Brand Marketing Channel Business Budgeting Strategy Misfortune : Porters of Racine

portersPorters of Racine was founded in 1857 providing furniture of distinction well before Abraham Lincoln was President of the United States. My understanding of the history is that fine furniture was brought into port of Racine, Wisconsin and that people traveled from across the Midwest to Porters of Racine to purchase fine furniture. Fast forward to 2010 and we learn that Porters of Racine is closing after 153 years. There were detailed stories in the Racine Journal Times which mentioned the owners were hoping for better sales that did not materialize. The Milwaukee Journal Sentinel mentioned the following items in their story:

“Small local furniture retailers who sold mid-range to higher priced furniture already were challenged before the recession because of competition from lower-priced Chinese imports.”

“Porters of Racine, one of the oldest surviving high-end furniture retailers in Wisconsin, soon will close after struggling for several years with declining sales.” Reaction: Notice that phrase “several years”, it’ll become vitally important in a minute.

“Through November, retail furniture sales in the U.S. dropped by 12.1%, according to the U.S. Census Bureau. The decline followed an 8% slide in 2008.” Reaction: Yes, after the housing bubble which created unnatural demand for furniture in 2005, 2006 and 2007, this would be natural.

The story states that Porters of Racine “will close after several years with declining sales”. Yet the story mentioned sales figures that only showed declines for 2008 and the first 11 months of 2009. dictionary.com defines several as “being more than two but fewer than many in number or kind”. This seems to indicate a period of two to possibly up to seven years. A previous 2007 story mentioned Porters of Racine being in a challenging business situation, before the housing bust took place indicating a clear issue about the business had formed earlier than 2007.  What could possibly explain several years of declining sales that included a four year boom in housing that correlated with increased buying of correlated household goods? That is a really good question.  It would seem to indicate that there was an agonizingly long, slow drop in quantity of qualified store floor traffic.  Let’s examine Porters online marketing channel usage, obviously without the help of the actual marketing plan in my hands.

The following branded terms for Porters of Racine had the following monthly query volume:
porters of racine outlet    36
porters of racine    1000
porters of racine furniture    91

According to my post, Local Search Marketing Keyword Allocation: Porters of Racine, there were about 48,948 qualified queries for the term Wisconsin furniture, 38,971 for Milwaukee furniture and 3,110 for Kenosha furniture for a total of 91,020 queries. Give that the standard 1/3 Google keyword haircut and we’ll call it 60,000. However, if you include the other communities in southeast Wisconsin and northeast Illinois, you’d probably have between 40,000 and 60,000 long tail queries for places like Lake Forest, Wilmette, Winnetka, Kenilworth, Highland Park, Glenview, Northbrook, Deerfield, Buffalo Grove, Lincolnshire, Mettewa, Libertyville, Schaumburg, Kildeer, Lake Bluff, Barrington and Riverwoods. In Wisconsin, there is places like Madison, Green Bay, Appleton and other cities within a drivable distance of Porters. To be conservative, we’ll even leave the high query volume term Chicago furniture completely out of the equation. So let’s call it 100,000 monthly queries in the regional furniture query market.

A look at website of Porters of Racine, shows a classic flat small web site with “Porters of Racine” on every title tag. And while the site had several more pictures on it before the going out of business sale banner was added, this was the case before the change. A further look back at the Internet wayback machine, indicates a series of websites built over the years that did not venture far from the current web sites theme. The word Milwaukee does appear on the site during a year 2000 version. Well you are getting my point, Porters of Racine appears to have never created an effective content strategy that would attract the types of searchers that would be looking for high end fine furniture and lived in the region. In fact it only ranks for the non-branded attribute term – Racine furniture. In my opinion, the shift in how companies engage customers has been shifting from many traditional forms of media to effective content and relevant paid search marketing strategies that can create engagement with potential customers. I’m making an assumption about content only as I see no evidence of an active paid search marketing campaign.

One might assert that many of those 100,000 queries aren’t qualified customers of a high end furniture store like Porters of Racine. Alright I’ll grant you this. But before we write them off, let’s talk about their potential benefits for a minute. Thousands of people wanting the best and aspiring to buy furniture from Porters of Racine! The amount of word of mouth, the number of people who visit the store and tell stories about it. All great things!  Not to mention we likely all know someone in our lives whose significant other caused them to buy something more expensive than they should be buying right? I do! OK, so let’s drop 90% of those queries as completely unqualified customers. This leaves us with around 10,000 queries a month.

