Humanizing Your Business

 

Legends of Marketing Series by Gary Hoover

Humanizing Your Business

 

The Internet can be an impersonal world.  As much as we love Amazon and eBay and know that somewhere behind those facades are real workers and real sellers, the customer experience can be pretty cold.

On the other hand, the recent passing of former Southwest Airlines CEO Herb Kelleher reminds us of the power of putting people at the forefront of your business.  For a great look at Herb, one of the best CEOs in American history, and his principles, see:

https://www.forbes.com/sites/kevinandjackiefreiberg/2019/01/04/20-reasons-why-herb-kelleher-was-one-of-the-most-beloved-leaders-of-our-time/#6bee8450b311

and

https://www.texasmonthly.com/news/herb-kelleher-southwest-airlines-made-world-smaller/

While most leaders understand the importance of people, that is often not reflected in their web presence

A friend once asked me to evaluate a consulting firm he was thinking about hiring, directing me to their website.  When I looked, nowhere did a find anything about the people at the consulting firm, their backgrounds or accomplishments.  Yet all a consulting firm is, is people and their skills.  While the consulting firm’s website bragged about how much they had helped other companies, I could tell nothing about the people who did the work.  This surprised me, and I told my friend I would not consider hiring them, based on what their website told me.

On the other hand, even giant organizations like Walmart and Target give great emphasis to their people on their corporate websites.  The “About Us” section is the perfect place to really talk about us.

There are other ways to humanize your website and online presence, to celebrate the human nature of your business, your employees, and your customers.

Think in terms of a bricks-and-mortar parallel.  Back in the days when record stores were still important, Richard Branson’s Virgin Music retail chain had a great website.  Instead of saying, “Contact Us,” the link was labelled “Get me a manager!”  All of the brilliant Branson’s businesses place a great emphasis on a sense of humor and humanity.  His airlines are far “friendlier” than most competitors, even in the signs and words they use.  Do you have a sense of humor?  How could your website and apps stand out from a boring crowd?

Great companies often use human stories, with real people and all their flaws.  Videos of your employees, their families and pets, and your customers and how they use your products and services can be very powerful.  I am sure you can find many examples on the web; here is a company that does a nice job of being deeply human:

Few things are more powerful than storytelling.  It is the foundational principle of the Walt Disney Company, and most great filmmakers, authors, and speakers.

Do you tell your story?  Are you proud of your history?  How did your company get started?  Who are or were the founders?  Your company does not have to date from 1806, like this great American company, to cherish its history:

Of course, the truly human enterprise goes well beyond the Internet.

How often do you talk to your customers?  At one of the companies I co-founded, Hoovers.com, one of our later CEOs spent each Friday talking to customers.  Every week, the sales team would give him a list of people to call, ranging from the smallest home office customer to the biggest enterprise subscriber.  At Build-A-Bear Workshop, the founder and original CEO Maxine Clark personally answered every single customer email, even when such emails numbered in the thousands.  One great Coca-Cola CEO spent something like eight hours a week in supermarkets, talking to workers and inspecting displays.

And Herb Kelleher always placed every single employee on a pedestal, spending what others considered inordinate amounts of time with them.

It is easy to get caught up in the big deals, working with investment bankers, venture capitalists, accountants, and flying along at “30,000 feet.”  But so often this altitude does not result in soft landings, because the real work of serving customers and leading and celebrating people gets lost in the shuffle.

 

 

Gary Hoover is a serial entrepreneur.  He and his friends founded of the first book superstore chain Bookstop (purchased by Barnes & Noble) and the business information company that became Hoovers.com (bought by Dun & Bradstreet).  Gary served as the first Entrepreneur-in-Residence at the University of Texas at Austin’s McCombs School of Business.  He has been a business enthusiast and historian since he began subscribing to Fortune Magazine at the age of 12, in 1963.  His books, posts, and videos can be found online, especially at www.hooversworld.com. He lives in Flatonia, Texas, with his 57,000-book personal library.

To get updated information about the team at Apogee Results, please follow us on your favorite social media channels.

