Alliance Data kicks into high gear under Melisa Miller’s leadership

 

Melisa Miller’s career has taken her from emptying ashtrays to serving as president of Alliance Data’s card services business, one of the fastest-growing companies that few people have heard of.

“We support the brands whose names are on the front of the credit cards. So, if you were to walk down any mainstream mall, roughly one in every three brands that you would see are our iconic brand partners,” she says.

As the brand behind the brand, Alliance Data manages credit cards for Lane Bryant, Meijer, Pier1 Imports and others, engendering customer loyalty in 47 million cardholders. It also acts like Switzerland — each brand only sees the data for its brand.

Since she assumed her role in 2011, Miller has helped triple the subsidiary of Alliance Data Systems, a $7.8 billion public company out of Texas, where she’s also an executive vice president. When she applied for the job, the chairman asked her why ADS shouldn’t sell the division off.

Miller replied: “Because we’ve never really given ourselves a chance to be successful.”

Today, Alliance Data employs 9,000 people, which includes approximately 4,500 Ohioans, with 1,700 of those at its new headquarters near Easton. The division accounts for 70 percent of the overall company’s profits, with more than $4.5 billion in annual revenue.

It’s a far cry from pouring coffee and emptying ashtrays at a credit bureau. As a senior secretary in 1984, Miller had the cleanest ashtrays in the office. She rose through the ranks of TRW, which became Experian, in sales and marketing for the next 20 years.

Then, Miller found her second employer, which was once the financial arm of Limited credit services.

“Alliance Data was actually one of my clients, so when a recruiter called in 2006, I thought it would be really impolite if I don’t go on the job interview,” she says. “I didn’t have a resume, and it was just really serendipitous.”

Organized, focused and relentless

After six years as senior vice president and chief client officer, Miller took charge at Alliance Data. She wanted to shake up the company, which was comfortable with the status quo.

“We believe high-growth companies have to double in size every five years, and so our plan always keeps us on that path,” Miller says.

The first plan was simple and clear. Everyone knew what had to be done. Once the company doubled in size in three years, it set off on the next plan.

Miller believes any task can be accomplished with organization and a clear destination.

“We want to be the only partner on whom our brands need to rely for their marketing needs. We’re clear about that. We want to be the obvious employer of choice for our associates,” she says. “So, if you are clear about where you are going and you are organized about how you get there, you don’t become overwhelmed.”

This point hit home years ago when Miller was organized at work, but not personally.

She cleaned out her purse and found a paycheck for $384. It could no longer be cashed, even though she was eating popcorn for dinner and worried about putting gas in her car.

“I was too embarrassed to go to my employer and say I was so unorganized that this check was stuffed in the bottom of my purse with makeup all over it,” Miller says.

Today, her purse is organized with military precision.

Clarity was also essential when developing Alliance Data’s go-to-market promise. When you have to rally 9,000 employees around more than 150 brands, it needs to be simple. Miller says the test was to find something that could go on the back of an M&M. “Know more, sell more” is tight, but it fits.

The company also followed a NASA-like approach. In the 1960s, if you asked any NASA employee why the agency existed, he or she would say, “I exist to put a man on the moon.”

“We would like to believe that if you walked into any of our 14 sites across the U.S., whether it’s a customer care associate on the phone or a safety services professional, they would say we exist to help our partners know more about their customers so that they can sell more,” she says.

Choose carefully, fail fast

By 2020, Alliance Data should have quadrupled in size, and under Miller’s leadership, it isn’t afraid of a contrarian approach.

For example, the company relies on the capabilities and data assets of its sister division, marketing firm Epsilon. Even though Wall Street initially hated the idea, Miller says Alliance Data pays the same price as every other customer, so it doesn’t have to wait in line.

“I’m glad we did it that way because we have the A team,” she says. “We get A team coaching and really extract a lot of value from that relationship.”

Alliance Data also adjusts under each growth plan.

“The actual partners we are engaging with are different,” Miller says. “Previously, if it was a moving, breathing, living brand, we were trying to become their partner.”

The company has learned to be deliberate, which has led to some strategic nonrenewals when, for example, Alliance Data and a client don’t place the same value on a loyalty program.

“We want Toyota to say, ‘Oh my gosh, we’re going to launch a new Camry. Get the folks from Alliance Data in here. It has nothing to do with the card program, but we want their point of view on consumer behavior,” Miller says.

The company also learned valuable lessons from one of its most progressive customers, Wayfair.

“They have helped us to hone our skills at fail fast, fail cheaply and get out. That really is their whole culture,” Miller says. “They have helped us improve our tolerance for making mistakes. In fact, I think they have an idea that is brilliant. They have the award for the best worst idea.”

The need to choose customers carefully and fail fast is especially meaningful when Miller remembers how Alliance Data targeted specialty markets like dental and elective medical. It discovered a company with 1,000 branches, which acted like 1,000 franchises, was too unwieldy.

