Secret Shopper / Competitive Research

Early in my career when I worked at Lands' End we focused on stuff that was within our control. We'd analyze each catalog spread like our lives depended upon it (and while our lives didn't depend on it our careers kind of did depend upon it). Our circulation director micro-managed circulation managers to the point of exasperation ... "find out from Finance if your assumption of a 59% gross margin is 59% or 59.5% and if it is 59.5% redo the entire seasonal plan by Monday morning". There was a lot of work being done, and it was all based on how "we" performed. We responded to ourselves.

Then I arrived at Eddie Bauer.

There was a team at Eddie Bauer responsible for our Secret Shopper program and Competitive Research program. We had a younger employee ... and this poor guy ... it was his job to go into Gap and J. Jill and J. Crew and take pictures of the assortment without being noticed. He'd occasionally buy merchandise so that we could analyze it and figure out how we stacked up against Gap on the exact same item. He'd occasionally be chased out of the store by a wily store manager who "knew" who he was and what he was up to.

Assuming this poor guy didn't end up in jail, he'd put together presentations showcasing how our competitors presented the same merchandise we sold ... he'd analyze price points and presentation style, setting off an in-house firestorm of criticism ... "just because they sell that item at $49.99 doesn't mean our $59.99 price point is wrong, it just means we know how to bundle more value out of the item than they bundle." Those meetings were a real treat ... as opinions crashed up against opinions. Not enough data to conclude anything, just enough data to rile up everybody. We'd be at $59.99 and 20% off (meaning we were really at $47.99), they'd be at $49.99 at full price. Who was "right"?

Our Market Research Team would combine secret shopper data with competitive research / surveys. They'd ask me to link PRIZM Cluster data to this information. We had personas ... and wait for it ... wait for it ... the best persona was a woman named "Karen" ... and they'd convert all findings into what Karen believed. You can only imagine what this was like in a meeting ... "How do you know that Karen feels this way, how could you possibly know?"

Where am I going with this?

All data / information has two components.

1. Weight / Importance.
2. Half-Life.

Making a decision based on how a person feels about a visit to your website has minimal importance and virtually no half-life.

Making a decision based on the fact that first-time buyers are always responsive in the first 0-3 months following a first order has high importance and a long half-life. In other words, you can make your company a fortune here, even if the work isn't glamorous or popular or isn't something that your "competitors" are doing.

Focus on important stuff with a long half-life. Seductive analytics based on weak information gets you nowhere.

Follow 'em

Let's say you acquired 2x or 3x as many new customers in May 2020 as in May 2019, on the same marketing spend.

Clearly you enjoyed a COVID-bump.

Pay attention to downstream spend.

Follow the cohort by month, averaging how much is spent each month thereafter, and compare it to prior year cohorts.

For instance, you analyze your May 2020 newbies and you measure future spend.

• June 2020 = $9.00.
• July 2020 = $8.60.
• August 2020 = $10.25.
• September 2020 = $9.85.

And compared to the year prior, you see the following trend.

• June 2020 = +31% vs. last year.
• July 2020 = +24% vs. last year.
• August 2020 = +9% vs. last year.
• September 2020 = +3% vs. last year.

As long as these customers maintain spend going forward, all is good. In September 2020, spend has been maintained.

If these customers begin spending less, you have a forecasting challenge that will spill into your 2021 forecast and will hurt performance thereafter ... counts will help you, but spend "could" mitigate the gains from new customer counts.

Follow 'em ... analyze 'em. Simple enough?

The Bully

There's a subset of "The Know It All" segment that we've all had to deal with in business ... this person is "The Bully".

It's important to figure out if the Know-It-All is a Bully or not. The Know-It-All cannot be reasoned with. However, if the Know-It-All is just a Bully, well, you are in business! You immediately assess if the Bully backs down when presented with facts.

I face this when I play pickleball. There's a bully, and at first it is intimidating to play against the bully. The person hits the ball HARD and pushes you around and makes you play a style that he wants to play. However ... however ... if you push back immediately against this person and set the tone from the first point, the bully backs down.

The Virtual Chief Performance Officer "tests" the bully, right from the get-go.

As a Consultant, you face bullies all the time. In fact, the Consultant is frequently hired because a bully is making life miserable for his/her co-workers, to the point where nothing gets done. I've made a living because of this dynamic.

Assess if the Bully backs down when presented with facts. 

Assess if the Bully storms back with theory when presented with facts ... this is the same as backing down. If you present facts and the bully comes back with "WHAT ABOUT THE BRAND, WHAT ABOUT THE BRAND?" in all caps (as happened repeatedly when I worked for a client back in 2008), you have a bully. In marketing, the word "branding" or "brand" is code for dealing with a bully. Branding is not rooted in customer facts, branding is an opinion. When a marketer tells you that the marketer won't do something because it will "hurt the brand", the marketer is being a bully, and is choosing marketing faith over marketing science. The marketing leader just opened the door, and it is your job as the Virtual Chief Performance Officer to drive a ton of customer facts through that door, right now.

