Articles Archive - Page 74 of 100 -

CISO’s Guide to ShieldX and Zero Trust Networking

With the onset of cloud computing, perimeters dissolved due to fragmented data centers. Suddenly, data and applications went from nicely confined rooms with a handful of doors and windows to virtualized environments with no perimeters. It was back to the Wild West, which meant security and compliance were quickly downgraded—and the increased interest in Zero Trust for network security. In fact, NIST has released Draft Special Publication (SP) 800-207, Zero Trust Architecture. Forrester’s report, Zero Trust For Compliance (July 15, 2019), details control mapping for Zero Trust against 12 industry and government compliance mandates.

Historically, security was attempted primarily by fortifying the data center perimeter. That architecture is no longer effective, as there is an incongruity between the physical data center boundary and virtual perimeters. Those new perimeters can take up any size and shape and change at cloud speeds, making it impossible for traditional security to follow. Additionally, the security controls offered by cloud vendors are weaker than traditional options and are often no match against attacks hindering confidence and compliance in cloud adoption. A comprehensive Zero Trust networking architecture is required.

What is Zero Trust Networking?

Creating a Zero Trust networking architecture means creating a least privileged environment. This requires an understanding of:

•N-tier application structure

•Tier boundaries

•Tier isolation

•Microsegmentation

•User, process and workload identity

Click here for the full guide

#MillenniumLive Talks DTC, Customer Loyalty & Attribution with Mark Friedman

Mark Friedman’s vanguard insights hail from his experience with a number of top retail companies, like Steve Madden and Brooks Brothers. He is now the President of Details Interactive and recently launched his own podcast, The Marketing Playbook Podcast.

In this week’s episode, Mark shares his wisdom on a number of topics, including the shakeout DTC brands are facing, the best ways to approach customer loyalty through experience-based initiatives and one of the greatest challenges for today’s marketers: attribution.

Watch the video interview here

Listen to the podcast episode here

More About Mark Friedman

Mark has spent more than 25+ years in the direct to consumer business. He spent his early years focused on finance and ultimately moved into catalog marketing with a start-up business. He has led the marketing initiatives for a number of catalog and later, e-commerce focused brands including Brooks Brothers, Full Beauty Brands (formerly Brylane/Redcats), Amerimark and Steve Madden. At Madden, Mark was President of E-commerce. He is highly analytical yet creative, and he has driven growth through customer acquisition and retention programs and has been the architect of a number of loyalty and private label credit card programs. As an e-commerce leader; Mark speaks often at industry events. Mark is a strong leader and he has spent many years mentoring early stage companies. Most recently as a Mentor through XRC Labs, he has worked with 3 companies helping to shape their go to market strategies.

Retail Innovation Starts Here

Digital Transformation involves ongoing exploration by today’s leaders, and our best advice is to not trek the journey alone. Our Transformational Retail Assembly coming this August in Denver is set to be an inspiring event featuring some of retail’s top C-Suite executives.

We know what you’re thinking…

This isn’t Your Run-of-the-Mill Conference or Summit.

Our Founders, like many C-Suite executives today, became disillusioned by the slew of retail conferences, summits and events on the market today that promised “world class networking” opportunities with leading industry decision-makers. In reality, they found that these events had antiquated discussion topics presented in an impersonal format, and quite frankly, it seemed like just about anyone could attend the event.

What Makes a Millennium Assembly Different?

We’re dedicated to creating the greatest think tank of today’s executives from some of the most prominent companies today. Our invite-only events consist of 55 carefully selected leaders holding C-Suite, EVP, and SVP positions from Fortune 500 companies.

These attendees are provided the opportunity to intimately connect in workshops & roundtables with fewer than 25 people, with interactive networking opportunities at our cocktail hour and Gala Keynote Dinner and personalized 1:1 meetings. This is an experience like no other, all taking place at some of the most beautiful hotel and resort venues in the country.

We’re serious about executive education. Our Assembly Agendas are data-driven and curated from our industry-expert Advisory Board, a group of 26 industry movers and shakers with a proven record of digitally transforming organizations from the ground-up. The prevailing topics and trends discussed at this assembly will cover the most poignant challenges affecting leaders today.

The Millennium Alliance’s goal is to change the way leaders look at executive education, and you won’t find this level of content, discussion, and networking anywhere else. We’re on the journey to digitally transform the retail industry with you.

Join the Assembly

Want to find out if you qualify? Millennium Membership >>

Are you a Solution Provider interested in Sponsorship Opportunities? Learn More >>

How to Value a Company by Analyzing Its Customers

As originally published by our Marketing Thought Leader, Daniel McCarthy & Peter Fader on HBR.com.

In the weeks leading up to the initial public offering of apparel retailer Revolve Group, in June 2019, investors struggled to come up with a fair valuation. Several recent IPOs—most notably those of the ride-hailing firms Uber and Lyft—had been disappointing. Revolve had delayed its IPO for months because of a downturn in the stock market. Despite the headwinds, its IPO was priced at $1.2 billion—and it exploded by an additional 89% on its first day of trading, making it one of the best first-day IPO performances of 2019. The spike brought the company’s valuation to roughly 4.5 times its revenue over the previous 12 months—five times the multiple of its apparel-retailing peers and more akin to that of a technology company. What happened, and why did investors originally fail to see just how strong a firm Revolve was?

Revolve’s premium valuation was not a fluke. It stemmed from the firm’s strong underlying fundamentals, which were not fully appreciated by the underwriters who set the IPO price. This strength was less about top-line revenue growth and more about strong customer-unit economics: Simply put, Revolve not only acquired its customers profitably but retained them for many years, and that meant its longer-term profit potential was larger than its revenue growth to date had implied.

