CMO Insights: How to Launch a New Product

Many CMOs make it their mission to leave a mark on their brand and take the company in an entirely new direction. This is not Lee’s mission. Lee Applbaum, CMO of Patrón Spirits, will be the first to admit that when he took over marketing for Patrón just last year he was sticking with a “don’t fix what’s not broken” model. In Part 1 of this interview, Lee discusses how he has been able to amplify what’s been working for Patrón while also showcasing his own talent — specifically with the Roca Patrón launch, which happened this past July. Lee shares his experiential marketing success story, “Roca on the Rails”, where he was able to create a retro experience in a world of digital marketing and explains the ever so trendy garden-to-glass movement to me. With a guy as innovative as Lee, it’s not wonder he was a recipient The CMO Club’s Creativity Award.

Drew: You were nominated in the creativity category. There are a lot of different ways to consider oneself creative – whether it’s how you problem-solve or the ability to inspire, creative thinking or creative marketing campaigns. So it would be helpful for me to understand how you are being creative in your current role, and how is that helping your overall marketing efforts?

It’s a very fair question with great kind of background context because there are the very traditional definitions of creative. But I think we are being particularly creative in the way in which we are thinking about and re-imagining the conversation both in our category, which is ultra-premium wine and spirits and, more specifically, tequila.

When I think about creativity, I usually use a different word – innovation – and try to reimagine how to interact with our consumers. It’s not just about another page in a magazine or another billboard with clever imagery or copy. It’s what can we do that’s disruptive in digital, social, mobile ecosystem, what can we do that’s innovative and creative in experiential marketing, for example.

Drew: Can you point to one or two programs you’ve done, say in the digital, social or mobile spaces, which are innovative or disruptive that you’re proud of?

We recently launched a new line of artisanal tequilas called the Roca Patrón, which means rock in Spanish. Historically, we haven’t launched new products very often or in a very thoughtful, very strategic way. When we launched this line a few months ago, we were introducing three tequilas that had been in development for many, many years.

The traditional approach for this brand and for the industry would have been to splash it out in magazines, maybe advertise a little on T.V. and you’re off to the races. But we quickly realized and understood that a majority of media is being consumed digitally, which presented a unique opportunity here.

One of the things that is very true within the spirits industry is the consumer’s interest in sharing stories and experiences. We latched onto the insight that consumers in the luxury space now feel that it’s not just enough to have a big bold logo. Consumers want to know the backstory. They want to know the history, they want to understand the authenticity and integrity of a brand.. And maybe equally importantly, they want to share that backstory with others because it gives them inherent credibility.

To leverage this knowledge, we rebuilt all of our web assets, including building experiential microsites (all mobile optimized) for Roca Patrón to help consumers learn about the product. We explained the artisanal process that goes into making Roca Patrón through a series of vignettes and then allowed that content to be curated and shared. We also created a tool that allows both consumers and the trade to share and comment on cocktail recipes featuring Roca Patrón.

Drew: And how has the response been?

Short-term, we look at sales. Long-term, we look at sales, profit and brand health. It’s too short-term right now to be able to be able to gauge the long-term impact on perceptions of our brand but from paying attention to the social conversation, the initial response has been nothing short of phenomenal.

We launched it in July and we’ve already beaten our annualized sales goal by 50 percent. Now is that attributable to the digital piece alone? No. But I absolutely think that having really innovative and contextually relevant messaging helped to drive early acceptance of the new line.

Drew: You created this digital experience where consumers and industry players can make and use these dynamic tools. Did you then rely on organic discovery of the site or did you “market” the marketing?

Yes we did market the marketing. Obviously with the spirits business, we don’t sell direct to consumers. We don’t sell directly to spirits retailers or restaurants and bars. In some cases there are two layers within our media. We marketed the marketing to distributors who in turn marketed our marketing to the retailers, on and off premise.

We wanted to inspire confidence for a bar-owner, restaurateur or spirit storeowner that there’s going to be an ample amount of media gravity owned, earned and paid for out there that’s going to help me pull this through, sell it through once I bring it in. We make the selling easy for them.

Drew: It’s interesting that you talked about this story becoming social currency. Can you explain this idea a bit more?

