Macy’s Marketing Transformation: From “Mad Men” to “Math Men”


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Last week I had the pleasure of attending Forrester’s Customer Intelligence Forum, where the theme was “how to create engagement in the age of the customer.”

There was some similarity with a recent “Sales 2.0” conference I attended, where the emphasis was on how to make the profession (marketing, in this case) more scientific by using “big data” to gain and act on, customer insights.

The highlight for me was the presentation by Julie Bernard, Group VP of Customer Centricity at Macy’s. Before joining the retailer 5 years ago, Bernard earned her retail chops at Saks Fifth Avenue.

At Macy’s, her job was to “put the customer at the center of all decisions.” That was easier said than done at a 150 year-old brand that was organized around products. Bernard used her analytic skills to attempt to bust myths about what consumers really wanted but was largely ignored.

After banging her head against product silo walls for a year, the turning point came when she asked for help from the CEO Terry Lundgren. Bernard says that he appointed himself Chief Customer Officer and announced it on an analyst call. This sort of executive sponsorship was the first and arguably the most important step in turning marketing from “Mad Men” to “Math Men” at Macy’s.

What I enjoyed most about Bernard’s talk was how “big data” and analytics was used. Not to automate or depersonalized the experience, which has been the sorry end result of too many CRM and contact center initiatives. Instead, the insights gained from transaction data, loyalty programs, credit card and more were used to “give customers a seat at the table.”

For example, one key decision they made was to first focus on improving the products, pricing and experiences that move “loyals” — those consumers already buying regularly. In the future, Bernard thinks analytics can also help the retailer make smarter merchandising decisions. Each year Macy’s spend some $40B on inventory, a much larger expenditure than marketing.

Macy’s has been doing well lately and so has the CEO, er, Chief Customer Officer. According to this report, it grew profits by nearly 50% to $1.26B in 2011, resulting in a very nice payday for Lundgren.

Thanks to Forrester for providing a pass to attend this excellent conference!


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