Revolve’s IPO success illustrates the movement toward customer-driven investment methodologies. Using customer metrics to assess a firm’s underlying value, a process our research has popularized, is called customer-based corporate valuation (CBCV). This approach is driving a meaningful shift away from the common but dangerous mindset of “growth at all costs” toward revenue durability and unit economics—and bringing a much higher degree of precision, accountability, and diagnostic value to the new loyalty economy.

In this article, we explain how executives and investors can use the principles of CBCV to better understand and measure the value of a firm. The methodology works whether the company features a predictable, subscription-driven revenue stream (think of Netflix and Verizon) or a base of active customers who place discretionary orders every so often (think of Uber and Walmart). We also discuss how companies can benefit from providing investors with more of the right kinds of customer data—and how investors can avoid being fooled by vanity metrics that appear to be useful indicators of customer behavior but aren’t as meaningful as they might think.

A More Precise Way to Forecast Revenue

The premise behind CBCV is simple. Most traditional financial-valuation methods require quarterly financial projections, most notably of revenue. Recognizing that every dollar of revenue comes from a customer who makes a purchase, CBCV exploits basic accounting principles to make revenue projections from the bottom up instead of from the top down. Although this may seem like a radical departure from traditional frameworks, that’s not the case: CBCV simply brings more focus to how individual customer behavior drives the top line.

What do we need to implement CBCV? In addition to the usual financial statement data, two things are required: a model for customer behavior (what we call the customer-base model), and customer data that we feed into it. The model consists of four interlocking submodels governing how each customer of a firm will behave. They are:

the customer acquisition model, which forecasts the inflow of new customers
the customer retention model, which forecasts how long customers will remain active
the purchase model, which forecasts how frequently customers will transact with a firm
the basket-size model, which forecasts how much customers spend per purchase

Bringing these models together enables us to understand the critical behaviors of every customer at a firm—who will be acquired when, how much they’ll spend over time, and so on. Summing up all the projected spends across customers gives us our quarterly revenue forecasts. Together, these models can produce much more precise estimates of future revenues streams—and from that, one can make much better estimates of what a company is really worth.

This basic model is universal, no matter what kind of business a company is in. Exactly how it is specified, however, depends on the company’s business model—in particular, on whether the company is subscription-based or not. At a subscription-based business, such as a gym or a telecommunications firm, managers generally know how much customers will spend each month, and they are able to directly observe when customers churn out, because they literally cancel their contracts and close their accounts. This simplifies how the retention and purchasing submodels are built.

Most companies, however, are characterized by discretionary (that is, nonsubscription) purchasing and unobservable customer churn. If you have an Amazon account but decide never to buy from the company again, for example, it’s difficult for anyone inside or outside Amazon to immediately recognize that. Marketers call this latent attrition. Accounting for it requires more-complicated submodels, but marketers have developed methods for predicting it extremely well.

Peeking Inside the Black Box

Although this methodology may seem daunting, it’s relatively simple to get going, and it can be refined and extended as appropriate for particular business contexts.

Let’s peek inside the black box through an example. Imagine that you’re the founder of a young, fast-growing, subscription-based meal-kit company. In its first four months of operation, your company generated $1,000, $2,500, $4,500, and $7,000 in total revenues respectively. You would like to understand what this means for future revenues and the overall viability of your business. As a start, you want to forecast revenue in month five.

Let’s suppose that active customers pay a flat fee of $100 per month for meal kits delivered over the course of the month, and that the company acquired 10, 20, 30, and 40 customers, respectively, in its first four months of operation (100 in total). Half the acquired customers churned out in their first month; all customers who did not churn out in the first month have remained.

The first step in forecasting month five revenue is to figure out how much revenue will come from retained customers. Of the 100 customers acquired over the first four months, half, or 50, will still be with the company in month five if historical retention trends persist. Thus, the portion of month five revenue from retained customers is $5,000 (50 x $100). The next step is to forecast how much revenue will come from new customers. Assuming that acquisition trends continue, you can expect an additional 50 customers, representing $5,000 of revenue. By adding up the two forecasts, you arrive at a total monthly revenue of $10,000.

Using the CBCV approach, revenue numbers no longer exist in a vacuum. Instead, they are a direct function of a small set of behavioral drivers—in this example, total customers acquired, retention dynamics, and average revenue per user (ARPU). This framework makes revenue forecasting easier and serves as a diagnostic, helping managers and investors understand where the value creation is coming from (and what questions to ask when results are out of line with expectations).

Of course, few companies will have such simple models and neat patterns as our meal-kit example. Our purpose here is to outline the general mechanics of the approach, as extensions of it follow naturally. Suppose, for example, that your firm has tiered pricing (it also offers a second plan that delivers twice as many meals a month for $189). In that case, you would need to account for variable ARPU from period to period. If the firm allows customers to skip deliveries or make discretionary purchases, you would need to track order frequency and average spend per order. If the firm pivots to sell meals à la carte instead of on a subscription basis, you’ll need to use a model that predicts how often customers will place orders. These extensions add complexity to the model, but the basic process to incorporate them would be the same as in the example above. If you want to extend the time horizon beyond month five, you can repeat the calculation for multiple months. That gives you a long-term revenue forecast, which is vital for corporate valuation.

For an in-depth discussion of the CBCV methodology in complex scenarios, see our academic papers “Valuing Subscription-Based Businesses Using Publicly Disclosed Customer Data” (Journal of Marketing, October 2016) and “Customer-Based Corporate Valuation for Publicly Traded Non-Contractual Firms” (Journal of Marketing Research, March 2018).

