Alison Heiser Blog RSS

Why I'm Not Reading "Car Guys vs. Bean Counters"

Tue, 14 Jun 2011 00:34:23 GMT

Bob Lutz, former vice chairman of General Motors, has just released his book "Car Guys vs. Bean Counters: The Battle for the Soul of American Business". I'm not reading it.

The title says it all - an internally focused, internally embattled company that just cannot get beyond their own corporate walls. If there is a battle for the soul of American business - and I think there is definitely a battle - it's about shareholders. The battle that I'm concerned about is the one that pits serving customers against serving shareholders against serving employees.

It seems that the group that is best organized seems to win in this battle. Shareholders are very well organized. Sometimes employees are well organized - at least certain groups of them. Rarely are customers organized, but they still have concrete ways of making themselves heard in loyalty and defection rates.

I still hold fast to the notion that the best way to serve shareholders is to serve customers and employees well. Balancing what's valued by customers with what's valued by employees creates a virtuous structure that creates organic growth possibilities.

Sadly, organic growth can't hold a candle to an attractive merger, acquisition, or divestiture. Nothing like a big transaction to get the organized shareholders and their financial advisors all happy with themselves. Nevermind the well documented poor track record of these transactions just a short time later.

I think it would be cool if we could figure out a way to create a balance of power in business that achieves something like the balance of power in US government. Not that I'm asking the government to figure it out, but that somehow we could breathe life into the loftier notions of what it means to run a sustainable enterprise.

I'd read a book about that topic.

Embracing the Lowbrow?

Fri, 03 Jun 2011 15:07:58 GMT

Have you noticed the devolution happening in advertising to men? It's been mildly annoying to see so many brands embrace the idea of their customers as lowbrow - cretins who drink copious amounts of beer, are single-mindedly focused on sports, are physically unattractive, are poorly dressed - and kind of stupid. The trend to elevate this dismal portrayal of men as not only real, but worthy, is just as hard to swallow as the days of June and Ward Cleaver.

The latest ad from Klondike offers a prize to the husband who endures 5 seconds of listening to his wife. I read a couple of reviews that found this deeply misogynist, but I found it deeply the opposite. (Actually there's a word to describe hating men, but misandrist just doesn't seem to fit.) What kind of brand - what kind of ice cream lover - are we observing here?

There was a period of time when the word aspirational found its way into most brand positioning and creative meetings. Then the word authentic began to emerge. I just don't see the authenticity in the Klondike ad, and in many of the portrayals in TV advertising. It's like "The Hangover" - it's just a big joke, isn't it? But I'm not laughing.

Contrast that "humor" with the wildly popular ABC sitcom "Modern Family".

"Just when we were thinking it couldn't be done, ABC's "Modern Family" has single-handedly brought the family comedy back from the dead.

All the performances are terrific, but what makes "Modern Family" work is its relentless portrayal of recognizable family life. Creators Steven Levitan and Christopher Lloyd...have given us a comedy that is sharp but not cruel, amused but not judgmental. It's hard not to see yourself, or your mother, or your kids, or your sibling, reflected clearly in one scene at least, and to laugh out loud anyway." - Mary McNamara, LA Times

Marketers and agencies may be focused on what gets noticed, and what sells, but "Modern Family" gives us all reason to aim higher. It's not only terrific work, it's commercially successful. Let's not settle for less.

Church Meetings and Strategy

Wed, 02 Mar 2011 00:11:20 GMT

I met a friend for lunch the other day - he had attended a church committee meeting the previous night and shared his unspoken thoughts. One of his church leaders had just returned from a conference and was brimming with ideas. She wanted to share her ideas, solicit new ones, and inspire the committee to act. There was just so much great work to be done!

My friend said he wanted to ask "What are we trying to accomplish?" "What is the purpose of this effort?" The answers were important to him as a way to evaluate the ideas, and perhaps think of others. But he didn't ask the questions.

