RENEGADE THINKING from the CEO of Renegade, the social media & marketing agency that helps clients make more out of less by transforming communications into "Marketing as Service."

Branding, Content Marketing & Reverse Osmosis

05/21/14

snehal desaiMarketing never gets boring to me because each company, brand and sub-brand has its own unique challenges.  This is certainly the case for Snehal Desai, Global Business Director of Dow Water & Process Solutions, a division of Dow Chemical.  Snehal and I had a long conversation about the subtleties of marketing a sub-brand with multiple product lines aimed at multiple verticals with multiple constituents all while remaining true to the parent brand’s vision.  And if I haven’t built up the challenge enough, keep in mind that these folks are selling highly-technical things like reverse osmosis systems that separate salt from water.

How Snehal and Dow Water tackled this challenge is well-worth pouring over (sorry, couldn’t resist the pun) if for no other reason that it is a cogent reminder that if you focus on your customer you’ll rarely go astray.  As you will see, Dow Water puts a lot of energy into creating educational content (seminars, white papers, studies, models, etc.) that has helped drive the perception that they are experts, not parts manufacturers.

Drew: Can you talk a little bit about your brand, Dow Water and Process Solutions, relative to the corporate brand, The Dow Chemical Company, and how you distinguish between the two?
That’s a good question, because Dow as a company is very large. A lot of the time customers are thinking about the product that’s doing a certain function for them. As such, we are continually looking at the balance between leveraging the large company presence, investment on Dow’s capability and history. But we don’t lose sight of the fact that we have customers that are specifically buying, and have been buying for years, what’s come to be known as the Dow Water & Process Solutions suite of products. So we think first with respect to our customers and the things that they want the most from us.

Drew: I want to clarify a bit on Dow Water and Process Solutions. Would you describe it as more of an ingredient brand?
I would definitely say it’s more of an ingredient brand. For example, there are a variety of ways that one can separate and purify water. We make the technology that does the actual separation and purification. For example, we make the membranes that separate the salts from the water. So we make the guts, the advanced separation steps, and are in that way almost always inside a system.

And because we’ve been operating in this environment for decades and the very nature of b-to-b marketing, we actually do have a relatively high level of awareness among our users. But that’s also one of our brand challenges, to be able to remind people of the work we do.           

Drew: Were any of the sub-brands that you recently purchased well known enough to considered the generic brand in their categories and if so, did you keep those names?
We purchased Rohm & Haas in 2009, which was a very well known chemicals company that had a very strong position in ion exchange technology. With that company came a set of customers that knew exactly what they wanted. So depending on the sub-application, certain trade names did resonate more than others.

Once you start to really get into specifications, the customers don’t want to change them. The last thing you want to do is shoot yourself in the foot because you felt like it would make it more economical on a naming and literature basis, and find out you lost a million-dollar order because they decided they don’t like the new product because it was not what they expected.

Drew: So there’s the Dow brand and then there’s Dow Water & Process Solutions.  How are the guidelines defined? Is there a Dow brand oversight team that you as the marketer of Dow Water & Process need to go through?
There definitely is. We have a corporate public affairs group, which is the group that’s responsible for making sure that the brand standards are followed. What we do is work with that team to develop business brand standards, which might stretch the corporate brand one way or another depending on the audience a specific business is trying to reach. This way we are able to target our audience with the appropriate brand image while still staying true to the greater Dow brand.

The corporate Dow brand work supports this notion we’re trying to impart to our customers, which is to think of our job as providing solutions. We cover so many areas – if you think about a category like health and nutrition, the medical space, or energy storage, we have many, many different plays that are already going on in those spaces. People don’t always put it all together. So there’s this idea that we would be using the website and a branding approach to these market segments. In many ways we’re writing white papers to help talk about the broader issues that would interest consumers, like provisions of clean drinking water, cleaning up waste water, and the whole idea of sustainability.

Drew: Interesting. So “good” from a sustainability standpoint is that message to serve around a good, corporate citizen, and you guys help fill that role?
Yes, and you can always look at it as both a blessing and a curse. Because with that role also comes the need to balance between talking about almost philanthropic good then what we really do, which is helping companies, helping municipalities, and really driving a sufficient, low-cost, reliable provision of separation and purification services. If you look at some recent product launches such as ECO FILMTEC™ reverse osmosis elements or SEAMAXX™ reverse osmosis elements, sustainability is intrinsic to the value proposition and is in fact, what our customers expect. They are looking for improvements such as lower energy requirements, less chemical requirements and resistance to fouling. All of these benefits, while operational, are also sustainable.

Drew: How much and how important is consultative selling? Can you give me an example of how you “campaigned” it?
It’s the way we do business. It’s the way that our sales team and our technical sellers do things in the marketplace. We do seminars. We actually have projection programs that allow us to model some systems for people to help them make some choices on what options they might have, the tradeoffs, etc. We did some brand study work around three or four years ago. They did some good external studies and surveys. One of the things that people said they bought was expertise. They were buying the knowledge of the people that they were working with.

