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."

Q + A w CMO Award winnter 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.

Turning Marketing into Service w John Hayes, CMO, AmEx

01/21/14

john-hayes (1)A common phrase in the service industry is “the customer knows best.” While waiters and retail associates will roll their eyes at this, especially when it’s delivered by a manager following an unpleasant customer interaction, there’s definitely some credence to it. American Express is one company that takes “customer knows best” to heart, and has used the adage to help inform its marketing strategy for decades.

AmEx CMO John Hayes and I caught up around the time of the CMO Club Awards, and he gave me a glimpse into the intensely service-focused world that runs American Express from the inside out. From creating an Open Forum that lets small businesses help each other out, to starting a publishing arm way before “content marketing” was a buzzword in—wait for it—1971, to offering live streamed concerts to its music fans, Hayes and his team are are not just believers in “marketing as service,” they are the poster children for this approach. 

Drew: One of the big issues that big companies have is how to keep their marketing fresh and nimble and not get stuck in a rut. Over the years, you have been incredibly innovative in terms of your marketing. Have you been able to institutionalize this innovation?

There are a couple of answers to that question. The most fundamental is that you have to continue to focus on the customer. If you become focused on the issues that present themselves inside the company instead of looking outside at the customers, you’re sacrificing innovation. If we’re going to be a great service company, we need to be serving them, we need to be communicating with them, we need to be marketing in the places where our customers or our prospects spend their time.

Being customer-focused is the first part of innovating because what you’re trying to do is anticipate the needs that those customers have and looking for an advantage over your competition, which usually comes from serving your customers in a unique way. The second part is to generate a level of curiosity about what’s happening in the world, both in terms of the talent you bring into the company as well as the culture that you build and maintain over time. We have been able to build a culture of curiosity where people are curious about how to make things work better.

Drew: You’re a great service company, yet one might argue that you also sell a lot of products. Has a service mentality always been front-and-center at American Express? How does being a great service company affect your marketing?

American Express has been around since 1850, and when we first started, we were a freight forwarding company, not a payment company. Then we slowly moved into the traveler business and the travelers check business. The company was 108 years old before the first American Express card appeared. Since the beginning, there has been a focus on being a great service company, whether that service was freight forwarding, opening up markets for people to travel and experience, offering people a safer way to carry their money with travelers checks or offering them something like the American Express card to simplify their lives and make it more rewarding. All of those things come from a service culture, a company focused on service.

This brand has been about 3 things from its very origin: Trust, security, service. So the iteration we experience today happens to be mostly in the form of plastic payments, whether that’s corporate, small business, consumer or for our merchants, but that’s just the way we’ve taken service to market today. It starts with understanding what business you are in and understanding that this is a company that believes it’s noble to serve. From that comes the way we go to market.

Drew: I saw the case history on Small Business Saturday, and there’s a lot of evidence that it drove a tremendous amount of traffic. That was probably among your more measurably effective initiatives, at least from a small business standpoint. But my understanding of Open Forum is that you can’t find a direct link to revenue, yet you’ve been investing in Open programs for years.

I think there are some general trends that are very positive but you’re right. When you get to a granular level, it’s difficult to say this program generated this many cards and this much spending for American Express.

We have a belief that if you serve people well, they will become your customers, because people find it rare to be served extremely well. We don’t require people to be a cardholder to use Open Forum. We created the site because we knew that part of enabling the success of small businesses was helping them understand what other small businesses had already learned to help them be successful. That’s why we created it, and that’s why we made it an “open” network – so people could find the people that would be of most value to them.

When you’ve contributed in a meaningful way to a small business’ success and then say, “Hey, I’ve got some other services for you. I’ve got a card that could help you manage inventory better,” they are quite open to it because they’ll say, “Well, you guys have already been enabling my business, enabling my success,” and that’s the philosophy. Some programs we can measure on a granular level, and some we can’t, but we’re careful not to overvalue the things we can measure or undervalue the things we can’t. 

Drew: You’ve been developing content, one way or another, for small businesses for years. Given that everybody is creating content, and other companies are targeting small businesses like you are, what are you doing to stay ahead?

What’s really important is that we don’t do things just because they’re a trend; we do things because we think it’s the right thing to do for our customer. In 1971, we started a publishing group called American Express publishing. Wow, what a concept. Who was talking about content in 1971? But this company has the foresight to understand that if you’re going to be a lifestyle services company, you’re going to serve businesses and people. You need to talk to them about their life, not what they’re going to use to pay for something.