He didn't ask them because the momentum of the leader and the group was focused on discussing the ideas. He didn't ask them because he didn't want to derail the leader's enthusiasm. He didn't ask them because the meeting looked like it was going to run long, and asking the questions would surely make it run even longer.

Despite incredibly busy lives, most of us are not too busy to attend meetings, not too busy to work on new initiatives, and not too busy to give our thoughts on how best to get work done. Sadly, we are almost always too busy to ask the important questions. So we work and work and work, and to what end? Growth is still stalled, margins are still squeezed, and we can't find the elusive silver bullet.

The truth about mission, vision and strategy is that it's hard to do well. Even if we take the time, all too often the efforts result in ambigous statements that fail to give the direction that is so needed by our people. But when it is done well - when the statements are clear - when the communication is inspiring - we are poised to achieve great things. We can begin to work on the things that propel us in the desired direction, and begin to question the things that do not. Setting the organization's strategic direction is one of the most valuable skills a leader can possess. It is also incredibly rare.

I talked recently with a colleague who was passed over for a senior leadership role. The feedback was that she was clearly the better candidate when it came to leadership and strategy. The company felt more comfortable, however, with the candidate who brought specific operational experience they needed. To me, this seemed a terrible decision for the company, and for the people who were anxiously awaiting a new leader. But at least the meetings will run on time.

Craigslist and Neighborhood

Wed, 10 Nov 2010 01:53:03 GMT

The torn envelope is on my desk - it was sent by a father who lives about 40 miles north of me. He saw a craigslist posting for my son's dirtbike gear and emailed me over the past few weeks. He finally decided he wanted to buy the gear, and asked if I would ship the gear to his house if he sent me a check.

I wrote back and said I would be happy to ship if he added $10 to the price. And, oh by the way, I would prefer if he paid a PayPal invoice. You see I hadn't decided to trust him.

No problem at all he said, but would I mind if he sent a cashier's check instead of using PayPal - he wasn't sure where his password etc. were. I was impressed - a trip to the bank to get a cashier's check seemed like a lot of effort. I said sure.

Friday's mail arrived with the envelope as promised. When I opened it, a plain piece of white paper was folded over two fives and two twenties - fifty dollars cash inside the envelope. I was taken aback by this man's trust. Trusted the post office - trusted me. And I felt honored by his trust - and somewhat embarrassed by my lack of it.

Is craigslist helping us be better neighbors? Could be. The messages they send are clear - deal locally and things will be good. These are your neighbors, after all. Quite ironic that technology enables the delivery of this message. Technology that connects us to neighbors we haven't yet met, and warns us to avoid scams from distant places. Reminds me of the small rural town I grew up in.

I like the feeling of being trusted by this father. Next time I think I will try it myself - makes for a better neighborhood.

CEOs in the News

Thu, 29 Jul 2010 00:37:01 GMT

The big news this week was the departure (do we still say firing?) of BP's CEO Tony Hayward. Several headlines I read called him the "fall guy". I guess I thought he was actually responsible. A fall guy/scapegoat is punished for the errors of others...and wasn't it Hayward himself who actually blew it in nearly every public forum held about the oil spill?

I'm not feeling any sympathy for CEO expectations. In my own experience, these are the same expectations we all have of each other. Tell the truth. Don't be an arrogant jerk. Take responsibility for your actions. Say you're sorry when you screw up.

Sure it's worse when the media covers it, and customers and investors get to watch the whole thing. But really it's all about integrity, and I'm pretty sure that was written into Hayward's job description. But if you don't have it when you get the job, the PR experts aren't going to be able to help you develop it on the fly.

In smaller news, A&P replaced their CEO for the fourth time in less than a year. I thought the comments from WSJ readers were quite amusing and also quite interesting.

Amusing:

Their stores are Food Museums and Christian Haub knows absolutely nothing about how to run a Company. No one can fix this. Cut your losses if you own the stock, avoid the stores unless you are starving on an island and there are no alternatives.