So that’s always something that our customers always talk about. They rely on us to give them good answers. To help them solve problems that aren’t always directly related to the product that we sell. In fact, this is a core value proposition and our biggest differentiator against our competition. We have the best people in the business and the most expertise. Our customers rely on that.

Drew: With the person who’s buying your product and essentially reselling it to someone else, is there a combined branding activity?
It’s not exactly like that. It’s more like this: if you consider an equipment seller, and anybody can buy pumps, valves, and fittings on the market, the question then becomes one of “how does he differentiate himself?” One of the ways he can do so is to identify that the components he’s putting in the customer’s system is something that the industry knows and everybody trusts and is the best on the market. So that when he puts his bid in, and he actually calls out, “I’m using Dow XYZ,” that’s his way of saying, “Look, my bid with this technology is really the winning solution.”

But some companies are more collaborative. Meaning they’ll ask us for help. They’ll ask us if they can come in and jointly sell or help answer questions for the customer given the confidence that technology will work. And we do that. But that’s the industrial sector. We also sell into the residential market which is very different. That’s more about brand owners that are putting white good appliances into your house, so in that case, you’re talking about a consumer story. Building the confidence that these products are good and healthy for you, and they’re going to deliver what they say they’re going to deliver.

Drew:  If you were to define the Dow brand, and then you were to define the Dow Water & Process Solutions brand, would there be differences?
Probably not. I don’t think they’re that different. Where the differences occur is when you get really right down to the specifics of the solutions and markets. People are telling you about sort of the things you did for them. Not the company, but the things your people and technology do. I’m not saying that every business in Dow is delivering the same set of attributes, but I think we pivot off of a lot of the same thing. It’s a strong technology base. It’s the ethic around reliability and consistency, a global reach. So I think we have a lot of similarities.

Drew: That gets back to enabling the channel, the consultative selling, all the content marketing that everybody wants to talk about now. It’s all in this category of doing versus saying. Do you feel like you have a luxury that other brands don’t have, in that you can build Dow Water & Process Solutions focused on the “doing” because the parent company is taking  care of the “saying” component?
You’re absolutely right. And yet by doing, as you say, that becomes the basis of the stories of what the company wants to say. As long as we continue doing well and enabling changes and differences in the market, then people are looking for ways to tell those stories in creative and inspiring ways. We are definitely lucky.

Final note: thanks to my friends at The CMO Club for the introduction to Snehal.

Why CPA is a Horrific Metric and Must Perish

05/20/14

Author’s note: a significantly shorter version of this post ran on MediaPost.com today, so read on…

CPA (Cost Per Acquisition) is a monster.  In slavish devotion, 41% of businesses consider CPA their top metric (according to recent DMA study) thus making ill-advised marketing decisions that further nourish the CPA beast.  Fiendish is an understatement when you consider the hypnotic power of CPA. After all, who wouldn’t, on first blush, want to determine how much it costs to acquire customers and then figure out how to minimize these costs?

Before providing proof to this thesis and suggesting an alternative metric, let me stop and pay homage to the monster’s creator.  Thanks a lot Google.  Before your arrival, businesses had a somewhat vague notion of what it cost to acquire a customer and even if they could make these calculations, it often took weeks or months.  Now the smallest of businesses can spend a dollar via Google and just about instantaneously know if that dollar resulted in a sale.

But herein lies the true villainy.  Because CPA is so easy to calculate, especially in the case of digital media spending, business leaders have become obsessed with this number and critical decisions are made in an effort to achieve the lowest possible CPA.  This seeming no-brainer for marketing then wreaks havoc across the organization as complaints, returns and churn rates rise while lifetime customer value averages drop.

CPA is Destroying Businesses
Lest you think I’m being melodramatic, let me provide two representative real world examples with the names changed to protect the innocent.  Company A is a tech company that when it first launched a decade ago had a game changing value proposition that helped them acquire several million customers who heaped praise on their service and served as willing brand evangelists.  But in the last 2-3 years, their competitive advantage slipped and the market stopped growing.

At weekly staff meetings, “new customers acquired” was the predominant metric determining not just the mood in the room but the actions for the subsequent week.  If one media type or promotional program was achieving a lower CPA than another, then dollars were shifted accordingly.  Meanwhile, the weekly lost customer count was completely ignored even if it exceeded the newly acquired figure that particular period.

So now we get closer to the real problem with a CPA obsession.  Company A drove down its CPA by running price promotions that attracted “switchers,” those savvy seekers of special deals who abandon ship once a better deal comes along.  These folks were also the first to complain, sucking up expensive customer service time, driving down sentiment on social channels and depressing employee morale.  This particular case does not have a happy ending so let’s move on to Company B.

