Podcast transcript
Paul Sonneveld
Hi everyone. It's Paul Sonneveld here from Marketplace Masters. It is so great to have you with us as part of this live episode. Now, before we dive in today, just a quick word about Prosper. As some of you will know, if you are heading to Prosper in Las Vegas from March the 10th to the 12th, MerchantSpring is an official sponsor this year, and we generally love to see you there. You can find us at booth 334. We're going to be showcasing our latest AI-powered capabilities, including our Insights Agent, one of the most impactful features we've ever released.
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Welcome back, everyone, to Marketplace Masters. Today's conversation is about something that many large CPG teams really struggle with on Amazon, not because they lack effort or expertise, but because their operating rhythm really hasn't evolved with the complexity of their business. So late February is typically when plans meet reality, and KPIs are everywhere, but often decisions can be unclear. New items stall because ownership is fuzzy, and many teams spend too much time reacting instead of executing. Quite a few challenges there.
Now, to help me unpack this today, I am joined by Donte McCrary-McClain. Just a little bit about him. Donte has led Amazon and e-commerce transformation from both sides of the table, working with global brands like Unilever, Newell Brands and Hershey, and later serving as the vice president of Amazon Media at Flywheel Digital, where he helped lead a 200+ team in their media organisation. Today, he's the consultant and co-founder of Willse-McClain Advisory, advising brands and agencies on building clear operating models, decision frameworks, and durable capabilities for modern e-commerce.
So specifically in today's conversation, we're gonna walk through how really large CPG teams can tune up their Amazon vendor operating rhythm from KPI decision scorecards to new item launch governance to the few workflows that actually move the business forward. So you're in for quite a meaty topic, and I can't wait to get into it. But first of all, Donte, great to have you on the show. Welcome.
Donte McCrary-McClain
Thank you so much for having me. Excited to be here.
Paul Sonneveld
Hey, just before I fire my questions at you, you know, they're loaded and ready to go. Just a reminder to our audience, if you are watching us live, we'd love for you to participate in this session. Ask our questions, and I will just nicely handball them. I don't know if that's an Australian term to Donte, who will do his best to answer them as part of the show. So if you're on LinkedIn, put me in the comment section. If you're on YouTube, do the same, and they'll flow through to us.
All right, let's kick off. I guess, you know, in my intro, I mentioned, you know, February is typically a time where sort of a lot of this sort of comes together or it comes to a head in terms of the challenges. But Donte, why do you think QAnon is really the best time to tune a vendor's team's Amazon's operating rhythm?
Donte McCrary-McClain
Yeah, absolutely. I think Q1 is a fantastic time for a couple of reasons. Number one, you're kicking off the top of the year. You're still settling into the realities and reconciling, which were inspired from the previous year, particularly if you are on that January to December fiscal cycle. Moreover, that late February time period, it's really early enough such that you can tune without panic, and you've got a late enough evidence and not just opinions to be able to react to the realities of what's transpired over those first sixty days. But then you can also pause, reflect and make sure that you are actioning against what transpired into the future state.
Another key component and sort of rationale as to why that late February Q1 time period is fantastic is that Q1 often exposes friction early. And so whether that from a vendor perspective, you've got some inventory constraints, your forecast is starting to drift a little bit based off of what you previously anticipated would happen. Maybe there are some content gaps in the mix and agency handoffs by way of budgets not necessarily making their ways into the right players' hands towards that later of the end of year time period. You've got some time to be able to take a beat, pause, reconcile, and making sure that you are moving seamlessly successfully deeper into the annual cycle.
And moreover, another key reason as to why that beginning of the Q1 time period is fantastic is because, you know, generally at the bigger CPG organisations, your annual plans are, quote, set. Right. But the inputs are unstable, and some of those inputs can be budgets, priorities, accountability or availability and promo cadences. and as well as media efficiencies. And so you've got the opportunity to recognise that there is a little bit of a set structure from an annual planning perspective, but those variables are ones to which you can manipulate to either reconcile if you are going off of the rails, or supercharge if you are doing fantastic and you want to add some fuel to the fire. So, that first like quarterly time period where you have top of the year, some bit of early signals, and you have some variables to play with, make that late January, February time period opportunity to make some changes.
