by Gay Gaddis
Around 1993, a friend from my college days at the University of Texas who was working at Dell Computer Corporation asked us to consult on one of their direct marketing programs. Dell had the same problem that most direct marketers at the time had, a lousy database full of duplicate names and bad addresses. This was way before the sophisticated database programs we enjoy today were available, so most direct marketers cobbled together their lists using a variety of third-party vendors. We really did not have that much data management experience at the time, but we did not mention that to Dell.
We made recommendations for some quick, fairly easy fixes, and we also made some long-term suggestions on consolidating vendors. And, while they did not ask us to do so, we came back with our Trojan horse—some creative ideas for direct mail campaigns that we thought could improve results. They engaged us to address the short-term fixes and to test our creative ideas. The campaigns did well and we started to get more work. A lot more work.
Within just a few months the workload expanded rapidly and got a lot more complex, so I asked my husband, Lee, who had his own marketing consulting company at the time, to come help with strategy. Lee and the guys at Dell hit it off, and I ultimately talked him into joining my company. Over the next year we did hundreds of direct mail projects for Dell. We did lots of off-site planning sessions at our ranch just north of Austin. The Dell teams loved to get out of their cubicles, come to the ranch, and work and play hard. Skeet shooting, beer drinking, card playing, late-night storytelling around the campfire with red wine flowing freely. (No one was allowed to drive home; we literally padlocked the gates.) There were late-night poker games as well!
A quick aside: We had a guy working for us who was a great chef, and he cooked at these events. He also was a frequent winner of the poker games. A few years ago we removed some furniture at the ranch and discovered an ace of spades stuck into a crack on the underside of the card table! We always thought he was a skilled player, but maybe not!
The relationships we developed brought a lot more business. At this point we were really functioning as a think tank. The work we were doing was not something that would come out of a typical ad agency. In 1995, working with Dell’s senior marketing managers and Vijay Mahajan, from the University of Texas business school, we created the Dell Marketing Academy—a university-level course designed to teach the unique Dell business model to Dell marketers and salespeople. Dell faced a cultural challenge because they were hiring some of the top MBAs from the best Ivy League schools in the business. But those newcomers were often assigned to work with salespeople who had just graduated from Pflugerville High School a few miles up the road. We helped define the direct sales model and taught it as a core business strategy that everyone could understand. The MBAs all thought they had the answer and it turned out that the Pflugerville guys understood it better. It was a simple idea—go for share, not margin. It took a while for everyone to get on the same page. The classes were taught every other Friday afternoon at a nearby hotel meeting room. The original plan called for the course to last about three months. It went on for two years.
T3’s success gave us a lot to celebrate, and since my birthday was April 1, we decided that we would own April Fools’ Day in Austin by throwing a huge party and inviting all of our clients, vendors, media representatives, friends, and business associates. Clients would come in from all over Texas. It was a huge affair with big tents, a different theme each year, lots of food and drink, and a big band. One year April 1 fell on a Sunday, so we had a huge brunch complete with a gospel choir. The April Fools’ parties put us on the map as a major player in Texas.
Dell asked us to take over production of their small business catalog. We hired about thirty people and had the operation up and running in ninety days. I recall being at a small designer dress shop in the Lower East Side of Manhattan, and on the table was one of our catalogs. It was at that moment that I really understood the magnitude of what we were doing. We were touching almost every small business in the United States every month. It was a huge revenue driver for Dell. It was a massively complex production with hundreds of products in each catalog, extremely detailed technical specifications, and prices that changed every month. Rail cars arrived at one end of the printing plant with massive rolls of paper for the presses. Tractor trailers departed, fully loaded with catalogs, to all of the major postal distribution centers across America.
In 1996, Dell started selling computers online. Their business simply exploded. A year later, online sales were running at $3 million per day.4 Now IT managers could look at their monthly catalog to understand the options, and then go online to configure a computer to meet their unique needs twenty-four hours a day, seven days a week, without having to put up with a pushy salesman from Texas.
We watched it all unfold before our eyes. We predicted that the Internet would someday be at the center of all marketing activities. Some clients and staff looked at us like we were crazy. “Well, crazy is as crazy does,” said Forrest Gump.
It was all new. There was no one to teach us. So we did the cowgirl thing. We hunkered down and learned it. We adopted cc:Mail, one of the first e-mail platforms. We were the first to learn how to use online sales results to make the print catalog more effective. We were the first to build a configurator in an online ad for Dell so that buyers could price their components in real time. We could even directly code to the Dell site and could change pricing in an online ad on the fly.
Dell had grown to become almost a third of our business, and we knew the danger of having a client portfolio that was out of balance. We knew the risks of pursuing Dell’s interactive business. But we jumped on it like a duck on a June bug. For Dell, we were a proven partner, we already had all the assets because of the catalog, and we could see the vision and opportunity to be in on the ground floor of the Internet.
