Hot Topics Magazine - The Truth About Data Issue by Truth About Data

Q4, 2015

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IN THIS ISSUE

Along with a growing troop of Data Heroes, Qubit founder & CEO Graham Cooke is ready to launch TruthAboutData, a global industry campaign to drive data literacy in marketing

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UBS Priceline.com Home Depot CMO 100 HSBC Aston Martin Paddy Power Nintendo Jim Stengel Post Office Rory Sutherland

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CMY

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LEADER

THE TEAM Philip Randerson Founder Tom Lytton-Dickie Editor Wendy Webb Creative Director Deanna Watkins Art Director Amedeo D’Amore Product & Marketing Manager Peter Stojanovic Staff Writer Jack Hershman Staff Writer Joel Watson Staff Writer

General Enquiries contact@hottopics.ht Address: Maddox House, 1 Maddox Street London W1S 2PZ

If I had a dollar for every time I have heard the word ‘data’ mentioned over the last two years, I would not be writing this. I would be on a beach. The topic dominates the conversation at tech conferences, in the media and in board rooms globally. The reality is though, that for all the discussion, businesses are using the wealth of data now available to them to varying degrees of sophistication. In follow up to the release of our CMO 100, a community selected list of the most innovative marketers on the planet, we have quizzed a broad selection of them on how they are applying data within their organizations. Or in fact, asked them to write articles on the subject. In this edition, you will find contributions from 13 marketing heavyweights, representing some of the world’s biggest brands across a broad range of sectors. If you were to take a single summary of the stories told in this ‘marketing data’ issue of Hot Topics, it would be that while we’re all facing in the same direction and are on the same journey, the spectrum of ‘data sophistication’ that we’re all sitting on is far broader than we perhaps thought. Commentators, conference speakers and trade press alike share a habit of benchmarking our entire industry against the levels of digital customer experience already reached by Uber. And while the aspiration to match the standards set by the disruptive taxi cab business is healthy, such comparisons are of little use to most companies. It is also why we have chosen to focus our cover story on the ‘Truth About Data’ campaign (page 26) led by Graham Cooke, CEO of Qubit, a pioneer in delivering ‘data-first’ customer experiences for hundreds of the world’s best-loved brands. Cooke is focused on demonstrating the value of truly understanding data. He wants to upskill the global marketing workforce, which he says, hasn’t yet got to grips with the sheer business transformational power of data. That sentiment is reiterated by former P&G marketing chief, Jim Stengel, who asserts that half of today’s CMOs lack the capabilities to fulfil the role effectively. What’s clear is that there is no end in sight to the disruption we’ve experienced since digital became an ‘issue’. Indeed, the suspicion now is that this disruption will never end; maybe this constant state of evolution and learning is less an ‘era’ and more of a correction. If that unsettles you, what may add comfort is that the vision shared by the companies that are succeeding is the oldest and simplest business principle there is: work harder to understand your customers.

Tom Lytton-Dickie Editor

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our COVER STAR Qubit Founder & CEO Graham Cooke recalls a ‘lightbulb’ moment of his Google career. “Google has tonnes of information about how advertising sells and how users interact with those ads. I discovered that we weren’t able to tell our customers how effective their advertising really was on Google. We had so much data but we weren’t using it to help sell our own core products more effectively. I dug around and realized that nobody was really using their data to answer the deeper, more interesting questions that would drive competitive advantage. Yes, everyone was getting reports to tell them what the numbers were doing; looking at their five ‘core metrics’, but nothing beyond that. Nobody was using the data to predict forward, they were just using it to reflect backwards. That’s when I knew there was an opportunity. That’s when we decided to launch Qubit.”

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COVER STAR

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IN THIS ISSUE CONTENTS

14 58 32 10 32 The Marketing Data Issue

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3 Leader 4 Cover Star 8 VC50 10 UBS 14 Priceline.com 16 Walgreens 21 CMO 100 26 COVER STORY 32 HSBC 36 Aston Martin 40 Top 40 Exits 42 Rory Sutherland 46 Paddy Power 48 Box 52 Brooks Bell 55 Nintendo 56 Bernard Liautaud 58 Home Depot 62 Jim Stengel 67 Nissan 70 Post Office

CONTENTS

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FUNDING FOCUS

The Global Top 50 Tech VC Deals: H1, 2015 Money is changing hands again. Perhaps not at the rate it did during the heyday of the last technology bubble but that won’t cause anyone any distress. Indeed, if the deals being made are more grounded and based on real valuations, that will only serve to reinforce investor confidence in the technology sector. At the same time, it would be easy to argue from looking at this list of the largest 50 global VC technology investments in the six

months to June 2015, that the idea of a ‘technology sector’ is now somewhat outdated. These deals, which span the dating, music, health insurance, storage, education, energy, biopharmaceuticals sectors and more, demonstrate what is only really now becoming clear. Technology may be a safe investment in itself but its chief role in the future will be as an enabler of game-changing ideas that improve customers’ lives.

Advertising, Marketing & PR

Dating

In partnership with

Quikr India

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Domo

Baihe $210m

Biopharmaceuticals

Cloud Computing

BioNTech $330m Intarcia Therapeutics $300m Denali Therapeutics $217m Adaptive Biotechnologies $195m

SimpliVity Slack

$150m

Business Intelligence

$175m $160m

Consumer Social Networks Pinterest

$186m

Education $241m

Lynda.com

$186m

E-Commerce

Energy

Meituan $700m Delivery Hero $568.35m Flipkart $550m Wish $500m Jia.com $160m Jet $140m

Renewable Energy Trust Capital $125m

Enterprise Integration MuleSoft

$128m

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Highlights Total value monitored:

Largest deal:

$15.5bn $1,000m

FUNDING FOCUS

SpaceX (Satellite) Uber Technologies (Marketplace)

Finance & Banking

Marketplaces

Affirm $275.11m Prosper $165m Funding Circle $150m

Uber Technologies $1,000m KuaiDi Dache $600m Hangzhou Kuaidi Technology $600m Lyft $530m Olacabs $400m Meitu $350m Ele.me $350m Uxin $170m Lyft $150m Blue Apron $135m HelloFresh $126m

Hardware Softbank Robotics

Credit Karma

$175m

Online Music Spotify

$526m

$236m

Mobile Advertising

Health Oscar

Mobile Payments & Banking

Panshi $145m

$200m

Satellite SpaceX OneWeb Planet Labs

$1,000m $500m $118m

Software Zenefits $512.57m Pacific Control Systems $272.25m

Online Publishers Purch

$135m

Storage Hardware Infinidat

Mobile Messaging

Identity DocuSign

Snapchat $278m

$537.64m

$150m

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$130m $125m

Publishers China Business News

$193m

Web Analytics Dataminr RetailNext

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CMO SNAPSHOT

UBS Johan Jervoe Group CMO

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innovate your way out of the comfort zone Banking is not an industry in which you would expect to see groundbreaking innovation but Johan Jervoe says that in today’s world it is ‘innovate or die...’

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CMO SNAPSHOT

UBS Johan Jervoe Group CMO

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CMO SNAPSHOT

UBS Johan Jervoe Group CMO

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“Innovation is everything.” Robert Noyce, one of the founders of Intel was famously quoted as saying that. And it is true more so for marketing than many other disciplines. You have to look at some of the more traditional tasks and ask yourself how you can bring innovation and new thoughts into them; not only by doing different things, but also by doing things differently. It boils down to talent and having some of the best people on your team that have an appetite to drive innovation and drive new territory thinking. That means having some of the best talent in the agency world on your team as well. Once you start fostering that kind of spirit in thinking, you will slowly but surely see a fresh approach being created within your digital arena. In terms of staying abreast of the innovation that is possible through the use of technology, we have three distinct groups allocated to this within the business. The first is a client centric organization that studies the major trends and gains customer feedback around what they would prefer to have as a usage case.

There is also a team sitting within the broader technology division who are looking at it from a different perspective, but the crossover is where the interest lies. Lastly there is a group which considers innovation from a brand building, advertising and marketing perspective. When you get those three cornerstones lined up, you see some really interesting conversations starting. After that, it is about doing a few things really well. It isn’t about creating 200 different apps or products. My mantra is to think big, start small, scale rapidly. By starting small you can have multiple pilots in place, rather than putting your whole weight on one. You can then learn as you go with the philosophy being that done is better than perfect. What big data means to UBS With big data and more importantly, behavioral data, I’m less interested in knowing how often you use your credit card and more interested in knowing what that credit card means to you from a motivational standpoint.

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“Uber is now the benchmark for all apps including banking apps. I don’t look at our competition in banking and that is true for our technical innovation as well. I look at the entire ecosystem”

It’s the same with a bank account. I’m not overly concerned about the big data focused on what people are doing with their money. It is more relevant to figure out and understand what motivates you to choose one thing and not another. It is the insights that are relevant, regardless of where the data comes from. Interpreting what influences behavioral decisions is what we primarily use data for. If you can extract those insights, you can then create products which are very attractive for your customers and clients. However, it is often the case that the offer that results from a technological innovation, whether it is an app or something else, is too broad and has too many bells and whistles. In that case, it often becomes unfocused. There is a beauty in the focus of today’s world that means if you get that right you get picked up really well. Innovating within the financial industry The sheer size of big corporations means that trying to adjust your strategy can be challenging. What makes the financial industry slightly harder than many other industries, is the amount of regulatory demands that comes on top of that. Often that regulation prevents you from innovating and trying to create great stuff for the future, and it attempts to lock you into the ecosystem of the past and put barriers in to keep you there. However, there’s good reason for that. You have to be careful about what innovation means in this area. At the end of that day, as a customer, I want my money and my payments to be safe. Whether I’m receiving or sending a payment, I want my investments to be safe. In the finance space there is perhaps less appetite from clients for their financial institution to be at the forefront in terms of what else can be done. Having said that, the marketplace is moving very, very fast, and it’s being influenced by the success of applications from all sectors. Our clients and customers will use apps like Uber and love the offer and how easy it makes ordering a taxi. That’s now our benchmark for all other apps

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we have, including banking apps. That’s the level of service that you want to have. You’re not comparing your banking app to just other banking apps. Our competition in the advertising world isn’t the other people in the banking industry, it’s the best advertisers out there. My competition in terms of agency talent isn’t judged in comparison to other banks’ access to talent. I want the best creative director in that team. Essentially, I don’t look too much at our competition in banking, and that is true for our technical innovation as well. I look a lot at what is trending and what is moving in the entire ecosystem: where is the agency model going? What is happening on mobile? How are you booking behavioral advertising? You always have to look at this through the lens of regulatory compliance, but it’s still interesting for me to see something outside of the banking industry that I may never be able to apply to the industry. It allows you dwell on what is possible now. l

CMO SNAPSHOT

UBS Johan Jervoe Group CMO

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CMO SNAPSHOT

The Power of Conversion

Priceline.com Brett Keller CMO

‘If you’re coming to Priceline via a mobile device and you’re looking for a hotel, 75% of the time you need a hotel for tonight or tomorrow’.

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I want to discuss the concept of conversion and the power that conversion has for any company. There are components that drive conversion, especially in travel, that are universal in nature. If you break it down to the four components, the first is the strength of your brand, second is creating a compelling product and innovating that product over time, third is using big data to attack conversion and the fourth is ensuring that your traffic or your consumers are moving through a high converting UI. Each of the components are quite different but they work together to create a really powerful conversion machine. This is essentially, “the power of conversion in the digital space”. In the travel category in particular, we’re seeing a trend in both search and our relationship with big search engines such as Google or Bing as well as with our larger distribution channels, such as TripAdvisor or Trivago. Across all of those platforms is a trend where they are really tightening up the shelf-space so that fewer and fewer brands can actually advertize to their consumers.

In the past, even as little as three years ago, you went to a site like TripAdvisor and it would show any given product listing up to ten or twelve different advertisers that you could click on then and there. Now you visit the site and it is their own brand and maybe two more so the shelf space, or number of brands shown is smaller and smaller. If you don’t have a strong converting experience, you take less and less of that business and you become less relevant within that category or industry. Let’s go back to the four points and the importance of each. A lot of this is very relevant to travel but it can expand to other categories and other industries.

Create a powerful brand

Digital has enabled many competitors and players who do not have highly visible brands to operate and to find a way to attract and bring consumers in. However, the power of the brand plays a more important role than it did three or four years ago. Here in the United States we are heavy users of television advertising and that’s how we

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Priceline CMO Brett Keller says there are four distinct elements that businesses can get working together to create an all powerful ‘conversion machine’

CMO SNAPSHOT

Priceline.com Brett Keller CMO

communicate the proposition of our brands. We also benefit mainly from users who have used that product and gone on to tell their friends and family about it. The power of word-of-mouth is very real and when you combine both word-of-mouth from a positive experience with the advertising and the investment in advertising you have a very strong brand with a higher draw and gravitas.

Build a compelling product

Number two is to have a compelling product and prices associated with that product. Let’s assume there’s a product with compelling prices. What happens over time though if that product is not subject to innovation is it will become stale and stagnant. Your competitors will of course put a product on the shelf which is greatly improved with better data, better photography, improved descriptions and more insight and better reviews - so the more we innovate and develop the product size, the more we can impact on conversion. In the digital space, everyone is moving towards a programmatic world and we hear all of this discussion around data management platforms and your ability to go out and find your target consumer much easier than you have been able to before. When you’re bidding against core search, hundreds and thousands and millions of keywords, you need very strong systems that have been built out to effectively

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micromanage your business. This not only deals with the ever changing inventory position of your products but also counter balances your competitors put into play as they move within the market.