Paul Sonneveld
Yeah, enough for some cracks to appear in the overall process and disciplines, but not too far down the road for the consequences of those to be unrecoverable for the remainder of the year. OK. Well, there might be vendors listening to this and saying, well, actually, Donte, we're good. Everything is sorted. Everything runs so smoothly. But what would you say to them? I mean, what signals would tell you actually your operating model isn't working as well as it should before we really see the big impact and results start to dip?
Donte McCrary-McClain
Yeah, that's a great question. And there may be folks that are currently tuning in that are in that position, and that's fantastic. I'd say there definitely are other variables or signals that are in play before there is perhaps fire and or revenue implications associated with the state of the business. And the way which at Willse-McClain Advisory we like to think about it is in these four leading indicators pre-revenue. So first and foremost stems down to media, excuse me, meeting proliferation. And what that entails is more meeting forums and fewer decisions. And so if you are analysis paralysis and or building decks just for deck building purposes, and that is the general nature and really the structure and the rhythm that you've got, although the business is in a healthy position, you may want to take a beat and pause and scrutinise. Why is it that we are meeting internally so frequently without making decisions and actionable changes as a result? And so that first pre-revenue signal is all about meeting proliferation.
The second bit, in terms of early indicators pre-revenue, is around escalation frequencies. And as someone who sat on both sides of the table, be it the likes on the brand side, as well as the agency side, fire drills absolutely exist. However, what you don't want is this perpetual cycle of leaders and or core teammates consistently being dragged into operational problems. This may manifest in slack chaos and or a lot of different activities that are keeping your teams away from the ball or the focus. And that escalation frequency is I'd say, the second pre-revenue indicator.
The third one that may come up includes the likes of duplicate reporting. Perhaps there is no shared source of truth, and there is mismanagement and or lack of clarity with regards to what's the focus, what's the data, what's the North Star. And again, that could be a pre-revenue signal if the health of the business is stable. And last but not least, and this ties to movements from an inventory and your product assortment perspective, and that's by way of launch delays and accumulations of those missed gates tied to innovation and trying to bring a product to life.
And so, the persistence of some of those pieces happening time and time again could manifest in revenue implications, but you want to take a deep one practice that we always advise individuals to do. It's called a fire drill test. And so what you can do is you can ask your teammates, how many fire drills did we actually have over the last quarter? And were they identical to the fire drills that we are currently experiencing? If that be the case, triaging and looking inward by way of the processes, cross-functional collaboration, and things that are sort of underpinning the frequency of those fire drills and try to root cause and put some solutions at play there.
Paul Sonneveld
Yeah, that absolutely resonates. In fact, when you started to answer that question, memories started flooding back from some of my corporate experiences, you know, spending a lot of time in meetings, producing decks with kind of just show and tell, but no decisions, all of those efficiencies. And then, you know, to your point later about, you know, actually nothing is happening, right? Things are getting delayed. So I'm sort of glad you spoke a little bit about kind of like, you know, internal presentations and presenting things, because that sort of gets us into the next topic I wanted to explore, which is around KPIs. There are so many things and, you know, I think there's a tendency, as you sort of alluded to, for particularly large organisations to focus on everything and perhaps even the wrong things. So my question to you, Donte, is this, like, how do you as you're working with your clients, right? How do you work with them to pick the right, I don't know, six to eight KPIs that, you know, actually drive decisions and not just, you know, reportings or not just there to fill up slides in a deck?
