Reimagine Marketing Podcast
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Season 3, Episode 3: Reimagine Digital Advertising

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BRIAN ALFOND: Hello, folks. Welcome to this episode of the Reimagine Marketing podcast I'm your host Brian Alfond. I'm part of SAS' Global Customer Intelligence group, where I work with customers to find elegant and creative solutions to their marketing problems. Today I have the pleasure to speak with Roy Reeves, a colleague of mine here in SAS, about a subject that I certainly have a lot left to learn about-- digital advertising. And with over 20 years of experience as a sales and business development leader in advertising media and technology, Roy is the perfect person to help educate me.
Roy was the co-founder of PumpTop TV, which, at the time, was the world's largest gas pump TV network. And then while at Bullseye Media, Roy helped pioneer out-of-home audience measurement, which used the mobile phone as a proxy for the person carrying it. Roy is currently leading the go-to-market efforts in the Americas for SAS 360 Match, SAS' first-party ad serving and management platform.
Roy, thanks for joining us. I'm hoping we can record as interesting a conversation as the one we had off the cuff-- at least I found it interesting. If I remember correctly, it stemmed from the fact that I was guilty of thinking of digital advertisers buying their ads, if I may, the old fashioned way, like television advertisers did back in the days when I would steal the TV remote control from my father. But in reality, like in all of marketing, things really have changed. Would you mind just recapping that part of our conversation a bit?
ROY REEVES: Certainly. Well, thanks for having me on today, Brian. I think when we were talking, it was about how marketers have traditionally bought ads by media channel versus--
BRIAN ALFOND: Yes.
ROY REEVES: --now somewhat buying audiences. And really until recently, marketers would do their best to identify their target audience, then do the research, or hire an agency to develop a very detailed media plan to find opportunities to reach, well, let's say, 18 to 34-year-old women. We'll keep it simple.
BRIAN ALFOND: Like the classic almost Nielsen demographics that we talked about.
ROY REEVES: Absolutely. Yeah, yeah. And that media plan might include some TV ad spots on a show like Friends, maybe some banner ads on websites like Vogue or Cosmo-- media properties where a high density of their target could be found, very contextual stuff. And this would be very fairly typical of some of the line items on a media plan years ago. And the reality of this method was that it resulted in a lot of money wasted on delivering ads to people outside of the core target of, again, the 34-year-old women in this case. So really today-- because of advances in technology, measurement, et cetera-- marketers can now really target and buy audiences in an omnichannel mode.
So, in other words, a brand looking to reach those 18 to 34-year-old women can place a single media buy to reach that audience through programmatic means. And really the result would be ads delivered to women in that age range through a variety of media channels. Let's say addressable TV ads to the right households, display ads on web pages where the first-party data or the third-party cookies match the audience, mobile ads, et cetera. So this way--
BRIAN ALFOND: You said the magic-- so you did say the magic word, though, if I could interrupt you for one second. You did say the magic word--
ROY REEVES: Yeah, sure.
BRIAN ALFOND: --which is third-party cookies, which is something that I've expressed some strong opinions on those. But you helped show those in another light to a certain degree there. I mean, in a past episode, I talked about privacy in third-party cookies, but maybe I can learn a little bit from your perspective. So maybe you could define them and then talk a little bit about how they're used and the usefulness of that.
ROY REEVES: Sure, sure. Well, let's just start with cookies, which are really just small pieces of data stored on a user's web browser. The websites use cookies to remember what the users do so they aren't asked to perform a task over and over. Cookies should help provide a better, more personalized user experience. And so now third-party cookies are a bit different. They're placed by third parties. Those are websites other than the website you're visiting. These little files collect data on the user as they move across the web and, yeah, I mean that's really what they do.
BRIAN ALFOND: Yeah, and in my episode I called the third-party ones the tracking where you're going. I call them creepier, maybe even I said something worse than that. But it does seem that the majority of consumers agree with me. But, at the same time, you mentioned personalized. And it also seems like the majority of consumers want personalized digital experiences, if they're forced to view ads at all. And so, to me, that's a really interesting paradox. I want a personalized experience, but I don't want you tracking me.
ROY REEVES: Right, right, isn't it? And that's really the way it is and what really the savvy marketers are going for. And really on the creepy end-- I mean, certainly, some people feel that way, and is really-- one of the reasons why Google's Chrome will be phasing them out, and I think they recently announced sometime in 2024. Other browsers have already phased them out.
But whether you know it or not, a vast majority-- about two of every three people use the Chrome browser. And the fact is that about 80% of advertisers and brand marketers have really relied on these third-party cookies for ad targeting. So I think they would like cookies-- these third-party cookies to stay around for as long as possible. But they really have been the building blocks that marketers have used to develop profiles on their targeted consumers. And they've used them to track users across websites for retargeting. I mean, do we all need to be reminded of that time we looked a little too long at that pink snuggie or whatever, right?
BRIAN ALFOND: I definitely understand the usefulness to advertisers of them and that need to get something a little more targeted than the pink snuggie, if you will. And if I want relevant ads, then I think that I have to be willing to tell the advertisers something about me right. But with all the privacy concerns that are going on, I think we're going to have to find maybe a better approach or a better way to do this. What do you think?
ROY REEVES: Yeah, absolutely. It's a balance. I mean, certainly third-party cookies aren't all bad. Again, for years, they've been really the targeting data for most online marketers, which is super valuable. But with all the privacy concerns, and mandates out there, and the fact that they're unable to cross devices or even between apps in this-- I call it a multi-device world-- I think they've about run their course. It's really now time for what I think is a more consumer consent, privacy-centric, really first-party data driven approach to advertising.
BRIAN ALFOND: I certainly believe that the first-party data approach is going to offer organizations a wealth of maybe untapped insight about their customers. And hopefully they can help that use that data to truly personalize that customer experience. But, as we've talked about, we have to get the customer into the funnel in order to do that. You can't just strike up a conversation with somebody and assume you're going to know everything about them, right, just based on observable characteristics. Otherwise, anybody who met me would assume that I was just a really mean, grumpy guy. But once they get to know me, hopefully we can have a more meaningful conversation as they add to that initial impression and maybe even correct it.
ROY REEVES: Absolutely, absolutely. Yeah, no, that first-party data is key. And the more you collect, the better your targeting is going to be.
BRIAN ALFOND: So this is one change that I want to talk to you about. And I'm going to ask you to take your crystal ball out here twice. You've been in the adtech industry for quite a while. So looking into that crystal ball for the first time-- as some change comes to the world of third-party cookies, what would you recommend for marketers to do going forward?
ROY REEVES: Woo. So once-- you're talking about once third-party cookies go away?
BRIAN ALFOND: Yeah, how can how can marketers pre-arm or pre-strategize, if you will, their marketing budgets their marketing strategies to deal with that?
ROY REEVES: Well, yeah, obviously, it's going to-- I think marketers need to, obviously, do things differently. A lot of marketers believe that it will definitely be more difficult to target consumers and personalize ads. And it may be somewhat of a step backwards for the industry. Without those identifiers that the third-party cookies have provided, at least some of the folks I've spoken to believe that the personalization and the ability to optimize campaign performance will definitely be more difficult, which would, of course, negatively impact their return on ad spend. So that's one thing.
Some see this phase out as somewhat of a power play by Google. I mean, let's be honest, Google's the 800-pound gorilla out there. It has a ton of user data collected for years through its tools and, what, its properties like Search, Maps, YouTube, et cetera. They have loads of first-party data. And it would not surprise me to see many marketers become more reliant on Google. And so I would say, how do I put this, an easy and, dare I say, lazy choice for marketers would be to just turn to Google Ads or Facebook for their campaigns. But, really, in the long run, I don't think marketers want to be beholden to Google or Facebook.
I listened to one of your recent shows, Brian, and I have to agree with you that first-party data is the way to go and I really liked your analogy in that-- remind me of what--
BRIAN ALFOND: The conversation? It's just it's all about having a conversation and like I led into this topic, you can't rely only on your first impression.
So third-party data is the prejudgment we make when we meet somebody. We look at them. What are they wearing? What do they look like? What's the hairstyle like? And we categorize them mentally into our head as to, oh, well, this it this type of person and this is what the conversation is going to go like. And that's just our evolutionary instinctual first impression. We try to breed it out of ourselves. We've had a couple-- I think I said we have a couple of millennia of social veneer, but we're still animals underneath that.
So the first-party data we gather when we actually sit down and talk to somebody and start engaging, well, first party, one-to-one, so we can find out that, yes, I have a resting mean guy face, but I'm actually friendly, I'm a musician, and get to know more about me that puts things in a context. And I think that's what marketers need to do in order to create that personalized experience is, sure, you get your cohort data, so, like you said, we're looking for somebody-- a woman 18 to 30. That's the cohort data.
But then once we bring them into-- the marketer or advertiser can bring them into their own property, then you can get to build out that profile with more nuance to say, OK, yes, you're 18 to 30, you lead a very active lifestyle, you prefer hiking to a cruise and things like that. We're really getting to know that person. The problem comes when people go to sell that data. I think that's where the privacy issue comes in.
ROY REEVES: Sure, sure. But, yeah, you're right, the prejudgment and, as you said-- if we rely solely on that, we're really missing out on the deeper richness, so to speak, of that individual. So, yeah, that's well said.
BRIAN ALFOND: When we were talking, you talked about that marketers are going to have to kind of gird up for a period of experimenting with their approaches, and maybe with their channels, and what they're going to do.
ROY REEVES: Yeah, definitely, I think the savvy marketers out there, if they're not experimenting, they should be experimenting. The third-party cookies are going away. It's been delayed for a year, thankfully, I think most of them would say. But if they are not experimenting, they really are doing a disservice to their company.
And if it were me, I would appoint one or two people within my company to work closely with the agency and my adtech provider to really ensure there's a complete understanding and transparency on the potential impact this change will bring about. And, of course, continuing to beef up the first-party data through lead gen forms, progressive profiling, surveys, customer reviews, et cetera. There's many tried and true strategies out there for first-party data collection. So the tools are out there.
BRIAN ALFOND: But I like your thoughts about experimentation because one thing that experiment-- experimentation, sorry, provides-- it shows a willingness and almost a necessity to make mistakes so that you can learn from them. So much of this digital marketing stuff is new to everybody and things change so quickly you absolutely have to have a mindset for learning and adapting. And it seems to me that kind of mindset is the most likely to help an organization succeed.
ROY REEVES: Absolutely, absolutely, couldn't agree more.
BRIAN ALFOND: So that does lead me to something else. Things changing so much-- something you alerted me to-- Roy, am I correct that there are soon going to be commercials in my Netflix shows?
ROY REEVES: There are. Yeah, no, Netflix, as you may have seen, has been losing quite a few of their subscribers. And I think last quarter they reported a reduction of almost a million subscribers. So really the behemoth of the industry, who touted that they were never going to an advertising-supported model, is actually now going to go down that road. I believe they recently chose Microsoft as their partner to deliver the advertising.
And I think I just recently read last week that they're looking to charge a $60 CPM cost per thousand impressions on the ads, which is really at the very high point of connected TV advertising. So it'll be interesting to see what happens there.
BRIAN ALFOND: And I wonder if the other streaming services will follow suit or how that will work out, but I guess it's all part of that experimentation thing.
ROY REEVES: It is. It is. There are many of the services out there-- I mean Disney+, Paramount+-- they all now have an advertising component to them. There are actually something called free ad-supported TV services out there, things like Pluto and Xumo and others. But it's actually a pretty interesting model and they've actually done very well recently.
And I think just with the economic pressures, I think a lot of people are starting to turn to these ad-supported services as a way to continue to get premium content. And it just makes sense. It's funny because it's going back to the old TV model, but really the ad loads on these services are much less than on your broadcast TV.
I mean, on broadcast, you're looking at 16 minutes probably per hour of ads, whereas on these they're closer to four to six minutes per hour. So, yeah, it'll be interesting to see what happens. And a service like Netflix could be cannibalizing some of its subscribers, getting them over to the ad-supported offering, but, yeah, we'll see what happens.
BRIAN ALFOND: I guess it just depends on how badly you watch do you want to watch The Umbrella Academy or some of those shows, right, maybe even can pull them over to that.
ROY REEVES: Right, right.
BRIAN ALFOND: But it will be interesting. And if the ads are, theoretically, more targeted and, as you said, the ad load-- I mean a 30-minute sitcom is 22 minutes. So do the math there, yeah, you're getting 14, 15 minutes of ads. If I can watch an hour show and three or four ads that might actually be relevant to me, in a way that is improving that customer experience as well or the least we could do the experiment to see if that improves the customer experience.
ROY REEVES: Yeah, I totally believe it. And I think that's why you're seeing many of these fasts, as they call them, and the larger subscription services now going toward this ad model.
BRIAN ALFOND: Well, that's something to watch for, if you're a Netflix fan or any of that-- and any of those streaming services. Roy, I want to thank you for joining me for this conversation today and I look forward to you helping me stay up on what's happening in the digital advertising world.
ROY REEVES: Absolutely, it was fun.
BRIAN ALFOND: We'll do it again as events warrant. Absolutely. And I hope to have more conversations about a variety of topics in upcoming episodes with other people like Roy, other experts I know.
In the meantime, if you have any thoughts you'd like to share with us, you can head on over to sas.com/reimagin emarketingpodcast-- all one word-- and join in the conversation. You can also subscribe to the series on your favorite podcast platforms. Just search for Reimagine Marketing.
And I'd be pleased if you shared your topic or guest ideas, like we had Roy on today. Just email us at reimaginemarketi ngpodcast@sas.com, where, once again, Reimagine Marketing podcast is all one word. Thanks for listening and please consider joining us next time. Until then, this is Brian Alfond, hoping all the important things in your life are good.
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Episode 2, Season 3: Reimagine Your Cookies

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BRIAN ALFOND: Hello, folks. Welcome to this episode of the "Reimagine Marketing" podcast. I'm your host, Brian Alfond. I'm part of SAS's Global Customer Intelligence Group, where I work with customers to find elegant and creative solutions to their marketing problems. Today, we're talking about cookies. Specifically, about losing them.
We know that in spite of Google granting a stay of execution for another year, third-party cookies are going away. And clients, customers, and colleagues are asking what to do about it. First, is it really a shock that these are going away?
I'm sure you've seen Apple's recent commercial showing an imaginary auction of a user's data where the auctioneer says, "it's not creepy. It's commerce". If you have to say something like that, then it's pretty obvious that there's a problem. The tracking and selling of every digital step we take is creepy. And it always has been.
Now, I'm a man of a certain age with certain opinions and thoughts about privacy that I thought were about as current as parachute pants and trapper keepers. But it turns out that those younger and older than I, for the most part, agree with me. Every generation surveyed is concerned with online privacy.
Sure, we may differ by a few percentage points, with the lowest being only 68% of Gen-Z users. But it's still the vast majority of users in any generation that finds this tracking thing creepy. To me, it just makes sense that this is going to go away. Yet these cookies, which enable the selling of your personal data, is how companies like Google and Facebook make a whole bunch of money. As a result, they and others are putting great effort into coming up with a way to do the exact same thing they've always done, but call it something else.
They want and need to be able to track your activity across the internet and your devices. Now, they say they won't track you as an individual, but rather place you in a flock, or a cohort, or a gaggle, or whatever they decide to call it. Either way, you're still being tracked. A group is nothing but a collection of individuals. And even put into cohorts, that individual data has to exist for them to do so.
And I get it, I'm not disparaging Facebook or Google. At least not for this. Because they're serving a very real need to get customers into the top of the funnel of organizations from mega marts to mom and pops. But if consumers are uncomfortable with internet tracking to the point of calling for legislation, and those same consumers are saying they prefer to do business with companies that "know them," maybe companies that spend so much of their marketing budget on the top of the funnel are looking at things a little bit backwards.
Maybe companies need to start re-imagining their digital marketing and putting more emphasis on an approach that provides for deeper customer understanding, longer customer relationships, a better customer experience, and more profitability. Maybe the future of digital marketing is first-party data. We think it is.
I've always thought of marketing as just an extension of a conversation. And if we think about our conversations, the more meaningful ones are clearly the more memorable and enduring. When you first meet someone you don't know very well or at all, the only data you have to go on is similar to cohort data. I know we aren't supposed to profile. Yet, we all do it.
Evolution has perfected this in us as a survival mechanism. And we can't shuffle off a few billion years of natural selection and a few millennials growth of a societal veneer. We make prejudgments about people-- the way they look, the way they talk, and what we expect of them based on our past experiences and knowledge of dealing with others who resemble them. This is analogous to cohort data. Well, you sort of look like others that do these things and like those things. So I'm going to serve you up some messages that similar people have responded to.
But as we've learned as we've developed this thin veneer of culture, if we rely just on our prejudgments, we're missing out on the richness that is the individual, the experience and perspective that make one unique. And that can ultimately enrich our conversations and relationships. I understand it is the role of cohort-based data to get someone to consider sitting down in the conversation, to balance on the edge of the funnel, to consider engaging in a more personal manner.
Yet, companies very often spend an inordinate amount of money on just this part of the conversation. And the return on that investment, when you can even determine it, may not be worth it. And when we see a company that we do business with providing new customers with better incentives or deals than we who have been loyal for years, it leaves a bad taste in the mouth. The two largest telecoms in the US, and probably more, are advertising how great it is that they're treating their loyal and existing customers the same way they treat new customers.
They are trying to address one of the reasons why mobile loyalty is so low. It doesn't feel right when you ask your mobile company with whom you've been with for years for the same deal they are offering new customers only to be told that you can't have it. Well, why wouldn't I just keep my number, switch to another carrier that is cheaper, and will give me a shiny new phone for free?
It's the proverbial bird in the hand situation. And as the spigot of birds in the bush all but closes with the deprecation of third-party cookies, companies are going to have to realize that it is worth investing in and keeping the birds in their hand. And the secret to keeping that bird right where it is could be the first-party data you already have. As long as you don't sell that data to others, it makes sense for a company to capture everything they can about their existing customers.
Then, combine this data with all the historical data you have on past transactions and interactions. This is how a company "gets to know you". And survey after survey indicates that the customer experience that feels like a company knows them is what consumers are looking for. But in my experience, this data very often sits idle just waiting to be leveraged. But if you, as a marketer, can tap into it, analyze it, operationalize it, well then you have the making for an insights and customer experience renaissance.
Now in order to do so, you're going to need to be able to track and leverage your customer activity across all your channels. You'll need a data strategy for how to combine what you're learning with what you already know. And you'll want to be able to examine all of this data for insights into how you can improve your customers experience and keep them coming back.
As it happens, I work with some wicked smart people that could help your organization with this. And if you're looking for this kind of thing, I ask you to keep that in mind. Now, clearly there is a need and a place for third-party data in a marketing strategy. Businesses need customers to grow.
I'm just positing that maybe the balance needs to shift to emphasize using your first-party data to deepen the relationship with your existing customers. And when organizations make that shift, I'll bet that the return on the marketing investment for your marketing strategies overall will improve. Now, I'd like to gather some first-party data myself.
I'd like to know what you think about my take on this topic. Feel free to post your comment or a question. Think of it as enriching the conversation, and maybe we can learn a little bit more about each other. So if you enjoyed today's show, or even if you didn't, you can head on over to sas.com/reimaginemarketing podcast-- all one word-- to join in the conversation. You can subscribe to the Series on your favorite podcast platforms too. Just search for "Reimagine Marketing".
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Personally, I'd be thrilled if you shared your topic or guest ideas by emailing us at reimaginemarketi ngpodcast@sas.com. Reimagine Marketing Podcast is all one word. Thank you for listening. Please consider joining us next time. Until then, this is Brian Alfond, hoping all the important things in your life are good.

Season 3, Episode 1: Welcome Back to the Reimagine Marketing Podcast

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BRIAN ALFOND: Hello, folks, and welcome to season three of the Reimagine Marketing. Podcast. If you've been here before, you may notice that things sound a little different. I'm your new host, Brian Alfond. I'm part of SAS's Global Customer Intelligence group, and I work with customers to find elegant and creative solutions to their marketing problems.
I've been in and around marketing for longer than I care to admit out loud. Let's just say that I'm firmly ensconced in Generation X. And over this time, I've seen trends come and go, buzzwords born and then often die in the same week, technology that tries to solve every imaginable problem, and technology that creates every unimaginable problem.
Looking over the past 10 years alone, the pace of change in the marketing space seems to be, if I may borrow from an influencer of mine, at ludicrous speed. And while things haven't quite yet gone plaid, it does appear that we are on the verge of a traditional tartan. And if you didn't catch that reference, please do look up gone plaid.
For a quick comparison, consider this. My grandfather was born in 1899. This was a time before airplanes, heck before cars were really common, although many of the cars around at this time were electric cars. When he was a boy, he heard about the Wright brothers' success at Kitty Hawk.
In his retirement years, he watched Neil Armstrong step foot on the moon on a 12-inch black-and-white TV. And in his eldest years, he saw the space shuttle retired from service on a 44-inch flat screen. Imagine the scope of change to his world and what he had to adapt to, and imagine how fast he must have thought that pace was.
I know it seems that things are changing even faster now, not only in marketing, but in all aspects of the modern, connected life. But for all this activity, are things actually changing all that much? Because I have a feeling that, while the pace of change is indeed frenetic, this is more the result of changes to technology. We aren't truly changing what marketing, or really life, is at all. And this is what I find fascinating. And this is what I hope to explore in upcoming episodes of this podcast.
I hope to go beyond technology to the human aspects of things like privacy, the metaverse, social media and dopamine exhaustion, and how marketers are trying to keep pace with each new technology and trend. But I want to work from the foundational idea that the purpose of marketing itself hasn't changed much at all. All marketing is still an attempt at a mutually beneficial conversation between two entities, and that the goal of marketing now is the same as it was when the first Mog's Mammoth Meats advertisement was painted on a cave somewhere.
While the only voice you're hearing at the moment is my own, we certainly will have conversations here where, as we say where I'm from, wicked smart people can exchange their thoughts and opinions, and I get to learn something new. Hopefully you, the listener, will, too. And to be clear, the thoughts and opinions that I express on this podcast are my own, and could very well be misinformed, misguided, and even blatantly wrong. This being the internet, I'm sure there are folks who will disagree with my views and who will politely, helpfully, and constructively offer their own point of view and perspectives in a calm and respectful manner. Well, one can always hope, anyway.
So thanks for listening so far. Next time, we will actually delve into one of these topics and see how it goes. Until then, I hope all the important things in your life are good.

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Episode 9, Season 2: Reflections & Projections

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WILSON RAJ: Marketing organizations are leveraging the continuing pandemic-related disruptions and accelerated digital transformation efforts as catalysts to reinvent marketing and transform customer experiences for a digital first consumer.

Hello, I'm Wilson Raj and welcome to this Reimagine Marketing podcast. Today's episode is called Reflections and Projections, season 2. This episode marks the end of season 2 but not the end of the podcast series. Plans for season three are underway. And I'm excited to be joined by my co-hosts, Steven Hofmans and Justin Theng. Hi, guys.

STEVEN HOFMANS: Hey, Wilson.

JUSTIN THENG: Hi, Wilson.

WILSON RAJ: Good to see you all.

JUSTIN THENG: Likewise.

STEVEN HOFMANS: Good to see you, too.

WILSON RAJ: Great to have you on the show, and this is a great season. We've had a range of guests ranging from very progressive marketing leaders in different industries, everything from telco to CPG. We had futurists and leading market research leaders weigh in on marketing transformation in today's world and leading into tomorrow.

