Back in the Dough

The exterior view portrayed a strong, stable company — a well-oiled machine churning along toward future profits and continued success. The interior showed an entirely different story — a company crumbling just like one of its cookies. Mrs. Fields’ early success actually led to the downturn of its catalog direct/online unit.

With that early success and rapid growth, Mrs. Fields didn’t invest properly in the infrastructure (marketing database, systems, tracking) of the direct division, says Greg Berglund, president of Salt Lake City-based Mrs. Fields Gifts. What’s more, the company failed to keep product offerings fresh and relevant, especially the refreshing of photography and item newness.

“The company grew very rapidly,” says catalog consultant Coy Clement, who worked with Berglund and Mrs. Fields Gifts for much of 2006. “My impression was that the controls within the business and sort of the technical underpinning of the business were not very strong when Greg came in.”

Berglund joined Mrs. Fields Gifts in August 2005, a time when the company was struggling to serve its customers properly. At the same time, Mrs. Fields Gifts’ product relevancy was declining. This made it difficult for the company to retain its customers. And with the cost of acquiring customers increasing, the 12-month housefile was taking a substantial hit.

What’s more, the catalog division was considered an afterthought. “Mrs. Fields’ direct marketing business isn’t its core mission,” Berglund says. “It’s an ancillary business. So the corporate energy was on the franchised retail stores. It was just milked.”

Building a Change
To get the direct marketing business back on track, Mrs. Fields hired Berglund, who was fresh from helping turn around Disney’s catalog and e-commerce operations. “Ownership — the CEO and the executive committee — noticed there was a great opportunity here in the direct marketing business,” Berglund says. “They realized they’d been underinvesting in it and saw a great future if they got behind it.”

Once onboard and with the support of upper management, Berglund undertook the following steps:

1. Cut catalog circulation by 40 percent. “Philosophically, you have to get the product, presentation and offer right before telling the world about your offering,” Berglund says.

2. Consolidated eight separate warehouses into a single new manufacturing plant and distribution center.

3. Implemented a nightly matchback process, in which online orders are matched back against the company’s outbound marketing techniques, namely its catalog and other forms of direct mail. The company then credits the marketing channel that most likely stimulated the order.

4. Nightly deduping at the data warehouse — pulling together and aggregating customer records to help understand the purchase history and true activity of customers.

5. Invested $1 million in new operations software to control inventory at every step in the process, including informing customers in customer service situations as to the status of their order. The company bought Microsoft’s Dynamics AX 4.0 business software and implemented Junction Solutions’ Multi-Channel Re-tail (JunctionMCR), Food & Beverage (JunctionF/B) and Business Intelligence (JunctionBI) programs. The systems have allowed Mrs. Fields Gifts to streamline retail processes, gain real-time information and meet compliance and safety requirements in its bakeries.

6. Assembled a team of highly skilled, experienced and knowledgeable employees in creative, merchandising, operations and marketing.

7. Made use of fact-based marketing tools in the data warehouse, such as square-inch analysis, cost of acquisition, lifetime value and multichannel influence.

8. Invested heavily in increasing product quality. For example, because more than 95 percent of its orders are gift orders, the company customizes individual orders. So if customers ask for a very specific sentiment on a decorative ribbon, they can order a basket full of cookies with “Congratulations,” “Thank You,” “Great Job” or “Welcome to the Team” ribbon messages. Mrs. Fields Gifts also has the ability to print a company’s logo on top of its cookie tins.

A Return to its Values
With the infrastructure concerns shored up, Berglund then focused on re-establishing the Mrs. Fields brand and its commitment to customers. With this, he didn’t have to apply any past experience; he simply had to turn to the company’s heritage. “The heart and soul of [founder] Debbi Fields’ operation was one of fantastic quality,” he says. “So in making excellence the standard, we just rolled out in our fall catalog a 100-percent-satisfaction guarantee. We simply make excellence the standard.”

The company’s guarantee cuts no corners. It pledges that if you’re aren’t 100 percent satisfied with the freshness, quality and/or presentation of your gift, it’ll do whatever it takes to make it right, including reshipping the order.

On its peak days during the holiday season, Mrs. Fields’ bakes about 40,000 cookies an hour and will ship about 35,000 packages a day. Unlike in the past, the company’s quality control measures are such that every cookie must be of acceptable quality. The company now employs a director of quality who’s empowered to take any product, at any time, in any state, and throw it away if it isn’t good enough. According to Berglund, that person can take an entire rack of cookies and roll it off the back of the dock and say, “Start over, this wasn’t good enough.”

Debbi Fields’ philosophy can be summed up in one phrase: “Good enough never is,” a mantra that’s implemented in every aspect of the business, including the catalog unit. The saying originates from a visit Mrs. Fields paid to one of her retail locations. Looking at a batch of flat and overbaked cookies laid out for customers, Mrs. Fields asked a store employee, “What do you think of these cookies?” His response was, “They’re good enough.” With that, she took the cookies — $500 to $600 worth — and threw them in the garbage. Her response to him, “You know ‘good enough’ never is.”

As for the catalog’s improved customer service, Mrs. Fields Gifts guarantees same-day shipping on all orders placed by 3 p.m. MST for the majority of the year, the only exception being the Christmas holiday season when the cutoff is noon. The company also invested in the packaging of its products to ensure freshness upon delivery, as well as the texture of the ribbons. Another fresh touch is the inclusion of tissue paper inside the boxes with a little gatefold and a sticker. All of this was done with one common goal, Berglund says: to consistently take Mrs. Fields Gifts to that next quality level while providing superior customer service.

To increase the relevancy of its products, the company increased the new product percentages for each catalog drop, increased the frequency with which photos of the products were shot and improved the quality of the packaging.

“Instead of taking a picture of burlap or using a drawing of burlap and putting that around a gift package to come across as burlap, we now use burlap,” Berglund says. “It’s the difference between the impression of quality to true quality.”

Room for Growth
Much of the foundation has been laid for future success at Mrs. Fields Gifts. Circulation has grown steadily to nearly half the level it was prior to the 40 percent cut with no signs of stopping in sight. And there’s plenty more that Berglund and his staff have on the agenda. Chief among those concerns is fulfilling its commitment of 100 percent satisfaction guaranteed so that all interactions customers have with Mrs. Fields Gifts are positive.

“I’m in the process of [asking], ‘How can I make that experience when they call us on the phone just as special as the gifts are when they go out the door?’” Berglund says. “‘How do I improve that service level on the phones and on the site?’ We’re working on that experience and on the experience with our marketing e-mails and confirmation e-mails. This way, right after you purchase, you get an immediate and accurate kind of response. These are all works in progress for us.”

“In general, it seems to me that the place they’re in right now is a pretty good place,” Clement says. “They got their control issues back, and they have the ability to measure results and make good decisions. And operationally, it’s in a much better position. There’s considerable room for growth, both in consumer and business-to-business gifts.”

Following some tough years, it appears Mrs. Fields Gifts has found its recipe for success. “We’re back in a growth mode,” Berglund says, noting that the direct division carefully has increased investments in pages, circulation, online marketing and its sales teams. “We’ve added back almost half of the marketing investments I cut as a part of the initial turnaround. We’re feeling very good about the offering that we have in the marketplace, and our customers are responding very positively.”