Multichannel Magic

Management is hard. People do things that surprise even the most jaded manager. Sometimes the surprises are good, but often they undermine your faith in humanity. My first entry into the management arena was at the ripe old age of 25. The first lesson I learned was that I was a much better manager before I became one.

It’s easy to second guess management decisions when you don’t have the responsibility that accompanies them. Every decision is a complex challenge that has to balance the needs of shareholders, employees, customers, and individuals. Sometimes, finding the right answer requires the wisdom of Solomon.

If being a manager is hard, managing a high growth company nears impossibility. Change is constant. People resist change. Sometimes managers have to pull their team into the next phase of the business’ development. The pie in the sky leadership mantras don’t mean much when employees can’t see the future.

Some think that leadership ability is all that is needed to keep companies on the right track. They are wrong. The best leadership qualities will not stop toxic employees and customers from undermining company objectives. Leadership is the ability to influence people. Management is the ability to direct business affairs to achieve objectives. Ideally, the people ultimately responsible for corporate success would have a combination of the two. If not, management skills trump leadership because growing a business requires more than being a good people person.

The phenomenal growth we experienced at Ballard Designs came with never-ending challenges. There wasn’t time to stop to study the situation so the management team could develop and test a plan of action. We had to learn on the go. The process improved our leadership and management skills. Here are a few lessons I learned:

• Fire toxic employees and customers. Time and effort invested in trying to change people that creating unwarranted problems is wasted. Invest in the people who contribute to growth and profitability instead.
• Participate in an Employee Assistance Program. Having the EAP allowed our management team to focus more on the needs of the company and less on individual team member issues.
• Create a bonus program that rewards people globally and individually. We tied bonuses to profitability, team accomplishments, and individual objectives.
• Listen, question, and think before you do. Information provided isn’t always accurate. Double check the facts before acting.
• People first. You can’t fake caring. If you don’t care about the people who make good things happen, you don’t need to be in management.
• Communicate well. Resistance to change is reduced when people understand why things are changing and know what to expect. Fear of the unknown is crippling.
• Take time to celebrate. Pausing a moment to celebrate wins and recognize jobs well done revitalizes the people doing them.
• Watch for morale quicksand. Employee morale can seemingly change in a flash. Watch for events and activities that will negatively affect morale so they can be nipped in the bud.
• Take care of yourself. If you let yourself get run down, you’ll take your team with you. Plan and do activities that recharge your batteries. It’s good for you and a good example for others.

To learn more about improving management skills, email Debra at dellis@wilsonellisconsulting.com.

The term “big data” was coined to identify complex data sets requiring massive computer processing to access usable information. Companies like Target use it to identify when and what customers are most likely to buy. They convert data for a variety of sources into information that is used to create irresistible marketing messages.

Searching through multiple databases to find the variables that help target customers is not for everybody. You have to be statistically inclined and able to identify trends before they become obvious to the rest of the world. Target famously outed a pregnant teenager to her father by comparing her purchase history with known behavior of expectant mothers. The company’s revenue growth is attributed to the ability to accurately match promotions to an individual’s behavior.

What if your company doesn’t have the statistical chops or deep pockets to mine data for those golden nuggets that improve business?

Target was a multi-billion dollar company when its marketing strategy expanded to include big data. The resources to mine information out of volumes of rapidly changing data were readily available. When speaking with people about data mining, I’m often told that they do not have a marketing team with the needed statistical ability or the cash to hire a third party capable of mining big data. This view is short-sighted and counter-productive.

The lack of resources isn’t important because most companies don’t need an extensive data mining program like Target. The bigger the company the less room there is for growth. Target has to find creative ways to generate revenue because the company has saturated most of the market. If your business isn’t on scale with big box stores, you don’t need big data to grow. You need mint data.

Mint data is hiding in your databases just waiting to be mined for more sales, improved loyalty, and greater profits. When converted to information, prospects become customers and customers buy more while staying longer. The data needed to grow your business includes:

• Prospect source and activity. Companies used to search for prospects. Now, prospects find companies. Instead of being identified and targeted by how closely they matched a customer profile, prospects appear without pre-qualification. This requires companies to find other ways to qualify and segment them.
• Customer buying behavior. Knowing how, when, and what individuals buy helps create targeted marketing messages designed to provide the right promotion at the right time. It also reduces marketing costs by minimizing investment in hit-&-run shoppers.
• Service levels. The quality of service has a direct effect on marketing success. Monitoring the cause and effect of service levels shows where improvements generate the best return on investment. Everybody wins when the marketing and service departments work together.
• Traditional metrics. Direct marketers identified key metrics like RFM (recency, frequency, monetary value) that qualify buyers. These metrics still work. They may not be as effective as in times past but disqualifying them without testing is premature.

