Reimagine Marketing: A podcast from SAS

[MUSIC PLAYING] SPEAKER 1: Hi there, and welcome to the second season of The Reimagine Marketing Podcast. My name is Steven Hofmans, and I will be your host for this episode. In today's sessions, we'll talk about marketing planning. We will try to answer questions, like can marketing planning and agility go hand in hand? What do you do when your marketing plan ends up in bad results.

And to find an answer to these difficult questions, I have invited the lovely Sandy Kirchhoff. Sandy holds a master of science in marketing and has held different marketing positions at Office Depot, from retention manager to head of campaigns and, today, senior manager of commercial marketing. She's always planning for an awesome customer experience and a good return on marketing investment, making her the perfect sparring partner for today's topic. Welcome to the podcast, Sandy.

SANDY KIRCHHOFF: Thank you, Steven. Glad to be here.

STEVEN HOFMANS: Oh, happy to have you here. So let's start with my favorite part of the show, which is your marketing quotes. Every time I invite a guest, I ask them about their quotes. So I'm very curious, what is the quote that you prepared for your audience today.

SANDY KIRCHHOFF: Well, it's not directly related to marketing, but it is related to what we're going to be talking about today, marketing planning. So my favorite quote-- probably my favorite quote life is from Benjamin Franklin. It's "by failing to prepare, you prepare to fail".

STEVEN HOFMANS: Wow. That's actually a good one for this session.

SANDY KIRCHHOFF: It is, isn't it?

STEVEN HOFMANS: If you don't plan, you don't know where you're going to. Oh, I love it. Thank you. Very surprising. Oh, it's great. I'm very excited to have you as a guest today. I'm really excited also about the topic marketing planning. It's not always a very fancy topic or sometimes the audience is looking at the topic of, OK, should we do marketing planning? Yes or no.

So really excited to have you here and also have you from your experience and your background from Office Depot. So just to allow the audience to get to know you, can you explain a bit your journey at Office Depot, where you started, and how you became the commercial marketing director at Office Depot.

SANDY KIRCHHOFF: Sure, Steven. No problem. Oh, gosh. I've been with Office Depot-- well, Office Depot Europe for about 10 years now. I started as a data quality executive that was looking after making sure all the different marketing teams were entering proper data into our campaign planning tool. And that wasn't an easy one because we were scattered across different locations, all the marketing teams were separated.

Some were looking after online, some were looking after offline. So it was just kind of making sure everybody's working in the right way in the same tool. And I think that really helped me in the role that I am today. And I think that's also why marketing planning is so close to my heart because I have been doing that since the beginning.

And I've kind of gone onto a journey over the last couple of years of just consolidating across Europe. So as part of Office Depot's history, we've been looking at creating more synergies and efficiencies by consolidating countries, consolidating channels. And I've always been part of that process and making sure everything's set up correctly and bringing all the different marketing teams together. And just having been there for the last 10 years and helping shape the Office Depot that it is today or the Viking that it is today, which is actually our e-commerce brand that we operate under in Europe, that's kind of brought me to my role today.

And I think my planning and being a little bit of a nerd when it comes to that has kind of helped me in my role today.

[LAUGHING]

STEVEN HOFMANS: What I like is that you start at the foundation, right? It's all about it starts with data, having good quality data, gaining insight from that data. And then you can steer, I assume, your marketing plan. One of the things that I find very interesting is you talked about aligning different countries. You talked about making sure that we are all going in the same direction.

Having these diverse set of cultures, what are the challenges or what is the advice that you can give? How do you align the marketing organizations with those different backgrounds or different cultures and make sure that they still have their own local touch?

SANDY KIRCHHOFF: I think you just got to do it somehow. I mean, it's really important to be aware and to be conscious about the different cultures that are in the different countries, so really understanding the mindset that particular cultures have and some don't have. So I think with me being a German, I'm very aware of the fact that I can be very direct, I don't like to smooth things over.

But I know that's not appreciated in all the different countries. If it comes to more English-speaking countries, it's much more about being polite. So a little bit having more stereotypes in your head, but I think being open is probably the most important one. Being open to understanding that things are different at different countries and just, together, trying to manage through that. And I think it's about gaining the trust of everybody.

So it's not about forcing something from one culture from one country into another one but really doing it together as a team and by including everyone as well. So I think when we started doing this, it's about involving all the different countries from when we used to be separate by country, and then just looking at what's the best way forward and trying to get people to understand the benefits because it is more efficient to consolidate across the countries.