Interesting:

It's rather disturbing that Mr. Martin will receive a $1million salary on top of 1.5 million shares and stock options along with a possible $276,000 payment if he stays until February. A&P is crying hard times but is willing to waste such massive amounts of money on one man while cutting much needed help from the bottom.

There are many good workers who work in A&P stores that make the company it's money and these people don't see even a modest increase in salary or full-time positions. As for myself, I was told that I was going to receive full-time within my department a few months ago. The VP approved it to my Produce Merchandiser and I was told it was a go. Then after about 2 or 3 months it came down in an email that the policy of a full-time hiring freeze was still in effect and somehow the VP was overridden.

If A&P refuses to replace full-timers when they retire and only fill the gaps with $8.00 an hour part time help, as in mine and many other cases, the company will be facing some major pains down the road. When product doesn't get to the shelf and the departments look messy, customers will be pushed away. People who only look at numbers all day won't understand that and you can't expect to cut corners in areas where the money is made. Paying someone $1 million at the top while your backbone rides on those making $8.00 an hour is not smart business.

I don't shop A&P, but I do shop WalMart and Copp's - a regional grocer. At least in my shopping area, it seems the strategies of these two retailers are converging. Increase the emphasis on private label, and reduce the selection of branded items to streamline inventory. It's an unexpected turn of events for me to watch these very different businesses compete on the same strategy. Makes shopping a whole lot more challenging, as my favorite brands and products get harder and harder to find. Not to mention how it just plain ticks me off.

Well maybe this new CEO at A&P will find a growth strategy. That would be news worth reporting.

Your 1-year-old Merrell Radius Shoes

Tue, 18 May 2010 00:34:39 GMT

Your 1-year-old Merrell Radius shoes

I got an email today that was impressive in its simplicity. The subject line read: "Your 1-year-old Merrell Radius shoes". The body of the message read:

           Dear Alison Heiser,
           One year ago, you ordered the following product from Zappos.com:
           Merrell Radius - Dark Taupe/Rust Nubuck - 15/D - Medium
          We wanted to let you know that right now, your size is still available from Zappos.com

It was from the Zappos.com Customer Loyalty Team.

It's hard to overstate the importance of customer loyalty - vast bodies of research, thousands of business strategies, and common sense all tell us that the smart money is on keeping your current customers. Yet so few organizations execute well against this concept - it continues to provide an enormous opportunity for competitive advantage.

I think most organizations envision complicated programs, rewards, incentives. So they get started, falter, reinvented, abandoned.

Sometimes the obvious answers are so simple that they are often overlooked. What if we took the time to tell our customers that we know they bought something specific from us in the past, and we have an idea for something specific they might be interested in buying from us now? This type of data mining hardly even seems like data mining...it's too simple to carry that description.

Do something simple - write a personal note to your customers and offer them a suggestion that tells them you know who they are. See if you can follow the Zappos.com model and make it 35 words or less. I think the results will surprise you.

By the way, I do not wear a 15D. I bought those for my big-footed husband.

Say it ain't so, GM!

Thu, 06 May 2010 22:32:37 GMT

I'm having a strong reaction to the news from GM this morning. Yes, after firing Campbell-Ewald after 91 years, they are now putting a fourth US marketing leader at the helm in 12 months time. GM's spokesperson reports that Ed Whitacre's thinking "is that we need to grow as vigorously and aggressively as possible, and he expects the company will grow market share."

There are so many problems with this leadership move and GM's situation...but I will limit my thoughts to a few points.

1. GM cannot "grow share" until they "hold share". US market share fell again to 18.7% from last year's 19.1% - it just keeps falling. Stopping the bleeding from the customers that are defecting from GM is problem number one. I am completely amazed that customer loyalty is not the highest priority. And since GM has nearly perfect information about who their customers are and where they live (thank you, VINs), it seems that 1:1 marketing is the most important path forward. High profile ad campaigns? I hardly think so.