Personalize search results

Fifteen or sixteen years ago, industry leaders were starting to speak about the need to personalize search results. When you search for a hotel, flight or car rental, why does everybody need to see the exact same results? Isn’t there enough data available in order to create a more personalized experience? If you’re coming to Priceline via a mobile device and you’re looking for a hotel, 75% of the time you’re looking for a hotel either tonight or tomorrow. That’s very different than if you were going on a desktop where it is less likely to be for tonight and more likely to be for next week. And because of that, the type of hotels which we show you will be very different. Even if a customer only books one hotel with us, we have an idea of what kind of hotels they like. The star rating, the location, the quality – all those things all become evident if they book two or three times with us. The beauty of conversion in the digital space is that while you do end up spending more dollars, it is actually a positive net result because as your conversion grows, it gets you to bid higher on these platforms, and draws in a lot more growth for your brands overtime. l

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INTERVIEW Q&A

Walgreens

The 114-year old startup

Sona Chawla President of Digital and CMO

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Sona Chawla, President of Digital and CMO of Walgreens, discusses how the worlds of digital and marketing are converging. Fast.

Q&A

Walgreens Sona Chawla President of Digital and CMO

Hot Topics: Why does Walgreens need a president of digital as well as a CMO? Sona Chawla: Both roles currently exist and co-exist in many companies. The growing influence of digital on the core business has led many companies to establish a president of digital or chief digital officer role to ensure focus and domain expertise in this area. The Chief Marketing Officer role has been an established role at most companies. HT: How do you configure those two job titles and remits into one working week? SC: In the case of Walgreens, the worlds of digital and marketing are converging, so the teams were working very closely together anyway. I also have a very talented and collaborative team, so that helps me scale, get a lot accomplished and connect the dots more easily. HT: You came to the CMO role through Ecommerce - is that a trend already? Will we see that happen more and more? If so, why? SC: Each company and individual is different, so it is hard to generalize. I do believe CMOs today need to have a solid understanding of digital – they could come from that background or they could learn it. Either way, they have to be agile learners since they will be in unfamiliar territory (digital or traditional) and given the rapid pace of change in marketing, they will have to continuously adapt and reshape their strategies. HT: As online becomes an increasingly important channel in which to engage with customers as well as transact, how important is customer experience to your success in fulfilling Walgreens’ promise to its customers? SC: Customer experience is an absolutely critical part of our purpose - to “champion everyone’s right to be happy and healthy”. We’re also known for our

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Q&A

Walgreens Sona Chawla President of Digital and CMO

Walgreens has over 8,200 drugstores across the US, covering all 50 states.

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ability to provide a convenient experience due to the ubiquity of our locations, based on the best corners of America – hence our tag line “At the Corner of Happy and Healthy”. Now we are redefining the meaning of convenience through the integration of digital into our core experience. For instance, we allow customers to refill their prescriptions in 30 seconds or less by scanning them and then pick up at their local store. By doing so, we’ve made the refill experience absolutely frictionless for our customers and ultimately convenient. We also believe that each channel is unique and provides more opportunities to deliver on our brand purpose, while connected through our brand philosophy and core tenets of the customer experience. No matter how customers interact with us, it should feel like the kind of Walgreens experience we want them to have. For instance, in the store, one can have a face-to-face session with a pharmacist, while online we offer 24x7 pharmacy chat. Those interactions happen in a different way based on the channel, but the spirit of the experience should feel like Walgreens. HT: How do you use data to improve the customer experience on the site and in store? SC: Today, we offer the nation’s largest drugstore loyalty program with more than 86 million active members. We glean many insights from this program and are able to refine our merchandizing, marketing and experience to provide relevant offerings and

meaningful customer engagement across all our channels. In addition, we are often able to test and learn quickly in the digital channels and implement our learning in the store – for example, new product launches. Finally, we are laser focused on continuously improving our customer experience and our teams pore over customer feedback and behavioral data to eliminate pain points and deliver delight. HT: How do you transition from an owner of ‘Big Data’ to being able to apply that data to increase efficiency and make better business decisions? SC: We are focused on building infrastructure and tools to democratize customer insights throughout the organization, so that each function can leverage this insight to be more efficient and effective. HT: Through its founder Charles Walgreen Senior, Walgreens is one of the great American stories of entrepreneurship and innovation. How much does that spirit infuse the way your ecommerce site looks to deepen trust and relationships with your customers? SC: Charles Walgreen Senior was ultimately customer focused and he was always seeking and adopting new ways to serve his customers. Today, we still follow his principles and through digital we have innovated in our own unique way by bringing together our businesses and enabling technology to provide a better customer experience. We follow three core principles for our digital

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Q&A

“We are 114 years old, but we still feel like a startup. We have continuously reinvented ourselves through the decades as customer needs changed and technologies evolved.” innovation: Simplify, Reinvent, Unify. Simplify is all about taking friction out of the customer’s way and to making things easier for them – a good example of this is how we’ve integrated our loyalty card and digital coupons with our mobile app. Digital also allows us to reinvent core businesses – in our case, we’ve completely transformed our photo business by allowing customers to directly print photos taken on their smartphone to their local Walgreens store. And finally, digital enables us to unify or connect experiences for customers across partner ecosystems. We leverage our mutual assets and

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connect them for customers. For example, we’ve extended our Balance Rewards Loyalty program to include awarding points to customers for a range of healthy behaviors. Many of our partners want to leverage this program and award loyalty points to their members – we let them integrate our program into their app through our API strategy. HT: How is Walgreens partnering with startups to stay abreast of the latest innovation and become more agile? SC: The digital ecosystem is vast and we want to help drive innovation in the ecosystem both directly and indirectly. Our approach has enabled third-party software developers to tap into our Walgreens Web services, thus creating multiple mobile apps that can connect to our convenient store capabilities for their customers. We have about 240 API partners through our loyalty, prescription and photo APIs. We continue to announce new partnerships with startups – just earlier this month, we announced our partnership with Postmates, an on-demand delivery startup. HT: The CEO of Dentsu Aegis stated that every business today has to be a ‘startup or a turnaround, there is nothing in between’. How would you define Walgreens? SC: We are 114 years old, but we still feel like a startup. We have continuously reinvented ourselves through the decades as customer needs changed and technologies evolved. l

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Calling All Data Heroes

We want to hear your stories and best data wins, and share them with our TruthAboutData community. Top brands such as Farfetch and Edmund Optics have already shared their data expertise. You could be next.

Visit TruthAboutData.com now to watch our Data Heroes in action

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The role of â&#x20AC;&#x2DC;chief transformation officerâ&#x20AC;&#x2122; is up for grabs. Again. As the customer appetite for personalized customer experiences continues to evolve, companies that lag behind digitally, risk becoming obsolete. In some quarters CTOs and CDOs (Chief Digital Officers) are taking ownership of the digitization of their businesses. This Hot Topics list of the 100 most innovative CMOs, as voted by our community of tech leaders, suggests any power struggle will not be easy. The expertise among these executives stretches past digital technology to incorporate the customer, the boardroom and the future.

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CMO 100

“We have dealers, but customers want to have a direct relationship with the factory and the people in the company”

READ THE INTERVIEW P36

Simon Sproule, CMO, Aston Martin

Roxanne Taylor

Accenture

Ann Lewnes

Adobe

Jonathan Mildenhall

Airbnb

Tiger Wang

Alibaba

Neil Lindsay

Amazon

John Hayes American Express

Simon Sproule Aston Martin

Erika Nardini

AOL

Phil Schiller

Apple

Aston Martin

Abigail Comber

Katherine Whitton

Barclaycard

Andy Brent

Barclays

Simon Sproule

Omar Johnson Beats Electronics

Katherine Whitton Barclaycard

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Whitney Bouck Box

Kieran Hannon

Belkin

Dr. Ian Robertson

BMW

Whitney Bouck

Box

Iain Conn

Suzi Williams

BT Group Plc

Sarah Manley

Burberry

Blair Christie

Cisco

Heather Cox

Citibank

Sarah Speake

Clear Channel

Marcos de Quinto

Coca Cola

Joachim Schmidt

Daimler

Karen H. Quintos

Dell

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“Marketing needs to leverage technology more than it ever has before to be at the eyeballs and fingertips of our target customers”

READ THE INTERVIEW P48

CMO 100

Whitney Bouck, CMO, Box

Brad Brooks

Docusign

Ebay Enterprise

Pippa Dunn

Mark Kirschner

Thierry Antinori

Emirates

Helena Norrman

Ericsson

Jessica Harley

Gilt

Gary Briggs

Facebook

Jim Farley

Ford

Beth Comstock

Alan Batey

Lorraine Twohill

Google

Antonio Lucio

Chris Clark

HSBC

Steve Shannon

Hyundai

Jon Iwata

IBM

Paul Darcy

Indeed

Steven Fund

Intel

Pippa Dunn EE

Chris Clark HSBC

The Marketing Data Issue

Ian Armstrong Jaguar Land Rover Craig Inglis

John Lewis

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Alison Lewis Johnson & Johnson Alex Dale

King.com

Chris Goodman

KPMG

Matthew Wohl

Kraft Foods

Marc Speichert

L’Oreal

David Roman

Lenavo

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Jon Iwata IBM

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CMO 100

“The ability to analyze, optimize and obsess about ROI has never been greater. It needs to be embraced.” Christian Woolfenden, CMO, Paddy Power

Jonathan Rigby

Scott Moffitt Nintendo

Roel De Vries Nissan

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READ THE INTERVIEW P46

Christian Woolfenden Paddy Power

Manchester United

Raja Rajamannar

Mastercard

Penny Baldwin

McAfee

Deborah Wahl

McDonald’s

Bernie Glaser

Mercedes-Benz

Chris Capossela

Microsoft

Tori Campbell

Mulberry

Patrice Bula

Nestle

Kelly Bennett

Netflix

Chris Duncan

News UK

Trevor Edwards

Nike

Scott Moffitt

Nintendo

Roel De Vries

Nissan

Judith Sim

Oracle

Christian Woolfenden

Paddy Power

Patrick Adams

Paypal

Kristin Patrick

Pepsi

Geert van Kuyck

Philips

Kurt Kane

Pizza Hut

Brett Keller

Priceline

Anand Chandrasekher

Qualcomm

Simon Mouyal

Rackspace

David Wheldon

RBS

Huib van Bockel

Red Bull

Jerome Stoll

Renault

28/09/2015 18:39

“There isn’t one piece of marketing technology or one clever idea that will set everything alight or act as a magic wand to make everything work”

READ THE INTERVIEW P67

CMO 100

Reol De Vries, CMO, Nissan

Frank Boulben

Rogers Communication

Patricia Parra

Shazam

Lynn Vojvodich

Salesforce

Younghee Lee

Samsung

Keith Moor

Santander

Jonathan Becher

SAP

Stephen van Rooyen

Sky

Seth Farbman

Spotify

Kevin Burke

Square

Sharon Rothstein

Starbucks

Mary Clark

Syniverse

Mike Sievert

T-Mobile

Nina Bibby

Telefonica UK

Kristen M. O’Hara

Time Warner

Jeffrey Hirsch

TW Cable

Lynda Smith

Twilio

Johan Jervoe

UBS

Keith Weed

Unilever

Alan Gershenhorn

UPS

Kerris Bright

Virgin Group

Stephen Quinn

Wallmart

Andy Lark

Xero

John Kennedy

Xerox

Kathy Savitt

Yahoo

Danielle Tiedt

Youtube

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Stephen van Rooyen Sky

Keith Weed Unilever

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Johan Jervoe UBS

28/09/2015 18:39

COVER STORY

The Truth About Data Graham Cooke CEO Qubit

ThE truth about data We’re sitting on a gold mine in terms of how close we can get to our customers. A wealth of data is ours to exploit. The vastly uncomfortable truth is that many of us are data illiterate. A new campaign aims to change that.