And I think, let's say, the more natural ones-- so for example, Germany, Austria, and Switzerland are much more natural to consolidate rather than trying to combine the German or the Dutch market. So I think just by taking it step by step but taking the learnings from that, that will help in coming to a European approach. But also never forget countries are different, customers are different in the different countries. So we have a lot of 80-20 rules in place, but probably the same applies here as well.

So on average, we can probably consolidate and combine 80% of all our activities, and then we can specialize for the 20% that's needed.

STEVEN HOFMANS: Yeah, it makes sense. I think also that the way you explained it is everybody needs to-- everybody has his own culture, but also the customer has his own culture. I remember you talking about having like-- is the French customer, is it the same customer as the German customer? Is it the same customer as the Dutch customer? Or do they all shop differently?

SANDY KIRCHHOFF: At least what we can see in our customer base is they're all kind of different. So we can see French customers, for example, they have a much higher affinity for free gifts and for things being more colorful when it comes to free gifts. So there, if we choose-- for a backpack, for example, we'll typically go for a colored one. Whereas in Germany, a black backpack would be working much better.

But we can also see the decision makers are quite different. So again, a typical situation that we have is the secretary will be placing the order in Germany, whereas in the UK it's much more the head of the business or one of the managers that will be placing orders. Also, the genders can differ quite a lot across the countries. The Dutch market, for example, is a very gender-neutral market where we have equal share.

So the customer is different in the way the customer likes to place orders, the way the customer likes to be incentivized. All of that needs to be taken into account into a marketing plan. And we'll make the adjustments and the adaptions that's needed across the different markets.

STEVEN HOFMANS: So, actually, when you look at the planning perspective, you have indeed a fixed amount 80-20, but actually what I'm hearing now is that that 20% can go very specific because every market has its very specific needs, you need to adapt your promotion strategy to every market. So probably customer journey, also, you have a very specific customer journey strategy per country as well as they shop differently in the different countries.

SANDY KIRCHHOFF: Yeah. So we'll standardize where we can. For example, we might be standardizing certain email campaigns, certain printed media, but then we push it out differently to the different segments depending on the market. So even though, within a channel, we can adapt to that specific country or to that specific customer, it doesn't mean the material cannot always be standardized. Or we might decide to do a promotion on paper, but what paper we promote might then, again, be different per country.

So it can go down to a very detailed level, but from a high level point of view we will standardize and then adapt. But it's true, so it can be in the channels, it can be in our promotions. So there's a lot of different angles that you can look at it from.

STEVEN HOFMANS: So every country can still have a number of freedom in how they implement their promotion budget or the promotion assets. Sometimes when I discuss with companies I hear that rigidity goes hand-in-hand with planning, while I think there should be room for agility. And I think, with COVID-- So we are in December 2019, your plan and budgets are ready. And then you kick off the first quarter and everything works fine, seems promising because you built that whole nice marketing plan based on your 80-20% rule.

You have a local strategy. But then, at some point, COVID kicks in. And you need to or you need not-- I don't know-- to adapt your whole marketing plan. How do you handle such a situation?

SANDY KIRCHHOFF: I think for us, we handled it very well. And I think this is where people sometimes get the wrong thought in their head. Just because we plan doesn't mean things are set in stone. And I think that's one of the first things that I'm hoping I can eliminate through the session today, is to get that out of people's mindset, is that planning doesn't mean you can't change anything. So what we'll do is, yes, we'll create a 12-month plan.

We'll create that ahead of time. And obviously, COVID was something nobody had foreseen or at the speed that it came up. But if it's not called COVID, it was called something else. It just might have been smaller or slower, but something will always come along that will make you adapt your plan. So we've handled it within our regular process which, again, brings back that 80-20 rule.

So we have a 80% fixed campaign plan or marketing plan where we leave 20% room for adjustment. But even when we talk about that 80% plan, it's quite high-level. And we'll go through refinement sessions throughout the year. So, even though I have a 12-month plan, I'll revise it and refine it every quarter to make it more specific. I'll do that again on a monthly basis.

And then I'll even break it down onto a weekly basis. And by going through those different refinement sessions, I'm much closer to the campaign goal. I have dates, and I can adapt either my target group, my offering, my promotion, whatever it is that needs to be altered for that specific period of time. So even though I have an 80% fixed plan, there's still a lot of room for us to change. And we've handled COVID that same way.

We've gone through those refinement sessions. We've just done them slightly more frequently or give a little bit more room for ad hoc than we would have previously done. But in general, our standard campaign planning cycle that we've implemented a couple of years ago-- and that's really been kind of trial and error proof-- we've been able to use during this time. And that's given us a tremendous amount of security.

