Featured

Loyalty — I’ll be back! Strategy Magazine December 13, 2007

Everywhere you look it seems someone is talking about building customer loyalty and using database marketing. What I don’t see is very many people doing anything meaningful about it from a consumer point of view.

Recently, I experienced an example that gave me new hope.

But, first, scene one…the flip side.

I have been a faithful customer of the same hair salon for at least a decade. But, I’ve been faithful in physical form only because, in one way or another, I’ve left after almost every visit feeling irritated. It always took several hours. Everybody moved at a snail’s pace. The place was rampant with prima donnas. Not to mention that they had the worst and oldest selection of magazines with which to kill the inordinate waiting times! And, it seemed as though just about anything was more important than serving customers…talking to friends who happened by, taking the dog for a walk, finishing lunch, going outside for a cigarette…believe it or not, I’m not exaggerating, these things actually happened. Complaining had no effect.

And, in all that time, not once did I receive anything in the mail, not once did I receive any special treatment, not once did anybody ask whether the service was satisfactory.

So, why did I keep going back for so long? Habit…inertia…procrastination…masochism…who knows?  But, aren’t those all wonderfully positive loyalty-building attributes?

So guess what finally happened? I switched to another salon.

Scene two: first visit to the new salon. I was asked to fill in a form with my name and address which were entered into the computerized appointment system. I was told how long I might be waiting. The stylist brought me a choice of beverage and a selection of recent magazines to look at while he worked on my hair. Every hour an attendant came around selling snacks for those (like me) who might have missed lunch to fit in a hair appointment. But, all that is not the best part. My appointment was on a Thursday afternoon. The following Tuesday I received a mailing from the salon. All black and white. Good quality paper but nothing fancy. The note inside was dated the preceding Friday: Dear Mr. de Gruchy: I would like to thank you for visiting our salon recently. I trust that your service and experience was a pleasant one. We welcome any comments, positive or negative and hope to see you again in the near future. I am enclosing a scale of charges for you indicating the range of services and prices we offer. Also, if you present the enclosed business card on your next visit, you will receive a free bottle of MK shampoo. “The note was hand-signed by the owner. It was enough to make me think they valued my business and really wanted me to come back again! And, guess what? I will.

I use this simple example to illustrate that building customer loyalty and using a database in a marketing mode requires neither rocket science nor alchemy.

Let’s look at the elements:

  1. Timeliness: My experience at the salon was still fresh in my mind and within less than week I was reminded of it and pleasantly surprised by the speed of the communication.
  2. Acknowledgement and appreciation of the customer’s business: Thank you is such a simple thing.
  3. Request for feedback: Remember, the average business never hears from 96% of its unhappy customers and the average customer who has a complaint will tell 9 or 10 people about it. 13% of them will tell more than 20 people! On the other hand, 95% will return if they feel the complaint is resolved quickly and they’ll tell an average of 5 people about that. And, asking your customers for feed back doesn’t mean you formulate a self-serving questionnaire that only gives you the news you want to hear. Recently, I examined the feedback survey used by a major hotel chain. My conclusion was that they didn’t want to know what I really thought otherwise they would have asked different questions. Be careful your questionnaires and surveys don’t just tell you what you’re prepared to hear.
  4. Invitation to re-purchase: Turning a one-time buyer into a two-time buyer is a direct marketing adage is as old as the hills and twice as enduring. Not to mention that the only way to finance the cost of constantly acquiring new customers is by having sufficient profitable repeat customers.
  5. Suggest additional products and services: Every communication with a customer is a selling opportunity. There are those who may have trouble with the notion of constantly selling customers, but keep in mind that today’s consumers are looking for information and, in the case of my salon story, they were simply letting me know something that I wouldn’t have known otherwise. The result is that I am now a better informed customer.
  6. Incentive for re-purchase: Keep it simple. Make it relevant. Give it value. A bottle of shampoo for a salon visit. Bingo.
  7. Accountability: Here’s one that many forget. Untold dollars are spent writing glowing customer service letters which are then signed by a non-existent, made-up person. The president or owner doesn’t have to answer all customer correspondence personally but it sure leaves a warm fuzzy feeling when he/she cares enough to personally endorse the outgoing message to the customer.

 Charles de Gruchy remembers how it was

Featured

Barbara Canning Brown, President Misco Canada says good-bye to her team at Regal Greetings and Gifts, Toronto, Summer 1991

Misco

CANADA INC.

MEMO

TO:  Regal Greetings and Gifts, Management Team                                                                                  

DATE: August 29, 1991

FROM: Barbara  Canning Brown

RE:  YOUR TIME, OUR EFFORT AND SO MANY THANKS

Following is a review of current status of various projects and activities and some thoughts on areas of problem/opportunity for the future:

A. Recruitment

  1. Incremental plan has been implemented for drop date 6/17 (37M English, 13M French direct mail).
  2. Status report of year-to-date activity has been published.
  3. Need current full-year forecast versus budget including and excluding incremental plan.
  4. Agreement has been reached with Operations to fulfill new account kits at Ordan with a commitment to 24-hour turn-around. This will be tested with the fall program for potential roll-out in ’92. Estimated additional cost is approx. $6M which has been absorbed in budgeted funds.
  5. Request for spending on incremental recruitment from Business Development budget ($26.8M) is not required as additional funds proved available from Ad/Promo budget.
  6. Conversion incentive testing should continue, particularly as progress is made in building predictive models of rep potential behaviour.
  7. Communications with new reps after the initial kit should be addressed.
  8. Reporting format still needs work to provide all indicators needed to measure results on ongoing basis and draw “no surprises” conclusions.
  9. Analysis of Rep penetration and understanding of appropriate levels plus missed potential needs to be examined.
  10. Strategic issues to be addressed:
  • -strengthening positioning to alternate and primary income versus part-time
  • -environmental issues revolving around use of direct mail (will be forced  by external events to address this, probably).