The philosophy that got this company to create a publishing group in 1971 is no different than the way we think about our company today. If you’re in the service business, every interaction with a prospect or a customer should be a service interaction. We provide those magazines as a service to those customers. If you look at what we do on stage – bringing music to so many people on a live-stream basis – the philosophy is the same. That is our way of serving customers who we know have a passion for music because of the things they do, because of the way they spend their money. We should be helping our customers experience what it is they want to experience, and many of these experiences are open architecture because we want prospects to know that’s what it feels like to be a member.

Drew: Have you seen your role, in the last 10 years, evolve as a CMO? 

My role has evolved a lot. First, it’s evolved from the standpoint of understanding what is happening in the world related to media. How are people consuming media? How are they absorbing new messages? Those things have changed fairly remarkably in the last decade. Part of my job is to make sure I understand how the world works today from a media standpoint, whether that’s social media, digital, or traditional, and how it’s changing. How are brands being established in the landscape today?

My role is also about identifying which elements of American Express will not change from 1850, and which elements absolutely will in terms of how we go to market. Trust, security, and service will not change. This company has existed for 163 years because it’s reinvented itself, but always around the ideas of trust, security, and service.

Drew: What role is Big Data playing in your job today?

Data is a fundamental part of what we do today, and it’s a great opportunity, because data can allow us to optimize on a much shorter cycle. We also see it as an opportunity to serve customers better. I can anticipate your needs, I can help you with the things you want, I can begin to understand what you might need in the future based on data and that data can be very useful in service and marketing standpoint. I won’t talk about marketing without mentioning service because I think there’s a lot of marketing out there that is of no service to anyone and frankly doesn’t have much impact. The things that are sustainable are the marketing elements that serve people well. So data becomes an enormous opportunity not only to find prospects, but to also understand them and to offer things that are a real service to them, so that you can begin the relationship on a service level and not just a sales level.

Drew: If you had to justify the creation of Open Forum today based on data that you didn’t have because you hadn’t yet introduced it, how would you do it? I believe there’s a risk today that marketers might not take the giant leaps of faith in an untested program because its’ impact is not going to be linear.

I think your assumption is entirely correct which is that the data allows you to find the opportunity, execute the opportunity, and prove that it was a success; all on shorter cycles than ever before. You’re not waiting 6 months to say ‘did it work?’; you’re saying ‘let me show you the week after Small Business Saturday’. Let’s take a look at the behavioral shifts we saw. You’re able, because data is as robust today, to see insights to what might have cause and affected certain positive outcomes.

You cannot be a great marketer without experimentation. Experimentation requires great accountability. You have to be experimenting with a purpose and you have to have the data and the metrics that will allow you to demonstrate what worked and what didn’t. It’s okay to fail as long as you don’t fail twice on the same thing. That’s the way we try to operate here, we experiment a lot we have some things that work phenomenally well which the world gets to see on a broad scale basis and we have some things that don’t work at all and we say that didn’t work fold it up let’s not do that again, let’s try some other things. That to me is a big part of how the job has changed because 20 years ago, it was not as experimental as it is today because the data wasn’t as robust, the metrics weren’t easy to access, the cycles took longer and there weren’t as many new permutations to try.

Drew: Let’s talk about the Link Like Love and Card Sync programs. Are they both social? They have transactional elements, which is very different than some of the other things you’ve done. How would you evaluate those two programs, and do they have futures?

They definitely have futures. They come from a very clear observation of many digital channels, which are unlike many traditional media channels, which tend to be really focused on communications. These new channels are distribution channels, they’re service channels; they operate on so many different dimensions that it allows you to create products specifically for these platforms.

I believe iIt’s a missed opportunity if you’re working in the digital space and all you’re trying to do is create a communication. You’re going to disappoint people, because people who consume these channels don’t see them as just communications channels.

If you start to build products and services that exist within these very robust platforms then you start to create more interesting things that people can spend time with on the platform. You’re building something that mirrors the behaviors you’ve already seen customers take in those categories and on those platforms. Our philosophy has always been to build things that compliment the platforms that we’re building them on.  We are able to distribute products, services, and communicate with our customers because the channel is so robust it allows us to do that.

Drew: Let’s take Facebook Link, Like, Love, how does that work?

We have a lot of card members who spend time on Facebook so this program now gives them a way of further utilizing their Facebook presence. We then offer them things based on their social graph, their friends, their behavior, and their traditional spending behaviors. We’re then able to see how well we’ve done because some things have an enormous uptake. We’ve offered other opportunities to customers to sync their cards that have not gotten enormous uptake.

When we launched Tweet Divide, it was basically a similar product on a different platform. We communicated with people who were going to South by Southwest before they went on their route. We also reached them in a variety of ways en route to South by Southwest. There was a special show that we were doing, which we were live streaming with Jay-Z. If they wanted to attend the show all they had to do was sync their card on Twitter, tweet the show, and they would get tickets to the show. The viral effect was unbelievable. It was an incredible show. The headline the next day was something along the lines of “The most innovative new startup was American Express.”

