"I'm convinced that the strategies Chief Outsiders helped us put in place, are going to pay off with a very large ROI in the future." Mark Mickelson, Managing Partner, Next Point Capital Corporation
PE-backed Art Brand Studios (Art Brand) is a publisher of branded art that evokes emotion and inspires new thoughts and ideas with omni-channel distribution. Seeking to integrate an acquisition and develop strategies to accelerate growth, Art Brand's Chairman, Mark Mickelson, engaged Chief Outsiders CMO, Sandy Barger. Working closely with Art Brand’s leadership, Barger developed insights to inform and execute several branding, strategic, and operational initiatives. Achieving improved results in 2020, including a 49% increase in D2C revenue, Art Brand is now poised for significant three-year growth.
PE-Acquired and Looking for Growth
Next Point Capital is a private equity firm that invests in small businesses across the United States. The firm sponsored the acquisition of Art Brand Studios (Art Brand), an art publishing and licensing company, installing Mark Mickelson, a Managing Partner for Next Point, as Chairman.
Mickelson and his leadership team recognized an opportunity but faced some difficult challenges. “We had three very different brands at different stages in their lifecycle,” related Lisa Nixon, Vice President of Sales and Marketing. “And we were looking for an experienced executive to come in and help us better define our marketing strategies.”
Branding and Strategy Assistance
Functioning in an advisory role, Mickelson called upon Chief Outsiders, engaging CMO, Sandy Barger, to do the heavy lifting. “At the time that we engaged Sandy, we had completed an acquisition of a nature art company in the Midwest,” he reported. “The key initiatives that we engaged Sandy to focus on were branding and acceleration of direct-to-consumer sales.”
Barger quickly determined the lay of the land, reporting, “This $25 million art company was relying on cherished but dated marques. They knew they had an opportunity but needed insights, strategy, and collaboration to leverage these opportunities. They were working hard, but without centralized strategies, various departments were interpreting data differently and implementing divergent strategies.”
Over a six-month period, Barger met weekly with Mickelson and Nixon to develop a growth strategy. She quickly encountered the need for increased reporting speed and greater data transparency. Thus, she worked to develop reliable financial, operations, sales, and profitability data.
Digging deeper, Barger discovered that Art Brand’s low cross-company data visibility and lack of data integration made it difficult to accurately quantify ROI for individual marketing actives. It was also hard to see how the tactics used worked relative to each other to support the optimal media mix.
“Art Brand has great people and products and leverage,” stated Barger. “But the various products and distribution channels were working separately, they were not getting synergies across their business units and not benefitting from an omni-channel view.”
Additional Insights Developed:
- ROAS for digital appeared to be 5 to 9 xs that of catalog.
- An IT analysis showed surprisingly low long-term customer value.
- Website conversion on some items was under 1%.
- Artist engagement tactics drove consumer loyalty.
She also found that Art Brand’s catalog business was not looking at omni-channel media. Overall, they under-invested in digital marketing.
While facing the challenges head-on, the collaboration worked well for Art Brand leadership. “Working with Sandy, we were getting someone that was both strategic and hands on,” explained Nixon.
Strategic Branding Initiatives
To address the data issues, Barger brought in a CRM system and one to aggregate data. She also initiated strategies to reposition and leverage core aspects of the primary brand, expand an existing brand and launch a new brand, the Art of Entertainment.
Key Initiatives – Revenue
- Thomas Kinkade Rebrand
- Wild Wings Brand Extension
- Art of Entertainment New Brand Launch
- SKU Optimization and Price Increase
Leveraging new trends to grow revenues, she also expanded product development into additional categories.
Organization and Operational Improvements
To streamline the organization, Barger provided a product management structure with dedicated brand owners and shared support services. The organizational realignment provided for centralized strategies and clearly identified roles and responsibilities.
Seeking to improve performance, she provided a RACI (Responsibility, Accountability, Consult, Inform) project responsibility process. Other key organizational initiatives included implementing easy to access, omni-channel integrated data, shared reports and increased cross department transparency
To increase marketing ROI, she also recommended that Art Brand outsource select support services and automate key marketing actives. Distribution initiatives included developing channel support, affiliate and Amazon programs. In addition, cost reduction initiatives focused on allocation changes, margin management and freight.
49% Growth in D2C Revenue
Working closely with the VP of Marketing, Barger increased company-wide collaboration, confidence, and decision-making. As a result, Art Brand grew 9% in 2020 despite the pandemic and is poised for significant three-year growth.
Overall industry retail sales declined in 2020 and Art Brand was no exception. With key retail channels closed, wholesale revenue was down 33%. However, Art Brand pivots resulted in a 49% increase in its direct-to-consumer business and an overall positive 2020 versus the prior year.
“She set the framework for us to manage multiple brands and to grow and expand our marketing efforts,” added Nixon. “The value of having someone like Sandy who can serve as an unbiased resource is to really enable us to be quick with change and ideas.”
Improved Organizational Effectiveness
Barger’s efforts impacted both marketing and operations. “Sandy increased organizational effectiveness by improving cross departmental communications,” reported Mickelson. “And that greatly improved the product development cycle and manufacturing efficiencies.”
One of her most immediate accomplishments at Art Brand was the launching of a new brand, Art of Entertainment. “She pushed us to be more creative and gave us a lot of ideas about how to better reach a new target audience,” explained Nixon.
A Great Solution for PE Growth
For a PE-backed CEO, Chief Outsiders proved to be the key to growth. “I would recommend Chief Outsiders to any business owner who's looking to get perspective on a sales and marketing growth strategy,” concluded Mickelson.
“It’s a great platform because you can bring in talented people that you couldn't afford to hire on a direct basis. They really helped clarify what we needed to do at Art Brand to continue the growth of the company.”