 B. Fundraising

  1. CNIB project at chromalin stage, on schedule for delivery of materials to CNIB 7/2 for them to mail.
  2. United Way mailing to last-year buyers and selected prospects currently being prepared for mailing in-house.
  3. Results for core catalogue fundraising program are up over last year. Detailed report and forecast should be requested.
  4. Progress on private label opportunities has been somewhat slow and untimely, so, perhaps should be viewed as a head start on ’92! Opportunities with Muscular Dystrophy, Multiple Sclorosis and Heart & Stroke are being explored.
  5. Member-get-member leads (130) exceed plan (103).
  6. Summer promotion has 75 qualifiers to date. Results may indicate that focused incentives will increase effort.
  7. Only the “surface has been scratched” on long-term potential of core business fundraising. Investment will be required in targeted recruitment through direct contact, localized efforts through stores, direct mail and advertising to achieve significant growth.
  8. The most productive private label business formula has yet to be determined, but potential is there. May not be a significant profit centre, but it’s a business that “makes sense for Regal” from an image and product point of view. If Regal doesn’t go for it, somebody else will or already has.

C. Advertising

Although radio was cut back for ’91, it shouldn’t be forgotten in the marketing mix. While wrestling with finding viable methods of driving customers to reps with an appropriate linkage system, all possible opportunities for building ongoing image, awareness and need among consumers should be perused.

D. Marketing Services

  1. Improved relationship/cooperation with Merchandising has produced improved catalogue presentation and theming. Positive results should contribute to natural continuation of the process–not at warp speed but making progress.
  2. Current capacity is being stretched and should be watched carefully, especially under revised organizational structure and implementation of desktop publishing. Potential for problems will be in terms of capacity versus capability.
  3. Sylvie Robidoux has resigned and will be leaving June 28th to return to Quebec. Although disruptive, the timing (in production terms) is not critical. As well, Sylvie has had some difficulty adjusting to the new relationship with Neuville, so it’s also an opportunity to improve that situation.
  4. Paper stock testing indicates positive gains from improved presentation despite increased costs. Enough information will exist by budget time to make decisions on whether to take advantage of the potential. Sandy has been researching improved stocks at better prices as well as recycled.
  5. Catalogue quantities have been brought under better control through segmentation, advance pack control and improved usage tracking. There’s still room to improve store tracking and reporting systems.
  6. Final desktop recommendation is ready for presentation and, given approval, purchase. I believe the intense level of “homework” and level of detail invested so far will pay off in smooth, manageable implementation. Power availability is a problem but is being addressed by Earl Redmond.
  7. Given that the holographic wrap sample test is effective this year, efforts will be made to continue opportunities to sample manufactured product

D. Non-Cat

  1. Although ’91 sales are under budget, the positive result is less excess inventory.
  2. Non-cat sales in self-serve stores is a concern which is being addressed. An improved signage program has been costed but budget is problem. Suggest using business development funds.
  3. Sell-through promotional opportunity as recommended by Brenda should be revisited within ’92 budget.
  4. It appears that larger non-cat promotions produce better results which should be considered in ’92 budget.
  5. Outstanding question–does non-cat promotion drive catalogue sales or vice versa?

E. File Analysis/Segmentation

  1. Results from spring activation/reactivation testing and current analysis activities have yet to be formally reported, but should be reviewed prior to ’92 budget.
  2. Streaming of recruitment process with grooming opportunities will require coordinated effort.

F. Preference/Prestige

  1. Launch and implementation of program has proven the opportunity for Regal/PDL to deliver on the “income” concept. The hard part will be what comes next for current high achievers, maintaining/continuing to improve their performance.
  2. Strategic Issues:
  3. –is “what we have all we want” in terms of performance and it’s just a matter of increasing the numbers of reps at the upper levels
  4. -do we move further toward “direct selling” complete with territories, quotas, layers and rah-rah, if so, is it “testable” with a significant-sized group who have come to Regal under the “old” do-your-own-thing scenario and/or is it a matter of testing a “new” strategy with a “new” audience unaffected by historical treatment. This may be necessary given that current offers on recruiting reps and/or fundraisers have not been positively received.
  5. A mailing to activate inactive credit card holders has been implemented for drop 7/9. Continued monitoring and proactivity on the credit accounts will be required to meet BOM targets.
  6. 800# ordering service is being offered to a test panel of 790 Prestige reps. Given successful testing, an additional special service element could be added to the Preference/Prestige segment.

G. Environment

  1. Given management support, the environmental committee will carry on its activities under the leadership of Anna-Lisa. She has done a noteworthy job of taking control and will be continuing to issue progress reports and will bring issues requiring decisions to management.
  2. I recommended establishing a separate cost centre to record and measure the costs and savings achieved through the environmental activities in order to broaden focus on the issue beyond individual departments. Ron reviewing with Kevan.
  3. Strategic Issue:
  4. -long-term impact of waste, mail and privacy issues on Regal’s business–are we ready for it?
  5. The next major project of the green team will be fact-finding from legislation impending, activist group activities, industry (print, paper, etc.) and competitive activity in order to identify the real risks to Regal and offer possible solutions.
  6. Continuing waste reduction efforts will be focused on minimizing cafeteria waste.