This particular launch for this particular product line was rooted in this handmade, artisanal, very traditional production process. We’re talking to a very specific artisanal audience; the same people who follow the farm-to-table movement. This is a garden-to-glass movement.

We’re unapologetic about the success of our marketing. There are cynics who believe that, because the core product can’t deliver, they just have to be clever. But the truth is we don’t. We’ve got a very honest, real, great artisanal product, and we developed really great marketing to go with it. We wanted to make sure that everything was really rooted in authenticity, and that we never got accused of just fancy window-dressing.

Drew: What exactly is “garden to glass?” 

I don’t know who coined it. The farm-to-table movement is obviously big. Garden-to-glass is the mixology version. It’s the idea of using fresh ingredients that are locally procured, really kind of honest cocktails, rather than just the premixed stuff. Our tequila is authentically made in Jalisco, Mexico, from the earth.

We see mixologists doing amazing things that are linked to the style and ingredients of the area. In Charleston, South Carolina, you might find a reinterpreted Old Fashioned coming right out of the south. You might find a Bloody Mary reinterpreted as a Bloody Maria in San Francisco with cocktail juice made from fresh clam juice. All leveraging locally procured ingredients.

Drew: If you were to look at your body of work so far, is there one specific program that’s your baby and that you feel is really cool?

Here’s one cool thing we just completed yesterday. As a brand, we own a 1927 vintage rail car that Clarke Gable and Huey Long and FDR rode on. We gutted and restored it in a very cool, very authentic style. This thing makes the Orient Express look like a railcar in the subways of New York. It’s over the top opulent.

We then developed a program using the rail car called Roca on the Rails. We took Roca and the train into cities all over the U.S. where we got an iconic chef from the city and leading mixologists to come out and create these beautiful bespoke dinners and tastings on and off the train. Then we harnessed and captured that content and shared it on social media, where we have over 3 million Facebook likes and are the number one spirit globally on Twitter . We have this huge social footprint and were able to give consumers a behind the velvet rope look at what happened with Roca on the Rails. We also encouraged the attendees of these events, who were culinary writers, journalists, consumers and bartenders to blog and post and Tweet about it as well.

Drew: I imagine there was a fair amount of press related to it as well.

Yeah, the media was sort of phenomenal. It was everybody from the local foodie journalist to the big publications The best thing we can get are the big mixologists who carry a ton of credibility with consumers, and with their fellow mixologists. What I really want are the credible, objective mixologists coming to an event and telling their friends and customers, “Holy shit, I just tasted this new Roca Patrón at this event and it is sensational”. That’s going to carry a lot more weight than any message that I send.

CMO Insights: Marketing the Lifestyle

Every 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.

Timely Tips on Experiential Marketing

BRANDWEEK ran an expansive special section on Experiential Marketing this week that included some pithy quotes from yours truly. Since this is a topic I tend to think a lot about, here are extensive notes from my conversation with BRANDWEEK reporter Michael Applebaum a couple of months ago.

Great experiential marketing programs

Experiential marketing comes in a lot of flavors which makes it tough to generalize what makes a program great. For some clients, it is enough to have created an engaging trial-focused experience during which the consumer consumes the product or service in a reasonably memorable fashion. For others, the ultimate goal is buzz, as measured by PR coverage, word of mouth or on occasion trade reactions. Still others seek to establish a continuing relationship with the target, so online registration becomes the ultimate measure of effectiveness. A truly great program, in my opinion, does all of the above and then some.

A truly great experiential program first and foremost is so appealing the consumer wants to engage with the brand. It is the opposite of disruptive advertising which like an unwanted door-to-door salesman intrudes into the home. Great experiential marketing is not shoving a donut in someone’s face on the street and then saying “try our bank.” To be appealing, marketers need to offer a reasonable exchange of value, during which the consumer gives up his/her time while the brand provides the experience and usually some free stuff!

Done correctly these experiences can have exponential impact which is important since 1:1 experiences can be pricey. If an experience is targeted at the right influencers, then these influencers will undoubtedly share their experiences. If the physical experience has an online component, then there is an opportunity for both WOM and a deeper relationship with that consumer. If an experience is sufficiently newsworthy, millions of other interested parties can be influenced by the event(s).