10,000 queries a month for how long? Let’s say 7 years from 2003 (once Google had mainstream traction) through 2009. 10,000 queries times 7 years times 12 months per year yields us = 840,000 queries over the past 7 years! During a time period where customers were deluged with tons and tons of new content in news ways and forms. Not to mention that all of these queries were people putting in the word furniture with a regionally local qualifier – so they were relevant prospects! If done right, much more effective than traditional brand marketing spend that wastefully sends outbound messaging to many unqualified and uninterested customers.

So would 840,000 queries from relevant prospects have made a difference in Porters of Racine viability as a profitable and thriving business concern I think so.

Not fully convinced? Consider this. Doris Hajewski’s next “Shop Talk” entry was about Steinhafels opening a new mattress store. Who ranks #1 for the terms – Wisconsin furniture and Milwaukee furniture? You guessed it, Steinhafels!

Back in Chicago, I performed business content strategy and seo services on Weber Furniture Service, a fine furniture and refinishing and restoration provider, at the end of 2008, in the 1st quarter of 2009 versus the 1st quarter of 2008, a very different economic period, unique site visitors were up 45%!!! The company was able to cut traditional media spending as an added benefit which improved profit margin!

To be perfectly clear, my goal here is not to rip on Porters of Racine. Quite the opposite. By profiling a business which is going out of business, it is my hope that tens of thousands of other businesses can learn about the importance of effective SEO, SEM and content marketing practices from this event, which in my personal opinion is one of missed opportunity.

Let’s summarize what we’ve observed here in this post.

1) Effective search rankings can contribute to business success (Steinhafel’s) or business failure. Do you want to learn about Gen X CMO management techniques so you can prevent other businesses from this fate.

2) With the emerging changes in operational risk liability laws is your Board of Directors receiving qualified advice from someone who understands seo and web analytics as well as traditional executive level business techniques? Are they keeping current with these items are transforming the world of business strategy and customer distribution? If your Board of Directors  is not yet receiving this advice, it should be. Shareholders should be demanding it!

3) Are you aware of the trend of how search marketing is allowing product attributes to be electronically stored and retrieved from non-branded search queries allow you focus on the customers needs instead of your product push? As volume of content increases there is an ever increasing lack of mental band with to absorb additional information. You may wish review the appendix to this post.

4) Are you aware of the microeconomics of your marketing channels and successfully migrating organizational resources to align yourself with the customer and lead this change management initiative?

5) We are living in a time that is similar to the industrial revolution.  Marketing is changing from a purely outbound medium to a medium via search that is creating inbound marketing. This is a 180 degree process change that has large process ramifications. We are in a recession, but there are structural changes happening to the economy as a result of search and most businesses are not properly adjusting.

6) In the new normal economy, one needs to utilize the power of the Internet to lower marketing and sales costs to create competitive advantages over their competition. It’s actually not that hard to do once you understand it, but one has to understand that revenue and profitability improvements are possible. This is why the change management is so difficult, many don’t understand what is possible and are not aware of the far reaching organizational issues. One further needs to understand that SEO content strategy is not instant, but rather a long term process.

7) Newspapers, online news sites, TV and cable news need to cover more than just the facts. The reality is yes businesses are closing and jobs are being lost, but that is a symptom, not a root cause of these complex business issues. But these are things that happen well after the damage that is caused by not migrating your marketing channels to an ideal search marketing strategy.

If you’d like to learn how to become aware of these issues so that you can migrate the structural changes in our economy, please consider attending Think Tank Live in Waukesha on February 23, 2010, code WI50 gets you a $50 discount. Chris Campbell of Lakeshore Branding and WordPress Expert Lisa Sabin-Wilson wrote blog posts about the upcoming event where you will learn things such as “How Breaking Business News Stories Migrate to Mainstream Mass Media“. We hope to see you there!

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18 Responses to Brand Marketing Channel Business Budgeting Strategy Misfortune : Porters of Racine

  1. Randy Pickard February 15, 2010 at 5:53 pm #

    David,

    Thanks for making such a compelling case study for the need for SEO. Too bad they didn’t hire you. Sad to see such an iconic retailer fall by the wayside.

    Randy

  2. Jim Sterne February 16, 2010 at 3:56 pm #

    Case studies on failed businesses – now there’s a new twist. Humans have a wonderful capacity to learn from other’s mistakes. Thanks for finding a real-life, bad expample and comparing it to successes. Love to see more.

  3. Pam Silverman February 17, 2010 at 11:51 am #

    I think your points are well taken, but you might have selected a better case study. Porters has always been know throughout the region for their excellent reputation as a retailer of fine furniture. Most consumers purchase this type of furniture through their interior designer and most of these folks have an ongoing relationship with a designer. They aren’t usually looking for a single piece of furniture on their own. They don’t search for a furniture store online. Porter’s demise is likely due to stronger forces at work that lack of Internet marketing.