H. Random Other

  1. Strategic Issue: Seasonality and frequency of catalogues to different file segments needs to be addressed, e.g. two 6-month catalogues with several seasonal spin-offs. As the concept has considerable impact on Merchandising, coordinated effort will be required to move forward in this direction.
  2. A proposal has been received to offer an additional product line to selling Reps (custom-made tablecloths), see attached. As the selling situation requires face-to-face contact with the customer, the proposal has been offered to Regal as a possible fit with our rep concept.
  3. A proposal has been received from George Farr to promote videos to the Regal file in a co-venture with Video One. (See attached). George Farr is meeting with them Friday to put together a list of recommended titles including cooking, gardening, decorating, child entertainment, nostalgia, etc. and will follow up with us next week.
  4. Discount Issues
  • -dollar volume levels should be upgraded for spring ’92
  • -strategy for annualized or alternate discount formats or point systems should be further researched and tested
  1. Due mainly to budget restraints, we have moved away from testing opportunities and have not capitalized fully on results of testing conducted in the past. Perhaps some of the “history” should be revisited, particularly in the areas of catalogue package and format design and sweepstakes/promotions.
  2. Signing authority procedures and dollar amounts need to be reviewed and updated.
  3. Further progress needs to be made on implementing M.E.S.S. One positive result of initial efforts has been a formal, published schedule from Merchandising.
  4. Bilingual reps continue to be problematic and current treatment should be “sorted out” or altered in some way. This issue crosses several areas of responsibility–catalogue, file, stores, PDL, so probably requires coordinated effort to address.
  5. A fully-integrated in-store customer information program needs to be thought-out and budgeted for 1992 and can be designed into self-serve conversions and new store openings coming up in the next couple of years.
  6. DMR Group’s national change of address system has been offered to Regal for testing. I haven’t heard from them since our meeting May 8, but might be worth pursuing.
  7. Testing of a new seed mailing concept has been offered to Regal. Although our own seed system works reasonably well, a more formalized process is probably worth trying out, especially as test will be a freebie.
  8. 1992 is Canada’s 125th birthday. A federal committee has been set up to explore event and promotional marketing opportunities with Canadian businesses. May be worth exploring.
  9. 1993 is Regal’s 65th anniversary–use it for all its worth!

I. My hope

I hope that Regal’s support and commitment to Catalogue Council we worked so hard to make a success continues.

J. Thank you So Much!

I can’t thank all of you enough for the thought and energy you’ve all committed to the Regal business and how much your efforts have made this company one of the great direct marketing successes in this country.  I have sincerely loved working with you and Tony, and hope I can have the same sense of commitment and positive work community as I move along life’s path.

That’s all folks!

Barbara Canning Brown

President MISCO Canada

Barbara Canning Brown's good bye party, The Regal Team.  The best ever!! 1989
Barbara Canning Brown’s good bye party, The Regal Team. The best ever!! 1989

These Men Wrote the History of Canadian Football – John de Gruchy

The Toronto Globe and Mail in 1963 —

I was sifting through some family papers and stumbled across a newspaper article my father had saved from the 60’s about the foundational leaders of Canadian football, one of whom was my great grandfather – John de Gruchy.  What does this have to do with my work and customer engagement?

Directly nothing but indirectly a lot.  John was a man of integrity and commitment. These are characteristics that run in my family.  My father often said “keep busy, have a list”.  Well we are all built that way.  And, we all believe in a world of mutual trust and respect.   The early days of Canadian Football were in a state of flux.  Football could have headed in many directions but because of men and women like John with his strong beliefs in the value of people of all races, cultures and origins Canadian Football went in a good way.

My point here is that leadership sets the tone and direction. Nothing has changed that makes this any less true.  The challenge today is finding leaders of real integrity and real commitment rather than just lip service.  And, the examples we need to follow, are in many respects sitting in our recent past.

So lets’s not forget!John de Gruchy wrote the standard for the Canadian Grid

The Sounds Bosses Make.

 

 

Trust and the human condition

To some degree we can be successful in a challenging environment but it’s often hit or miss, and a lot of hard work, and frankly, I’d rather not expend that kind of energy if I don’t have to.

The following vignettes are drawn from life experience and describe six working scenarios.  The vignettes describe the challenges that work against trust and how I managed them, for good or ill.

You make up your mind.

Vignette 1

My first introduction to the cosmetic business was a bit of a surprise.

It was a retail business in rapid growth with a managing director I couldn’t decide I liked or feared, or whether I was just fascinated.  In the end fascination rose to the top and I began to respect her for making decisions where none would, and for having ideas and “wanting them now”.

She was, in turn, always respectful.  Where others struggled I warmed to her management style and looked forward to the Monday huddle.

She always came prepared.  She always had a list.  She always was on top of her game. Her directions were simple, and short, and she left you to figure out the rest.  And, she gave feedback.  Who could ask for more?

The only other time we heard from her was if we hadn’t met her deadline.  Generally it wasn’t pretty at that point so we firmly limited that eventuality.

I remember her for saying “are you ready, you should be by now”, and “what other options did you look at” and “does everyone agree?.”

Yes, there was a pretty large sword of Damocles hanging over our heads but she was concerned about how we worked together and the working process.  And, in the end she respected what we said and what we recommended.

When we did the right thing we knew it!

Good job team.

“The minute you settle for less than you deserve,

you get even less than you settled for.”

Maureen Dowd

 

Vignette 2

I sat down in his office and put my 90 day plan on the table and he said “before we get in that let’s talk about how you see yourself fitting…I want to make sure you get the right start in the department.”

How often have you had a boss say that to you?

How often has your boss expressed some form of concern for your success and well-being?  Fit doesn’t happen by itself.  Success is work.