So, as we kind of recap this for our audience, just give them a taste of season 2. Let's start with just some, maybe some highlights that perhaps resonated throughout the show.

STEVEN HOFMANS: Yeah, OK, for me one that I found interesting was like, the 80-20 rule. I learned in the first episode with Sandy, 80-20, it was all over the place, and actually you can apply that to many things in your life. Actually, it was about marketing planning, and she said, you need to put your plan 80% fixed and you need to give global teams the ability to personalize 20% of the marketing plan. Same with personalization, right?

You – 80% you can personalize through a specific country but then you still need that 20% to embed the local culture and embed that local flavor. And actually that 80-20% rule you can also adapt to your work. You can spend 80% on your – it was in another episode; 80% you can spend on your normal tasks and 20% of your time you can spend on innovation. So, it was actually very funny that in the first episode with Sandy, that 80-20% rule was very important.

And then later on when we talked about implementing marketing automation solutions globally and how do you overcome global challenges, it was also 80-20%. So, I found that that 80-20% rule is actually something very important that you should apply in your daily life.

WILSON RAJ: All right.

JUSTIN THENG: I love that, it's so fascinating, that 80-20 here in Australia, in our region, one of the variations on, I think they call it the Pareto principle which is 80-20, right, is the 70-20-10, and all it is they've budged a little bit, Steven, and the 10% is left for crazy experiments and testing. And it's just – that's where you just have fun, take some big risks, and see what happens afterwards from the data.

For me one of the things that stood out was Wilson's interview with Ray Wang. And he was talking about data supremacy. I love the idea of data supremacy because it speaks to that competitive advantage. It's true, whoever owns data is king. It's not just the brand that owns the data. But even at a boardroom level, whoever owns the data and can extract a narrative from that data is going to be the most credible voice in the room, because everything else would be anecdotal.

So, Ray Wang talks about the three A's, analytics, automation, and AI. And those three A's to me are like AAA battery, right? That's what's fueling a lot of growth these days. And I know we're going to talk more later, Wilson, about some of the data restrictions and challenges.

WILSON RAJ: Mm-hmm.

JUSTIN THENG: But I do feel like in this coming era of privacy and governance, especially in the marketing arena, analytics and predictive analytics are going to be critical.

WILSON RAJ: Yeah, I think that particular one with Ray around decision velocity was really critical because his notion was that the gap between the analog physical world and that digital world has really meshed, and so how do these interfaces and interactions occur? And basically, you need the analytics and AI to be able to speed value from data to decisions, and then obviously into actions, and then to be able to bridge physical and immersive, augmented reality-type experiences or digitized experiences.

So, I think that was the key thing where the brands or the business will need faster, more precise decisioning. The other thing that he also mentioned was around anticipatory analytics. That's an interesting word which is, I think, certainly a big part of AI, because it is predictive.

But how do you then not just react to experiences or fluctuations in customer engagement in real time, but to anticipate moment by moment, not necessarily into a next phase of a customer journey, but in that moment, what is that next moment? What's the next step? What are the choices?

So, he gave an interesting example which I won't share here, listeners can talk about, hey, how a future elevator ride would look like. So go check that episode out and you'll see some of Ray's thinking there.

JUSTIN THENG: Yeah, that was a great little scenario, yeah. And just to echo that, Wilson, I think in an unpredictable time we need to put our own predictability back in as much as possible.

WILSON RAJ: Mm-hmm. The other one that was particularly interesting was the interview with Scott Brinker, we did two with him, around the meshing customer experience with your marketing technology stack there, and also around, how do you bridge those CX goals with investments in technology? And there's a lot there, but there's one I think I did like, where we really tackled the age-old problem around, do marketers build technology or buy technology, or is it integrated and best of breed?

I know, Steven, you had some thoughts there. You've been – you're in this business, you talk to customers around those kinds of choices. So, what's your take on that one?

STEVEN HOFMANS: So, he kept me – when he was talking and explaining his different kind of situation, it struck me that, on the one hand, when you buy a platform from a vendor and everybody would implement that same platform in a standard way, you won't differentiate on customer experience because everybody's sharing the same experience. So, if you want to be top of the market, you need to customize. You need to think about what will that technology mean for you, and how can you use it to your benefits, and how can you customize it, do little tweaks, to bring that experience?

But then the other question is how much tweaking do you need to do? And then I wondered, myself, I think the moment when you have the feeling that you are becoming an R&D company and you're becoming a software development company, I think that's really the end of the road. I mean, unless your ambition is to become a software vendor in your business, I mean, that's where you have taken the road too far.

So, finding that balance between customizing that makes sense, to do good customer experience and excel, but also watching out that you're not becoming an R&D port, I think is a very important factor that you need to take into account when choosing softwares and working in a marketing technology environment.

WILSON RAJ: Right.

JUSTIN THENG: I think that that South African proverb is apt here, if you want to go fast, go alone. If you want to go far, go together. And that's certainly been the feedback that I've been hearing especially out there in the market where people are able to build specific solutions in-house and that's great.

But the upkeep of it, they tend to go out of date and very, very fast. So as the rest of the world adapts it's difficult to keep up. Once the project is closed off and finished, it's very difficult to keep reiterating and making sure that it stays current and continues to work.

On the flip side, as you said, Steven, even if an organization were to buy, there is a certain level of customization that needs to be done anyway. And the question is which way around do you want to do it, and what would you like your speed to value to be? I think you raised a good point around, IT typically would prefer to build, whereas so there's some IP ownership, or IT ownership, IT/IP ownership, whereas the business would probably prefer speed to value.

WILSON RAJ: Right, and I think the guiding principle, he tried to say, whatever you customize has to be very unique, unique to the organization that only the organization can provide, because for the most part, a lot of these engagements across industries, across sectors, are very, very similar, so to have a thoughtful approach to that. And I like that proverb because that does link to some of the themes that we saw in, I think, most of the podcast, which is around collaboration, not just teamwork. I know, Steven, you had one about the people first. I definitely want to hear about that.

But I think in the Ulta Beauty with Kelly Mahoney, in terms of how they were digitizing beauty experiences, it really took not just the marketing team but an entire stakeholder team ranging from marketing, sales, service, technology, and brand loyalty, that was all integrated into their Ultamate Rewards program. And I think Christine Moorman, in her CMO survey report, one of the episodes there, she talked about – there was some stats around companies where they had higher levels of collaboration tended to do better in terms of their marketing efficiency and effectiveness.

JUSTIN THENG: Mm, and inter-brand collaboration as well, even beyond the organization, now, as marketers are looking for solutions of what to do once third-party cookies and third-party data disappears entirely, is how can brands who are non-competing share first-party data in a compliant manner? But this is nothing new. Jay Abraham has been talking about this for, I think decades, calling it the host-beneficiary model. And it's just that now we are forced to not be able to use third-party data and everyone's thinking, OK, well how can we collaborate better and share data?

STEVEN HOFMANS: I think it contributes to the whole idea of, if you want to, as a company, become a partner of your customer, you actually need to go outside – go think outside your box, right? A customer has a dream, he wants to realize something. And actually, maybe the service your company is offering is not enough. So, you can actually, by sharing data with third-party providers and maybe building a service together with third-party providers, you're really getting to that: I'm no longer a vendor of that customer, but I'm becoming a partner helping to realize his hopes and dreams.

And I think if you can use an ecosystem and really use all the data available to become relevant, I think that that is going to be a massive differentiator for the future. The company that can integrate different kind of external partners in their services using data from all of those kind of providers offering that ultimate dream customer experience is going to win the market. I believe – I mean, that's my belief for the next coming years.

WILSON RAJ: Right, I think that was a common theme among all of the guests, that centrality of data, and Ray Wang said it nicely, data supremacy. So, as we move through, what are some of the challenges?

STEVEN HOFMANS: I think one of the things I mentioned by Geert, this is – where we're looking for synergies within companies. But on the other hand, you need to be able to allow individuality in a company. And what I mean by that is there are always discussions in marketing going on, on what do you centralize and what you don't centralize? Who do you leave independent and not independent?
And every market has its own ecosystem, so how do you decide on what is best for the market and the company together to give a global customer experience? I think that's a kind of hard challenge as there are many ecosystems out there and providing value for the customer. I think that's quite a hard nut to crack.

Where should you collaborate? Should you collaborate local? Should you collaborate global? Should you look for different kind of services? I think it's a hard nut to crack, to really give a personalized experience tomorrow with all these global and local players. I mean, for marketing, it's hard to choose, I think.

WILSON RAJ: And Justin, I think in your episode you had a nice – I think you touched on some of that in this notion of experiential tech, right, happier customers and increased profitability because they have to go together. You don't just make the customer happy, you've got to be profitable as well, as a brand and as an organization.

JUSTIN THENG: That's right, Matt Kuperholz spoke about exponential technologies –

WILSON RAJ: Mm-hmm.

JUSTIN THENG: – and the experiences that they bring. And yes, one of the things that, I mean, as we've spoke about, I think that third-party data is a big issue. Being able to centralize a single view of customer, I think, is also another big issue that cuts beyond marketing, goes into sales. And then it goes without saying, I think any time you bring this up in a room of marketing and CX leaders, you talk about talent and every head is nodding, saying, yep, yes, that's me. I mean, the Great Resignation, right?

WILSON RAJ: Mm-hmm.

JUSTIN THENG: So, one of the things that I, not to just present problems, but one of the things that I predict is going to be best, it comes from an idea that Adam Grant put forward in his book, The Originals. And he talks about, he did this incredible study around what provides longevity in brands and businesses, and would you believe that if you look further afield from the actual function that you're hiring for. So, for example, if marketers were to say, well, what about if I take somebody from automotive or what about if I take an engineer or what about if I take a, yes, a data scientist, or what if I take a marketer from fashion, or – so they go further afield.

And I think for that to work, as long as the leader is very strong in data as the source of truth, then you can bring expertise and viewpoints from various different fields further abroad into your marketing ecosystem and form squads or form strike teams that can look at data and use their intelligence and intuition to think, what should we try next? And the data will tell you whether it's working or not.

And we have the benefit now of being able to rely more on artificial intelligence to do what marketers traditionally would have done using intuition. I'm not saying it's replaceable entirely, but I'm saying it's more enabled now to look beyond the field of marketing for talent. So, I mean, those are the three challenges that I see as the core.

WILSON RAJ: Excellent, I think now we can kind of – I think this is a great time now to pivot to some of the interesting topics that we could potentially have a deeper dive to more in season three. I think that notion around data but then also what's the humanity, right, the empathy there.

And I think in The CMO Survey there was a very surprising finding where brand building has now taken on a focus for marketers in her [Christine Moorman] global survey. So, building the brand in terms of more advertising, telling the narrative, getting more connected from a value, emotional capacity, rather than just sort of a transactional, so that kind of supports a little bit, Justin.

So, for season three, what are some of the one or two topics that each of you think would be an interesting one that we can do a deep dive into?

STEVEN HOFMANS: I think for me, you guys in season 2, we talked a lot about the value of data, and we are becoming a decisioning economy and we need to focus on data. I think the customer is realizing the importance of data and is more and more going to see it in the future as a currency. So, they'll expect, when you ask them to share their data, there's going to be a discussion around fair value.

WILSON RAJ: OK.

STEVEN HOFMANS: Are you providing me fair value for the data I'm giving you because data is currency, and I'm paying you with my data so what do I get in return? So, I think having a discussion around fair value, what is fair value?

And can you ask banking transaction data, and what is the cost of asking banking transaction data to a customer to provide a better service? When is a customer willing to give his data up for a certain service? I think that's a very interesting topic or discussion just to understand the synergies between those two, the customer and data.
JUSTIN THENG: I 1000% agree, Steven. I think this fair exchange of value will even get to the point where third parties are facilitating payments for the use of your personal data, and you can sell it for a time. That's a topic I'd like to explore. It's something that's fascinated me.

Another topic that's fascinating me at the moment is actually based on some research that Google has done called the messy middle. And if any of the listeners haven't seen that whitepaper, I certainly recommend you go and look at it because what it does is it challenges, based on the data since the pandemic, how people are searching and purchasing, in fact, what we might have called the funnel previously, throw that out, the flywheel, throw that out. It's called the messy middle.

And interestingly, awareness plays a role, but not as a phase. It's called exposure, where all the activities that you're putting out in market of all kinds, whether it be conversion campaigns, or whether it be lead gen or nurturing campaigns, all of it is exposure and all helps it. And I think that's where brands are starting to – or rather, marketing teams are starting to focus on brand. It's that idea of exposure.

WILSON RAJ: Yeah.

JUSTIN THENG: That's something I would love to explore further, I think.

WILSON RAJ: I think for me I definitely see that and in addition to that, what I call pandemic-era services, so things such as curbside pickup, virtual assistants, digital delivery. All those kinds of things will not just become the next customer experience normal, but those expectations are going to continue to rise into 2022 and beyond.

So, I think sometimes we're also reading that some brands are reverting back, for example, like airlines right now. Some of those systems are kind of, while they made a lot of inroads during the disruption, some of the bad habits are creeping back in, in terms of wait times and more complex processes. So that will be something that will be an interesting topic.

The other one, as we all mentioned, that need for privacy or consent journeys that are designed with the customer in mind. That's going to heat up. So again, going back to things like the data deprecation, the going away of third-party cookies, the legal scrutiny, governance, all those kinds of things will have to be built into that messy middle for sure, in terms of reimagining customer engagement and marketing.

Well, I think this is a great spot to wrap up this discussion. And that's it for season 2 of the Reimagine Marketing podcast. Now if you enjoyed today's show, please search for the Reimagine Marketing podcast on your favorite podcast platforms and subscribe to the series for show notes, hear previous episodes, and to catch season three content when it drops in 2022.

Also, you can head on over to SAS.com/reimaginemarketingpodcast, all one word, to join in the conversation and discover more bonus content. So don't forget to join us when we return with more personalities, paradigms, and practices on the future of marketing and customer experience. Thank you all for listening.

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Season 2, Episode 8: Marketers on the Rise: Findings from The CMO Survey

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WILSON RAJ: Digital transformation is a fixed, yet fluid, reality in our post-pandemic world. Brands are shifting to a digital-first economy where prospects and customers expect genuinely tailored experiences. More than ever, marketers today are taking on more responsibility for digital transformation, driving business performance, and expanding their strategic leadership in their businesses.

Hi, I'm Wilson Raj, and welcome to this episode of the Reimagine Marketing podcast, "Marketers on the Rise-- Findings from The CMO Survey. I'm really excited to have our special guest, Professor Christine Moorman, who is the senior professor of business administration at the Fuqua School of Business from Duke University, where she's a faculty member in the marketing area. Professor Moorman has authored many books in this area around marketing leadership, marketing excellence, marketing expertise. One of her books, Strategy from the Outside In-- Profiting from Customer Value, with George S. Day, was awarded the 2011 Berry Book Prize for the Best Book in the field of Marketing.

Professor Moorman is also the founder and managing director of The CMO Survey, that founded in 2008. The CMO Survey is the longest-running, noncommercial survey for and about the field of marketing. And this is where the research-- where she collects and disseminates the opinions of top marketers around the world in order to predict the future of marketing and to be able to improve the value of marketing in firms and the businesses that they serve.

Now, she also blogs extensively about the survey findings at Forbes, Harvard Business Review, Marketing News, and many other publications. So, with that, I'm excited to welcome our guest, Christine Moorman. Hi, welcome, Christine.

CHRISTINE MOORMAN: Thank you, Wilson, it's wonderful to be with you today.

WILSON RAJ: Absolutely, you know, I think it's absolutely-- your work since 2008 has become sort of a stalwart piece where marketing folks, pretty much all over, use as a benchmark to assess where the state of marketing is at, what is happening, but also more importantly, what needs to happen. So can you just tell a little bit about just the genesis of this project, called The CMO Survey, that started in 2008 and has been just running through up to now and I'm sure into the future.

CHRISTINE MOORMAN: Well, thank you. So, the survey was really born out of frustrations that I was experiencing. And then I sensed other, actual marketing leaders were experiencing as well, which is that marketing leaders weren't being interviewed by the press or investors for their views on various critical marketplace trends or company marketing activities. Often, they would ask the CFO these questions. And so, I felt there was a need to get more exposure for marketers, in their role as experts, about what was going on with customers and how customers could be managed, as well as brands and other important assets that they're responsible for.

But it was also the fact that what I sensed is that-- and I think this is still a frustration for marketing leaders-- is that they don't have very good benchmarks. So, when they think about going to their CEOs, or CFOs, to increase their marketing budgets, how do they know whether more budget is necessary?

How can they put that into perspective? And so, that's when I developed the survey to sort of capture the opinions of these marketing leaders and then disseminate the results.

And a lot of the questions that we ask are forward-looking measures. You know, where is marketing going. What are you doing to lead marketing within your organization? But also, to provide those benchmarks that I mentioned so that marketers can turn to the survey and get a sense of where they fit.

Whether it's in firms of their size or firms in their industry, they can gauge how well they're doing and how much they're spending on marketing.

WILSON RAJ: Right, and so with that, Christina, great intro to one of our first sections, the notion around how-- and it's a very important part of your research-- how the marketing function. Right, and certainly it's called The CMO Survey, but I think everyone in marketing leadership, or in marketing, absolutely benefits from this.

So, the context here is that we know the context, the pandemic has prompted many businesses, many brands, to undergo just a radical, rapid transformation in their gold market models. And you've tracked those. And we are seeing in other research, but certainly in yours, that there's a sense that many of these businesses are moving past that initial, nascent phase of digital transformation maybe about a year or a year and a half ago. And becoming, you could say, more mature, they're more integrated, they're more emerging. And you're seeing that spectrum.

So, the question is, what's that spectrum that you're seeing, where the people going from nascent to emerging, and related to that, the role of marketing leaders?

CHRISTINE MOORMAN: These are excellent questions. And I think, just to put it in perspective, it's important to appreciate this dramatic transformation that's occurred during COVID and born out of necessity. Companies had to transform quickly.

And as a result, one of the questions that we've asked a few times in the last couple of surveys that look at the period over the pandemic is, how the importance of marketing has changed. And what we see there is, we see consistent reports of increased importance of marketing during the pandemic. In fact, 72% of marketing leaders reported that marketing had increased in importance.

And a big part of that, as you mentioned, is the responsibilities that they've been given in the digital area. What we report in The CMO Survey is that marketing is responsible for digital marketing in 94% of companies. They are leading those efforts not the CTO, not the chief digital officer, not the COO. It's the CMO. And the other thing is, they have led the transfer-- the digital transformations in 73% of companies. So not only are they responsible, but they led that transformation in the majority of companies.

And so, you might ask, well, what are they doing? And what are some of the things that they've done? Two things really stood out from the surveys that we've done over the last year, and even this most recent one, which is that they were focused on building better customer-facing digital interfaces and also working to try to help transform their company's go-to market business models.

These are big strategic activities. Which, I think, has been really important for marketing to play a role. Because, I think, what happens is the way that we imagine marketing-- which I really like the title of your podcast-- and the reimagining of it, is that we need to think about it as a strategic function. That is the full benefit of marketing. If we think about marketing just as sales support, or promotion, or things like that, we're really not fully generating the value that marketing can bring to organizations.

WILSON RAJ: So that's actually good news. And so how are marketers sort of taking this new-found, I don't want to say notoriety, or newfound halo effect that they are involved. You know, pressures, are they stepping up to the plate? And then can talk about some of the other pieces.

CHRISTINE MOORMAN: Sure, so maybe good news and bad news. The good news is that during this same period we've asked how often is the senior marketing leader asked by the CEO, or the CFO, to participate in board meetings or earnings calls. Which, in a publicly held company, that is the upper echelon. That is the place where-- that's the seat at the table that the marketer wants, right. They want to be advising in those critical situations. Also strategically, but here, in these situations when they are managing this key stakeholder, it's important.

And what we find is that those average participation rates are a lot higher, actually, than I think most people would expect. 43% of companies say that marketers participate in board meetings all the time. And on a 7-point scale, the number is about five, where seven is all of the time, and one is none of the time. Now the numbers are slightly smaller for earnings calls, which you might expect, but they're still healthy. They're sort of average rates.

So, I think that's the good news. I think that the challenging news for marketers is-- it's really a story that challenges all companies going through this digital marketing transformation-- which is that there still is work to be done. That to really get the full benefit of the digital marketing transformation, we do need to move beyond offering non-integrated digital elements to fully institutionalize digital investments that really can drive marketing decisions all the time.

I think most companies are still stuck back at this kind of non-integrated stage. So, the work of the marketing leader, then, is going to be really an internal marketing job, if you will. To fully get the organization to embrace this big change. And to then have its tentacles reach all the way across the organization because that's where you get-- first of all, that's where you see that marketing really is a pan-organizational superpower. And second, that that's where you really get the full benefit of your digital investments.

WILSON RAJ: Right, this notion around those changing expectations around spend and marketing investments, I think your data points around the increase in the number of marketing leaders asked to participate in earnings calls, right, or board meetings. That's, again, a testament to driving that strategic digital transformation.

And that they actually -- it's funny because in the press, in the popular press, you don't, frankly, I don't see that a lot. It's always -- maybe the tune is changing -- but it's always sort of, oh, here's the short tenure of the CMO. The current one right now might be a little bit longer than whatever it was two years ago. But these encouraging results really show that marketing leaders are slowly but surely earning a seat. And you talk about the improvements.

I'd like to pursue one more line. In the past, we used to say the best buddies for the CMO, for her, it would be the CIO because marketing and technologies go together. And there's something that you said, there's now a new person and that's a new best friend, if you would, the chief financial officer.

So could you talk to that, in terms of that you talk about marketing being a pan-strategy, cross-functional. What are some of the things that you have seen in your research, anecdotally, in terms of that CFO and CMO construct? Although, rather than just, hey, I need to justify my budget. Does it go beyond that?

CHRISTINE MOORMAN: That's a good question. So maybe what I can do first is drop in one quick benchmark data point that I think marketers actually will find useful. It's probably the most-used data point in The CMO Survey, which is that we find that marketing spending is, on average, about 12% of overall company budgets. So, if you take the full company budget, marketing spending is about 12%. And it is about 9% of company revenues.

So, for marketers out there who are trying to get their handle on where they sit on that budget spectrum, those might be useful numbers. You can also go deeper into some of the firm and industry breakout reports where we say, OK, if you're a software company, if you're a health care company, and look to see what those budget figures are. But those budgets are-- they sort of, I mean, they fluctuate a little bit, but those numbers have stuck around for a long time now, for more than seven or eight years. So that's kind of one number that marketers can put in their pocket and turn to.

But here's the problem. And this is the problem that you are referring to, which is that marketers do get a lot of pressure from CFOs, and CEOs, to prove their worth. And the pressure is really not the problem. I think the problem is that these non-marketing leaders tend to focus-- they tend to think about marketing as a short-term effect. So, they look for the short-run effect of marketing spending, and they're not really patient for the long-run effects of marketing spending.

And so that's the job I think that the marketer needs to take on. They need to really embrace the opportunity to educate the c-suite on where they can provide value. And I think that part of that involves building a business case with the CFO that really does focus on those longer-term effects. And we did some additional interviews, both with Deloitte and with Google, on one of their big organ future studies. And some of the findings from the survey, together with those interviews, point to just maybe a couple of things that I'll point to.

First, having a real business partnership with the CFO, to think about that as a relationship, as you mentioned, that needs to be engendered. And that means saying, this is how marketing really connects to the firm's business strategy. And also, to meet with that person regularly, not just at big senior management meetings but outside of those meetings, to explain what you're doing, what is your hypothesis, if you spend in this direction what do you expect will happen.