Donte McCrary-McClain
That's a fantastic question. And I'd say we isolate the decision-making associated with selecting those KPIs on three core questions. And you really have to look inward and be diligent to make sure that you can answer to and respond to these questions, because if you can't, then there may be mismanagement and or lack of efficacy on selecting said KPIs. And so one of the first questions that you should seek to select is, does someone own the actual KPI? When it is measured, it often matters, but the measurement and it mattering is only as good as the execution once you've identified and or tracking that KPI. So first question is all about, does someone actually own the KPI?
The second is the likes of is there a threshold that triggers a decision? And so whether that is a red, yellow, green related thresholds associated with if KPI moves across or too low, what are those trigger points and who's going to enact that decision? And then the third bit or the third question, the third question is all about does it change in the metric? What happens or does a change in this metric change what we do? If the answer to any of these questions are no, based off of the KPIs that you are earmarking, you may want to cut that KPI because it's not purposeful, dutiful to select a KPI just for vanity metrics.
At an aggregate level, If you are a large brand or CPG, you should be striking a tune with respect to how am I ensuring that I am delivering against profitable growth, so sales and share, and really emphasising the likes of profitability and making sure that you have clarity of who's owning that KPI, because there are so many different that could be tracked underneath that, tied back to those three core questions, I'd say are the fundamentals. For example purposes, and just to provide you a couple of maybe the six to eight KPIs that you should be steadfastly tracking, as well as having owners and those triggers against it, it includes your ordered revenue versus your plan. So of course, everyone must be accountable to some form of delivery of a number. In stock level as well as availability, because we are working in an environment to which consumers are looking for the ability to transact and to get these products, but the transaction is only good as the ability for it to be serviced and its availability.
From a new item perspective, you should be making sure that you're ramping up accordingly and making sure that there is a visibility with respect to the velocities of them against your forecast. Media efficiency, whether it's the likes of either from a ROAS perspective, incrementality or the new to brand rate. And again, these are just high-level KPIs you'll need to scrutinise based off of the job to be done per each of your respective campaigns. Your content quality and your search ranking also is a key KPI.
And then from an operational efficiency and just overall financial health perspective, your chargebacks, your PR rates, and all the other added cost and benefits of servicing and satisfying consumer needs through Amazon are ones to which you'd be laser focused on. So those are just examples. Big North Star is sales, share and profitable growth and asking and really asking yourself internally those three core questions with respect to the KPIs. Are they the right ones? Do we have accountability? Do we have triggers associated with them those will help to isolate what truly are the six to eight that matter most? And you will make a change as a result.
Paul Sonneveld
Thank you. Yeah, that's very helpful, particularly around the, does any behaviour actually change if a KPI changes? I'd love to, I mean, are you able to provide, maybe just to really make it clear to our audience, right? Maybe an example or elaborate a little bit more in terms of in your mind or based on what you've seen, what does good ownership of a KPI look like? And that link between thresholds and action. I'd love to sort of, can you maybe give us an example of where you've seen that work really, really well?
Donte McCrary-McClain
Yeah. And so first and foremost, KPIs, as I previously mentioned, you've got to tie it back to the level of accountability. And so who are the teams and or the players, when the going gets rough and or when we are really successful as well, are going to own the number to trigger the decision to actually take action. And you want to make sure that you are tying those actions to time-bound due dates, as well as the visibility of what action was taking and its implication towards the rest of the team, the rest of the business, health, et cetera.
Good ownership reduces politics, and the systems decides when you need to actually execute or escalate, excuse me. And just to tie back to a material example, right? When we think about one core KPI, which can be the likes of in-stock rates and that KPI, If I am at a large manufacturing or a brand or a CPG, the owners in this dependent upon the complexity and the organizational structures, some CPG still have center of excellence is some from an e-commerce perspective sits between both sales and marketing teams, et cetera.
