credible Professional ... you feel like a "mover and a shaker".

The converse is not exciting. Nobody wants to sit down with a merchant and a creative professional and an inventory manager and have those folks beat you into mulch because you are "marketing to the wrong people".

Again, where would you rather spend your time?

1. Vendor-paid sporting events and dinners at Ruth's Chris Steakhouse.
2. A meeting with merchants, creatives, and inventory managers where you are told you don't know what you are doing.

I've been in the industry for nearly 30 years. During this time, there's been a gradual slide across the industry.

• More time with vendors.
• Less time with employees.

Not surprisingly, you look at the profit and loss statement and you see a slow-moving train wreck in process.

• 30% of company net sales (often 40% to 60% of gross margin dollars) paid to Search Agencies, Catalog Co-Ops, Facebook, Paper Reps, Printers, the USPS, Retargeters, Affiliates, Comparison Shopping Engines, Social Media Agencies, Email Service Providers, and Influencer Programs.

The more vendors you have, the more focus you must give to the process of feeding vendors. You become disconnected from reality.

Twenty years ago, the relationships between marketers and creative were pretty strong. As a result, you had more Customer Awareness programs ... you had Low-Cost / No-Cost Customer Acquisition Programs.

Today, the relationship between marketers and vendors is strong. As a result, you have a lot of programs where you pay vendors.

Today, marketers are largely running Vendor-Centric Marketing Management Systems. Is it any wonder it is so hard to grow customer acquisition via Low-Cost / No-Cost Customer Acquisition Programs? Your focus as a marketer needs to be on your co-workers, your customers, and your bottom-line ... not on the bottom-line of your vendor partners.

P.S.:  I get it ... this is the part of the story where I get a dizzying array of "UNSUBSCRIBE - CONTENT NO LONGER RELEVANT" from various vendor employees. That's fine. I'm here to increase profitability among my client base.