Google / Brand Response Marketing

I noticed a commercial during the Oscars ... a cute little thing about being picked on and inclusiveness and the like:

Think about this for a moment. The most "digital" company of all time ... a company that has repeatedly told you to measure ROI and be data driven ... going so far as to provide you free software to prove that digital activities "work" ... and in the process biasing/blinding you into a "digital first" thought process ... that company runs happy, airy branding commercials on network television, a platform the digital elite tell you is "dead".

You are repeatedly being lied to by lemonheads who use Lizard Logic to promote a biased agenda.

Put a Brand Response Marketing team in place.

Plant seeds this spring.

Harvest new customers this fall.

Earn profit next year.

Like A Sore Tooth

It started with one of those random tweets you see from somebody attending a conference ... stuff that is completely out of context to anybody not at the conference but is completely relevant to a person absorbing fifty-five minutes of vendor-paid content.

The tweet went something like this:

• Instead of asking for 30 minutes of time with a CEO, try asking for 15 minutes. You will increase your chances of landing a meeting.

Immediately, the cold, unending reality of being a Vice President entered my mind ... the non-stop phone calls, the random individuals showing up in my office, the sales rep calling 15 execs hoping to land one meeting where he demanded that the other 14 execs be invited (that was Forrester Research), and then performing a victory lap around the table, celebrating his ability to navigate the labyrinth of corporate matrixed hierarchy. Naturally, IT took the bait on that one.

So I tweeted out the cartoon above. That's what I do on Twitter now. Nobody listens to anything anymore, so why not entertain?

Then I found out that people were listening.

• "This is my life, and I hate it."
• "These people are just throwing darts and don't care about my time."
• "I have to deal with 40 of these cold calls every single day."

I spent a year working for a vendor ... 2000, at Avenue A. I worked with two different people. Each person offered me an interesting quote that I never forgot.

1. "It is my job to lie, it is your job to make my lies come true."
2. "We aren't selling anything today. The reason I'm the best sales rep at this company is because I never sell. These people want to meet with me because I don't sell. Surprisingly, I learn what these people need, and then I find people like you to deliver a solution."

The sales rep in (2) was phenomenal. I traveled with him a few times. He didn't sell. He was invited into companies, where I witnessed Execs that you know open up their confidential information, share their secrets, and then hand over $750,000.

The person in (1) was like a sore tooth that few people wanted to be anywhere near.

Identify if your vendor partners are (1) or (2).

Throw (1) out the door.

Double-down your investment in (2).

Omnichannel Costs

Ramit sends us this little gem about Nordstrom and the high costs of being "omnichannel" (click here).

Pundits misunderstand the cost structure of channels. There is a reason certain merchandise is sold online, and certain merchandise is sold in stores.

• Retail has horrific fixed costs.
• E-commerce has horrific variable costs.

The omnichannel thesis, then, is highly dependent upon one key customer behavior ... without this behavior, the thesis crumbles under a mix of fixed and variable costs.

• Existing customers must spend more, and there must be more new customers who are willing to shop each channel, in order for the omnichannel thesis to deliver incremental profit.

To date, neither has happened. Existing customers tend to spend less over time (ask Macy's, the omnichannel flag bearer), and new customers (Millennials) choose merchandise/experiences over channel experiences.

When neither happens, all you do is transfer sales from one channel to another, and that doesn't work for anybody.

So, today, we sit here with increased expenses (variable) and decreasing store sales (as customers move online) causing stores to de-leverage (fixed costs).

This will cause stores to close (ask Macy's and/or Wal-Mart, for instance).

When stores close, fixed costs disappear, but debt remains.

When stores close, the sales do not all shift online and/or to other stores. You are lucky to recoup 30% of your sales, on average. The fixed costs are gone, the debt stays there, and the sales that are left are largely variable in nature (if they go to other stores, you cover fixed costs ... if they go online, they are tagged with added variable costs).