Company B is a young digital services company that is growing leaps and bounds thanks to a ferocious sales culture.  Dialing for dollars, the sales team calls upon prospects, offering their services with one solitary goal—close the sale.  Management and marketing are all aligned behind this singular obsession, rewarding top sellers for their efforts and spending marketing dollars on lead generation that results in the highest close rate.  And though this goes well beyond CPA as a metric, the menace is parallel.

For Company B, the trouble emerged online as their reputation began to suffer.  Complaints about the ineffectiveness of their services bubbled up on organic Google searches as hundreds of newly acquired customers ranted on Yelp and other social channels.  Undaunted, Company B hired a reputation consultant hoping to drown out the negativity online rather than address the fundamental problem—as an organization, they were focused on the wrong metric (sales closed) leading to the acquisition of a consistent percentage of customers they couldn’t satisfy.

It’s Time for a New Metric: Cost Per Satisfied Customer
Here’s a fundamental truth: what you measure defines your organization.  Company A’s fanatical focus on short-term CPA meant ignoring churn, creating a customer service nightmare and diverting resources from new product development to fill the pipeline.  Company B’s dedication to acquiring any and all new customers as quickly as possible spawned a reputation problem that still dogs them to this day.

Having established the villainy of CPA, we can now turn our attention to a radically new yet simple metric solution: Cost per Satisfied Customer or CSPC (because an acronym is essential here!).  In this calculation, we seek to differentiate between all customers acquired and those that are actually satisfied with your product or service.  By isolating the characteristics of your happy customers and how you came to acquire them, you can then replicate this in future acquisition efforts.

Practically speaking, this is a bit more complicated than I make it sound but fortunately in the world of big data, not beyond the reach of most companies.  The key is the willingness to recognize the problem (not all customers are of equal value and some are even of negative value) and the solution requires more than changes in media buying and data monitoring, including an entire organizational shift from gaining customers to satisfying them on an epic scale.

For Company A, calculating Cost Per Satisfied Customer is not a stretch since their CRM system already tracks means of acquisition and length of service.  These two data points alone can root out the “switchers” who can then be further profiled against the rest of the customer base acquired in a similar timeframe, allowing for the isolation of problematic promotions and preferred prospect characteristics.  This data could deliver a rudimentary CPSC by dividing the marketing spend by the total of non-switchers acquired.

For Company B, getting to Cost Per Satisfied Customer is also doable.  First they would need to look at their customer satisfaction data and isolate both promoters and detractors.  Then they would need to model both groups looking for trends in terms of how they were acquired (lead source, sales person, pitch process) and business characteristics (size, ownership structure, vertical, location, years in business, etc.).  With this info in hand, it would then be possible to concentrate sales efforts on those types of prospects most likely to be satisfied and divide the costs of these efforts by the number of promoters acquired.

A slightly more sophisticated CPSC calculation requires the ability to bring together marketing spend (M), customer satisfaction data in the form of total satisfied customers (SC) and lifetime customer value (LTV). The formula looks like this:  M ÷ (SC x LTV) = CPSC.  And I have no doubt that data geeks out there could refine this more by factoring in the additional costs of servicing unhappy customers as well as a reputational quotient that blends in recruitment and retention savings when complaints decline.

Here’s the bottom line—Cost Per Acquisition is the wrong bottom line and leads to organizational problems that can indeed be disastrous.  All customers are not equal; some can help you grow and others might just put you out of business.  By focusing on Cost Per Satisfied Customer, you can shift marketing/promotional/sales efforts towards those programs that deliver customers you actually want today and for the long haul, thus extinguishing the CPA monster once and for all.

Customer-Centricity Spins Gold for Richline’s CMO Mark Hanna

05/12/14

mark hannaAbout seven years ago, Mark Hanna and his team at Richline Group devised a unique strategy for improving their business model that called for thinking small in order to think big. In the interview below (arranged by the folks at The CMO Club), Hanna explains how his company went from a “one size fits all” product approach to having over 40 retailer-specific jewelry lines.  Though this approach meant a lot more work for the Richline marketing team, it fulfilled Hanna’s desire to dramatically reshape its relationship with its customers, an effort that has paid huge dividends both in terms of higher customer satisfaction and increased sales.  Hanna reminds us all that ultimately, the fundamental role of marketing is to build customer trust and without trust, there is no brand.

Can you talk a bit about the structure of Richline and your role at the company?
We have four independent divisions or business units within our larger company. These include Richline Brands, Inverness Corporation, Rio Grande, and LeachGarner. There are synergies among them but they are very independent of each other and since I’m corporate, they all fall within my purview.

I’ve been CMO of Richline for 8 years and see myself as chief business catalyst, which means that I carry the marketing responsibilities for everything from outbound to services. I also carry the social responsibilities in terms of ecology and social responsibility issues and I have tremendous influence on our operations.