WILSON RAJ: That's a good one, Christine. So, getting the CFOs buy-in into the marketing strategy rather than looking at it as like, all right, I need to justify to the executive. Here's my budget and then defend. It's actually to co-create with the CFO. So that's definitely a shift in mindset.

CHRISTINE MOORMAN: Yeah, that's a great way to put it. And one thing that can help marketers do this is to run experiments. These can be very small-scale. They can be on a website. They can be in a lab. You can do surveys-- sorry, do experiments in so many different ways. They're so very uncommon for many marketers. But they're a nice way to show, if we take this action, we see this lift over baseline because we have a control condition. So, running those experiments is really important.

And then finally, I think marketers tend to pay attention to-- and marketing leaders also-- tend to pay attention to those shorter-term effects that marketing can have. So, I think what we came to was this idea of creating a full-funnel view, that really showing the effect of marketing across the funnel.

So, you have to spend at the top of the funnel because you know that it's going to really pay off at the bottom. So, you see that longer-term effect on whether it's customer retention or customer purchase. To start with, customer retention, the value of the brand, all of those require that the company spends. But if you don't pull that thread all the way through the funnel, then how is anyone going to see what that longer-term effect is?

WILSON RAJ: Right, absolutely, so that long view. I think that constant pressure, especially public firms and quarterly earnings calls, where there's that short-term pressure, but then to have that long view and balancing that.

Just something popped into my head here. Are you seeing sort of similar strategies for both what I would call digital natives -- so like the Ubers of the world where they started digitally? That's their mindset and their whole business model, and the ecosystem is predicated on that. And then the others who were traditional and then have now digitized. Are you seeing similar kinds of behaviors? Or the digital natives, they have this pretty much locked and loaded?

CHRISTINE MOORMAN: I think the latter. I think because they've set up the metrics. The systems are set up so that they feed back into the decision making that's going on. I mean, this goes to one of the topics that I did want to talk with you about, which is metrics. And what we actually find, it's very surprising.

We find that when we asked marketers to rate a whole, I think, 26 different metrics. Like, how frequently do you do certain things. The top, the most used, metrics were all things like sales, revenue, customer engagement, digital, web, mobile performance. Those were highly used, which is great.

What was very weakly used were things like customer lifetime value, brand equity, even measures of brand differentiation. Things that should really be part of-- you should be measuring these things regularly so that you can actually, first of all, show what marketing is capable of. If you're not measuring these things regularly, how are people going to know where marketing is having its effect.

But also, it doesn't really-- it also hurts the ability to make the case for marketing spending. So, I think the idea that we need to expand the number of metrics that we ask-- I mean, these were used, for example, brand equity was the lowest of all of these metrics. Which is really surprising given what we know about the value of brands.

WILSON RAJ: Absolutely, and especially if 2020 and suddenly this, 2021, and I think moving forward into this post-pandemic world. Where that brand equity, the longevity of the brand, the transparency of the brand, all the things are critical factors beyond just delivering your products and services or engagement.

So, I think there's a huge learning, I think certainly in your research, around the most used metrics which are very near and dear to the marketer's hearts-- in terms of content, lead gen, conversions, those kinds of things, to something. And then aligning it from a financial measure to the strategic value-- speed to market, agility, you mentioned CLV, or customer lifetime value of profitability. And then drawing the comparisons.

So, I think the big takeaway here is that marketers need to convert marketing metrics to business metrics as best as they can and show the lineage, or the linkage to those things, upstream and downstream. And clearly some companies are doing better than others. But I think some of the things you outlined there are really helpful.

CHRISTINE MOORMAN: Absolutely.

WILSON RAJ: So just as we kind of talk about marketing growth, you also identify beyond the metrics there were certain behaviors that marketing leaders were doing. They were sort of that common behaviors that was helping to drive the marketing side of the business. But also, there are other less-common behaviors, just like the metrics you talked about. Can you illuminate us on that, in terms of how that maps into marketing growth and proficiency?

CHRISTINE MOORMAN: Absolutely, well, one of the things that I talk about a lot in my class is that I think businesspeople in general-- and I would put marketers into this group-- they tend to be sort of captured by their own industries. Which is fine. I mean, they do need to know what's going on in their own industries. But a lot of learning and a lot of growth opportunities can come from looking at other industries.

And so, what kinds of business model changes are these companies engaged in. What kinds of marketing activities are they engaged in. Where there's-- the company can learn from it and import it into their own strategy. I mean, historically, there's lots and lots of examples of companies doing this. But I think it takes time to step out and say, wow, what is this company doing that could have implications for my business.

There's a great example, the person who did the first rotating sushi company in Japan. We all know the-- I think it's YO! Sushi, is the very popular one these days. But this was in Osaka, the founder of that concept. Where did he get his idea? From a local Asahi brewing company where he watched the beer bottles go around on the conveyor belt. And it struck him that this was a way that he could bring some novelty to his shop. Now he had to transfer that knowledge from a very different area, from a factory into a retail, into a restaurant, but still.

I think the opportunity here-- there's many, many opportunities. So, I think keeping your blinders down is important. Letting some of those cross-industry opportunities seep in is really important. I think also, machine learning, using machine learning and leveraging it for growth is really important.

And we find that marketers really aren't using artificial intelligence or machine learning as much as they probably could. They're only using it about 11, about 12% of the time. They report to us in The CMO Survey. They expect that to triple to about 38% of the time. So, we ask them, in all the decisions that you make, how often are they being driven by artificial intelligence or machine learning. So only 38% of the time over the next three years.

So, I think the key thing here is that they think about where they can lean on their martech stack to identify opportunities for automation and augmentation when they're trying to personalize their customers' experiences because it shows that there's still a lot of opportunity there.

WILSON RAJ: Now, beyond some of the things that we talked about, what do you see emerging from your research around some of the drivers of what future marketing leadership would look like?

CHRISTINE MOORMAN: So, there's a couple of things that I can point to. One I just wanted to -- I think a theme for me for this discussion is that marketing is so much more than just creating short term sales. It's about creating valuable customers and creating valuable brands. And just one statistic that I've shared widely that I think is important is-- this was based on a study that we published in the Journal of Marketing.

And what these researchers did was, they created a portfolio of companies that scored high on customer satisfaction as measured by the American Customer Satisfaction Index out of the University of Michigan. And they compared that, basically, to just the market returns. And what they found is that over a period of about 14 years, from 2000 to 2014, the companies that performed, had the higher customer satisfaction ratings, were able to achieve a 518% return compared to the 31% return for the S&P 500 during that era.

So big picture, marketing really does matter in a strategic sense. And this is looking at the stock returns that are associated with companies. And so, keeping that in mind is important.

And maybe just two quick things that really stood out to me in the survey. One is this very surprising finding, which is that for the first time in a decade we saw that traditional advertising-- this is sort of like radio, TV advertising-- became positive for the first time in a decade. So, the last time it was positive, in terms of growth rate, was 2011 when it was 1.3. And then it's been negative growth over the last decade. It re-emerged as positive here in August 2021 when we measured it at 1.4%.

So, I think what-- it remains to be seen exactly why. My speculation is that marketers are finding that there's a lot of digital clutter out there and they're looking for ways to break through, podcasting, for example. I mean, you may have sponsors for your podcast. I don't know if it's just SAS or if it's other companies. But they need to break through, and so traditional advertising is one way that they can break through. So that's one topic that I thought I would discuss.

WILSON RAJ: Along with that, we've also seen more of that emotional empathy and caring as it's expressed to diversity, and equity, and inclusion. Not just in the brand but also in the way that you go to market. So, for example, in the finance sector, we've had some conversations with folks where, how do you serve the underserved in banking, people who don't have access, people who are in dire straits? And really help them along with advice, with empathy, with information, with guidance.

So, we're seeing that happen, and certainly in the CPG place as well, spots, as well. So, I think your research kind of touched a little bit. Can you speak to that? And is that also another element for the next level of marketing?

CHRISTINE MOORMAN: I think so. And I do have some data I can share with your listeners, which is that marketers, marketing leaders, report that they'll spend about 11% more, and-- they spent about 11% more over the last year on DEMM. So, it is something that's very salient to people. And we've asked these questions a couple of times.

We see a shift, which I think is really an important shift. We see a shift to where marketers were focused more on external things like communication and brand, which was more the primary emphasis maybe six months ago. This most recent survey shows that it's shifting to, more attention is being paid to things like segmentation and targeting, products and service design, partnerships, things that are more at the-- other aspects, other important aspects of marketing. So, we see that shift.

But there still is work to be done, as there always is. And so just two points on that. We find that most companies don't have very strong processes for making marketing decisions that send those decisions through a DE&I filter. So, on a 7-point scale, when we ask people to rate their companies, where seven is very highly, do they have this process, versus one, not at all. We find a mean of about 3.5. So, with fully 23% of companies say they don't do it at all.

So without that kind of filter, it's hard to correct decisions that are going to not be DE&I sensitive. And so, and also, we find that fewer, too few, companies have really changed their marketing strategy to reach more diverse customers. Again, on that 7-point scale, a 3.4. Companies just have not shifted away from their core customers to think about a more diverse set of customers.

So, we asked where's the bottleneck? What's the trouble? Why aren't you doing more? And there were two things that emerged. One was the difficulty of assessing the value of those DE&I opportunities. So marketers are worried about if they have that marketing dollar to spend. If they can't really prove the business value of DE&I, even though it might be the quote unquote, "the right thing to do," they have some concerns about spending that. They like to be able to prove the value.

But then the other part of it is-- and this is, I think, a real opportunity. It may be the basis of a whole other podcast, which is envisioning those opportunities. You know, like how do they-- how do they actually come up with what those DE&I opportunities are. I like the "serve the underserved" idea that you shared about banking. But how is it that those ideas are generated? I think marketers are struggling with that.

WILSON RAJ: You know, I think that, fantastic, this is really, I think, a great spot to kind of end on that note. And I think the big takeaway here, from your research, Christine, is that as the marketing function continues to evolve, marketers will be called on to provide even more strategic direction across digital investments, performance, and certainly brand building and brand value efforts. So, I think leveraging deep knowledge of a customer, certainly aided by technology such as data analytics, AI, helps.

But I think the bigger story here is really that mindset of experimentation, looking beyond your organization, or even the borders of your team, and then to be able to get that spark of innovation. So, thank you so much for joining us, Christina. It was great to have you on the show.

CHRISTINE MOORMAN: Thank you, Wilson. It was my pleasure.

WILSON RAJ: Absolutely. Now if you enjoyed today's show, be sure to head on over to sas.com/reimagin emarketingpodcast -- all one word-- to join in the conversation and discover our fantastic bonus content. Now you can certainly subscribe to the series on your favorite podcast platforms. Just search for Reimagine Marketing on your platform. And again, thank you for listening and joining us. We'll hope to see you again on another episode of the Reimagine Marketing podcast. Have a great day.

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Episode 7, Season 2: Rule the World with Customer Experience

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WILSON RAJ: Today, extreme consolidation and accelerated digital transformation is changing the global business landscape. To win, businesses must embrace agility and use automation to address customer needs. It's all about adopting a customer experience strategy that speeds decisions, reduces risk, and enables real-time customer engagements to stay relevant, valued, and in demand. Hi, I'm Wilson Raj and welcome to this episode of Reimagine Marketing Podcast, Rule the World with Customer Experience.
I'm super excited to have my guest, Ray Wang, founder, chairman, and principal analyst of the Silicon Valley based Constellation Research. Ray is an expert in his field. He is well known. He hosts a weekly enterprise and business leadership webcast called Disrupt TV that averages 50,000 views per episode.
He's also a prolific writer, authoring a business strategy blog that has received millions of page views per month. Ray also serves as the nonresident senior fellow at the Atlantic Council's Geotech Center, and he has been on countless stages and keynotes all over the planet. So, welcome Ray.

R "RAY" WANG: Hey, thanks a lot, Wilson, and finally I'm now on your stage. So, thank you for having me, really appreciate it, and glad to be on your Reimagine Marketing Podcast.

WILSON RAJ: Hey, it's fantastic because I know we do a lot of things together and it's always nice to see you in action and it's nice to actually, for selfish reasons, have you on this podcast to really have a great conversation on a lot of things you have done. But certainly I think your latest book, Everybody Wants to Rule the World. And I think I'm going to start there first, Ray. This book certainly is a timely read, the backdrop is certainly COVID-19 scenarios, it has digital transformation, but your thesis there is that that itself is not enough.

And as I kind of read through some of the reviews and the summaries, you have been really aligning around some historical narratives. Bringing in Alexander the Great, quoting the British military strategist, and he says time was his constant ally. He capitalized every moment, never pondered on it, and thereby achieves his ends before the others had settled on their means. That is JFC Fuller on Alexander the Great.

So, let's start there. What was the impetus and the main thesis for this book?

R "RAY" WANG: Yeah, taking a step back we started Constellation in 2010 focused on digital transformation. I wrote a book that kind of summarized the theses of the company, which was Disrupting Digital Business that was published by Harvard Business Review Press. That book laid out the groundwork for where digital transformation was heading. White data was such an important asset how people were building new business models.

So, in 2018 I started the process. They tell you to write the book after the book comes out for your next book. I forgot to do that. So, five years later, I'm like, OK, let's see what happened. We started looking at companies in 2018 to understand what was going on, 2019 we started to get some weird trends, and we realized that wait digital transformation, as you were putting, is not enough. Something is going on here.
We got a different class of companies that were exceeding expectations. And it wasn't just like, oh it was like one X or 2X. Let's put this in context. In 2017 Facebook, Amazon, Apple, Netflix, and Google, their market cap was about $2 trillion. And Microsoft. There were about $2 trillion. The Fangs plus Microsoft today their market cap is over 10 and 1/2 trillion. Never before in the history of capitalism, in the history of organizations, have companies of that size and scale quintupled.

WILSON RAJ: Yeah.

R "RAY" WANG: And so usually they get big, they get sloppy, they get lazy, they forget what sight of their mission is, right? They have a bad management team in the back end, their products no longer scale up, but in a digital world these companies completely changed the game. And so, the book starts out by talking about what are the elements of these digital giants, what's required to partner and compete with digital giants, what that lifecycle is going to look like, and of course how do we keep fair and free markets as we regulate digital giants.

WILSON RAJ: That's such a fantastic statement because you're right. Digital transformation in and of itself is not enough. Right? There are other factors. And I think there's a great concept that you have coined decision velocity. I love that, because you and I have been talking quite a bit, right, in our engagements around, and I quote you, "data to decisions," right? And now this term decision velocity really bridges and spans that gap. Can you talk a little bit about that and some examples of what you have seen in your really expansive research, not just for this book but I think really over your career?

R "RAY" WANG: I appreciate that. Decision velocity kind of works like this. You and I make a decision per second, but it takes us what a day to get out of management committee? A week? A quarter? Maybe a year? Right? It takes us a long time, right? And most people have that challenge. They're constrained by the decision-making capacity of an organization. Machines make 100 decisions per second, even thousands of decisions per second.

That asymmetry is what we're competing against. Companies that can make faster, more precise decisions on a consistent basis are going to win. They're going to create an exponential advantage by being able to do that. And to deliver on decision velocity there are a couple of things you have to do, and three of them are important. This is analytics, automation, and AI. We have to ask the right business questions.

That's where the analytics comes in. And sometimes the answers don't exist. We have to find sources. There are external sources, internal sources. And automation, because that's how we actually collect the data and the information and insights and how we actually scale up by bringing that information and collecting at a much faster rate. And then the last piece is the AI. That's the basis of the business graph. That's the basis of these new companies, which are these data driven digital networks.

These are the platforms, the 100-year platforms with multi-sided data networks that they're powering. And AI provides that capability to have the institutional memory to build the business graph, the intersection of a customer, an employee, a supplier, a partner, with an object like an invoice or an ad or an order or a request. And the context. Weather, location, time.

Thinking about your sentiment. Wait, what was your heart rate, Wilson? Were you smiling when you were at that engagement? Who were you with? All that data is being captured for future use so that they can anticipate what's next.

WILSON RAJ: Right. I think those three As, right, analytics, automation, AI, is really the fundamental crucible in which that decision velocity happens. And I really love frameworks like that because it really helps, I think business leaders and marketing leaders to really hang their technology stack on, their organizational structure, even measurement. So, we're going to talk a little bit about some of those things further down. And you mentioned business graph and I do have a specific question on that a bit later, too.
But as you see in your research and putting this book together, I mean, you came up with very surprising examples. And these are not the digital natives, per se. These were some old older, traditional brands that have really adopted those three As, analytics, automation, and AI. Can you speak to some of those? And maybe some of the surprising things you found in terms of customer experience and meeting consumer needs?

R "RAY" WANG: Yeah, we saw that. I mean some great examples where I think we use Phillips as an example. How they're using data to compete, how that data is actually changing the way we look at health care. Every device has become a sensor. We looked at companies like Honeywell in terms of their connected buildings and their ability to actually build digital twins of buildings and kind of deliver on that.
And we started to see other examples where people have built businesses that are on data. And I'll give you an example in terms of industries that are collapsing against data value chains. Communications, right? Telecom. Media, entertainment, software, and tech. They're really the same business today. We have a digital asset. That digital asset gets put out through distribution networks. Those distribution networks run on a technology platform.

And we basically try to build the biggest customer networks that we can. And you see that, right? Whether you're selling a game, music, a video, a live stream audio, enterprise software, it's really the same set of business models and monetization models. And that's why we see comms, media, entertainment, and telco collapse and come together.

WILSON RAJ: Right.

R "RAY" WANG: Retail, manufacturing, distribution, same thing. We're going to see that. Hospitality, health care, that sounds an interesting one. Hospitality, health care, and insurance? Well, those are really experiences. Right? And they're data driven experiences. So, we'll see more of these types of collapsing around data value chains and I think that's where people should spend some time understanding where upstream data, downstream data come together in the Cloud and more importantly, how that data is being used, consumed, or being able to be created as inputs.

WILSON RAJ: I think that's a really fascinating idea, Ray, around not just CX innovation within a vertical, right, or a sector. It's these multi-industries coming together as you mentioned in different combinations and probably there are other combinations that we have not even seen yet. And that is now the totality of the experience, right? And therefore, that data becomes that connective glue.

So, it's really, I think an important point for our audience to listen to. There's one thing I want to press on and you mentioned it so many times, and this notion in your book. You call it data supremacy, right? With analytics and automation as sort of accelerating and you talked about, I think you tweeted this and it's certainly in your book, that, “data is a foundation of every customer experience powered moment. Every company will have to be competing for data supremacy.”

So, can you unpack that? There's a lot in that tweet, in that sentence. What are some of those attributes that can be gleaned and be practical for our listeners?

R "RAY" WANG: Yeah, it's important to think about data. It's really about having that analytical mindset, asking the right business questions. Part of the challenge in most organizations is they only ask questions to answer as they have. And that works, right? I mean you want to know what your performance is, you want to know where you are in terms of profit margin and how many employees you have. That's great, right? Those are our answers you know. But let me ask you this question. Should we add 10 more people to the marketing team, or do we add one million to the budget? Which ones are going to have better lift and which ones is going to drive more revenue?

WILSON RAJ: Right.

R "RAY" WANG: Now you and I know we can't answer that question right now because we really don't know. And part of that is because we don't have all the data sources we should be putting together. And many times, we actually don't even know where those data sources are supposed to be.

But when we start asking those types of questions, we start getting closer to business alignment. And by getting closer to business alignment, we can start figuring out what techniques to apply and more importantly as well, what tools to apply. And so that's an example of where this is headed.

The other way to look at this as well is once you have that in place, we want to deliver on what we call precision decisions. And precision decisions are hard, right? We make exceptions all the time. We break rules all the time. And automation doesn't know that that's happening.

And so, if we can actually figure out how to augment that, reduce the number of false positives, reduce the number of false negatives, we can improve precision in that process. And we want to automate precision decisions because we want to bring this to a point where when we see a gap, we can actually improve the false positive, false negatives rate and improve the precision. And then we get to that concept we talked earlier about, which is decision velocity.

WILSON RAJ: Right.

R "RAY" WANG: How do we use that to drive decision velocity? And so, this whole notion of what you asked about, competing on data supremacy in that chapter and in that lesson learned is the fact that organizations that understand that data is their most critical asset are the ones that are going to win on data supremacy. And you apply, you get information to the Cloud, you think about the impact of data, and then you apply the three As of decision velocity, analytics, automation, and AI, and that's how you come to it.

But there is one more piece around autonomous enterprises. Is their time to talk about that?

WILSON RAJ: Absolutely, Ray.

R "RAY" WANG: OK. So, the autonomous enterprises are important because in every single business process we're going to ask four questions. When do we fully, intelligently automate something?

WILSON RAJ: Yeah.

R "RAY" WANG: Now I'll take you back to senior year in college. There was a class I wanted to take on a Thursday night so I could avoid a Friday class to make my major and graduate. And it was a class on the history of something like train accidents. Something like that. One of those kind of classes you're just trying to fulfill a requirement.

WILSON RAJ: It sounds rather esoteric there.

R "RAY" WANG: Yeah, it was very esoteric along with the history of the American automobile. But so, this class was interesting because in the history of train accidents it was the conductor was asleep, the conductor was drunk, the conductor was on a mobile phone, right? So, it was always human error that drove that.

Now when you go to an airport that has a self-service, automated monorail or connector between different terminals, do you see anybody driving that thing? No. It's fully automated. And in fact, not only is it fully automated, there might have been maybe a handful of recorded accidents ever with these kind of devices. And it's automation of a train. So, we have full intelligent automation today.

The second question that we ask is when do we augment the machine with a human? And that's where we start to train and pair these machines and that's where the false positives, false negatives also get looked at, because what we're trying to do is figure out where are the errors? Right? Why is something not perfect? So, 99% accuracy in manufacturing is not bad. We want a few more nines, we get that, right? You know, but 99% accuracy in healthcare would you take, Wilson?

WILSON RAJ: Yeah, I think not in this day and age, probably.

R "RAY" WANG: But your doctor is only 87% accurate. Right? So, we believe that the human is more accurate when the machine is actually more accurate. And we have higher expectations for machines than we do on humans. That's what we've just proven over and over again. But that's what happens when we augment the machine with a human.

But then we're going to augment the human with the machine, and that's different. That's where we democratize data. We give people the access. They make the insights. They jump in and they use that information to make faster decisions. And then at some point you and I going to trust human judgment.
So let me give an example. It's 2 AM, I'm checking into a lower budget hotel in the RDU area. I don't want to see the clerk. I want to choose my room. I want to tell them my preferences. I'm allergic to feather. And I want a late checkout and an invoice sent to me and a mobile key. I don't really want to see anybody, right? That's fully automated self-service in the back end.

But imagine if I'm checking in at the Umstead. I want to pull up to the driveway. I want the door person to welcome me. I want to smell the scent airburst. Oh, it smells like the Umstead. I want to see the flowers, right? I want someone to hand me a flute of something to drink and someone to greet me and say hello.
I'm the same person. Nothing changed. Right? And our ability to offload choices and friction when there's value or automate when it's more necessary, that's what's driving the future customer experience. That's what's driving how decision velocity plays a role. And that's where analytics, automation and AI come together.

WILSON RAJ: Right. I think this is really I think what you're building up to. With the decision velocity, right, with data as a foundation activated by those three As, is coming down to this notion of immersive, right, and what you call ambient customer experiences that's really delivered for mass personalization and at scale.