 

The Power of Cross-Promotion

 

Legends of Marketing Series by Gary Hoover

The Power of Cross-Promotion

 

The idea of working with other companies to build your sales has been around a long time in many situations.

Most of my life has been in retailing.  My friends and I built the first chain of giant bookstores, Bookstop, in the 1980s.  Barnes & Noble purchased the company and then expanded the giant store idea in a big way.  One of the most important parts of retail strategy has always been site selection.  In each of the 20+ stores we opened from Miami to San Diego, our first question was, “Who will be our co-tenants?  Will they appeal to the same customers who shop bookstores?”  Restaurants, movie theaters, and The Container Store were some of the co-tenants we sought.

Our first store was in a new shopping center in northwest Austin, Texas.  Two doors down was a young company’s second store, called Whole Foods Market.  I went to every store in the shopping center, maybe 15 of them, and offered to share in our grand opening campaigns.  Only Whole Foods’ management was interested.  We set it up so that if I customer bought enough at Whole Foods, they got a free book, and if they bought enough books, they got a free steak at Whole Foods.  All I clearly remember is that Whole Foods ran out of steaks in the promotion.

At the level of big companies, McDonald’s has worked with many others, including the makers of Monopoly.  But their greatest partnership is with Coca-Cola.  The inability to capture the business of fast food chains led PepsiCo to buy their own chains and create the second biggest fast food chain group.  Later, they spun those operations off as Yum Brands, which includes Pizza Hut, Taco Bell, and KFC.  Pepsi made sure they signed long-term contracts to have their products in those restaurants.

One of the most successful co-marketers is Intel, which sells nothing to end consumers, but backs the advertising of those computer makers who use Intel “inside” with their logo and sound bite.

And of course, the movie companies use co-marketing heavily, from James Bond and Aston-Martin to E.T. and Reese’s Pieces, from Burger King in Men in Black II to Mini Cooper in The Italian Job.

There is no marketing organization which can’t use cross-promotion to their advantage.  It’s just a matter of being creative.  When everyone else is just running low prices for Black Friday and special sales, surprise people with the unexpected, something different!

Starting questions include:

  • Who is our customer? (You gotta know that already!)
  • What else do they buy? (Think hard, do surveys or focus groups, look for the unusual or surprising.)
  • Which companies are best in those categories?
  • Which companies are most interested in tying-up with us, which are easiest to work with? (Especially if they already do some co-marketing.)

From a variety of sources, here are a few ideas – it’s up to you to figure out how to adapt them to your business:

Pool your marketing budgets and human resources to co-sponsor an event, from a marathon to a webinar to a museum exhibit.

Share in a contest – any contest.  Fill in the missing letters from famous quotes or movie dialogs, to spell out your company or brand name.  Find hidden codes in each other’s websites or email campaigns.

Have customers submit videos of themselves using both your products or services.

Exchange premiums – a gift of wine with cheese and vice-versa, a gift of cosmetics with clothes, a gift of consulting time with a valuable report or study.  Look for unusual combinations!

Create bundled products and packages that you both sell – a restaurant discount with a hotel stay, shoes with socks, website creation and social media marketing tools, and again cheese and wine.

Selectively combine frequent customer, loyalty programs, or points.  Buy ten things from us and get one from the other company.

Create affiliate programs where other companies earn commissions for driving traffic to your site or products and services, wherever they are sold.

Share content – if your food site has recipes tips, share them with the people who make the ingredients and vice-versa.

Share customer lists (within the rules and with the customers’ approval, of course!).

Get creative, look at every industry for more ideas.

Even without telling the other company, you may be able to promote their product without them objecting.  Tie something you sell to a popular TV show, movie, song, or book.  When our Bookstop employees tired of receiving book discounts as a perk, we added gift certificates from the largest local record store and people loved them (remember record stores?).

Any such program needs strong joint promotion and social media campaigns to work.  Tweet, Instagram, Pinterest, Facebook, Yelp, and TripAdvisor a lot!  Review each other’s products on Amazon.

With the right partner and creative thinking, you can both accelerate your business!