But in general, jumping back to the KPI example of in-stock levels, we know that the supply chain and the vendor ops lead are going to be closest to the ownership table with that specific KPI. And say your target for that KPI is ninety five percent or greater. And so that is the job to be done. That is the focus. What are some of the thresholds, whether it is green being ninety five percent higher, yellow being somewhere in between or lower, and then red perhaps being significantly lower? Identifying what those actual figures are between yellow and red, and then what are the subsequent protocol to enact change as a result.
And so again, just going down this very simple example, maybe the yellow trigger for your in-stock rate, if green is over ninety five percent, yellow is between ninety to ninety four percent. The owner of said KPI has the accountability or the responsibility to investigate the root cause. They've got to flag it to perhaps their cross-functional teammates, particularly if there is media activated against it in stock rate, and you're not going to be able to turn a favourable conversion. You don't want to draw eyes or media to it, making sure that your teams and those that are closest to hands-on keyboard and campaign activation are taking action accordingly. You may also want to broadly share out the likes of what's happening to other teammates. So that would happen within like the yellow tier of triggering if you are below that ninety five percent, call it ninety to ninety four percent.
Now, then you're going to go down to the red territory of that specific KPI. Again, we've got clear owners. We know who's going to be doing what. Perhaps at that point, you were escalated even further, right? Not just to your cross-functional teammates to enact change, but maybe if it's below that ninety percent threshold, you want to trigger that to your executive leadership because there could be big visibility by way of a specific item or launch. You also may want to initiate some purchase order reviews or really going deeper diving into triaging. You may also want to consult your Amazon counterparts by way of your vendor manager or whomever to get their support on trying to root cause and or providing some solutions and pivots.
And so that's sort of the ways of working when you think about the action plan associated with a KPI, the ownership and having those triggers by way of your green, your yellow and your red and what actions will need to happen on each of those instances. So easy, and rather easier said than done. But the diligence associated with who, when, why and how is critical for operations to really scale when there is so much happening at once within your Amazon business.
Paul Sonneveld
Absolutely. And the thing that strikes me as you're explaining, particularly the action piece, that there are such cross-functional communication involved there as well. I think there wasn't a single example where you weren't sort of saying, well, we need to talk to marketing to make sure we don't drive unnecessary exposure to all these things, which sort of brings me back to some of the biggest pain point that certainly we've spoken about on this show a lot, which is around know coordination within these large CPGs you know uh you know this this age-old problem of preventing silos and how do you engage collaboration and structure and all of that. So i wanted to sort of see the conversation in that way and uh you know i guess when it comes to kind of you know readiness gates and the like like, how how should teams really structure those readiness gates, maybe in relation to sort of new product launches across kind of retail, media scale, like how do we orchestrate everything such that we have a well-functioning internal org?
Donte McCrary-McClain
Yeah, it's a great question. And so when I was on the brand and the CPG side, I know in yesteryears when e-commerce was really scaling, and it was just a disparate team, small and mighty crew, there was this notion of e-commerce evangelist. And I frankly take a lot of pride in the work that I've done on both the brand side and the agency side of being an intrapreneur. Because to your point, it does require a degree of cross-functional collaboration in terms of communication and action. Perhaps much more complex in the e-commerce space than in other functions at an organisation.
First and foremost, you've got to recognise that that is the focus. Digital is no longer an offshoot small team, particularly in these bigger CPG organizations it is a through line the consumers interact and their journeys and their buying experiences are not isolated just to one channel it is a connected experience. And so yes, it is a tall challenge, but i think there's a lot of pride that can come as a result of being that connective glue across an organisation. And specifically getting at your question, right?
And so, relative to new item launches, we like to think about structuring readiness broken down into the retail side or retail readiness, then media readiness, and then the scale readiness as well. And so those three prongs and sort of making sure that there is appropriate stage and actions for each of those is what make new item launches successful. And call it gate number one, or on the retail side of the house, what are some of the steps and or protocol associated with that? Relative to Amazon, it is around making sure that the actual ASIN is live.
