A C.E.O. Sells the Store

New York Times, March 1, 2008 — Women’s suits. Mickey Drexler has women’s suits on the brain.

It’s a Tuesday afternoon in SoHo in Manhattan, and Millard S. Drexler — Mickey, as he is universally known — is in a Madewell store looking for customers he can talk to. Mr. Drexler, as you may know, is the chief executive of J. Crew — a job he took in 2003 after being summarily bounced from the Gap, the company he had led for 16 years, transforming it in that time from an $800 million midsize retailer into a $14 billion Goliath. Madewell, which he’s visiting today, is a brand-new J. Crew offshoot that sells hip, casual clothes. It’s a little like the way Mr. Drexler started up Old Navy to offer clothes that were less expensive than the Gap’s.

This visit is not some stunt... continue reading

Hoping to Make Phone Buyers Flip

New York Times, February 29, 2008 — These days, designing a new mobile phone can seem like something out of an episode of “Dr. Phil.”

LG Electronics, the maker of the Chocolate and Voyager phones, begins by asking focus groups to keep a journal, jotting down feelings about features they like most. Participants can call a toll-free number to share their emotions about the phone they are testing. And sometimes they are asked to draw pictures that represent their mood when they hold the phone.

“Our job is to be behaviorists and psychologists,” said Ehtisham Rabbani, LG’s vice president for product strategy and marketing. “We constantly have to be reminding ourselves that we tend to be geek types and our customers are not.”

Executives and industry analysts say it has become... continue reading

Next in Line for Reinvention: The Art of Selling†

Consultant Ram Charan Says Focus Is All Wrong; What a Customer Needs

Wall Street Journal, January 28, 2008 — Ram Charan is known for his platinum clients and his relentless schedule. The business professor-turned-management consultant says he's worked seven days a week for 30-plus years, advising executives at the likes of General Electric Co. and Verizon Communications Inc. on such topics as improving results and execution.

In his spare time, he has written or co-written 16 books, mostly on strategy and leadership.

Recently, Mr. Charan turned his attention to sales, particularly from one business to another. He doesn't like what he sees. In "What the Customer Wants You to Know," published last year by Portfolio, he argues that companies need to "reinvent" the way they sell, to focus on their customers rather than product features.

McDonald's Takes On a Weakened Starbucks†

Food Giant to Install Specialty Coffee Bars, Sees $1 Billion Business

Wall Street Journal, January 7, 2008 — This fall, a McDonald's here added a position to its crew: barista.

McDonald's is setting out to poach Starbucks customers with the biggest addition to its menu in 30 years. Starting this year, the company's nearly 14,000 U.S. locations will install coffee bars with "baristas" serving cappuccinos, lattes, mochas and the Frappe, similar to Starbucks' ice-blended Frappuccino.

Internal documents from 2007 say the program, which also will add smoothies and bottled beverages, will add $1 billion to McDonald's annual sales of $21.6 billion.

Ad Houses Will Need to Be More Nimble†

Clients Are Demanding More and Better Use Of Consumer Data, Web

Wall Street Journal, January 2, 2008 — The Web's emergence is forcing ad executives to succumb to marketers' demands that agencies reinvent how ads are created, and forgo their TV-centric approach. Clients are even calling for changes in the way ad firms are structured. But until now, few advertisers have spent more than 5% to 10% of their marketing budgets online. With the growth of online video and social networking, ad experts expect that percentage to jump significantly this year.

The Customer Connection: The Global ­­­Innovation 1000

Booz Allen Hamilton’s annual study of the world’s largest corporate R&D spenders finds two primary success factors: aligning the innovation model to corporate strategy and listening to customers every

Strategy & Business, December 10, 2007 — How do companies innovate successfully? They can spend the most money, hire the best engineers, develop the best technology, and conduct the best market research. But unless their research and development efforts are driven by a thorough understanding of what their customers want, their performance may well fall short — at least compared to that of their more customer-driven competitors. John Schiech, president of the DeWalt division of Black & Decker (the division that makes power tools used by professional contractors), put it simply. When asked what made his com­pany so successful, he responded, “It’s engineers and marketing product managers spending hours and hours on job sites talking to the guys who are trying to make their living with these... continue reading

Raising Your Market IQ†

Too many companies gather intelligence on a narrow slice of consumers. They need to think more broadly.

Wall Street Journal, December 1, 2007 — It sounds so obvious: You have to know your market.

Yet when it comes to actual market intelligence, too many companies do it all wrong. Some miss the big picture by focusing on just a slice of their market, or by limiting their studies to transactions and other customer data already in their possession. Others have the opposite problem: They don't look at their customers closely enough, causing them to miss opportunities right under their noses.

Such efforts reveal little about new market opportunities and risk losing current customers to companies with better data. By contrast, obtaining a better understanding of a complete market and what drives customers' purchasing decisions would help companies discover untapped or underserved customers.

The Power of Suggestion

Forget focus groups. These days, big brands are all involving customers in all stages of the marketing process

Deliver Magazine, December 1, 2007 — Whenever Jeff Hayzlett, chief business development officer and vice president at Eastman Kodak Company, goes into retail printer outlets, he’s struck by an absurdity that has become the norm in his industry: In many stores, rows of inkjet printers sit out on open shelves for all to see and touch — while the small ink cartridges that are used to fuel them are secured behind locked cabinets.

As obvious and wrongheaded a message as this sends — that the costly cartridges are more valued than the printers themselves — Hayzlett says consumers have been saying as much for years. Incredibly, he says, many in the industry still aren’t paying attention.

“Our customers were very clear in telling us they were fed up with the cost of inkjet... continue reading

A Virtual View of the Store Aisle†

Kimberly-Clark and Others Track Shoppers in New Ways; Finding Huggies on the Shelf

Wall Street Journal, October 3, 2007 — Using a new tool developed by Kimberly-Clark Corp., a woman stood surrounded by three screens showing a store aisle, a retina-tracking device recording her every glance.

Asked by a Kimberly-Clark researcher to find a "big box" of Huggies Natural Fit diapers in size three, she pushed forward on a handle like that of a shopping cart, and the video simulated her progress down the aisle. Spotting Huggies' red packages, she turned the handle to the right to face a dizzying array of diapers. After pushing a button to get a kneeling view of the shelves, she reached forward and tapped the screen to put the box she wanted in her virtual cart.

Kimberly-Clark hopes these virtual shopping aisles will help it better understand consumer behavior and make the testing... continue reading

Room & Board Plays Impossible To Get

Private equity sees big growth for the retailer, but founder John Gabbert prefers his own pace

BusinessWeek, October 1, 2007 — By all conventional standards, Room & Board should be bigger than it is. The Minneapolis-based furniture retailer, which runs just nine stores, has a devoted base of customers who rave about its hip design and customer service on message boards and blogs. Its sleek styles, priced between the highbrow midcentury classics at retailer Design Within Reach and the flat-pack furniture from Ikea, are often featured in magazines alongside brands several times its size.