The good news is that for the most part I’ve worked for individuals who believed in their team, believed in how the team functioned together, and understood the value of alignment.  Team Alignment enables teams of all types, at every level of the organization, to rapidly accelerate performance, deliver consistently higher business results, and work together as unified, self-directed entities.

The leadership of most companies talk about it but, in practice, it seems to be largely missing.

In this particular situation it was recognized that I was highly independent and could work with little direction.  And I did.  He was happy.  So was his boss.  We trusted each other and all was right with the world.

But with all good things comes change.  That change was fairly radical and took the form of a new SVP.

You’ve all been there – that first team meeting and the troubling sense that life would never be the same. Anxiety descends upon the floor.  Ambiguity replaces clarity.  Trust flees.

Needless to say it was time to make a change.  First my boss did, and then I and others followed.

In the end she pushed herself out.

“I’m working with two speeds today;

slow and fuck you. Which one do you want?”

Nicole Hill

Vignette 3

I went to work for this company because I perceived a tremendous potential for the company based on reported marketing investment.  I engaged friends to introduce me into the company and the VP of marketing.

Over a six month period I interviewed with more than 15 people, and for more than four roles and opportunities.  Feedback was always the same – “we were really impressed by your background but we are just finalizing the department structure and can’t move forward right now”.

I was still wanted to be there!

Finally my hire was confirmed for a long term analytics contract. The confirmation came indirectly and in what I was soon to learn was the style of my manager, the VP of marketing.

Trust would never develop on this ground.

My relationship with her was built on benign neglect.  I was irrelevant unless needed.  Initially I took this personally.  Don’t we all want to believe we are at the center of the universe sometimes?

There were insiders and outsiders in the marketing department.  The insiders heard the news first, got to discuss the direction of the department and gossiped about those they perceived as having a weakness.  And, you just live with it.  I was just a contractor and didn’t have a chance.

In some respects this made my work easier because her focus was always on the task and the immediate deadline.  Help couldn’t be expected but the good news was that I rarely needed it.  If you delivered to deadline there were never any challenges.

As time passed and as I was entering my 3rd year with the company I saw very little of her.  Status reports were sent; feedback was given; new projects came; results were delivered and presentations made.  The numbers were very solid and well received by the executive leadership.

But neglect, however benign, does take its toll even if you are doing a good job.  Indifference follows and then it’s definitely time to move on because self-destruction sets in.

“You know, I used to think it was benign neglect, but now

I see that you are intentionally screwing me.”

Parker Selfridge

Vignette 4

The first sign –

I was walking from the Penn State Smeal School of Business with the President of the company to the parking lot when he paused and turned to me saying:

“you shouldn’t trust me…you really shouldn’t…I’m not a very nice person”.

I paused, tried to be polite, smiled weakly and said something about not believing him.

We continued our walk, got into our mutual cars and went on our way.

Those 13 words resounded in my ears and screamed – ‘Get out!’

The second sign –

Just after I started with the company I presented to my boss a schedule for touchbase meetings and marketing finance reviews.  He said it was too much.  He then said:

“you and I don’t need to meet very often when something is wrong I’ll find you…”.

Getting out was doubly reinforced.

Trust in a job is a fundamental.  And we all learn from various small signs to not trust.  This was definitely one of them and only into my first 60 days.

My work carried on.  I met deadlines, worked within impossible budgets and worked diligently behind the scenes to find another job.

On the positive side there were two senior managers I reported into and who I have kept touch with to this day.  The heads of product development  and EMEA marketing.

Both looked for value and added value to the working lives of the people around them. Both are now working for ‘A’ list companies and are  in ‘A’ list roles today.

They deserve it!   I’m honored to know them.

I’m sick of giving creeps money off my soul.”

Bob Dylan

Vignette 5

I’ve always moved from job to job because I’ve known someone.

Through a referral I was introduced to the head of omnichannel.  I’d heard good things and thought this would be a tremendous opportunity.

A mentor once told me : “In an interview process we learn 30% about and opportunity.  The balance is either a terrible or wonderful surprise.”

It was.

On the one hand I was able to practice some of the more sophisticated CRM strategies I had in my kit and on the other I was able to watch up close a boss who was so totally unlike me as to be incomprehensible.

His starting point was always “I have an idea…, or meet you in the meeting room…”  The challenge was that it was typically the day before whatever we were working on was due.

I come from a world of pre planning.  I’ve been very well trained.  I had terrific mentors.  I’ve worked for big companies that believe in minimizing risk. Direct marketers do this extremely well.  The time line drives everything and those timelines are sometimes very long.

I was entering new territory here — a world of hyper last minute.

My biggest challenge was trying to determine if we were working together.  Alignment is very powerful and critically important for a successful executive leadership team.  Some days, as I would stand in my boss’s office drawing org. charts, or discussing goals and objectives, I would think I’m supported, valued and trusted.  The feeling looked mutual in those instances.

At other times I would see his self-interest in his own agenda emerge.  At those times I would be thrown under the bus.  The good news is that I did, for the most part, see it coming and could struggle with evasive actions.  But there wasn’t a lot of trust.

This went on for 4 or more years.  The ideas and the frantic pace continued.

In the end his self-interest won and trust went out the window as he sought to protect his acolytes.  I had been recruited out by that point and was able to watch with some neutrality as the department imploded.

Does trust exist where trust is fleeting?

“I’m not upset that you lied to me,

I’m upset that from now on I can’t believe you.”

Friederich Nietzsche

Vingette 6

I was fascinated by the intersection of entertainment, marketing and  personality.  The work was easy, the organization less so.