So, we did some research, we found that brands are really stepping up. In a separate survey we did recently, a pulse survey to Experience 2030, which is around the future of experience, around how they are accelerating their deployment of customer facing technologies such as AI, AR, VR, holographics, customer journey analytics. And we found that the cohort that was just – this was mid-pandemic that we surveyed – that 33% of brands are accelerating them and shortening those timelines by literally 24 to 36 months.

So that's not trivial. That's really huge. So, the question is this notion around ambient experiences. You know, there's mass personalization and then at scale. You know. Great to hear, but sometimes it may seem at odds with each other. So, as you did your research and from your findings and just your experience, how these two elements you know reconciled from an immersive, ambient experiences like the example that you talked about, what's the underlying principles or enablers to be able to do mass but then at scale on top of it?

R "RAY" WANG: Great point. What's happening in the world of ambient experiences, these are things that are happening in the background. They're being observatory, they're understanding what you're doing, they're applying relevance and contacts to make things happen. And the idea is that in a digital world every choice you make has a demand signal. It informs of what's going on.

And so, we actually see that the context plus the choices plus the ability to deliver an anticipatory analytics give people the capability to actually personalize over scale. That's the fundamental thing. But I'll take something even step back. Let's use a work example. Your return to work.

You come into the office, it's 2:00 in the afternoon, 27-point facial scan, gait analysis says, hey, that looks like Wilson. Not like you have a lot of skyscrapers where you are. But imagine you're working in a 50-story building, and you walk in into the lobby. And it's 2:00 in the morning, and you've been standing there for 20 seconds. They should actually send an elevator down. What are they waiting for? You don't need to push a button. There's someone sitting there, and they've come in through for 20 seconds.

OK, great. You swipe your badge. The digital exhaust and the digital footprint starts kicking in it says, hey, we think it was the guy on the 14th floor. Now we know it's the guy on the 14th floor because he swiped the badge. You get into the elevator and the console says, hey, would you like to go to the 14th floor? You know, your glasses a little VR chip in there and says, hey, would you like to the 14th floor? Your phone says, hey, would you like to go the 14th floor?

I mean, these are immersive experiences. It doesn't matter what channel you're in, it suddenly says, hey, would you like to go to the 14th floor? But wait, your boss. She's on the 48th floor and you've got a 15-minute window. And you could actually make it and set up a meeting with her. Would you like to meet up with your boss?

That's very interesting. Now there's a 90% probability you would have gone to the 14th floor, but now we've entertained another idea and there's a 70% possibility you might catch up with your boss who you've been trying to catch up with for the last three weeks. So, choice number two pops up.

But wait, there's more! There are free donuts on the 10th floor.

WILSON RAJ: Oh, that would be – I'd be rushing right there.

R "RAY" WANG: See, I'm learning. Your decision of choosing the donuts on the 10th floor was smart, but did you take those donuts back to the office, did you eat it yourself?

WILSON RAJ: Share it with the boss.

R "RAY" WANG: Or did you give it to your boss on the way up?

WILSON RAJ: There you go.

R "RAY" WANG: There you go. Share it with the boss, right? And that's the learning, right? And so, what do we do? We just walked through this. We talked about the fact that we digital exhaust, right? Then we figured out how we were going to deliver on a set of immersive experiences. Those immersive experiences didn't care what channel you were in, right? They basically took the context, they understood what was going on, delivered different channels.

Then we actually started delivering the personalization at scale. We had anticipatory analytics. I gave you a bunch of catalysts that inspired you to make a set of choices. If you took the choices, we had value exchange. Sometimes it's consensus, we had a meeting request. Sometimes it's an action, you forwarded something that's non-monetary. And sometimes you paid for something, it was a transaction.

And what we start studying is the cadence of those interactions, which we learn over time, we apply to our ML models, and we start bringing that process back in again. And we know what you did last time when you go back into the lobby at 2:00 in the afternoon, and maybe there's not a meeting request that's open, but maybe you'll take the free Bundt cake on floor three.

WILSON RAJ: Right. You know, I think you've really introduced I think just a very interesting model or a framework. When we talk about ambient and immersive experiences, most of the time it's more around at least from what I have seen really, connecting digital and physical. Which is definitely a part of it, and your example on this elevator experience shows that, but behind that there's a lot more. I think I love the context and choice and action and then predicated by learning underneath that where each moment this system is learning.

R "RAY" WANG: Yes.

WILSON RAJ: And then providing better options. More predictive, forward-looking kinds of choices for the consumer or the person to take.

R "RAY" WANG: Yes.

WILSON RAJ: So, I think that's really a new, fresh idea. So, appreciate that. There is one term, Ray, that you mentioned earlier on that I think part of this dynamic. You talked about brands or organizations building a business graph, right? Very much of how social networks have a social graph.

R "RAY" WANG: Yes.

WILSON RAJ: So, what does that mean as a brand? What are the aspects or attributes practically of building a business graph for differentiated CX? What the componentry there?

R "RAY" WANG: Yeah, the business graph is anything from the CDP on the back end, your ability to figure out relevance, your marketing intelligence, your customer intelligence, the analytics on the back end. But let's take a step back. Like social graphs and social networks, it's that interface, right, between the customer and a object and the relevancy on the back end that we talked about.

And when you build out the business graph, what happens is you're using the volume of information and the levels of connectedness that you have to other networks. What you're starting to do is identify patterns. Because what we're trying to do is go from data to decisions. Lots of data, lots of insight in the business graph, let's align them to something like a business process, incident to resolution, order to cash, campaign to lead, and what we want to do is start mining for patterns. And so, you need a lot of data in the back end to make this happen.

WILSON RAJ: Right so that becomes sort of a template, almost like akin to a customer profile.

R "RAY" WANG: Yes.

WILSON RAJ: But enterprise-wise for CX and then to be able to activate on that – merging, the technology, and the intelligence, and certainly the outcomes in terms of journeys and in moments. Have you seen, just on that path alone, examples of companies, big or small traditional or digitally native, that are doing those kinds of things particularly well?

R "RAY" WANG: Yeah, let's take a great example. I mean let's take Tesla, right? People like, oh, they're doing EVs and that's great. But at the heart of it, Tesla is a data company. Those cameras that are driving around or capturing location information, mapping data, the analytics behind your car behaviors, powering the future of Tesla insurance. Right?

You could get underwrited by Tesla because they've got better data than the insurance companies on your performance, on your safety records. Right? They're building electric grid management capabilities with not just your car, which is a source, and not just the charger or solar panels which is also sourced.

But also, what happens when you interact between the choices, right? What draws peak demand? What do ISOs have to do? Can you provide additional demand by rerouting what you put into the batteries? Right? And so, you can see all across the board how much Tesla is a data driven digital network. It's a data driven company and we're seeing them compete for data supremacy.

WILSON RAJ: Right. I appreciate it. Thank you. That's a great example. I'm sure there are others. I think what you said within that, there's a salient point. Tesla is a data company. And I think by definition, every company is a data company.

R "RAY" WANG: They just don't it yet.

WILSON RAJ: Right, to be able to succeed I think in this new world. Yeah, there's no getting way around it. Wow. For the audience, just to summarize, I think a couple of points, at the end of day, capturing data is really what allows long term success for customer experience in this very, very complex changing digital world.

To survive, really, brands need to rethink everything. You know, journeys, experiences in the way that you talked about, right? Anticipatory, immersive, but yet having that business graph to be able to optimize those linkages between the data, the technology, and certainly the whatever, the experience interface.
And of course, the automation and the AI that helps empower that, that's a great summary. So just before we wrap up, you are a person. You're just prolific. You're thinking about these things. So, I'm just curious, and I'm sure the audience is also curious as to what other topics are you researching or pondering about that are taking brands from status quo to become the market leader or market disruptor? What are the other concepts that's buzzing around your brain that you think you want to maybe write another book on?

R "RAY" WANG: So, if I were to write a book today there are two book ideas I would do. One is more tech related. The other one's a little bit different. The tech related one would be about the metaverse economy, or DeFi, decentralization, where new digital worlds are going to play.

The gap between the analog physical world and the digital world, how do those interfaces and interactions occur? And of course, how these transactions are occurring with blockchain DeFi. With what's happening with cryptocurrencies and new types of coins with NFTs and what's happening with the representation of digital assets. That's where we see this future on the metaverse economy.

WILSON RAJ: Cool. Well, we can't wait for that. And in the meantime, I would encourage our audience to pick up your book. Ray, any tips there?

R "RAY" WANG: Yeah.

WILSON RAJ: Everybody Wants to Rule the World. And it's not the Tears for Fears song. And by the way, I had a quick question on that one, Ray. Did you have to get permission from those guys or?

R "RAY" WANG: You actually don't for book titles, but we do—

WILSON RAJ: OK. I was wondering about that.

R "RAY" WANG: If Curt Smith is listening around, happy to sit down with you, catch up, maybe we'll bring you in to actually do a cover live or something fun. But yeah.

WILSON RAJ: That would be something.

R "RAY" WANG: That would be awesome. So. But, hey, tips on the book. Really simple if you're building a digital giant there's five lessons learned. Here's the cliff notes. Disintermediate the customer account control, build the biggest network, compete for data supremacy, figure out digital monetization models, and play the long game. That's how digital giants work.

WILSON RAJ: And there you have it, folks. Great spot to wrap up this discussion. Pearls of wisdom there, but I would encourage everyone to get the book at your favorite bookstore. That's it for this week's episode of the Reimagine Marketing Podcast. Thank you, Ray, for joining in.

R "RAY" WANG: Thanks a lot, Wilson. Always a pleasure.

WILSON RAJ: Same here. Now if you enjoyed today's show, be sure to head on over to SAS.com/reimaginemarketingpodcast – all one word – to join in this conversation and discover more fantastic bonus content, you can obviously also subscribe to the series on your favorite podcast platforms. Just search for Reimagine Marketing. So, stay in touch and share your topic or guest ideas by also emailing us at reimaginemarketingpodcast@sas.com – all one word. So, till then, don't forget to join us for another episode. And thank you for listening. Have a good day.

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Episode 6, Season 2: People-First Approach: How to Implement Successful MarTech Rollouts Around the Globe

STEVEN HOFMANS: Hi there. And welcome to the SAS Reimagine Marketing Podcast. My name is Steven Hofmans. And I will be your host for today's session on how to implement marketing solutions across the globe. During this episode, we will try to answer questions like, what are best practices to share knowledge during a rollout? When should you centralize or decentralize a part of your marketing organization? How do you infuse and scale innovation? And how do you measure success of such a rollout? To do this, I have invited Geert Moens.

Geert has gained extensive experience in the world of marketing, first as a CRM consultant, and later on as a program manager for Digital Worldwide at Atlas Copco, making him for me, the perfect sparring partner to share key insights on what makes marketing solution rollouts so successful. Welcome to the show, Geert.

GEERT MOENS: Thank you. Thank you, Steven.

STEVEN HOFMANS: As you know, every guest that comes to my episode has to bring a quote. So, what is your quote? And why do you find it important?

GEERT MOENS: OK, Steven. Yeah, for me, people aspects are the most important aspects. So, the quote I chose is related to that. So, people are key to value. For me, it's always about people. You can choose the right technology. You can implement it in the right way. If you don't have the people on board to deal with the process and the projects that you have, it will always be a failure. It will never get the results that you can reach with the right people on board. So, for me, people are key to value is absolutely valid for everything you do under marketing.

STEVEN HOFMANS: And what do you do? Do you first get the people on board and then choose the technology? Or the other way around?

GEERT MOENS: I think it's a little bit a combination. Most of the time, I think it's first, you choose the technology. Then you choose about the approach that you want to change, and the people comes most of the time latest in the picture. But it's very clear that whenever choosing a technology, it already starts with the people – the sales guy of the technology provider that cannot motivate people internally, that is not the trust of the organization, will never manage to get the solution on board. So, I think it starts on all the levels that people are key.

But the key, the people, that will have to do it at the end, are most of the time, the local country people, the people that are really working in the organization. And these ones you do not always choose. And these are already in place doing other topics and whatever you bring in, will have to come on top of their normal daily activities. So, a big part of the key of the people aspect is indeed training the people, changing the mentality of the people, and preparing them for the new challenges that they will have. So, it's a bit a combination. For some aspects, you choose the people first. But in most of the cases, you have to motivate the people to join your initiatives.

STEVEN HOFMANS: So, I retain really from this, people and trust. I think, trust what you emphasize, trust it starts at the beginning with the vendor and the technology vendor all to the end of the people. And having a common ground on trust is actually also key for having success.

GEERT MOENS: Absolutely. It's definitely one of the things that I believe in strongly, that the trust of the people is key to build a good team, to build a good atmosphere of the things that you're doing. The trust in the people is very important. It should go bottom down. The people should trust the messages that you bring, that you have thought about it, that the plan is right.

But also, the opposite way, around the moment, you give the people the authority to do things on their own level, that you trust them, and that you give them the guidance, and that you let them go, and that you believe that they will do the things that they are supposed to do. So, trust is indeed key on all of these aspects, during the whole implementation, but also during the rollout afterwards.

STEVEN HOFMANS: OK, thanks. Great insight, great insight. Thank you. So, I went a bit to look at your profile. And I looked at your resume. And I noticed you have been working in digital and CRM programs since 1998. For those who can't remember 1998, it was a time that we were running with CD-ROMs to install software on computers. And USB sticks and flash memory cards weren't invented yet. I mean, during your career, I think yet you have seen really a digital revolution. And I was wondering, through the course of your career, how has marketing changed according to you?

GEERT MOENS: Yeah, it has changed a lot in these years. But the key always has come back. I started as a CRM consultant at a certain moment in my career. And at the end, it's all about putting the customer first. That was definitely the statement. Put the customer first at that time. It was with limited technology comparing to what we had today. Limited insights, you had to build and believe that it was the right way to focus.

And also limited surveys, whatever is the result, there were not a lot of examples of companies that did focus on customers in the right way and got great success with it. There always were cowboy stories about, yeah and that company has done it great. But it was not always clear that what was the key for the success in the different companies. But putting the customer first is important that they want. And is still an important aspect of today.

The focus has been changed. We have a lot more insights. We build up a lot more insights. Now it is all about personalization, about marketing automation. Use the knowledge that you have about your customers. In the old days we could only dream about that. We knew a lot about the customers. But using it on the right way, on the right spot, was a very difficult situation. It's also about what you share with your customers is also a lot – completely different. In the old days, it was a one-way direction. We communicated to the customer and hoped they would respond. These days with social media, with a lot of focus on interactions on your website. There's a whole new world opening in customers showing what they really want, customers being involved, what they really want. And it's more and more important to differentiate on these kind of aspects. It's not good enough anymore to just share information.

Whatever you do, you need to make sure that you create a kind of an experience for your customers and that only goes with bringing that extra service and extra experience that the customer is referring to. So, it's really a lot more difficult these days to have your product that's important, to have your services. But also, to bring them in a way that the customer sees added value for them. So, I see a huge evolution in the last, these 20 years from one direction communication into a completely double interaction.

And in all the knowledge that you have, if you don't use it anymore today, you look like a fool to your customer. If he raised a complaint, and half an hour later, whoever contacts that same customer and has no clue about that complaint, is making himself a fool. People are not accepting that anymore. You don't accept that for every service that you buy for yourself. So, for the services that you deliver as a company, people are just not accepting that anymore.

And that for me is a very big, big change and a great evolution, if you look it from the right perspective. Yeah, customers are much more empowered than they were today. And I hear everyone saying that. But it's really the case in everything you do.

STEVEN HOFMANS: And that's what is interesting. Atlas Copco is coming, it's a manufacturing company. And even in manufacturing, you see the trend. So, what I understand is that it used to be more about advanced communication and pushing actually more advertising-related communication. It has totally changed to data-driven marketing. If you're not in data-driven marketing today, you're actually making a fool of yourself. That's what I understand from the conversation.

GEERT MOENS: Yes.

STEVEN HOFMANS: And when in the program, right? You worked 18 years at Atlas Copco. When did you start implementing this change and making a first digital move at Atlas Copco as a program manager?

GEERT MOENS: Yeah. The first thing Atlas Copco, I worked a few years on a kind of distributor portal. And then afterwards, I took the responsibility of all the websites of Atlas Copco. That was the first project where we initially launched all the website from a global approach. Before that, every website had a local team. Difficult to manage, difficult to maintain. We start approaching it from a global level.

So, we did. And we pushed on a kind of web content management system all over the world to all the different countries. But at that moment, it was seen as high technology, because it was multilingual. It was also looking a lot on SEO. So it was, for these days, it was really the way to go. We were very early in the process in Atlas Copco.

But afterwards, you saw that the world is completely changing. There were always new things coming on top and new aspects. Products became more important. E-commerce became more important. At a certain moment, and I don't know exactly what time it was, also the more analytical, analytics were always there, but in the beginning it was just have some statistics.

But at a certain moment, the role of analytics became more and more important. So actually, when that switch happened, it's for me very difficult to mention. But we saw step by step, more and more focus on the analytical part, more and more focus on the marketing automation aspects, more and more initiatives on personalization.

I am not saying that in Atlas Copco, all of these are already in place and are already implemented. But you saw the initiatives going. You saw the interest going. And in a big company, it's also nice to try and eventually fail, if there are things. If the company is, there is the power and the capabilities to try out something in one country, in a few countries, and then see ah, it's not yet a success, we wait for it. And we push it. And we see later how it works. So, you really have that possibility. I'm not sure that it was used to the optimal level. But the possibilities to experiment with certain aspects are definitely there.

STEVEN HOFMANS: So, the first phase actually at Atlas Copco was making sure that there is one global brand by standardizing the websites, and making sure that whatever website that you would visit in the world it would have the same feeling. And once actually that standardization is done, and you have one unified brand, actually your next step was to start implementing more personalized approaches towards your global customers.

GEERT MOENS: Yes.

STEVEN HOFMANS: Is that correct?

GEERT MOENS: Yes, that's correct. The first initiatives were also purely financially driven. Rolling out a website in the country has a certain cost. Moving it to the global level has a much lower cost. In the beginning, it was mainly also driven by financials. What can we do for the money that we have? So, in the beginning, it was really focusing on the budgets and doing a return on investment for every initiative that you take. At a certain moment, the focus was more and more towards the experience of the customer. So that's indeed an evolution that you see in a lot of countries. Yes, in a lot of countries.

STEVEN HOFMANS: So, actually, cost was the main driver to change things in the beginning. And now it's really about, OK, we see that experience of the customers becoming more valuable. And it's not always tangible probably, to measure what the value is when you give a good experience.

GEERT MOENS: Yes. And in a big company as Atlas Copco, we also have quite a lot of – yeah, every country is different. You have a lot of countries. And also, you have a lot of brands. So, there are brands that position themselves on the highest level in the market and position products that are higher standards of the Atlas Copco products.

But they were also that were more for the lower for the more common functionality. So, you had different brands. You had different countries. Each of them has a different approach and a different need for their marketing. There were countries that were not as mature as the other ones, so they really wanted to do the basics, while there were countries that were state-of-the-art on a lot of functionalities. They wanted to go really far. So that balance you have in big companies as well, the speed of the countries is absolutely not the same.

And in Atlas Copco, it was even made more complicated with the number of brands. There were quite a lot of brands. And each of them had their own marketing approach. Some of them focused on distributing. Some of them focused on direct customers. Some of them on the combination. So, it is a really complicated setup and landscape to deal with that. And one of the keys, in my opinion, was to listen to the countries, and listen to the brands, and to make sure that they can do the things that they really make see for themselves as differentiators.

STEVEN HOFMANS: That's what I find very interesting, because what you actually describe, it's a very complex landscape, right? It's global. It has different kind of views for every kind of market. So, are you being responsible at that time for the rollout of a marketing automation package? Where do you start? If I'm tomorrow becoming the program manager of a global company for the rollout of a solution, where should I start? What is your experience as a program manager to make a good start?

GEERT MOENS: Yeah, I had the advantage to start when there were not that many expectations. So, a lot of the things that we did were new. So, when you start rolling out something that no one else has tried, then you learn on the way. You learn on the fly. And that's one of the aspects that is maybe an interesting focus point. But you learn a lot on the fly, on the road.

So, you see that despite the fact that every of these new technologies is different, and every of these has their own key differentiators to make it success or not, it is still a certain pattern that comes back. Trial and error, correct fast, listen to the people, see what works, try to read about a lot about these kind of initiatives. So that was the key how we did it.

If today you start with, in a big company completely from scratch. I don't think it's always from scratch, because they have a backlog of initiatives they already taken, some of them successful, some of them less successful. So, you take a certain reputation with you of things that you have to overcome. So, making sure that the onboarding everyone is, I think even these days, more important than years ago. So, make sure everyone is on board of the initiatives that you want to do. And make sure that there is a lot of room for potential enhancements. You learn on the fly. You learn step by step. So you have to make sure that there is enough room for incorporating what you learn during the process. STEVEN HOFMANS: And do you start with, for example, a smaller country like Belgium? Or do you go immediately for a big fish like United States or Brazil? How do you choose where to start? It's not an easy one.

GEERT MOENS: No, it's not an easy one. It's not an easy one. Yeah, whatever you choose, there's always a risk involved. If you start with a country that is too small, and it is a success, then they say, yeah but it works in a small country. But it's not applicable for a bigger country. If you start with a bigger country and it fails, then it becomes a problem as well. So, I think it's a wild guess that you sometimes do. You try to look for the countries where you have a trust in the people. It goes back to the trust. So, where you trust the people that you say, OK, whatever you do, they will listen to the advice that we are presenting.

I can tell you, in all these years, there were countries that promised to do in a certain way and never delivered. There were also countries that you never heard about them and were a pain in the arse until the moment they start delivering in a way that you said, I've never seen this in the company before.

So, it's a little bit about trust and knowing your network of people. And yeah, it's a guess. I could say it's a guess. There is no best approach. The only thing is what works to limit that risk is to balance out, is instead of in a company as Atlas Copco, you have to roll out to 180 countries. So, whatever you do, if you start one by one, and you do have one country every three months, it takes you, yeah, you're going on your pension for every project you do. So that you cannot do. So, you have to make sure that you roll out faster.

So, I would also say in the example, that most of the time we took a bunch of countries. We took a few countries, and a bigger one, a smaller one, et cetera. So, you combine a few countries. And then you roll out to these countries. But it's a risk. It's a risk. It all depends on good luck and good guidance of making sure this it is a success. But it's always a risk.

STEVEN HOFMANS: And when choosing countries, when doing this, what are typical caveats that I need to take into account? What are the booby traps that can be laid out when rolling out a program globally?

GEERT MOENS: Yeah. I would definitely say the practical things. Make sure that you focus on taking countries in the same time zone. Taking countries in the same language. Taking countries in, with the same, a little bit same principles. So, but don't take the most extremes. Don't take a country in three languages combined with a country where they hardly speak any language. Don't take a complicated brand together with a simple brand.

So, try to find a good balance, that it is practically that you can explain everything. If every country has a completely different way of working, then it will be complicated, because you're still learning. And you cannot focus on changing everything at the same goal at the same moment. So, I would definitely say, focus on making it easy for yourself.

I remember a situation where we rolled out a training program. And in four weeks' time, I had to travel during three different time zones. Afterwards, it's fun. I'm not saying that. But afterwards, you have to recover for a few weeks, because you're dead tired. So, I know it's a bit, it looks a bit stupid, but keeping in mind that the people that has to do it still have a life and still have to survive whatever you do, is very important. So, I would definitely say, if you choose, be very pragmatic. And make it easy for yourself, for the people that have to do it.

STEVEN HOFMANS: So, key really is finding similarities between countries that are more or less similar, equal?

GEERT MOENS: Yes.