Does each division have its own marketing budget?
Each division has a marketing team, which reports to me, and each of those divisional Presidents develops their actual numbers for the division budgets. So each division has its own marketing mandate based on that division head’s objectives, as they each have very different markets, and I manage each of those four individual marketing departments.

Since you work in a more advisory capacity on the corporate level, how do you rationalize success? Since you’re not responsible for each of the four divisions from a line standpoint.
I think there are two ways to answer that. First, we’re a little textbook in terms of goals, strategies and tactics. And that’s done at the division level but those also roll up to the corporate level. At the corporate level, those goals and tactics are the collaboration among all the separate divisions. It’s about one group’s ability to greatly influence the direction of another group.  For example, our Brand Group has a good feel for the market and where it’s headed and informs our fabricated division in terms of what they should be making. Our division that works with the hobbyists, are all over the current trends and interpreting them in different ways, so there’s a big synergy among the divisions created by the consumer market. If you work back from the consumer to our divisions, they really do all influence each other very much. I personally manage the strategic planning process for each one of the divisions.

So that includes a lot of troubleshooting and making sure they set clear objectives, right? Do you also handle budgetary allocation among the divisions?
Yes, definitely on the objectives. And there are really two specifics that we run everything through: one is called “moats,” and the other used to be called collaborative benefits but I now refer to it “return on relationship,” in deference to Ted Rubin. The term “moats” I took from Warren Buffet, and it refers to services, products, and abilities that we own that no one else does. These are our corporate differentiations, our product differentiations, our service differentiations and it’s the single most important strategy we emphasize throughout the divisions, this creation and maintenance of moats.

What are some of your moats?
We’d really have to look at it division by division. But if we start at the fabrication level, their really strong moats are the ability to create precious metals in pretty much any format or any composition, strength, and consistency depending on the product. We have 100 variations of 14k gold, for instance, and our investment in tech is second to no one else’s. So the moat there, at the initial stage, is our precision and knowledge base.

How do you measure your own success as the corporate CMO?
This is where our discussion will get into talking about return on relationship, because all of my goals are based on the growth of our business and the growth of our profitability. My goal is that we become the biggest go-to company among retailers. It’s like life insurance – you’re investing premiums and they continue to appreciate. We see our investments in these and “return on relationships” as the same thing. Growth of business over time is really about how strong our relationships are, how strong the trust is. Improving that trust every year is my single most important goal.

Have there been any specific marketing initiatives that you can point to as having really helped build those relationships? 
In 2009 we identified our biggest weakness as not having control of the consumer touch points. We were pretty much a company presenting our wares to a buyer and had very little influence over how things were packaged, how things were displayed, how they were advertised. So from 2009 onwards, we made it our priority to gain that control. We identified 20 key customer touch points for each of our brands. And it became the single best focus that we ever made and the most important strategy we’ve developed over the last few years.

The first thing we did was look at our market, look at our customers, which are the major national jewelry chains, shopping networks, mass merchants and department stores. If we sell something to one of them, we can’t sell it to another. So the strategy became going from national label to private label and creating very specific multiple private labels within that category of products. In karat gold for example, we have 14 retailers carrying assortments of products within a reasonably small range of innovation all under different names. And what that did for us was take away channel conflict. It multiplied the marketing stress because we had to create everything from brand guides to color guides for 14 instead of one. But it absolutely shot our sales through the roof because we took away channel conflict and allowed each retailer to create their own margins and positioning.  It got us on this track of being very in control of this vast number of private label collections of which we now have 42.

How do you keep things straight and get down to who controls what between both of your marketing department and the marketing departments of the retailers? 
We’re very careful, and it’s all proprietary. Everything is done on a project basis together with the internal sales and product teams of the store we’re working with. Most of our customers have a single sales team associated with them. So we can keep it pretty straight. Collaboration, at all levels with the retailer, follow the same path.

How do you manage, since you’re dealing with four divisions and 42 different brands in retail, how do you set the big picture for these folks since you obviously can’t be involved in the day to day sales?
First, you come back to the word moat, and the idea of customized reality testing versus the differentiation that we’re providing. Secondly, it’s not all on the marketing department as each of those brands is associated with a retailer and that retailer has an internal team, a product development team, an operations team, a customer service team so that ultimately, we become the organizer of that team and the catalyst for that team to walk in the customer’s shoes. And there might be occasional conflicts but for the most part, everyone is focused and it’s a lot of work but the system seems to work quite well. At one point in time everyone is focused on one brand and one customer. We honestly have so few sales and marketing conflicts; we work side by side with the sales teams at these companies and it creates a bond, not an antagonism.

The world is about trust and transparency. At some point in time there’ll be a day where we can say, we’re Richline, these are all our brands and you can trust them. And to do that we need to be socially conscious, we have to be absolutely able to live in a glass house. That’s why improving customer trust has always been my single most important goal.