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There’s a worrying gap between the amount of data that businesses have in their grasp and the skills that marketing departments possess in order to make it profitable or even useful. That gap needs to be closed according to Graham Cooke, co-founder and CEO of pioneering customer-experience technology Qubit. Cooke is hell-bent on democratizing data and making it valuable across the business. If you haven’t yet heard of Cooke’s TruthAboutData (TAD) campaign, the likelihood is that you soon will. TAD is a global, industry education campaign to drive up data literacy in marketing. TAD is a noisy, educational B2B campaign with a ‘B2C feel’ that is upskilling marketers and their teams

22/09/2015 16:04

with the tools to better understand and unleash the “utterly transformational power” of Big Data. The campaign’s Data Heroes that are on hand to share their best practice are selected for their demonstrated ability to interpret data and apply its insights to light sparks and achieve goals throughout their businesses and organizations. “Who’s my data hero?” Cooke ponders for only seconds before his eyes light up. “A gentleman called Hans Rosling. He’s a Swedish medical doctor and academic but he’s also an amazing statistician and co-founder and chairman of the Gapminder Foundation, which developed the Trendalyzer software system.” “Rosling created Gapminder when the government started releasing all sorts of data to the public: health information; life expectancy; the GDP, stuff like that. Rosling visualized this data enabling normal people to see patterns in how entire economies were changing over time – as wealth increased, as family sizes shrunk, as life expectancy increased. Now of course we’re used to being able to access data showing us entire economic plots of countries, even predictive data. That’s because Rosling took it and showed us how to combine it, visualize it and make it predictive. “That’s what we are doing with TruthAboutData. We want to educate the market, give marketers access and open their eyes to what’s possible with a fuller understanding of data.” Data, and the technology that enables that data to turn into positive action is Cooke’s passion. To date Qubit is more than 220 people and tracking triple digit growth. Behind Qubit’s growth lies, among other things, Cooke’s gift for embracing the latest technological breakthroughs, taking advantage of the cloud and advances in big data processing power. Now though, says Cooke, it’s time to change the conversation. From one that’s all about technology and data, to one that includes people and processes. “While businesses are generating around 200 times more data than they were 30 years ago, we’re not really looking at a great deal more data than we were back then. We’re using the same metrics. What that means is we could be going far deeper, becoming far more predictive and efficient. We can ask bigger questions. It’s a

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COVER STORY

The Truth About Data Graham Cooke CEO Qubit

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22/09/2015 16:04

COVER STORY

The Truth About Data Graham Cooke CEO Qubit

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disparity but it’s also an opportunity if we have the required data literacy skills.” That may explain the reason behind the campaign but why Cooke and why now? “Good question. At Qubit, we’re 220 people, the most brilliant minds I’ve ever worked with. We’re always on this maniacal quest for getting the right answer. A couple of years ago the engineering research team was examining the results you get from different AB tests. But you need a few robust elements of science to ensure you’re seeing real results. It dawned on us through investigations that much of the industry didn’t understand notions such as statistical significance or how many people should be in a test. Many didn’t understand what a well-powered test was, or what different models like Bayesian and Frequentist mean. “And you know what? ‘Experts’ weren’t helping. Parts of the vendor industry were sometimes taking advantage of this lack of knowledge and showing things that were probably false positives while marketers walked away thinking they’d done a great job. Actually the triumphs in their careers were sometimes statistical flukes.” “That might have been fine for past eras but in these modern times when data is increasingly driving business, flukes like that will create distrust in, and contempt for, marketers. The industry is changing; it’s adopting much more robust models. If marketing doesn’t keep up it’s heading for a massive set back. It’s a disaster waiting to happen.” Cooke, animated now, is recalling how he’s had to explain this to clients. “It can make for a difficult conversation. Our customers would say: ‘all the stuff we do with your technology is only giving us a 4% uplift while all the things I was doing with this other technology were giving me a 30% uplift’. We would say: ‘look, there’s no way you’re ever getting a 30% uplift. Your business generates $100 million a year online. Were you really generating an additional $30 million a year from this colour change?’” Despite the tough conversations, Qubit has forged itself a reputation for integrity and applying rigorous data science to the tasks of optimization and personalization for its clients. In January 2014, a Qubit research engineer wrote a white paper comparing all the technologies in the industry on how they measure uplift. The paper, ‘Most Winning A/B Test Results Are Illusory’, was quietly posted on Hacker News and was quickly downloaded around 30,000 times. “It was the proverbial can of worms,” says Cooke. “Our data scientist behind it had just wanted to talk openly about what we were seeing all the time –

we didn’t realise there was such readiness for the conversation – that paper got everybody blogging. People actually care about this stuff; about getting data right.” From that point on, Cooke says, Qubit decided that it was going to publicly stand up for doing things the right way. “Externally, we wanted to find a way of educating the industry without it being ‘Qubit’ doing it so that others could feel no conflict in joining us. “Internally, we were determined one way or another to empower marketers with the new skills they need.” During those early days there was talk within Qubit’s ranks of presenting itself as an alternative to snake oil. “The concept of snake oil is interesting,” Cooke

22/09/2015 16:04

COVER STORY

The Truth About Data Graham Cooke CEO Qubit

says. “The medicine we know today is very much evidence based. You have long-running trials where they take two groups and the testing is rigorous because when you’re testing whether a drug is going to cure cancer or solve a major medical issue like cholesterol, you want to make damn sure that the drug isn’t going to make people worse. As proper medical testing has increased, so has our ability to save lives. Prior to this methodology, you had snake oil salesmen selling potions: ‘you may not know anything about it, but it will save you… make you healthier, younger...’ - it worked because it appealed to a human emotion. We see the same thing happening in marketing. There’s been snake oil in digital marketing about ‘magical stuff’ that’s never

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going to work. The reality is, snake oil never lasts, because people eventually want the truth.” The TAD campaign is currently a website at the heart of a growing community that is using its e-learning modules and learning from its Data Heroes. In the months to come it will be on platforms at a range of live events as the TAD industry partners find new ways to share data best practice. The question is, how far can TAD go? Cooke is quick to answer. “What we’ve been through in the past 20 years is the digital revolution. We’ve taken analogue businesses and made them digital. Everybody understands digital marketing. Now we need to go to the next step. We need to go deeper and understand data. We want to inspire

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22/09/2015 16:04

COVER STORY

The Truth About Data Graham Cooke CEO Qubit

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everybody to understand data because that’s how we get closer to our customers. That’s how we make better decisions. There are CMOs out there that have had a wonderful career through being a superb marketer with an eye for a great ad campaign and a good grasp of the business strategy. They have been successful because they are creative and they’re inspiring leaders. Now though, it is their responsibility to lead the effort to increase the skill level around data.” “We all talk about making data-driven decisions in our jobs now but the reality is that not many people really understand how to use data. In fact many are scared of data. As data becomes increasingly more important in making good decisions, we believe there’s a need now to admit that most of the industry actually doesn’t know everything it should about this. For those prepared to admit that, well, here’s a great chance to learn.” The target audience for the campaign is officially

marketing. But the beneficiaries of TAD span the hierarchies and departments, says Cooke. “It’s a campaign for data literacy. If you’re a practitioner working with digital, you need to understand data. If you’re a CMO you need to understand the high-level concepts of data like what statistical significance means. Ultimately we’re seeing a new breed of marketer. They request raw data from the system because they can do their own statistical analysis. Five years ago that person would’ve settled for what the interface told them. We now see people who actually interrogate data themselves. They go deeper. We’re sitting on a gold mine in terms of how to understand the world better, how to understand the customer better, how to improve things for people and how to make our lives easier. We just have to start asking the right questions. That’s what TAD is about. We’re trying to give businesses the skills to make their customers lives better.” l

22/09/2015 16:04

Are the customer insights fueling your marketing campaign based on

fact or fiction? Visit TruthAboutData.com

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22/09/2015 12:01

Q&A

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22/09/2015 12:07

‘I can drop the smart bomb anytime’

INTERVIEW Q&A

HSBC Chris Clark Group Head of Marketing

HSBC’s Group Head of Marketing Chris Clark is witnessing huge change to the role he’s always known but one thing stays constant - his focus on the customer

HT: When you look at your role, what kind of balance is there between creative human input and a reliance on automated technology? CC: One of the things that has happened both in my career and at HSBC is that CMOs have become a conscience for the customer within businesses. We can all get seduced by technology, emerging markets, or things that forget the customer and we’ve seen the marketing department within HSBC evolve into something which is almost a representation of the customer at the right moments for the business. That is the power of that CMOs have which they need to understand and leverage. They have a smartbomb which they can always use and go into the room with and that is that we understand the customer, their buying behavior, their preferences and what brands they love. Aside from that, it is crucial to stay abreast of all the massive changes that are happening in the world of media. Years ago, you essentially bought a TV ad, a print ad, a poster, bought some media and then went down to the pub. These days it is much more complex but also far more interesting.

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22/09/2015 12:07

Q&A

HSBC Chris Clark Group Head of Marketing

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HT: Your previous role had a big customer experience focus. What does customer experience mean to HSBC? CC: You would have had to be living under a rock to not have noticed how much banking has had to adapt and change to the fact that people now want to be able to pay their gas bill on the bus. And why shouldn’t they? They should be able to do it with the touch of a finger and not have to sit there spending hours and hours going through all sorts of complex interactions before they are let anywhere near their bank account. Those kinds of things have meant that understanding the customer and understanding what they’re doing and then how to build experiences around that, which start with the customer, is critical. One of the most important things, and I subscribe to Henry Ford’s theory on this, which was that you can’t ask customers what they want because they’ll tell you ‘a faster horse’ but you can show them some things that they could do and then sit back and figure out whether or not that works. At HSBC, we’ve had some fantastic opportunities to learn about how customers are changing and the kinds of ways that service can improve. I wouldn’t say that banks get it brilliantly but we do spend a lot of time thinking about what it is that customers want to be able to do and how they are using the various tools at their disposal. We look after all the user interfaces in the marketing function, and a debate I had recently with my design team around how we could design UIs which respond to swipes of the finger as opposed to typing, because that’s what people expect now. HT: How have apps like Uber, which have simplified the use of technology for the customer, affected banks? CC: For us the key is understanding what people’s expectations are of using digital services.

I don’t think you can just be the company which is slightly better than the rest of the players in your category. Customers expect their service businesses to help them find interesting ways of using the product. For example, we’ve just implemented a text messaging product for customers in the UK around overdrafts. What we now do is instead of sending someone a letter, we send them a text the moment you go overdrawn and we give you a certain amount of hours to rectify it. And that’s what people expect now. And it’s the right thing to do. All of those things are around understanding the simplest of technologies like text messaging and understanding ways in which customers would want us to communicate with them and how that is trusted. We’ve taken lots of learnings from other categories and what we try and do is understand what implications that has for the way we build our UIs, for the way we look at how apps work, and for the way we look at how social media works. We have a very active social media presence as an organisation now and it’s proven very effective in helping customers work with us and achieve what it is they’re trying to do. It’s not just in personal banking as we have an exceptionally live network of B2B interaction through social media. I don’t hear much about how social media and B2B are coming together, but they are and it is very powerful. B2B marketing, which is always seen as a poor relation of customer marketing, is actually an area where there are some amazing things going on now. It’s about creating events, communities, and you have to execute well. HT: How do you use data to improve customer experience?

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”I get decks of information that I call ‘stroky beard’ stuff. Potentially interesting but are we actually going to do anything with it? The answer is often no.” CC: What we have to do now is understand how to measure our customers in the right ways and understand how to distinguish the wheat from the chaff in data. The problem is that you drown in data these days. People will tell you by the minute, or even by the second, who is doing what, when and how. But how do you really look at all of that stuff and make a better sense of it? For us, it’s still about big fundamentals. How many complaints do we deal with and how many do we deal with effectively? What kinds of positive user interfaces do we build that allows customers to achieve things with a single click? How do we start to understand the behaviors of loyal and advocating customers? The wonderful world of market research might tell you that your net promoter score is ‘x’, but how did we get there and what can we do to stay there or improve? Those are the questions we are dealing with now. For us the conundrum is looking at behavior and trying to link that behavior back to levels of customer satisfaction and customer experience. HT: In an era in which data and analytics have become so prevalent in marketing, how do you determine which information is actually useful? CC: I’m the sort of person that when someone says the words big data I start to try and hide under the desk because I think I’m going to get rather cross with a bunch of slightly flannely things here. The key is genuinely understanding what you can use that is information related to your business and your business’ performance. And getting to know your customer and the actions and activities they undertake, rather than just looking at everything you could possibly know. I get decks of information that I call ‘stroky beard’

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Q&A

HSBC Chris Clark Group Head of Marketing

stuff. Potentially interesting but poses the question, are we actually going to do anything with that? And the answer is often no. For me, a lot of the marketing metrics which exist, a bit like the old reach and frequency numbers from classical media, aren’t useful. Is 8million impressions good or bad? I don’t know. What I do know, is that especially in B2B,10,000 is pretty good as long as they’re well qualified. Eight million sounds like a lot but I have no idea whether that would be a waste of money or not. HT: Let’s move the conversation on to fintech. How does HSBC engage with the innovation that’s coming out of that ecosytem? CC: We have a lot of stuff internally what we’re looking at. We spend as much time as is allowable working with a variety of partners in fintech on a global basis. Some of it is amazingly inspiring, some of it is quite scary and some of it is a bit daft. For us, we recognize that we’re never going to pioneer this stuff and we shoudn’t try. There are better people out there. What we’re much more interested in is what we call applied innovation. How do we take what is there and understand how to apply it to our business, rather than just be wowed by it.

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HT: Where do you think will be the one leading hub of fintech innovation? CC: Asia. I cannot see the world just having Silicon Valley and London. I think there will be certain things that some of the more established countries dominate but China and India are going to have such a hunger to succeed and have so much engineering talent coming through that they are going to be the places to watch and we’re going to have to follow them quite quickly. l

22/09/2015 12:07

CMO SNAPSHOT

Aston Martin Simon Sproule CMO

ACCESS ALL AREAS

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22/09/2015 12:13

Aston Martin CMO Simon Sproule says the luxury car brand is a small, boutique business with a special gift for building “old-fashioned” relationships with its customers in the most modern way possible...

Personalization is key

One of the main focus areas for us has been a shift towards personalization. We still need the sophisticated CRM systems and technologies underpinning our efforts but for a luxury brand, particularly in our market segment, it is increasingly about how you can have a personal relationship with customers. We have dealers, but customers want to have a direct relationship with the factory and with the people in the company. It sounds counter intuitive to say the cutting edge marketing breakthrough is about talking to people, but that really is the case. The challenge is how you do that at scale. We will sell 4,000 cars this year and we hope to do double or treble that in the coming years, so accumulatively we will be managing relationships with a lot of people.

