Page 1 of 3 Chapter 15 As of: 5/8/18 PHK BUSINESS (11e) VIDEO SERIES FINAL (9/21/10) EDITOR: A. Grazioso SEGMENT: Chap 15: L.L. Bean (Marketing Communications) VERSION: Final (9/21/10)

NANCY FISCHMAN: My name is Nancy Fishman and I’m vice president of corporate marketing a LL Bean. I’m in charge of marketing using catalogues, search, promotions, email. Basically, my group drives traffic to the website, to retail stores, and to the phones. LL Bean, uh, in 1912 was an avid hunter living here in Maine and he was tired of cold and damp feet when he was out hunting. So he went to a local cobbler and took the bottoms from a rubber work boot and leather uppers and had them stitched together and he chose to market them using a three-page brochure. He was a pioneer in the direct mail industry. And he needed someone to mail the brochure to, so he, uh, got the list of non-resident hunters in the state of Maine and mailed out the brochure. And in the brochure he promised, uh, that the person who tried the boot would be satisfied in every way. Now, the story goes that he sold 100 pairs of the boots and shortly there after, 90 were returned. True to his word, LL returned the money of all 90 dissatisfied customers, went on to repair the boot, and that now is the main hunting shoe that you see in our catalogue. But from that story, he, LL learned three really important things: first is the importance of testing your product, making sure that it’s what you promised. Second is the value of honest advertising. And third, and most importantly, is to keep the customer satisfied at any cost. LL Bean, uh, then grew the company in several ways. Word of mouth played an important role, as customers talked about the legendary service and the quality of the products, but as importantly, LL continued to invest profits into the advertising and so he regularly put together a catalogue and mailed it out, for customers to shop and browse and then fill the orders right here out of Freeport.

LL also knew the value of growing his customer list and, uh, so he took out quarter page ads in magazines such as the New Yorker, where people-he offered a fee catalogue, so early interactive marketing. And by the mid 80s and to the mid 90s we were mailing catalogues close to 300 pages because it was prior to the web and to show our whole range of merchandise. ‘Cause you have to remember that LL Bean sells sleeping bags, tents, canoes, and women’s apparel, and men’s apparel, kids and home. Today, things are very different. So, today we have a website where more web order come in than phone or mail. We have fourteen stores outside of Maine. We have weekly and sometimes twice a week emails to our customers. We run television, online, radio advertising. Um, and we do a lot of alternative marketing now, with, um, if you, uh, watched a Red Sox game recently you’ll see the LL Bean on the, uh, tarp that protects the field during rain delays, we outfit meteorologists at weather stations across the country. So, we look for a lot more touch points because the consumer is really busy and we want them to see LL Bean throughout their daily life.

TERRY SUTTON: My name is Terri Sutton. I’m vice president of e-commerce for LL Bean and what that means is I’m in charge of LL Bean.com. When the web started to become an engine for commerce, and that was really back in 1996, it has been slowly changing the channel that our customers place their orders in. So, if you go back four or five years, you would get the catalogue, you would look in the catalogue, and then you would say, okay, I want to find these three products. I’ll go online, I’ll key in their numbers and I’ll buy them.

Submitted for review by NKP Media Inc. Page 2 of 3 Chapter 15 As of: 5/8/18 PHK BUSINESS (11e) VIDEO SERIES FINAL (9/21/10) Now, it’s so much more driven by search engines and browsing and comparison-shopping. So, it’s really changed the way our customers find us and how they find the products that they want. The customers that start to shift from the phones to the web, we worry about because it they’re not having that one to one relationship with a human who do we, uh, transmit the brand, uh, the LL Bean brand and it’s focus on service. You can lose it if it’s purely mechanical. So, we really have to think about what does a superior customer experience look like online.

GREG ELDER: My name is Greg Elder. I’m the vice president of stores at LL Bean and my job is to run all of the operations of all of our retail stores both outside of Maine and in Maine. We appeal to families and, um, we view as core to our mission the ability to get families into the outdoors. People are all at varying levels of comfort and the store learn, try, buy, and enjoy concept is designed to, um, have them come in, try the product, go out and use the product, um, and if they like it, this sport, and they want to purchase from us, great. If not, um, you know, that’s fine too.

NANCY FISCHMAN: two areas that are growing for advertising us is using online ads. So, banners, um, if you go out to weather.com or cnn you’ll see one of our banners and customers can click right through there to the website. That we make printed investment to mail you a catalogue and so we don’t want it to get lost in the pile or quickly recycled and what we see is this advertising really working in conjunction with that advertising. We also run, uh, television campaigns, primarily in fall and holiday. Um, again, to work or interact with the number of catalogues we’re sending out, trying to find space in consumer’s house as they receive all these catalogues, we know they’re also watching a lot of television at that time, having a lot of screen time at the computer, so what brand imagery can we give them that will drive them back and remind them that they just received that catalogue. Um, television we buy nationally and as well as locally. We’ll buy a little heavy around our stores and, uh, put an insulate onto that TV to drive people into the retail store. But we feel that it’s a really important, um, investment to make to make a stronger brand statement and to, uh, interact with that very expensive catalogue that we’re mailing.

I don’t want to mail catalogues to people who don’t want them. In fact, if I could, I’d only mail them to people who would guarantee to buy. So it’s using, um, data, statistics, um, customer information, to try to actually reduce the number of catalogues I’m mailing. To make them more relevant and get higher response rates. This large catalogue cost is one of the biggest challenges we have but if we don’t have the catalogue then it’s really easy to get lost in that noise. And we recently went out and talk to about 200 customers and found that although we were quickly labeling them retail, web, phone, in reality it didn’t matter if you were 16 or you were 60, everyone understood how these channels worked together. And so what we kind of have to consider is that whole, all those touches, you might have seen us on weather.com, browsed through our catalogue on your sofa, gone to hulu and saw a preview of ours, and then visited a store. And so you have to kind of take into account all those interactions and all those touch points that might have gotten you to the store. And then, of course, once you get to the store, converting you into a customer. One of the things we talk about in terms of what I do in corporate marking is I’m driving traffic. I’m driving traffic to the stores, I’m driving traffic to the web, I’m driving traffic to the phones. Once they’re there, then you have to convert them into a customer. While we’re in the business of selling outdoor apparel and gear, we really care about the customer. We really want to sell a good product and we really guarantee that product. We

Submitted for review by NKP Media Inc. Page 3 of 3 Chapter 15 As of: 5/8/18 PHK BUSINESS (11e) VIDEO SERIES FINAL (9/21/10) want to keep, at all costs, the customer happy and keep that customer coming back to LL Bean over and over.

Submitted for review by NKP Media Inc.