How the mindset of one CEO might affect marketing directors across the home category.
The CEO of a high-end home brand was visiting with me about revenue and profit trends at his company. We had talked about some of the inherent challenges facing his brand. On one hand, his brand was the category leader. On the other hand, his product was also very expensive, with a longer-than-average consideration and sales process, a complex two-step distribution system and low category awareness.
The CEO had a few things going for him. For starters, he had an extremely sharp marketing director who had built an aggressive marketing strategy fueled by consumer ethnography research, database analyses, concept testing and geo-targeted lead generation tactics in a handful of test markets across the country. Overall, the team felt pretty optimistic about the beta test, including the CEO.
But then the CEO dropped a bombshell.
“I am going to ask my team to triple sales in the next two years,” he said. I must’ve looked bewildered, because he smiled and said, “Let me show you why.”
In front of him were two giant binders, filled with data on company sales trends by region, home starts, GDP growth, population trends, remodeling statistics, weather patterns, fuel prices and economic forecast models. He walked me through the happy new year sms highlights and pointed out that every piece of data he was studying indicated that his category would quickly recover to pre-recession levels if the economy improved as anticipated.
“We don’t even have to take share from our competition over the next two or three years. We can just maintain our current share of market and double our sales by riding the recovery,” he said. “So my marketing and sales team needs to know that doubling sales won’t be enough.”
Was his logic brilliant or flawed? I could probably argue it either way. In any case, that’s not really the point. What occurred to me then was that he is probably not the only CEO in the home category with that kind of logic train. And if that’s the case, we may begin to see similar kinds of goal-setting coming down the pike over the next few years.
So what’s a marketer to do? First and foremost, imagine yourself having a similar conversation with your CEO. Ask yourself:
- If our company is in a category that stands to improve dramatically in the coming years, might I be tasked with driving sales at a higher-than-usual level?
- Does my own data support these forecasts and goals or not?
- Do we have the ante to play the game we wish to play? Or do we need to adjust our goals or our behavior to level-set corporate expectations?
If you thought the past few years have been interesting times for marketers, let me suggest that the coming few years will be equally as crazy. If economic recovery takes care of doubling your sales, what are you going to do to triple them?