We don’t like to just put everything on autopilot, particularly with something like South by Southwest. If you’re going to do something, we believe it should live up to very high standard of innovation and newness so we didn’t repeat it this year. We are taking the things that worked from it and applying it all over the place.

Drew: As the CMO, how much influence do you have on the entire customer experience?

At any company, that grows with time. I do believe there is a benefit of having been in this position for so many years. You have earned the right to influence many things that ultimately build your brand by doing things, demonstrating the value, measuring the value over time. I feel for CMOs who are just coming into a complex organization and trying to manage all of the elements that they believe are impacting both their brand and their business. It’s very difficult in a short amount of time to get your arms around it. I don’t know of a company structured in such a way that the CMO has control over all of the touch points.

For me, what’s really been tremendous is having the steady support of a CEO who has said “This is important,” and being able to demonstrate to my colleagues: “Here’s the value that we can bring,” and how, if we work to together and bring something that has synergy to the market, we all benefit. We’ve seen the impact that service has on the American Express brand, our customers and their behavior following a positive experience. It’s really been about picking things off and demonstrating the value of each over time.

It took me a few years before I was really able to get people on board and see how we can be more successful with greater synergy. It’s really a plea to consistency. Some people think consistency means boring and tired, and I don’t. We’re demonstrating that we have a consistent level of talent. Our organizational structure has allowed us to build relationships internally, and some things that were difficult 12, 15 years ago are second nature today.

Q+A on Innovation w Jonathan Becher, CMO, SAP

12/6/13
Jonathan Becher, SAP

Jonathan Becher, SAP

Jonathan Becher, CMO of SAP, sees innovation as absolutely mandatory, to be approached by organizations in leaps and bounds rather than baby steps. In his world, ROI means “return on innovation,” and the culture of innovation at SAP is an essential foundation for providing an innovative, meaningful customer experience.  Its little wonder that Jonathan won The CMO Award for Innovation from The CMO Club.  Here’s our interview:

Drew: In your presentation at The CMO Club Summit in April, you mentioned that innovation isn’t a buzz word; it’s an imperative for marketers. Can you explain why innovation is so important, particularly for CMOs?

Jonathan: For all good business leaders, there comes a day when you realize: “what got us here, won’t get us where we need to go.” We all know that the way customers consume information, products, and services has completely changed. It follows that the way we need to engage with customers must also change. However, incremental changes will not be sufficient; we need to innovate the discipline of marketing.

Drew: Real innovation requires organizational change. Can you talk about the changes you made to your marketing organization to institutionalize innovation?

Jonathan: A few years ago, I created a group called “Innovation Marketing.” The charter of that group was to try new things, break rules, make people uncomfortable, and change the status quo. The team generated tons of ideas, many of which were very interesting and impactful. However, it didn’t accomplish what I expected, as we were essentially segregating innovation to one small group. In fact, it created some resistance to change and innovation. We disbanded the group and focused on creating a culture of innovation instead. Now, we highlight efforts throughout marketing that push boundaries and embrace change, even ones that are not completely successful. In some sense, we’re reinforcing our corporate motto of “Run Better” – the quest for relentless improvement.

Drew: Marketing seems to be getting increasingly complex in terms of ways to spend and ways to monitor. Has it gotten more complex for you and, if so, how are you dealing with that complexity?

Jonathan: Luckily for me, I run marketing for a company that specializes in using technology to solve complex business challenges. For example, I have a mobile dashboard where my leadership team and I have real-time visibility into all parts of our marketing business. We can see what’s working and what isn’t, then redeploy resources and budget as necessary.

Drew: Have you been able to link your innovative marketing activities to the kinds of business metrics favored by CEOs?

Jonathan: Innovation is an investment, so you need ROI for it as well. Return on innovation.

We try to run marketing like a business, which means that we need to be able to prioritize between all of our initiatives. From an analytics point of view, we distinguish between the macro view (crunching data on a scale unheard of a few years ago) and the micro view (data equivalent of a focus group).

At the macro level, we apply marketing-mix modeling to get a holistic understanding of marketing performance across channels. We can then tie marketing investments directly to corporate objectives, and reallocate the mix accordingly. Based on this type of analysis, we have shifted unproductive spend to tactics where we have seen higher ROIs.

At the micro level, we’re constantly trying to optimize each interaction with our customers. Whether it’s an outbound marketing campaign, a customer event, or an inquiry on our Web site, we apply statistical analysis to the wealth of information we have about our customers to predict what’s relevant to them and to personalize the engagement. This level of customer-centric targeting, along with a test-learn culture, allows us to measure the effectiveness of everything we do and maximize ROI at the micro level.