STEVEN HOFMANS: And taking into account both cultural aspects as well as company or organizational product? Say, you said from a product view they need to be, or a brand view, they need to be kind of similar. But also, from a cultural point of view, they need to be kind of similar. Otherwise, it's hard to get success.

GEERT MOENS: Yes.

STEVEN HOFMANS: Actually, when working with these different countries. We also discussed that every country has its own opinion. Some countries are small. Some countries are bigger. Then from a corporate point of view, everybody wants to centralize everything, because that brings efficiency gains.

But decentralization is also these efficiency gains, because they maybe better know the local culture and market. So how do you decide when to centralize something? When to say, we are going to centralize the marketing department, for example, and this program for those countries? Or to say, we are going to decentralize and say, OK, in this matter it makes sense to have a decoupled organization and to sell at your own course.

GEERT MOENS: Yes. Yeah, of course there are multiple ways to deal with that. But what I have good experiences with, is to be, again, a little bit pragmatic and split in different categories. So, you take, there are countries that definitely have not the capacities to do anything. There are countries that are in a process, that they are maybe capable of doing something, but maybe not have the maturity to do it, but are probably interested to learn. And there are countries that are definitely saying, yeah, we are more than capable of doing it on their own.

So, you split them. You take an approach that handles these three different types of countries. And then it's a matter of who do you find, what countries in what category. And what we most of the time did was based on some figures. How many articles that you create? How many initiatives have you taken in the past? How many people do you have in the team? And create a kind of list.

Five people, ah, you belong in the top category. Three people, you belong in the middle category. No person, you belong in the lowest category. So, make a kind of a split based on some basic rules. That's the theory. And then you inform everyone about the category that they’re in. And then the negotiation process starts. Some countries think, yeah, can you push us in a different category? And we are not capable of dealing with that. Can you not lower us? But if that's the key country, then you don't want to lower them.

So, it's a matter of negotiating with each country in what category they belong. Also, a very important motivator is the cost. And I don't know, maybe it does not make sense at the first sight. But the higher in the category you want, the more you have to pay globally to participate. So, a country that wants to do everything on their own, you charge them higher prices than the countries that are lower in the market, because you believe if they can put the effort on the local level to assign people to focus on it, the return on investment should be higher. So, they have also a part of that profit should also go to the global program to make it affordable for everyone.

So that's also an aspect that you look at. The more authority you give, the higher the prices are for that authority. So, it makes a bit, it looks a bit contradictory, but that's really the way we handled it in Atlas Copco, because to make sure that…

STEVEN HOFMANS: You buy your autonomy.

GEERT MOENS: You buy your autonomy, yes. Actually, yes. And of course, you give a global services link to data. If a big country pays a lot higher, you give them a faster response on ‘in case of emergency’ tickets. You make sure that every automated monitoring is focusing on their country. You make sure that the process of supporting them in their process is as good as you can deliver for all the countries. So, there is a certain trade-off on the price.

But actually, it's the local country that decides, yes, I want to do this on my own. I believe in this functionality. I believe in this aspect. I pay for it to make sure that I can implement it on a local level. And yeah, of course, if it's about cost, it's always about negotiation. If there is a crisis and countries come back and say, yeah, but we paid so much the past years, can we not negotiate? And in a few years' time, you see a country growing. And the general manager sees it as a next step on the level to success in the Atlas Copco world to make sure that they can also level the digital aspects to a higher level.

So, they actually want to get in that higher level automatically as well. So, it's a very tangible and political discussion. But it worked, I think. If you don't have that pricing and that cost aspect, people will just, all of them want to be in the top category. And most of them probably will not be able to deal with that. And if you buy that pricing, people really have to motivate and really have the effort and make sure that they bring the added value for their local country, but also for the group in total.

STEVEN HOFMANS: You talked about that you use kind of parameters. And you looked at past success they had.

GEERT MOENS: Yes.

STEVEN HOFMANS: With different programs. You talked about the size of the team. So that makes me kind of wonder, how do you measure your success of a program? Of your program globally? And how do you measure local success? What are good parameters to look at when rolling out a technology, like a marketing solution? What are good parameters to look at success? And how have you been evaluated, actually, on that success? How does a manufacturing company look at that?

GEERT MOENS: Yeah. That's a difficult one, because success is not always purely a return on investment. At the end, if you do digital initiatives, you want to sell more. That's the key element. But it's very difficult to see the result of your initiatives you do. During the past years, we have been more and more implementing result-driven initiatives.

So, lead generation, for example, was something that in the past was not really – there was always lead generation on your side, people could send a request. But the last few years, lead generation has become really a topic that is followed up on an almost daily basis. How many leads do we have? And what do they bring until the end of the results?

So, following the chain from a customer trying to look for something, until the customer actually buy or not buy the products. That lead generation was an important measurement for success. But that is an aspect that we only focused on the last few years, because before that, it was not available.

So, the average success was probably on the parameters that were not always the most relevant. How many visitors do you have? Do you see an impact of the changes you make on your website? But actually, 100% measuring return on investment of your customers to the digital initiative was, and is, still very difficult for bigger companies.

But it doesn't make any negative aspect on the fact that it is important to measure. There are definitely initiatives that you can do. And you can perfectly imagine and put some initiatives towards your initiatives that you do.

I give an example. If you improve your website on look and feel, then you can definitely measure, what is the experience of the customers on that? What is the satisfaction level on the customer? And a better website, a nicer website, does it automatically return in more product sales and more service sales? That's more difficult to measure. But it is any way possible to make your local goals and to compare your goals with the goals of the other countries.

STEVEN HOFMANS: Was there ever a look at, for example, what we call usage metrics? Because some of the metrics are sales driven, which is indeed high level. But you, being a program manager of that digital rollout, that you looked at the volumes of campaigns that were being used, the amount of user adoption of a platform, more customer success metrics. Were those also part of the program to evaluate it? Or was it purely looking at revenue?

GEERT MOENS: No, no, no. We also did this more user-based figures. I know one of the communication managers in Atlas Copco that had problems selling his new ideas into the company. And he made it 100% result driven. He said at a certain moment, if I do this initiative, and I bring in so many more visitors, so many more. And he put really criteria on his list of objectives, if I manage to reach this, do you automatically give me approval for my next initiative? And he started doing it that way.

So actually, negotiating at the first start, I will give you these results. You give me the next time the budgets again. And I like that aggressive approach. It's a little bit assertive on some aspects. And it's also – but he takes responsibility. And I like that approach. I like the fact that he dares to take the responsibilities and links it to results. So, he says, if I can make the return on investment, on the key parameters of success of my project, give me the possibilities to do it again. So, I really like this kind of approach. Do something. Take responsibilities. And also, deliver them afterwards. And that could be the restarting the circle.

At a certain moment, we have tried to implement that on a global level. Of course, it is very important to put whatever you do, is to put some results into your key performance of the year. So, if you're a communication manager, it is good to link success on the digital aspect, success on the website, into your yearly objectives. In Atlas Copco, everyone had personal goals for their task. So, link it to the goals so that you have your bonus linked to it. That's always a good way of dealing with it. So, I always like that.

People are awarded in their bonus for the initiatives that they support and the success that they have. But that's also something that on a global level, you cannot offer that to everyone. You can propose that to the countries. But that authority on global level is not big enough to push that into everyone's goals for the next years. But of course, in some countries I did it. And I think it works for everyone. What is measured and what you get rewarded for, you focus a lot more on it. So, if it gives you that extra motivation to do it in the right way.

STEVEN HOFMANS: Awesome. Awesome. I'm coming to my last question of the session. And imagine that my job is done, and 12 months after implementing, the whole project falls apart. And it's a complete failure. It happens, right? Not every story is a success story. So, what are, me being the program manager, what are the potential things I've missed?

GEERT MOENS: Yeah. Of course, every case is different. But I think that, and this is a very dangerous pitfall, is that it only starts with implementing. So of course, you need to have your goals and your objectives. But most of the time, the projects are very tricky the moment they are implemented. You get a lot of attention. You have the momentum in the organization. And at a certain moment, everyone drops out. So, the people going back to their own desks, and going back to their own jobs. And that's always a risk that you have, that people are not continuing the actions that you are initiating. It's always a tricky situation.

And I think that most of the projects that will fail after a year, they will lack for continuation. I think that's the most difficult in bigger companies, to, after the project, becoming a real program, and making sure that the programs are followed up in a good way. There is no magical solution for that. Every project is, every situation is different.

But I think the only way is to create the kind of community. I think it’s, make sure that people are continuously talking about it, focusing on it. But linked to results, if the first few months you don't reach the results, then it comes a negative atmosphere about your project. It's a lot more difficult to correct it afterwards. So, I think you need to be very sensitive for the internal feedback that you get about certain solutions. If it is not a success because you just don't reach the goals, then yeah, then it's maybe not bad to stop the project.

But if it is not a success because the company has not put the right efforts in it, then maybe it's a missed opportunity. So, I think it's always a matter of evaluating that in the right way. I hope that in bigger projects that you start in a way with the possibilities to roll back or to stop when it is not a success. So, start with a kind of pilot thing to avoid that bigger failure at the end.

I know that some people refer to it – try fast, fail fast – something like that. But I don't like that fail aspect in the sentence. I think it's more a matter of keeping that in mind upfront. If you're focusing on new technologies, people have to accept that you try something. And you evaluate success afterwards. But I understand if it's a successful pilot, and then you roll out globally afterwards. And it becomes a failure for the rest of the organization. Yeah, then it will be anyway successful in a few countries. And then you can let the bigger countries that for which one it is a success, you let them continue. For the ones that it is not a success, you let it slowly go down. You let it stop slowly. And then you see afterwards what happens.

Maybe in a few years' time, there is the market again. And it's ready for that new initiative. Maybe it never will come up. I think it's in the global world with all of these local different cultures, et cetera. I think it's normal that not everything will be successful in all the countries.

And I think companies need to be a lot more aware of that aspect and be a lot more open for that. But I know that if you're working on a project like that, it's not nice to spend a year, one and a half year, or two years, maybe on a project, and then see that half of the world is not ready for it. I think people will see it as a personal failure.

And sometimes maybe it is a little bit linked to the person implementing it. But in a lot of cases, it's linked to circumstances. So, it's a tricky situation. I don't want to cope with that too often. But it's, I think – and in these kind of things, I think communicating transparent about the risks of the projects, about the things you need to do to make it success, are important.

I think that a mature project manager in this case would look at the risk, would communicate about risks, would come at a possible failure upfront, and then do his best to avoid the failures. But it's a tricky situation.



STEVEN HOFMANS: Thanks, Geert. Thanks for sharing your insight. It was again, a blast of an episode for me. I learned a lot, right? Trust. Everything starts with trust. I think trust is important in the beginning, from the vendor to execution. I heard the word value. If your project is valuable, right, it will keep on living on. And it's not because two countries fail that the project is a failure. You learn something. The countries that have implemented and are successful, they can go on. And with the countries that remain, those you can try new stuff. So that's very interesting. I would like to thank our audience for listening and hope to see you soon again. Have a nice day. Bye.

Ep. 5: Match MarTech with Customer Experience Goals

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WILSON RAJ: Today, modern marketing must harness the full capabilities of the business to provide the best customer experience. Delivering on this promise requires a whole new way of operating. Marketing departments need to be rewired for speed, collaboration, and customer focus. It's less about changing what marketing does and more about transforming how the work is done.
Hi. I'm Wilson Raj, and welcome to this episode of Reimagine Marketing podcast, "Match MarTech with Customer Experience Goals." I'm joined by my guest, Scott Brinker, who is the editor of the renowned marketing technology blog called Chief Marketing Technologist, and he's also the VP of Platform Ecosystem at HubSpot. Welcome, Scott.

SCOTT BRINKER: Hey, it's great to be back here with you, Wilson.

WILSON RAJ: Absolutely. I have to say, the conversation that we had-- and again, for the audience, if you're tuning in, you can certainly check out a previous conversation that Scott and I have had around martech, the perils and promises of martech. So check that out.
Again, I think there's so much there that I think we just wanted to unpack a couple more questions around some of the topics we were discussing. So we're ready to roll.

SCOTT BRINKER: [LAUGHS] Let's do it. Martech awaits.

WILSON RAJ: Absolutely. We'll dive in. And most of the audience would know about the marketing landscape. Of last count, we have in excess of 8,000 marketing solutions or applications or apps, right? It's just mind-blowing. You're absolutely right. You once said, homegrown martech is like homemade pizza. I love that.
So given what you've seen in the last five, six years with your landscape evolving and then exploding, what do you make of that statement now? Does that still hold true for you in current build versus buy conversations?

SCOTT BRINKER: Yeah, the whole build versus buy debate, it certainly isn't limited to marketing or martech. But it's interesting, because 10 years ago, for those companies who were really pioneering digital marketing, the truth was there wasn't a lot of commercial technology available for this. And even the technology solutions that were there, I mean, they were limited in the boundaries of what they delivered. And so a lot of the pioneers, particularly for larger companies, simply invested in saying, well, let's build out our own technology to do this.
Now over the past 10 years, as you referenced to the martech landscape, exhibit A, we have a plethora of off-the-shelf commercial martech solutions to draw from. And so that was where I kind of made the remark a few years ago of, like, OK. Well, making your own martech at this point, it's like making your own pizza. I mean, yeah, you could, but why? I mean, you pick up the phone. It's the hot, delicious pizza on your doorstep in 30--

WILSON RAJ: And you can add pineapples on top of it, right?

SCOTT BRINKER: You could if you were, you know, wanting to--

WILSON RAJ: Or not.

SCOTT BRINKER: I'm not going to attack pineapple choices on pizza. [LAUGHS] To each their own. Live and let live. But the reason I actually raised this up in a recent post on my blog is because it's not that simple anymore. And the reason it's not that simple is because there's still truth to the fact that you probably do not want to be reinventing the wheel. You don't want to be building things that from a comparative advantage perspective, it's just much easier for you to buy off the shelf.
But the difference is we are now truly going through digital transformation where companies are not just having pieces of their organization being powered by digital technologies. The whole organization is becoming digital. And the way in which we engage with our customers, our products and our services either are entirely digital. Or even if they have real-world elements, they're now serviced by a layer of digital technologies to support that.
And the truth is at some level, you get to a place where the customer experiences you're building, the digital products you're building, the behind-the-scenes workflows that you create to deliver those products and services. They become unique to your business. You can't just buy it off the shelf, plug it in, and it just automatically-- automagically starts generating profits for you. It'd be nice if we can do that.
And so increasingly, we're having to find this balance of saying, well, let's buy as many of the things as we can as foundational systems. Let's not waste time and energy where we don't have to. But we want to get more and more savvy now about being able to have a layer on top of that that really is the unique secret sauce for our own digital business.
And so I think, yeah, [LAUGHS] maybe you don't want to be having your homemade pizza now, but you're going to have your own candles. You're going to bring your own bottle of wine. You want to put it on your own plate.

WILSON RAJ: You know, I think that's a huge point in terms of that build versus buy debate, right? We just-- I think will still be ongoing, is this notion of from a customer perspective, we have a new tech-infused buyer where digital is pretty much serving up that rich, deeper, more immersive user experience.
In fact, we did a survey on the future of CX called Experience 2030. And one of the things we found was that the consumer, about 70% of them plan to use some kind of smart AI agent to control their immediate environment, their home, even the garage, the lawn. About 60% expect drone or some kind of autonomous vehicle to then deliver their purchases.
So when you look at these additional interfaces that are going to be coming in-- and they're coming at a fast clip-- the marketing that needs to happen to keep pace with that, yeah, you can't be just building it, right? Or even buying it at the same rate. It has to be sort of an and proposition. Your thoughts on that?

SCOTT BRINKER: I think you're absolutely right. I mean, it's not build or buy. It's build and buy. In fact, this is one of the themes I feel like from the past 10 years to this next decade, it's like these things that we used to think of as dichotomies-- build versus buy or products versus services, or in the marketing world it was suite or best of breed-- this new decade we're in, it's basically none of those are these exclusionary dichotomies. And it's like, oh, well, it's actually build and buy. It's not products or services. It's very often like services supporting products and products supporting services.
And even in the martech land, it's not suite versus best of breed. It's basically platform ecosystems, you know? People have 10 pull systems and then they attach and integrate all sorts of specialized apps around that. And yeah, it's exciting to be in a world where we're looking at it from a more coherent and harmonious--

WILSON RAJ: Yeah, I like that. Balanced, coherent, harmonious. And we're going to come to those dichotomies. Especially we'll deal with this one. But I've got lots of questions on the other one, right? Best of breed and suites.
But then in terms of build versus buy, do you think, Scott, are there some scenarios or settings where maybe one is better than the other, right? Understanding that it's very nuanced, but are there, from a marketing ops perspective or marketing content or planning, are there scenarios where maybe one might be slightly better at least start with?
We look at the mid-sized businesses, for example, right? They're constrained by resources. Can you shed some light there? I'm just interested in your thoughts if there are scenarios.

SCOTT BRINKER: Oh, absolutely. And I think, again, it's really a question of layers. So let's pick a really clear example, which is your website. As a marketer, your actual website content, your information architecture, if you've got some sort of app-based logic on how people sign up for something or engage with it, you're building that. You have to build it. You just can't snap your fingers and open a box and magically the whole website is there. So that is the sort of stuff we have to build.
But then you go to the layer below that and you're like, OK. Well, the actual digital experience platform on which that is built, the digital asset management system that is getting content into it, the underlying web server technology that's managing HTTPS connections, you would have to be out of your freaking mind to be building that stuff at this point, right? I mean, this is all commercial, commoditized solutions.
Leverage the heck out of that and then put your energy on building the things that you can't get off the commercial market. Because again, they're just entwined with what makes your business your business and different from everyone else.
And so I think if you think of that as one clear example, we're seeing that same sort of pattern now elsewhere, you know? I do not want to build my own CRM. I don't want to build my own marketing automation platform.
But I might want to create a little bit of custom logic around, like, OK. We get certain feeds of data from some of our digital touchpoints, and we have our own machine learning algorithm that we think is best to interpret that data to match people to segments. I might actually want to build that little piece, because it's just so unique to my particular business. But then I'm plugging that piece into this infrastructure that's largely commercially available software that I got off the shelf.

WILSON RAJ: Got it. For the audience, this is that huge-- I think it's not so much where we use build, where we use buy. I think that principle around differentiation, at least the way I hear it from you, Scott, is really important.
So anything that gives the brand differentiation, the customer experience edge as it relates to that particular organization, in that particular vertical, for that particular customer segment, it's a build, right? Because that's where your brand DNA probably is expressed.
The other stuff can be operationalized through standard systems. But then the magic is in integrating those two. So I think that's a great way to think about it and to clarify, right? Because there is no right or wrong answer. It's sort of, what's the principle here in terms of using build versus buy?

SCOTT BRINKER: Exactly. Just getting really smart about leveraging what we can from the market, but also getting very strategic about, yeah, what is a unique advantage for our particular company?

WILSON RAJ: Cool. Now, I'm going to add another thread to this principle that you just really nicely just elucidated, and it's one of your favorite topics around low code, no code, right? So where would that necessarily fit into this market? Obviously, it's a build. But then are there also off-the-shelf kinds of stuff that you could do? Where would that come in or fall on the range? Or is it the same principle applies? How do you look at it?

SCOTT BRINKER: No, I'm so glad you brought that up. I think you're absolutely right. So there's these layer of things we buy that just come for us, like pretty much out of the box they're ready to go. But then yeah, you start to add this layer of build on top.
Well, how do you build? Well, in some cases, it's things that really do require an expert software engineer to build a particular microservice or some custom logic in JavaScript that you're going to plug-in.
But increasingly, for a vast number of these things that we need to, quote, unquote, "build," we're actually using no code, low code tools very often in the commercial platforms that we purchase to configure and design and create these components not necessarily with JavaScript, but if I'm sitting at a Workflow Editor and I'm designing, OK, this trigger here, I want this action to happen here. And then based on this decision here, I want these two other things to happen.
You now have all these workflow tools where people are not software developers. They're marketers. They're general business users. But they're able to pull these things together and implement them and launch them. But still, that's building. We're realizing actually there is a much wider spectrum of things we can build and a much wider universe of people who can do some of that building.

WILSON RAJ: All right. Scott, now I want to kind of add maybe just another thread to this build and buy principle. Many analyst firms, they have a taxonomy to describe martech stacks, right? It's very simplified.
You have the system of data or systems of record. And then on top of that, system of insight. Then above that is some kind of system of engagement or delivery. Again, very simplified. I think your 8,000 martech apps would certainly range all through that stuff, right? And then some. And so the question becomes when you think about that build or the low code, no code, is it safe to say maybe for that brand differentiation to occur, more of the build would take place in that system of insight, because it's so specific to that brand?

SCOTT BRINKER: Yeah, it's a good question. I actually think traditionally the biggest area of differentiation is actually the engagement, because the experiences become increasingly unique to the particular business.
But I think you've got a really good point, because as those experiences become richer and the data that we're feeding in from these, we have the opportunity to create models at the insight level that, yeah, just become very specific to our business. And again, this might not be something that people are having to code up in Java or JavaScript, but even having a business user or an analyst or a data analyst person being able to model, say, OK, here's the way I want to organize the inputs from different customer touchpoints into a propensity model for what we want to do with them next.

WILSON RAJ: Absolutely. And that's where I think visualization would come in, right? Not visualization in terms of reporting, but how do you do it in visual analytics, right? Visually analyzing so that business user who may not have all those algorithms can do something, get some business value out of that. That's fantastic.

SCOTT BRINKER: I mean, I know I'm preaching to the choir here. I mean, you guys are SAS, right? I mean, there's such an art that people can do with data. And the people who now have this combination of incredible tool sets for this and then they've sort of conceptually got the ideas of how to orchestrate them together, and then we're giving them this wonderful toy store of all these new data sources that are coming in, it's-- yeah. I know a fair number of people who are in the data analyst and data science world, and these are happy people. There's a lot of fun stuff going on right now.

WILSON RAJ: Yep. There's a lot of data to be had there as well. So no, we've talked about that debate between sort of build and buy. There's another big debate. And actually, you talked about it in terms of best of breed versus integrated stack. So again, there's some data, again, I think that was featured on one of your blog posts. It's a report that came out of the UK around data platforms where they talked about what other types of software or data platforms that the business is using.
And I'll just read out the stat here. From a best of breed perspective, it was about 32.5% best of breed. Integrated marketing suite, that's about 10.5%. And then a majority, 38%, was some kind of in-house, custom-built develop and vendor solution, right? And then you have a smaller number of purely in-house, around 15%, 16%.
And so just as that debate around build or buy, integrated or not integrated. Are there also same principles or different principles that can apply to this argument to say, hey, it's not just all here and all there? But what are your thoughts there, Scott?

SCOTT BRINKER: Yeah, this is such a fun topic. I really do think today in the world we are living in, the suite versus best of breed debate is-- it's really irrelevant, because I don't know of any suite at this point in time that doesn't have basically open APIs and ecosystems of people integrating to them.
And when people talk about best of breed solutions, there are very few marketing stacks out there now where just everything lives in its completely own isolated silo. These things are often purchased now based on the integration capabilities that they offer out of the box. So I kind of think this debate is last decade. Yeah, the new decade, it's software. It's APIs. It all works in the cloud.
But I found the stat about the hybrid model, this thing and folks saying, OK, well, almost independent of suite versus best of breed, what we're doing is a stack that has some combination of stuff we buy off the shelf commercially and some combination of pieces that we build that are unique to our business.
And what I thought was fascinating is to be honest, for all the years that people have been asking this question about suite versus best of breed, I haven't actually seen a survey where someone asked the question even of like, oh, well, you're also intermingling some of your own stuff in there too. Which is crazy, because actually, it makes a ton of sense that people are doing this.
And to now finally have at least-- I mean, this is just one survey. Take it for a grain of salt. But to have at least one data point that's like, yeah, actually, a lot of people, a lot of companies are blending these two things.
To be honest, I actually think this is some of the best evidence that digital transformation really is happening. I mean, people have been talking about it for years. It's become almost this hackneyed phrase. But the reality is, hackneyed phrase aside, businesses are becoming more and more digitally driven. The way in which they operate internally is digital. The way in which they engage with their customers or their audience or their partners is through digital.
And as part of that, they end up creating pieces of software and they end up using a whole bunch of other software. And we've now got data that, yeah, quite a few companies are now at that state. It's great. I love it.