Merchants employ comparable techniques, talking about a "trend-right assortment". That's the merchandising version of "branding". It's merchandising faith, and it opens the door for you to drive a dump-truck full of customer facts through the door. Do it.

CEOs will bully you incessantly if you let 'em. They will combine their knowledge of their company with CNBC-fake-facts (i.e. "the industry" is really struggling right now) and Woodside Research reports to triangulate into a position that aligns with his/her worldview. When the bully does this, you have the bully "backing up" ... drive hard to the basket with customer facts.

In general, I've found it counter-productive to deal with the Know-It-All head-on. However, I've found it highly-productive to deal with the bully head-on. Bullies back down in the face of an onslaught of actual, actionable customer data.

Identify if you have a Know-It-All or a Bully.

All Those COVID Customers

If you aren't a retail brand forced to close down stores, you may well have experienced a COVID-bump this Spring.

And I get it, you worked REALLY hard to make this happen, given the awful reality of COVID. But now you have all these customers .... customers who didn't buy from you because of your carefully curated catalog or because of the magic of your personalization program. They bought from you because your merchandise solved a COVID-related problem.

Now, what are you going to do with all of those COVID-related customers?

The first thing you are going to do is block out all of the in-house noise.

Instead of focusing on the four people in your company who are not on your side, focus on the 1,004 people in your company who are on the side of the customer. There, you will find a path to the future. And the future includes managing all those COVID customers who will pay you back, with interest, in 2021 and beyond.

Triangulation

Maybe "triangulation" is the wrong term. But you know what I mean.

Let's say you want to implement an idea ... maybe you want to do something interesting with your new merchandise assortment, fusing it with email and your best customers.

Certain employees present problems for you.

Your CEO is "The Lizard". He only wants to sell and only wants to maximize sales. He won't let you take a step backwards and generate less revenue by featuring new merchandise.

Your Chief Merchant is "The Know-It-All" ... she "knows" that new merchandise and best customers are a bad mix and she wants new merchandise featured on the home page where EVERYBODY gets to see it.

Your Chief Marketing Officer is "The Climber" ... he's on a fast track to working for a major brand and he doesn't have time for anything as boring as email marketing.

You pull out your Crayons and you color in the area where you might have room to wiggle.

That's you ... you are in the white area ... that's what happens after you triangulate between the forces working against you in your company.

Fight back. You can fight back and stay within that tiny white area in the diagram and you can learn enough to make a difference.

1. If email is boring to your Chief Marketing Officer, make sure you have budget to do something, and then do it ... do something ... because your CMO just doesn't care. Do what your CMO asks you to do, but you have latitude to do something.
2. If your Chief Merchant thinks new merchandise and best customers are a bad mix, personalize your email targeting strategy to new merchandise and new customers, and provide that you can help out there. You get to test your strategy while avoiding an angry Chief Merchant.
3. if your CEO thinks it is bad form to feature new merchandise in emails because you lose sales, sample a small audience for your prototype. Nobody, and I repeat NOBODY is ever going to notice if you sample 10% of your email list and test your ideas among that audience. NOBODY WILL EVER NOTICE THE DIFFERENCE. Nobody.

Now go test your ideas, learn, and triangulate your way toward an answer. Build a case. And instead of asking permission to do exactly what you want to all customers, you bring FACTS regarding how customers CONVERTED when you executed your own ideas.

Those are the kind of things that a Virtual Chief Performance Officer (hint - you) does to move a business forward in a red-tape-fueled environment.

Oversimplification

This is the part of the story where you suggest that I've over-simplified things.

Well of course I've over-simplified things!

You have to over-simplify things in order to make a larger point.

The larger point being, of course, that the Virtual Chief Performance Officer is fusing the following concepts into an actionable direction.

• Customers: Explaining how customers behave in a way that sets a direction for the company.
• Merchandise:  Outlining the role that new/existing products have in fueling business success.
• Management Analytics:  The fusion of customer analysis and merchandise analysis.
• Coaching:  Setting up employees to be successful, even when they are faced with intimidating internal forces that are there to block what you want to accomplish.
• Goals and Objectives:  Giving employees clear direction on what they need to accomplish to be successful, then rewarding employees when they do well or holding employees accountable when they fail to perform.

That's what I'm looking to do ... I am fusing Management Analytics, Coaching, and Goals/Objectives. Based on the past thirteen-plus years of Consulting work, this "fusion" is missing. It's a pothole that somebody should fill. Why not me? Why not you?

The Climber!!

Some personality types are very challenging to work with. The "Climber" doesn't have to be one of 'em.

We've all met The Climber. She's young and on a meteoric rise to the top of the Corporate Ladder ... your Ladder or one pre-defined by the Industry you work in.

The Virtual Chief Performance Officer happily ties cargo to this rocket ship. Find areas where you and The Climber agree, and then let The Climber get credit for agreed-upon ideas. Just like that you're getting stuff done.

Oh, I know, nobody likes this idea, because YOU deserve credit. Well of course you deserve credit! But that's not what a Virtual Chief Performance Officer does. The VCPO makes sure that the company performs at a high level.