“I waited too long before I said this thing’s not scalable,” she says. “We did it for three years and I should have called it after year two. I was clouded by the fact that it was printing money. But if you get back to, ‘Don’t stop trying until you’re proud,’ I would have run the company into the ground trying to be proud of that.”

Miller has gotten better at those calls — when 50 percent of the room wants to hold on.

“That’s one of the greatest gifts that leaders can put forth: Know what to do, know what not to do, and don’t try to do 50 things and advance four things,” Miller says. “Every year, we launch our four imperatives. Now, that doesn’t mean we only do four things, but the decisions that we make need to fit within one of the four categories, or we’ve got to ask ourselves, ‘Why are we doing this?’”

Leadership growth

Miller isn’t the only one who has grown into her role. Her team has done the same with training, focus and a disciplined, thorough annual SWOT analysis.

“We sit in that room and we are very honest when the emperor is not wearing any clothes,” Miller says.

It can be challenging, however, to always be changing — to continue to be the disruptor — when the employees don’t see something as broken. This only gets harder, the more successful and larger the company grows. But the answer comes down to leadership.

“For me, leadership is when companies fail,” she says. “It’s usually not the business plan because your strategy can be wrong. You can have a strategy that’s a bad one because you can fix it. But you cannot have lazy or ineffective leadership. You just can’t. That’s when companies get killed.”

In addition, Miller has learned a subtle but important distinction. It’s better to help people understand why the plan is a good one, rather than convincing them the plan will work.

She also sees her job in a new light — it’s not to get the employees excited.

“My job is to create an environment that is exciting, that is filled with opportunity and purpose and clarity and accomplishment. Their job, the job of all 9,000 people, is to find their excitement,” she says. “I can’t make someone happy, but I can provide an environment where people are treated with respect and they receive a fair wage.”

But there’s no time to waste as the company embarks on its next journey of growth and continues to set a higher bar. Miller says nobody in Alliance Data’s space has tripled in size, and nobody else has the same return on equity and return on assets.

 

Retail is alive and well

Alliance Data’s more than 150 brand partners generate about $30 billion annually in credit sales, says Melisa Miller. While nearly 40 percent of all transitions are digital, 80 percent of retail still happens in the store. This disproves the fallacy that online shopping cannibalizes store sales.

“We know when we can get her shopping in both channels, she will shop two, sometimes three times as much,” she says, adding that the company refers to all of its cardholders as she.

Millennials, 86 percent of the time, interact digitally with in-store transactions, such as checking if they can order a different color online.

“She is seamless in her approach. She doesn’t make the conscious decision, ‘I’m going to be in the store or be on my digital device,’” Miller says.

Another misconception is that Amazon is taking over the world. Miller says Amazon has just mastered the hassle factor of buying online.

“They have helped all of us up our game, but what they haven’t mastered is the experience of going in to touch the fabric and see the color in person and have that personalized experience, particularly in cosmetics or fine fashion,” she says. “It’s not an either/or. We don’t believe that it’s solely brick-and-mortar. We don’t believe that it’s solely digital.”

Today’s customer wants easy, convenient shopping, Miller says. She wants value for the brand that she chooses to stay connected to. Therefore, her behavior dictates how she should be rewarded — bonus points, early access to sales, connectivity to designers, discount coupons, etc.

“Consumers are willing to give you any amount of information about them as long as it’s used for precise and relevant information. So, we have a show-me-that-you-know-me approach when one of our cardholders hits us in the store or hits us in one of our digital channels,” she says.

 

Takeaways:

  • Any task can be completed with focus and organization.
  • Choose customers you can scale with.
  • Fail fast to stay the disruptor, not the disrupted.

 

The file:

Name: Melisa Miller
Title: Executive vice president, president
Company: Alliance Data’s card services business

Born: Davenport, Iowa
Education: Studied English at various universities. My father fell ill, and I was the one who was able to go home and help my mother.

How are you — and Alliance Data — involved with the Columbus community? I sit on the boards of the Columbus Partnership, Nationwide Children’s Hospital Foundation and the Ohio Business Roundtable. I’ve been here for 13 years and have watched this community change in a very positive, collaborative, civil way.

I believe giving back to the community may be one of the most important legacies I would want to leave behind. (Not me personally — my husband and I make a personal choice every year, as it relates to Nationwide Children’s Hospital.) But we want our legacy as a business to be that it wasn’t just about stock price and profits.

We want to be significant in the communities that we serve. We want folks, when they say Alliance Data Systems, to add they’re great people to work with. Their associates volunteer. They’re incredibly committed to the community. Those are the various badges of honor. But we want to do it quietly.

So, I’m not big about wanting the Alliance Data Systems name all over a room in a hospital. I would rather do it more quietly, like leaving a $100 tip for a waitress. Others would say, ‘You’re crazy. You want to get credit for it.’ They’re probably right. But there’s something a little gratifying about anonymity when it comes to doing the right thing.