Looking at Customers from Inside and Outside

The richness of the insights that can be derived from CBCV depend on how much access the person performing the analysis has to internal company data. A corporate executive would have full visibility of all customer data. A private equity investor assessing an acquisition target would typically have access to transactional and CRM data. For subscription firms, that would include the length of contracts, periodic payments, and observable churn; for nonsubscription firms, it would include the timing and size of each individual purchase. Access to other behavioral data, demographics, marketing touchpoints, service interactions, and the like would further enrich the CBCV analysis.

For those on the outside looking in—hedge funds, Wall Street analysts, regulators, and others—detailed customer data might be impossible to obtain on a regular basis. They may, however, have access to the firm’s customer cohort chart, or C3, which tracks revenue by acquisition cohort over time and shows how total customer spending changes as each cohort ages. (For an example, see the exhibit “C3: A New Tool for Corporate Valuation.”) Many large, reputable firms (both subscription and nonsubscription) have begun to disclose their C3, among them Slack Technologies, Dropbox, Lyft, and luxury marketplaces the RealReal and Farfetch. A firm’s C3, along with the number of active customers and the total number of orders, is sufficient to give investors a good understanding of customer behavior.

The customer cohort chart is straightfoward: total revenue, period by period, broken down by customer acquisition cohort. Though its format may vary, the C3 is increasingly finding its way into companies’ public filings, giving investors a powerful tool for gauging what a company is really worth. This example of a C3 comes from Revolve Clothing’s 2019 SEC filing.

If a firm can’t or won’t release its C3, investors should press it to reveal four key metrics: the number of active customers (in total and the percentage from tenured customers, or customers who have been with the firm for over 12 months); gross acquired customers over the most recent period; revenue (total and percentage from tenured customers); and the number of orders (total and percentage from tenured customers).

While we would strongly encourage firms to disclose more, having three or four years’ worth of these disclosures (from past filings) is enough to run a CBCV model and assess the overall health of a company’s customer base, albeit with greater uncertainty about future revenues.

Trending Toward Transparency

Few companies currently provide all the data outsiders need to perform CBCV, for a variety of reasons. First, disclosure of customer metrics is voluntary, and companies feel little to no pressure to make them available. Second, there is little consensus about which customer metrics are the most informative and how those metrics should be calculated and reported. And finally, policy makers and regulators have been largely silent about these issues, leaving disclosure to companies’ discretion.

Unfortunately, executives often have a “less is more” mentality regarding disclosure. They fear that additional disclosure, however aggregated the numbers may be, could put them at a competitive disadvantage or open them up to potential litigation or regulatory scrutiny. Successful firms worry about how investors will react if the metrics they’re disclosing start going in the wrong direction. And customer-level forecasting often remains siloed in the marketing department; managers in finance and related functions are unaccustomed to incorporating customer behaviors in their revenue forecasts and are more comfortable using traditional methods.

In the absence of investor pressure and regulatory standards, firms can arbitrarily choose which metrics to disclose, generally selecting those that paint an overly rosy picture for the investment community. The metrics are often defined improperly, based on faulty assumptions, or framed incorrectly.

Think about the story your customer metrics would tell if disclosure were required.

Consider Peloton, which sells high-end home-exercise equipment and monthly subscriptions to streaming-video fitness classes. When it filed its pre-IPO S-1, in August 2019, it chose to disclose its customer lifetime value (CLV) per subscriber, boasting a CLV of $3,593 in its most recent fiscal year. To its credit, Peloton also disclosed the underlying formula it used to compute its CLV, but that formula left much to be desired. The most glaring problem was that it did not account for the time value of money, and instead simply added more than 13 years’ worth of future cash flows without discounting them. Applying even a modest discount rate would slash its CLV by more than 50%—a drop with significant implications for the health of the customer base. As more firms voluntarily disclose customer metrics, analysts must be vigilant about vetting data that may be misleading or is mostly window dressing.

Although Peloton’s metrics are far from perfect, they nevertheless represent an encouraging shift toward transparency around customers that will be good for shareholders, companies, and customers. Shareholders will increasingly rely on customer data to evaluate potential investments as more purchases are made online and traditional brick-and-mortar metrics, such as same-store sales, decline in relevance. Executives can use customer data to build the case for investing in activities that will generate long-term value for the firm and to communicate to shareholders the impact of those investments on CLV and other long-term metrics. Customers will be treated as strategic assets whose value should be cultivated over the long term. This mindset will be a welcome change from the status quo, in which shareholders, lacking the information needed to assess long-term customer profitability, compensate by pushing firms to hit short-term performance measures.

Until the CBCV revolution fully takes hold, what does all this mean for you? If you are an investor, don’t ignore the customer-related metrics that may be tucked away in financial reports; actively seek them out. If the data you need isn’t disclosed, demand it, or find alternative sources that can serve as effective proxies. Focusing on unit economics will almost certainly reveal opportunities you can exploit.

If you’re an executive and you aren’t currently disclosing your customer metrics, start thinking about the story they would tell if disclosure were required. If you would not be proud of your metrics as they stand, this is your golden opportunity to refocus on and improve the health of your customer base in the dark. It may not be long before market participants demand sunlight.

Daniel McCarthy is an assistant professor of marketing at Emory University’s Goizueta Business School and a co-founder of Theta Equity Partners, a customer-based corporate valuation solutions provider.

Peter Fader is the Frances and Pei-Yuan Chia Professor of Marketing at the Wharton School of the University of Pennsylvania, a co-author of The Customer Centricity Playbook, and a co-founder of Theta Equity Partners.