Converting the data in your systems into usable information is the first step toward harnessing big data. Begin small with the data that is easily accessible and expand as you learn what works and doesn’t. You don’t need a brain trust or deep pockets to benefit from analysis.

For information on how you can improve your data management, email Debra at dellis@wilsonellisconsulting.com.

When UPS first came to Western North Carolina, my father’s company was hired to help with, well, everything. The contract that started out as a vehicle maintenance agreement quickly expanded to include anything that needed to be done. Many of the lessons I’ve learned about business came from time spent with Dad and UPS executives.

The best lesson came when I asked one of the executives why UPS didn’t advertise. The company was experiencing phenomenal growth without spending a nickel on marketing. The response was simple and persuasive: “Our service is the best advertisement we can do.” Decades later, the answer remains a universal business truth.

Somewhere between then and now, people running companies forgot that service differentiates their business from the competition. Service became an expense to be reduced as much as possible in an effort to increase profits. This strategy works until the side effects of less service kicks in. Reducing the quality of service always begins with a short-term boost to profits followed by a long-term drop in sales.

Marketing works better when people are happy with a company’s service. It is more efficient and effective. The service provided doesn’t have to be exceptional or expensive. It simply needs to match positive expectations and preferences. I qualify the previous comment with “positive” because poor expectations are also an option.

Best Buy is a good example of a company that forgot the importance of quality service. Years ago, it was my favorite store. I tend to be a bit geeky when it comes to technology. My equipment needs to be reliable and fast. Best Buy was my go-to store for all things electronic for over a decade. It is my last choice now. The company’s shift from favorite store to shopping pariah began with a change to the return policy. I researched products before making purchases so returns from me were extremely rare. A visit to return something usually meant the product was faulty.

After choosing a laptop that was almost $2,000, I was told that if I returned it there would be a restocking fee. I explained that the only reason that I would consider returning it was if there was a problem. The store associate responded that the reason didn’t matter. The return policy applied to everything and everybody. A slam dunk purchase just became a problem. What if there was a problem? Did I really want to pay a restocking fee to exchange a faulty product? After careful consideration, I completed the transaction while deciding that computer would be my last big purchase at Best Buy.

I still visited the store to see new technology and continued to make smaller purchases. I liked talking to the associates. They were knowledgeable and helpful. In time, that changed too.

The move from Atlanta to rural Western North Carolina came with interesting technology challenges. I found that I needed to install a building to building wireless network. The buildings were separated by a quarter mile. I headed to Best Buy for help. After studying the routers and antennas on display, I asked for help. The associate referred me to the Geek Squad. After laughing out loud and sharing the joke with others, the Geek Squad agent told me that what I wanted to do was impossible. I tried to explain to him that I had researched it and knew that it could be done. All I needed was the equipment. Another round of laughter accompanied with some “blonde” comments followed. I left. U.S. Robotics provided the expertise and equipment I needed. Within a week, the building to building wireless network was up and running.

Since then, I’ve returned to Best Buy a few times. The experiences continue to disappoint:

• A splitter was presented when a diplexer was requested. They look similar on the outside but work differently and are not interchangeable.
• Finding sales associates is a challenge. They meet you at the door but locating a blue shirt helper in the store requires a skilled tracker.
• Inventory management is sketchy. Requests for specific items are often met with “let me check online for you” responses. If I wanted to order it online, I wouldn’t drive to the store.

The chain’s management blames showrooming on the loss of market share. They’ve declared war on the activity with a new price matching policy. The policy sounds good but it comes with rules that limit its benefits. Showrooming is a real issue that can’t be solved by matching prices. Quality service trumps low prices, if the competing price is reasonable. There is a lot of power in instant gratification. Being able to receive the answers needed and walk out the door with the right equipment is a positive solution for most people.

Best Buy has an advantage over the online companies that needs to be exploited. Personal service isn’t available at Amazon. Technology is confusing and constantly changing. It’s hard to get answers to technology questions by talking to a computer monitor. Providing clarity to make the buying decision is the service that people want. It reduces the desire to showroom. Providing that service and price matching gives a competitive edge.