Here are some links for further research, inspiration, and idea generation:

https://petersandeen.com/partnership-marketing-methods/

https://blog.rebrandly.com/co-marketing-campaigns/

https://blog.hubspot.com/marketing/best-cobranding-partnerships

https://www.bluleadz.com/blog/10-great-examples-of-co-marketing-partnerships-that-work

https://www.powerlinx.com/resources/types-marketing-partnerships/

https://econsultancy.com/a-complete-guide-to-partnership-marketing-part-one/

https://adage.com/article/agency-viewpoint/10-branded-content-partnerships-2017/311725/

https://www.entrepreneur.com/article/254742

For small businesses:

https://smallbiztrends.com/2018/04/partnership-marketing-small-business.html

https://www.marketingdonut.co.uk/marketing-strategy/cost-effective-marketing/marketing-partnerships-that-every-small-business-should-build

https://www.hatchbuck.com/blog/small-business-partnerships/

https://www.inc.com/magazine/201504/erin-geiger-smith/tipsheet-the-tricky-art-of-parenting.html
(The link sounds wrong, but this is about marketing, not parenting.)

For bricks-and-mortar, local:

https://townsquared.com/ts/resources/cross-promotion/

https://www.nfib.com/content/resources/marketing/10-ideas-for-cross-promoting-your-company-50506/

https://www.independentwestand.org/cross-promote-your-small-business-through-local-partnerships/

https://www.thebalancesmb.com/attract-more-customers-through-cross-promotion-2947163

https://smallbiztrends.com/2018/05/cross-promotion-small-business.html

https://www.amfam.com/resources/articles/your-business/tips-for-cross-promotion-with-other-businesses

https://www.thryv.com/blog/7-cross-promotion-ideas-small-business/

Gary Hoover is a serial entrepreneur.  He and his friends founded of the first book superstore chain Bookstop (purchased by Barnes & Noble) and the business information company that became Hoovers.com (bought by Dun & Bradstreet).  Gary served as the first Entrepreneur-in-Residence at the University of Texas at Austin’s McCombs School of Business.  He has been a business enthusiast and historian since he began subscribing to Fortune Magazine at the age of 12, in 1963.  His books, posts, and videos can be found online, especially at www.hooversworld.com. He lives in Flatonia, Texas, with his 57,000-book personal library.

To get updated information about the team at Apogee Results, please follow us on your favorite social media channels.

 

Launching a Growth-Ready Business

Launching a Growth-Ready Business

by Kyle Nations

Bill Leake, founder and CEO of Apogee Results, joins the conversation on the Angel Investor’s Network podcast with host Laura Rubinstein, of Social Buzz Club. During this episode of the podcast, Bill shares his personal insights and experiences as an entrepreneur, business founder, and digital marketer. He also explains how his marketing agency is becoming an incubator for start-ups in their Venture Studio. The full interview is embedded here and show highlights follow.

Some early marketing lessons from Bill’s career as a McKinsey Consultant were: 1) the power of brand, and 2) the value of pattern recognition.

Brand

Brand is meaningful, always. Direct response marketers underestimate the power of brand, sometimes thinking anything can be sold if it is sold effectively. However, building a brand, (particularly if you are a small business) is not just helpful, it’s critical. Brand is very powerful, and if you can articulate your brand identity from Day 1, it can be extremely helpful in opening doors and helping achieving scale. People will call you back if they recognize your brand. People will respond favorably to you if they like your brand. People are more inclined to do business with a brand that has invested in building trust and relationships.

Pattern Recognition

Pattern recognition is a helpful tool as well. If you are talking to someone about their business and trying to learn more, you can take shortcuts to understanding their assumptions and how their business model works, by drawing from your own experience and looking for the similarities and patterns you have seen before, perhaps in different or unrelated businesses. Essentially it is applying your collective experience to a business problem by looking for similarities and patterns in operating assumptions, models and outcomes, from other businesses. It allows you to test hypotheses much faster – it saves time, and time can be more valuable than money.