The witty repartee that I was introduced to ran in parallel with strategic conversations and planning meetings.  It was a heady mix.  But what was most fascinating was the shining political acuity.

“Let’s see what we can do…” was a frequent starting point.  He was never really about producing work himself but he was good at keeping the priorities straight and managing up.  The operations teams viewed him as a hothouse specimen but he was tolerated and sometimes respected.

But it was still the trust problem.

I’d learned from my history.  I worked at building commonality, shared intent, and a  high level of comfort in order to support a high level of mutual trust.  But the mutual part never happened.

I was expendable. So was my team.  They knew it.

So I thought that if I delivered outstanding work, quickly, that this would mitigate the expendability problem.  It looked like it did for a while but it was just an illusion.  While he said “great work” what he really meant was don’t lose me any points.

It was just as well that the project ended.

“Truth is beautiful, without doubt; and so are lies.”

Ralph Waldo Emerson

_________________________________________

Work is all about trust in my view.

Building it. Maintaining it. Adapting it to changing circumstances.

Trust is what keeps you at the job, generates the most rewarding collaborations, and delivers the highest level of innovation.

And trust will not exist when there is no trust at the top – the president, your boss, the COO.    If your boss is a no trust kind of guy you are, to some degree, sunk before you get into the boat.  Yes, sometimes you’ll manage through, but frankly, that’s just because you’ve been lucky.

Or, maybe you are both not trustworthy and you both manage to get along just fine.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Packaged Goods Dilemma

And how collaboration is always better

I’ve worked in retail my entire career.    I’ve watched the rules of retail marketing get tested over and over again and while digital has expanded our universe it hasn’t really upped everything altogether.

David Edleman’s article a few years ago created angst among retailers with a vision of the customer decision journey that looked like something the Jetsons might have designed. Yet, in the end, and once the dust had settled, we all figured out that few of us had an active customer file big enough to execute touch point optimization and the illusion of web to retail behavioral tracking was just that, an illusion for the majority and barely possible for those without several million plus in their active files.

What worked in the past continued to work and the integration of social and digital media extended and expanded reach and 3rd party endorsement to the overall benefit of the business.

Customer vs. Packaged Goods marketing

The vision of a customer marketer is multi touch.  Analytics drives touch point optimization, offer structures are paneled and segmentation is geared to customer lifecycle all managed within the iron grip of the retail calendar.

I hadn’t realized how little packaged goods marketing disciplines had changed.

I understand the aggregated view of customer data they are restricted to.  I also understand their proxy for customer data is the A&U study and focus groups which more often than not deliver a view of the customer filtered by the vision of the product manager and the limitations of the panel.

The customer marketer recruits from the customer database and extrapolates the results.  The active file underpins every action we take and drive the KPIs that measure success.

The Olympian struggle

The Olympian struggle is when packaged goods meets retail marketing.  Most often it’s a confrontation of distant planetary orbs rather than a meeting of minds.  The challenge is that the minds don’t meet because the languages of their respective marketing disciplines are so completely at odds with each other.

While the customer marketer has learned the value of a strong brand in lifting response the brand managers struggles with our vision of targeted and versioned brand messaging. More often the customer marketer flexs to the brand marketer’s point of view.

The customer marketer’s weapons of choice – segmentation, offer tests, versioning, pulse promotion, clienteling – are sometimes discounted or not even considered as requirements within the packaged goods view of the marketing mix.

Where the struggle is most simply illustrated is by the brands versus the customer marketer’s KPIs.  The brand sees the business metrics as their key indicators while the customer marketer starts with the customer and works up.

A customer marketer’s metrics are a by day, week, year view of changes in customer behavior versus year ago within a test and learn rigor driving change.

When packaged goods leads retail marketing without an effective collaboration it’s simply bad for business.

The language of Customer Marketing

New customers, returning, net daily, weekly, monthly and annual customer, customers retained, customers lost, top of file change, file migration patterns upwards and downwards, propensity, recency, frequency, monetary, and so on are the bread and butter of customer marketing’s pattern of success.

Get the machine running on this basis and we make a consistent +10% net.

This is at the heart of the risk scenario of packaged goods strategy driving retail marketing. This is not a question of lack of expertise but a question of inappropriate expertise. And, please don’t misunderstand and believe I don’t see a place for brand marketing.  Of course I do.

A strong brand makes for strong CRM but there is a very big BUT in this statement

Here’s the difference —   the brand might say “cut the monthly mailer” and not consider the impact on returning customers.  The customer marketer would say “test a matched group” to understand the impact, and test into the rollout.  They are fundamentally different points of view.

Testing into change.

The challenge in the overlay of packaged goods strategy on retail marketing is losing sight of the customer.  Knowing customer behavior is predictive of future business. Knowing how many new customers entered the business in March will tell you how the business will perform in May much more accurately than a focus group, a quant or AC Nielsen.

I haven’t forgotten that packaged goods companies have no customer access to data.  That’s not my point.  My point is a strategic one – that packaged goods strategies need to flex to the disciplines of retail customer marketing.

The result when both sides collaborate is a successful retail business.  The other option we just don’t want to consider.

About Charles de Gruchy

As we age I think we sometimes become more sentimental.  The analyst in us looks back and tries to understand what has really changed.  My consensus is not really very much. I’ve been in the direct marketing industry my entire career and the questions being asked today are much the same as yesterday.  The answers, however, are much more complex — strategic alignment, 360 view of the customer, integrated systems, one channel view, etc.  We all wanted these things 30 years ago and we still want them today with few companies (even today) actually realizing the goal.  Surprising? Not really when you think about it.  Of the companies I’ve worked for some have made a real commitment to customer marketing while for others it is  simply the current thing to do and there was no investment. Worse still the digital guys thought they knew all about it and you know that story.  This blog is about things observed a while back that are still relevant now.