Marketer’s Checklist for Navigating COVID-19

Many brands are facing the reality of messaging that was ill-timed or even insensitive. The COVID-19 pandemic has already had a tremendous impact on consumer behavior, and brands continue to face tough decisions on how to respond. All brands are affected, one way or another, and all marketers should take steps to ensure that their marketing strategy is in line with consumer needs during this crisis. In times as turbulent as these, it is important to act with safety as the number one priority and to keep lines of communication open.

With that in mind, Exponea has created the following checklist and resources for consideration in your marketing strategy over the next few weeks.

Marketer’s checklist:

Send an email reassuring your customers and let them know you and your business are concerned about them, also provide some real resources
Review your emails that relate to shipping: change language like “free shipping, expedited shipping” to “thank you for your patience and your business, it might take some time to get to you”
Check your automated templates, make sure they are written in a way that takes current circumstances into account (don’t send a “we hope you’re looking forward to your vacation” when it’s likely they’ve had to cancel)
Pause some of your automations, particularly the ones that aren’t adding value to the current situation in your market
Use frequency capping to limit emails to one per day in Exponea, your automations in a normal week could be seen as positive but during time of consumer concern it could have a negative view (unless you’re sending API triggered communications)

Click here for the full checklist

Thinking Like the Enemy: Banks Conduct “Self-Hacks” to Strengthen Defense Against Cyberattacks

Sometimes you have to think like the enemy in order to stay one step ahead of them, at least according to the American Bankers Association. As cybersecurity experts strengthen their defense against increasing security breaches, cybercriminals continue to improve their own capabilities. The solution? “Self-hack” their own systems to determine key vulnerabilities in order to find a way to eliminate them.

“I could compare it to an arms race,” says Nicholas Antill, Senior Vice President and Senior Security Manager at PNC Bank. Antill draws this comparison based on the constant skill and technology improvement on both ends, which results in a continuous power struggle between hacker groups and cybersecurity teams. Many of the 300 banks hacked in December of 2019 by the Russia-based hacker group Evil Corp are conducting their own hacks to prevent future breaches. Many are relying on in-house teams and contracting third-party vendors to act like hackers and test their systems for weak points. Some, however, are taking more extreme measures an enlisting real, non-criminal hacker groups called “white hat hackers” for a more realistic simulation. Regardless of the approach, each self-hack method aims to achieve the same thing: to get inside the mind of a cybercriminal.

Another factor to consider, in addition to who will be conducting the test, is which kind of test will be conducted. There are several types of testing, each with different factors used to produce different results.

Penetration Testing

Penetration testing, otherwise known as “pentesting” is the most common type of self-hack. Pentesting involves hacking an individual network or application to detect any vulnerabilities not covered by other security measures. Caroline Wong, chief strategy officer at the security testing firm Cobalt.io recommends starting with this method to find where weaknesses lie, such as in mobile apps or cloud infrastructure.

Under the umbrella of penetration testing, there are three different types to consider.

Black-Box Testing

In a black-box test, the hacker has no knowledge of the system it is attacking. This approach more realistically simulates an actual attack, as the average malicious hacker would not have inside knowledge of the system’s operations.

White-Box Testing

White-box testing is conducted by someone with a comprehensive understanding of the system. White-box testing is very thorough because the tester is familiar with the nuances of the system’s security, and therefore knows where to look for vulnerabilities.

Gray-Box Testing

Gray-box testing is conducted by someone who has some understanding of the system’s inner workings, but not extensive knowledge. This method combines the benefits of black-box and white-box testing and may emulate a hacker who may have been able to obtain some knowledge of the system prior to the attack.

Red Team Testing

Red team testing is a more formal, experiment-like, test in which the “red team” acts like actual hackers and launches an attack on the company’s “blue team”. Red-team tests are conducted on a wider scale and often use specific tactics used by known security threats. The target and objective of a red team test are specific and narrowly focused compared to those of a penetrative test. Wong recommends starting with pentesting for a more broad overview of the security system and a general understanding of where vulnerabilities lie. Red team testing is typically conducted by companies with a higher security level that are looking to fine-tune specific weaknesses. Red team testing aims to accurately simulate a real attack, so they typically last two to six months. The tests target both software and human-related weaknesses and threats.

The benefit of carrying out a “self-hack” rather than simply using scanning software to detect vulnerabilities is the human element involved. “If we were bad guys, you know, what would we use to get in?”, says Aaron Shilts, president, and COO of vulnerability assessment firm NetSPI. Once weaknesses are detected, it’s up to leadership to reevaluate security across all channels and personnel.

As more and more companies around the world are hiring hackers to test their defenses, questions of standardization are raised. The European Central Bank has released the European Framework for Threat Intelligence-based Ethical Teaming, or TIBER-EU, which lays out standardized practices for institutions that execute self-hacks. Tyler Leet, Director of Risk, Information Security, and Compliance Services at core banking and cybersecurity provider CSI, warns to only use these tests to “actively look to learn from the results” and to avoid pointing blame at employees.

When done right, self-hacks prove to be very helpful for banks and financial institutions looking to find gaps in their network security. The best way to beat hackers and their rapidly improving capabilities is to stay one step ahead of them, which means thinking like them and constantly hunting for weaknesses they could exploit.

Cybersecurity Innovation Starts Here

Digital Transformation involves ongoing exploration by today’s leaders, and our best advice is to not trek the journey alone. Our Transformational CISO West Assembly coming this August in Las Vegas is set to be an inspiring event featuring some of cybersecurity’s top C-Suite executives.

We know what you’re thinking…

This isn’t Your Run-of-the-Mill Conference or Summit.

What Makes a Millennium Assembly Different?

Join the Assembly

Want to find out if you qualify? Millennium Membership >>

Are you a Solution Provider interested in Sponsorship Opportunities? Learn More >>

COVID-19’s Impact on eCommerce: Get the Numbers Here

As originally published by WITHIN.