Love What You Do

Bill says, that at this point in his professional life, what he loves most is the ability to gather the top marketing talent not just in Austin or Texas, but in the US to work with every day. The team of people at Apogee consistently cultivate a good mix of creative and communications skills, and quantitative ability. For example, our strategists need to know “how to test” and “what to test.” Top shelf digital marketing talent does not have just an agency profile, nor are they purely engineers. They are a hybrid.

Building Business for Our Clients

Although the details of building business through digital marketing vary by market segment, it all starts with “who is the customer?” It’s imperative to understand your customer and how digital helps that customer along the journey. To do this, it is critical to be voracious about data collection and leveraging that data. Marrying customer/audience data with advertising creative and content messaging is the “secret sauce” of digital marketing. That “secret sauce” impacts the types of human behavior you can initiate. Be intentional, not just getting the right message for the right customer, but also knowing the right message for each customer in terms of where they are in the journey. Account based marketing, retargeting ads to a list, is a specific example of that “secret sauce.” In this use case, we are targeting those who have expressed interest and are already having conversations with sales to get customers all the way to the finish line. Influencer marketing is another flavor, so to speak, of account based marketing. If you are trying to reach the masses with your message, it is important to reach the press, online publications. and niche bloggers too. Influencer marketing is the cheapest and best way to do this in the digital world. But whether you’re encouraging potential customers along the path to a sale or engaging the help of influencers, segmentation and targeting are the most important activities in digital marketing.

Venture Studio

Rather than focusing on growth at Apogee Results, Bill is more interested in optimizing his business to help launch more successful growth-ready businesses. When we look at the Austin based start-up community, we see a lot of companies that are great at developing products and services, but counting on inexpensive and inexperienced marketing and sales teams to take those products and services to new customers. Building a product is not as expensive as it once was, especially in the digital world. What once took 7 figures to create, can now be done in the range of $50k to $250K. Where most companies fail is not product development but getting that product to market. The knowledge base and experienced marketing talent cultivated at Apogee Results in many cases is more valuable that additional venture capital funds.

What Should Be Invested in Marketing

If you are a start-up what should you be spending on marketing? It is not the traditional 8-10% of revenue – that is an old-school rule of thumb. It’s more like 40% of revenue or more for early stage companies. If you are a start-up, and if you are trying to get the word out and you don’t have channels and don’t have viral you need to be prepared to lose money for a couple of years. Ad agencies understand and focus on paid media. PR firms focus on earned media. If your content/product/service is good, you should do both. You can increase the odds of success and get more people to link back to your business using paid media and realize a good return. If you do well with the earned visibility, pour some paid on it.

Your Baby Is Ugly

For new ventures, it is important to know if “your baby is ugly.” Don’t just evaluate the product and the market for it, also evaluate the process necessary to complete a sale and get it into the hands of customers. Consider the following:

  • Is there a market need of more than ‘one’ for your product?
  • Is the market large enough to sustain growth?
  • Have you tested your product – not just the idea of your product, but have you tested adoption at all levels?
  • Do you have the right skills, but also the passion for it?
  • Do you know what you don’t know?
  • Do you know how to find out what you don’t know?
  • Do you have the right investment partners and plan?
  • Do you understand the competition?

If you would like to learn more about Apogee Results can help you build your business, please visit our Marketing Consulting page or fill out the contact form here in the blog post.

Kyle Nations has a long career in business development and marketing, He brings both big and small company experience to Apogee Results and our clients.  Kyle has undergraduate and graduate degrees in business and two college-age sons he loves to brag about. A lover of sports, he is both participant and spectator and is particularly fond of the water, hiking, and snow skiing. To get updated information about the team at Apogee Results, please follow us on your favorite social media channels.

Splashing Outside the Digital Box

Legends of Marketing Series by Gary Hoover

 

Splashing Outside the Digital Box

Today’s marketers and retailers, online and off, face more competition for the customer’s attention than at any time in history.

