Coffee & Commerce with Cascone: Incremental Gains with Mark Friedman

At the onset of COVID-19, one thing became clear: Retailers needed guidance. In an effort to help brands operate effectively and efficiently in this digital world, we launched Coffee & Commerce with Cascone: A biweekly series with bite-sized episodes tackling the latest in retail, featuring established marketers from today’s biggest brands.

As retailers redefine their success metrics while doubling down on digital channels, incrementality and attribution have never been more important. This week, Bluecore’s Senior Director of Marketing, Sarah Cascone, is joined by industry leader Mark Friedman who shares his thoughts on how brands can approach measurement in this new environment.

Welcome back to Coffee & Commerce with Cascone. Today, I want to get into the mind of the retail executive, who is making crucial decisions every day to drive a rebound for their business.

Since retailers don’t know if what they’ve seen from shoppers so far is a set of new and permanent habits, or only permanent or only temporary reactions to a global shopping shakeup, executives are identifying short term opportunities to guide their plans over the next six months. The primary focus seems to be on measuring digital incrementality, which is the lift and the desired outcome, like revenue from a marketing activity, driven by digital.

Joining me to discuss this topic today is Mark Friedman, a long time retail executive and marketing expert who has led digital teams at a number of direct-to-consumer and wholesale retailers, including Steve Madden, Amerimark Holdings and Warnaco. Mark, thank you for joining us today!

Mark:  Thanks for having me look forward to doing this with you.

Cascone: Awesome. So Mark, from my perspective, without incrementality, brands can’t really determine if they have attracted store shoppers who are buying from them for the first time online or if they’re attracting shoppers who have always shopped online. For example, some brands are now seeing older demographics, once hesitant to buy online, now fully embracing it. What are your thoughts on this?

Mark: Incrementality and this whole concept of attribution, we know there’s no great solution for it. In the businesses that I’ve run, we really tried to triangulate using a lot of different information that we had available. You look at each channel and the return on the investment of the dollars you spend in each of those channels. But oftentimes what you find is that, one order could cost you advertising dollars in more than one particular marketing channel. That one order could have started as a paid click on search or on Google. It may have brought the customer to the site. They may have left. They may have gone out to an affiliate marketing site to see if they can get a better promotion. And then, maybe at the end of the day, they wind up being retargeted on a social media platform. So, that one order where a number of years ago, there were many fewer touch points along the way, nowadays, there’s just so many other aspects of it.

Cascone: So how do you hone in on measuring that? Obviously for a multichannel retailer pre-COVID, you’ve basically outlined the landscape in which the retailer is operating as far as what’s influencing the sale. Now that we’re isolated to almost one platform, how would you recommend a retailer trying to at least get some directional idea of what is really moving the needle?

Mark: The challenge is that there’s just so much noise. You’ve got not only the various marketing tactics, but you’ve got channel. You mentioned physical retail, and then in digital you’ve got customers that are engaging perhaps first on a mobile device. And then they ultimately execute their order on desktop because they still find it easier to see that larger screen in order to make their decision. So I think it’s a function of testing holdout panels, the analytical tools that are available. And then ultimately I think it’s really around philosophy. I deal with a bunch of catalog businesses and their philosophy has tended to be give as much attribution as we can to the printed piece, because we philosophically want to keep mailing our books because we know that those books are driving traffic into stores and online.

Cascone: Interesting. I do want to dive in a little bit more into what you said about testing, because I think the current environment has lent itself to a bit more agility on the part of the marketer than they would normally be open to. If I was a marketer dealing with all of these signals right now, what are some — maybe it’s at a campaign level, maybe it’s at a philosophical level — where would you advise them to test and learn during these next two months to get some sort of directional perspective on what might be a good place to focus for the holidays, which is meant to be the most profitable time of year for the majority of these businesses.

Mark: There’s also a lot there. I don’t know what holiday is going to be like this year. I think we’re already hearing from retailers that they don’t expect black Friday and that weekend to be the same kind of experience that it was. People are probably not going to be piling into stores. They are going to be piling online. Because there’s going to be so much demand there, I would imagine that advertising costs are going to go up, and that’s going to be a challenge because we’re going to have learned a lot during this period where I think ad costs have come down quite a bit

I would still test on promotion and the kinds of things that I’m doing on my site or on my email. If you are a part of affiliate marketing, continue to test the messaging and the promotion there. I think the site personalization capabilities that some brands haven’t been aggressive to execute upon over the last year or two will serve them very well, and those businesses that for whatever reason put that off on their roadmap are probably kicking themselves right now that they don’t have that capability.