WITHIN is monitoring the effects of COVID-19 on ecommerce. Using data from a sampling of clients, we are tracking year-over-year trends in ecommerce revenue, ad spend, and conversion rate relative to the pre-COVID benchmark period.

For insight into how to best weather the storm, check out our new study, “Digital strategies to get your brand through Coronavirus.”

Tuesday, March 17, 2020

The effects of the COVID-19 outbreak in the US are growing, with 4,226 documented cases as of this writing. San Francisco has ordered a shelter-in-place policy while New York City ponders doing the same. Meanwhile, for now, retail metrics seem to be leveling off.

FASHION

From its pre-COVID trend, fashion ecommerce revenue has fallen -61.68%, up a bit from yesterday’s -63%.
Conversion rates are down by -34%, higher than yesterday’s -46%

OMNICHANNEL

Revenue has fallen -63.13%
Conversion rates continued to fall, now at -16.3%.

LUXURY

Revenue saw a little bump, up to -31% compared to yesterday’s -37.87%
Conversion rates fell to 0.40% from yesterday’s +25.4%.

PURE-PLAY ECOMMERCE

Revenue made a slight rebound from -46.43% to today’s -29%.
Conversion rates are likewise slightly up at -26.5% compared to yesterday’s –32.63%.

SUBSCRIPTION & AT-HOME CONVENIENCE

Revenue has risen by +204.3%.
Conversion rates are up by +159.22%.

Monday, March 16, 2020

As of this writing, the number of reported COVID-19 cases has grown by 114% since yesterday. Across the country, stores, gyms, restaurants, bars, venues, movie theaters, and schools are closing their doors indefinitely. The retail world is likewise not faring well.

FASHION

From its pre-COVID trend, fashion ecommerce revenue has fallen -63%.
Conversion rates are down by -34%, higher than yesterday’s -46%.

OMNICHANNEL

Revenue has fallen -57.3%.
Conversion rates are down by -7.44%.

LUXURY

Revenue has fallen -37.87%.
Conversion rates are up by +25.4%, likely because they’ve pulled back ad spend which has decreased traffic. Repeat buyers and lack of new site traffic make the CvR appear higher.

PURE-PLAY ECOMMERCE

Revenue has fallen -46.43% from its pre-COVID trend.
Conversion rates are down by –32.63%.

SUBSCRIPTION & AT-HOME CONVENIENCE

Revenue has risen by +204.88%.
Conversion rates are up by an amazing +119.36%.

Friday, March 13, 2020

COVID-19 continues to spread, with 1,629 confirmed cases across the US. The economic impact is being felt across retail verticals too.

The fashion category has been hit hard, with revenue -40.96% from where it was trending around this time in January (the baseline benchmark we’re using).
Pure-play ecommerce growth has slowed from our last update from -14.57% on 03/10 to -35.30 from its growth trend.
Omnichannel has declined to -41.42% from trending revenue growth.
Subscription brands continue to grow at an incredible pace, at +127.19% from its baseline trending growth this time two months ago.
Luxury goods continue to drop, now at -35.99%.

Go here for WITHIN’s latest updates on COVID-19’s impact on eCommerce.

In Times like This, Culture is so Important.

As originally published by Denise Lee Yohn on Linkedin.

Have you ever read a book and thought, “Dang, I should have written that”?! Or maybe the book so resonates with you that you highlight practically every word of it (thus rendering your highlights useless)? For me, What You Do Is Who You Are: How to Create Your Business Culture by Ben Horowitz is one of those books.

Examining the philosophies and practices of some unlikely leaders (such as Genghis Kahn and a Detroit prison gang leader) as well as those from the business world (including Uber, McDonald’s, and Slack), Horowitz provides exceptional insights on organizational culture — how it works, how to build or change yours, and the elements of a good one. He should know – as the founder of a start-up that he grew and eventually sold to HP for $1.6 billion and as the co-founder and partner at the venture capital firm Andreessen Horowitz that’s backed Facebook, Google, Airbnb, and many other tech giants, Horowitz has helped create some of the most successful companies of our time.

The premise of What You Do Is Who You Are explains so well why I believe that your external identity (brand) and internal workings (culture) must be integrated and aligned. Horowitz’s particular take on culture and culture-building point to the productivity and sustainability that leaders create in their businesses when they ensure there is no gap between what they – as people and as organizations – say and what they do.

Some of the book’s best bits (and my thoughts on the topics in italics) are below — and check out this slideshow of my top 10 quotes from the book.

What is culture

Horowitz:

Culture isn’t a magical set of rules that makes everyone behave the way you’d like. It’s a system of behaviors that you hope most people will follow, most of the time.
Your culture is how your company makes decisions when you’re not there.
It’s the set of assumptions your employees use to resolve the problems they face every day. It’s how they behave when no one is looking. If you don’t methodically set your culture, then two-thirds thirds of it will end up being accidental, and the rest will be a mistake.
That’s the nature of culture. It’s not a single decision—it’s a code that manifests itself as a vast set of actions taken over time.

Every organization has a culture – whether or not it’s the one you want is up to you. Your desired culture doesn’t just happen. You must intentionally and deliberately cultivate it. If you don’t, your people will create their own cultures, work from their own values, and act in ways that may or may not produce the results you want.

Your culture must be unique

Horowitz:

…No one culture is right for everyone. Indeed, no single virtue makes universal sense. Your company’s culture should be an idiosyncratic expression of your personality, beliefs, and strategy—and it should keep evolving as your company grows and conditions change.
While you can draw inspiration from other cultures, don’t try to adapt another organization’s ways. For your culture to be vibrant and sustainable, it must come from the blood, from the soul.
Some ways of thinking about a virtue’s effectiveness: Is your virtue actionable? Does your virtue distinguish your culture? Not every virtue will be unique to your company, but if every other business in your field does the same thing, there is probably no need to emphasize it.