WILSON RAJ: It's really positive, you're right, because this is actually real proof around-- it's concrete. You can see this in terms of, it's not just an airy concept around digital transformation, right? There is hybrid. We are actually coding. We're also using best of breed in scenarios that would then help them differentiate, but also reduce costs as they get maybe more integrated suites for that efficiency. So it's fantastic.
Now, you did something also-- you went beyond this, right? Beyond just best of breed and integrated where you made some connection to, as an analyst, Ben Thompson. He has a website called Stratechery where he had very interesting thoughts around aggregation theory, which there's a lot to it. But sum it all up, it's just a completely innovative way of thinking. Rather than sort of stacks or vertically integrations, it's sort of solving customer problems in a very unique way. So can you speak to that and how that applies to integrated and best of breed?

SCOTT BRINKER: Sure. Yeah. This is an observation that I've been sort of slowly becoming aware of over the past year, which is for these martech stacks-- in fact, not just for martech. But again, let's think more broadly for the entire business stack.
There are increasingly these products that were designed to thrive with a heterogeneous stack, right? I mean, for years, we had this thing of, oh, well, the way you solve the challenge of all these different software apps is you try and consolidate them all into either one suite. Or if not that, you try and get one product that acts is the absolute center of gravity for everything else.
And as much as that vision is wonderful and it works in certain contexts, for the overall business, there's just too many things happening. It's just-- there's too much innovation and too many products.
What we're finding now is there's a set of these technologies that are saying, OK. What if you were going to have a heterogenous stack as the new reality, that this was just the world we were going to live in? There are challenges to that, right?
There's challenges of, how do we make sure we're getting the data to some sort of unified core? There's challenges of, how do we manage work flow across these apps that are created by different developers? There's challenges from identity access management and control perspective. There's challenges from a data governance and privacy aspect.
Those are real challenges you have when you have a heterogeneous stack. But what if we started to build products that that was their mission in life, was to be able to say, oh, I mean, let's pick something like data governance and privacy compliance. There are now these tools out there. I mean, there's actually a whole little category of them.
Companies like OneTrust and DataGrail and all these folks that basically their mission, say, whatever different apps you have, we will connect to your different apps, to your different databases, and we will provide a layer on top of that of the auditing capabilities, the monitoring and visibility capabilities that you can actually enforce good privacy compliance without having everything unified on just one single app. And there's a ton of these.
And so I kind of feel like, yeah, this is where that connects to Ben Thompson's aggregation theory, is he's looked at a number of these models out in the market with things like the dynamics of Facebook and the iPhone and stuff--

WILSON RAJ: Google, Googler.

SCOTT BRINKER: Yeah, of how you have this sort of aggregator that serves as a way of matching supply and demand where the supply and demand might be very heterogeneous on either side. And sort of the value of that aggregator is to match the two together to help them unlock value from each other.
And then in a really weird way-- and I know this is-- I'm, again, super nerdy with this stuff. This was one of my more nerdy posts, so thank you for [LAUGHS] calling me out on it. But you know, in many ways, these products that are working across the martech stack or across the broader business tech stack, they're kind of almost serving as aggregators within the systems of data of our own businesses. So kind of the dynamics of software are continuing to evolve in front of our eyes.

WILSON RAJ: Right. It's so awesome to geek out, because I do encourage the audience, especially not just marketers, to actually take a look at this post-- we'll definitely add that to our show notes-- because it's a philosophical approach to how we look at integration. It's aggregation and solving a really key customer issue, whether it's privacy or personalization or loyalty, but I think it's worth a dive there.
I want to shift gears to something else. We talk about martech and marketing ops, and that's certainly a key driver of today's modern marketing organization. And this layer of function typically sits between-- on the top we have the marketing vision and strategy, and on the bottom you have on-the-ground marketing and CX delivery, right?
So how do you rationalize this? And you have your new rules of how marketing of five rules-- again, the number five. Can you walk through those five rules of how the marketing tech and operations connects with strategy and with execution and that framework there?

SCOTT BRINKER: Yeah. Wow. This number five. We were talking about this in our previous episode.

WILSON RAJ: It keeps popping up.

SCOTT BRINKER: Your five trends, my five trends, you know? There was packing, and this vaguely reminds me of something Monty Python Holy Grail skit around--

WILSON RAJ: There you go. We'll bring out the coconuts.

SCOTT BRINKER: [LAUGHS] Exactly. All right. So what is my favorite color in martech? So yeah, I mean, part of what I realized is in this whole new rules of marketing technology and operations is that a lot of marketing operations leaders were really being put in a position where they had to balance these things that seemed-- I mean, just opposing by their very definitions.
And the two examples I have were like, OK. We have all this demand to centralize. We want to centralize our data. We want to centralize brand control. We want to centralize privacy management. All good things.
But at the same time, there's all this demand to decentralize, to empower more teams at the edge of the organization to be able to build things faster, to be able to self-serve there needs, to be able to experiment. And so you're trying to, as a marketing ops leader, like, OK. Well, how do we do really good centralization and really good decentralization?
And then the same thing is on a different access here about the balance between technology and people and humans, right? On one hand, hey, how do we leverage more technology? How do we leverage more automation? How do we leverage AI?
But at the same time, how do we make sure that our brand is not just for customers, but even our own internal employee experience? That we have a soul, that we have-- we're able to connect the humanity to it in a way that people relate to it and relate to us, and that there's empathy to this.
And again, this is something as a marketing ops leader, right? You are trying to optimize the technology side. But the really best marketing ops leaders are also the ones who are so attuned to the human impact and the human touchpoint there.
And so yeah, I put those two things on a grid and we sort of went around the circle of like, OK. These are the different aspects of what it means to be able to deliver that. And then right at the center of that, the fifth rule was, OK. You're going to map this out, and you're going to have your ideas of how you think it should be done. This is great.
The next final rule is just be prepared for continuous change, because the way in which you do this today, next year, you're going to need to do things differently. Two years later, different again. We just kind of have to embrace continuous change as our new reality.

WILSON RAJ: Absolutely. And that's what I love about some of this thinking that you have. They're not just independent rules, right? It's balance. We live in a very complex world. And so these rules, while at first blush they seem like paradoxes-- wait a minute. Centralized and decentralized? Yeah. Access to data is centralized. Access to intelligence is centralized.
But what's decentralized are the experiences, the emotions as it relates to-- so the journey or moments of truth. And then in terms of having that agility at the core.
And of course, AI versus humans, right? What can we automate? What can we make it on scale? And then what are the things we can bring? That sort of judgment, creativity, empathy, emotion, et cetera. So I think thinking of it, again, in terms of a more holistic nature is key. And again, we'll have those notes there for our audience to ponder over and then hopefully reimagine marketing.
Just as we wrap up here, next couple of minutes, so Scott, you're a prolific thinker and a writer. What's next for Scott Brinker here? What upcoming topics very quickly are you kind of researching or pondering that you can share with this audience so that we may look forward to talking about it at some other podcast?

SCOTT BRINKER: Wow. You know, because I've become known for that martech landscape, every now and again people send me landscapes that other people created for very different industries. And a couple years ago, someone sent me this landscape of somebody who created a landscape of something like thousands of craft beers, and the producers of craft beers and how they all fit together. And I'm like, oh my goodness. I chose the wrong industry. What was I thinking? [LAUGHS]

WILSON RAJ: You're going to be the landscape guru.

SCOTT BRINKER: [LAUGHS] So like, yeah. When I think about what's next I'm like, hmm. [LAUGHS] Yeah. Maybe there's something beyond martech. But yeah. OK. Now in the martech side, I would say the topic that I am most interested in at the moment is this journey from big data to big ops.
And we talked about this earlier, the reintegration of marketing stacks and marketing ops into a fabric of the broader, entirely digital organization. I think we are really entering uncharted territory in, how do we run this? I mean, it's not just the systems architecture perspective of it.
It is the management approach to this. How do we collaborate in this world where we can just do so much and everyone can all do so much? But as we're doing this all in parallel, keeping the right things synchronized, keeping the right things open for experimentation, aligning operations standards across all these different contexts.
This is a big, huge, wonderful, very challenging, exciting mission for us to undertake. And so yeah, I'm just really fascinated and starting to peel away at the dynamics of how that evolution is happening.

WILSON RAJ: Well, Scott, it's been a pleasure. We can't wait to see what you uncover from this next big idea that you're looking at, big data to big ops. It was a great spot to wrap up this discussion. Again, I want to thank you, Scott, for being on the show.
SCOTT BRINKER: Thank you so much for having me. It's always a pleasure to chat with you, my friend.

WILSON RAJ: You too. You too, Scott. We'll do it again. Well, that's this week's episode of the Reimagine Marketing podcast. If you enjoyed today's show, be sure to head on over to sans.com/reimagi nemarketingpodcast, all one word, to join the conversation and to discover more fun content. You can certainly subscribe to the series on your favorite podcast platforms. And don't forget to join us for another episode. And as always, thank you for listening.

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Episode 4, Season 2: MarTech Perils and Promises

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WILSON RAJ: Marketing technology, or MarTech has suddenly become both more important and more problematic. Marketers must consider how to tame the profusion of technology and harness it to work more effectively, both for the customer and the brand.
Hi. I'm Wilson Raj, and welcome to this episode of Reimagine Marketing podcast, The Perils and Promises of MarTech. And today I'm so excited to welcome a special guest, Scott Brinker. He is well known as the editor of the chiefmartec.com blog. He's also the VP of platform eco-systems at HubSpot. Welcome, Scott.

SCOTT BRINKER: Hi, Wilson. It's great to be here with you.

WILSON RAJ: Absolutely.

SCOTT BRINKER: The perils and promise of marketing. I love it.

WILSON RAJ: Yeah, I know. I thought you would like that, that alliteration, but also I think sort of the dual-edged nature of the topic that-- Now, Scott, frankly, you had been on this for a long time. I think, if I remember correctly, I mean, I do remember this quote when you started in 2008. And there was a whole premise where you feel that marketing is really a technology powered discipline, and therefore marketers have to infuse this tech into their DNA.

SCOTT BRINKER: Yeah. And again, it's not to take away from the larger mission of marketing which is to find and engage and delight our customers. It's just that, in the past 10, 20 years, and accelerating even more in these past few years, the ways in which we reach those customers and engage with them are through all these digital channels. And to be honest, to do that, we're leveraging all sorts of amazing software. And so it's not that the software is somehow the top of the pyramid or the focus of what we're trying to do, but it's the enablement. It's the capability. It's how we actually achieve brilliant and amazing marketing in today's world.

WILSON RAJ: Absolutely. So let's kind of start from the top. How did this whole charting of the MarTech landscape start? I mean, there had to be some pivotal moment were you decided, you know what, I'm going to do some kind of a graphic out of this. And now that super graphic has really become sort of a hinge point for all kinds of discussions around digital marketing, digital strategy, digital transformation, as it relates to marketing. So how did that idea come about?

SCOTT BRINKER: Yeah. Well, I think there were kind of two pivot moments there. So the first, as you mentioned, when I started writing my blog, I was really on a mission to help persuade CMOs that they needed more technical talent inside their organization just because marketing was becoming a true digital profession. And at the time, not everyone was buying into that.

WILSON RAJ: No, I think it was a hard sell, Scott.

SCOTT BRINKER: Yeah. The world of IT and software seemed very far away from the world of marketing. So I remember, for one presentation, for a group of CMOs, I decided, all right, let me help them visualize this. And I put together that first slide of around 150 marketing technologies I found at the time. And it was entirely just to help people appreciate, oh my goodness, just how much technology is there in marketing. And again, even with just 150 at the time, it seemed mind blowing.

WILSON RAJ: That was mind blowing. Yeah. That's a lot.

SCOTT BRINKER: So that was kind of the first pivot. I think people were like, wow, OK, yes. There is a lot here. And then I remember the second pivot moment was, after doing that for a couple of years where it kept doubling year over year, in 2014, when all of a sudden it was like 1,000 solutions on the side. That was then like, OK, we're now going into some uncharted territory. This is a new dynamic.

WILSON RAJ: It's a new dynamic. It's a new threshold. Absolutely. So at that point, when you hit that mark-- I think, in the more recent one, we hit, what? Like 8,000 or something in 2020? And interestingly enough, about half of those things, I think like 2,000 plus, was around content and experience design. Another 2,000 was around social media. And then we definitely had quite a bit, almost a little over 1,000 around data, data management.
So when we hit that 1,000, that was a pivotal moment. Now, we're closing 10. Are we going to get there?

SCOTT BRINKER: Yeah. In fact, actually, one of the reasons we haven't yet produced a 2021 version is the landscape just continues to grow so much it is an incredible logistical challenge to figure out, how do we research them all? How do we get them all on a slide, where we're actually trying to rethink the whole approach.
But to give you some sense of this, because I'm now not the only person who does this, there's people-- I don't know. These icon landscapes have become a cottage industry for so many tech areas. There was someone a couple months ago who put together a landscape of just marketing technologies associated with virtual events and video conferences. And just that landscape, focused on just that narrow category, had over 800 solutions mapped into it.

WILSON RAJ: Oh man. That's hitting that 1,000 threshold, that you mentioned, that was for all of MarTech.

SCOTT BRINKER: And now it's just this.

WILSON RAJ: It's crazy. And you know what else, Scott? You talk about the landscape. I remember, in the earlier versions, it was this very elaborate block diagrams. Right? And your latest one, it looks almost like a map from Middle Earth in Lord of the Rings II, or something like that. It's just islands and peninsulas and all kinds of geographical features going on there. So I'm really excited. I'm definitely looking forward to see what your other rendition, once we hit that 10,000 mark, will look like.

SCOTT BRINKER: Yeah. Actually, I have to credit, it was the graphic designer who was helping me with that last one who-- The reason it is this sort of crazy free-form map is because the amount of time it took to constantly size and resize things within a rectangular box. And then the moment you come up with another logo, you have to go in and you have to resize everything and rearrange it. I mean, the graphic designer basically revolted, and said, not doing that anymore. How about we just put them here. We'll draw a line around them. I'm like, actually, that's kind of cool.

WILSON RAJ: Yeah. It seems organic enough. Right? So here's the thing. So you have seen this growth, this landscape evolving from 2014, even prior to that, all the way up to now. So what are the things that you're seeing that are pretty much the same, whether it's capability wise or thematically? And what are the things that you're seeing that are different, maybe that wasn't around even two years ago?

SCOTT BRINKER: Yeah, great question. Well, I think the things that remain the same-- and I'm actually both happy and sad that they remain the same-- is I think the themes of what marketers generally want to leverage technology for are pretty constant. Right? I mean, we're still in this mode where we're like, OK, well, we want to find the right audience. We want to get them the right message at the right time, which is, frankly, where marketing should be thinking. That's our goal.
It's just, as the technology environment in which we're operating just continues to evolve, and there are new channels, and there are new tactics, and there are new audience preferences and all this, the technology to actually deliver on that promise continues to evolve. But, yeah, the overarching mission remains wonderfully constant. So that's our north star.
I think the things that are changing-- Boy, there's so many we can dive into. I'll highlight two. And then we might come back to them in this conversation in more detail. But one of them is this whole no code movement. And when I talk about no code, I don't mean just building apps without code. I mean this whole idea of saying, you as a general business user, you as a general marketer, to have more and more of these tools that you can create things, that not so long ago, you couldn't create on your own.
You would have had to hire software engineers or graphic designers or different experts. And for a whole bunch of things that we as marketers want to do or we want to experiment with, the costs and the barriers to doing that, it didn't make it worthwhile. But so many of these no code tools, they give a whole other level of things that now become accessible to us to experiment and try.
And then the second thing that's really interesting right now is really the reintegration of marketing into the rest of the organization. For the past decade, you could argue, a lot of this advancement in marketing technology, in a lot of cases, it happened independent of the rest of the organization, for good reasons, actually. In a lot of cases, the rest of the organization wasn't even ready to move forward at the speed that marketing needed to move forward with.
But things are changing. Part of this whole digital transformation is the recognition that it's not just marketing. It's the entire organization that becomes digitally powered and engages with customers through a digital interface. And so now there's all these really interesting things happening around how do we take all the marketing technology and connect it better with the rest of the organization, and vice versa. How do we harness more of the things that the rest of the organization is doing and leverage them in marketing?

WILSON RAJ: Right. I think, Scott, those two points, firstly, that low code, no code, that aspect, as it relates to marketers, is such a very fundamental difference between marketers of yore and today. Right? Not that we have to be coders, although it might seem that way, but the ability to be technologically savvy enough to understand where these apps, how they work, how to integrate. What's the data flow? What's a process flow? We're definitely going to dive into that because I think there's some interesting market reactions, or expectations at least, from the management level in terms of that.
And then the other one is, yes, right place, right time, right content. But then, boy, this has exploded to something broader than just marketing, kind of a business impact. So let's kind of take the first element around skill set. I think you referenced this, Scott, in one of your blogs also. A CMO council survey where there was a question around where the C-suite thinks that marketing has a gap, or a hole.
And the first one was 42% of that C-suite said that it's the modernization of MarTech, that includes the org, the systems, and the operations. And then right, I would say, close behind that, at 40%, was proficiency, technical proficiency. That kind of speaks to your low code, no code kind of point there. And then the others that followed was around that old chestnut, data, at a 37%, and everything related to data.
So when I looked at this, Scott, when I looked at what we think the acceleration of digital savviness in tech, especially since the COVID, and we hear that digital transformation has accelerated from years into months, I'm surprised at that first one, that modernization of systems and operations, with that 42% of the C-suite would still think, hey, marketers, you guys have a long way to go. What's your read on that? How do you read the stat?

SCOTT BRINKER: Yeah. I mean, this data was surprising, but to me, it kind of makes sense through the lens of-- In some ways, I don't feel it's entirely fair to the marketing org because I do think marketing actually made tremendous advances, in many cases ahead of the rest of the organization. But I think where this is a perception issue, but also a bit of reality, is I do think marketing got a little bit too isolated on the MarTech stack.
And the problem with the MarTech stack is nobody else in the organization has visibility to that. And I think, in particular, what happened here, over these past couple of years, was a real acceleration of digital transformation of the rest of the business. The C-suite, all these other peers of the CMO, are looking at how they connect systems across the organization. And I think for a lot of CMOs, and I'll push some of this down to the marketing ops and marketing tech teams too, they were so focused on the MarTech stack, that I think we may have been a bit slow to catch on to this opportunity to say, OK, there's actually a second generation that's happening here. And it's not just our stack. It is the collective business stack. And how do we feed and work with that? And so I suspect that's part of what we missed.
But then also the digitally savvy, this sense of saying, oh, well, the C-suite doesn't necessarily think we have enough digitally savvy managers. I think that's fair. I don't think this is actually isolated to marketing. It's just the war for talent right now is so intense. And even organizations where they have great marketing operations, and great marketing tech people, very often they have a few people who are really amazing at that, and then perhaps they have a broader organization that's good at many, many things, but not necessarily as strong and really leveraging the state of the art technology.
And I think this is something that, for marketers, my takeaway from that would be, you can't just hire all this because this is the challenge, is the competitive war for talent. But it's like really leaning more into the enablement and training and development of internal talent. For years, marketers, we're so used to making such big investments in quote unquote "sales enablement," sales people better sell our solutions. It's almost like we need to take some of that energy and that creative insight and apply it to marketing enablement.

WILSON RAJ: Marketing enablement.

SCOTT BRINKER: That's helping our own marketing teams actually leverage all these capabilities that we're building out better.

WILSON RAJ: Scott, that's a huge point. You're right. Marketing traditionally-- and we still do-- we support sales. Ultimately, we have to show business results. From a C-suite perspective, that is typically revenue, profitability, reduction in costs, those kinds of things. Those are the numbers that C-suite look at. They're less interested in click through rates or use off assets. They have to be transformed to some kind of business metric. So I think you're right. How do we then enable?
And I love that point about perception stuff because I've seen a lot of brands, even at SAS, that acceleration of digital savviness. We're not the only ones. A lot of brands, CPG, retailers did that, accelerated in 2020. Right? I've never seen so much digital savviness, literally. And also experienced it for myself when I go to my bank or my grocer and so on. But I think, overall, in terms of what's the net effect of the business and other parts of the operation, that's where we have some more work to do there.

SCOTT BRINKER: And it's for the better, actually, because I think it's going to be a two-way street. I think, actually, because marketing does genuinely have so much experience that we've acquired over the tool sets and the tech stack that we have been using over the past 5, 10 years, I think we can bring a lot of insights to other functions of the business of how to leverage this and how to think of the right moments with the right customer.
But also I think we'll learn at that. I mean, if we just pick an area like the modern data stack, not just for marketing but for organizations as a whole, and how we're managing. This is obviously an area you guys know a lot about, but the whole analytics pipelines and machine learning. I mean, there's just so much that's advancing now throughout the rest of the organization. And I think there's so much marketers can learn from their peers in those organizations to, oh, that's the data set you have there. And, oh, that's how you're like. Yes, yes this is actually really well, we can use this.
And so I think it's actually going to be an incredible renaissance of this reintegration of marketing with these other functions. I think is going to be wonderful for everyone. And so I kind of expect that, two years from now, if they do this survey, it's going to be very different--

WILSON RAJ: It's going to be very different.

SCOTT BRINKER: --reception.

WILSON RAJ: I love the way you addressed it in the first. You were right around that modernization is certainly a perception and then that notion of technical savviness. We have a shortage of talent, but also at the same time, what can we do to do better marketing enablement? And then that's what that third element, that data piece, good customer data, but 37% of the C-suite said, hey, we've got some gaps here. That is the peril but also the opportunity, the promise, in terms of how we can activate that.
Now what can, from a data perspective, Scott, looking at it strategically, what can marketers, at all levels, from the CMO down, from her organization, leading it, to executives, to practitioners, to actual data scientists or marketing analysts, as it relates to data, what can we collectively do to up that number? Is it looking at different data sources or more of it within the org or slicing it into more infinite proportions? What are the things we can do to get that number up, that confidence level up?

SCOTT BRINKER: Yeah. It's a great question. I think two things come to mind. So one, I mean again, marketing has traditionally had some very specific sources of data. It's the data that we pull in through our advertising channels. It's data we pull in through social media. It's data we pull from engagements on websites, which is great. That's been awesome.
But what's happening here, in the broader digital transformation, is we are seeing more and more digital touch points being created for customers that aren't about marketing touch points per se. They're actually the delivery of the service, the delivery of the product. I mean, you mentioned going to your bank, and how that process, and the way you use those apps, it's just totally different. And I think one of the greatest opportunities for marketing is to be able to make sure we are getting plugged into and instrumenting these behavioral activities of what customers are actually doing with our digital services and products at different points.
In SAS, obviously, this whole thing around product-led growth. Or if you're an app developer for the iPhone or Android, all these tools, the Pendos and whatnot of the world that people are using. I mean, oh my goodness, this is a goldmine of real data about real customers behaving in a way, and then using that to both understand them but also then to find the ideal opportunities where we can serve them better from a customer, marketing, customer lifecycle perspective. So yeah, I think that's probably the single greatest one.
But I think it's also connecting that flow in the other direction. Just as we want to be able to pull data from all those digital products and services, I think the data that we have from channels that we traditionally own, we should be doing a better job of feeding that data to those same digital products and services so that they can use that in the context of just personalizing the actual customer experience of their usage.
And so again, I think I'm just going back to that same theme of saying the opportunity to re-integrate marketing and MarTech with now a more savvy overall digital organization. I feel like a kid in a candy store just about about it. I mean, there's just so many opportunities with that.