Drew: SAP seems to be in the midst of a brand transformation. Can you describe that transformation?

Jonathan: I’m not sure whether you should call it a transformation or a brand expansion. For many years, our approach was talking about how big, successful companies run SAP. You didn’t know what exactly we did for the companies, but you knew we were somehow linked with their success.

Now, we’re taking a much more human approach that’s closely linked to our company mission to “help the world run better and improve people’s lives.” We’re telling stories of how we create value, not only for our customers, but for our customers’ customers. For example, rather than talking about how a big bank benefits from an SAP deployment, we talk about how a man in a very rural area who can’t physically get to a bank is now able to bank on his mobile phone. This access to banking opens up entirely new economic possibilities that weren’t previously an option to this man and improves his life. SAP makes that possible.

It’s not just “business runs SAP”; it’s also “life runs SAP.” You can sum up the change as moving from B2B to P2P – people to people.

Drew: As CMO, have you been able to address the entire customer experience? Were there any organizational challenges you needed to overcome? 

Jonathan: In my view, the customer experience is the responsibility of every single employee at SAP. That said, marketing must be the champion of the overall customer experience across all channels.

While marketing doesn’t own all the customer experience channels, it can help make the experience consistent. For example, we know that, if we invite a group of executives to one of our briefing centers for a day of meetings, we’re obligated to deliver a consistent experience – from the messaging on the invitation to the car ride from the airport, and everything else until our guests are back in the airport to go home.

Marketing doesn’t manage the briefing centers, but we provide counsel to the facilities managers and the sales teams that run the meetings to help them understand the story they want to tell and provide them with the right assets to help them tell that story.

Q+A w Antonio Lucio, Global Chief Brand Officer, Visa

12/2/13
Antonio Lucio, Visa

Antonio Lucio, Visa

A marketer’s work is never done. This is especially true at Visa, a company that’s not new, by any means, but has a full agenda ahead of it, especially when it comes to engaging with its customers. I recently spoke to the company’s Global Chief Brand Officer, Antonio Lucio, who walked me through Visa’s innovative marketing strategies, how it measures ROI and the future of its social communications.  (By the way, Antonio was a recent winner at The CMO Awards hosted by our friends at The CMO Club.)

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?

Given the increasingly complex media landscape, deepening Visa’s focus and commitment to digital and social communications is a constant priority for my leadership team and me. The imperative has never been greater for us to better communicate the strengths, values and mission of Visa to our full range of stakeholders in an integrated way. This meant that some structural changes needed to be made to set us up for success. We have made significant progress on this front, but it is a constantly evolving ecosystem so our work is never done.

Drew: Have there been any big surprises in terms of what’s worked really well and what hasn’t?

It’s not really a surprise, but what I’ve learned is that showing vs. telling is the way to go. Whether it’s addressing a question from our management by showing results and data, or teaching the organization how to do social by putting a team in place to show them what a best-in-class social effort looks like (i.e., our recent #goinsix social media campaign). Showing has a much bigger impact that just teaching alone.

Drew: How do you stay close to your customers when you operate in so many markets and have so many different types of customers?  

Social media is a great equalizer in so many ways. It enables global brands like Visa – and myself personally – to stay close to customers in markets around the world, understand what is important to them, what they are talking about and what they care about, all while providing the ability to engage them directly.

Drew: How do you evaluate/measure the success of your marketing?  Are there some channels that work a lot better for you than others?

At Visa the ultimate measure of success for our marketing is ROI – our ability to drive the business.  We break that down to three components: 1) reach (how many people can recall our campaigns); 2) short-term impact (the short-term usage lift of consumers); and 3) long-term impact (lift in our brand equity and our ability to influence consumer behavior longer-term).

Drew: Marketing seems to be getting increasingly complex in terms of ways to spend and ways to monitor. Has it gotten more complex for you and if so, how are you dealing with that complexity?

While the media ecosystem is definitely becoming more complex, our approach of putting the consumers at the center has not changed. We strive to understand how our consumers are using different devices, where they are spending their time and what they want to hear from us. And then we adjust our media mix and messaging accordingly. We want to ensure we are delivering unique and relevant experiences across all these screens by using the unique capabilities of the technology or platform the consumer is engaged with and delivering them a message that will interest them. Through technology we are better able to measure engagement with our brand and understand the impact of the experiences we are delivering to our customers.

Drew: How does new product development work at Visa? Does it report in to you? If not, how do you make sure you have the right “news” to market? 