One problem with trying to copy another company’s culture is that what’s feasible for other organizations may not be for yours (not everyone can afford to treat employees like partners and offer them stock options like Starbucks does). Another problem is that what fuels one company’s success may completely backfire at another (imagine if Ritz-Carlton employees decided to joke around with their customers like Southwest Airlines’ do.) In fact, it’s ridiculous to try to imitate someone else’s brand – and it’s just as ridiculous to try to copy another company’s culture.

Getting to your desired culture

Horowitz:

The first step in getting the culture you want is knowing what you want. It sounds obvious and it is; it sounds easy, but it’s not. With seemingly infinite possibilities to choose from, how do you design a culture that gives your organization the advantages it needs, creates an environment you are proud of, and that—most importantly—can actually be implemented?
Identifying the culture you want is hard: you have to figure out not only where your company is trying to go, but the road it should take to get there.
Culture begins with deciding what you value most. Then you must help everyone in your organization practice behaviors that reflect those virtues.
Pick the virtues that will help your company accomplish its mission.
The most important aspects of an organization’s performance—quality, design, security, fiscal discipline, customer care—are all culturally driven.

Every organization requires a specific culture to reach its goals and achieve its vision. If you want to become more innovative, for example, then your culture must encourage risk-taking, experimentation, and curiosity. Or, if you’ve set your sights on being a style leader, then you need to infuse your culture with design, discernment, and creativity. You need clarity about the brand identity and performance you desire and the kind of organizational culture that will enable you to achieve those targets. (My free online Brand-Culture Assessment Tool can help you get that clarity.)

How to initiate culture-building

Horowitz:

To get [your people] to be who you want, you will first need to see them for who they are.
Cultural design is a way to program the actions of an organization, but, like computer programs, every culture has bugs. And cultures are significantly more difficult to debug than programs.
To change a culture, you can’t just give lip service to what you want. Your people must feel the urgency of it.
It’s also critical that leaders emphasize the “why” behind their values every chance they get, because the “why” is what gets remembered. The “what” is just another item in a giant stack of things you are supposed to do.
So a gigantic portion of your cultural success will be determined by what gets rewarded at your company. Every time an employee is recognized or rewarded for pushing the company forward, the culture strengthens.

Start culture-building by assessing your culture as it actually is. Do a culture audit and identify the core values that are currently in play in your organization every day—not necessarily the values that are stated in your company’s mission statement. Compare those values to the ones you’ve determined you need to reach your goals. Then make the case to everyone how the organization needs to change and why.

Translate core values into behaviors

Horowitz:

Culture is an abstract set of principles that lives—or dies—by the concrete decisions the people in your organization make. As a leader, this gap between theory and practice poses huge challenges.
The reason so many efforts to establish “corporate values” are basically worthless is that they emphasize beliefs instead of actions. Culturally, what you believe means nearly nothing. What you do is who you are.
If a company expects its people to behave ethically without giving them detailed instructions on what that behavior looks like and how to pursue it, the company will fall far short no matter whom it hires.
The failure to enforce good conduct often brings modern companies to their knees.

Your organizational culture is largely shaped by its purpose and core values so you need to clearly articulate both. But don’t assume that employees will understand what your core values mean or that everyone will interpret the same value into the same behavior. It’s critical that you establish the desired behaviors or behavioral norms associated with your values so employees know what your values look like in action. In doing so, you are not micro-managing employees – you are setting them up for success.

Culture isn’t static

Culture is not like a mission statement; you can’t just set it up and have it last forever.
Culture is about actions. If the actions aren’t working, it’s time to get some new ones.
Whether your company is a startup or a hundred years old, designing your culture is always relevant. Cultures, like the organizations that create them, must evolve to meet new challenges.
Culture is weird like that. Because it’s a consequence of actions rather than beliefs, it almost never ends up exactly as you intend it. This is why it’s not a “set it and forget it” endeavor. You must constantly examine and reshape your culture or it won’t be your culture at all.

Culture-building isn’t a one-time initiative or a goal you include in your annual plan one year and remove it the next. It’s an ongoing effort that involves making big strategic decisions in planning sessions and sweating the small stuff every day — attending to it when everything seems to be running smoothly and when everything seems to be crumbling around you. You’ll need to be patient, focused, relentless, and disciplined. It’s a journey, not a destination.

Influencer Marketing: What We Can Glean from Marketers’ Shortfalls

If there’s anything that marketers have learned, it’s that social media isn’t going anywhere and it will continuously evolve in our lifetimes. Over the last ten years, Instagram was born, Vine had come and gone, Facebook may have interfered with American politics, and professionals are now TikToking. Social media’s growth and seamless assimilation into our lives has brought forth a new era of word-of-mouth marketing, with influencers being a driving force in what people are talking about today. Research has shown that a large percentage of young people favor the opinions of influencers over their own friends, and with this shift in dogma comes a projected $15B in spend in influencer marketing by 2022.

According to Mediakix, 80% of marketers say influencer marketing works, and certain studies have found that when done right, it can rake in an ROI of $6.50 for every $1 spent.

“It all sounds too good to be true…”

And you may have a point there. Let it be known that influencer marketing isn’t a science. Oftentimes we see influencer campaigns met with skepticism because the cringe-worthy blunders are just so unforgettable- like Mike Bloomberg’s campaign bust, Kim Kardashian’s Diclegis promo that violated FDA standards and the tale of an influencer with over 2 million followers that struggled to sell just a few dozen shirts.