Cascone: Yeah, absolutely. The current environment is definitely accelerating the things they wish they would have started and also accelerating net new things. To your point, the strategies they may have employed pre-COVID may not work anymore, so how do you try something new? I think we are seeing some of the brands that we work with taking this POC — proof of concept — approach versus an RFP approach with regards to technology, so they can test and learn and have a speed to market that’s very quick, and they have a better idea of where to make their investments. I do want to go back to this idea of attribution and incrementality. What’s your suggestion for how brands should measure if they have no, minimal or advanced attribution in place?

Mark: It’s really incredible still how many brands have those multiple channels that I mentioned and don’t have a unified 360 degree view of their customer. In a perfect world, we all have heard CDPs (customer data platforms) and the ability to have “Mark Friedman” and all of his transactional history: Whether he went into a store, whether he picked up the phone or used the catalog to drive online.

So some tools external and some tools internal, and then ultimately you have to use your business judgment. Because there is no right or wrong answer. There’s so many businesses still using last click. And when you ask them, why do you use last click? They answer that it’s easy. It’s the same thing we’ve been doing. We don’t know anything better. And for the lack of something better, I think it’s human nature, unfortunately, to stick with what we’re comfortable with.

Sarah: Yeah, I agree with that. I think you bring up a good point with getting this 360 view of the customer. CDP is definitely a big buzzword technology these days. And the point to me is, it’s not only just knowing everything you can about Sarah or Mark or whoever, it’s knowing very important factors about them. So you brought up, how do you get someone to buy for a second time? The fact that we know there are so many first time buyers in this current climate, if I can delineate between those two groups, I know who my one time buyers are, who my two-time buyers are, and I can create some sort of reactivation streams around them. That in and of itself is hugely valuable. So if you could find a tool like a CDP or a “CDP lite” for that, those are some of the most valuable strategies you can put into place rather than spinning your wheels on “I need to know every single thing about this customer.” Maybe you disagree. I’d love to hear your thoughts.

Mark: No, I don’t disagree at all. It’s akin to your comment before about doing a proof of concept as opposed to doing a full blown RFP. We have tended to want to be the 100% solution, when the 90 or 85% solution could probably get us enough of the way there. So that’s one piece. The second part about reactivation of all these first-time customers — when I talk to potential clients or current clients, many businesses wait too long to be aggressive to try to convert that one-time buyer into a two-time buyer. For each business, the economics are different. Your cost of acquisition is different, so are the lifetime value or the near term value that you look at for your brand. The earlier you’re aggressive in trying to get that next purchase from your first-time buyers, the better off you’re going to be. And I see businesses wait months before they really put something in front of the customer that is going to grease the skids. It’s kind of like you have this big slope, you got this ramp up to get the new to file. You get to the top. If you can just give them that little nudge to push them down, you can improve your rebuy rate and all of those customers, those are the ones that are really driving profit in businesses.

Cascone: Yeah. I think you make a great point there. Even as I think of some of our own reported benchmarks, 100 days after that first purchase, there’s a steep decline in the likelihood of them coming back to buy again. If you can get to them aggressively, and I agree whether that’s with a promotion or just a relevant message, that’s a huge way to help accelerate a rebound.

Mark: And I think that metric is a good metric that I don’t think a lot of businesses use, looking back at what their historical average period of time between first and second purchases and trying to create some kind of probability graph of: If the customer hasn’t bought that second purchase after 30 days, the likelihood of them buying again from you again probably declines precipitously. So you should be able to know that and put tactics in place to make that happen.

Cascone: Absolutely. And I think for lack of knowing if a retailer doesn’t have certain tools to kind of figure that out, there are so many benchmarks out there that can kind of give you some directional guidance. I think that 100 number was an average from the apparel industry. So it’s good to take stock of the resources that are available to help there as you build toward this more individual complex understanding of your customers.

Well, Mark, thank you for the insights today. I really enjoyed this conversation and, thanks to everyone at home for joining us.

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