So there is a lot of diligence associated with the setup behind the scenes to make sure that it's live and suppression-free and things of that nature. Content is absolutely critical, particularly content in a world to Rufus has major implications in the buying experiences and consumer behaviour shifting as they are engaging with the search bar differently, as well as LLMs and other different tools. Your in-stock levels and making sure that there's actual product availability. Reviews, your pricing, and making sure that there's diligence such that you can competitively win depending on your strategy. All of that needs to be clearly articulated by way of owners internally, as well as with your agency partners. All of those steps in terms of new item fall underneath the retail readiness gate.
The second gate, right, and I come from, and we come from the school of thought, such that you don't want to draw media activation until there is a really strong hold on the likes of retail readiness. But once you are there and once you are starting to see that demand, then you move to gate number two. And that's really all about media readiness. And so making sure that your campaigns by way of search and DSP and even more broadly, depending on the category that you're playing in and the media strategy that you want to articulate, making sure that that is built and structured accordingly,
Making sure that you've got clarity from a budgetary perspective on how much you need to spend and what is sort of the tipping point associated with when you spend more. Making sure that you have your content score appropriately signals And then a true test. And learn as well as leveraging clean rooms such as AMC from Amazon side of the house to make sure that you can be even more descriptive and granular from an audience targeting perspective. All of those and more call it sit within gate number two, which is around media readiness within the context of a new item launch.
And then gate number three is all about your scale readiness. And so this just really necessitates the likes of close collaboration with respect to here's our plan. Here's how we're doing. How are our velocities tracking? How is our supply chain health tracking? How are we performing from a retail media perspective versus our benchmarks? And then what are the decisions that we need to fluidly make as we are calibrating success across the plan, whether it is sustaining, scaling, pausing, et cetera, and having a really tight test and learn repository such that at the end of a new item launch, you are learning from things that were successful and also learning from the fail forwards.
So structurally, those are the three gates that we have developed and sort of approach from a new item perspective. The gate number one, which is retail readiness, gate number two, which is around media readiness, and then gate number three, which is around the scaling readiness and the mechanisms and the tools and the collaboration that need to happen to move through each of those gates.
Paul Sonneveld
Thank you. That's a fantastic framework to think about how you manage, how you sort of drive results, and how do you get the fundamentals right before moving on to the subsequent gate. So that's a really useful framework. We're almost out of time and I've got two questions left that I love to sort of throw in there because we often get asked these. The first one is, cadence and meetings and internal communication. Let me ask it differently, which is weekly huddles or daily huddles or stand-ups. Yay or nay when it comes to large CPG corporates? You know, thinking about the point you made really at the start of this, like, you know, talk fests and slides and PowerPoint presentations and another meeting where nothing gets done and no decisions are taken and the like. So within that context, weekly huddles, yay or nay? And if yay, how, right?
Donte McCrary-McClain
Yeah, I'd say yay. Totally down for an efficient and effective weekly huddle. And so just to hit it in the upfront, that weekly huddle is not a status meeting. It's a decision meeting, much like sort of the theme that I hit in the prior question. You want to run and focus on the exceptions list. It's not a full business review, and it's not talking about the steady eddy and or where you are hitting the marks in terms of expectations.
Your agenda should be clear should be tight it should have an amalgamation of a decision log associated with what happened walking through launch gates and sort of progress points and triaging activities including those that are decision makers and have the authority and or have remit over the teams to enact change so that at the onset of the meeting you leave it with clarity of what are the exceptions, clarity of who's going to take action and by when, and then when you come back to the subsequent meeting by way of it either being asynchronously in between the next week and or the week after, that you truly have action and you are moving the needle forward.
Another component, which I think sort of ties to the cultural aspect of working within the e-commerce space, knowing that it takes the collective team to make things happen. It could be a powerful opportunity within that weekly status just to celebrate those wins not to harbour on it because there are different forms for that. But affectionately at my last organisation, one of the key things that I like to do every Wednesday is stand up and sort of shout out my teammates in this win Wednesday style. And it is a virtual and or perhaps in-person high five when things are going really well.