The anti-showrooming strategy adopted by the company is implementing a “stores within the store” merchandising strategy and price matching. Customer service lessons haven’t been learned. To keep from following Best Buy’s lead:

• Determine why customers are leaving. The top five reasons that people stop buying are neglect, boredom, overload, alienation, and lifestyle. Blaming it on the competition is an excuse that will not fix the problem.
• Fulfill positive expectations and preferences. More data is available than ever before. Turn it into information that tells you what people want so your company can deliver.
• Change negative expectations. Has your service been less than stellar in the past? Fix the problems and ask people to give you a second chance. People are surprisingly forgiving.
• Use marketing to reinforce positive service experiences. Sometimes people need to be reminded about them. A good practice is: do it, tell people you did it, and do it again. Repeat.
• Train employees well. The more your employees know the better they can help your customers solve their problems. If saving money on service is an objective, start by improving training. It reduces the time (i.e. cost) required to serve customers and resolve issues.
• Reward quality service. Employees that face disgruntled customers have low morale and a “why bother” attitude. Implement a program that rewards the people who provide the best service. It is a bad attitude antidote.
• Pay attention to details. Initial impressions affect how people respond. Teach employees to communicate a willingness to serve with their tone of voice, words, and general attitude. It disarms unhappy customers.
• Tie marketing results with service levels. This allows you to see cause and effect so you can maximize the return on both.

For information on how you can use service to improve marketing, email Debra at dellis@wilsonellisconsulting.com.

The best marketing begins with an understanding of the human psyche. Despite proclamations of individuality, people are surprisingly similar in how they react to stimuli. My friend, legendary Herschell Gordon Lewis*, taught me that there are five emotional triggers that motivate people to part with their money: Fear, greed, guilt, exclusivity, and approval.

Marketers can use these triggers to manipulate or motivate. Manipulation occurs when emotions are used to make people buy things they do not need or really want. Motivation is when the triggers are used to encourage people to buy things that solve their problems. Both create an environment where money changes hands and sales increase but only one has long-term benefits.

If one-time sales by hit-&-run shoppers are enough for your company, motivation and manipulation works equally well. If you want to build a foundation that will serve your company for years to come, never manipulate people into buying a product or service they don’t need. Doing so replaces all goodwill with the memory of manipulation and wasted money. A better approach is to invest your resources in creating solutions and educating people about why they need them.

When Ballard Designs offered me the opportunity to help the company grow, I started on the service side. The first thing I did was learn about their customer needs, employee challenges, operational systems, and internal processes. I’m sure that my actions seemed counter-intuitive to the people working with me. After all, corporate growth is all about sales, isn’t it?

After a few months the sales started to come and they kept coming. We had high double digit growth year after year. Equally important, we had the foundation in place to consistently deliver on the promise. My experience as Chief Operating Officer made me a better consultant because it showed me the importance of having a great team. It was a privilege to work with my wonderful teammates. Our commitment to provide a better shopping experience changed Ballard Designs forever.

A mindset shift is required to change marketing into service marketing. Your customers and prospects are people with problems, not simply a target market to manipulate. When the marketers in your company start thinking about how to serve through sales instead of sell more, the conversion process becomes easier, customer loyalty improves, and lifetime value increases. To start the shift:

• Review your marketing strategy and service levels for the last five years. Does it focus on generating sales or providing service? Are the metrics that determines customer value trending up or down? How are service levels trending?
• Challenge everyone in the company to suggest better ways to serve customers. You can even make it into a competition with prizes. The best ideas often come from frontline personnel. Their knowledge about customer needs comes from serving every day.
• Look online for opportunities to fill service needs. Social media and review sites give you a glimpse into your competitors’ strengths and weaknesses. Use that information to expand your marketing and service reach.
• Change the name of your marketing department to Service Marketing Team. It reminds everyone that service is foundation of your company’s success. The addition of team delivers the expectation that people will work together for a common goal.
• Create and execute a plan that capitalizes on service. This is the best time in history to implement a service plan because people are desperately seeking companies that care. You don’t have to be the best; you just need to be better than the competition.
• Build from the ground up. Your plan has to have the foundation and infrastructure to make it work. Without the base, it is another form of marketing manipulation that will not consistently deliver on the promise.

* I know Herschell Gordon Lewis as the king of copywriters and a man always willing to share his expertise with an engineer trying to learn about the nuances of marketing beyond analytics. I’m forever grateful to the lessons he generously shared. Seeing him at conferences is a treat anticipated for months before the date. During our time together, he has always been charming and helpful. It was years before I learned that he had a dark side.

During a client meeting, I suggested that they ask Herschell to review their catalog copy. The marketing manager asked me if I was seriously recommending that the “Godfather of gore” movies look at their catalog. I was completely unaware that Herschell has dual careers where he is recognized as the best in both. Knowing this now, I qualify my recommendations. If you want to learn how to create copy that motivates people, buy Herschell’s books and read his articles. If you are a horror film buff, check out his movies.

For information on how you can make service marketing work for your company, email Debra at dellis@wilsonellisconsulting.com.