So how does the CEO manage to keep up with his email to satisfy all the people that want to have a direct conversation? It is super important for customers in this market segment to feel that they have that level of contact with the company. I would say that the breakthrough for us is how we move to this very high level of personal interactivity. Whereas in the mass market, it’s all about convenience, speed and one touch shopping, for us it is almost going backwards in terms of old fashioned service. But also how we can do that in a modern way. That’s one of the most interesting marketing challenges that I have right now. There are only so many people inside the company, so how do you allow the customers that want a direct relationship to be able to speak to them? We have to rely to some extent on our dealers to carry the water but our challenge is to figure out how to create that access. It’s really part of a trend within the high luxury segment around how this personalization can be achieved. It’s no longer about the object, it’s about the experience, the story and the relationship that the consumers have with their brand.

CMO SNAPSHOT

Aston Martin Simon Sproule CMO

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22/09/2015 12:13

CMO SNAPSHOT

Aston Martin Simon Sproule CMO

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22/09/2015 12:13

CMO SNAPSHOT

Aston Martin Simon Sproule CMO

“We actually pick up the phone and talk to customers, we invite them to events, we get to know them and we build a relationship because they often buy multiple cars with us.”

Within the luxury market, you have to think beyond the product and understand that customers now want a relationship. And can that be monetized? A lot of product brands are increasingly selling experiences. The factory, events and social gatherings create opportunities, so figuring out the best way of maximizing that is one part of it.

Use smart data to make decisions (and keep your CFO happy)

The second point is what role smart data has to play in marketing. A year or 2 ago we were all talking about big data, I think the conversation has moved on now to smart data. The next challenge is how you use smart data to drive decisions. Those decisions are around allocation of marketing dollars. There is always an element of gut feel and instinct that a marketer needs to have but increasingly the CEO and CFO are not looking for only instinct, they want to see smart data driven decisions. It has become key for marketers to be able to understand smart data.

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In the end the only way of maintaining a positive relationship with the CFO is by delivering revenue, margin and profit. If you’re making smart data work effectively, so you’re making data based decisions, then by inference those decisions have been made knowing that the outcome is as likely as it possibly can be. Of course, nothing is guaranteed, but when you’re making a marketing decision you need to give yourself the best chance of success. For example, we are currently debating whether or not to put some extra marketing dollars into the second quarter in the US. The debate is whether we continue our above the line activity, because we’ve got a new lease program out, or do we spend it on events. My discussion with the CFO consists of me going to him and saying, ‘I want to spend an extra ‘x’ for the second half of the year’, and he says, ‘well, that’s very good but how many cars are you going to sell and where are you going to spend it?’ The positive relationship with the CFO only happens when you deliver results.

Listen to what your customers want

If you’re the CMO of a company, your available time to think is increasingly challenged, so you have to listen to customers when you get the chance to. The reason why we see this growth opportunity in experiences and personalization is because that’s what customers have told us. It’s not rocket science but as a CMO, getting out and actually meeting customers and asking them what they want is crucial. I appreciate that we are a small, boutique business so its critical we take the time to talk to our customers. We don’t tend to do frequent focus groups like a mass market brand would. We actually pick up the phone and talk to customers, we invite them to events, we get to know them and we build a relationship because they often buy multiple cars with us. You can’t beat sitting down and listening to your customers and actually understanding what it is they want. l

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22/09/2015 12:14

The Top 40 exits across global tech in the first half of 2015 including acquisitions and IPOs. All figures in $m.

The Marketing Data Issue

TriQuint Semiconductor

Brierley+Partners

Lynda.com

Flexus Biosciences

Datalogix MyFitnessPal 15 Merger/Acquisition $1,200.00 Merger/Acquisition $475.00

PayEase Accelyst Solutions 16

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Merger of Equals

Merger/Acquisition

$4,900.00

$3,356.38

$1,500.00

$1,250.00

Yemeksepeti.com

Merger/Acquisition

$589.00

Trophos

TellApart

PneumRx

$750.00

Merger/Acquisition

$545.00

$533.00

$475.00

$450.00

Fitbit Senator Entertainment 17

IPO

$731.50

Merger/Acquisition

$360.00

Convergence Pharmaceuticals

Universal Robots

Gamesys (Online Bingo Business)

Novescia

Pentaho 20 Paydiant

Merger/Acquisition

$675.00

$629.70

$600.00

Merger/Acquisition

Buyout/LBO

Merger/Acquisition

$350.00

$301.29

$280.00

22/09/2015 12:16

TOP 40 EXITS

Etsy

Amplidata 32 Panaya

23 24 25

IPO

Merger/Acquisition

$266.67

$264.00

eXelate Buyout/LBO

Merger/Acquisition

$200.00

Distech Controls 33 Boston Heart Diagnostics

Merger/Acquisition

$252.21

Merger/Acquisition

$200.00

LearnVest 34 Congebec Capital Merger/Acquisition

$250.00

Merger/Acquisition

$200.00

Meritage Pharma 35 Evolent Health

Merger/Acquisition

$245.00

IPO

$195.50

The Marketing

Urban Brand 36 Centerre Healthcare Data Issue

IPO

$235.64

Merger/Acquisition

$195.00

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SuppreMol Adaptimmune Therapeutics 37

Quandoo 38 GlycoVaxyn

6 Wunderkinder 39 Heptares Therapeutics

TaxiForSure 40 Box Merger/Acquisition $200.00 IPO $175.00 41

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Merger/Acquisition

$225.00

$224.30

$200.00

IPO

Merger/Acquisition

$191.25

$190.00

$180.00

22/09/2015 12:16

INTERVIEW

Rory Sutherland Ogilvy & Mather Group

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TED icon and Ogilvy Group UK boss Rory Sutherland is excited to be alive while a revolution occurs in the collection of customer data; as reported data continues to be replaced by behavioral data Sutherland says the time has come for marketers that can employ the right psychological triggers to drive user experience.

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22/09/2015 12:23

THE PSYCHOLOGY OF BUYING

INTERVIEW

Rory Sutherland Ogilvy & Mather Group

“User experience is the single most important field of human advancement. I often tell clients that their customer experience teams should be the highest paid people in the building.” Coming from Rory Sutherland, Vice-Chairman of Ogilvy Group UK, Spectator columnist, TED regular and one of marketing’s truly big brains, that’s quite a statement. From being described as the worst graduate trainee that Ogilvy & Mather had ever hired, Rory Sutherland is known as one of marketing’s most original thinkers and influential speakers. Rory is a leading light in the advertising industry and as outspoken as he is creative. A champion of psychology and an early adopter of new technologies, Rory spoke to Hot Topics about the behavioral triggers that can spell success in the era of Big Data. To those in the know, Sutherland’s view on ‘user’ or customer experience is hardly controversial. Indeed, it is now top of the agenda for any future-facing company with analyst Gartner recently reporting that 89% of marketers expect to compete ‘primarily on customer experience by 2016’. Sutherland is annoyed however, that customer experience is still not truly recognised for the difference it makes to businesses that invest in it. “I’ve heard people question whether customer experience should appear on the balance sheet,” says Sutherland. “I think it does, in that companies that do it well are hugely more profitable. I just don’t think the value created is attributed correctly. “The people at the top of great companies like to attribute success to McKinsey-type reasons like cost

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cutting. They don’t feel comfortable attributing it to the fact that ‘we understand human psychology better than the other guys’. Followers of Sutherland’s TED talks will know how much stock he places in psychology and ‘behavioural economics’ as triggers to drive purchase. If allowed, one senses he would talk for hours on the potency of psychology if harnessed cleverly by a good customer-led company. “I get apoplectic when I read in the Economist about Uber’s ‘disruptive’ business model. The business model, pinging a car from your phone, isn’t what makes Uber successful. What’s disruptive about it is merely the booking mechanic where the passenger can see the car approaching and is given an expectation of arrival time. “As the passenger you are peerlessly relaxed, spared the agonies of uncertainty that come from wondering how long you’ll have to wait. But when they talk about their success they’re talking to financial analysts who want to hear about disruptive business models. They don’t want to hear about superior psychological insight.” “Take the growth in rail travel too, particularly prebooked rail travel, over the last 15 years. It’s usually attributed to people making longer journeys and people wanting to travel more. Actually the reason for it is simply that the user interface of railways has improved a hundred times. The fact that you can now get easy information instantaneously and in real time is one of the biggest drivers of increased rail use, but the commentators put it down to a lifestyle trend for using railways.” Sutherland is bullish in his belief that any business

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22/09/2015 12:23

INTERVIEW

Rory Sutherland Ogilvy & Mather Group

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focusing its decisions around the customer and the exploitation of behavioral economics; better framing of the choice for the customer; would see instant uplifts. “There is a problem with holiday booking websites for example, that you could solve with a behavioral tweak. The problem is that the gap between ‘book’ and ‘don’t book’ on a travel website is simply immense. There are ways to shrink that gap and give both the passenger and the holiday company a ‘win’. Airline websites should create a step where they say: ‘Reserve this holiday for £10. If you subsequently book it we’ll refund you £20. If you don’t book it you lose the £10.’” The study of the effects of psychological, social, cognitive and emotional factors on the economic decisions of individuals and institutions that Sutherland is such an advocate of suggests that more often that not, such decisions have little to do with logic. The brain, he says, is often thought of as monolithic but in fact has separate modes. “If you want a very good book on this you should read Passions Within Reasons by Robert H. Frank. The book’s subtitle is ‘The Strategic Role of the Emotions’. Its point is that emotions are very fast ways of making decisions and they don’t require explanations in order to work.” He also cites Robert Kurzban, a psychology professor at the University of Pennsylvania: “He says the human brain is similar to an iPhone in that it has certain things running constantly in the background. You know, fear of shame and embarrassment, various things like that. “Equally though it launches apps which dominate the screen for each particular task so that at certain times you’re in scarcity mode. Your mode while booking a flight is: ‘I don’t want to lose this deal’. When you shop in a sale, it’s: ‘If I don’t buy this now I’ll never be able to buy it again.’ Whereas when you buy in a supermarket the brain assumes that what is there is abundance so it launches a different app which prioritises different things in the heuristics of the judgement it’s making.” There is also, Sutherland says, a difference in the way the brain treats online and offline shopping. He notes for example, that scarcity messaging on an ecommerce website is an incredibly powerful driver of conversions whereas when your local supermarket has gaps on shelves it acts as a turn-off. “I occasionally shop at our Tesco at two o’clock in the morning,” he says, “and the empty shelves make me less likely to buy because it suddenly feels like I’m forced into making a suboptimal choice.” It’s that sort of contextual understanding of the customer that ecommerce professionals are now charged with gathering and applying to their

businesses. Is there a sense that we’re on the cusp of a new era where an understanding of the power of data will distinguish the more successful marketers? “The data question is hugely complicated,” Sutherland says. “Undoubtedly the one thing that arguably excites me the most about data in the 21st century is that it’s behavioral rather than reported. Self-reported data is unreliable at best and catastrophic at worst. “An awful lot of the data marketers had to work with wasn’t really about what people actually did or liked but what they said they did and liked. Actually most of our behavior is controlled and mediated by parts of the brain that don’t talk and which we can’t really interrogate. So both our actions and the reasons behind those actions when reported by people rather than when purely demonstrated are subject to an enormous distorting effect.” Maybe the marketing and advertising industries haven’t necessarily helped themselves in gathering or understanding accurate customer insight in the past. A recent report by the Institute of Practitioners in Advertising, the trade body for advertising agencies in the UK, investigated relationships between clients and agencies and questioned whether agencies still have the power to get inside the heads of ‘regular people’. One client was quoted as saying “I don’t think any of them have ever been into an Asda store; they shop at Whole Foods…” Sutherland, who has been an influential voice in driving a behavioral change to the way his ad

22/09/2015 12:23

“Most of our behavior is controlled by parts of the brain that don’t talk and which we can’t interrogate...emotions are very fast ways of making decisions and don’t require explanations in order to work... ”

INTERVIEW

Rory Sutherland Ogilvy & Mather Group

Sutherland cites psychology professor Robert Kurzban who says the brain is like an iPhone, launching apps to handle specific tasks while other programmes run constantly: “fear of embarrassment for example...”

agency Ogilvy approaches its work for clients, says: “There are times when understanding how things feel from the point of view of an average person as distinct from the kind of people who make decisions is hard. There’s far too little investment in ‘drivethrough’ retail in the UK and the reason for that is that the people who make the decisions all live in London and Londoners don’t drive to work.” The advertising industry and indeed the market research industry may have to adapt and evolve rapidly now that ecommerce teams can use real-time behavioral data to analyse customers’ purchases and predict their next desires, wants and needs. “Demography,” says Sutherland, “was always a polite fiction to allow mass marketing a symbol of intellectual rigor to be absolutely honest. Don’t get me wrong, people who buy Mercedes are generally richer than people who buy Kia. But the fetish of brand differentiation that people who buy Toshiba laptops are widely different from people who buy Samsung laptops is perhaps not true. “Obviously brands are still important in that a brand significantly affects the confidence you feel in making a purchase but, a lot of that stuff was probably done because an agency guy was thinking: ‘shit I’m making a lot of money in this advertising lark so I better make it look complicated’. The increasing expectations of consumers will, says Sutherland, continue to present challenges to the marketing and advertising industries – especially those ill-equipped to use data and apply the right creative

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approach to ecommerce and customer data. “My children don’t really understand the concept of online shopping by which I mean, you know, they just see it as shopping of which online is a part. By the way they haven’t stopped wandering around shops as well. The appeal of that doesn’t seem to have diminished. “Undoubtedly though this stuff is here to stay. It will continue to evolve and it will continue to be disruptive as well. I actually think businesses like Doddle, the ‘commute and collect’ guys and the likes of Amazon Locker are quite a significant part of the ecosystem and growing. But it’s worth remembering that for anybody using these services there are a lot of people like my dad. I tried to persuade my dad to order his groceries online because he’s 84. I told him ‘I belong to Amazon on Demand so if I order them for you and get them delivered to your house, you don’t even have to pay for delivery’. He wasn’t interested. And the point I realised is the reason he doesn’t do it is that unlike those of us who live in the cities, he’s not particularly time-poor. He’s got more time than money and actually, going into the village to Waitrose is an excuse to get out of the house and have a bit of a trip. He goes to the supermarket then meets with some friends and goes to the pub. He goes home having felt he’s accomplished something. That’s a sharp contrast with my children who have this weird sort of instantaneous gratification fetish where if they’re forced to wait for anything it sends them into weird convulsions.” l

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22/09/2015 12:23

CMO SNAPSHOT

Paddy Power Christian Woolfenden CMO

In an era of innovation within marketing, Paddy Power added mischief and entertainment to great effect, says the company’s CMO, Christian Woolfenden. But how did it create such a culture of creativity?

