Chris Daly

A retailer is complaining about high discount rates harming margins. You dig into the data and produce your results, and of course, high discount rates hurt margins. Story over. Except you told the wrong story. The consumers using heavy discounts also generate CASH and they frequently move dated inventory out of stores and warehouses. Is the goal margin protection or cash generation and inventory turn? It's the latter. So if the heavy discount margin rate is 25% and you factor merchandise at 5% the best way to move excess inventory is with heavy discounts and conserve 2000 basis points. You have to know what the real problem is to get the real answer and tell the correct story.

If you want to learn BI tools, the first thing to do is not learn a BI tool - learn about the databases. Most database schemas you can figure out in a hot minute and once you SEE how data is stored and interconnected, it is much easier to understand. a consumer table is connected to an address table on a consumer id a consumer table is connected to a household table on a consumer id so a household query can collect the consumer data from the consumer table and the address data from another and aggregate consumer and address table data into a single line. Once you understand that structure, much, much, much easier to learn the BI tools. Start with the data

One of the biggest challenges in e-commerce is the unidirectional nature of the channel - you get what I give you, if you don't want it, don't buy it. If you do want it, but don't want to pay what I want, don't buy it. Then you start guessing what offer makes a visitor a customer. E-commerce is online retail. Retail is about selling. In every sales engagement, you have a BATNA - so what is your Best Alternative to a Negotiated Agreement in e-Commerce? Zero. Excess inventory. The people who figure out that e-commerce is not transaction processing, but selling, will win. E-Commerce companies spend thousands of dollars to generate demand and fail to capture it in a single moment. When your customer wants to buy, help them do it.

If you do not understand how the business works, it's hard to solve problems. Here's an example: Sally wants to run a clearance campaign that is 60% off. Maria, the CFO is skeptical of the margin hit but is cognizant of the need to move dormant inventory. For Sally to win Maria over, she creates a Clearance Profit Model that does not look at core profitability, but rather the opportunity cost of disposing merchandise through factoring. The clearance campaign has a 28% gross profit equating to $.28 on the dollar. But if they had sold the inventory using factoring, they would have gotten $.05 on the dollar. The incremental cash of $.23 says clearance the merchandise. Problem solving comes from knowing the business and its needs.

I learned this a long time ago, there are three elements that build trust with customers: 1. Are you Responsive - do you get back to me quickly? 2. Are you Reliable - do you deliver when you say you will? 3. Are you Accurate - is your work correct? You can be Responsive and have poor quality work. Thanks for getting back to me but we have to do it again. You can be Reliable but not Responsive. You delivered on time, but it took forever to know if you would or would not make it. It's the combination of the three Responsive, Reliable and Accurate that builds trust in personal and professional brands. A Brand is a promise of future value. Being Responsive, Reliable and Accurate sets your value high relative to those who are not.

Your voice builds your authority. But to do that, you have to use the customer terms. So if you are working in e-commerce and you talk about pricing, you should know the difference between IMU Pricing, EDLP Pricing, Competitor Pricing and MSRP Pricing and what each pricing strategy means to the customer. Understanding what a maintained markup is for a merchant is more important than generically speaking about driving margin. You also establish your voice by recognizing the challenges in a business. Not every campaign is about profits, sometimes you just need to generate cash for the business to drive inventory turnover. When you learn their business and language, your voice becomes more clear, authoritative and powerful.