2. The marketing profile at GM is baffling. Let's start with the fact that they are all automotive insiders. Mark LaNeve, Bob Lutz, Susan Docherty, and now Joel Ewanick from Hyundai. I think Joel did a fantastic job at Hyundai, along with a product line-up that has steadily won over consumers and impressed competitors over the last decade. However, Hyundai is all about new customers - the missing skill set is loyalty and retention. If GM ever gets serious about customer loyalty, they will need to look outside their own industry to find the best models.

3. Do I really need to say that 4 marketing leaders in 12 months is ridiculous?

4. Finally, I have the distinct impression that the marketing leadership issues at GM are fundamentally linked to a misguided understanding of what marketing is all about. "Clever campaigns" may be important, but this misses the larger point. Marketing's role is about guiding the company to develop a compelling value proposition for each of their brands and the company. Brand experience - in all of its complexity - is incredibly hard work, and touches every area of the company. More importantly, it touches every customer. GM needs to be careful about looking for a Midas touch solution from the hands of a single new marketing hire.

The Shim Solution from Toyota

Thu, 04 Feb 2010 00:06:41 GMT

The word shim is driving me crazy. I know what shims are, and I know who uses them. They're for propping up or wedging something that doesn't fit properly or work as it should. At least that's what the people I know use shims for. Wobbly tables. Things that aren't level. A rudimentary solution to something that wasn't built right.

So of course I looked online and there are some other more sophisticated definitions of the word shim, but you would have to be an engineer to know those. Which is at the root of Toyota's fiasco. A product recall for an engineering company is an engineering problem. Using a word like shim is probably no big deal for them...but of course it's a big deal for Toyota owners.

I don't want a new shim, I want a new car. Or at least a new accelerator. This may be an expedient solution, but I don't want any part of it, and now - worst of all - I don't want any part of Toyota. They are no longer the company they were. Dare we say it? Did they outpace GM's sales to become like GM???

I read their news release and the official word is that they are fixing the accelerator with a "precision-cut steel reinforcement bar". I like that better. Sounds stronger...sounds permanent.

But unfortunately I heard the word shim first. No going back now, is there?

Thinking about Private Label

Wed, 30 Sep 2009 21:19:00 GMT

My husband uses Zyrtec on a regular basis for allergies. There's an interesting statement on the package that I haven't seen before. Maybe it's been there - maybe it's on other packages as well - but I have never noticed until now.

"The makers of ZYRTEC® do not make store brand products."

That's interesting to me. When I started my career at P&G, we could have made the same statement. But we didn't. Private label was another world at that time.

Today, private label products are pervasive. The trend is definitely up. When McNeil Consumer Healthcare makes that statement, there's a lot to think about, because that statement is intended for consumer information. And since they don't make store brand products, they're making a point that most likely is in direct opposition to the store brand alternative: it's not "exactly the same thing". All the innovation that McNeil can muster is devoted to their branded products. Clean and simple. Just like P&G.

As I have worked in several other businesses where we actually did make both branded and private label products, the issue there is much more complex. Serving two masters requires a much more thoughtful strategic and operational approach to customers and consumers. It's difficult to get it right. I have found that the key - as in most things - is understanding the consumer. It's essential to forge a partnership with a retailer that is working to meet consumer needs. If it's a pure profitability play things can get dicey.

When consumers shop private label they're normally looking for a more economical alternative to branded products. (Although it's true that in some situations they actually begin to prefer private label offerings - but that's a topic for another day.) For the manufacturer, getting beyond the price differential to figure out what the value proposition is can be difficult. How do you make the products different? What do you do when you launch new innovations? How do the manufacturer and retailer respect each other as competitors?

Probably a branded package won't carry a label about store brands when the manufacturer makes both. But it's worth thinking about what that label would say. Your organization needs everyone on the same page.

Consumer Focus – Not for the Faint of Heart

Thu, 20 Aug 2009 13:06:01 GMT

Perhaps you read recently of P&G's decision to test "Tide Basic". Also Abercrombie & Fitch plans to lower prices after standing firm on premium pricing over the past year. Travelzoo's recent email headline was "NEWSFLASH: Worldwide Air Sale from Chicago, $49 & up". And the Wall Street Journal reports that the average home is about a third cheaper than it was at the peak three years ago, a plunge unprecedented since the Great Depression.