And again, you want to celebrate and you want to triage, you want to, excuse me, acknowledge and take action to the exceptions and make sure that there is action there. But then also making sure that there is diligence and celebrating the wins throughout those forums, but just make sure that you're tight on your timeline. So in short, yay for the weeklies, the rigour, the action, the ownership, and leveraging asynchronous and synchronous levels of communications to move things forward makes them effective use of time.
Paul Sonneveld
Thank you. That's a yes, just for our audience. But there are some real tips that Donte just shared about how you really make them as effective as possible. Don't take it for granted. Just because it's called a stand-up or a weekly huddle, they're going to be efficient. You have to make it work. Okay, last question. We're at the thirty-minute mark. Unfortunately, I have to say goodbye very soon. But I want to talk about this last question, which is about continuous learning and reviews, right? I've been in organisations and a year goes on, and it used to be around like seasonal planning, right? We used to make the same mistakes around seasonal planning because somehow there was no learning loop, right? Maybe that was just the organizations that I worked for. But in your mind, in the context of CPGs and particularly winning on Amazon on the vendor platform, you know, what does a sort of a high-functioning learning loop across content, supply and media look like in practice?
Donte McCrary-McClain
Yeah. And so in practice, and I love this question because there is so much continued change happening within the space of e-commerce, and I touched on it very, very briefly with respect to agentic commerce. And so where I love this is because it is the fantastic challenge point on scrutinizing, do brands and organisations, have they done the brilliant basics in the ways in which they may have touted it externally? And so the brilliant basics from an SEO and AEO perspective are the foundational grounds for agenda commerce and what that will look like and its disruptive nature moving forward. And so learning pathways are critical to that because as we are leaning into agenda commerce, there is a ton of testing and learning practically from a review perspective.
I'd say you can utilize those weekly huddles as a way in which you are making sure that you're statusing against the exceptions. Another key aspect that I've seen successful is doing a cross-functional, internally focused quarterly review against what you said you would do. What you have learned as a result, and how you are taking those learnings and applying it to the subsequent quarter. That QBR is something to which I definitely felt an experience when on the agency side of the table, and agency partners would conduct that same experience, making sure that their client points of contact had clarity in the value that they were providing and what's around the corner.
But from an Amazon vendor perspective internally, I'd say I've had a lot of positive experiences in making sure that you are coordinating those forums, you're educating, and then you are democratizing the information on the fail-forwards in some form of either an internal website so that everyone has access to what's been successful, what perhaps wasn't successful, and then you can move forward. I'd say learning pathways are absolutely key, making sure that it is done in a regimented manner, especially because there's continued disruption within the marketplace is key. And then celebrating wins is last but not least, because just tying back to the culture aspect and the space that we operate in.
Paul Sonneveld
Fantastic. Thank you so much, Donte, for closing us out. I think our whole conversation was really a really clear and grounded look on how large CPG teams can really bring discipline back into their Amazon operating with them. Thank you so much, and I look forward to doing more with you in the future. You're bringing a wealth of knowledge, and I feel like we're just touching the surface there. But I appreciate you coming on and being so generous with your knowledge today. Thank you so much.
Donte McCrary-McClain
Thanks for the opportunity.
Paul Sonneveld
All right, everyone, that brings us to the end. For everyone who joined us live, thank you so much for joining us and giving us your time. If you're watching the recording, this is one of those sessions worth sharing with your broader Amazon supply chain or leadership team. So I encourage you to go ahead and do that. Most Amazon issues aren't new, they're repeated, and fixing them doesn't require more dashboards, better decisions, clearer ownership, and simpler ways of working. So I hope this was used this was useful for you. Thanks again for joining us on marketplace masters, and I can't wait to see you at our next live session. Take care.