A Canadian star makes the catalog business shine, May 1989 By Karen Gillick Direct Marketing Magazine

Barbara 1989, Direct Marketing MagazineEvery now and then, the fruits of a writer’s efforts are rewarded with fan mail.  When Charles de Gruchy from Goodis & Sharbura, Inc., Toronto, Ontario, wrote, he opened with the following statement.

“As a faithful reader of Direct Marketing magazine and of your column, I am surprised not to see a change of perspective.”

Well, it was sort of fan mail!  What did he mean by this?

What Charles was suggesting specifically was that I cast my eyes across the lake to some of the bright young stars in the Canadian direct marketing industry.

In checking out the Canadian stars, Barbara Canning Brown’s name rose to the top.

When she was approached, she graciously agreed to the interview.  She bubbled over the fact that this has been a particularly good year for her and that she had just been promoted to director of marketing for Regal Greetings & Gifts, she was just starting as chairman of the newly formed Canadian Catalog Council and she was about to take a trip to Guadeloupe.

As the interview began to roll, she described her life as a child, growing up on a 400-acre farm in Orillia, Ontario.  Her father raised beef cattle and in the spring, eh made maple syrup from the trees in their maple forest.

She has fond memories of gazing at the starts, enjoying the country life and loving her pets. She chuckles about a picture of herself in a lace dress surrounded by 14 cats.

During grade school, she was a member of a church organization called “Canadian Girls in Training” (CGIT).  She and her friends said t really stood for “Cutest Girls in Town!”  As a member of this group, she received her early training in arts and crafts, piano and organ.  Her leadership qualities surfaced during this period when she was elected president of the organization.

Because she lived in such an isolated area, her extracurricular activities in high school and college were limited.  Heavy emphasis was placed on education. As a result, she was the recipient of numerous awards in history, French, Spanish and public speaking. When she graduated from grade 13, she received the high honor of Ontario Scholar.

It was so refreshing to hear about Barbara’s hobbies during her school years.  They weren’t, as we so often hear, jogging, aerobics and bodybuilding, but back to the basics.  She wrote poetry and painted.  She attended the Royal Conservatory of Music.

As she was about to graduate from McMaster University with honors in English and fine arts, she wondered what she would do with her “non-useful studies.”

She picked copywriting and answered an ad for a junior copywriter position at Sears.  She was tested and hired.  A large portion of our industry’s superstars started in Sears’ school of copywriting and role to the top.  She is no exception.

Her first stop was soft goods.  She wrote about children’s bedspreads with ballerina and another with jungle scenes.  Her headline was “How to Tell the Girls from The Boys.”  When she got to fashion she described knee socks as “soxy”.  When writing about brightly colored suede shoes with chunky soles, she name them “the Rebels.”  This method certainly wasn’t the norm for Sears, and she constantly had to justify her style.  The advantage she had was that she knew the current market, and her customers and she usually won the battle.

She quickly progressed from junior writer to senior writer in merchandise and direct mail merchandise promotions.  Because of her constant thirst for challenge and development she was able to convince Sears to let her go forward.  A promotion out of the copy department after one year was a major breakthrough.

Her new position was sales promotion coordinator.  In this role, she was responsible for design and execution of monthly sales promotion packages to all of Sears’ national outlets.

After two years, she was promoted to creative group director of fashion and special projects.  She had a staff of six.

During her free time, she picked up some free-lance assignments.  One led her to a catalog showroom company in Montreal called Cardinal Distributors.  She like the company and decided to accept their offer to join them as assistant advertising manager.

In this position, she was responsible for all catalog execution and sales promotion.  She was the liaison with the advertising agency and also became involved in producing Eastern Canada TV spots. She loved her responsibilities, despite the difficulties of moving to another province with French as their first language.

A little over a year went by when Cardinal was bought out by Consumer Distributing.  There wasn’t a fit for her at Consumers so she took the opportunity to move back to Toronto and form Barbican Advertising.

Barbican was a creative boutique offering services in creative development, media placement and strategic development and planning for packaged goods marketers, as well as retail.  The company was also involved in POP direct mail solicitation and public relations projects.

Thirteen months into Barbican, she had to make a choice.  Consumers Distributing came after her, offering position as sales promotion manager. Her decision was whether or not to return to corporate life.  In the final analysis, the answer was ‘yes’.  She wanted to return to her true love, the catalog business.  Her new position at Consumers gave her invaluable experience in administrative responsibilities and corporate communications.

During this time, she was instrumental in bringing in on-line typesetting system whereby copywriters worked on terminals with telephone lines that went directly to an off=site typesetting service.  This allowed the writers to control the typesetting process and they would get the copy back within minutes.  This was extremely innovative for the time.

Her four years at Consumers were enjoyable, but she didn’t see any room to grow.

In 1984, she seized on an opportunity with lots of potential for growth.  She had her hands full when she came to Regal Greetings & Gifts as catalog advertising manager.

Her department desperately needed systems, reorganization and credibility. There were schedules, but no one followed them.  What systems there were, they were not used.  There were outstanding bills from suppliers, but no one knew what they were for.

Their production system was to take a catalog page and have everyone take a run at it.

After she fixed those problems, she was promoted to marketing manager, where she was responsible for media advertising, promotions and sweepstakes, new customers, catalog creative, production and mailings.

Most recently, our subject was promoted to director of marketing…no small challenge in a $64 million company.