What's going on? Is it capitulation to the economic mood? Or is something more fundamental - something worth pondering after all these months of lower revenues and squeezed margins?

"Now, some of the biggest innovations in our company are geared toward making products more affordable," says P&G Chief Technology Officer Bruce Brown.

"Consumer spending patterns domestically continue to be dictated by cost and value propositions, and this is clearly a headwind for our premium brands," Abercrombie Chief Executive Michael Jeffries said during a conference call.

"It's not terrorism this time," said David Swierenga, an aviation economist. "It's a sea change in demand."

A June 2009 survey commissioned by the National Foundation for Credit Counseling, found a deep-seated pessimism about home ownership. One third of respondents don't believe that they will ever be able to own a home. And 42% of those who once purchased a home, but don't own one now, believe that they'll never own one again.

I have to admit, I had been secretly cheering for Michael Jeffries. He was a holdout on discounting and stood firmly confident in Abercrombie's premium brand positioning. But now I'm no longer a fan. The message in his last investor call was actually twofold - yes, the consumer spending patterns have changed...and oh by the way they stumbled on the fashions. A bad time to get the value proposition wrong.

I think globalization and the US economic downturn have intersected to motivate a more selective, more discriminating consumer. It just might be that economies like China and India are teaching us something important: our deeply held convictions about US consumerism are being challenged. What we want and what we need are being defined more clearly, and we can no longer afford sloppy behavior. If we choose to be extravagant, it had better be worth it. And if we find a lower cost way to get what we need, we feel savvy - not like cheapskates. And the persistence of the movement to "do without" shouldn't be underestimated.

It's time to face up to the fundamental questions of category relevance and brand value, because in this environment there is nowhere to hide.

It's Annual Report Season!

Wed, 29 Apr 2009 22:30:15 GMT

I love reading the letter to shareholders that frames up the annual report for public companies. There is so much to learn about the culture and strategy of the company, and the tone of the CEO. I also look to the letter to get some insight about the market focus of the corporation...or the apparent lack thereof. Probably I have always done this, but I began doing it more overtly after Peter Darbee, Chairman & CEO of Pacific Gas & Electric, wrote the following introduction to the 2005 PG&E annual report:

DEAR STAKEHOLDERS:

In 2005, PG&E celebrated 100 years of providing gas and electricity to Californians. At the start of our second century, our new focus and direction may best be signaled by this: PG&E's 2005 annual report to shareholders - our 100th - is the first ever to picture a customer on its cover.

Darbee, a former CFO, understood completely the significance of the words and pictures that accompany the financial reporting. And what a way to establish his leadership and vision at a key milestone in the company's history.

I was curious to see if there's some sort of award for best annual report, and of course they are numerous. In fact the League of American Communications Professionals (LACP) specifically gives an award for best letter to shareholders. I wondered if I would agree, and was surprised to find I absolutely agreed with last year's award recipient. Here's the opening:

To our shareholders, associates and customers:

When I look back over this past year, one thing stands out very clearly. The hard work and exceptional efforts of our two million associates, managers and leaders around the world paid off by year-end. In fact, the year really took off during the second half. What brought it all together was WalMart living the mission of saving people money so they can live better. Whether it was in the United States, the United Kingdom, Mexico or Brazil, we positioned ourselves as the unbeatable price leader. Our customers appreciated it and our shareholders understood it.

Lee Scott, President and CEO, WalMart

How cool to have shareholders, associates and customers each called out in the salutation and opening paragraph! PG&E's "dear stakeholders" covers the same territory, but Scott makes it personal. And I think we all know that WalMart had a successful 2008.