In 2002, we opened an office in Manhattan because we were buying lots of interactive media for Dell. We had to do it because no one in Texas knew squat about purchasing interactive media. There were no big business publishers in Texas. We found a team in New York who were considered experts at the time and hired four of them to run our New York office.
Over the next six years T3’s relationship with Dell continued to grow. We were recognized with supplier awards and earned larger opportunities within the organization. We developed a strong sense of trust with our Dell clients. We were never the “lead” agency that did national advertising. We were always in the direct marketing or interactive disciplines, which was a good thing because we watched Dell go through five or six different national ad agencies over the years.
In fact, we gradually achieved more status and respect as the bigger agencies fell by the wayside, and we started doing national campaigns for new product launches. Our last big campaign featured real Dell small business customers. We invited them to New York for a celebration and surprised them with ads running on the big screens in Times Square. They were thrilled! I remember watching those people standing in Times Square taking pictures of themselves up on the big screens.
At this point our Dell business was growing so fast we could barely keep up with it. If we had lunch in the Dell cafeteria, we would come back with more projects. So we knew we had a tiger by the tail. The question was, should we throttle the Dell business back so it did not dominate our T3 business? At this point Dell Computer represented about 50 percent of our income. We simply could not grow the rest of our business as fast as Dell. Plus, we were right in the middle of learning the Internet. We took the risk and hung in there because we were quickly building a unique expertise that very few firms had at the time: digital marketing.
Lessons from a Fall
But things change. Dell was not an easy place to work, and many of our personal contacts moved on. In 2008, Dell brought in a new team of marketing leaders. They made a decision to consolidate Dell’s global roster of advertising agencies, which ran into the hundreds, down to two or three big global agencies. It mad
e a lot of sense because the complexity of managing different agencies in different countries was daunting. They hired the holding company WPP to build them a custom global agency focused primarily on Dell.
WPP promised to have it up and running in ninety days. They did not even come close. It was a massive project and the idea was flawed. It was too big, too fast, and most advertising people did not want to work for a single client, especially Dell, who was known for execution, not creativity. The whole thing turned into a complete goat rodeo, probably one of the biggest failures in the history of the advertising business. As the months went by, WPP got desperate and decided to try to make our company their Austin hub because, at the time, we were the only thing not broken. One of the Dell marketing executives came to see us to present the idea. We listened with great interest. The only catch was that we had to agree to sell our company to WPP. They believed they had the financial upper hand because Dell was our biggest client and they did not think we could survive without them.
Here we were in another important negotiation, and we did not have the upper hand financially. But we did have principles. Without discussing it at all, we said no. Actually, what we said was a bit more colorful, but you get the idea. We walked the Dell executive out of the building. No one said a word. We called the staff together a few minutes later and told them we were going to be out at Dell. We told them that we were not sure what would happen, but that we would be 100 percent honest with them and they would always know what we knew. We knew we would have to continue working the Dell business until they could find someone else to do our work. We explained to the staff that we would have to make cuts but that we would help them find new jobs. That was no small task as we were heading for a serious economic depression. There wasn’t a dry eye in the house, but everyone understood and respected our position. That day was February 14, 2008. We called it the Saint Valentine’s Day Massacre. That cloudy day in February, I was stronger than bear’s breath. We told everyone that we would perform at the highest level of professionalism until our last project was done. And we did. And we did help everyone who was displaced find another job.
Ultimately we lost about half of our total annual revenue. WPP named their new agency Enfatico. Within less than a year, the new senior marketing team at Dell was fired. This was happening just as blogs and social media were coming on the scene, and the whole thing became the laughingstock of the industry. The entire project was gradually rolled into other existing WPP agencies.
Sour grapes? Not at all. In fact, it was actually the best thing that ever happened to us. I will always be indebted to Michael Dell for the opportunity he gave us. We learned to embrace change and be decisive, and we became an Internet pioneer because of him.
I love the business, but it is not all roses and bluebirds.
A Blessing in Disguise
Dell’s departure was truly a blessing in disguise. We had several teams working on Dell and then another team that worked on everything else. When Dell left, a few people wanted to break out and form “T3 Interactive” to ride the digital wave. I said no. We had always been one big team, and I knew that we would be stronger together. With Dell gone we were able to pull everyone back into one cohesive team and refocus on the quality of our work. Fortunately, several factors aligned perfectly. First, I was free to travel (Sam, our youngest child, had just gone to college)—and I did. A lot. Second, we had real-world digital marketing credentials that few agencies had at the time. Third, major clients were recognizing that digital was not going away and that they had to figure it out.
Thank goodness I had developed a strong network of business people. I called all of them, and pounded the pavement to try to win new business, and thus save as many jobs at T3 as I possibly could. I was honest with all of my contacts. I told them how much money we were losing and why. I explained that I had some fantastic people who were ready to go to work on a new piece of business. My network came through in a crisis.