But these failures shouldn’t deter marketers from investing in an influencer campaign, and like many marketers will tell you, knowing what not to do is just as important as knowing what to do. There are valuable insights we can draw from these failures, what did they do wrong?

They lacked brand alignment, authenticity & opted for impression quantity over quality.

Micro-influencers have the ability to reach an audience far more targeted and tailored to your brand’s values than any instagram celebrity could. These influencers with under 10k followers can reach a specific locale, age demographic, and any combination of lifestyle affinities. Their opinions are trusted because they’re real people with jobs and families- which also means they probably won’t kill off your campaign in a distasteful publicity stunt. Build a network of these micro-influencers, and your brand can rival the reach of any macro-influencer at a tiny fraction of the cost and nearly double the engagement.

If you’re investing a portion of your marketing budget on a single post, you’re essentially given one shot at success. Comparable to print, soon enough your instagram post will be buried in new content and forgotten like old news. Not to say that nano and macro influencers can’t make waves in your brand awareness campaign- but what’s the ROI? How much of that spend is really driving conversions? The notion that anyone that follows Kim Kardashian may be a potential customer is unrealistic, and it chalks up a significant portion of your reach as wasted ad spend. Morning sickness drugmaker Diclegis spent upwards of $250k to reach any woman in a single post with Kim Kardashian, when they should have invested in reaching the everywoman, or more specifically… pregnant women. Their poor decision in choosing an influencer was not only met with an FDA warning, but their target audience was left to feel ostracized and dubious over the drugmaker’s claims.

Daniel Schotland, CEO at Linqia says, “With 92% of consumers trusting influencer marketing over traditional advertising, brands will adopt the former as an ‘always-on’ strategy and rely more on machine learning, which is increasingly vital in determining which influencers and content will resonate best for a specific audience.”

We couldn’t agree more with this “always-on” approach, and this strategy is one of the key reasons why Glossier became a billion-dollar industry unicorn in just a few years. Glossier identified that their best advocate was their customer, so they provided their network of micro-influencer “Glossier Gals” with a kick-back on each sale attributed to their recommendation. This built trust around the brand, developed an endless cycle of user-generated-content, and created a community centered around the brand with tweets, memes and makeup tutorials going viral.

Influencer marketing can seem like uncharted territory for many, but as long as you stay true to your brand, there isn’t much reason to fear. When creating an influencer campaign, just ask yourself these three questions:

Does this person align with my brand?

Is this authentic to my customer?

Does this serve quality over quantity?

Digital Marketing Innovation Starts Here

Digital Transformation involves ongoing exploration by today’s leaders, and our best advice is to not trek the journey alone. Our Digital Marketing Transformation Assembly coming this August in Denver is set to be an inspiring event featuring top C-Suite executives from Fortune 500 companies.

We know what you’re thinking…

This isn’t Your Run-of-the-Mill Conference or Summit.

Our Founders, like many C-Suite executives today, became disillusioned by the slew of marketing conferences, summits and events on the market today that promised “world class networking” opportunities with leading industry decision-makers. In reality, they found that these events had antiquated discussion topics presented in an impersonal format, and quite frankly, it seemed like just about anyone could attend the event.

What Makes a Millennium Assembly Different?

Join the Assembly

Want to find out if you qualify? Millennium Membership >>

Are you a Solution Provider interested in Sponsorship Opportunities? Learn More >>

WITHIN’s Joe Yakuel Joins Us on #MillenniumLive

With the company’s recent rebranding, WITHIN has made its vision clear: to approach branding holistically and align each client’s marketing goals with the long-term goals of the company. On this week’s episode of #MillenniumLive we had the chance to catch up with Joe Yakuel, Founder and CEO of WITHIN, on rebranding from Agency Within to WITHIN, rejecting the traditional agency model, breaking down silos to create a better user experience, and acting like the business owner when making each decision for every client.

Go here for the full video interview

Go here for the podcast episode

About Joe Yakuel

Joe Yakuel is the Founder and CEO of WITHIN, the world’s first Performance Branding company. WITHIN works with brands to collapse the funnel between performance and brand marketing to unify objectives, targets, and strategy. Some of WITHIN’s partners include Nike, Anheuser-Busch, Facebook, Shake Shack, Spanx & Hugo Boss. Joe previously worked for The Vitamin Shoppe and Quidsi where he optimized more than $500 million in media. Joe graduated from Tulane University with a B.S. in Finance, then received his MBA from NYU Stern School of Business in Digital Marketing, Entrepreneurship & Innovation, and Business Analytics.

Retail Innovation Starts Here

We know what you’re thinking…

This isn’t Your Run-of-the-Mill Conference or Summit.

What Makes a Millennium Assembly Different?

Join the Assembly

Want to find out if you qualify? Millennium Membership >>

Are you a Solution Provider interested in Sponsorship Opportunities? Learn More >>

Who Among Us is Earning Their Leadership in our Coronavirus Crisis?

As originally published by David Sable on Linkedin.

“We’ve never been faced with this before”…“New Territory for our leaders”…and my favorite, “We are learning as we go…”

The topic? Coronavirus. The scourge of our planet as I write this—sowing fear and skepticism and distrust with fake news, misinformation, and frankly, clueless officials and public.

Are we so leaderless…so short of real leadership that we really think this is all new?

In my series on Leaders and Leadership, I have posited on the difference between real Leaders and mere Authoritarians…that is people who wield vast amounts of power and authority with little or no accountability….the worst kind.

Real Leaders—those who wield true Leadership are always in Beta…looking ahead….living in the now and learning from the past…and always with humility and accountability.

