Kevin Hillstrom: MineThatData

AI Already Knows What You Should Do

I gave one of the AI applications a quick task. I gave it annual results for a segment of customers. I shared catalog costs, profit factors, average catalogs mailed to the segment for the year. I told the application the organic percentage.

In my contact strategy algorithm, I determined that the segment received twelve mailings on average, and should have received nine to achieve optimal profitability.

Within five seconds, the AI application created its own curve of diminishing returns, then authored a solution of 8.7 catalogs to achieve optimal profitability.

Several things.

This is probably bad for my business. Wrong. More on that in a moment.
If you are able to speak properly to AI and provide data in a manner that AI can deal with, AI should be able to guide your entire investment strategy as a marketer. No need for a third party to tell you that ROAS was 3.443 in June, worse than the 3.184 measure in May.
This is really good for YOU. You get to experiment without having to write 3,000 lines of computer code yourself or have somebody else write 3,000 lines of code for you.
If you ask questions the right way, you should be able to see what the future holds for your business.

Here's why this isn't bad for business - the minute you do things better than last year, your optimization solution needs to be recalibrated. Let an algorithm do that - analysis of categories and customer interaction with merchandise categories is where your success comes from.

AI probably won't be good for quite awhile at knowing how you should assort stuff to customers (others will disagree with me) ... but it already knows what you should do to optimize what you're currently doing.

Reasons "Brands" Don't Trust What Others Say

Thirty years ago at Eddie Bauer, I'd receive a Monday call from a sales person responsible for weather software. Not a call every few months. A call every Monday.

"Hi Kevin, it's Tom from Weather Solutions. How's your family doing? Listen, I don't know if you noticed, but there is a cold front coming down from Ontario that is going to change everything. Temperatures will be fifteen degrees below normal in New England this weekend. Are your stores ready?"

I'd explain that we were an outerwear brand. I'd explain that our stores were always ready for a cold front. He was undaunted. "Kevin, imagine the sales gains you'd experience if you followed the advice of our software like leading brands do, and you put your outerwear at the front of the store? Customers would notice. Sales would surge. All because of our software. That's the opportunity you are missing out on."

We'd have the same inane discussion in May. "Kevin, it's going to be fifteen degrees above normal in Ohio this weekend. Imagine how sales would surge if you had this level of intelligence and put swimwear at the front of the store ... all because of our software."

For this guy, every problem was a problem that would be solved by moving products to the "front of the store".

After awhile, I'd see his number on caller id and take the call just because I wanted to hear this week's sales pitch.

And awhile later, I stopped taking his inane calls.

He probably thought ... "another dumb brand with employees who just can't see the future."

You're probably dealing with somebody who wants to solve your "AI Problem" for you. You know you'll solve problems with AI in the future. But you won't hire this guy. Nope. Because you don't trust this guy, in the same way I didn't trust the weather pundit from 1996.

Or, you're dealing with somebody who wants you to focus on neuroscience that generates emotional engagement.

I used to deal with a Forrester Research sales professional who spent months figuring out the weak link in our salesperson defense program (it was a Credit Vice President). I'd attend a 10:00am meeting, walk in the room, and there was the guy, smiling at me with a look that said "you can't beat me". Well, I can beat you ... as a consultant I never once recommended Forrester Research because I couldn't let my clients run into this guy. Short term gains, long-term pains.

Sometimes "brands" simply don't trust what you are saying ... the employees aren't stupid, the employees simply have been burned so many times by vendor reps who make life miserable for their victims that they simply shut down and stop trusting anything.

We've all worked with vendor partners who are brilliant, kind, and have our best interests at heart. If you find an individual like this, hold on to him/her like grim death.

Email Marketing Article From 1996

Here it is ... click to see who the author was/is.

Old-school articles were different, weren't they? Here's an image of the bottom of page one of a twelve-page missive from Don Libey in 2005.

On page three, he discussed the political polarization (caused by economic disruption) that began with Ross Perot and would dominate our discussions in 2026. He missed the jet fighter fluid that would be poured on the topic by Fox News, for nobody is perfect. He argued that people studied individual trees when they needed not just to study the forest but the regional and global issues that influenced the forest. A good analogy for 2005. Imagine if he'd seen the forest fires coming and tried to explain why they would happen? He'd have been mocked (more than he already was for trying to tell you about the future).

Back to the email marketing article.

I've worked with more than three hundred "brands" in my twenty years of consulting. Here's a quiz question for you. How many of those brands did a good job with email marketing, the kind of job that Seth Godin would be proud of?

2 clients.
17 clients.
29 clients.
50 clients.

The answer is (1) ... two clients.

Two!!

The first client had a young female employee who presented her findings to the Executive Team, showing all the profit she generated for her company. As she left the Executive Conference Room, one of the Executives whispered to me "God, what a nerd".

It's easy to lose faith when you hear those comments.

I was once asked to speak at a conference - the conference asked me to attend a dinner for Executives attending the conference. One of the CEOs, sitting across the table, said "Why should we listen to you, you are just a nerd? Meanwhile, we run businesses!" The table chuckled. Yeah, ha ha. Funny. I later created a term to define this person. "Lemonhead".

Two years after Seth Godin wrote the article at the start of this post, Management at Eddie Bauer asked him to speak to Leadership. The most used phrase I heard from co-workers after he described his premise of "Permission Marketing" was "we're not going to do that". Of course, Eddie Bauer went bankrupt multiple times since then, but that's a topic for another day. Any vision of the future that goes beyond standardized, routinized, templatized work is one not likely to be embraced.

There are reasons that nearly every single company scrubs the humanity out of public-facing work.

Garden variety Managers and Analysts don't want to do the additional work because they won't be recognized for the brilliance required to do it and they won't be compensated for their efforts.

Directors and Vice Presidents don't want to do the additional work because if the additional work "doesn't work" they won't be believed/respected the next time they want to implement something important to them.

C-Level Executives and Owners don't want to do the additional work because it doesn't align with their "vision" for the future.

So nobody does the work.

Which means the competitive advantage of "doing the work" has never been greater ... even for a discipline like email marketing that is three decades old.

Subscribe To Our Channel On YouTube

Here's the image from Skagit Speedway on Friday night on FloRacing (if you didn't understand a word of what I just said, no worries, that's our modern world, where things only matter within the 10,000 people who care).

"Subscribe to our YouTube Channel". If you do that, you can watch every race on Saturday night for free instead of paying to go an hour north of Seattle / an hour south of Vancouver to pay $20 to watch the races.

That's what a small dirt track that features sprint cars north of Seattle wants you to do.

One of you recently told me that "video is not who we are" when queried on the topic.

Really?

Does what Midland Paper thinks more closely align with who you are?

I mean, read that ... my goodness. "Emotional Engagement". Notice there are two things not mentioned in the word salad ... sales increases ... and profit. #telling

There are frustrating days. Today is one of those days. Come on people, a dirt racing track in Northwest Washington should not be a better marketer than you are!

They're Testifying About (Checks Notes) Pickles

Here's the article about a music industry blogger and pickles (click here).

Here are his readers testifying about said pickles (click here). Read the comments about how his readers interacted with marketing.

Here is their Instagram - 600,000+ followers. Spend 10 minutes here, please. Here's a marketing tactic. Another one.

They're selling PICKLES for crying out loud.

Somebody has to be excited about what you sell. Get some stories going, folks.