POWER TO THE PEOPLE Integrating new technologies

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From a technology point of view, we constantly test and learn with the ‘new and different’. If it’s good, we quickly run with it and continue to put ourselves a few steps ahead of the competition. If it’s not, we learn a few things, and move on. We also have a percentage of budget ring-fenced to invest in experimental technologies. It means every year we invest in what could become the next big thing, well ahead of anyone else. It might (and often does) go up in smoke, but also has the potential to deliver a real competitive advantage if we nail the genuinely innovative stuff early on.

Fostering a culture of experimentation

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Unsurprisingly, Paddy Power has a real willingness to take risks; it is all-pervasive culturally and great fun to operate within. The team has a remit to push the boundaries as far as possible, as long as there is clear evidence of it ultimately driving top and bottom line growth. A good example of our innovative marketing strategy

is our use of social media. We are often asked how we are so quick on social media, and the answer is simply that the team have complete ownership and freedom to do what they want, when they want. There are brand guidelines, but beyond that the team does whatever it needs to, to entertain our customers and use that engagement to drive turnover. They never have to ask for permission and there is no approval process. It means they can react very quickly to what’s going on in the world and get the first mover advantage. Obviously we occasionally get it wrong, but it’s rare and celebrated in its own way.

Using mischief to create an innovative marketing strategy

The mischief team is like a black ops team on nitrous oxide. We run a ‘day to day’ business in an incredibly competitive environment where we just need to hit the numbers day in, day out via the more traditional, proven ROI approaches. But central to our marketing strategy, is the need to keep creating unique, engaging and highly

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“Marketers aren’t ambitious enough with their brands; happy only to come into role and do a slightly better job than their predecessor,” says Paddy Power’s Christian Woolfenden.

CMO SNAPSHOT

Paddy Power Christian Woolfenden CMO

“The mischief team is like a black ops team on nitrous oxide.”

disruptive brand activities. That’s where mischief comes in. Locked in a dark room, with no day-to-day responsibilities, their only mission in life is to come up with ingenious ways of entertaining our potential audience and they are a force to be reckoned with. As a customer you might only see one out of 1,000 ideas that have actually been dreamed up, but the ones you do see are legendary. The mischief we do drives a real affinity for the brand and mass awareness at a fraction of the cost of more traditional approaches.

Team creativity

The Paddy Power brand team is very diverse, and that’s incredibly important when implementing an innovative marketing strategy. There are people with classic FMCG backgrounds, people who are ex-agency, people with analytical/insights backgrounds and then those who are just about the right side of ‘wrong’. In combination, if you get the right personalities, it works brilliantly. This is all born out of the mentality of the founder, who recognized the importance of

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embracing being the underdog, the challenger. We constantly have to find a way to punch above our weight. We do that by being more relevant and engaging than anyone else. Money can’t buy that, but creativity, ambition and courage can, and you need the right people on the team to make it happen.

Combining analytics and creativity

I have two big complaints around the broader marketing industry. One is that people aren’t ambitious enough with their brand; people appear to come into a role and do a slightly better job than their predecessor. Good marketers should be aiming to take a brand by its boot straps and push it creatively as far as they possibly can (always keeping their customer in mind of course). I don’t think enough people lead with that level of ambition. Whether you are working on a boring old washing powder or the latest ‘exciting new thing’, you have a responsibility to maximize its potential returns through great brand building; it’s not good enough to just move it on a bit. Being ambitious with the brand also makes the job way more interesting, and attracting great talent much, much easier. There are a lot of average brands out there. They could be phenomenal brands if they took a bit more risk and were more courageous in their actions. The other issue is that marketers, overall, still don’t love the numbers. The ability to analyze, optimize, and obsess about ROI has never been greater. It needs to be embraced. It makes life easier and done the right way provides the foundation to go way beyond what people thought was possible with the brand; without question creativity can be improved by getting stuck into the numbers. Anyone who says otherwise has an agenda best ignored. l

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22/09/2015 12:29

CMO SNAPSHOT

BOX Whitney Bouck CMO

standing at a box junction Box CMO Whitney Bouck says her business is standing at a crucial intersection between technology and creativity

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Everyone talks about the term digital marketing, and while it’s not very well defined, I think the base definition that everybody would agree with is that it’s the marriage of creativity and technology. I was at an event recently where the person on stage was talking about that intersection of technology and creativity as where magic happens. In the world of marketing that’s true. We’re at a pivot point because, now more than ever, our target audiences, regardless of whether they’re businesses or consumer, are online. Marketing needs to leverage technology more than it ever has had to in the past to be at the eyeballs and fingertips of our target customers. As marketers we now need to be experts in technology as much as we need to be experts in the art of marketing, which is largely about creating value and creating messages that resonate with target buyers.

That whole move towards technology systems has enabled a personalized experience, that detects who the individual is, where they are geographically and what kinds of engagement experiences they have had with you. Now we can use technology to take all of that into account to craft an experience, message or an offer that will be relevant to that individual, much more so than they might have seen historically. That’s really a ‘here and now’ challenge that lays the groundwork for what we might do going forward. I believe that the next 2 years are so critical to getting it right and it’s a very daunting task. The technologies are emerging, converging and developing, and that poses a massive challenge for marketing professionals today. We’ve been investing in a whole host of new technologies to really make sure that the foundation for nimble, agile experimentation is there. We have

22/09/2015 12:35

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22/09/2015 12:35

CMO SNAPSHOT

Box Whitney Bouck CMO

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to be able to drive that personal experience, where we can detect what the user is doing, where they came from or where they’re located geographically. We want to be able to track and manage their past interactions with us and be a lot smarter about how we serve them content and offers online. Those include, but are not limited to, simple A/B testing to be able to detect where somebody is coming from and what kind of industry they’re in and systems like Demandware, that let us serve up more personalized content experiences and customized navigation packs online. Those are just a sample of the kind of things that we’ve been implementing over the course of the last year or so, to really make sure that we then have the means to

deliver that personalized experience online. I’m talking a lot about online and digital on purpose. It’s not to say that standard longer-term marketing techniques are completely dead, but the days of direct mail are pretty different now. I think we have to be omni-channel marketers, which means we have to be as good at in-person events and direct mail, if that’s a technique that people choose to use, as we are at the online experience. We have to be flexible enough to let a prospect or end-user choose the way they want to engage, and also be omni-present with someone if they’re a target prospective buyer, regardless of where they happen to be at any given moment. Whether they are on their email or at their physical mailbox, or on

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a website or mobile device. Omni-channel marketing is part and parcel of that complexity that we’re dealing with. In terms of engaging with new technology, one question that emerges is how do we keep the people in our team abreast of the latest tech that’s relevant to us? How do we make sure that they’re being appropriately re-skilled, that we’re bringing in the right talent in the organization so that everybody maximises that opportunity? I think that’s a career development opportunity for a lot of people. It wasn’t that long ago that we didn’t have a lot of these technologies in play and we weren’t as embedded or constantly on our mobile devices as we are now.

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The iPhone is only 9 years old. It hasn’t been a part of our day-to-day work environment for that long. It’s an opportunity for the younger generation who are natively mobile and natively digital to teach others and to really embed their way of thinking into the way that we work. And vice-versa, it’s a way for those that have been marketers for a longer time, to impart knowledge of how to connect with buyers in a human way and how to do some of the message development which is about putting yourself in the shoes of a prospective buyer. I think there’s a great opportunity at that intersection of knowledge and that’s pretty exciting. The flip side of the coin with technology is the human element that gets shown to the prospective buyer. You don’t want it to feel all computerized and ‘templatized’ or to feel like spam. The vehicle of engagement and the content itself that ultimately gets placed in front of someone electronically, has to have a human message too. That really is the promise of some of the modern technologies that allow for personalization. As an example, if I happen to be an IT professional, working for a healthcare organization, and I’m seeking to solve a problem to give more coordinated patient care, and I happen to visit the Box website and the first thing that shows up to me is a healthcare customer success story for Box, that’s fascinating and is also powerful. There is something really human about that. There are ways to leverage today’s and future technologies to deliver what feels like a really personal experience. Right now it’s a challenge. We are all getting bombarded by tons and tons of messages, ads, promotions, offers, all the time, and frankly technology just exacerbates that problem. It makes it much easier for people to give us those messages. So finding a way to sort the wheat from the chaff and get to someone with a message that’s meaningful, resonant, and relevant to them is crucial. As we move forward, one thing I’m excited about in the future is predictive behaviour analytics. You use a combination of demographic data combined with past behaviour, and predictive analytic - which at the moment is still underdevelopment - to try to project what will best resonate with someone and to serve them up a proper experience to engage with them. That whole predictive analytics area is emerging and I think that as we start to see more machine learning and artificial intelligence start to become a reality, and not just a thing of futuristic movies, we’re going to start to see a real opportunity to use it in marketing in a whole different way. l

CMO SNAPSHOT

Box Whitney Bouck CMO

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22/09/2015 12:35

The Utilization Gap 52-53-BrooksBell.indd 52

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A huge rift separates the potential of data and technology from the reality. It will take dedicated marketing leaders to close this gap. Naoshi Yamauchi Chief Performance Officer The technology that forms the foundation of testing and optimization is always improving. As these platforms have expanded capabilities and increased in complexity, the opportunity that testing offers has increased. But as the sophistication of technology has increased, the ability of individual testing teams has not grown proportionally. Indeed, it’s not the lack of advanced capabilities that hold testing teams back. Testing programs are prevented from being successful programs by a series of stumbles over the same fundamental hurdles—and these hurdles have little to do with the power or functionality of the tools themselves. Instead, the frustration is caused by a utilization gap—a discrepancy between the capabilities offered by testing tools and an organization’s ability to take advantage of these features. In fact, of all the testing and optimization programs we’ve benchmarked through our assessment, utilization ranks the 20th weakest of 24 total categories overall. In most cases, the utilization gap is caused by a misalignment between people, process, and technology. To close the gap, we need to focus on four essential actions: 1. Form an Expert Team When it comes time to expand a team, finding good analysts and developers can be an intractable problem. Research from McKinsey & Company has estimated a shortfall of 190,000 trained data analysts in the United States alone. And, as more companies decide to invest in Big Data and related fields, competition for the talent that does exist will only become more intense. In addition to a lack of talent generally is the problem of having the right kind of talent. As

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testing expands in an organization, it’s common to find people occupying roles who lack the competencies necessary to perform in the changing business environment. A survey of IT professionals conducted by SAS and IDG Research, for example, found that 57 percent of respondents said they lacked the skills to properly analyze data. Working with groups across the business— from IT to marketing, product development to customer support—can reveal new sources of testing insight and technical competencies that may not be obvious otherwise. Continuous training, too, is essential for team growth. Regularly sharing test case studies, cross training, and constant encouragement to use data to justify recommendations and decisions are low-cost ways to ensure teams continue to develop skills. 2. Cultivate a Productive Culture Talent, of course, is just one of the contributing factors. Additionally—and perhaps more importantly—a company’s culture can enable or inhibit the work of those in the testing team. This is most evident in organizations where analysts are inundated by superficial reporting requests. Instead of spending time developing a deep analysis of data and forming new insights, analysts are reduced to “report monkeys,” forced to perform a mechanical task that requires little thought and only a fraction of their expertise. Building a data-driven culture is difficult, but with careful communication, tailored to the right audiences, managers and CMOs can create an environment that encourages the growth of individual team members and the program as a whole.

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As the level of sophistication of technologies used to track, measure and access data rises, the capabilities needed to use those tools is lagging behind. That disconnect has been coined as the ‘utilization gap.’

3. Create Repeatable Processes Poor documentation and a lack of governance leads to frequent broken tests and a loss of trust in data and testing. But process is important for more than just avoiding busts. It provides the framework in which testing takes place, outlines the means of communication across teams, and can help testing teams increase velocity and efficiency. The utilization gap reflects the capabilities of the testing team but it also represents their perceived value of the testing tool. This perceived value is independent of the price and depends on the product’s ability to satisfy the needs of the customer. In other words, testing platform vendors are hard at work developing advanced features even though many customers struggle to make use of the basic toolset and, as a result, the perception is that the tool is somehow deficient. This perception creates a negative feedback loop that reinforces inefficient processes and poor practices; justified by a belief that the tools available are inadequate. It is critical that optimization teams develop standard, repeatable processes that drive tests from ideation to concept creation, development to analysis. Test idea intake forms, ideation frameworks, prioritization schedules, QA checklists, and analysis standards are just a few examples of the resources teams create to help improve process and close the utilization gap.