Those customers may spend record amounts of time on their smartphones, tablets, and laptop screens, but they also still live most of their lives in a real, three-dimensional, non-digital, non-virtual world.  They walk, bike, or drive streets, they visit bricks-and-mortar stores for 90% of their spending, they go to concerts, festivals, churches, schools, dinners, and parties.  Above all else, they talk to their friends about products, services, and what is in the news, what is cool.

And in this world of competition for attention and engagement, those smartphones and other devices are distinctly flat and two-dimensional, no matter how imaginative you may be in their use.  We all recently witnessed the record sales day of Cyber Monday 2018.  But even Cyber Monday is flat, the same old thing, essentially boring.  Its excitement is entirely price-driven, not exactly how you build a unique and durable brand.  Cyber Monday is not about customer experience or engagement.

In this environment, how does one make a splash?  Perhaps we can get some inspiration from the “splash-makers” of the past.  Perhaps there are opportunities to make a splash in the three-dimensional world, even for online-based marketers.

“Mr. Stanley” Marcus was the man most responsible for making Neiman Marcus a globally known luxury brand, even though during his years as company chief, they only had stores in one state, Texas.  He explained to his publicists that every media outlet received hundreds of corporate press releases each day, most going unread and into the trash.  He said the only press releases his company wanted to send out were items that were truly news, that would be worthy of making the front page.  His specific tactics included a Christmas catalog which included such items and “his and hers aircraft” and in-store two-week-long “fortnights” which celebrated the culture, art, and fashion of a different country each year.  These attracted international attention.  Today the company generates about 100 times the revenue that it did when Mr. Stanley built its reputation for fashion innovation.

H. J. Heinz built one of the most recognizable global consumer brands. At the 1893 World’s Columbian Exposition (World’s Fair) in Chicago, he had a display booth, but it was relegated to an upper level gallery that was rarely visited. So he dropped coupons across the fairgrounds, offering a gift to anyone who came by his booth.  The gift was a small pickle lapel pin; the result was that the fair authorities had to reinforce the floor of the upstairs gallery due to the heavy foot traffic.  At the close of the fair, the other upstairs exhibitors gave him an award because of all the attention he brought to them.  In 1898, Heinz bought the big Ocean Pier along the popular Atlantic City Boardwalk, where he held concerts, art shows, and demonstrated Heinz products.  Operating for 46 years, the Heinz Pier drew 15,000 people a day in the peak summer season.  His competitors were left in the dust – and not just in Atlantic City!

At the same Chicago World’s Fair where Heinz passed out pickles, George Westinghouse substantially underbid larger and better-known competitor Thomas Edison’s General Electric to power the Fair’s remarkable and unprecedented lighting system.  The Westinghouse name soon became a household word.

A few years later, Westinghouse also got the contract for the giant turbines to power the Niagara Falls Power Plant, one of the largest in the world.

The power company encouraged manufacturers to move to Niagara Falls to avail themselves of the cheap, plentiful electricity.  One who did was Henry Perky of the Shredded Wheat Company.  Though a national brand, he like Heinz understood the power of attracting tourists:

From 1901 until discontinued sometime around 1946, tours of the shredded wheat factory were part of the marketing of Niagara Falls. Honeymooners saw the falls and then toured the factory. The company estimated that around 100,000 visitors took the tour annually. Perky had designed the factory with balconies and aisles that permitted visitors to see the machinery in operation. They were welcomed every day of the week all year except Sundays, in the lobby above, fitted to resemble that of a hotel. Off to one side was a demonstration area where free lunches were served to visitors that used shredded wheat products in various ways. Tour guides led the visitors through the 5.5 acre factory and up to the roof garden and auditorium where they heard lectures on diet, cooking and good living.

In this same era, in 1896 small-town (Chattanooga) newspaper publisher Adolph Ochs bought the struggling 13th-best-read newspaper in New York City.  While his primary tactic was to improve the reporting in the paper, to be fair to both sides of each discussion, and to skip sensational, bloody stories, he also had a knack for promotion.  He put a big lighted advertising sign near Madison Square, and later built the city’s second tallest building as the newspaper’s headquarters.  At the base of the building, he put the day’s news in a running electric banner.  Each New Years’ Eve, he had a lighted ball drop from the top of the building.  The city renamed the square next to the building from Longacre Square to Times Square, after Adolph Ochs’s newspaper, The New York Times.  The Times also sponsored risky ventures like Admiral Peary’s search for the North Pole and Lindbergh’s solo flight across the Atlantic.  Thus “the world’s greatest newspaper” was built.