So as much as I run or, within my department, have a marketing planning team that does all of that, that creates this huge marketing plans for the next 12 months, I think we're very agile and very flexible in the way that we're running our activities because we always leave room for doing this.

STEVEN HOFMANS: So the impact of COVID is more about the fact that, OK, the plan, you put in more agility and more flexibility in this case but you also increased the frequency of planning reviews, maybe, to adapt to the ever changing market. Because that's what I understand, is that the market is changing faster. So the frequency goes with it. The faster the market is changing, the more frequency you'll have reviews of your planning session in comparison to before COVID. Is that correct?

SANDY KIRCHHOFF: Yeah, absolutely. And I'm sure, as for the majority of retailers, we could really see product life cycles changing as well. So the demand in certain assortments that have been there before have decreased. At the same time, demand has come up for assortment that wasn't as big before or as popular or new assortments. For example, with those rapid tests that you can do at home, that's something that didn't exist before. How do you market that and make that available to your customers?

But I think for us, the most important thing as we have been able to rely on our existing processes that we have implemented over the last years as having planning a fundamental part of our business.

STEVEN HOFMANS: I found very interesting the fact-- and this is, I think, a reality that many retailers had during that COVID period. You said some demand was higher, and then the demand got lower for other products. So how do you handle that from a marketing perspective? Do you start promoting certain products that nobody wants anymore? How do you-- because you have that stock, so I'm very--

SANDY KIRCHHOFF: Yeah, obviously, I don't think anybody ever expected we were going to have a worldwide crisis and running out of toilet paper

[LAUGHING]

STEVEN HOFMANS: Yeah, that's true. Nobody wants to starve without toilet paper.

SANDY KIRCHHOFF: Exactly.

[LAUGHING]

STEVEN HOFMANS: That's funny. No, good. Interesting. Next, so you have the planning aspect. And then what comes in with planning is also being able to track marketing activities, being able to track in what state your campaigns are. How did people react to the fact that you could see, OK, we are in this planning stage, you need to spend this amount of time on campaign? We're going to track where you are on your marketing plan and we're going to evaluate.

How did you succeed in that specific change? I don't think it's something that you can do over a day. But how did that work? How did you go to that tracking perspective and being able to allow an evaluation of the things you're Doing?

SANDY KIRCHHOFF: When it comes to measuring our campaign success or our marketing success, overall, there's a lot of different things that we would be looking at. So whereas, historically, we've been much more focused on looking at product performance or looking at the performance within individual channels, as part of the transformation that we've been undergoing at Office Depot Europe to transform into an omnichannel business, which very much means breaking down the silos of looking at channels individually but looking at the customer and what the customer needs and, to a certain degree, not looking at the channels anymore.

And I think by doing that as well during the last year, that has helped us understand the customer better and also what works and what doesn't work. Because it doesn't make any sense for us to measure, for example, catalog performance when we don't know if our catalogs are reaching our customers anymore because we're not sure if they're at home or if they're still going into the office because we're still sending most of our material into the offices. So it's really looking at it from a customer point of view and measuring the customer, not the channel, and then bench-marking ourselves against competition or against what the market is doing.

I don't think looking at traditional office supplies-- obviously, during COVID, they've been decreasing. So it's not only that they're decreasing with ourselves, but they're decreasing overall. So it's how do we benchmark against what's happening in the market, but what other categories can come in to compensate for this? Which is then perfectly fine because, if we can compensate our sales through new categories or through increasing things like disinfectants, toilet paper-- I think that's going to be one of my favorite examples out of COVID times, is the amount of toilet paper we sold.

No, but you're going to have to start counterbalancing your product sales by shifting your focus into categories that weren't as high on your radar as previously. And then, in terms of your campaigning or your channels, it's going to be different. We've had a tremendous amount of increase, obviously, on our website; customers coming more to our website than potentially calling in to our call centers, which has also been still quite popular in some of the countries. And it's understanding that shift that customers are going through, and then trying to make sense of it, and also accepting it, that this is the way that things are going and times are changing.

But by not looking at an isolated channel anymore, so potentially looking at certain call center KPIs, they just might not be relevant anymore. So as we've gone through this change and the customer changing and the market changing, it was really important for us to also change our KPIs and the way that we measure because some of the more traditional KPIs are just not as applicable anymore as they've been before. We've been testing quite a bit to see what works, what doesn't work.