Without a dramatic gain in merchandise productivity, the math simply doesn't yield growth ... the math can yield increased profit, in some instances, depending upon how poorly the lower quarter of stores perform and how sales shift when the poorly performing stores close.

Only the very best retailers know the math, and understand the right path into the future.

It is highly unlikely that anybody who doesn't work at a retail brand truly understands the math and the dynamics, unless they've written tens of thousands of lines of code to thoroughly understand the dynamics.

When A Brand Surprises People

Here you go, readers ... Lands' End with a bit of fun to deal with (click here).

My cube at Lands' End was in a great spot - building five, up against the atrium, sun pouring in from the glass rooftop. It got so bright at my cube that I put tagboard up to block the midday sun ... allowing me to see my mainframe dummy terminal (black background, green text).

The tagboard drew attention. It looked like garbage. The two men running the company, founder Gary Comer & Dick Anderson, would stop by and ask my why I had a piece of junk blocking my cube? I would ask them sit in my seat, and try to read my monitor without the tagboard. 

They let me keep the tagboard.

So when Mr. Comer brought a prospective Congressman into Building 5 in the summer of 1992, I participated in a quick drive-by. "Kevin, I'm not telling you how to vote, I just thought you'd like to meet the future Congressman from our district."

Of course I was being told how to vote.

But Mr. Comer also thought it was important to give employees Christmas Eve off, even though he held different religious beliefs. He also paid half of our annual bonus prior to Christmas, knowing how important that was for many of his employees, even though the fiscal year ended in late January and the annual numbers that determined bonuses were not final yet.

When you see a consistent mix of blue and red, it all blends together, and is purple. Customers are tolerant of a consistent mix of blue and red.

When we see a consistent purple, it's surprising to suddenly see blue or red. The consequence is abrupt customer behavior. It's kind of like when JCP reinvented itself into a 30% comp store sales drop. Purple turned into something else.

10 Year Anniversary

March 1 is the ten year anniversary of The MineThatData Blog. 

My goodness.

3,200 posts and 1,500,000 words. Anywhere between 1,500 and 2,500 are subscribed to the blog at any one time. Nearly 300,000 unique individuals have read at least one post, nearly half of the grand total read one single post in January 2007. That's the only time anything went viral.

There are two things that posting five times a week give me.

1. Practice. You get better when you write 3,200 blog posts. You don't get better as fast when you publish ten times a year. I see this pattern repeat in my work - digital folks get smarter so much faster than offline folks, simply because digital folks get to practice often and quickly. I measure everything. I've learned that almost all "engagement" and "content" best practices are invalid for the work I do. In fact, the less engaged folks are with content, the more business I tend to get. Let that one sink in for a moment if you are a content marketer or a social media guru.
2. Frequency. Frequency is a big deal. If you aren't in the inbox, you are forgotten. I know this to be true ... I lost 1,000 subscribers when Google Reader died three years ago ... 90% of those people never came back.

Early on, I realized it was going to be very hard to write honestly about what customer data was telling me. There are just too many forces that do not want an honest discussion about how customers behave, forces that make money when a dishonest view is promoted, one filled with seductive lizard logic. You know this is true, for most of the advice you've been given, when implemented, did not help grow your business. 

The compensation structure of our industry (vendors fund research brands, conferences, and trade journals) makes it very difficult to share an honest message without being pummeled by those who have a vested interest in protecting the compensation structure of the industry.

So seven years ago, I tried something that became the most popular series on this blog. The series? "Gliebers Dresses". By writing about a fictional company, I could say things that couldn't be challenged ... what is a vendor going to do, publicly beat up Roger Morgan for advocating adherence to a Woodside Research report? Is the trade journalist going to beat up Glenn Glieber for making fictional comments like "I love free marketing?"

The second most popular series written on this blog are the posts that support this presentation about Customer Acquisition (click here). This has been an eye-opening learning process, folks.