When radio (“wireless”) came along a few years later, John Wanamaker’s New York department store put a radio receiving office on the top floor, to draw attention and publicity to the store.  Young radio operator David Sarnoff was the first to hear of the 1912 sinking of the Titanic, gaining Sarnoff (and Wanamaker’s) attention and fame.

None of these promotional ideas were the norm, none were expected.  Competitors were shocked, and often thought the ideas stupid.  Bold ideas  require imagination and courage, thinking “outside the box.”

These stories may seem old and irrelevant, but surely there are modern parallels that imaginative marketers could develop.  In more recent years, we’ve seen Red Bull gain global attention with unusual sports and events, and Richard Branson spread the Virgin brand by attempting unrivaled flights.

  • Is there an opportunity for your company to leverage concerts, fairs, events, marathons, or festivals, especially in geographical areas where you have a lot of customers?
  • Is there a way to reach out to your ever-moving customers, whether that be through wrapping some cars (or trucks or scooters) with your logo?  Or running a tour bus across America, stopping in key cities across the way to demonstrate your products?
  • What can your company or brand do that no one else is thinking about?  What would really make a splash?  Even if it requires leaving the comfortable world of the flat screen where your competitors are stuck.

Gary Hoover is a serial entrepreneur.  He and his friends founded of the first book superstore chain Bookstop (purchased by Barnes & Noble) and the business information company that became Hoovers.com (bought by Dun & Bradstreet).  Gary served as the first Entrepreneur-in-Residence at the University of Texas at Austin’s McCombs School of Business.  He has been a business enthusiast and historian since he began subscribing to Fortune Magazine at the age of 12, in 1963.  His books, posts, and videos can be found online, especially at www.hooversworld.com. He lives in Flatonia, Texas, with his 57,000-book personal library.

To get updated information about the team at Apogee Results, please follow us on your favorite social media channels.

 

The Marketing Lessons of Sears, Roebuck

Legends of Marketing Series by Gary Hoover

 

The Marketing Lessons of Sears, Roebuck

For 60 years, Sears was the largest general merchandise retailer in the world, the most profitable retailer, and the most feared by competitors.  In October 2018, this once-great company declared bankruptcy, and may not be long for this world.  The rise of Sears and its downfall both contain many lessons for marketers and managements in general.

First, the rise.  Sears’ founder Richard Sears began selling cheap watches by mail in the 1880s, but he did not care about product quality.  In the late 1890s, he sold controlling interest to his supplier of menswear, Julius Rosenwald.  Rosenwald raised the quality standards by opening product testing labs.  He reorganized the company to insure quick and accurate fulfilment of the hundreds of thousands of orders that poured in via the U.S. mail. He and his team built new facilities and systems which were efficient.  He shared in the wealth by giving employees large amounts of company stock.  Sears blew past the older catalog company Montgomery Ward, and became number one.

 

In the 1920s, Rosenwald was ready to retire, and turned the company over to General Robert E. Wood.  Wood might be the greatest retailer of the 20th century, as he maintained Sears’ catalog dominance while entering the bricks-and-mortar retail business.  New stores were built from coast-to-coast, and soon Sears was bigger than any other general merchandise retailer (only grocer A&P was larger, but later Sears passed even them).  It is from Wood that we have the most to learn.

Building upon Rosenwald’s talented and highly efficient organization, Wood first put prime emphasis on finding the best products and innovating in every product category.  Whereas in the past, retailers tended to sell whatever was available or whatever they had on their shelves, Sears’ buyers worked directly with the best manufacturers they could find.  In the stores, they listened to customers to find out what they wanted.  They bought rubber in advance to help their tire suppliers save money.  They found they could make refrigerators larger with just a little more inexpensive steel.  Sears’ people learned every step of the supply chain and the manufacturing process, becoming free consultants to their suppliers.  Sears made more money, the suppliers made more money, and the customers got lower prices – a hard combination to beat.