While product development is led by our global product teams, our marketing and communications teams have strong partnerships with these teams – often sitting on their leadership teams. A collaborative work environment is essential to product development that registers as being innovative and relevant among clients and customers. As a team, we bring our respective areas of expertise across product, marketing and communications to ensure that we are bringing new products to market that will truly resonate with consumers.

Drew: Your “Go World” cheer campaign during the 2012 Olympics was one of the most successful examples of traditional and online marketing integration to date. What strategy did you use to integrate the various channels and what were some of the biggest lessons learned from that campaign?

We used our “Audience First” approach to develop a global campaign framework that directly engaged consumers through a global social platform that allowed fans to connect with the Go World marketing campaign by “Cheering” on athletes. London 2012 was heralded as the most social games ever and our Olympic Games marketing campaign was the most successful in our history – a true “game changer” in the way we drove engagement. We’re still applying the lessons learned from London, such as the benefits derived from engaging in social with concise, snackable content which inspired our #goinsix campaign.

Drew: Have you been able to link your innovative marketing activities to the kinds of business metrics favored by CEOs?

Our key performance metrics evolve to address changing dynamics in the industry.  For example, we recently added metrics to address social marketing, which enable brands to build direct relationships with consumers. We added social KPI goals that are part of a select few KPIs known to drive the business.  We closely track our progress, and have timely and transparent accountability across leadership towards delivering against these business driving KPIs.

Drew: Visa has made a big push to integrate social media into their overall marketing efforts over the past few years. Can you comment on your current strategy and where you plan on taking the program in the future?

Visa believes we are in a social era that extends beyond any platform or community; social is a mindset that empowers consumers and connects communities. We are incorporating social in the very heart of our marketing, not merely during the execution phase. We strive to develop social-at-the-core campaigns by designing for share-ability and planning for conversations. We invite consumers to drive the conversation while structuring our ecosystem to make sharing frictionless.

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?  

Everything is marketing when it comes to the customer experience because whether you are designing a product or a marketing campaign it is about designing it to be a more consumer centric, intelligent and seamless experience.

Q+A w CMO Award-Winner John Costello, Dunkin Donuts

11/21/13

John Costello After defecting to the client side, former Renegade planner Tad Kittredge told me what he loved about being on that side of the fence, “I finally feel like I have all the marketing levers at my fingertips and now, its just a matter of pulling the right ones at the right time.”  I haven’t spoken to Tad in a while so I can’t be sure if he has found the right formula but one gentleman who has, without a doubt, is John Costello.  Currently President, Global Marketing & Innovation at Dunkin Brands, Costello has a long track record as a successful marketer with stints at Home Depot, Sears and PepsiCo among others.

Not surprisingly, Costello recently received the Officers Award from The CMO Club for his outstanding work at Dunkin and I had the pleasure of interviewing him before The CMO Awards event.  In this highly substantive discussion, Costello provides a clear blueprint for any student of the business, offering insights on strategy, TV advertising, measurement, mobile, building loyalty and much much more.  Its a bit longer than many of my interviews so grab a large cup of America’s Favorite Coffee and have at it.

Drew: Marketing seems to be getting increasingly complex in terms of ways to spend and ways to monitor. Has it gotten more complex for you (for Dunkin’) and if so, how are you dealing with that complexity?

John:  Marketing has become more complex as technology and consumer engagement continues to evolve rapidly.  A key factor in Dunkin Brands’ success has been the close partnership between our franchisees and the company.  This has enabled us to stay close to our customers and respond to the changing marketplace better than ever before. Our team has done a good job of balancing what has worked in the past with innovation.  We conduct very sophisticated ROI analysis on our marketing plans, but we also encourage our teams to try new things, such as our digital billboard in Times Square for Dunkin’ Donuts or our viral soft-serve video on Facebook with Baskin-Robbins.  On the product side, we’ve implemented a strategy called “Familiar with a Twist” that has combined old favorites like Dunkin’ Donuts’ original blend coffee and our breakfast wraps, along with innovative and fun new products like our turkey sausage breakfast sandwich and the glazed donut breakfast sandwich.

Drew: Pundits like to say that TV ads are dead yet every retail/fast food exec I talk to swears that TV is still the most cost effective way to drive store traffic. Are you still finding TV to be effective at driving traffic for Dunkin’ Donuts?  

John: Through the great work of our team and advertising agencies, traditional marketing tools like TV, out-of-home and in point-of- purchase displays still work very effectively for Dunkin’. However, consumer engagement is changing as consumers spend more time with their computers, tablets and smart phones and are using these multiple devices at the same time. Thus, while traditional marketing remains very important for Dunkin’,  our investments in digital, social, mobile and loyalty marketing are increasing even more rapidly.