The most popular product I've offered is Merchandise Forensics. It's not even close. Merchandise-centric posts are in the lower quarter of "engagement", but generate a ton of business. Let that one sink in for a moment, and reference it the next time you are told to build a credible, relevant, optimized content strategy that leads to increased engagement.

Repeatedly, via project work or my conversations with you, I have learned that your needs and observations are different than the mainstream pap you're being fed.

1. You want an honest discussion about why business is tepid, and will heartily consume a fictional account of a business in order to get closer to truth.
2. You are struggling with finding new customers at a reasonable cost, and realize that this is one of the two secrets to business success.
3. You now realize that merchandise productivity is holding you back, and as merchandise productivity erodes, your customer acquisition activities suffer, and without a steady diet of new customers, you don't any loyal customers to retain.

That's the reality of ten years of content. You want honest facts. You want to learn how you might acquire new customers. You realize that merchandise is terribly critical.

Ok, your turn. What do you want to see covered in the next year? What is the content that will help you the most? Why not send me an email message (kevinh@minethatdata.com), and share how long you've been a subscriber, what you've liked, not liked, and what you want to see going forward.

Thanks,

Kevin

Updated Customer Acquisition Presentation

With the VT/NH event now sold out, the way you get to see the presentation is to read it (15,000+ views now, according to their counting system, which I think is a gross overestimation of the real count, but what the heck).

So click here to read it ... I've added +/- 10 slides with examples from Facebook and YouTube.

I'm also being asked to make the presentation at the companies you work for ... so if you need it done that way, contact me (kevinh@minethatdata.com).

It's the second-most popular piece of work I've done. I'm hopeful you are actually doing something with the information ... this is not meant to be a vapid thought leadership piece ... you are supposed to see the tactics used by your competition, and you are supposed to apply the techniques in a manner appropriate with your prospect base to find new customers via what I now call "Brand Response Marketing".

Send me a message (kevinh@minethatdata.com) ... what additional slides do you want to see added to the presentation? What would be helpful to you?

Customer Acquisition: The Story of 2016 - 2020 from MineThatData

The Organic Percentage

If there's one concept that has been alien to many in my reader base, it is the concept of the "organic percentage".

Specifically, if I polled the readership base, it is entirely possible that more than half of you disagree that demand happens without marketing.

Certainly, attribution vendors have a vested interest in proving that demand must be generated by marketing.

Certainly, marketing employees have a vested interest in proving that demand must be generated by marketing.

Google has a vested interest in proving that demand must be generated by marketing. So does Facebook. Some use the term "micro-moments" ... to suggest that the customer is touching 29 channels 73 times before purchasing ... and therefore, you must pay the 29 channels 73 times for each purchase. Who benefits from that?

In fact, the entire vendor / trade journal / conference / research brand ecosystem is designed to get to you to believe that every order touches 29 channels a total of 73 times. This ecosystem gets paid when you believe that the customer touches 29 channels a total of 73 times.

Is it any wonder, then, that so many of you struggle with the concept of the organic percentage? Every message you hear out of the vendor / trade journal / conference / research brand ecosystem runs contrary to reality.

Reality is, of course, that orders happen without the need of marketing. You drive past an Olive Garden, you are hungry, you stop by. Somebody will demand that an Olive Garden commercial from 1997 caused you to hold Olive Garden in high regard. That may be true. It's probably not true, but fine, I'll concede. But you are hungry, and they are open, and you turn in and order something. You like the breadsticks. And two weeks later, you drive past the Olive Garden again, and the breadsticks are on your brain. You stop in again.

See? The merchandise (breadsticks) cause you to visit. That is the very definition of the organic percentage. The better the merchandise is, the better the customer experience is, the better the price/value relationship is, the higher your organic percentage is.

Stop mailing catalogs, stop sending emails, stop retargeting campaigns, stop paid search for a month, stop your Facebook ads for a month. What happens? If this customer segment continues to spend money, then you have just proven that the organic percentage is alive and well at your brand, like it is for the vast majority of companies I work with.