Just for fun, I took a look at last year's annual report at General Motors. I expected to be underwhelmed, but I was astounded. In 3352 words, the 2037^th was customer - and it was the only mention: "We've begun delivering 100 Chevy Equinox Fuel Cell SUVs to customers in the U.S. and Europe, to create the world's largest hydrogen fuel-cell test fleet." And check out Rick Wagoner's introduction:

DEAR STOCKHOLDERS:

A century is a long time to be in business. For General Motors, it's been a century of leadership and achievements, of challenges and opportunities. A centennial is a great time to reflect on and celebrate the past. But for us, it's more than that...it's an opportunity to look forward to our next 100 years.

Rick Wagoner, Chairman & CEO, GM

Ouch! "Dear Stockholders" - and then three sentences focused on the past, and one on looking forward. Hardly inspiring, and wow, what an omission of the customers and employees that matter. I was thinking about how hard it would be to write a 3352 word letter and not mention customers or consumers. You'd think the words would creep in almost by accident, regardless of the strategy of GM. No one needs to throw more stones at GM, but it is a stunningly inward letter.

I checked out PG&E's report they just issued - and I'm glad to say that Darbee is staying the course:

The most important thing we provide to our customers doesn't flow through pipes or wires. It's the confidence that their utility is a company they can count on. And it flows from our 20,000 men and women, who share a collective commitment to reliability in all we do.

As a leader, as an investor, as an employee - take a look at what your own company is saying, and let me know your thoughts. And just for fun, here's a link to what may be the only intentionally humorous annual report being published. https://www4.acuity.com/acuityweb/about/relatedtopics

A Picture is Worth a Thousand Words

Wed, 01 Apr 2009 02:09:37 GMT

I had lunch a few weeks ago with Janet Cho in Cleveland. As we were leaving the restaurant, she pulled her keychain from her purse and I couldn't help but notice that the key ring was loaded with loyalty cards. I immediately asked her if I could take a picture. There was something so compelling about the visual of dozens of loyalty cards in a veritable "wheel of fortune" that I knew I wanted to preserve it.

It seems that everywhere I go, sales people and cashiers are asking me if I have their brand of loyalty card. "It just takes a minute..."

If I say "no", they immediately invite me to sign up, and sometimes offer me an immediate discount if I'll agree. If I say "no" again, two things begin to happen. The store associate starts to sell harder, and I start to feel guilty and often feel obligated to give some explanation about why I'm declining. My final "no thank you" ends the transaction in an awkward silence.

If I say "yes", the store associate is delighted. I seem to be a prize, and now I'm special. I fill out the obligatory sign-up form, growing more hesitant with each additional question - especially the phone number and email address. I walk out with my loyalty cards - one for my keychain, and one for my wallet. And then my work begins. Where do I put the cards? Will they fit in my wallet? Do I really want it on my keychain? Do I give one to my husband? And what am I really getting for all this effort?

Fast forward to www.shopittome.com - a website and shopping service you may never have heard of, but you will. From their website: "Shop It To Me began after one too many frustrating trips to on-line retailers. We were tired of finding out about on-line sales too late...Why couldn't we just give someone our preferences and have them search for us?"

So they decided to create a different way to shop. A quick sign-up to let them know the things you're interested in (handbags - no, shoes - yes, etc.), the brands you want, and your sizes (no worries if you're a different size pant, skirt and top) and you're on your way to having an online personal shopper. I love it - a Salemail^TM only shows me what I want to see, and I get to choose how often. You can even pick the retailers you want, and exclude those you don't.

Now why didn't one of my loyalty cards offer me something like that?

The smart marketer will think about marketing programs from the customer's point of view. It seems we are inundated, however, by programs that have the company's goals in mind. Loyalty card marketers would be well-served to post a picture of Janet Cho's keychain on their wall. She covers retail business as a reporter for The Plain Dealer, so her key ring is a symbol of her work. For the rest of us, loyalty cards are just so yesterday.

