Kevin Hillstrom: MineThatData

Stories Support Missions

I met with a client ... the analyst was struggling to articulate something important. I spent fifteen seconds tying thoughts together ... an Executive then said to the analyst "Why didn't you say that?"

The analyst looked mortified.

Because HE DID SAY THAT!!!

Of course, he didn't say it in a way that resonated with anybody.

Every three or four years, stories re-emerge. They re-emerge because technology moves us in a direction we don't fully understand, leading to a handful of individuals who articulate the future in a way that allows us to feel comfortable, feel knowledgeable, feel confident, and consequently take action.

In my hobby (headphones), people will ask questions about headphones or review headphones on Reddit (https://www.reddit.com/r/headphones/). You can sniff out bad storytelling in two seconds ... it is clear contributors using AI to write, and you know it the minute you see it. AI has a structure that is synthetic and inauthentic. It's obvious. Bad storytelling.

The same thing happens in business.

In catalog marketing, there are no storytellers ... and that is horrifying because the most famous sitcom of all time leveraged catalog storytelling as a core component of the series (Elaine working at the J. Peterman catalog). Seriously ... pick one employee from any ... ANY catalog brand who is a brilliant storyteller. I'll wait for your reply ...

You'd think the catalog vendor community would be able to communicate a compelling story that does not use terms like "digital fatigue", "Gen-Z", or "leading brands".

Human Teams = Talent + Leadership + Storytelling.

Our equation evolves.

(IDEAS) * (TALENT + LEADERSHP + STORYTELLING) = MISSIONS

Strong Teams, Weak Teams

Last year, my Green Bay Packers were a very good team that was decimated by injuries to key players.

There are three overriding teams on a football team.

Offense
Defense
Special Teams

In the playoff game in Chicago, the Bears scored 25 points in the fourth quarter to rally for a 31-27 win. They entered the fourth quarter trailing 21-6.

On offense, the Packers generated 421 yards and had zero turnovers. That should be enough to win a game.

On defense, the Packers yielded 445 yards, but generated two turnovers.

In terms of penalties, the Packers had 65 penalty yards vs. just five for Chicago.

Here's a fun stat. On special teams, the Packers kicker missed two field goals and an extra point. That's seven points given away in a four point loss.

In other words:

The offense was good enough to win.
The defense was good enough for three quarters then fell apart in the fourth quarter.
Special teams gave up seven points in the kicking game.

One team ... three sub-teams with varying levels of success.

Does the same thing happen at your company?

I'll go out on a limb and say ... yes ... yes it does.

It's easy to pick on the merchandising team ... they source the products that customers buy. If they do a poor job, there's no amount of help that anybody else can provide to prevent a lousy outcome.

It's also easy to pick on the marketing team. It's a discipline that, historically, has been populated by an odd combination of absolutely dim-witted knuckleheads, brilliant business leaders who will run brands in the future, highly competent individuals who execute campaigns flawlessly, and analytics professionals who want to optimize things that nobody else wants to optimize. Try running a great team with that combination of talent!

I've spent a lot of time talking about category performance in the past month, for good reason. When the marketer or analytics professional understands how merchandise categories fit together (and interact with marketing channels), the professional can "be a bridge" between marketing and merchandising ... the professional can be a Leader, growing categories that yield high-value customers, capitalizing on the profit generated by specific categories.

Your business has a lot of teams. Those teams are unlikely to function perfectly. Be the person who helps teams function better.

Ideas * Human Teams = Missions

A quote from the Prof G newsletter:

This is the moment where we should all start believing again, when ideas become missions ..."

Ideas do not become Missions without Human Teams.

That's where you enter the picture!

Ideas generally come from an individual. To implement the idea, you need one or more (sometimes many) Human Teams to get the work done, to build the bridge from ideas to a Mission.

Take a moment, and articulate in ONE SENTENCE what the MISSION is of your marketing team.

I know, it's hard to boil the essence of your marketing team down to one sentence.

This might be the MISSION of your MARKETING TEAM.

"To connect as many people to your brand as many times as possible at the lowest possible cost, thereby generating increased profit."

The equation that represents your MISSION is as follows:

(IDEAS) * (HUMAN TEAMS) = MISSIONS

The equation can be stated differently. Are your HUMAN TEAMS effective? Divide each side of the equation by IDEAS and you get the following:

HUMAN TEAMS = (MISSIONS) / (IDEAS).

This is where it gets good! For instance, assume you have 1 mission and 10 ideas.

HUMAN TEAMS = 1 / 10 = 0.10.

Now assume you have 1 mission and 100 ideas.