STEVEN HOFMANS: So what I find very interesting here is that people behave like they're KPIs. I understand. So you went from maybe a less customer-centric organization if you look at KPIs because its channel performs, a lot of that amount of people that are coming on the website, amount of email opens. But if you start evaluating people in that way, I understand that what you're saying is then people start not thinking about the customer but thinking about the performance of their channels.

And you guys made a total shift to saying, OK, those channel performance, it's a negative. It's interesting to know, but what we actually want is we want to put the customer at the center of our organization and start working with customer-centric KPIs. Is that correct?

SANDY KIRCHHOFF: Correct.

STEVEN HOFMANS: Yes. So, from my perspective and from the audience perspective, what are good examples of customer-centric KPIs that you would track to allow to understand how good the customer is in relationship to Office Depot?

SANDY KIRCHHOFF: Well, two fundamental things for us that we're looking at is customer journey analytics; how many touch points, how is the customer interacted with before they place an order with us. Because that really gives us a good understanding of the combination of channels or touch points that are needed to get that conversion, the same as with attribution modeling. So really, how much of the final sale can we then attribute to those different touch points?

But then it's really looking at what percentage of customers are active and actively coming back to us. How many multi-buyers can we generate? How many of the new customers that we gain during this COVID time are staying loyal customers with us? Have we been able to increase the share of wallet of specific customers?

Breaking it down to the different customer segments or not looking at the entire customer base, but looking at the smaller customers or the larger customers. Do they behave differently? Because it's quite easy-- and I think this is the trap that a lot of people will fall into, especially on a more senior level, is they tend to look at the sales. How much sales do we generate? But sales is a product of different things coming together.

How frequently does your customer come? How high is the order value of that customer? That's what makes your sales. And those are the KPIs you should be a lot more focused on than just saying 'I want to grow my sales' or 'I want to do more'.

STEVEN HOFMANS: That makes sense. How do you measure brand awareness, for example, if you run brand awareness campaigns because you want to be top of mind. And you want to say, OK, give me two office suppliers. The first one should be Viking or Office Depot.

SANDY KIRCHHOFF: Of course, always.

STEVEN HOFMANS: From a marketing perspective, you need to invest but I understand that it potentially doesn't immediately generate a sale. So you need share of wallet. Very important, I understand. Amount of customer journey touch points, attribution modeling is very attractive. So those are techniques you would recommend to the audience to use to look at, really, from a customer journey perspective.

SANDY KIRCHHOFF: Absolutely.

STEVEN HOFMANS: I have another important questions there that I sometimes across. So the attribution modeling, it helps you-- which team helped to consolidate the sale or which channel or campaign contributed to a specific conversion. The question I often get is, how do you make the link to, OK, we have the attribution modeling, do you then use those results to adapt your marketing budgets in the different channels for each country? Because I can imagine that every attribution model in every country could be different.

Or how do you work with the results of your attribution modeling and journey KPIs? How does that get fed back into the marketing planning system?

SANDY KIRCHHOFF: Oh, I was already afraid you were going to ask me a very analytical question.

STEVEN HOFMANS: No, no, no.

SANDY KIRCHHOFF: Or you're going to get me into trouble with my data science guys on how they built the attribution model. No, but indeed. So we do look at attributed sales across the different countries, across the different channels, and how that shifts on a month-by-month basis. And then we will adjust our budgets accordingly. So we do very actively work with this.

So, again, we have a process in place of reviewing this on a regular basis and then looking at do we invest or not invest into specific channels. So we will adapt our budgets based on this, yes. And the same goes with our journey analytics. But it's been a process of getting to that point. It's not something that just happens from one day to another.

Everybody has to learn to work with the data differently because there's-- in the first instance, it seems like there's winners and losers because some channels will get more sales attributed, other channels will get less sales attributed. So there's a degree of change management that needs to go with this.

STEVEN HOFMANS: No, makes sense. But you talk about your 80-20 rule, and we've talked about it in the beginning about you set your marketing plan and your campaign planning 80-20. Then we talked about adapting agility, flexibility in your planning. It's also 80-20. So you have your marketing plan set 20. But then again, at the budget level, you're saying, again, every evaluation round or every time you sit together, you also there, I assume then that your budget is partly fixed but, based on the outputs of the attribution models, you start shifting your budget to get better conversion and results.

SANDY KIRCHHOFF: Yeah, absolutely. And I think, again, that's one of the major benefits that we have of being a centralized European organization, is we can not only shuffle and move our budgets around across the different channels, but we can also do this across the different countries because there's very few decision makers that come together for all of Europe. So we can really see how markets are shifting, how our sales are shifting across the different channels. Because there's going to be a lot of country-specific impacts, such as seasonality and holiday periods.