Social Media Innovation + GRAMMYs CMO, Evan Greene

04/21/14

evan greene

As CMO of the Grammys (officially titled National Academy of Recording Arts and Sciences),  it would seem that Evan Greene doesn’t have to go out on a limb to create engaging content. Most fans are already engaged, eagerly awaiting the next photo or tweet about their favorite music artist. But he and his team maintain that the biggest contributor to their success is their dedication to listening to those fans and joining them in dialogue, which is not quite as easy as it sounds.

To dig into this more, I had the pleasure of moderating a breakout discussion with Evan at The CMO Club Inspiration &  Innovation Summit in New York City last month.  It was a lively conversation with about 40 other CMOs covering a wide range of social media challenges, many of which Evan and I addressed on the spot (and rather pithily I might add!).  Since I am not a great notetaker, I recorded Evan’s responses, which are transcribed below for your reading pleasure. Given the GRAMMYs extraordinary success overall (ratings were 2nd highest in 21 years) and on social (13.8 million tweets during the show generated 862 million impressions), you’ll want to read on…

Could you talk a little bit about your planning process?
Our campaigns need to engage people and if they don’t, then social media is not going to help and we usually abandon it. It’s really for us about having a very respectful, two-way dialog that we think is engaging on a daily basis. We don’t come from the standpoint that we’re the authority, that we’re the expert, that you should listen to what we say, that we want to tell you what to listen to, who to follow, how to dress, what to do. We simply want to be where music is happening. We want to be a credible voice in music.

And the thing that we’ve discovered, the sort of the universal truth that we’ve hit upon over the last couple of years, is that people generally are looking for two things. They’re looking for discovery and they’re looking for community. And if we can enable the idea of discovery and empower the concept of sharability, then we are, by default, going to be leading to a greater, more robust community.

Can you share some of the innovative things that you’ve done in the last couple of years?
Innovation really is simply how do you add more to the conversation to make it more interesting on a daily basis? So some of the things that we did this year were simple, but engaging. For example, we’ve now live gif-ed our nominations show and the Grammy awards telecast. So we’re now creating gifs in real-time.

We also expanded the size, the scale, and the scope of what we call our social media command center onsite at the Staples Center during the show where we have more bloggers from more diverse areas from more diverse music genres and we try to get more people to tell our story for us. Because it’s one thing if the GRAMMYs talk to you about it and tell you about it. It’s another thing if people that you know and like and respect and trust are telling you about it.

How does content marketing fit into this discussion?
For The GRAMMYs, it’s all about content. Granted, we’re a non-for-profit trade organization, so we don’t have the budgets that you probably think we do. But we’ve made a pretty sizable investment in our content infrastructure because we want and need to be creating a lot of content. For example, we want to be creating engaging, short, episodic video pieces that are easily digestible and easily shareable.

In a lot of ways we’re fortunate because music overlaps and enhances so many different areas. A good example is the intersection between music and sports. So six years ago, at the Beijing Olympics, the biggest story was what’s on Michael Phelps’ iPod as he’s going in to compete for 8 Gold medals.

So we thought, since there’s always been that overlap between music and sports, we created a content program called Champion’s Playlist where we talk to professional athletes and say, “What’s on your iPod? What do you listen to to train, to get motivated before the big game, before the championship?” And this starts to become a shareable experience where you can now overlay what your playlist is with your friends’, you can see how some of these famous athletes, how their playlists overlap with your own. This gives us the opportunity to create a leaderboard, et cetera.

So you’ve done all this stuff. How do you measure it and do you try to differentiate social metrics from your broader metrics?
The easy answer is what are your ratings and how much money are you generating. Well, I look at it another way.  I see all of that as a consequence of everything else that we’re doing right on the front end. If we spend a whole lot of time on the front end, being really true to and respectful of our brand, and really making sure that we do the work to fill the pipeline, and if we create that conversation, if we create that relationship with music fans everywhere, then we’re going to be rewarded by people watching the show, we’re going to be rewarded by 99 percent positive sentiment. We’re going to be rewarded by the fact that our marketing partners are more engaged and happier than they’ve ever been before. Our revenue is going to increase. I think if we focus on the revenue and we focus on the ratings as the objective, it skews the narrative and it skews the story.

It used to be how many Facebook friends you had, right? And then it was, what’s the sentiment? But now the questions are getting a lot more detailed and a lot more sophisticated. And so that’s why listening is changing all the time. That’s why you need people who have access to the full Twitter fire hose. You need people who are doing more than just sort of skimming the surface with Google analytics.

We spent a lot of time talking about listening as a customer service channel and I think everybody recognizes that as a doable thing in social. I’m curious if any of you are listening for customer acquisition opportunities and if you’ve been able to systematize that and talk about that.
It is about credibility, and gaining the trust of your customers. You need to be where your customers are, and not necessarily only your own Web-site, and seek to create evangelists. So if your business is photography sales, you go to a photography forum where people are talking about a new camera. So, from a social media standpoint, don’t try to sell people with a link to your website and a price. Rather than talk about this new camera, utilize the buzz that is already happening organically, and re-tweet or re-post other credible voices in your community. Trust and credibility are powerful tools toward acquisition.

