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Listen, plan, communicate, and listen again – that’s how Mike Logue, former CEO of Dreams, said he took the retailer from a company that had “gone bust” to one that sold for “£533m”.
Speaking at the Retail Tech Show 2022, Logue said that when he joined the company in 2013, one of the first things he did was to figure out why it had gone into administration, what needed changing, and how he would go about it.
While some people warned him he was an “old-school” retailer with limited experience in digital, he joked that he wasn’t “going to make it any worse”.
“I could only take it in one direction.” he said.
The retailer had received £54m from an investment fund, putting the pressure on Logue for a quick upswing in revenue to please investors.
Realising the business was suffering not because of a lack of financial availability, but because of a drop in sales and profit, Logue began to develop a plan.
“What do you do when you’re the CEO of a business that’s in administration?” he said. “I go and listen to the people who know what they’re talking about, I go out and listen to the colleagues and I try and find ways to talk to as many customers as possible. If you gather all the comments around and you filter it down, you really find your strategy.”
Logue said there were a few things that were representative of why the business was underperforming – the first was signs in the car park for executive parking. Logue said he had these removed straight away, because he wanted a “followship”, not a dictatorship.
The second things was a chest of drawers that had remained unsold in a store for eight years – a two-drawer chest with one drawer missing, reduced from £59 to £49.
With little time to prove that the business could improve, Logue utilised technology to ensure he could gather as much data as possible.
For gathering employee opinions, Dreams used Denison Consulting to survey staff, and Logue said the survey “told me quite a lot just by how many people completed it – 51% – that’s not very engaged, is it, if you can’t even get feedback from your colleagues”.
Externally, Dreams worked with Service Management Group (SMG) to develop Pillow Talk, an experience-sharing service though which customers could provide feedback, opinions and data – initially, 30% of customers completed the survey.
“A bit of tech, actually quite smart tech as it turned out, to gather as many customers’ feedback as possible and respond to it as quickly as I could, because the clock was ticking,” said Logue.
This turned Dreams around, said Logue, who called the data “golden” and “game-changing”, not only because it helped to highlight where some of the problems were with the business, but also because feedback directly from customers is more motivational to employees than someone higher up in the company telling them what to do.
Logue devised a plan – to create a better company culture, sell better products, and improve the store and brand experience.
“We listened to the customers, we listened to the colleagues, we analysed that data,” he said. “I’m a pain in the ass, I don’t stop – we review, we go back, we review, we go back until we find a solution. And that’s what we did.”
Monday and Tuesday at the business became meetings-based, filled with “pure data” from customer and colleague feedback – every meeting started with a customer, and later on, digital was always the second element of the meetings.
“I communicated, I listened to the response,” said Logue. “I communicated to colleagues, I communicated to customers, I listened to the data, what was changing, and I communicated again.”
But having a plan and a strategy means nothing without communication, said Logue, who pointed out that unless everyone in the company is filled in, and feeding back, on the strategy, then it will not go anywhere.
Early steps towards success included recruiting an executive team who “love fixing things” to work towards the goal of “improve the brands, improve the shops, improve the website”, said Logue.
Draw in customers better
The brand started to work on marketing to draw in customers better – pointing out that it was not quite accurate to say the company was a “bed specialist” when the company was “bust”. Instead, said Logue, the brand began to focus on giving customers a good night’s sleep, as well as on a new campaign urging people to replace their mattresses every eight years, which led to an increase in sales.
Working with Google, Dreams found out that across one month, of the 20 million people seeing its adverts on TV, 2.2 million ended up searching for a bed and 1.4 million were visiting the Dreams website. Logue admitted to then shifting the focus away from the shops to becoming “a little bit more techy”, because conversion rates on the website were “appalling”.
In 2013, which Logue calls a “lifetime ago digitally”, only 7% of revenue for the business was coming through digital.
Putting communication at the heart of its new digital strategy, he said, colleagues across the entire business were involved in developing a new platform that would cater to customers, as well as conducting A/B testing.
“I wanted everything tested – every button, every colour, every size of button – to push that conversion, push those page views, get the time on the page up,” said Logue.
The firm’s internal culture was another important part of the equation for Logue. When people feel they are part of an inclusive culture where they feel they can be themselves, there is an increase in productivity, creativity and retention, he said, adding that as colleague engagement grew, so did sales.
“Great engagement, great involvement – guess what, it does equal sales and profitability,” he said.
When looking into Dream’s sales, SMG highlighted some of the things that make a huge difference to basket size – greeting people in the right way, offering them a drink at the right time, and offering them a pillow, all of which became part of how customers were treated in stores.
“Quickly on results – what happened at Dreams?” said Logue. “Sales went up 83%, profit moved up £69m, it came from 43% in the stores and digital was seven times, we had 100 million [pounds] in digital sales. Who would have thought that many people would buy a bed digitally?”
He added: “We listened, we understood, we acted, we had great data, we had a plan, we communicated.”