And we can-- constantly might be a little bit too much-- but on a regular basis, we can review the numbers. And then we can, together as a group, decide if we want to start shifting some of those budgets across. And that really makes us much stronger as a group. But here, again, the most important thing is I think we do this-- it's a joint decision. So we have the owners of the channels, we have different marketing teams coming together and kind of reviewing this together.

STEVEN HOFMANS: That makes sense. That makes a lot of sense. We talked a bit about evaluation attribution modeling is a way to evaluate your marketing efforts. Whenever you put in measurements in place, people are a bit scared. And then they ask you "we've been doing marketing for five years and we got good results, now you start measuring. What should I do when the results are bad?"

It's a hurdle that people are afraid of to take. They say, "but maybe I don't want to show you that I have bad results. So what do you do as a marketer when you have bad results, right? And how do you communicate that to your manager? And how should an organization look at that?

SANDY KIRCHHOFF: Well, it's a culture change. So you need to let your people know that it's OK to fail sometimes or to make mistakes sometimes. So I think, before you start changing those KPIs or also be aware that people might be afraid of, all of a sudden, you start measuring something you haven't done before, you start measuring things differently. Because, ultimately, you're trying to do something better for the company and trying to get better results for the customer.

So if somebody does deliver bad results or not as good as they have been previously, as long as you understand why they've changed or what didn't work and you then optimize and move on from there, there's no reason anybody should be worried about things being measured. Because you can obviously only improve and get better if you know what's gone wrong and if you can start measuring it but then also afterwards measure the success if you've done something right. So I don't think anybody ever needs to be afraid of putting those measurements in place.

But it's very much the responsibility, I think, of all the different management levels to let people it's OK for things to go wrong sometimes.

STEVEN HOFMANS: When you change that, when you communicate, when you allow people to have bad results, did you see an impact in the organization? Was there more experimentation, more creativity? Or do you see any benefits of having these type of cultures where you foster fail fast, actually, it's almost, right?

SANDY KIRCHHOFF: Yeah, it is. And we can see people are a lot more open, willing to share. But we have been testing quite a lot in all the different campaigns or channels, so we very much have an established test and learn culture. But again, that's taken time to grow. Somebody needs to take the first step and say 'it's OK, and I'm willing to do this.' But it also sometimes takes management to stand in front of the employees and say, you know, I've made a wrong decision or we've done something that wasn't right, but we've learned from it and we've moved on.

So I think if you lead by example as a manager, then your people will start to feel that. But also don't punish people. Don't tell them something's gone wrong or something's bad. But give them that comfort blanket of it's OK sometimes if things don't go as planned. And one will catch on from the other.

STEVEN HOFMANS: It makes sense. It's leading by example. I assume you, as a manager, also sometimes have bad results or take wrong decisions.

[LAUGHING]

SANDY KIRCHHOFF: No, of course. And at least the way I like to manage my team is, or just the way that I am is you can hold me accountable for everything I do. if I've done something wrong or something didn't go as planned, I'll just say it as it is and move on from there. Don't dwell on the past, but look at the future. What can you do because you can't change anything that's happened in the past anyway?

STEVEN HOFMANS: No, that's true. You can learn and build together, I think. Build together on the roads to success. We're coming to the end of this episode. What can you say to organizations that are at the start of implementing marketing planning processes? And what are your best tips and tricks for those people that are starting that marketing planning journey?

SANDY KIRCHHOFF: Start small. Don't try to cover everything at once. Start off with one channel, one market depending on where you're coming from. And really find the best way for yourself of how to organize the different teams, and then start adding on.

Because if you try to do everything at once, it becomes overwhelming and it seems like an impossible task to do. But if you really start small with consolidating two countries, for example, then you'll start to see the natural and right next step. And don't have your mind set on planning means you need to fix things. Always make sure that you have enough head space to say there's flexibility and room to change things.

STEVEN HOFMANS: OK, interesting. So Sandy, I really learned a lot during these sessions about having customer journey KPIs, having your 80-20% rule is something I'm also taking home. And then the last one is don't try to eat the whale at once. Try to drop it in pieces.

SANDY KIRCHHOFF: Exactly.

STEVEN HOFMANS: Do it piece by piece. Thank you for joining this podcast. It was really fun for me. Thank you for that. And on this bombshell, we'll end this episode. Have a great day, everybody.

SANDY KIRCHHOFF: Thanks, Steve.

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