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4. Develop Deeper Strategies There’s a tendency to use testing to settle disagreements, verify decisions that have already been made, and evaluate a scattering of best practices tossed onto an underperforming page. For new programs, there is some basic value in these tests—it gives the team a chance to develop skills, work on process, and possibly even build support among key stakeholders. But let’s be clear: This type of testing misses the fundamental goal of the entire methodology. To close the utilization gap, testing must focus on generating insight into customer needs and behaviors. It must follow an iterative approach that applies the learning of one test to the strategy of another. It must climb a ladder of hypotheses that contribute to an overall deeper understanding of the customer and the business. By focusing on strategy—ensuring each variation has the potential to answer a clear question and is based on some theory and datainformed assumption—testing can contribute to sustainable growth of the business, enabling not only incremental lifts on specific pages but the development of competitive advantage and innovation moves within the industry. It’s critical the entire testing industry—from analysts to CMOs, consultants to testing tool developers—work to close the utilization gap. Doing so will help increase the realized value of testing tools and, more importantly, create rapid advancement of testing and optimization through an elevation of talent, culture, process, and strategy.

22/09/2015 16:08

Nintendo CMO, Scott Moffitt, explains why all the digital channels mean nothing in the gaming business without human creativity

CMO SNAPSHOT

Nintendo

THE MARKETERS’ TOOLBOX “Technology is changing the world.” How many times have we heard it? And today, could any statement be more prosaic? Of course, it’s indisputable. At Nintendo, we currently operate on at least a dozen social media channels. We were present on none of these when I started this job, just a little more than four years ago--because most of them didn’t exist. And this doesn’t count our own broad online presence via the channels we host, including our discreet, gamefocused social network called Miiverse. So, yes, the digital age is changing everything, right? Well, yes—and no. In my first marketing job, the internet as we know it did not exist. It changed everything. And before that, so did TV. And radio. This is in no way meant to diminish the growing importance and value of analytics or social media. They give us insight, and personal contact, that simply weren’t possible before. But as a marketer, it’s vital for me to draw the distinction between tools that can inform your world…and those you let run your world. At Nintendo, we’ve long maintained a history of limiting the use of research. This has certainly expanded in recent years, but the impetus really

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hasn’t. It’s always been our belief that simply asking people what they want—or analyzing them to achieve the same end—is inherently self-restricting. Because, in short, people can never tell you they want things that they haven’t yet imagined. The imagination part is our job. In recent years, this has included advances like motion control, touch screen and glasses-free 3D display. And on the software side, ground-breaking games like Nintendogs, Brain Age and Wii Fit. These simply were not things a focus group could identify, because consumers hadn’t imagined them yet. Each of those games sold tens of millions worldwide, on platforms that also sold in the tens of millions. So, to conclude with another over-used metaphor, technology has made our toolbox bigger and more diverse. It’s grown to extend both our productivity and our reach. But we will always hold to the belief that the most important element in our creative process is the craftsman who carries the toolbox. Yes, he or she must be aware of the surrounding world. But creativity operates in a much wider sphere, where the inspiration of a single human being can make the world a more enjoyable place for millions of others. l

Scott Moffitt CMO

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22/09/2015 14:20

Q&A

Bernard Liautaud

The art of winning Bernard Liautaud, founder of Business Objects and now partner at tech investor Balderton Capital, has made a habit of picking winners. Bernard shares some tips with Hot Topics. Bernard Liautaud is a Partner at Balderton Capital, which is one of the leading technology-focused venture capital firms in Europe. Liautaud founded Business Objects in 1990, led the company through its IPO in 1994, and spearheaded the growth of the company as it became one of the 15 largest software companies in the world. In January 2008, Business Objects was acquired by SAP for $6.8 billion; the third largest software acquisition at the time. Liautaud has received a number of distinctions including “Chevalier de la Légion d’Honneur” in 2007 in France, Time Magazine Europe’s Digital Top 25 and BusinessWeek Stars of Europe of 2002, Top 10 CEOs in North America by Chief Executive Magazine in 2001. He talks to Hot Topics about today’s technology scene and what he looks for in an entrepreneur.

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HT: Let’s talk about the technology landscape. What are the things about this industry that keep you turned on every day? BL: The tech landscape is really booming right now, and the big difference is that it’s booming globally. Fifteen years ago, it was mostly a US phenomenon, as most of the innovations and tech companies originated and were financed in the US. Good initiatives and companies did start in Europe, but they were far and few between. Obviously the US continues to be a powerhouse, but now big tech companies come from Asia and Europe too. There is a lot of participation at start up level, but you also see global companies getting scale. You also see governments everywhere recognizing that the digital economy, digital transformation, and digital innovation must be at the forefront of their agenda. HT: Do you think governments now fully understand how important the tech start-up

scene is with all its digital expertise, engineering capacity and customer knowledge or is it seen as just another strand of the economy for them? BL: I think they understand at a conceptual level, in the sense that they have seen companies, especially outside of Europe, grow fast to become a very important part of the economy. So governments recognise that if they want their economies to grow, they can’t just rely on the older industries. Do they understand what elements of the tech industry will genuinely influence the future? I don’t think they are there. The same with data - there is a general understanding that data is important, and that many new developments relate to big data, but I’m not convinced that there is a full understanding of the power of information, and how it translates into a more powerful economy. HT: Though they are closely intertwined, big data and digital are distinct fields – how do you rank them when looking for your next investment? BL: I don’t necessarily think about it in these terms. We look for companies that transform specific parts of industries, bring sustainable innovation to market, and can scale rapidly to a very large size. Data plays a role in most companies, but in different ways. It is either key to the core offering itself, or for others, it is used essentially to aid decision-making. What is clear is that the ability to master data is critical for the success of any company today. HT: What sort of challenges do you face in looking for the next investment and in creating scalable paths to success for the companies you work with? BL: The first obstacle is finding the great future entrepreneurs. We meet a large number of people every year and the challenge is to find these rare individuals with very strong ambition and absolute

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Liautaud says, ‘there is a strong correlation between the success of a company and the longevity of the founder at the helm.’

belief in their ability to succeed. I always look for that conviction. What’s also critical is that they speak with clarity about the challenges that lie ahead, and about the plan to achieve their ambition. You often see some who have only half of that. They are very ambitious, and have grand plans to transform the world and to make it a better place, but they don’t really know how to do it, or they underestimate the challenges. HT: How do you know when you’ve found it, is it a gut instinct thing? BL: With the entrepreneur themselves, there is a bit of gut instinct because there’s no magic formula. If you look at the entrepreneurs that have succeeded, they come in different stripes. Mark Zuckerberg is not the same as Larry Page. In our portfolio, Graham Cooke of Qubit is very different from Federico Marchetti who runs Yoox. But they can all be successful. Another key question that we try to figure out each time is: ‘can this entrepreneur take it all the way?’ Indeed, there is a strong correlation between the success of a company and the longevity of the founder as the person at the helm. The other thing that is really hard is predicting whether a business that we see in its early phases is going to last for a very long time. The value of that business is not about how successful it is in the first two years, but on its potential success seven or eight years after we invest. Understanding what that company’s customers are going to be looking for 10 years ahead of time is not an easy task! HT: There is a race between international cities to become the leader in fintech - is there a sector that is more appealing to you as an opportunity? BL: Financial services is an interesting area because it is messy, in the sense that it’s run by

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very large organizations with old, complicated IT infrastructures. Therefore their ability to change is limited. A lot of the banks are struggling with their systems and can’t move fast. This kind of situation creates fabulous opportunities for startups to disrupt the status quo with better services that are adapted to the world today. They can build technology from scratch without having to deal with the past, or having to constantly maintain systems that were built 25 years ago. In general, any sector where large companies find it difficult to move, you usually see opportunity created for companies that can provide brand new solutions. Much harder, but also very valuable, are companies that have a completely new offering. Twitter didn’t replace anything. It provided a completely new type of communication vehicle and, as a result, displaced a lot of old media. But it was not created to fix a particular issue, it was created out of innovation. HT: With the emergence of fast, flexible startups that can evolve at the speed of the consumer through Cloud software services and so on, what will happen to large legacy corporate businesses that can’t or won’t evolve with the changing customer in the same way? BL: Business works in cycles. Companies are started on the basis of a new innovation, or because an entrepreneur develops a new service that they want to provide to customers. As a company develops, they ascertain more customers and grow. Quite often, the company loses its agility. It becomes a masters at its own way of doing things. As a result, it becomes the bigger company that startups want to beat. The cycle continues, and a new generation of companies come up with new ways of doing things, and displace the prior generation. In most industries, these cycles continue to make things better for the customer. What’s fantastic is that the pace of disruption is continuing to accelerate; therefore the speed at which the small companies become big is greater than it was before. It is therefore critical to invest more into these startups because they’re rapidly going to emerge as the big companies of tomorrow. These are exciting times. l

Q&A

Bernard Liautaud

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22/09/2015 12:39

Q&A

Making the customer feel at home

The Home Depot Michael Hibbison VP Marketing

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Hot Topics: How has the role of the CMO changed over the course of your career? Michael Hibbison: The role of a marketer in general has changed because you now have to be far more savvy across multiple forms of communication. Even 5 years ago, marketers really only had traditional forms of marketing that they were focused on. Today you have many more channels that they can reach customers through, inclusive of digital channels that didn’t exist, or they did but the technology that powers them wasn’t powerful enough to really target customers based on their behaviors. Five years ago you were looking at demographic information. Now you have behavioral information that you can use to target customers in

a much more powerful way. There are customers that may behave like certain demographics but don’t actually fall within those demographics. Targeting them is very important and using behavioral information is much more powerful. HT: What data interests you and how do you collect that data in a different way to in previous years? MH: There are two very powerful types of information that is interesting to us now. One is social media information. What people share on social media can be a very powerful tool that previously did not exist. People tend to over share in most social media channels and because of that you’re able

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Home Depot VP Marketing, Michael Hibbison, says that whilst the broad skill set required to be a marketer hasn’t changed drastically, the key is being able to understand the technology that powers the new digital channels that are available to reach customers today.

Q&A

The Home Depot Michael Hibbison VP Marketing

to work with the platforms themselves to use that information to market better. The second type of information is their clickstream or what things people are searching for on Google, Bing or Yahoo. That information can also be used to target customers. The more powerful marketers will take the two and put them together and really start to understand who their customer is in a much more powerful way. HT: Given that, as you say, many of these channels didn’t exist five years ago, how have today’s CMOs had to reinvent themselves to stay relevant? MH: The easy part is understanding the platforms themselves, like the social media sites and what Google is doing.

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Hibbison has been at The Home Depot for 4 years, holding the VP Marketing role from May 2013.

“Even 5 years ago, marketers really only had traditional forms of marketing that they were focused on.”

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22/09/2015 12:45

Q&A

“There is a time and place for broad messages but for a lot of marketers you need to be more pinpointed in the way you target customers.”

hottopics.ht

The power behind the technology that allows you to use all of that information is what CMOs have had to adjust to and become hyper aware of. We’ve also had to weed through what is reality and what is still science fiction. There is a lot of technology out there that is just not quite ready for primetime yet. A CMO has to be well read, has to understand what is out there and be able to consider whether a piece of technology is something that they can enable now or if it is just a bright, shiny object that’s not ready yet.

HT: How has the skillset of a marketer had to evolve? MH: I don’t think the skill set that is required to be a marketer has changed all that much. You still want people who are data driven, which is not all that unique or new, that’s actually been the case for quite a while. People that are self-motivated and can take charge of their careers, is also not anything new. The access to data is vastly different and there is a lot more of it, so you need to hire someone who is

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discerning and can weed through all of that. However, my overriding feeling is that the skill sets haven’t changed all that dramatically. HT: What is your opinion of marketing talent that is coming through today versus in previous years? MH: That’s a great question. Marketing talent today is actually very similar to our customers today that shop in our stores. They’re much more aware of everything that is out in the market. They’re aware of the data that is available to them, how to access that data and are just much more informed about all of the information that is available. And that is true for both customers and talent alike. HT: How do you create an attractive workplace for a marketer today? MH: We are very focused on creating great experiences, both for our customers and our associates. The best way to do that is to create an environment of sharing, technological innovation

22/09/2015 12:45

Q&A

The Home Depot Michael Hibbison VP Marketing

Hibbison says, ‘There is less waste in marketing today for those marketers that have enabled and use digital data to make decisions.’

and a place where someone’s opinion matters and is valued. I don’t know many industries that are like retail, in terms of allowing people to come into a role and have a lot of responsibility very early on. Early on in our life as a retailer, we did it through growth and today we are also one of the leaders in retail in terms of growth rate. That means talent can come in and have some responsibility right off the bat and maybe even a small team that they manage. That’s pretty exciting because when you can get things done through other people and work together to leverage all of the information that’s available to you, that is a good place to be. HT: How do you use data to improve customer experience both online and in store? MH: It all comes down to relevancy. There is less waste in marketing today for those marketers that have enabled and use digital data to make decisions. You have to make sure you use data to create

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relevant, creative experiences for customers. If a customer is shopping for a particular line of goods, you have to be relevant to them in the moment versus spraying your message across all different marketing mediums. There is a time and place for broad messages but for a lot of marketers you need to be a lot more pinpointed in the way you target customers. Customers have reacted by interacting more with that marketing as well and are starting to prove out the return on ad spend and marketing dollars. We’ve just become much more relevant in the way that we use our marketing. HT: What is the one trend, technology or piece of innovation that you are most excited by that will enhance the efficiency of marketing? MH: This isn’t a new technology but the aggregation of 1st party, 3rd party and 2nd party data is very exciting. As marketers we have to embrace it and ensure that we are using it. We already have a lot of information about our customers on 1st party data but then marrying that with 3rd party data, like what they’re doing away from our site hits home with that relevancy factor. That means making sure that if a customer comes to you and looks for a product on your site but then actually converts on someone else’s, that you’re not hitting them with irrelevant information or marketing. l

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22/09/2015 12:45

Q&A

Jim Stengel

“HALF OF ALL CMOS ARE UNFIT FOR THE JOB” Jim Stengel, former CMO of Procter & Gamble, discusses the opportunity for Consumer Packaged Goods in digital and challenges marketers across the board to be better.