All of these investments are driven by five key principles:  First, most great ideas flow from the consumer. Whether it’s B-to-B or B-to-C, there’s really no substitute for truly understanding your customers’ pain points and how you can address them. Second, building brand differentiation is the most important thing a marketer can focus on because it answers the fundamental question: why should consumers choose your brand over all their other choices? Third, building a strong team both inside and outside your organization is imperative. It’s not just about the people who report to you, but also about your peers within the organization and the key agencies and technology partners with whom you work. Fourth, tactics matter. While developing the right strategy is important, executing that strategy to the highest standards can really make a difference. And fifth, agility. The environment in which we compete is changing more rapidly than ever before, so it’s important to be agile and adapt your plans as needed. The bottom line is that, while the way consumers learn about brands, consume information, and decide where to buy brands has changed over years, they are still looking for better solutions to their everyday challenges. All five of these principles flow from the core principle of understanding your consumers’ unmet needs and meeting them better than anybody else.

Drew:  How important is mobile marketing to Dunkin’ in your overall marketing mix?  

John: For a company like Dunkin’ Donuts, mobile and marketing go hand-in-hand. The surge in mobile usage, coupled with the busy, on-the-go Dunkin’ guest, creates a very compelling business case for us. By launching the Dunkin’ App and offering mobile payments, we created an entirely new level of speed and convenience that further distinguishes our brand to current and new customers throughout the country.

While the majority of our mobile efforts are focused on adding value for our consumers through the Dunkin’ App, we do believe that it’s critical to optimize for mobile across all of our digital touch points. With consumers increasingly reliant on their mobile devices for information, it’s important that our website, online advertising, e-mails, social media communications and more, all be optimized for the mobile audience. Each month, we also host a number of fun promotions and programs for our consumers on mobile-friendly social media platforms. You may have seen our recent integration with ESPN’s Monday Night Countdown, where Dunkin’ Donuts has a billboard ad during the program that was created with Vine.  The billboard ad promotes a #DunkinReplay Vine, which re-creates a marquee play from the first half of each week’s Monday Night Football game with Dunkin’ food and beverages. The goal of creating the content and sharing it across Twitter and Vine allows Dunkin’ Donuts to engage with users who enjoy watching Monday Night Football while leveraging a mobile device to connect with others about the game.

Dunkin’ Donuts also recently partnered with Zynga’s Running With Friends for iPhone, iPad, and iPod touch, where we are providing players with in-game tips for perfecting their game, plus Dunkin’ coffee boosts to help keep them running past their friends and up the leaderboards. Guests can also earn 500 free gems to use during game play for checking in to a local Dunkin’ Donuts, further emphasizing how Dunkin’ keeps them running both in their everyday lives and during game play.

Overall, we are very pleased with the response to our mobile initiatives. The success of these programs supports the importance of taking a 360 degree approach and thinking thoughtfully about the best platforms that will help us to engage with Dunkin’ Donuts guests. The future of mobile for us is to continue putting Dunkin’ in everyone’s hands. We see a lot of potential for mobile to be an extension of the Dunkin’ Donuts experience. The Dunkin’ App has been very popular with our guests and we see a strong opportunity with mobile when we roll out our DD Perks loyalty initiative nationally in early 2014.


Drew: New products seem to be a really important part of QSR marketing yet in many cases product development does not report into the CMO. How does new product development work at Dunkin? Does it report into you? If not, how do you make sure you have the right “news” to market?

John: Our world class culinary team does report directly to me and is made up of chefs, food scientists, and operations folks.  They work very closely with our brand marketing group, supply chain, operations, and franchisee groups in a fast-moving, highly-collaborative, and highly-disciplined way. For example, we do sophisticated concept and sensory testing on our new products, and our culinary team has really embraced that as a key tool to help them get great new products to market even faster. I meet with the culinary team at least twice a month to review and taste our new products under development for the next 18 months.

Drew: At the start of my career, I worked on the Century 21 Real Estate account and became very familiar with the challenges of working with franchisees. How does the fact that Dunkin Donut shops are almost 100% franchisee owned impact your overall marketing strategy? How do you keep them all happy? 

John: Our franchisees are the core of our business at Dunkin’ Brands and we value their opinions and business decisions. I view our franchisees on both Dunkin’ Donuts and Baskin- Robbins as a secret weapon in our product development and marketing efforts. These franchisees understand their markets in the U.S. and around the world better than anyone. They are a constant source of ideas, and we regularly review our product development plans with them to get their input.

Drew: How do you stay close to your customers with so many points of distribution (17,000 including Baskin-Robbins) in so many countries?