I racked up millions of miles and gained Executive Platinum status on American Airlines. Every major corporation in America was struggling to build digital marketing infrastructure. They had all decided that the Internet was not going the way of CB radios, as one of my traditional creative directors quipped. Our Internet prowess, which Dell had bought and paid for, became our Trojan horse.
We put ourselves out there, big-time. We won Chase, we won Marriott, we won Universal, we won Microsoft, we won UPS. We replaced the Dell business in less than a year and, in spite of the loss of revenue, made a nice profit. In fact, knock on wood, T3 has made a profit every year since we began. And we have never borrowed a dime to operate the company; we are totally bootstrapped. That is not easy; it means putting the pedal to the metal on new business, growing existing business, or cutting losses before it is too late. It’s usually a combination of all three.
Our work was not only great, in many cases it was breakthrough. We did a very early crowdsourced project for Renaissance Hotels where people shared personal snapshots of their favorite vacations on Renaissance’s website. We did an interactive tour of the new, updated rooms at Marriott. We were able to watch how consumers engaged with the site online. For instance, the most watched part of our interactive tour for Marriott’s newly redesigned rooms was when we showed a tight shot of the computer connection panel on the desk. The road warriors watched this more than anything else because they wanted to be sure they had the right connectors to get online. This is where the Internet got magical.
We’ve always had opinions and our clients have always had opinions. Suddenly, through analytics, we knew for a fact that more visitors to the site were more interested in the Internet connection than in the showerhead or the thread count of the sheets. Learnings like that cascaded one upon another, and everything we did started getting smarter and more effective because we could measure everything. My original dream of doing great creative and getting tangible results was now irrefutable.
I was frequently asked to speak at industry conferences, and we began to build a very solid, national reputation. I pinched myself to be sure that it was really true. I had built a very successful, very cool company that was worthy of respect and admiration. It took me a long time to get there. But we had arrived.
What to Do When the Governor Calls?
In 1997, Texas Governor George W. Bush asked me to join the Lower Colorado River Authority (LCRA) board of directors. The LCRA, a nonprofit public utility that manages water, electric generation, and transmission for much of Central Texas, is the biggest wholesale electric generator in the area and employs more than 1,800. I originally said no, that I did not have the time. But he twisted my arm and I went to interview with the general manager of the LCRA. During the interview I told him, “I can’t drive all over Central Texas attending board meetings.” He said, “Okay, I’ll have a ranger drive you.”
So, I did the cowgirl thing. I accepted and served for six years, two as chair of the Water Committee. I was the first woman from Travis County to serve. It was an amazing experience—more valuable than the MBA degree I always wanted. I learned so much, met so many wonderful people, and was able to serve the State of Texas with the integrity Governor Bush expected of me. I even got sued by the city of San Antonio over a water deal that had gone wrong. It was complicated but I believe we did the right thing. I wear that fact as a badge of honor. Sometimes you have to stand your ground.
Many mornings I would walk out my back door at the crack of dawn, and there would be my LCRA ranger in his police car, lights flashing, waiting for me with a hot cup of coffee. Off we would go to La Grange or Bastrop or Marble Falls. In my arms would be the huge packets of information we received to review before each meeting; often there would be three or four huge binders of detailed information. The ranger and I would visit and catch up on family news, and then he’d focus on driving and let me work all the way down and all the way back. I even had a badge; no joke.
Finding My Sisters in Success
I have belonged to the Committee of 200 (C200) for over ten years. It is composed of half C-suite corporate women and half entrepreneurs, and the members are highly vetted and have achieved remarkable P&L responsibility and positions of leadership. Most are mothers, community volunteers, and board members and are passionately involved in advancing women in the workforce. C200 members collectively generate more than $1.4 trillion in annual revenues and employ more than 2.5 million people. I recently completed a two-year term as chair of C200, so I have personal relationships with some of the most powerful businesswomen in the world.
However, my first C200 meeting was a bit intimidating. I couldn’t believe some of the heavyweights in the room. CEOs of major corporations, wildly successful entrepreneurs, and women who had just plain knocked the glass ceiling down. Before long, I realized they were real women with families, issues, and struggles like my own. After speaking with a few members, I felt like I was home.
One of the first women I met was Ellen Hancock. She had been the most senior woman at IBM and was a true force of nature. She was hard-charging, curious, but also helpful and supportive. A couple of years later, Ellen would attend the opening of our T3 San Francisco office and drove my husband and me at breakneck speed through the backstreets of San Francisco in her Rolls-Royce to a dinner engagement. She was a cowgirl!
A Toe into Texas Politics
I was invited to join the Texas Business Leadership Council in 2003, and within a year was the second woman asked to serve on the Executive Committee. This bipartisan group of corporate CEOs and leading entrepreneurs studies issues that affect the ability of businesses to thrive in Texas—issues like transportation, energy, health care, water, and education.