She is thrilled with her promotion and extremely proud of how the company has turned around and grown. She attributes this success to Tony Keenan, who came on board three years ago as president.

When she retires, among other plans, she wants to return to astronomy and know the names of all the stars.  When you get there, Barbara, look up, your name will be there.

 

Karen Gillick, 1989 Direct Magazine who wrote about Barbara

Karen Gillick is president of Karen Gillick & Associates, a national executive search  firm specializing in direct marketing.  Her knowledge of direct marketing comes to her through her father, Bob Stone. Gillick may be reached at 980 N. Michigan Ave., Ste. 1060, Chicago, IL 60611 – 312/337-0345

Loyalty is a two way street, or it should be Direct Magazine June 28, 2000

The scene is childhood in the 1950’s. You’ve just come home from a trip to the supermarket with your mother. She passes you a sheet of little green stamps and a book to stick them into. Finally, after weeks of collecting and licking and sticking stamps enough books are full to warrant sitting down with the catalogue of all the neat stuff you could “buy” with the books of stamps.

For those of us too young to have participated in that primordial, philatelic pastime, let’s fast forward to the mid ’80’s. In droves we joined the ranks of”frequent flyers”, flitting from airline to airline to take advantage of the latest promotion for triple miles between Oshkosh and Oshawa. It was fun…for awhile.

Then came the ’90’s   sales slid…costs climbed…profits peaked.

Suddenly, like a virulent contagious disease that remains undetected until the emergency wards fill up, the dernier cri was unleashed on an unsuspecting consuming public…customer loyalty programs! Things to collect like membership cards, points and more points. Stuff to receive like newsletters, free samples, special services. Places to belong like clubs and circles. Wonderful words to describe you like Premium, Select, Priviligé. You and your peers, whoever they are, from kids to seniors.

Cookies, coffee, cat food, credit cards or cars, it seems no product is immune (or not for long) from the scourge of customer loyalty programs. In fact, I’m sure it could be a full-time occupation just keeping up with them all.

” But, but, but…”, I hear the marketing managers sputtering. “We have to get customers to stay with us. We have to compete. We’re building a database that allows us to track customer behaviour around the clock. We have all this information at our disposal. Look at this powerful new program, these prestigious new premiums, our bountiful new benefits. We’re giving away gifts. We’re giving away goodies. We’re giving away margin…”

You’re giving away the farm.

Know why? Loyalty can’t be bought. At least, not for long.

Not to mention it may all just be getting to be a teensy bit much too much for people to take. In medicine, when the disease takes over the patient dies. In marketing, when the customer reaches overload…you know what happens next.

Let’s put on our consumer hats for a minute. I ask, “Hey, Marketing World! This is not only about my loyalty to you! What have you done to deserve my loyalty? You’ve pushed merchandise at me. You’ve mailed me more stuff than I ever care to read. You’ve invaded my privacy. I’ve got a wallet full of every conceivable form of membership identification. Every breath I take, every move I make has been data captured, data processed and data based (or may be it’s de-based). Hello, out there. Anybody home?”

All I, and, I think, most consumers really want from a “loyalty program” is:

  1. To perceive that what you’re trying to get me to do has some genuine substance and relevance for me…personally. Too often marketers seem to assume people are just sitting waiting for their first next bright idea. Wrong. My life has context and texture and a lot going on in it. That wonderful database will tell you all about it. Now, what are you going to do for me that ninety-nine others won’t do?
  2. Not to have to work at this loyalty thing. Just make it easy for me. Don’t ask me to remember to carry goofy little cards around, or make me wade through encyclopedias of instructions and wait weeks and weeks before collecting “my rewards”. Relationships with my nears and dears keep me busy enough, thank you. Don’t ask me to go out of my way to work at one with you, because I simply won’t.
  3. A little love in your heart, as the old song goes. OK, that may be pushing it, so I’ll settle for a little empathy…human being to human being. The target market of one. What that looks like is well-researched, substantiated approaches, real thought put into the use of technology, delivered through tactics that aren’t intrusive in an obvious way.
  4. Delivery on your promises…and then some! You earn the right to receive my loyalty and maybe, just maybe, I’ll stick around.

 Charles de Gruchy remembers how it was

Good to Great, or how to not fall into the rabbit hole

When we begin asking ourselves what is this life really all about clearly the implication is that something puzzling has confronted our sense of order and sent it careening into the wall. My last 6 months have been something of that sort.  And, yes, my sense of order and the universe has been challenged, severely.

I have worked in retail marketing most of my career and there are very clear pros and cons to that business.  If you are like me taking pleasure in my busy list and liking to keep busy generally the retail life is for you.  But…at times we question what has seemed to work and think that far fields are greener. Yes, I fell victim to the siren call and the earnest desire to avoid Black Fridays; to shun “holiday”; and to keep well away from the life and death of the 4th quarter.  I longed for a flat horizon where the peaks were in any other quarter except the 4th and where, I truly believed, a higher plane of rational thought drove logical and more strategic customer marketing decisions.  I fell hard and fast and was seduced by my own inventions of what that outside world looked liked.  What followed was a startling revelation!

I was recruited by Wiser Partners into a global CRM & Loyalty project with ABG Group by a very thoughtful practitioner of the art of retained search, Ruth Frantz.  She was extremely thorough.

We worked together to rationalize my work history of headcount and non headcount roles and emerged with a resume focusing on the highlights of a very successful career in global CRM.  Many successes and many innovations littered my career where, to a large extent, my sweet spot was to bring order and align process to deliver efficiencies across the marketing operation.  I’m one of those people who are like a search light where dysfunction exists.  I love to take ambiguity and massage out the wrinkles then align ALL the stakeholders behind a unified effort.  What fun. It is fun! And, it’s necessary but not always appreciated.