Well, you also brought up an interesting point which is sort of empowering employees to be social voices for the company as opposed to trying to control the conversation centrally.  Can you explain the advantages of this decentralized approach?
The key is, I think there’s so many divergent conversations happening all the time about all our respective businesses and the key is how do you channel those conversations. How do you channel all those disparate conversations into a cohesive dialogue? And I don’t know that there’s one answer to do that but one of the things that we did is we created what we call our Social Media Bible which has all of our correct URLs. It has all of our proper hashtags, all of our handles.

We distribute that to all media, and all of our friends, fans, and followers. We distribute it to artists and managers, labels, anybody that can possibly be having a music conversation. Now whether or not they’ll follow it is another story. But when everybody’s got the same consistent inputs and the same data, the results are usually stronger than they would have been otherwise.

Do you have any ideas as to how one can track word-of-mouth marketing and be able to then put some type of ROI to it?
I think one of the biggest fallacies and one of the biggest misnomers about social media is that it’s free and easy. And I think right now, the next big step is figuring out how you can track word-of-mouth marketing and be able to put an ROI on it.

How do you measure measurement analytics? What’s the value of having a bunch of Facebook friends? Is it the aggregation of tonnage? Is it who’s passing it along? All of that is being parsed right now and I don’t think anybody’s got the answer but there are some companies that are getting a lot smarter about it.

How do you approach social media innovation?
We try a lot of different things and the down side of trying a lot of things is that you fail sometimes. But every once in a while, you get it really right. And if nothing else, we’re always learning. Sometimes we make the right move, sometimes we don’t but we’re always in there. And frankly, the deeper you are into social media, the more you hear about trends first. So you can sort of pivot down the river and play around over here and see if it works and if it does, great! If it doesn’t, you just come back to where you were.

Q + A w CMO Award winner Michael Lacorazza of Wells Fargo

04/5/14

Michael_Lacorazza

Before taking the job as SVP, Head of Integrated Marketing at Wells Fargo, Michael Lacorazza was cautioned that it might take a while to get things done at this huge bank.  Much to his delight, he was able to push through a number of new initiatives in his first year that had a profound impact on the business.  Though he credits his strong team for making it all happen, The CMO Club acknowledged his accomplishments in the area of digital marketing with their Programmatic Marketing Award last fall.  Here is my interview with Michael including some timeless insights on the power of customer-centricity:

Drew: Wells Fargo is considered an integrated marketing leader in the banking industry. What is your approach to seamlessly promoting the Wells Fargo brand across multiple channels?
We start with the customer—identifying the needs and insights to define the customer journey.  The customer journey determines the channel strategy, so that we integrate in the right places.  To bring the work to life, our large-scale campaigns are headed by a marketing integration lead, who assembles the physical and virtual teams (both Wells Fargo team members and outside resources) needed to develop and launch the assignments – and is ultimately accountable for the project.

Drew: With the purchase of Wachovia in 2008, Wells Fargo became a nationwide presence. How do you stay close to your customers when you operate in so many markets and have so many different types of customers?  
While we are a coast-to-coast company now, our focus is on serving our customers and our communities at the local level. We have a strong culture of putting the customer first and strive to live it every day. And, that customer-centric culture is guided by our company’s vision to satisfy all our customers’ financial needs and help them succeed financially.

Drew: You operate in a relationship-based business. How do you improve loyalty among your customers?
It’s about living our vision and values and doing what’s right for the customer.  It’s about building lifelong relationships one customer at a time. Our team members are the competitive advantage that enables us to achieve greater loyalty through that relationship building.

Drew: Innovation is a sexy word but not as sexy to a CEO as ROI.  Have you been able to link your innovative marketing activities to the kinds of business metrics favored by CEOs?
Measuring the impact of the marketing investment is critical in a data-driven company like Wells Fargo.  We create scorecards with KPIs for all of our large initiatives and leverage tools like media mix modeling to help us quantify the economic value of our investment and make optimization decisions.  Further, we share the results transparently with business lines and senior management.

Drew: A lot of financial services firms have tiptoed into social.  Do you see social as viable channel for your business and if so, in what capacity?  
Absolutely.  Our customers live digital, mobile and social lives.  We are continuously investing in social infrastructure to enable us to serve our customers and connect with them where they are.

Drew: A CMO has a lot of choices in terms of where they invest their time.  What have been your top priorities in the last couple of years?
My first priority has been to enable Wells Fargo to design and execute fully integrated marketing campaigns that engage the customer and drive measurable business success outcomes.  We’re very proud of that work. We have made a lot of progress and have more opportunities going forward.

