Michael’s Stores Links CX And Marketing

Last month I met Paula Puleo, CMO of Michael’s Stores, at a SAS event in Orlando. She gave a presentation that I really enjoyed, describing activities at the arts and crafts retailer that blends marketing with customer experience.

The importance of customer experience comes out loud and clear in what Puleo presented as the three elements of Michael’s corporate mission:

  • Inspires and enables consumers to experience creativity
  • Leads industry growth and innovation
  • Creates a fun and rewarding place to work that fosters meaningful connections with our communities

I was really impressed with Puleo’s presentation, so I caught up with her after the event. In her presentation, Puleo listed her six marketing priorities. Here are some of the additional details that she provided for each of them:

  • Live The Brand: Puleo talked about trying to foster connections with customers and associates. The company runs events like craft cruises and craft days at baseball stadiums (they’ve had them at Arizona Diamondbacks and Texas Rangers games and expect to expand to other sporting venues). Puleo also pointed to Michael’s participation in the Festival of the Masters at the Walt Disney World. The goal is to bring crafts to venues that are more family oriented. She said that these activities bring a level of inspiration to all of their messages.
  • Real Time/Face Time = The New Prime Time. Puleo talked about having a dialogue with customers. Michael’s uses a dedicated Social media team to keep Twitter and Facebook alive. Each store has dedicated customer experience managers that aren’t focused on other store operations. Puleo says that these employees make the environment happy, friendly, and fresh and she called them “our people-people.”
  • Make the private brand not so private. Michael’s has a large private brand business, which provides strong financial benefits. Rather than positioning these store brands as boring alternatives, Michael’s wants to celebrate them and make them a strong value proposition. So the company introduced its product designers to customers. Influential bloggers, for instance, are periodically invited to spend the day with product designers. Connecting customers and influential crafts bloggers with product designers make the private brands come to life and creates what Puleo called a “playground for customer co-creation.”
  • Compete in the trenches. Puleo said that they need to compete at a local level. So corporate marketing helps the stores understand who their customers are and any local competitive threats.The company is investing in deeper data insights to better understand customers and provide the stores with even more insights. The corporate marketing team also creates experiential events and demos that can be used in the stores.
  • Remove the angst. Puleo talked about finding what’s in the belly of your customers. if you remove that angst then you will eventually sell them something. She understands that shoppers are anxious about spending, so they lead with value. She also recognizes that Michaels customers have angst about having quality family time. That’s why Michael’s came up with the idea for The Knack, which is a site with simple ideas for family crafts projects.
  • What works. Puleo discusses the importance of measurement and having good KPIs in place. She works closely with her finance partners to understand what’s working and what’s not, to measure the ROI of the marketing spend.

Puleo also discussed Michael’s loyalty program.They’ve just started offering experiential benefits for Gold customers (that spend $250+ per year). In about 275 of its stores, Michael’s invites its top customers to events with stores designers and celebrities in the crafts world. In St. Louis they had an event with The Crochet Dude and in Dallas they had a contest where customers pitched their projects to Puleo, Michael’s chief designer Joe Pearson, and “rock stars” like the Double Stitch Twins. Puleo says that “access” is the currency that they try to give to good clients; it’s all about surprise and delight.

I asked Puleo about what’s next. She recognizes that many of their customers come to a Michael’s store because they have to come – to get materials for a kids project or to buy a widget. She wants to inspire customers into coming into the stores because they want to. Her goal is to get everyone, even non-customers, to realize that they have some talent and creativity and have them think about coming to Michael’s to express it.

The bottom line: Michael’s sells products, but it markets the love of arts & crafts

People Are Key To Predictive Analytics

I recently wrote about remarks from General Colin PowellScott Hudgins from Disney and Orlando Magic’s Alex Martins who spoke at The Premier Business Leadership Series sponsored by SAS. Here are some additional tidbits that I found interesting throughout the event:

  • Paula Puleo, SVP and CMO of Michaels Stores, talked about how the retailer is “living its brand” and “putting Michaels’ brand into the hands of its customers.” She describes that the company used to “shout at customers” with Sunday circulars but have been building more of a dialogue with customers and employees over the previous 18 months. When she discussed the redesign of the frame section in the stores, she described the goal as: We help preserve the cherished moments of our clients. I am planning to interview Puleo and provide more details on the work that she’s doing in a future blog post.
  • Tim Belk, Chairman and CEO of Belk, shared these comments: “If you’re going to build your brand, you need to invest in your people” and “You need to make associates happy if you want your customers to be happy.”
  • Matt Cappio, SVP of Marketing Strategies at Bank of America, explained how the bank is using analytics to understand what’s most relevant to the customer and beneficial to the bank. It can identify offers that meet certain goals in ares like revenues and credit risk. It’s not just about having the technology spit out an offer. Cappio said: “We need to win our associate over as to the value of the offer or we will have a crisis of confidence.”
  • Jim Goodnight, CEO of SAS, discussed how massively parallel in-memory processing allows companies to do analysis on ALL of their data, quickly. Jim Davis, SVP and CMO of SAS, discussed a scenario where SAS reduced the time to complete a marketing optimization for a European telco from 8 hours to 2 minutes and 17 seconds.
  • Halina Karachuk, VP of Innovation, Research and Analytics at AXA Equitable, talked about “mining for diamonds” which is a process where they analyze their advisors’ book of business (client and product information) and identify the “next-best offer” for each household.
  • Eric Webster, VP of Marketing at State Farm Insurance, explained that the most important question for a life insurance underwriter is “are you a smoker?” It’s so important that insurers insist on a medical exam to validate this answer. State Farm is starting to use predictive models to reduce the number of medical exams; only using this expensive and time-consuming step when it’s most required.
  • Best selling author Jim Collins also spoke at the event. His core message was that great leaders wrap three attributes around their ambition: Fanatic discipline, empirical creativity, and productive paranoia. Collins’ analysis showed that great leaders and companies aren’t just lucky. He researched more than 200 “luck events,” which are situations that: are independent of your actions, have significant consequences, and are unpredictable.  It turns out that great companies aren’t differentiated by their good luck, but by their ability to deal with all of the luck events they run into — good or bad. Collins described this as their return on luck.

There’s a lot of different stuff going on in this post. Is there anything that connects all of these elements besides a conference center in Orlando? I’ll give a shot at wrapping it all together:

Predictive analytics will increasingly put deep insights into the hands of people at the point in time when they make decisions. But this won’t have a significant impact on companies unless they use the insights to identify value for customers and engage employees in designing new processes. This combination of left brain analysis and right brain human engagement will help companies more nimbly respond to rapidly changing environments full of both good and bad luck.

The bottom line: Powerful analytics is necessary but not sufficient for successful analytics

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