John: Because brand-building tactics and cultures may differ from country to country, people sometimes believe the principles may also differ. We operate in many different countries, in many different cultures, but we find the principle of understanding what our consumers want remains a constant around the world. We really try to adopt a global mindset that searches for the best ideas. It’s important to understand both the differences and the commonalities of countries around the world in order to remain close to our customers. For example, we sell a shredded pork donut in China right alongside a Boston Kreme donut, both of which are very popular. Green tea ice cream is popular in China, but so is French Vanilla ice cream.

We conduct extensive market research on key trends and get great feedback from our local teams and franchisees and business partners.  It’s also very important to visit local markets. I was in Europe earlier this year and will be rerunning to India and Indonesia next month.   Social media is another great way to stay in touch with customers. We understand that our guests like to use social media to interact with us, whether it be complimenting their favorite local shop’s crew members or telling us about their excitement for our pumpkin menu to return. We try to engage with our loyal fans as much as possible through these constantly growing channels in an effort to humanize our brand.

Drew: Consumers have lots of choices when it comes to coffee and donuts. What kinds of things are you trying to do to build loyalty?

John: The passion for Dunkin’ Donuts is unmatched and we believe the key to our continued success has been listening to our customers and evolving to meet their changing needs.  Providing great food and beverages at a good value, in a fast, friendly and convenient environment is the best way to build loyalty. We’re also planning to expand our enhanced DD Perks national loyalty program later this year. We believe that a customer-centric approach and ongoing commitment to evolving with our guests is why people have been coming to Dunkin’ Donuts for more than 60 years.

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?

John:  I believe that everything that touches the consumers drives the success of your brand.  It’s not just advertising.  It’s the products you offer, the guest experience in the store, how we handle customer feedback and the stories about Dunkin’ in the media.  A key part of our success has been a strong cross-functional team culture involving our franchises and internal groups within Dunkin’ like Marketing, Culinary/Innovation, Operations, HR, IT, Corporate Communications, etc..  We may different points of view on various issues, but after we discuss things, we move forward as one team.

This touches back to something that I mentioned earlier in our interview. I also believe that there’s really no substitute for truly understanding your customers’ pain points and how you can address them. This mindset keeps me inspired as I lead my team. I also believe this is a common theme across the Dunkin’ Brands leadership team, which allows for us extend the scope of our roles and promote a highly collaborative, cross-functional work environment from the top down. Coming together to take a 360 look at the entire customer experience cultivates a culture of innovation and has resulted in a number of powerful successes. Like any organization, there will always be the occasional road block, but I’ve worked hard to hire positive, proactive individuals who are strong communicators and adopt a solutions-oriented approach. Our industry is incredibly fast-paced and ever-changing, so we can’t let road blocks slow us down. Leading by example and encouraging people and teams to take initiative, has been a powerful recipe for success.

Q+A w The CMO Award-Winner Beth Comstock, GE

11/14/13

Beth ComstockSmall brands innovate out of necessity. Their very survival depends on finding not just a fresh solution to a customer problem but also a distinctive means of getting their story out there.  Fewer naysayers correlates to fewer entrenched ways of doing things equals faster pivots and a natural openness to experimentation.  For big brands, however, innovation is a triumph of determination over institutional inertia.  Or think of it this way, organizations are like planets–the bigger they get, the stronger the pull towards the center.

In this scenario, as one of the largest corporations in the world, GE should have the gravitational pull of Jupiter, crushing innovators before they can take a single step.  But guess again, big bias breath! From a marketing perspective, GE has been on the forefront of digital innovations for the last decade putting many smaller companies to shame.  Curious about how this was possible and thanks to an introduction by The CMO Club, I was delighted to be able to catch up with Beth Comstock, GE‘s CMO (who won The CMO Award for Leadership).  There is nothing more I could say that would be as near as insightful as the counsel Beth provides below.

Drew: For several years now, GE has been ahead of the curve when it comes to experimenting with new channels.  What is the strategy behind all of this experimentation? Is the medium essentially the message?
Beth: GE’s a leading technology company so we believe it important to be aligned with leading edge technology channels. The other thing to consider is that our audiences expect GE to be where they are – they aren’t going to always come looking for us.  We like to experiment as a way of learning, but our efforts have to align to our goal of connecting with our target audiences, which are largely industrial technologists and enthusiasts. And we’ve adapted our strategy around  being micro-relevant – meaning targeting the right audience in the right way. It doesn’t have to be a big audience, just the right one.

Drew: As the CMO, Is it a mandate of yours that GE explore all the newest coolest channels and if so, how are you finding them?
Beth: We have an awesome media team that identifies themselves as digital explorers.  We also take risks with new ideas and small companies as a way to learn and as a way to augment more traditional plays.  I’m a big believer in  carving out a percentage of your budget to develop new models.