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HT What is the opportunity for FMCG brands with digital and data? JS There are a couple of different elements to this. The first is that they can way better understand their business today than they could a few years ago. One huge opportunity is just understanding what is driving your business. There’s been such an explosion in computing power, internet of things, sensors, analytics and marketing science. All of these things have come together to create a perfect storm. I’m an adviser to a company in Santa Monica, which has had explosive growth in predictive analytics, so you can just be far more knowledgeable about your resource allocation, your speed of decision making and your effectiveness in how your spending money, than you could have when I was growing up. FMCG is well positioned for this because all the purchases are captured, so all of the data is there. This sounds simple and intuitive but obviously it demands culture changes, capability changes and process changes, so it’s not like it’s all nice and neat right now. I think we’re still in an era of experimentation and adoption but that is pillar number one and a huge opportunity that some are taking advantage of. The second opportunity for brands is how they can communicate now with people who are important for them. That is way more open, free and interesting than it ever has been but it is a disruption

as to how companies plan, buy and analyze media. There is a lot of talk about the content revolution at the moment and there are a lot of brands doing a great job in this area. One that stands out for me though is Lowe’s, the $55 billion dollar home improvement company, primarily in the US. The way they use Pinterest is unbelievable. They have 3.5 million followers, they have some pins that get 200,000 repins, and they can get a lot of consumer data from that. They can see where all the interest and energy is from their consumers and they are helping people with all sorts of ideas. This would have been completely unfathomable 10 years ago, even 5 years ago. This opportunity to be of service to people, to help them, to be there when they need them to be there, to truly be always on, is the potential we now have because of how we can communicate. Now, again, not everything is neat and tidy with this either. It demands different skillsets and processes and changes how people need to do budgeting. All these things have to fall into place and not to mention the brands need to understand all of this better. I still talk to a lot of CMOs who are mystified about how it all works today, they don’t know. That gap has to be closed, and frankly a lot of the agencies don’t know either.

22/09/2015 16:12

Q&A

Jim Stengel

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22/09/2015 16:12

Q&A

Jim Stengel

I would say that at least half of today’s CMOs don’t have the capabilities needed to win today. That obviously has to shift and it will shift. The other big opportunity is media buying. The way we do financial services if primarily digital, the way we do music is obviously digital, the way we have bought and sold media is not digital. That is happening as we speak. The programmatic and adtech explosion is real, it’s shifting very quickly and that is going to be a very different way of creating advertising and delivering advertising than we’ve had historically. That ball is rolling and we will get to a point some day where

nearly every pound, dollar or euro of media will be delivered automatically by machines, based on a strategy and knowledge. FMCG is going to benefit tremendously there as well because right now the high percentage of the media is still not done that way. We’re just going to have much more efficiency when that happens. HT Given the issues about customer preference and distribution, how will e-commerce play out for FMCG brands? JS I love Jeff Bezos’ stance on this. I heard him say this at a conference once: “It’s not a god given right for people to get in a car, drive to a parking lot, go out and go into a building, and buy the things they need.” It’s just the way it has evolved and we are seeing that change very quickly and there is a tremendous amount of innovation in that area. Google is looking at delivering groceries, and Amazon is looking at hot delivery. I think it is only a matter of time before a huge percentage of the FMCG business is direct delivered. HT How is data allowing FMCG brands to improve their customer experience? JS It is allowing them to understand traffic and where people like to buy things. They’re getting customer feedback way more quickly and so it’s really rich. The difference between success and failure in this is whether organizations can take advantage of what’s at their finger tips and do they act on it. Retailers have been pretty quick on this and there is a big shift in power going on in that sector. We’re seeing the rise of the likes of Aldi and Lidl and the likes of Tesco struggle. The reason Aldi an Lidl are growing is because they’ve made the customer experience better. It’s not so shameful anymore to go and shop there, it’s actually pretty good. If you look at the big US retailer Target, which has had its troubles in the last few years, and had a

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real issue with consumer trust. It’s now rebooting itself, growing like crazy, the stock price is rising rapidly nuts and it’s basically saying it is going to focus in a few areas and make the customer experience way better. The reality is that all the data is there now and it’s just a matter of leveraging it, making decisions on it and moving forward. HT How has the way data is gathered, changed since you were CMO of P&G? JS The market research groups that do a good job today are the ones that are really out there looking for what’s new, what are the new capabilities available, what are the startups doing, what’s innovation really like in cognitive and behavioral science and what are the resources available to us now? To me, market research now is much more about being the navigator now. Big companies need more navigators and explorers out there looking for the most promising, new companies and ideas to address their business challenges. That’s how marketing research is shifting. They’re becoming more strategic, more external and they’re becoming explorers. We are now just able to understand things much more deeply than we could 10 years ago and now it’s a matter of acting on it. I met with Mondolez this summer and they are working on this fabulous project focused on the shopper of the future. They’re looking at how shopping is changing, how consumers are changing, looking for startups in this area and they’re investing in the capability which is more important than ever. HT Is social media a threat or an opportunity for brands and how can they cope with the volume of immediate customer response and feedback? JS Brands have to be set up for this, it’s not a choice anymore. You have to challenge how your functions are designed now, how your departments are designed and what people work upon. There used to be a criteria for success, which was to reduce your non-working marketing dollars which is the money you put into ‘people and production’ and you want to maximize your working dollars, which is generally your promotional dollars and your advertising dollars. You can’t use that anymore. A lot of the things you considered as ‘non-working’ in the old sense is actually people who are responding to customers; who are reacting to things that are happening in the culture of the business, who are pushing out content and are sharing promotions at the right time. In a way, it’s got more people intensive.

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You can get a lot more earned media today than you could 10 years ago but you need people to do that work, and to respond and react to it. There are a lot of brands who are doing this pretty well. GoPro is one that comes to mind. They are great at taking all the response that comes in from their users, they create and share great content, they monitize it and they have millions of subscribers on YouTube. I spoke to the guys at Twitter earlier this year and it is amazing to me that of all the tweets that have a brand name in them, only 2% are responded to. Maybe we will never get to 100% response rate, but couldn’t we at least be at 20 or 30%? You can’t just be open from 9-5 anymore, that’s not how people work. Especially if you’re in a category where education and service is important. And that is almost everything now. HT What learnings have you taken from the startups you have been working with that you wish you knew 10 years ago? JS There’s a lot. We’re actually working on a book around this topic and the working title is ‘Young bloods and grey heads’. If I look back to my time at P&G and think about what I wish I knew, there would be a number of points. They may seem obvious but it is about acting on them and not just talking about them. The first one is speed. The speed in which startups make decisions and get stuff into users hands or into the market is way better than big companies. The smart big companies like Mondolez, GE and Lockheed Martin who are bringing a lot of startups into their company, are getting that and they’re really challenging how they make decisions and the accountability behind them. When you make decisions quickly, it doesn’t mean you act carelessly, it just means you act with urgency. I love a quote from the CEO of Dentsu Aegis’ operations in Americas and EMEA, Nigel Morris, who said, “today you’re either a startup or a turnaround, there is nothing in between.” I think there should be more of that mentality across the board. A second point is about people and recruiting. I come from a company in P&G, that values people and spends a lot in recruiting and has a lot of science behind how they recruit, and does a great job but I’ve been with a lot of startups who do it even more intensively. The amount of time that top management spends on recruiting and talent and the focus they put on cultural fit is astounding. The principle exists that there can’t be one bad hire.

Q&A

Jim Stengel

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22/09/2015 16:12

Q&A

Jim Stengel

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One bad hire can start to change things for the worst so I wish I would have been even more personally involved in recruiting talent than I was. The third point is that, in the great startups, there is a maniacal focus on the quality of the product or service. I spoke to the founder of Pinterest, Ben Silbermann, about a year ago and I asked him how he spent his time. He said, that he didn’t like going to sales calls and conferences. He said he just liked working on the product and the people. Over and out. I think this crazy focus on product and service in startups is something that bigger companies could learn more from. In bigger companies, I think it is generally true, that people are more selfish. They’re more worried about their career, their salary, their title and who got promoted before them. If you go into a startup, you don’t have that conversation. They’re talking more about whether the product is good enough, are we disappointing people, can we make this faster and it’s just a different vibe. I think bigger companies need to get more of that. If you could make a big company behave more like the successful, energetic startups, there is only an upside. HT In a time where coporates and startups are beginning to find ways of working together more closely, what is the future for a business like P&G? JS P&G, Unilever, Toyota, General Electric or any global, multi-category iconic business still, even with recent stock market shake down we’ve seen lately, they have incredible brands, reach and intelligence. They have great cash flow and generally have premium products in great categories. We would be silly to write them off. Their success and survival as we look forward will be more about embracing the lessons that are there to be learnt from startups and investing in capabilities for the future. Initiatives like Mondolez’s ‘shopper of the future’ and Unilever’s Foundry, they’re making a statement about what kind of things they’re going to need in the future. That is really healthy and I think will drive really good returns. These businesses are operating from a real position of strength but the issue will be whether they will be as quick to embrace the new capabilities and leave behind the old ones. If you look at General Electric, they’re probably doing it as dramatically as anyone. They’re betting big on the internet of things and they’re shedding stuff which has made up a lot of the company for

the past 50 years. I’m optimistic for those companies who are restless and are behaving like a turnaround and a startup. HT What are the core areas of innovation within marketing that you are particularly excited by? JS I’m excited by the explosion in very helpful analytics. I think that will lead to better resource allocation, and frankly better growth. The second one is more philosophical. I do think that having a higher, more ambitious purpose or a higher ideal or answering the question of why we are in business and why do we make a difference, I think that is a sweeping trend and the way that management will be done in this century. If you go to any conference around the world and look at the stories that are transformational and growing, and the companies that have fabulous momentum, they are activating something very deep and special about their category. I’m optimistic that’s happening and it is true of big and small companies. It’s not necessarily a technology related point but activating a higher purpose or ideal is enhanced by the technology available to us. We spend a lot of time with companies on this topic and I think it is very optimistic for the future. The third one I guess is about media innovation. If you look at the amount of money invested in this area and the number of startups that have great ideas around media, communication and service, I think that’s going to be fun to watch. HT What is the truth about data for you? JS I was on the AOL board before we sold to Verizon and one of the board members was Rick Dalzell who was the CIO at Walmart and Amazon. We had a lot of discussion around this topic and if you run your company in a way that tries to seek truth in the data and a deep sense of empathy, that is a really powerful combination. We can learn about anything now, almost immediately, and that is what we have to embrace, whilst having an incredible sense of empathy for the people we are serving or selling to. I think a lot of the leaders that get beaten up because they’re harsh are hard done by. Steve Jobs, for example, sought truth in the data and had no tolerance for disappointing consumers. I’ve worked with leaders who had that same conviction. They weren’t going to compromise, they weren’t going to disappoint anyone and they used data and information to help them achieve that. Those are the great leaders. l

22/09/2015 16:12

the risky business of big data The Nissan CMO, Roel de Vries, shares his views on the role of technology within marketing and why big data presents a threat to the profession. Integrating technology in marketing

I donâ&#x20AC;&#x2122;t think there is one piece of marketing technology or one clever idea that will set everything alight or act as a magic wand to make everything work. However, it is clear that we need to have technology and social engagement at the absolute heart of what we do. That means that we need to be very aware of what is happening in the world of technology, whatâ&#x20AC;&#x2122;s happening in the world of digital and social so that we can really integrate that into our work. As a big company with a very large marketing budget, the risk is that if you go after a technology or a specific idea, then it is difficult to integrate that on a global, consistent basis.

CMO SNAPSHOT

Nissan Roel de Vries CMO

What happens is that the people in each region all have their own idea on marketing technology and you end up doing hundreds of things. All are probably quite innovative and could be breakthrough, but you end up spending a lot of money and the overall impact is relatively small.

Creating a consistent, global marketing strategy

To create a consistent, global marketing strategy you need to put digital at the center of what you do. At Nissan, weâ&#x20AC;&#x2122;ve created a small team called the nerve center, which consists of very tech savvy, innovative people that are checking, monitoring and staying on top of the latest trends in the market.