What are your company’s relationships with suppliers like?  Are you at odds or working together?  Do you start with studying what customers need and then work backward to deliver it, as Sears did?

Robert Wood was an information addict.  He reportedly read a new page of a statistics book every day.  He became an expert on demography and trends.  His strategy was based on these facts.  Over and over, this allowed Sears to trounce the competition.  Do you know more about long-term trends than your competitors do?

Robert Wood was a believer in making mistakes, in trying experiments.  He thought failure was part of learning, and failure rarely held someone back from promotion, as long as the company learned from it.

 

Sears under Wood made enriching his customers and their communities a key priority.  When he found poverty in the south, he asked his suppliers to build plants there.  To support local communities, he kept his cash in local banks rather than in New York or Chicago where he might have made more profit.  His managers were expected to lead the local Chamber of Commerce, the YMCA, and help fund schools.  Sears became the ultimate example of being a good corporate citizen, but this was always based on how it would help their customers.  Today many companies support various charities, but is it really helping your customers or broadening your audience?

General Wood said, “There are four parties to any business….the customer comes first…the employee comes next……then comes the community….last comes the stockholder…..if the other three … are properly taken care of, the stockholder will benefit in the long pull.”  Would this description fit your company?

These are among the many ways Sears rose to the top of its field.  For more on General Wood and his fascinating life, read this.

Now, the decline.  Most of Sears’ long and tragic decline started at the top, with general management issues.  Of course, these problems found their way into every aspect of the company, including marketing.

At the top, the leadership began infighting, something Rosenwald and Wood did not tolerate.  The bureaucracy at headquarters grew and grew, until the company in the 1970s built the world’s tallest building, something that did no good for customers, employees, and certainly stockholders.  Experimentation died.  The arrogance that comes with success rose.  Talented young retailers found work elsewhere, not at Sears.  Because the company was so strong, it took years for this decay to kill the company.

From a marketing standpoint, Sears failed to defend its fortresses, or “moats.”

Sears was America’s source for auto services and supplies, lawn and garden items, tools and hardware, and major appliances.  They were very strong in sporting goods and other major categories.

Since the 1970s, when Sears peaked, demand for these categories have boomed.  AutoZone, Advance Auto Parts, O’Reilly, and tire stores have covered the nation.  Home Depot is now our most successful big retailer; Lowe’s and Menard’s are also large companies.  The home appliance business has been transformed by innovation and higher average ticket prices.  Academy and Dick’s do well in sporting goods.

Sears “let” these folks murder it, in categories where Sears’ expertise was unrivaled.

Sears also knew more about non-store selling (catalogs) and distribution than any other company on earth.  But they shut down their catalog in 1993, the year before Amazon was started.  ECommerce represents the natural evolution of the catalog, merely using the latest technology.

Strategic failure often reflects such inability or unwillingness to defend your own moats or fortresses.  It isn’t easy, but you’ve got to fight back if you are smart and want to have a future.

What are your company’s fortresses?  What is worth defending?  How far would you go to defend your position?  Yahoo, MySpace, AltaVista, and others show how fragile online leadership can be.

There is always a great deal to be learned by the successes and failure of others, and few companies have as much to teach as poor, old Sears, Roebuck.

Gary Hoover is a serial entrepreneur.  He and his friends founded of the first book superstore chain Bookstop (purchased by Barnes & Noble) and the business information company that became Hoovers.com (bought by Dun & Bradstreet).  Gary served as the first Entrepreneur-in-Residence at the University of Texas at Austin’s McCombs School of Business.  He has been a business enthusiast and historian since he began subscribing to Fortune Magazine at the age of 12, in 1963.  His books, posts, and videos can be found online, especially at www.hooversworld.com. He lives in Flatonia, Texas, with his 57,000-book personal library.

To get updated information about the team at Apogee Results, please follow us on your favorite social media channels.