Drew: Naysayers struggle to understand how a photo contest on Instagram or a promotion on Pinterest can help you sell GE products like aircraft engines. What do you say to those folks?
Beth: Selling a jet engine is a complicated sale.  Many people influence the purchase decision. And since GE is a company that traverses multiple industries, pretty quickly you’re targeting decision makers across a wide range of the economy and functional roles of business, which is why we believe in the importance of building a vibrant umbrella brand.  In addition to those who buy our products, we target enthusiasts, recruits and GE retail shareowners who want to experience GE in various dimensions.  Industrial technology is exciting, yes, even fun… and some of these outlets allow us the opportunity to open up and express ourselves in new ways.  People want to see that you are approachable.

Drew:  How has your role as CMO evolved over that past decade?  With the advent of “big data,” are you spending more time on analytics that you used to?  
The role of CMO has evolved from defining what marketing can do to delivering it.  I’m a  big believer in marketing’s role as developing markets, and new models. We like to think our contributions are in mindshare, marketshare and margin.  We’ve tried to make marketing a driver of commercial innovation that sits alongside our technical innovators to deliver a range of value to GE customers.  Big data is a perfect space for marketing.  A customer wants to run their business better not just have lots data – those insights help focus the data scientists on analytics that matter most.

Drew:  GE is primarily a B2B company yet you seem to act a lot more like a B2C company in terms of creating emotionally-rich consumer-friendly communications.  Any thoughts on why that is?
Beth: Since when does B2B have to be boring to boring?  Business people are people too. We are emotional beings, we don’t just rely on logic when it comes to business decisions.  Good marketing is about making a connection and delivering perceived value. Period.  In some ways, business marketers have an advantage in that they are closer to their customers and in theory should be more responsive and intuitive.

Drew: Content marketing is suddenly a hot buzzword in the industry.   Are you investing more resources in content development?  
Beth: We’ve been on a path as a content producer for several years now. We’ve widened our definition of content to include data, experiences and yes, emotional connection and even humor.  Content has to be useful and relevant to be effective.  We’ve invested in a range of skills like data visualization and user interaction design as a way to drive content that is engaging and relevant. The marvels of science, engineering and manufacturing offer good fodder for content, and we’re constantly seeking out storytellers who get as excited about this as we do.

Drew: Marketing seems to be getting increasingly complex in terms of ways to spend and ways to monitor. Has it gotten more complex for you and if so, how are you dealing with that complexity? Yes, it is more complex – we have a multitude of outlets and a range of content types to consider.  You need good partners, room for experimentation and a good dose of curiosity.  Trust me, it’s not about the size of your budget, it’s about the ability to use complexity to amplify your efforts, not stifle them.

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?  
Beth: Innovation can’t just be about fun ideas or wonky theories.  Innovation means new methods that yield results.  The challenge is often that time, trial and error are required to get to scale.  I’m a big believer in pilot projects to create proof points and staged development to make sure you get results.  Innovation without process is chaos. Trendspotting without translation leaves you empty.

Drew: Besides your efforts on Pinterest and Instagram can you speak about another recent innovative program that you are particularly proud of?
Beth: I’m especially proud of the work we are doing to help define what the industrial internet can mean to business productivity. It’s a new category for business, not just GE. We’ve put a lot of science and analysis into connecting with our customers and new tech partners in this area.  We’re doing much more in open innovation – meaning using digital communities to drive new methods at GE.  A recent example is a data science challenge with Kaggle that is shaving off minutes and fuel from flight landings – something thought unattainable.  And we’re having fun with Vine, having had a successful #SixSecondScience effort this summer that shows how science can be fun and connects with tech enthusiasts.

Drew: How do you stay close to your customers with so many different types of customers in so many countries?  
Beth: You have to live with them, analyze them, listen and empathize with them.  This means putting good marketing people on the ground in  markets around the world and more importantly, helping engineers and other business teams understand that marketing skills can be added to their jobs too.

Drew: Finally, I’ve heard it said that marketing is everything and everything is marketing especially when it comes to the customer experience. Do you agree with that notion and if so how have you extended the boundaries of your job beyond the normal purview of the CMO?   
Beth: I’m a big believer in Peter Drucker’s view that without a customer there is no business.  That is a rallying cry for marketing if I’ve ever heard one. And I think business leaders who believe that marketing is just about advertising and go-to-market communications miss out on all the market-making skills we have to offer.  I do believe the new frontier for marketers is holistic customer experience.  We haven’t cracked it yet but I’m looking forward to seeing how we can – and I think digital technology is taking us there very fast.

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