WILSON RAJ: I think it's so important for the audience listening, and especially marketers who are listening in, that they get the sense of optimism. Yes, there are some perils of modernizing the stack, as well as improving in efficiency, our skill sets around data literacy, for example, or AI and so on. And one is, be the insights engine, not just for marketing, but for the business, and CX at large. And secondly, to be the collector, aggregator, of all the data that comes from literally every part of the organization. Right? And then play it back, either to them as part of the CX cycle, or to be able to revamp strategies. So I think that's a very important point, Scott, that you raised in terms of getting the confidence of the C-suite up.

SCOTT BRINKER: It's a great time to be in marketing.

WILSON RAJ: I love it.

SCOTT BRINKER: It's a challenging time, but it is a great time.

WILSON RAJ: Cool. OK, we're going to shift gears a little bit and take a little bit more panoramic view. The 2030 seems to be sort of this-- It's almost like a finish line for everything. So SAS, in late 2019, before the disruptions and all that, we did a world-wide survey around the future of experience, customer experience. It's called Experience 2030, where we had five different themes, themes around smart tech. From a consumer perspective, there's a lot of value there. Immersive tech, adoption of AR, IR, virtual reality, those kinds of things. Digital loyalty in the future. It's less about programs, but more about loyalty to the entire brand and experience. Obviously, data privacy, how that becomes a key part of the customer experience. And then this notion of agility and automation.
So we had these five drivers. And interestingly enough, I think you partnered with WPP, which is my former employer in a previous life, also with a 2030 title. I think you also had, about five. Is it five or four trends or something like that?

SCOTT BRINKER: Yeah, it's five.

WILSON RAJ: You hit the 5 too. And let it be known to the audience that this was done absolutely independently. So tell us a little bit about that research title, and then what some of the top line findings and your observations with that, Scott.

SCOTT BRINKER: Yeah, it makes me wonder, like, ah, all these people independently around the world, all of a sudden, get the idea of the number five, 2030. There's going to be some big event there. Yes, maybe it's the singularity.

WILSON RAJ: It could be.

SCOTT BRINKER: Maybe it's the aliens land.

WILSON RAJ: We could be responsible for that.

SCOTT BRINKER: But even if none of that amazing stuff happens, and it's simply a pinnacle for modern marketing, we'll take that.

WILSON RAJ: Yes.

SCOTT BRINKER: Yeah, so the five themes, I love the five themes that you identified. And I think they're not mutually exclusive. I think they're actually complementary with the five themes that we leaned into. The five things we had were, not surprising, this no code citizen creator capability. I think just amazing what we can do today. Play that out over the next nine years, it's going to be mind blowing.
The second was a little bit abstract, but it was basically about getting people to think more about these patterns of platforms, networks, and marketplaces. I mean, so much of business has been organized for now the past 50 years around really this concept of hierarchies and chains. We have our value chain. We have our supply chain. We have our distribution chain. You know, and there's still value to those mental models, but in the digital world, there's this new set of models that are just proliferating inside our companies, in our supplier base, in the way we reach customers, and are these platforms networks and marketplaces. So really understanding those dynamics and how to leverage them.
The third is what I call the great app explosion which is a little bit like the MarTech landscape. But it's bigger than the MarTech landscape. I have a stat from the folks at IDC that they expect, in the next two years alone, there will be over 500 million digitally created apps and services out in the world. Now, not only--

WILSON RAJ: Imagine doing a landscape for that, Scott.

SCOTT BRINKER: Yeah. I'm waving the white flag there. Time to pick a new profession. But I mean, they're not all going to be commercially packaged SaaS applications. In fact, it's almost like an iceberg. The vast majority of them will be below the water line, as custom apps and digital services businesses create themselves.
But still, this is Mark Andreessen's prediction from a decade ago. It's like software is eating the world. And rather than keep fighting that, or keep saying, oh, well, this is just a blip. And it's all going to consolidate into one or two major software companies and we're done. We just need to embrace the reality that we live in a world of, for all practical purposes, infinite software. So how do we harness that? How do we actually make that a good thing?
And then that leads into the fourth trend which was talking about the shift from an emphasis on big data, just figuring out, oh my God, we've got all this data, how do we collect it? How do we store it? How do we analyze it? To increasingly, this challenge of why we call big ops because it's now how do we actually operationalize on that data? The operationalization of our businesses around that data, it's like not just one spot here, one spot there. It's like everyone in the organization. I'm using this for my algorithm here. I'm using it for this app here. Using this with my agents on the phone over there.
The metaphor I give people is if you imagine the world of big data as this faraway data lake, that we can think of the world of big ops, it's the same amount of water. But it's an interactive water park. And everyone's there, and they're coming in. And how do we make sense of that? How do we govern that new reality?

WILSON RAJ: And that's why your marketing enablement piece, I think, would fit in that, as part of that broader ops. So that's fantastic opportunity, yeah.

SCOTT BRINKER: Definitely. Definitely. And then the last topic was harmonizing human and machine. AI is just becoming more and more practical in how we can leverage it in so many different contexts. But I think we're still trying to learn like, OK, how do we do this? What's good for the machine to do? What's good for us to do? And where are the magical intersections where, actually, us working in tandem with these machines let us do outcomes that are beyond anything we could have imagined five years ago?

WILSON RAJ: I resonate with that last point especially. I always felt like humans are better at thinking meta, so judgment. We have that creativity to do messages and codes and things that would hit the human soul, the human heart. And we're also comfortable with dissonance. Whereas AI, I think we can do a lot of outsourcing of a lot of cumbersome, repetitive tasks, and then therefore free up humans to do a lot higher-order value add in marketing.
So I'm a big proponent of that last point. It's fantastic. Wow, there's so much. And we definitely have to carry on this conversation, for sure. But I think there's a great spot to wrap up this discussion, especially as we look at the things that you mentioned with MarTech 2030, the overlay against Experience 2030. Now, where can we find some of these great resources? Obviously, your blog. Any other spots you recommend?

SCOTT BRINKER: Yeah. Actually, the blog chiefmartec.com.

WILSON RAJ: Yes.

SCOTT BRINKER: And that's chiefmartec, without the H at the end.

WILSON RAJ: That's right. That's the tricky part.

SCOTT BRINKER: Long story.

WILSON RAJ: We'll get that story in one of our conversations.

SCOTT BRINKER: But also, yeah, I'm @chiefmartec, the same spelling, on Twitter. So yeah, if you have a question, and you can reach out to me, always happy to engage with people. I'm continually learning as much from everyone else. Trying to just share some of that back into the world. So I'd love to engage with people around this stuff.

WILSON RAJ: And we'll make sure that all these are included in our show notes. Thank you, Scott. Has been fantastic as usual. I'm always energized after talking with you. So if you have enjoyed today's show, please head on over to SAS.com/Reimagin eMarketingPodcast-- all one word-- to join in the conversation and get even more bonus content.
You can also subscribe to our series on your favorite podcast platforms. Just do a search, Reimagine Marketing. And you can also stay in touch by emailing us at reimaginemarketi ngpodcast@SAS.com. So this is Wilson Raj. Don't forget to join us again for another episode. And thank you for listening. Have a great day.

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Ep. 3: Digitizing Beauty Experiences

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WILSON RAJ: From virtual try-on features to AI-enabled skincare analysis, the pandemic and ensuing disruption have accelerated innovative and immersive technologies. And with a further emphasis on health and wellness, beauty brands have had to evolve from a one-dimensional category to something more holistic and inclusive. Hi, I'm your host, Wilson Raj. And welcome to this episode of Reimagine Marketing, Digitizing Beauty Experiences. Welcome, everyone. And I'm really excited to introduce our guest today, Kelly Mahoney, vice president, customer marketing at Ulta Beauty. Welcome, Kelly.

KELLY MAHONEY: Thank you, Wilson. I'm happy to be here.
WILSON RAJ: As we are, too. So this is such an exciting and, I think, very interesting topic given the state of affairs, past the pandemic and now as we move to 2021 and to the future. And I know that, in your role, you've got a huge responsibility. You lead the global loyalty and CRM team. You're responsible for that journey from start to finish and the personalization across touch points. So tell me a little bit more about that role and some of the pressures that you're facing there.


KELLY MAHONEY: Yeah, absolutely. Yeah, customer marketing at Ulta Beauty is all about really engaging and connecting in as authentic way as possible with all of our members. And we're so fortunate that we have well over 32 million active members. So you're right, it's a lot to be responsible for. We manage our Ultimate Rewards program. We manage all of the customer contacts that we deliver across all of our channels with our guests.
And to your point, a big focus of our team right now is, how do you personalize every single connection?

WILSON RAJ: Right.

KELLY MAHONEY: And from, you mentioned, the pandemic, a big focus this year is just how do we re-engage? How do we welcome our customers back into our stores, online, and do it in a way that keeps them coming back to Ulta Beauty?

WILSON RAJ: Absolutely. And that will be a huge focus of our conversation today. Now also, from your experience perspective, you had a wealth of experience, but one really caught my eye here, you've had a significant number of years in the oil and gas industry, I think at least something like around 10 years or so?

KELLY MAHONEY: Yeah.

WILSON RAJ: This is really interesting. So how has that industry shaped your perspective on what you're doing now with Ulta Beauty?

KELLY MAHONEY: Yeah. I always like to say BP was my home, so to speak. It's really where I grew up, from a leadership perspective. And I look back with such fond memories of my experience in BP. I ran their loyalty, their point of sale for North America. And it was a fascinating industry. To have that challenge of trying to find ways to differentiate your brand in such a low involvement category is definitely not an easy task. But the brand itself is just so highly differentiated, a lot of it can be applied to beauty, believe it or not.

WILSON RAJ: Right.

KELLY MAHONEY: And that's what I've been doing. I mean, I agree, it's fascinating. And there's a lot I can take from my experience at BP over to Ulta Beauty.

WILSON RAJ: We'll see some of that transference in-- because, I think, the industries, while they're different, there's definitely the same challenges, in terms of reaching your brand affiliation and connecting with suppliers and consumers, so definitely interested to hear a little bit more about that.

KELLY MAHONEY: Absolutely.

WILSON RAJ: So now, getting on to this topic around this tech-infused beauty consumer, I saw a recent report by McKinsey that says-- this is pre-COVID research-- nearly 85% of all beauty product shopping took place in the brick and mortar store. And today it's closer to 60% online. And another stat from that research also showed that basically beauty sales declined as much as 30% in the first half of 2022, according to McKinsey.
So I think the health of beauty brands and the industry that you're in, Kelly, is tightly, tightly connected with the ability to try out new products or have on-site consultations with advisors. So how do you view recovery when these sorts of in-person experiences have basically fallen by the wayside?

KELLY MAHONEY: Right. Yeah. I mean, in March of 2020, we had to close our entire fleet of stores because of response to the rise of the pandemic and, obviously, the health and safety of our guests and our associates, absolutely our top priority. But that meant we became an online only retailer overnight. We had to accelerate, I would say, about two to four years of Omnichannel innovation in a matter of months.

WILSON RAJ: Wow, that's incredible.

KELLY MAHONEY: Right. And to your point, and you hit on it, in our category in particular, it's all about the art of discovery and exploration, and it's a moment of fun, and it's a moment of joy. And so what was on our minds is, how do we bridge that? How do we bridge that gap without our brick and mortar stores open? And we leaned-- we leaned into our shopping experiences on digital to deliver that.
So things like our GLAMlab-- which we were so fortunate to have invested in GLAMlab. That's our augmented reality technology that's embedded into our app-- this ended up being a key tool that we used to really amplify ways to explore. So this is things like foundation, that are typically difficult to find the right shade, we were able to bridge that in a digitized way to help support finding the right shade of foundation, as an example.

WILSON RAJ: Right.

KELLY MAHONEY: It also allows you to try and makeup. You can try on new hairstyles. And it's fun.

WILSON RAJ: That's a key point, I think, to make this-- still keep that fun, that discovery sort of DNA experience as part of it. Now, not just beauty brands, I think retailers at large because of the disruptions and so on, they had to-- they were forced to actually rethink their marketing efforts, moving from some more transaction oriented interactions, so maybe cheap deals or discounts, to something that's more value oriented. And you hit on some of those. And we're going to delve into those a bit later. We talked about experiential. Now, what's your take, as far as Ulta is concerned, from your brand perspective?

KELLY MAHONEY: Oh, absolutely. It's all about this idea of moving from transactional, functional to experiential, emotional. And we start, really, with our brand and our purpose. So about two years ago, we were on this mission already, to move our functional branding purpose. And so you might know, all things beauty all in one place is very purposeful. We will always keep that purposeful message, because there's a lot of value in having all things beauty all under one roof. That's inherent to our brand value proposition.
But about two years ago, we started to move, because we started to recognize that beauty is meaningful, and it's very, very highly emotional. And we wanted to play more in that space. So our bold new purpose is, bring the possibilities to life through the power of beauty. So we've been on this journey, and only accelerated it really, over the last 18 months or so to amplify the meaningful role that beauty plays in all of our lives.
And we believe we have the power to really influence that through our branding, kind of our North Star, and then everything we do to personalize all the different touch points across all the different channels that we're interacting with our customer.

WILSON RAJ: Kelly, what you said there is-- I think it's got huge ramifications for all brands, or in terms of their branding. And the beauty all in one place, it's not a bad thing. It's certainly valuable and functional. But I think this notion of bringing to life the beautiful possibilities, that's that aspirational, that emotional connection. I believe all the things that you do from a CX perspective definitely falls out from that. So I think that that's such a cool thing.

KELLY MAHONEY: Thank you. We're very proud of it. And we continue to invest in it. We launched our ad about two years ago. And even in the midst of the pandemic, we felt it was important to continue to lean into that, and especially as we started to note that people needed this from us. Our customers actually needed us to amplify sources of joy and light during what was dark times. So it was just kind of coincidental in some ways, that we had already been on this journey. And it allowed us to really amplify content that resonated during the pandemic and resonates now, ongoing.
WILSON RAJ: Absolutely. And I think, Kelly, here's another thing for our audiences, I think the brands, the leading brands that actually invested in marketing during this difficult time were the ones or are the ones that are continuing to be resilient. So there's no pulling back. The ability to launch such a big brand campaign in the midst of that is such a brave, and bold, and certainly, I think, a gutsy move that I think serves you well.

KELLY MAHONEY: Thank you. Thank you, very much. I mean, we had to be nimble in that moment. We had to act swiftly. We definitely had to reroute things, to ensure that we were hyper relevant in our communications during that time but without moving away from our bold purpose, which is to bring the possibilities to life through the power of beauty.

WILSON RAJ: Excellent. So this is an excellent segue here, to kind of now get into that, now, how do we merge all those things, that personalization, that brand purpose to build that loyalty. We acknowledge that consumer behaviors have changed as in-person engagement has been forced more into a digital, or maybe you could call it physically distant model. Now in your opinion, do you think this is temporary, or is it going to last? Is it-- how is this going to net out for you guys in the next couple of years?

KELLY MAHONEY: Yeah, as I mentioned earlier, we were an online only business overnight, fortunate to have the 32 million active members in our loyalty program, many of which pivoted along with us to our online shopping properties. No, the answer is, this idea of showing up where your customers want you to be, that's never going to change. Now, we are now leveling out, and we're seeing a return to brick and mortar, because it's a lot of fun to go into our stores and explore and discover. But we will always pivot where our customers need us to show up.
So our focus is still very much on delivering Omnichannel experiences, whether that be buy online, pickup in store, or whether that be even more personalization within our online. And how do we enhance that, even within our brick and mortar?

WILSON RAJ: Gotcha. And that is a key thing in terms of what's the mix, in terms of really giving the best experience and therefore, also value to the customer. Now, you said something that's really important, so that personalization now. Clearly, the type, and the intensity, and the depth of personalization that you do at Ulta requires tons of data. Now, that data has to be protected in order to not just gain trust but continue to maintain and build trust.
So you're caring for the personal well-being of your consumers of the brand, but you're also taking care of their data. So what's your philosophy in terms of building that trust to reinforce these engagements and continue building relationships with your clients?

KELLY MAHONEY: Oh yeah, definitely. Trust is paramount with our members. And I think, at Ulta we build that in a variety of ways. You hit on this idea of privacy and ensuring that the way in which we are tending to the data that we have about our guests is done with the utmost security and credibility that we could possibly deliver to our customers. So we take that very, very, very seriously.
From a marketing standpoint, at the heart of it, we talk about trust, more about authenticity. So showing up to our customers everywhere we show up with our customers, we want to show up in an authentic way. We think authenticity is really what builds trust. So how our associates are showing up to our guests in our stores by providing credible guidance, by the way in which we're communicating, understanding who we're talking to when we're personalizing, it's highly relevant. And it's delivered in channels that our customers want to see those messages. That's really what we mean when we get to trust, is showing up in an authentic way.

WILSON RAJ: Mm-hmm. And that seems, from a data perspective, there is certainly a lot of collaboration with-- as you're responsible for customer marketing, that involves such a wide swath of things right there-- CRM. There's loyalty. Now, who are the stakeholders that you connect with in the management team, broadly, to really build that trust that you just talked about?

KELLY MAHONEY: Yeah. So data is at the heart of everything that we do, from a building trust and building authenticity with our customers. And you don't do data by yourselves, for sure. So it's very much a cross-functional effort to deliver anything in a personalized way. So we partner very closely with our data and analytics team. We are almost symbiotic. As one team, they attend all of our team meetings. So they're ingrained and embedded in the customer marketing team, high focus with the partners in IT. So I have regular connects with our IT partners and our IT leadership.
But also our digital and our e-com teams are included as well. We have an agile pod that we work in. So we actually apply agile methodology to the way in which we go to market with our customers, from a marketing communications standpoint, which consists of all of those stakeholders that we just talked about, including creative, because creative is such a core component to really getting personalization.

WILSON RAJ: Oh, absolutely. Yeah.

KELLY MAHONEY: Yeah.

WILSON RAJ: I love your concept of the agile pod. I've heard different kinds of structural teams and stuff like that, but this notion of a pod, it's self-reinforcing, and, I think, Kelly, you used the word symbiotic. That is such a great word to describe collaboration. It's not just one way or one dimensional, even few dimensional. It's-- everybody gets benefit from that. And so I think it's how you've orchestrated that or externalized that from a team perspective, it is really commendable.
So just related to that, as you shift your brand, you have shifted from that transactional function to something that's more meaningful and personalized, the changes in your clients, the younger generation, that Gen Z, the millennials, how do you see them in terms of this digitizing beauty, all this orchestrated digital beauty journeys?

KELLY MAHONEY: Yeah, I see it as a must have. And I think that's probably true for every retailer out there, a must have, to be operating in a personalized way across all of your digital platforms, it's an expectation. That's how we see it. And so for us, it's license to operate. It's part of our table stakes right now.
And we are so fortunate, because we started this journey three years ago, four years ago, maybe, just getting the data right and getting the data housed in a place that allows us to scale and allows us to access the data so that we can actually activate. I think that's a mistake that many retailers have made, is that the data is there, but how do you activate it? And we're so fortunate to have the 32 million active members that we've talked about. You know, having access to first-party data is such a luxury. It's a differentiator, even, especially in the landscape that we're living in right now.

WILSON RAJ: Yes.

KELLY MAHONEY: So it's really, it's all of that that's allowing us to be able to action against highly personalized experiences in the digital landscape, to create that sort of human connection when there isn't a human.

WILSON RAJ: You know, Ulta has always been sort of in the forefront, in the category for digital innovation. We talked earlier about the virtual GLAMlab, and I know that there's a host of other very innovative immersive interfaces that you have created for your clients. Could you talk about some of them?

KELLY MAHONEY: Oh, absolutely. About 18 months ago, we created a digital innovations team. And their focus is all about in a plane, really figuring out new technologies that we think our customers will love. And one important one, outside of GLAMlab, that we talked about, but another important one is the skin analyzer. So the skin analyzer is an important one because skin is a difficult product to sell.
Makeup, you can try makeup on. And you can see whether or not that looks good, whether or not you like that. Skin's different. Skin's about problem resolution. And you don't necessarily see those results immediately. And so we figured out this tool that you can use on your mobile app, and it allows you to analyze your skin and provide you with recommendations in the moment, based on what the tool has noticed.
Maybe it notices that you have wrinkles, and we can help you with some anti wrinkling. Maybe it notices that you have some dark spots from sun damage, and it can offer you recommendations on products. So this has been a really great tool for us, where we're kind of combining a bit of play with the idea of solving a problem, and then adding personalized recommendations that are even split out based on price point, too, so going a layer deeper and trying to really get to a place that the customer, then, will convert and purchase those products.

WILSON RAJ: Right. I think, to me, what you've described, Kelly, is beyond hyper personalization, because you're right, makeup on the skin, you can certainly personalize that, but getting into individuals' skin tones, skin conditions, and then from there going from the inside out, that is a true audience of one person in the entire world. So to me, I think using things such as AI and data for that is such a cool thing.
Now, speaking of data, in your opinion, from a beauty brand perspective, are there other sources of data that has been maybe underutilized or maybe left uncaptured that could actually drive even more valuable insights?

KELLY MAHONEY: Yeah, definitely. I mean, I think we have a tremendous amount of data. So we have over 95% sales penetration, member sales penetration. So we know everything about what's going on with our members, what they're buying from us. The area that we've been focused on, and these tools like GLAMlab and skin analyzer really help us get underneath more about preferences, and browse data, and how customers are engaging with us.
Because in our business, we're not a every week purchase. We're a about three times a year, on average, type of frequency business. So the more access that we can get to that non-transactional data or that preferential data is really important to us. And that's why we've done some things like rate and reviews. And we are looking for feedback loop all the time in our personalized recommendation, to understand, are we getting it right?
I love-- and this is not an example of Ulta Beauty-- but I really love how Stitch Fix has their, it's almost gamified, way of learning about their customers' preferences. And I've found myself just waiting for a doctor appointment and running through the Stitch Fix app. We want to continue to create access to that type of data.

WILSON RAJ: Yeah, I love that example. And I think that's, I think really illustrative of not just the beauty brands but, I think, all retailers, in terms of creating those moments that stick. And it's not an opportunistic thing. It's something like, as you say, Kelly, of value. Can I make my skin more healthy and then how that linked to overall well-being.
So and I think even your brand, the new brand, beautiful possibilities, takes it from, should I say, the word skin deep to even something that's even broader, health, a lifestyle kind of thing. Are you finding that kind of reaction from your consumers?

KELLY MAHONEY: Yes, well, I would-- absolutely. I mean, beauty and wellness intersect. And we've really taken note of that. And so where we can step in and provide that guidance becomes very meaningful, very, very powerful. And that leads to what we like to call brand love. We're moving beyond the idea of just even loyalty to this concept of brand love. That's our ultimate goal, is we believe all the things that we're doing, all of the digital innovations that we've just talked about. The application of our data to create personalized experience is not to create loyalty, of course it is, but really the ultimate goal is love, an emotional connection.