Renegade’s rules of thumb for a great experience are as follows:

  • the experience is fresh enough that the press wants to write about it;
  • the experience is relevant to the story you want to tell about the brand;
  • the experience has legs well beyond one single event and/or one single communication channel;
  • the experience is entertaining and enlightening;
  • the experience is so engaging that the consumer wants tell his/her friends about it.

This is not about just getting attention. There is an old adage in our business, “If you want attention, put a gorilla in a jockstrap and stand him on a street corner.” This is about engagement. Mutually beneficial engagement.

Lots of industries are turning to experiential marketing

Food and beverage companies are old hands at this since sampling is essential to growing their businesses. Brands like Pepsi AMP go to extreme lengths to sample their product to the right target–they handed out as many as 5 million samples this summer. Alcohol brands are creating mini-experiences in bars, clubs and restaurants with extraordinary frequency across the US. Entertainment companies like to include experiential programs in the mix often with the hope of creating a “must see” buzz prior to launch. B2B brands are also crafting experiences with greater frequency (examples available if you need them).

Lately, we’ve been noticing a lot of brands pulling from the Experiential 101 Playbook:

  • The World Record—Wise potato chips set the world record for most chips crunched at the same time at a Mets game this summer. Not exactly New York Times material but surely some pub out there besides the Guinness Book was interested.
  • The Pop-Up Store–Southwest Airline is the latest airlines to set up a pop-up in Manhattan theirs being a café-like setting in Bryant Park. Now defunct Song tried a pop-up store in 2004—unfortunately the store experience was better than the airline itself.
  • User Generated Content—a lot of experiential programs start by asking the consumer to create some kind of content. HSBC’s Soap Box and JetBlue’s Story Booth (both by JWT) ask the man on the street to provide their points-of-view. This “content” was then turned into ads and online communications. A smaller scale example comes from a small Canadian Beer Company called Okanagan Beer that challenged consumers to tell them why the brand should sponsor their events/parties. This content was then repurposed into a 360° campaign and sales jumped 30% — this is definitely on my list of “wish we’d done that.”

There are lots of ways to measure experiential marketing

As for research, there are so many different kinds of experiences and a corresponding amount of measurement tools depending on the objectives. We like to use Net Promoter Score on a pre/post basis as a measure of the experience itself. We have seen 30-40 point swings in likeliness to recommend a brand to a friend after exceptional experiences. In theory, every brand can measure the value per customer gained and/or the value of increased loyalty per customer. For example, if a brand experience makes you twice as likely to buy and/or recommend a brand, then one can compute the increase in lifetime value of that customer. That said, the math can get fuzzy pretty quickly. That’s why PR coverage is so important. Great press coverage can extend the reach of a program, making it more comparable to measuring the effectiveness of a media or PR program.

Latest trends in experiential marketing

First, mobile devices are becoming integral parts of brand experiences. An iPhone app can start an experience. An in-bar trivia contest answered via text messages can start an engagement. Mobile is part of a bigger trend to integrate technology into the experience and extend beyond the physical into the virtual world. Event experiences are often extended via Facebook and Twitter programs. Event experiences can be used to introduce on online extension, like Frito/NFL’s hunt for the most “fanatical football family.” And of course, social media is playing an ever increasing role in starting and extending brand experiences. An experiential program Renegade created for Toasted Head wine has evolved into an on-going Facebook program that keeps the faithful engaged.

Second, microevents are starting to get big. Royal Caribbean held 1000+ “Cruisitude” parties at homes of former cruisers. As I mentioned earlier, alcohol brands are hosting small events at bars almost nightly to engage their targets.

Where to start

Marketers are best to start with “the why,” not “the how.” If they know why they want to create experiences then it is much easier to figure out the how. If trial is key, then the experience can be built around that. If they are doing it to stretch marketing dollars, then getting buzz & PR should probably be the top priority. From there, we recommend marketers focus on “the do,” not “the say.” What is it that you can do for your target that will make them want to engage with you? Sometimes “the do” is just free stuff but often “the do” can be more substantial. Sports car owners like to drive fast but rarely get to do it legally. “The do” for BMW was a Performance Driving School for its customers. Road warriors scamper about airports looking for places to charge their gear. “The do” for Samsung was charging stations in airport terminals.