  4. David Dalka February 17, 2010 at 12:59 pm #

    Hi Pam – I look forward to your post with a different case study. I’m sure that people in that legacy industry space who haven’t adapted their ways to the Internet business revolution will say the same thing because they don’t want to change either.

    Porters was chosen because the opportunity size is clear cut based on the keyword volume and it is clearly a factor in it’s lack of floor traffic and awareness.

    Your point about Porters always being known about the region for their excellent reputation as a retailer of fine furniture also needs clarification. My informal research showed 100% recall in senior citizens and older baby boomers in Chicago. However, there was virtually no awareness of Porters among Gen X or Gen Y. Like zero.

    The simple fact is that according to previous articles Porters was having troubles long before the current economic downturn. The problem was awareness and floor traffic among those with relevancy. Lack of an appropriate marketing channel shift is clearly a major cause in their demise.

    As for the interior design angle, the Internet is consistently removing middlemen from transactions. All I can say is this, if interior designers loved Porters and if they are so important to the equation, we wouldn’t be having this conversation about Porters closing.

  5. Deadhedge March 3, 2010 at 11:16 pm #

    This is a good start but I would like to see you take your funnel a little further to give a more complete picture. You made the case for a potential 10,000 impressions/month with good seo.

    How many click through’s would result (leads), how many calls or store visits, and how many purchases?
    If there was a 10% lead conversion (1000 leads), 33% calls or store visits (333) and 25% purchased (84). Throw in cost/lead and $ purchased and you would have a very compelling story.

  6. David Dalka March 4, 2010 at 6:20 am #

    Totally agree with you, though that’s a little too much detail for a high level business audience. The point of the post is to quantify the complete and total loss of exposure due to a lack of an effective search marketing strategy and that this can contribute to business failure. The majority of c-level executives currently do not understand the opportunity discussed here.

  7. SEM Sensei March 15, 2010 at 12:20 pm #

    Bookmark this story as a classic cautionary tale. I see numerous examples every day of such head-in-the-sand business management from even large, successful companies who could and should be increasing their market share and revenue, but are unaware that their web strategy is hurting their business.

    I also see a lot of instances of poor or even nonexistent web analytics, with key marketing decisions made using guesswork or intuition. My response is always “if you haven’t looked at the stats, then you don’t really know.” It’s amazing how many managers simply don’t understand that simple concept.

    SEM Sensei.

  8. Michael March 31, 2010 at 10:43 pm #

    You highlight a problem that is more common that it should be. I agree, if C level executives can understand the impact that can be made with a relatively easy online marketing strategy, I think there are some business failures that could be averted. Thanks for the detail.

  9. Mark K September 1, 2010 at 11:50 am #

    Thanks for making such a compelling case study for the need for SEO. Too bad they didn’t hire you. Sad to see such an iconic retailer fall by the wayside.

  10. Rafael Montilla September 3, 2010 at 8:13 am #

    Great post, David. I have been doing SEO work, for the furniture industry, for the past three years. In my opinion, furniture stores on the Internet represent a rapidly developing niche. In essence, this is where the customers are. As you’ve said, “Effective search rankings can contribute to business success or business failure.” I began SEO work for KMPfurniture.com in late 2007. Back then, it was just a budding online furniture store with a small warehouse. When they started ranking on the two first positions in Google results (for highly competitive keywords like “Modern Furniture”), the cash flow significantly increased. As a result, they were able to open a 14,000 sq. ft. store, here, in Miami.
    In 2010, I moved on to Modani.com (another furniture store). They also had a small 2,000 sq. ft. store, here, in Miami. Since then, they’ve been able to open two new stores in New York and Los Angeles, while building a second store in Miami. The growth rate is phenomenal, thanks to their successful Internet marketing through professional SEO assistance. Older, established businesses will also need to look to the Internet, if they want to maintain good business volume. But they need to realize that it’s going to take more than just having a website. Obviously, even if you have an expensive site, if it isn’t ranking in the top 20 in search engine results, it may as well not even exist!

  11. Tia October 15, 2010 at 4:37 am #

    The one takeback that I think is essential is what you said about the other furniture store ranking for broader, more relevant terms. Everyone is always focused on just seeing their site come up at the top of search results, no matter what the term is.

    It’s so crucial to do keyword research.

    Great post.

    Tia

  12. spondylolisthesis February 24, 2011 at 6:59 am #

    Thank you for sharing this case study. In SEO if you dont do keyword research correctly. All your efforts are of no use. I know several people who did same mistake. Its really hard to convince your client to target a broad keyword. I’ve one client who was into landscaping business he forced us to get his website ranked for the broad term landscaping, although he is getting good traffic but none of them are converting.

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