[UPDATE 5/1/08 -- Rich passed away on 4/25/08. See How to LIVE RICH post]
As part of the Marketing Bullseye series I will interview people who 'get it'. Rich Lloyd is one of those people.
Rich Lloyd and I worked together for 7 years at Dell. While I ran the consumer web site, he built the email and My Account capabilities for Dell. When I ran Consumer CRM, he was leading Dell's Global database infrastructure & CRM efforts. Rich has an extensive background in database and direct marketing and has a Harvard MBA. That's enough to say he knows his stuff. And on a personal note, he's an all-around good guy!
Rich recently joined Peruvian Connection, a multi-channel hig-end apparel retailer, as President. Rich understands measurability and word of mouth, and looks to several key principles to get as much return from imited resources as possible.
Here are a few questions I posed to Rich.
When you joined Peruvian Connection, how did you figure out what was or could be the most effective marketing?
A big part of this decision was looking at historical performance and realizing we'd had a successful, but fairly one-dimensional marketing approach. A beautiful and efficient catalog had been successful, but was tapping out in terms of reach, and needing to be augmented with a broader portfolio of marketing tools with different price points and different audience reach. Online marketing, in particular was an attractive area to ramp quickly on both of these dimensions. eMail and search have been very efficient and effective thus far.
What key principles would you suggest to a marketer coming into a new company who's job it is to grow the business with existing resources?
Treat the marketing budget as a fixed and finite resource that needs to be optimized not only for cost but for reach. Make the dollars you have go farther, well before you spend new dollars. Growth can only happen if more prospects become customers, or more customer by more often or in greater quantities, and marketing dollars have to be used for these ends. ROI is an obvious measure to help do this, but I think an underrated measure is reach (along with frequency). For example, the broad reach of search today makes it such an efficient prospecting tool as compared to catalog list rentals, historically just about the most efficient consumer marketing technique to bring in new customers.
How do you decide marketing investment allocation on things that are measurable vs. things that are not?
It sounds simple, but I honestly give measurable marketing entities a "gross up" factor to account for their measurability. That is, I'd rather have ROI of 2.5x on something I can perfectly measure than 3x on something that is only partially measurable and requires hypothesis for the rest of its performance. For example, take a print ad campaign that where only some of its worth can be measured (through vanity URLS and unique 800 numbers)... vs. exact affiliate sales. I'd measure the two on an ROI-basis, obviously, but I'd require a higher hurdle rate from the print ad.. .why? because the value of being able to more precisely measure something gives me some quantified value beyond just apples-to-apples response.
How does Peruvian Connection think about word of mouth? What are you doing to drive word of mouth for your company and its products?
We start with every customer interaction and transaction. I think the best brand building happens with every interaction. Rather than spend a ton of money on brand-building or word-of-mouth ads, we invest in customer sales and service. We have built a great brand over 30 years in this quiet and dependable way. Our customer loyalty is outstanding and comes from incredible "bend-over-backwards" homegrown Kansas service and from incredible customers who buy and wear our unique "get talked" about works of art year after year. We know this is our best word-of-mouth, but we also actively encourage referrals, have a long-standing VIP program, and do everything we can to stand behind our products for a lifetime.