HUMAN TEAMS = 1 / 100 = 0.01.

You have a framework for thinking about how effective your HUMAN TEAMS are. What if your marketing team has no missions and 200 ideas?

HUMAN TEAMS = 0 / 200 = 0.00.

Your HUMAN TEAMS are effective when they convert ideas to missions at a high rate.

This is the thing we all observe ... all the time. There's nothing more irritating than sitting next to an "ideas person". The "ideas person" slows everything down ... they are ineffective in that nothing gets done at a reasonable pace but they control the discourse by constantly polluting your marketing ecosystem with ideas. "Big Ideas" are even worse.

Now think about Apple with the iPhone. That's an IDEA that is converted to a MISSION through HUMAN TEAMS. The device doesn't have to do everything ... that's too many ideas.

Bad ideas also result in problems, because bad ideas consume human teams, taking resources away from good MISSIONS. When #papertarians demand that you turn the clock back to 1955 and mail a catalog (because Gen-Z has digital fatigue or whatever), they are asking you to implement a bad idea that consumes the resources of human teams, taking away your ability to complete your MISSION.

(IDEAS) * (HUMAN TEAMS) = MISSIONS.

Teams

Sometimes content and ideas just coalesce into a meaningful narrative.

I'm reading Prof. G's Friday newsletter about traveling to the Moon and "ding" everything came together. He talked about the Artemis 2 mission. On the one end, we have the AI gurus and those backing 'em with investments ... suggesting AI will bring the end of work as we know it and the only thing we can do is trust those who are bringing the end of work to us to ... well ... to do who knows what.

That's one end.

There's the other end of the spectrum. That's the end you are on.

You are part of an ecosystem of Teams.

Your marketing team is part of that ecosystem.

Your merchandising team is part of that ecosystem.

Other teams support marketing or merchandising ... creative, IT, website ops.

Your teams are supported by vendor-based teams ... really important people. They manage social media or your search budget (as examples). They help execute your email marketing program.

Teams aren't only represented by people. Your categories represent "teams" of product working together to support your customer. Your marketing channels represent "teams" that support the products that support your customer.

All these Teams interact. With each other. With your customers.

As every new technology evolves and advances, it seeks to become a Team that interacts with your existing human-based Teams and marketing/merchandising Teams.

The metrics we have to measure Teams are woefully inadequate. We measure the ROAS of digital advertising without regard to the effectiveness of the Team of humans managing the process or the long-term payback of digital advertising. FACEBOOK ROAS IS 3.43 THIS WEEK, DOWN 8%. So what? What if ROAS is down 8% but the Team of humans managing the process prevented ROAS from being -16%? I'll take the the Team of humans all day long. But how are you measuring the Team of humans?

What about a lousy Leader managing a category that is growing by 15% industry-wide? Is the lousy Leader responsible for good performance? Is Amazon responsible for developing a great marketplace that causes 5% of the 15% increase?

I'm going to frame discussions in terms of Teams and Storytelling in the near term. It has become painfully clear that we don't have a framework for thinking about the importance of Teams ... and not just human Teams ... we have Teams of categories that work together, we have Teams of marketing channels that work together. We need to do a better job before AI does our jobs for us.

Weird Categories

Every one of you managed Weird Categories.

In the data I'm analyzing, a customer could buy from a category last year or not ... then buy other merchandise (or not). This creates three twelve-month buyer segments. I segment based on behavior 13-24 months ago, then measure rebuy rates in the past year.

Here's what a normal category looks like:

Buy From Category 2 and Buy From Anything Else = 15.2% Category Rebuy Rate.
Buy From Category 2 no Purchase From Anything Else = 8.1% Category Rebuy Rate.
No Order From Category 2 and Buy From Anything Else = 2.4% Category Rebuy Rate.

Normal categories benefit from purchases in other categories, but benefit most from a purchase within the category. Duh!

Here's what a weird category looks like.

Buy From Category 6 and Buy From Anything Else = 12.4% Category Rebuy Rate.
Buy From Category 6 no Purchase From Anything Else = 16.2% Category Rebuy Rate.
No Order From Category 6 and Buy From Anything Else = 0.8% Category Rebuy Rate.

Very weird. The customer is less likely to repurchase from the category if the customer buys something else in the past year from other categories ... and ... the customer has virtually no chance of buying from Category 6 if the customer only bought from other categories last year.

If you are responsible for Category 6, you don't send batch-and-blast emails to customers who haven't bought from Category 6 very often because those customers just don't want to buy from this Weird Category! There are seasons that likely cause customers to consider Category 6, that's when you try to cross the customer over into this category.