I’m often confronted by that deer in the headlights look and the realization that no matter how much I might work to outline the benefits, demonstrate the cost savings, or show the long term benefits it just doesn’t resonate.   More often than not, however, in my retail experience the story had resonated.  Retailers are always looking for ways to squeeze out another sale and CRM holds the keys to the kingdom.

When I review the leaders I’ve worked for – Delphine Hibon, Tyler Heiden Jones, Sue Lewis, Fabrice Gautron, Jay Hirschon, Andrew Dubin, and Paige Havens – what has differentiated them from so many others is the willingness to listen and explore a new idea and to give back at the right time.

In my retail world the tactical CRM conversations had evolved to the point where profiling best customers and building look-a-likes in the offline world was almost regular business.  Digital and offline integration was a no brainer.  The idea of washing a data set through Experian or MasterCard to enhance a propensity view, or to add additional channels of contact was no longer considered unusual while the application of the CRM disciplines to the field now embraced store segmentation and all the geo fencing applications you can think of within a lifecycle view of the customer. Whew!!

So now we’ve set my benchmark and expectation considerations.  Combining this with far fields are greener produced a toxic combination.  The Emerald City is real, isn’t it?

Now back to Ruth – she and I worked through a rigorous process of vetting and validation before I was presented to ABG Group.    I provided a list of 20 references including all my bosses back into my dim dark past.  We analyzed my various roles from an accomplishments perspective then dissected my management style, handling of ambiguity, leadership and on and on.  I emerged at the other side of this process with a very clear and positive view of where I came from and what I am capable of delivering.  I was presented and my capabilities were both admired and desirable from the perspective of ABG’s leadership.  Yes, I interviewed with more people than really made sense.  I was pleased. They were pleased.  The deal was done.

The first few months were bathed in the glow of our differences — between the car rental business and retail between high value and commodity and between high customer investment vs. low.   It was all so very different yet in so many ways much the same but I wasn’t seeing the sameness or the important strategic gaps between where I came from and where I was.  The gaps emerged over time with questions like – Who owns the marketing calendar?  No one, we don’t have one.  How is marketing aligned through the channels?  It’s not, there is no process.  The questions I raised were pretty fundamental and had to be answered in order to proceed with the project I was hired to make happen.

Oops, I forgot about that part.

Let’s step back – the project I was hired to launch was the ABG loyalty program.  This was the holy grail  that would level set the Avis value proposition versus competition, e.g. Hertz, National, etc.  Avis had completed a cost/benefit analysis prior to my starting which framed in infinite detail how the program was to be launched and marketed going forward.  What the cost/benefit didn’t do was answer those basic and fundamental questions that the loyalty marketer would look at including impact on field and fleet; point’s budget relative to customer lifecycle objectives; integration into the customer lifecycle plan; customer migration patterns; integration across media touchpoints, and marketing systems.

The weekly and monthly status meetings were in place.  The right stakeholders were invited but responsibility was too distributed to work.  What ensued was a debacle with the reality of the situation bumping into the cost/benefit and the executive leadership’s weekly, daily, hourly…moment by moment changes of direction.

The most discussed question other than the fleet implications was the value prop and how to deliver it to market within the budget authorized by the already approved cost/benefit plan. The loyalty vendor layered additional constraints that severely limited the ability to apply real marketing thinking to the program aka the “platform can’t do it”. Around and around we went on a daily basis with senior leadership second guessing itself and everyone out there pitching their own version of reality.  And, we had a hard date for the launch of November.  Well, we all know about hard dates.  They change and they did almost daily.

Oh and I forgot to mention the very challenged existing technology backend that required untold soft dollars in people and system work arounds  to support its integration into the loyalty program.  The structure of this system was neither documented nor did any one person have a solid understanding of all the component parts and how they worked together.  Yes, there were a few translators of this byzantine “platform” but they operated with their own agendas which largely involved keeping their jobs while sustaining the chaos indefinitely.  So how was it possible to deliver a strategic proposition in this environment?

And the final straw?  One of the senior leadership had made a commitment to the street to deliver a billion $ EBITDA in 2015.  At the time they neglected to figure out how.

All of these independent streams of dysfunction eventually bumped into each other and doomed the loyalty launch to second fiddle and my project to something less than necessary.  Around me people were being laid off, my boss stood aloof and kept his hands very clean.  Our CMO’s feet staid off the ground while executive leadership made every effort to cut expenses to the bone to ensure delivery of that billion $ EBITDA. Exciting times!

So we have a challenging financial context, a non-strategic marketing department, a budget plan built out of context to reality, and a strategic outcome predetermined by a plan that just didn’t work.  An important secondary factor was the ruthless outlook and limited valuation of the human asset. In other words the human capital had no material consideration in the decision making process.

My friends were agog. They had a small window into another industry and couldn’t believe what they saw.  They were all like me.  They had assumed those far fields really were greener and anything must be better than a retail marketing life.

So – what’s the lesson?

I think it would have been better to have learned more about Avis before I jumped. The positive side is that all projects have an end date.

A good friend of mine many years ago said to me that you learn only 30% about a company and your boss to be in the interview process, and the other 70% is either a pleasant or horrible surprise.  When you also overlay on top of this the 80/20 rule – Yikes.  This means that 2 out of 10 companies you interview with are good to great and the balance is varying degrees of pretty god awful.  Sounds bleak.

But I’m an optimist and have faith in people – the right people. This still doesn’t answer the question of how to vet the audience better but we know great companies are out there.

Check and Done!