Of course, we haven’t been faced with this before except that we have. Many times…even in recent history.

More…we have more data (despite our wasting it on trying to get me to shop for what I don’t want). We have more science (even though we continue to squander it on profit not people). We have more applied technology (don’t get me started)…

And yet, we look like deer in headlights when a pandemic, accurately predicted by some who used data/science/technology, comes roaring in as scheduled—right on time.

Back to Leaders—my real topic. Let’s take a look at some of my favorite leaders, who, when faced with new crisis, unprecedented predicaments, or unanticipated disasters, reacted with calm…with humility…with accountability and rose to great heights along with the people they led. Always all in BETA.

Where else, but the Bible, do we have a never-ending story of calamity, humankind challenged and on the brink of disaster, often with a vengeful God at the center? I’d start with Moses, whose whole life was spent in Beta, who went from prince to slave to savior (I don’t think there are any training courses for that). Now imagine this scenario and see it as a metaphor for leadership today: God, according to the text loses his cool when, after giving the world the Ten Commandments, discovers that the people took it as Ten Tweets, and spent their time constructing and worshipping a Golden Calf, while Moses was on the mountain.

God gets seriously pissed and essentially tells Moses, “I’ve had it” (Exodus 32:10 for the adventurous)…“I’m done with them….finished….I’m going to get rid of them and start fresh with you”…Hmm…we’ve heard that before no?

What an opportunity for Moses—an unprecedented one. Imagine being the new starting point of history. Think about all the authoritarians who pursued that goal, who saw themselves as ordained by a higher order to wipe out what was and start again. In a less dramatic line of thinking, consider the corporate “leaders” who try to erase the past or ignore history in pursuit of their own egotistical grand dreams or goals…

What did Moses do? First, he makes it clear to God why total eradication would be a mistake, and then he lets God know that “if you dump them…you dump me.” That’s true Leadership, in BETA, humble, and accountable. Looking back, looking forward and seeing clearly in the now.

Moses was able to resist the temptation of power. He understood its ephemeral nature and its disconnect from true leadership, even though in our time, the two are so often conflated.

How about another example…not to be too Biblical, but a figure of modern history often associated with Moses: Abe Lincoln. Talk about BETA—this guy comes from rural poverty, becomes a U.S. President, is plunged into Civil War, must command Generals—and not to mention, a huge army—talk about the potential for power to go to your head. And what does Lincoln say?

“Nearly all men can stand adversity but if you want to test a man’s character, give him power”

Consider the corporate leaders of late. Been listening to any congressional testimony lately? Or the kind of statements given by our so-called leaders? All a far cry from the kind of figure who Lincoln embodied.

Not only was he always in BETA, he was always HUMBLE…ACCOUNTABLE.

For some reason this Moses comparison sticks out to me, so how about another U.S. President who was likened to Moses: George Washington.

Talk about BETA! A farmer, militia officer, a great reader…ends up a General of the Continental Army and then becomes the first President of our country, but only after having turned the offer of being king.

Of course, like all men, George messed up a lot. He didn’t always win. At some points in his life, he was on the run. He often he didn’t have a clue—during the war, his soldiers were hungry, cold and didn’t have enough of anything.

He could have blamed anyone in the moments of trouble, but what did George say?

“It is better to offer no excuse than a bad one.”

Hard to imagine that being said today, but there you have it…another learning from an always-in-BETA leader.

Jumping around yet again, but sticking with our U.S. Presidents trope, it seems only fair given the current crisis that we consider our longest service president, FDR or Franklin Delano Roosevelt. While, not a Moses figure (although he did clash with Robert Moses), FDR was a patrician, but also physically challenged. Soon after winning the presidency, he inherits the Great Depression and is gifted with a World War…talk about needing to always be in BETA…

FDR wasn’t afraid to experiment; to try new; to risk all. He was confronted by crisis after crisis, and what did he say?

“When you reach the end of your rope, tie a knot in it and hang on.”

I love this one…as much as I’m about taking leaps of faith and jumping into the swirling torrents, sometimes true Leadership is as much about hanging on and hanging in as it is about throwing it all out.

FDR, despite his patrician ego and upbringing, had the BETA gene: humility and accountability—and let us not forget, it is often way easier to blow it all up than to hang on when you need to.

One last example…and a perfect example to follow FDR: Harry Truman—a man not elected to greatness, but who had it thrust on him. A man who would have been a mere footnote in history had it not been for FDR’s untimely death.

As President, Truman is probably one of the few, maybe the only, who was confronted by something no one else had ever seen. And while he left some controversies in the historic-record, he also left us NATO and the Marshall Plan. This humble Midwestern man said:

“It is amazing what you can accomplish if you do not care who gets the credit.”

And I imagine that Marshall agrees. Give others the credit but never pass the buck, look that one up…Humility, Accountability, and Beta Leadership.

Bottom line? True leaders, real leaders are always in BETA, and when you are always in BETA the words of Michael Jordan (not a president, but still a great leader in my eyes) resonate loud and clear:

“Earn your leadership everyday”

Only real leaders get that. Power players and authoritarians hang on to power through entitlement…most often self-entitlement. And although they might have first gained access because we let them, to them uncertainty is an opportunity for power…not for leadership.

In the BETA uncertainty model, you earn your leadership rights every day.

Think about the current global virus crisis and see who you think is earning it every day…

Who might say, “I’m in this with you…our families are all at risk together.” Or who would be willing to cede power to people who knew more about the issue because that’s the right thing to do? And who do you think is hanging on the rope knowing that until we know better, just hanging on is the right option? And finally, who doesn’t care about the credit…just the solution?

Who you think is earning their leadership every day…is anyone?

What do you think?