Texas Women MBAs, Shoes and Marketing

Thu, 26 Feb 2009 14:39:00 GMT

I just returned from keynoting the eighth annual Texas MBA Women in Business Leadership Conference held in Austin last week. It was such a great event - attended by McCombs women, alumni, and friends. Preparing for the speech gave me a chance to reflect on my career as a woman in business, and it was fascinating to share stories along with the other panelists and speakers.

The logo for the conference inspired me to reflect on the symbolism that shoes have for women. And not just any shoes, but elegant and sleek almost-too-high heels. The ability of shoes like these to instantly communicate to women is undeniable. You know you're one of us, it says. An irresistible invitation to connect with other like-minded women. This is elemental targeted marketing.

I became friends for life with Ann Sulkowski Marsh when she and I were at Kellogg together. Even today, I remember how her shoes inspired and accelerated my own love of them. She shopped at Jacobson's in Michigan, and her shoes were beautiful. I yearned for the budget to own shoes like Ann.

The day I got an email from Nordstrom, pairing my favorite clothing brand - Eileen Fisher - with my favorite shoe brand - Stuart Weitzman - was such an interesting day for me. As a customer, I was thrilled. As a marketer, I was intrigued. Did they really understand my purchasing behavior and put that program together? Or do these brands have an affinity for each other, and they just guessed? Or a happy accident? It hasn't happened again, and my disappointing conclusion is that my shopping behavior was not the trigger. But it gave me hope.

I marvel at the missed opportunities to put two and two together in a meaningful way for customers. How often our favorite brands and companies market to us as if they have no clue about what we buy or how we behave. My highest levels of exasperation come when my bank spends the money to send me an invitation to use online banking services. Could it be that hard for them to check and see that I have been a power online banking user for years?

McCombs reputation continues to grow as a marketing center and I have to say I was impressed with what I saw. In this tough economy, campus recruiting is not business as usual, yet several of these talented women were weighing offers from Dell, P&G, General Mills, Dr. Pepper, Essilor and Frito-Lay.

Special thanks to Kristin Hibner for inviting me to speak, and thanks to Lauren Burton, Andrea Shortell, Marcy Copeland, Caroline Ewing, Lindsay Duran and Melissa Sprinkle for their tireless efforts in putting together an inspirational conference. Thanks also to Professor Vijay Mahajan, for meeting me for coffee and engaging in a lively conversation about CMOs, and also delighting me with his "intuition" about female CMOs and the special qualities they bring to organizations.

http://blogs.mccombs.utexas.edu/alumni-news/2009/02/23/alison-heiser-former-cmo-of-banta-and-kimberly-clark-addresses-wblc-%e2%80%9cthere-are-no-rules%e2%80%9d/#more-2219

The Myth of the Mass Market

Fri, 30 Jan 2009 02:03:00 GMT

Consumer packaged goods (CPG) marketers have long been preaching that the mass market no longer exists…yet the trusted toolkit of a CPG marketer continues to be dominated by mass market tools: TV, print, coupons, displays – all virtually the same as the past several decades. Even the terms “non-traditional” and “alternative” media are not-so-subtle references to how marketers view media that includes the internet, mobile technology and entertainment on demand. This is the very media that today drives our news, shopping, and conversations with each other. Isn’t it quite normal? Quite mainstream? Even traditional?

The CMO Council and Pointer Media Network released a study in December 2008 that I found fascinating. They studied purchasing patterns of 1,364 brands to validate the “80/20 rule” – the Pareto principle that suggests that most businesses will derive 80% of their sales from 20% of their customers. Their findings: A very small slice of shoppers are responsible for 80% of brand volume…just 2.5% on average.

Surely the preaching and talk must stop on this news. The inefficiencies of using mass vehicles to attempt to reach 2.5% of shoppers can no longer be supported. Unless the mass program is all about incrementality – the other 97.5% that is mined for 20%. It would be interesting to do the math on that proposition.

I’m reminded of a conversation I had with a direct marketing agency years ago on the most important tenet of relationship marketing. Your customers want you to know who they are, and what they represent to your business. The corollary being to say “thank you.”

Do you?