Operational courage in Steffen Daleng’s book means taking chances, trying new things and embracing discomfort to a degree. Cultural bravery, meanwhile, is about doing the right thing and standing up for and protecting people around us, “especially if it's an unpopular opinion but the right thing to do”.

“I encourage both by doing them publicly,” the Booktopia CMO says.

A moment to demonstrate operational bravery came up for Daleng in September. “We were looking at a specific promotion. We knew the commercials were hair-fine, and if our audience data and hypothesis around new customer percentage and upsell percentage possibility didn't stack up, it would be a bad call,” he explains.

“Ultimately it was a data-informed, calculated bet with a lot of unknowns we had to hypothesise on based on experience. It paid off and blew our assumptions out of the water, making it the largest and most successful promotion ever.”

Data-driven maturity

Another of Daleng’s big data-driven wins as described in his CMO50 submission was driven by the need to reduce defecting customer rates and increase the percentage of people making a second and third order.

“We created a strong CRM retention program driven predominantly by email automation and RFM [recency, frequency, monetary value] scoring combined with customer data and transactional data,” he explains. “To create a deeper pool of first-party data, marketing drove a redesign of our customer account page. To better tailor customer experiences in our communication channels and onsite, we included business categories for our B2B customers, and university and study categories for our B2C university student customers.”

A gamified view of customer accounts was then created, showing users the percentage of their profile they had completed. “This has the aim of persuading our customers to add more information, which we in turn can use in our targeting,” Daleng says.

“The data is instrumental in scoring which customers receive which offers, calculating purchase probability together with next-best offer logic, and helping to significantly reduce cost of sale and over-discounting.”

It did the job. Not only did the effort drive incremental revenue for Booktopia, it also saw a huge increase in second purchase customers and won back lapsed customers.

Innovative marketing

A longer-term, strategic initiative Daleng has been spearheading at Booktopia is growing traffic and brand awareness through partnerships. To do this, he’s led the overall partnership and affiliate strategy, with the goal of making the business less reliant on paid search while harnessing the power of brand distribution through partners.

A framework of commercially strategic partners based on brand, traffic and revenue contribution was created. “Within that, a remuneration priority framework was designed to answer the question of what value each group contributes to customer LTV, discounting, cannibalisation and how we should remunerate according to contributions,” Daleng says.

 “I personally created the current attribution driven remuneration strategy and cookie lifetime remuneration strategy that has been driving the primary cost reductions.”

Overall revenues for the area have grown by 220 per cent since the strategy rollout and delivered an additional $11.8m in revenue over a year. Cost per sale has decreased by 56 per cent in the same period.

“It shows the resilience of the cost-reduction program and its ability to grow revenues,” Daleng says.

Customer-led thinking

With the deep conviction “there is no better marketing than happy customers”, another of Daleng’s achievements has been creating a tactical advertising framework across paid and owned media to minimise friction in the customer purchase experience.

“This is used to ensure we are always generating a precise number of sales, optimising the number of pickable units sent to Booktopia’s Distribution Centre [DC] on any given day,” he says. “Too many orders can result in shipping delays for customers, while too few orders impact us financially, hurting transaction margins and making our pick and pack too expensive.”

The framework allows the team to stimulate traffic up or down with a precision that keeps the business within a few percentage points of daily unit forecasts. “This ensures the DC is always optimally staffed to ensure all orders get out the door in a timely manner and keeps our operational efficiency at peak profitability and performance,” Daleng says.

“Both the DC and customer service teams have benefitted from this framework as they are able to trust their staffing is correct. And they are better positioned to ship all units in line with the promised time shown to customers on our website.”

Commercial acumen

As a pure-play online retailer, Booktopia is heavily reliant on digital marketing. Today, Daleng oversees a marketing department comprising of four teams: Trade marketing, campaigns, performance, and brand and communications. These teams work together to drive brand awareness, website traffic and activate customers.

“We designed a growth strategy with a customer journey focus across multiple cohorts and buyer personas, developing acquisition and retention models across two websites and four marketplaces,” Daleng explains. “The models are built for profitable growth and LTV while reducing marketplace cannibalisation and lowering our reliance on paid activity.

“The strategy was predominantly achieved through stronger campaigns, cohort focus, partnerships, CRM, organic search, brand and loyalty, and developing earned and owned media.”

Key results include reducing marketing expense per unit from $1.61 in FY18 to $1.41 in FY21. At the same time, Booktopia has increased revenues from $111m to $217m. EBITDA margin lifted from 3.7 per cent in FY18 to 5.9 per cent in FY21, while average spend per customer has grown from $111 in FY20 to $126 in FY21.

“It demonstrates our strong retention and the ability to acquire higher average order value customers,” Daleng says. “We reduced promotional discounting by introducing strong RFM scoring. This reduced promotions’ cost of sale by 20.5 per cent while increasing promotions-based revenue by 8.1 per cent.”

Leadership impact

With a 100 per cent in-house team, Daleng is arguably running an agency within a retailer set-up. Given this, his emphasis has been on hiring leaders with a reputation of walking the talk, not just agency management experience.

“This is so we can provide mentorship and skill growth to hire and attract top tier talent in each discipline,” he says. “Criteria for a leadership position in the marketing team includes empathy, vision, clarity, strategic and tactical understanding, combined with the ability to precisely execute and communicate. I build my direct reports around those values and skills.”

At the same time, creating and nurturing the team's ability to predict, be proactive and problem solve is an imperative. “We set a high professional bar under the premise, ‘Work hard, play hard’, while creating procedures and standards that allow for all team members to bring their most creative and relaxed self to each task and project,” Daleng says.  

“We give freedom to play, experiment, test-and-learn, and own the wins and learnings, as well as creating psychological safety for when we make mistakes. I try to inspire greatness and create a communal vision for the company and team that everyone falls in love with and wants to be part of.”

Just look at the recent example of Booktopia's FAB Award (Favourite Australian Book), a people's choice award program for Australian literature and authors. Daleng admits the team went into planning with an attitude of not being able to beat last year's results. The previous year grew 1000 per cent to 102,000 votes year-on-year. 

“The team felt we had already done the impossible. But we kept the aspiration up and created a well-formed tactical plan heavy on influencer activity,” he says. “We ultimately ended on 170,000 votes.

“It became the team's moment of ‘reach for the moon and you might just end up among the stars’,  a powerful experience that made the team believe they can do the impossible. It’s an attitude they carry with them now.

“At the end of the day, the mantra is: ‘Have fun, be you, do great stuff.”