CDW exec shares customer sat know-how

July 15, 2004

BY MICHAEL KRAUSS

     Diane Primo, the chief marketing officer of CDW Corp., is on a roll. Since joining the $4.7 billion, Vernon Hills, Ill.-based seller of technology gear last June, sales are up 31%, net income is up some 30%, and Fortune Magazine named CDW No. 11 on its list of 100 best places to work. The company has made the list for each of the past six years.

Primo and her boss, CEO John Edwardson, are doing lots of things right. Tops on their agenda is creating an outstanding customer experience. CDW aims to deliver 97% of orders (on in-stock merchandise, to creditworthy customers) the very next day. CDW provides huge incentives to its 3,700 employees, who are called co-workers, to deliver the goods and create an unsurpassed customer experience.

Nearly three-quarters of the work force is eligible for a performance bonus, plus there are universal stock options to provide motivation. Then there are a bevy of intangible motivational tools, such as impromptu trips to Krispy Kreme and Dairy Queen. At a time when most companies are cutting costs, reducing workers’ perks and even outsourcing, CDW is investing in people and planning to hire.

Edwardson is a firm believer that a happy work force yields satisfied and loyal customers, and he doesn’t worry about sounding old-fashioned about this. He meets with each of CDW’s new recruits to help instill the spirit of customer service and he intends to hire nearly 700 new employees this year. While other firms are pushing work offshore, CDW has no plans to outsource.

While Primo might demur at the idea that she’s one of Edwardson’s top hires of the past 12 months--she’ll likely wince when she reads that line--I think it’s true. Primo brings three things to the mix at CDW that ought to cause competitors concern: She’s undeniably analytical; she’s a strong, level-headed leader; and she’s unapologetically customer-focused. She’s also a key ingredient to achieving Edwardson’s goal of gaining share and growing “10% faster than the market.”

CDW began in 1984 as a home-based business dedicated to providing the best bundle of technology products and services. Today it sells parts and products from Apple, Cisco, HP, IBM, Intel, Microsoft, Sony, Symantec and Toshiba, to name just a few. Its value proposition is simple: If you buy direct from an original equipment manufacturer (OEM), you get the best that OEM has to offer. If you buy from CDW, you get the best the IT industry has to offer.

“We are relatively agnostic,” Primo says. “We are pushing what is in (our customers’) best interests. We’re more of an advocate and an adviser.”

The one hole in CDW’s product portfolio is another direct-to-the-customer technology company, Round Rock, Texas-based Dell Inc. “We do not sell Dell,” Primo says. “They are our biggest single competitor.”

But Primo is prompt to remind her audience that Dell is simply one OEM while CDW can provide customers the best offerings in the industry. Coming from Primo, it’s a compelling argument, and CDW seems a worthy competitor to nip at Dell’s heels, though at $43.5 billion in revenues, Dell is a mighty big bull dog.

Primo cut her teeth at packaged goods and beverage marketer Quaker Oats, now owned by PepsiCo. She later served as president of product marketing for SBC/Ameritech where she earned her high-tech credentials. Primo is a by-the-numbers marketer who measures everything. She says she prefers technology marketing to packaged goods because of the knowledge marketers can have about individual customers. She feels technology marketing “can be more relevant than marketing a box of cereal.”

Still, Primo talks wistfully of her days as a pet food marketer. She seems to have enjoyed the psychographic segmentation models she implemented to appeal to pet owners. She cautions those crossing over from packaged goods to high-tech to take care when implementing segmentation approaches.

“You’ll find that segmentation churns year-to-year because they can’t find the customers,” Primo warns. From a b-to-b perspective, “attitudinal segmentations don’t work.” She advocates building segmentation approaches around more easily defined “firmagraphic” segments (demographic-like metrics relating to establishments such as number of employees, industry specialization, and so on).

Primo doesn’t consider herself a geek. She points out that marketers lead people. “They have to be well-rounded. They have to be able to work with a diverse group,” she says. “We have product people here. We have branding people here. We have some of the best direct marketers. What you learn is that all of those disciplines add value.”

The CMO’s success is a result of some of the first steps she took upon landing at CDW. She began by getting to know her co-workers. “I spent a lot of time with people who actually work here,” Primo says. “This is a great company. It has really phenomenal people that have made it successful. I spent my time sitting with people who knew the business.” She began by conducting internal focus groups with account managers who had various tenures at the company. She listened in on customer calls and spent time with purchasing and operations people. Then she got to know each member of her marketing team to understand how they could uniquely contribute.

Clearly Primo is working to expand her customer base. Growth is critical to CDW. She’s aiming to penetrate existing accounts and cross-sell current clients. She wants to make sure she has the right mix of products for her customers, and she’s constantly striving to develop new tools for her account managers that provide better real-time insights. Of course she’s launching programs to build her brand.

What’s the secret sauce at CDW? “(S)erving customers the way they want to be served,” Primo says. A lot of companies pay lip service to customer focus. On Primo’s watch at CDW, they live it and measure it 24/7.

Primo sees her efforts thus far as, “Pretty basic and pretty mom-and-pop.” She may be understated and self-effacing, but one thing’s for certain: Diane Primo is a savvy technology marketer.

Michael Krauss is a partner with Marion Consulting Partners based in Highland Park, Ill., and can be reached at Michael.Krauss@Marionpartners.com or news@ama.org.