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22/09/2015 13:01

CMO SNAPSHOT

Nissan Roel de Vries CMO

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They are not an agency themselves in terms of creating output and spending money. They sit in the middle of our agency network. People say that the future is digital, I actually think that today is digital. Everything that we do is social and digital. It might start on Television, or with a press release or in a print ad, but in the end what you try to do is create engagement and a connection with people and that always ends up happening in the digital and social world. We need to make sure that all the people that work on traditional media, people that design events, and the people that run PR, all are thinking with an innovative, digital mindset. That sounds very straightforward and obvious but it in a big organization I don’t think it’s the case. We have created, and I don’t think it’s only our company, a system where there are many specialized companies, agencies and teams. They all do great stuff but in the end the customer sits in front of all the screens, whether it’s their mobile, their computer or the Television and they still look at one brand. They want to see a consistent message

from that brand and they also want to make sure that these things are connected. So, if we connect to these people via a specific medium, then from that connection there needs to be a link to something else that they can do.

Has marketing technology improved the industry?

In the marketing communication world in the last 1015 years, we’ve found a huge amount of innovative, clever ideas. It’s been a transformative period but at the same time I think we have lost our ability to connect in a simple way with customers. We’ve found ways, via marketing technology, to connect more directly with people, and in a more innovative way, but the counter side of it is that we actually come across far more dispersed than we have ever been. We need to bring that back together and not see technology, digital and social as separate, independent or unique entities. It has to be at the center of everything. If we want to connect with people, we need to

22/09/2015 13:01

“The risk of big data and the analytical capability today, is that we try to make the CMO role a formula, which it isn’t and never will be.”

connect via all the ways that live their lives. It’s a massive challenge because we come from a time of specialization and in very large companies like ours, we have separated our budgets, our agencies and our business units. That was done with a good intent to become stronger and closer to marketing technology, but the backlash is that we ended up doing too many unconnected things, and the result was that they weren’t impactful enough. We now need to build a higher level of integration. I think that we should be careful in terms of specialization of agencies, and of separating departments and budgets inside the company. We need to look at every message and every piece of communication that we do, through the lense of digital. It shouldn’t be an expansion or an add on. This will lead to some fundamental changes because we don’t have that level of integration currently, and I think that is industry wide. A lot of agency change, mindset change and budget change is required and the winner in all of this is social, digital and the people that are savvy about marketing technology.

Embracing data and analytics

The marketing profession is becoming much more analytical. When I first started in the profession, we had research and some data from the media organizations in terms of who looks at what and that was basically it. From that, you made your plan and allocated your budget. It was very difficult to see a direct correlation between your investments and your business impact. The data availability is now changing very rapidly. We can build a much better correlation between where we invest our marketing dollars and what the impact is. To some extent, that makes our relationship with the CFO easier, because we can start talking a much more similar language than we did many years ago. In the past, I would have research that had been done in the field 2 months previously, whereas the CFO wants to know how much more profit or, in our case, how many more cars we are going to sell next week. Today, our relationship is closer in the sense that I can talk a lot about the impact of what we do and have immediate numbers in terms of the

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amount of engagement my activities generate. I can build correlation models between how a certain type of engagement has impacted car sales. It’s not at the level at which we can say, “due to this TV commercial or digital piece yesterday we sold 20 more cars today”, I think that’s utopia. Maybe one day the relationship will be that close but definitely not now. What we can do though, is link the investments we make to business impact in a much better way than we have ever done. It also makes the job more difficult because CMOs now need to be far more aware of data, technology and digital capabilities than ever before. We need to be more analytical and more financially savvy because we are running a business. As a big corporation, we spend a few billion dollars on marketing, and the company expects a return on that.

CMO SNAPSHOT

Nissan Roel de Vries CMO

The challenge for CMOs

The job of the CMO is to justify the investment and the impact of those investments. The counterbalance of this is that I think that big data is also the biggest risk to the marketing profession. In the end, what you’re still dealing with is to change the perception or the mindset of people, which is an emotional process, it is not a rational thing. With lots of data, we can check a lot of behavior and understand what our marketing dollars influence but when it comes down to whether we’re moving the needle on the perception of our brand, that still remains an art, rather than a formula. The risk of big data and the analytical capability today, is that we try to make the CMO role a formula which it isn’t, and will never be. In our world, we make cars, and we can analyze which features people want, how important fuel efficiency is, how big they want the cars to be, or whether they like big or small wheels, but in the end you buy a car because you like the car. All of this marketing technology creates a massive opportunity for the CMO to make their job much closer to the P/L of the business and justify the investment but at the same time, it has the risk that people start thinking that it’s a formula, which it isn’t. l

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22/09/2015 13:01

Q&A

Post Office Peter Markey CMO

Delivering the future of the Post office Peter Markey, CMO of the Post Office, says that the customer experience bar has been set by the likes of Amazon, and it is now the responsibility of brands around the world to catch up. The number of ‘Marketer of the Year’ and other various individual awards that UK Post Office CMO Peter Markey has picked up during his career soared into double figures some time ago. If you add it to the number of marketing ‘Power Lists’ he’s frequented and other gongs he and his teams have won for various campaigns you’d be forgiven for assuming Markey has a sizable ego to match that considerable talent. On meeting him it is quickly surprising how downto-earth Markey is. It’s rare that marketers possess Markey’s ‘every man’ outlook and approach. You could argue that this is a fitting persona for the top marketer at the Post Office; a brand that runs deep in the DNA of every citizen in the UK.

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HT: Peter, you’ve held CMO roles before but how does it feel to work at the top of a brand with such ‘national treasure’ status? PM: It’s a real challenge. Because we’re a 300-yearold brand with 17 million people coming through the doors every week and with a huge suite of different products to sell, the danger is we could create something quite generic that’s based on what other people do. At the heart of avoiding that is the understanding of why the Post Office exists and what we’re here for. We’ve done a lot of brand strategy work to identify our purpose; that is simply, to help customers get the important things in life done. HT: How do you measure success? PM: The most important measure for us from a customer perspective is - not Net Promoter Score, although NPS is very valuable - but customer effort. We use a customer effort score. So: ‘how easy was

it for you coming into a branch or going on our website to do the important thing you needed to do? And that directly links to both cross-sell and revenue growth. The better we get at that score the more customers will consider us for a mortgage or savings account. HT: How are you progressing it? PM: We’ve done a number of things. We’ve already transformed 4,000 branches out of 11,500. I’ve got a concept branch at Kennington Park, which is like a live test lab where we’re testing different customer flows and the customer journey. We’ve got an app where you can check in to your queue before you arrive in the branch. Use it and you’ll effectively jump the queue. So that’s being piloted right now. I’m really excited about technology and what it will do for us. We’ve done some research work in which we put heart and sweat monitors on customers in one of our test labs and sent them through our customer experience to find the points of delight and pain. There is a massive amount of change going on in the wider landscape of retail and digital experience. We have to stay in touch with what’s going on. The world moves around you so as much as you think and you know you are getting better yourself, through the eyes of your customer, it remains competitive. Take Amazon as an example. If you want something delivered today and are prepared to spend more money, Amazon can deliver that. The consumer view then is ‘why can’t other brands do that?’ The bar keeps getting raised on customer expectation and those setting the bar are setting the standard now that others need to either follow, regardless of sector or industry.

22/09/2015 16:09

Q&A

Post Office Peter Markey CMO

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22/09/2015 16:09

Q&A

Post Office Peter Markey CMO

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HT: Can you tell me about any new innovations that have come from this insight? PM: Yes, we’ve launched click and collect for foreign currency and we are about to enhance it further by adding more availability with better timeslots on weekends. We’re the number one for currency in the UK which is great. A number of people would come into branch to buy currency but they’d do it at lunchtime and have to line up. We wanted to ensure the service was more on their terms; put them in control. Another live example is something called the Travel Money Card which works like a pre-paid debit card. You come into branch to pre-load the card with Euros or Dollars or you can do it online. It comes with a clever app. It enables you to keep topping your card up when you are on holiday and also tells you where the nearest cash machine is wherever you are in the world. Again, this is not about making the Post Office the sexiest brand in the world, we’re not trying to go up against Disney. It’s about giving customers a utility that’s more powerful and an example of us trying to set the bar now on what you expect as a good customer experience. HT: When we’ve talked in the past you’ve told me that at the Post Office there’s an understanding that you’re at the beginning of this journey compared to some of the more mature retailers. How does that determine some of the choices you make? PM: We have a number of great customer relationships. We have three million customers in financial services alone who we know and with whom we have regular, positive dialogue and a really good cross-sell program and so on. But we have a need to refine the way we work in order to move from transactional to relational. That’s the heart of the challenge. People may come in every week, or they may come in once a year or once a quarter. I don’t actually know who that customer is at the moment and I want to. I want to know why they come in and whether we can do more to meet their needs or improve the service for them or, actually, whether we are doing a great job for them already. I’ve got chunks of data around that, but I haven’t got a full mechanic to really understand

through data capture who those customers are. The closest we have got is correlating transactional data. That’s a fancy way of saying Mark’s come into the Post Office to buy his currency. I know that Mark is going on holiday. I therefore know I can talk to Mark about travel insurance. I know where he’s going because he’s told me and I know I have a great product which I can either sell him in branch or I can turn into lead generation by asking for his email address to follow up with a really good CRM program. Another example might be if Mark is coming into branch or onto the website to pay a telephone bill, it might be that we can save them money so we’ll tell them that we do mobile and if relevant, broadband too. So there are certain data points that allow us to have a conversation that could help the customer there and then or allows us to start building that relationship. HT: Sounds great. So what’s the next step? PM: What I want to do is more of that on an industrial scale. I see brilliant examples like Mothercare (a UK retailer which specializes in products for expectant mothers and general merchandise for children). What Mothercare has done brilliantly with digital receipts is to capture data to then build a ‘mum and baby club’ – a great idea that builds loyalty and interaction and a conversation with its audience, especially less frequent shoppers. It’s helping that business understand who visits every week and who visits less frequently, so it can do something powerful with the information. HT: Does your deep-rooted history with the British people not somewhat protect you from some of the dangers that might befall other businesses? PM: It’s not enough that we have been here for hundreds of years. It’s not enough that we’ve served the community. Whilst these things are important to our brand history, showing our daily relevance is key. The tools out there that give you a more intimate understanding of customers are hugely powerful for a business like ours. We want to continue to dial up our relevance and give ourselves the chance to meet real, everyday previously unmet customer needs.

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Photos taken from the Post Office’s latest ad campaign, entitled, ‘Holiday.’

We’ve recently launched SIM-only mobile because why would the post office not do that? We sell e-topups all the time in a branch, so therefore people come to us to top up their, their SIM. Therefore why would they not come to us to buy a SIM? HT: What is the challenge of playing in a range of sectors with so many varied products aimed at different demographics and how do you ensure that the products you white-label from other providers align with your brand? PM: I guess you’ve got two things here. You’ve got the things we do today and the things we could do tomorrow. Thinking about the stuff we could do tomorrow, it will very much be on the back of the wealth of data we’ve now got. On ‘today,’ it’s about recognizing and seizing opportunities but they have to fit. So again with mobile, there’s a clear customer need we’ve identified that we can go after. It fits because we do telephony already. I don’t see a day when we’re suddenly going to set up a florist or something. I think you would get a negative customer reaction to that quite quickly if the fit is unclear. The territories we are in have real credibility for us. If you talk to customers about the Post Office in financial services, for example, we’ve helped customers with savings for more than 100odd years. We previously had Gyro Bank before it was sold to Alliance & Leicester. Aside from financial services and telephony, we’ve got vital government services we provide and we’re still the number one provider of mails in the UK - our partnership with Royal Mail remains really important. We’ve just got to keep focused on the customer and their needs. HT: How do you organize your website to ensure that focus on customer is kept intact? PM: We’re about to launch our website rebrand and within that we’ve organized our product set into really clear categories. We’ve used multivariate testing and some user experience research to help us build around the way customers segment their lives as opposed to how we think departmentally. So ‘your travel’, ‘your money’, ‘your home’ and ‘your car’. It’s gone down well with customers because it makes sense for their life.

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So whilst there are still a fair number of products, with mortgages, credit cards, current accounts, savings, investments, mails, parcels and even fishing rod licences, it’s all built around how the customer thinks. The glue that sits above all that is, still this brand promise of helping you get life’s important things done. HT: Pete, you’ve heard of the TruthAboutData campaign (see Cover Story, page 26). What’s your Truth About Data? PM: Great question. I think that data is potential. Data is more than just a pile of numbers and a load of customer records and names. I’m not a big fan of the phrase, ‘big data’. I’ve heard it called big insights which sounds a bit better but still sounds like jargon. The whole thing is about greater intimacy with your customer. What excites me is the route to unlocking that deeper relationship with your customers and the competitive advantage it brings. When we talk about data we’re actually talking about the future sustainability of your business. That’s why we’re investing in analytics. We’ll do more with insight. We’re investing in understanding our marketing performance as well as also investing in our customer analytics more. It’s changing at pace. What we know today is going to be different to what we know tomorrow. The insights I could get two or three years ago are better now. They’re cheaper, they’re faster, and they’re more immediate. They correlate more and take you deeper into understanding your customer than ever before. I’ve talked about it being a journey but it’s a journey where will you may never reach the destination. You’ll reach success points along the way but the end destination is this continual state of learning and getting closer to your customer. It’s blurring the boundaries between marketing and business. We’re kicking the departmental walls down. The chance for marketing to influence the strategic agenda of the business is greater than ever, given what we know about our customers; about what we’re doing and how it’s performing; about what’s going on online and the broader landscape. It’s a very powerful combination for marketing to really help drive business success more than ever. l

Q&A

Post Office Peter Markey CMO

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