Rinaldo Costa’s first meeeting as the new VP of marketing for retailer Trendsetter Fashions didn’t go so well. The company’s director of business development, Jayne Herald, was exasperated by the marketing team’s overzealous price cutting—primarily via email promotions for online discounts—and let Costa know it. Herald felt that the excessive promotions were undercutting not only the brand’s profitability, but also its perceived value as the place to go for the hottest new fashions.
The brand’s mission was to be first to market with what’s new; as a result, giving its customers access to the latest fashions days before other retailers had those items available—access that customers had long been willing to pay a premium for. Rushing to offer deals on new items had led to a significant drop off in opens, clicks, and conversions for Trendsetter’s nonpromotional emails.
Herald emphasized to Costa that Joe Berris, the company’s email marketing director, wouldn’t budge on switching back to fewer promotional emails. His compensation was based on overall opens, clicks, and conversions; so, although the performance of emails about full-price new items dropped, and profitability was taking a hit as a result of fewer sales of those items, overall opens, clicks, and conversions were up—which meant a bonus for Berris.
Costa left the meeting knowing that his fiduciary responsibility to the company was about to lead to some tough decisions, including how to handle Berris and what approach the company should take with its email marketing in terms of promotions.