Drew: Have there been any big surprises in terms of what’s worked really well and what hasn’t?
I joined Wells Fargo just over a year ago.  While preparing for the assignment, I received a lot of guidance to expect both change and projects to take a long time to matriculate in a matrixed, regulated company.  The magnitude, quality and impact of the work that the team has produced during my rookie season have been very impressive and much faster than anticipated.

Drew: Content marketing is hot topic at the moment.  What’s your perspective on content in terms of its effectiveness?  Are you increasing your investment in this area?
We view all of our communications as content – even our paid advertising.  And, more than ever, there needs to be a value exchange with the customer.   Marketers can no longer “message” at the customer at scaled weight levels.  The customer expects much more and look to us to deliver relevant content on their terms.

Drew: Big data as a big part of the CMO conversation these days.  How are you tackling big data?
It’s top secret, so I could tell you, but…all kidding aside.  What’s fundamentally important for us is to protect our customer’s data and operate in a spirit of transparency.  And we need do this in a tightly regulated industry with substantial uncertainty on where the privacy dialog will lead us. At the end of the day, we want to use data to improve our customer experience and deliver more relevance—that’s our focus.

Drew: Do you agree with that notion that “marketing is everything and everything is marketing” and if so how have you extended the boundaries of your job beyond the normal purview of the CMO?   
Yes, the key marketing leaders in the organization are deeply involved in helping to shape our future customer experience initiatives.  Because we are often so close to the customer and have unique insights to share, marketers can add a lot of value.  In my opinion, it’s not the sole domain of lines of business or product teams.

Q + A w CMO Award Winner Chris Brull of Kawasaki

03/30/14

brullEvery once in a while I meet someone whose job sounds like a lot more fun than mine.  After interviewing Chris Brull, Head of Marketing at Kawasaki Motors, I definitely had pangs of jealously.  I mean who wouldn’t want to ride bikes, ATVs and Jet Skis all in the name of customer and product research?  And then there’s the fact that his marketing mission is to reinforce the “wild, unrestrained, amazing fun” that his customers have using Kawasaki products.  Sounds like a winning formula to me and as it turns out, it also resonated with the folks at The CMO Club, who recognized Chris with their Rising Star Award late last year.

As you will see, Brull brings tremendous passion to his job at Kawasaki and is not afraid to take risks.  This sense of adventure made Brull an early proponent of digital, social and mobile, all of which helped build enduring connections with its fan base and drive new fans to Kawasaki dealers.  Read on to learn what Brull means when he refers to marketing Kawasaki not as a brand, but as a “lifestyle.”

Drew: Kawasaki Motors has a famously fanatical customer following. What are the things you are doing to maintain and improve loyalty among your customers?
I think you hit it straight on in terms of the fanatical following. We’re one brand (Kawasaki) and we have 14 different sub-brands, and 84 different models. You have to speak to these targets extremely authentically because these enthusiasts can spot a fake. To connect with them, we really have to know what we’re talking about. There can be no one-size fits all campaigns. You have to be very, very targeted and direct. Not every industry is as hyper connected with their customers as you have to be in power sports. You have to understand how people act, react, and think. We’re becoming real and authentic to the point where we’re almost a family member.

Drew: You said yourself that you have 14 different sub-brands and 84 different models. How do you stay close to your customers when you have so many different segments and so many hyper-focused initiatives?
Our company name is Kawasaki Heavy Industries. We’ve been around since 1870. We build products that are all about bettering people’s lives. Our company actually builds the Shinkansen bullet train. We build the fuselage of the Dreamliner. We build the factories where our products are made. It’s a crazy experience.

This is idea of Kawasaki Strong – the company that builds all of these things is actually the same company that builds these power sport products. If you look at Harley, they just build cruisers. Our engineering comes from something bigger and it’s very compelling for the customer. There’s a new campaign kicking off that will celebrate this engineering prowess.

Drew: Would you call this new campaign a re-launch?
It’s not a re-launch, it’s just re-telling the corporate story. We’re formalizing what the dealers have been doing for the past 15-20 years. There is a lot of story to tell, a lot of sex appeal that separates us from the competition. We call our appeal “intelligent rebel”. We’re not for everyone nor do we want to be. We’re about going further, faster. We’ve always been known for wild high-end performance. No one builds engines like Kawasaki. It’s just this rider feeling that we have created. Almost like you’re one with the product.  This is wild, unrestrained, amazing fun.

Drew: In terms of marketing, have there been any big surprises in terms of what’s really worked well?
We started testing our tools on customers via trial and error. Much of this stuff started to work. We were hooking these guys online long before the online bandwith was widely available. But it worked! We were giving fanatic customers their Kawasaki fix. They wanted to see the next big thing in Kawasaki and we were giving it to them. Our idea was to just give them a little bit. We were taking our content down to bite-sized pieces and giving our customers reasons to buy Kawasaki. The videos were shot in an elegant way that engaged, educated, and excited our customers. Our content strategy was ahead of the curve at that time. And there were skeptics within the company at the time but we were ultimately prophets and the strategy proved itself to be wildly successful.

Drew: As everyone moved online, experiential marketing was somewhat lost. Would you consider going back to experiential to be an innovation?
Personal interaction (especially in our industry) is still so critical. We might have a customer sitting on the website at 2am getting hooked. But at the end of the day, you can’t buy our product online. You still need to get the person to the dealership.

Demo rides are not often offered at dealerships because the dealerships have liability. That’s a strike against us. So, we create opportunities where we can show people the inside of our bikes and compare it to our competitor’s bikes. Tell the customer the Kawasaki story. People are hungry for knowledge. We get them fired up to ride. Now that I’ve told you what features we have inside of the bike, once I’ve showed them to you, then we go ride. I talk through what you’re feeling once we’re riding. It’s very experiential. Then you’re hooked. That’s the Kawasaki experience. We go to where our customers live and create our own experiential events.

Drew: How do you evaluate the effectiveness of your marketing?   
The sale of units is our top goal. But we’re not necessarily holding marketing solely accountable to the sale of the unit. Local sales guys are tasked with the selling. Flat out awareness of the brand is one goal for my team. We are also looking at engagement levels in the digital space and floor traffic into the local dealerships. We also evaluate marks such as the strength of the brand, likelihood to recommend, and likelihood of missing the brand if it were gone. This is all very top line.

Drew: What are a couple things that you’re most proud of as the head of marketing at Kawasaki?
The first thing that comes to mind is our online integration into social and mobile because we were the first to do it in the industry. Another thing that I’m very proud of is the global launch of our products. One of the sexier ones we did was a Times Square launch for Ninja. We had a live broadcast globally and had 1.5 million people show up to the event. No one else in our space had done something on that scale. It was a big risk with a big reward.

One of my biggest accomplishments was actually internal at the company. When I started, trust needed to be built between the factory team and the U.S.-based marketing team. I was able to build an internal coalition within Kawasaki that proved that the U.S. marketing team was able to work with and add value to the home office in Japan. The Times Square experiential launch was the turning point for us. It was the first time that the Kawasaki message was the same globally and the content was the same globally for a product launch. To be able to pull that off and get people to work together and trust each other as part of a global coalition – that was an accomplishment. Now I get to be a team leader of that global coalition.

Drew: Have you been able to use the voice of the customer to affect not just marketing but product development?  
When I started at Kawasaki, marketing didn’t find out about a product until 6 months before launch. There was an inherent distrust. Now through the trust that we’ve built, our company has realized that it’s critical to listen to the voice of our customers. We also realized that product marketing was critical to separate ourselves in the market. We needed to understand the real reasons why certain products weren’t selling. One of the things we realized was that certain products sell better in certain places. For instance, 4 wheel products sell great in the US and not in Japan. How could a customer tell you about advancement? They can’t. But they’re giving clues all the time as long as you’re listening.

Drew: It would be remiss of me not to ask about social media. You have 800,000 fans on Facebook, a fair amount of activity on Twitter. Let’s talk about it from a customer service standpoint. Are you set up to deal with customer issues on social?
We were the first in our industry to have a social presence. So that’s something to be proud of. For me, it wasn’t enough to post a bunch of cool shots of cool bikes. It was really about the voice of our customers. We have our social team set up to respond almost 24/7. It’s critically important that we are sensitive to what’s going on with our customers. These hyper enthusiasts are our “friends”. They expect that Kawasaki the brand respond in real time. Our communities will often police itself and many times they take care of their own before we have to. We’re looking at it as social business more than social media. It’s almost a lead tool. The conversations actually go pretty deep. We’re sharing riding tips, riding locations, history of the brand, dealership locations. Another nice thing is that we’ve never bought a single fan on social. Our 800,000 fans are hard earned.

Drew: You talked about the interest in all of this related content. How far have you gone with product related content to keep customers interested and engaged?
We think that content related to “how the product works” is critical to our audience. Then there’s the “what it is” content. This is the physical product, how it’s supposed to performs, etc. Then you get to the most important piece: why. Why do you ride? Is it the wind in the face? Is it the escape? Leaving friends and family behind? Or is it riding with a big pack? It’s the inspirational part of riding. It’s a very mature market and being able to tap into that with our 26 different targets. When you get into our content, we’re hitting the why, the how, and the what, when we’re trying to excite these people. We tap into the lifestyle. We show people what goes on at Daytona Bike Week. Let me show you what’s going on with our Ninja ZX14 when they’re actually drag racing it. Let me show you what happens in Europe at the Isle of Mann TT. People are hanging on every morsel that comes out of the Kawasaki Corporation. They want to connect. They want to belong. So the product itself is almost a ticket to the Kawasaki party. The all-access content is a hook. This type of marketing is hard to pull off. The deeper we go, the more rewarded we are. After all, I’m selling a lifestyle.

« Newer PostsOlder Posts »

Copyright © 2014 - Drew Neisser