WILSON RAJ: That's great. So I think this is a good point here to kind of do a little bit of crystal balling. I mean, you're already doing so many innovative things. I can't for the life of me, at least from where I'm sitting, think of like, wow, what's the next thing for beauty brands at large?
So from where you're sitting, and being right in the midst of this thing, what are some of the trends that you think are interesting or that might be more mainstream in a year, or two years, three years from now, or a business model that's changing, what's your take on that, Kelly?

KELLY MAHONEY: Yeah, I've thought a lot about this, obviously, in my role. And I know that industry-wise we've been talking about personalization for so many years, but honestly, I'm going to say it again. I think it's really about getting personalization at scale. That's what the trend is, and that's what's on the horizon. It's no longer these point-based solutions or these channel approaches to personalizing, but how do you integrate so that you're creating, in our case, a beauty journey that's personalized for the customer, wherever they are? And that's what's on the horizon. And I'm not sure we can point to any retailer that's really got that down pat, but that's certainly-- that is our focus.

WILSON RAJ: I love that, personalization at scale, certainly in the moment. And you're certainly employing all kinds of great technology, certainly AI, real time data, immersive tech, such as augmented reality, to help you do that but do so not just throwing some technology there, but I think you've got a much broader strategy in view. That was very clear from our conversation here.

KELLY MAHONEY: Well, thank you so much. It's definitely a-- takes a village. And we have an amazing team at Ulta Beauty. I couldn't be more proud to lead the customer marketing team and be a part of this amazing fast-growing brand.

WILSON RAJ: Thank you so much, Kelly. I think this is a great spot to wrap up this discussion. That's it for this week's episode of the Reimagine Marketing podcast. If you enjoyed today's show and content, be sure to head over to sas.com/experience2030 to join the conversation. You can certainly subscribe to more of the content on your favorite podcast platforms for show notes, and bonus content, and also hear previous episodes and guests. So thanks for listening. And I will see you on the next episode of the Reimagine Marketing podcast. Take care

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Episode 2, Season 2: Experiential Tech: Happier Customers, Increased Profitability

JUSTIN THENG: Today's consumers not only expect a lot from brands, they also capitalize on AI, IoT, mixed reality, and other immersive and emerging tech. This puts tremendous pressure on marketing organizations to reinvent their operating models so that they can act in the moment. But if you think about today's consumer expectations, they're pretty hard to meet, and you haven't seen anything yet.
Tomorrow's level of customer experience and personalization will need to be even smarter, more immersive, and more trust enabling. The question is, are brands and consumers ready.

I'm Justin Theng. I'll be your host for today, and I'm joined by Professor Matt Kuperholz. Matt was trained as an actuary but has been practicing data science for the last 25 years, focused on AI for the last 20.
He's PWC Australia's chief data scientist and a partner in their consulting business. He was awarded by Australia's top analytics leader by their premier industry body, and one of Australia's top 100 knowledge workers by then prime Minister Malcolm Turnbull, and the Office of the Chief Scientist, and most recently, one of the global top 100 tech innovators. Matt, it's great to have you with us.

MATT KUPERHOLZ: Thanks, Justin. Thanks for having me.

JUSTIN THENG: Matt, could you for the sake of the audience, just-- I mean, I've given an outline. You've obviously had an illustrious career. Can you give us a bit about your journey to this point?

MATT KUPERHOLZ: Sure thing. I guess it started back in 1972 when I was born, at the same time as the first microprocessor was born on a chip from Intel. I don't think that was a coincidence. Instead of sleeping with teddy bears and stuffed toys, I slept with toasters and irons. I've always been a massive fiend for technology. I still remember when my relationship with computers started in the late 70s and has been a continuous love affair ever since.

As a child, when you're good at maths and you want to get into business, there's not too much choice back in the day. So, I became an actuary. But I also studied computer science, and I was looking for a way to bring those two disciplines-- or actually, three disciplines. That's maths, computer science, and complex problem solving-- together, which I guess is what we call data science nowadays. But when I was put through University by an actuarial firm in the early 90s, we didn't know it as data science.

It's just the direction my career took first with the actuarial firm. Then jumping into an AI startup company that I was a general manager for. I had my own web development company. And I then started my own consulting firm in data science after we sold the AI firm, but quickly found myself with one main client, that being Deloitte, and started a great adventure with them, building an analytics practice in the early 2000s around the world.
I've since left Deloitte where I joined PWC as a partner and have been on a similar journey with them. Obviously, the market has changed substantially. I still remember Justin talking to clients in the early 2000s and saying, this business problem you're having, it's quite possible we can solve this by using the data that you've collected in your operations. Could you imagine when that was a completely novel idea and no one was thinking that way, to then everyone thinking that way, but no one being able to do it?
Like shooting fish in a barrel, the golden age of data science consulting, to nowadays where it's taken as a given that we are collecting and working with ever-growing-- in fact, exponentially growing-- amounts of data. And our customers and citizens expect that we're using the evidence at our disposal to best service them. So that's kind of the journey. Lots of technology, lots of nerding out. It's been great.

JUSTIN THENG: Yeah, you've been an entrepreneur as well as a consultant. And it's interesting that you said you've been on this journey for 20 years. I wish the listeners could see this. There's a visual behind you. You've actually got motherboards-- it looks like motherboards-- in the background just up on the beams.

MATT KUPERHOLZ: Yeah, I do a little bit of art in my spare time. I love the creativity merging with technology. Incredible global events like Burning Man make me very excited where you see technology as art, and I think that's one of our crowning achievements is the miniaturization that goes into electronic computing, and I find it quite beautiful.

JUSTIN THENG: Incredible. Matt, are you reading any books or blogs at the moment? How do you stay up to date with such a fast-moving industry?

MATT KUPERHOLZ: Yeah, look, I usually have a couple of books on the go. I have a bunch of websites I read regularly. It's interesting with AI. The field is growing so incredibly quickly. I think I'm at the cusp of-- well, certainly I don't have my arms around all of the detail, but I just feel like I've got my arms around some rough idea of everything that's going on. But with its exponential growth, it's becoming even more challenging to do that.

However, books, I guess pretty different. I'm a big fan of science fiction, so I'm reading a book called "Cryptonomicon" By Neil Stephenson. My girlfriend's been a practicing Buddhist for over 10 years, and I've just started chanting with her, so I'm reading an introductory book called "The Buddha in Your Mirror." and I've been playing a bunch of chess through COVID and lock down, so I'm rereading a classic called "Lasker's Manual for Chess."

JUSTIN THENG: Incredible.

MATT KUPERHOLZ: And also, I read every year "How to Win Friends and Influence People" from Carnegie—

JUSTIN THENG: Dale Carnegie.

MATT KUPERHOLZ: Dale Carnegie.

JUSTIN THENG: Yeah, yeah. Good old Dale.

MATT KUPERHOLZ: It's a good reminder.

JUSTIN THENG: I saw a super chessboard the other day. Somebody posted it in one of the Discord channels that I'm in, and it's four rows of all the pieces. So black has 4 kings. White has 4 kings with 4 queens. And you have to checkmate all 4. That'd be incredible to play.

MATT KUPERHOLZ: Wow. Yeah, there's actually been this movement of chess computing getting so strong that instead you rearrange the pieces or try novel arrangements of boards to mix things up a bit.
JUSTIN THENG: Now that's actually quite an unintentional but quite a good analogy for what it's like to be in marketing at the moment, or even CX for that matter. Anywhere where you're touching customer data there are so many moving pieces, and the competition always seems to be talking about the best moves that they've got. And but in reality, when I speak to CX leaders and CMOs, the general feeling is that wow. We're really early on in the curve. To me though, it's a really exciting time to be a leader in marketing. What are your thoughts on that, Matt?

MATT KUPERHOLZ: Look, I agree. A theme that you'll see me coming back to quite a few times in this chat, Justin, is that of the exponential times we live in, which is not my idea. It comes from Singularity University, and Ray Kurzweil and Peter Diamandis, two futurists that run it. And just quickly, the background to that is acknowledging that computing power is growing exponentially. We know that with Moore's law. But also that many other things, the storage of data, the communications, AI, a whole bunch of technologies are actually exponential in terms of their performance per dollar.

And their third point is that all of these exponential technologies support and reinforce each other. So when you're able to interact with the real world through IoT which is exponential, and automation which is exponential, and gather exponential amounts of data and crunch it using exponential computing power, and then find the hidden patterns with exponential AI, and then service individuals through a combination of all these technologies, it very quickly means the ability to market, or more importantly, relate, with individuals automatically in a cluster of one that understands their needs, aims, wants, and desires, is incredibly powerful.

And it actually brings that kind of win-win situation. With exponential technology you don't have to be robbing Peter to pay Paul, but rather you can actually have happier customers and a more profitable company. And I think that's the trend that we're on. Although when you sort through all the hype, I would propose, especially in Australia, that marketers are underutilizing the technology at their disposal to really take advantage of what is possible in a data driven world with regard to servicing customers.

JUSTIN THENG: And Matt, with so much exponential opportunity, why do you think it is that marketers are underutilizing the technology at their disposal?
MATT KUPERHOLZ: So again, Justin, it's really complex to sort through all the hype. The skills of doing this are in high demand. It's usually not a single technology out of the box that will gather all of the data, but rather an experienced data science led approach that says, in your organization you have latent assets in your data. Those assets are your operational data sets about the customers or the market that you're facing into, the customers that you have, the customers that you've lost, every marketing campaign you've run, every physical point of presence or virtual point of presence, every product you've sold, every price you've changed, every product your competitors sold, and marketed, and discounted in the process they've offered.

And then you've got geospatial and temporal overlays as well as the opportunity to enrich with social data and external data. We're talking about a very complex environment. The most successful marketing analytics campaign I've ever run, which was still many, many years ago, has not been bettered in terms of the response and the value delivered was for a 200-year-old North American bank. It was the most successful campaign they'd ever run.

We used AI to consider 17,000 metrics for each of their 10 million customers. So, to actually find the right offer for the right customer, we were simultaneously considering 17,000 different things about them, which is an incredibly high dimensional data set. And it's challenging to find the signal in the noise in such a large number of dimensions, but my personal belief evidenced through years of practice is that generally the more data the better. The more I know about you and are able to compare what I know about you with someone else, the better.

Which is why also in a digital world, the ability to experiment and test many, many different permutations and combinations on subsets of our customer base and learn from what succeeds with different customers and double down, essentially A/B testing across the whole alphabet, is another way to generate and work with data and technology, but something that's also relatively nascent in most companies marketing operations.

JUSTIN THENG: With 17,000 data points I think it was that you said, how does a human trust that the outcomes, the decisions that are being made by the AI, are appropriate, that maybe the model that was used is appropriate? How do you go about that?

MATT KUPERHOLZ: So, let's not talk yet about my latest obsession being responsible use of AI, which is appropriately governed, ethically sound, and the performance is unbiased, fair, transparent, explainable, robust, and secure. Let's put that to one side. Imagine I have some black box, and in this case, it's an AI that has built a model looking at the interrelationship between 17,000 variables, and we're trying to predict an outcome, which is your response to a certain campaign through a certain channel.

A very old trick, and not just used with AI, is that idea of withhold testing and cross-validation. Which is if I randomly choose for my 10 million customers, 1 million customers that the model is not allowed to see when it learns. So let's say in this case, I learned from 9 million customers. And in the remaining 1 million customers, I have some known outcomes, campaigns they responded to positively or didn't respond to.
I then disguised that from the model, rewind carefully in time to what those customers looked like before that campaign, passed it across the model, see what the model thinks, and compare it to the known outcome. So, you can always use historical data, in a way, to test and validate the models you've trained on, as long as you're very careful and very scientific about avoiding something called information leakage. But essentially, to sum it up, you've got data where you know the outcome. You use that to test your model.

JUSTIN THENG: That's obviously more than just technology. That's a thinking process. How do you go about leading others, Matt, to think in this way? I mean, there is a balance, I believe, between this behavioral science gut instinct, knowing how people tick, knowing what to look for and what questions to ask. And then, like you said, the huge data sets. Now how do you go about leading a team, for example, your own, to thinking this way or thinking through a challenge?

MATT KUPERHOLZ: It's not just our team. We actually have a service now that most of our clients have analytic teams, which is uplifting their analytics maturity as well. And all of this is very technology independent, Justin. It's not about a particular approach, or piece of kit, or even data set, or industry or problem domain. The answer is, you have a standard yet flexible process, an analytics process, and we use one that's actually over 20 years old.

But whichever one you use; you'll find that the good ones all have the following in common. They don't start with an analytical problem, or a data problem, or a technology problem. They start with a very clearly defined business or societal problem. We need to know-- and you mentioned it in your question-- we need to be very clear on what the question is we're actually seeking an answer for. And then we need to be equally clear at the tail end of this whole process, and what are you going to do with the insight.
I often say, OK, so your question is, I have a problem with customer churn. I would like to know which customers are likely to leave me next. And I say, well, OK. Here is a magic wand, and this magic wand represents everything in the middle of that process. Finding the data, engineering the data, running the models, running the predictions, tuning the models, et cetera. This magic wand is now predicting with 100 percent accuracy, sensitivity, and specificity exactly which customer is going to leave you next month.
How do you bank that money, Justin? What do you do next? Then you have to realize that your question was different. Which customers am I able to save with the offers at my disposal at the right investment in terms of their potential lifetime value if saved? My question is not about who churns. My question is about profit maximization through savability. So, you realize that when I put it to you that the analytics is not the hardest part, that I will give you-- if I give you this magic wand, you still are miles away from banking the money.

You've got cultural changes. You've got marketing execution challenges. You've got possibly legal, ethical, or moral challenges. You've got staff challenges. You've got all kinds of different things that mean it's much greater than simply analytics. But nevertheless, the answer to the question is, this whole thing starts with a process of getting the question right and at the tail end knowing what you're going to do with the answer. And in the middle, there's a very structured way of thinking about taking data on a journey from the operational systems to an analytic data map, choosing the right technique, applying that technique, rigorously testing it, for example, through the cross-validation I described earlier, and then deploying and executing.

JUSTIN THENG: In your experience, what is the level of-- I want to say data capability-- of the marketing people that you talk to? What level do you think that they're at? Because I know that from a more customer analytics background or data analytics background, the leaders tend to lean more into that. But you mentioned a lot of soft skills. What do you see out there in your conversations?

MATT KUPERHOLZ: So Justin, I'm a pretty harsh judge.

JUSTIN THENG: So am I.

MATT KUPERHOLZ: I don't score many companies in the world, or governments, as making full use of the incredible value of the data at their disposal because, in fact, the value from data is unbounded. The questions you can answer when you join it together and find patterns in the right way are theoretically unbounded, and practically levels of value that are very rarely attained. The best examples of attaining them are your AI first entities. Your Googles, your Facebooks, et cetera, that are built on a data and a data mining model.

Everyone else, in my opinion, is falling short. And that includes almost every Australian company that I look at them and I say, hey, whether you are digging stuff out of the ground, putting stuff on the shelf, or moving stuff from a to b, I can find you incredible efficiency simply by looking at this great asset of your data. So, I don't score anyone as doing anywhere near their full potential. Now within that harsh criticism, I must say that marketers are even further south of there. But that's OK because it is early days. It is comparatively early days.

But on the other side of the coin, your customers are very soon going to be overwhelmingly represented by digital natives and those that have grown up expecting treatment at an individual level-- relevant treatment at an individual level. I mean, I buy something online, and then I find from the cookies with that thing I keep seeing ads for the same thing for weeks afterwards. And I'm like, what a fail is that. I've just bought that set of, in this case, electric drums for my daughter. Why are you showing me ads for electric drums? You know, that's just a Mickey Mouse example of a technology getting it completely wrong.

JUSTIN THENG: Yeah, absolutely. There's an anecdote that one of our customers shares of his. And I won't say the brand because I don't want this to become a product demo. But his wife walked into his own stores, bought an iPhone, and left the store, and was being retargeted with iPhone ads. Exactly what you just described with the electric drums, and she actually complained to him and said, I just bought an iPhone. Why are you spamming me with-- and there is a role for that real time piece there. What's something in the last 12 months, Matt, that you think might help our listeners?

Now I want you to be completely honest because I'm going to be the black sheep here first. I don't like the phrase marketing as a standalone function, quite frankly. I have always seen marketing and sales as part of the revenue generation pathway, and now customer service is also a part of that because we're looking at customer lifetime value, or average order value, cut size, that kind of thing. So, when it comes to data-- and I'll let you answer the question in a second-- but when it comes to data, I think you've touched on it a couple of times now, it's a bit overwhelming.

And I feel like marketers, one, don't have access to the real tools that others might, like in predictive data analytics fields for example. And two, I think there's this kind of, I want to say, the legacy version of marketing, which is very gut feel, very what makes people tick anecdotes, that kind of thing. And three, the upcoming generation of marketeers, if I could call them that, who are data hungry, who are consumers themselves, they don't have as much of a feel for what makes people tick.

And we saw that during COVID. When all the data became difficult to use, more and more difficult to use, and things stop working. Funnel stopped working. Facebook stopped working. Google Ads stopped working. What do you do next? So, there's that skill gap there. So, what's something in the last 12 months that you think might help our spread of listeners?

MATT KUPERHOLZ: Yeah, I'm going to give you a couple of observations I've made because I think they are ultimately exciting and heading in the right direction. The first point is that end to end view not just of your customer, but of your position in market and your entire relationship not being about revenue maximization from marketing but being profit maximization across the whole value chain. From acquisition through to retention, it's actually about a present value of the lifetime profit, not the revenue, right? Because it's a tradeoff.

And you may actually realize that you have a different relationship with the household, not just the individual, and that you should consider the individual in their business context as well as in their personal context. So, all of these are-- it's important to look wider than that, than just marketing. But instead, the whole, as you said, get the provisioning right in the first place to stop complaints in customer service.
Build a relationship where they trust you and they want to interact with you, and then your marketing is a completely different proposition. In fact, it might be pulled and pushed in a different way. So that's one idea, and I've seen that greater sort of horizontal integration. I've seen a bunch of interesting AI first contact strategies where you start to build a relationship with an always on customer service AI agent that's starting to blur the lines between marketing service and just relationship building.

I've seen some really interesting advancements in what we call privacy enhancing technologies, which means if you're organization A, and there's organization B, let's say it's a Telco and a bank, and you would both benefit from sharing data about your mutual customers, and in fact your customers would benefit as well, but there are privacy constraints and other reasons why you can't simply hand over your customer data to each other, privacy enhancing technologies, which are relatively new, allow you to get the benefits of sharing that data without actually sharing it through things like home and morphic encryption and zero based proof.

So that's an exciting development because you remember my earlier remarks about the more data the better, even when you share it between organizations, especially with the right ethics and permission from your customers, that's even better. And the final advancement, which I think is hopefully a trend that will continue and will solve many of the challenges you were talking about, Justin, which is we've seen marketing being taken more seriously as we've seen CMO's join the boardroom table. What today's companies are going to massively benefit from is CDOs and CAOs, chief analytic officers and chief data officers, being elevated to that executive level and considered part of the most senior contribution to a company's ongoing livelihood.

When you take data seriously enough to elevate it to the board level, guess what? It's going to permeate through marketing, through service, through operations, through employee wellness and safety. By recognizing its relevance and putting it up at that senior executive level-- obviously I'm biased making this observation-- but you'll see a few major Australian companies going in this direction already, we will start to see the benefits more fulsomely captured.

JUSTIN THENG: And who owns the narrative, Matt? If a CDO or CAO gets elevated to the board level, who owns the narrative of what the data is saying?

MATT KUPERHOLZ: Well, they must be in tune with the needs of their fellow board members, right? So, what are the questions that the chief strategy officer needs to answer to pull the company in the direction of its strategy and purpose? What are the questions that the chief marketing officer needs answers for? What are the questions that the chief financial officer or the chief operating officer need answers for? The chief data and analytics officer is going to furnish them with answers to those questions, and there's only four types of questions we ask in the world, and in fact, in analytics, Justin, which is broadly, what has happened.

Help me accurately report on the past. What is happening? Help me segment, classify, and understand the present. What will happen? Help me forecast the future. And what should we do about it? Help me optimize between choices of scarce resources. And any and every business and societal question can be put in one or more of those four buckets. And any amazing analyst can answer the question with data.

JUSTIN THENG: Do you know what? In that short phrase, and I know you probably saved that silver bullet until last, that answers a ton of questions. If a marketer or-- well, let's say if anyone who's looking at what's best for the customer from a lens of profitability as well as customer satisfaction, those two together, if they were to just ask these four questions. What happened? What has happened? What is happening? What's going to happen? And how can I do something about it? That's brilliant. Matt, it's not-- sorry. Were you going to say something?

MATT KUPERHOLZ: No, no. Just to agree and to reinforce that all of those questions can have hard, and reliable, and verifiable answers when the right analytic technique or techniques are applied to data that's engineered in the right way.
JUSTIN THENG: Brilliant. And that's not necessarily the head of marketing's job, but the job of the head of marketing is to ask the right questions, know where to find the answers, and know how to get the answers.

And what to do with them. Ask questions that are actionable with that magic wand. Pretend you've got the magic wand, and now show me how you're going to bank the dollars.

JUSTIN THENG: And let go of all the vanity metrics. All the stuff that doesn't matter.

MATT KUPERHOLZ: 100%.

JUSTIN THENG: Now it's not every day that I get to talk to one of Australia's top 100 knowledge workers and the global top 100 innovators, so I have to ask your views on the future as we start to wrap up. Are there any industries or developments, big picture-- you even mentioned societal questions earlier. I'm very interested in that. Are there any developments that are inspiring you about the future?

MATT KUPERHOLZ: Yeah, absolutely. These exponential technologies when pointed in the right area, and I fundamentally believe humans are good, mean that we start generating even more value from even scarcer resources. So, look at the fact that we knocked out a vaccine in under a year. Look at the fact that AlphaGo, that was originally a Go playing computer using a new form of generative adversarial networks, has now solved protein folding. So just quickly, protein folding, a notoriously difficult NP complete problem.

And if you start to solve it using AI, that means you are going to make incredible leaps forward in drug discovery and personalized medicine. So, we're going to do away with horrible things like cancer. The leaps forward we're making in environmental sciences and renewable energy now just make good commercial sense, not just good moral sense. I'm incredibly excited about those technologies and what they offer the world. AI in general, I think, is one of our crowning achievements as a society if we step up to the plate and acknowledge that it brings with it a whole new risk profile which we need to address responsibly as well. But on the whole, I think it's a very bright future for us.

JUSTIN THENG: Brilliant, and I couldn't agree with you more. And what I love about our chat today, Matt-- and thank you for sharing your insights-- what I love is that we went very technical, but at the end of the day, technical in terms of process. Or at least for some of our listeners who maybe aren't data scientist, probably were like, wow. How do I achieve all of this and how do I get my head around all of this? But I mean, as you summarized it earlier, the four steps, the four questions, I think summed it up perfectly.

But it is true that the same advances that we're seeing in our technology for marketing is actually an overflow of the advances that we're seeing more broadly. And you're right, AI is a crowning achievement. It brings with it a whole bunch of questions that we need to answer at a societal level, and we need to answer at an organizational level. We also need to answer it at a personal level. What information am I willing to give over? So that's a very fascinating topic, and probably a podcast all of its own.
MATT KUPERHOLZ: Sure. Well, I've spent the last couple of years focused on that, so I'm happy to pick that up another time, Justin.

JUSTIN THENG: Great. Thanks for joining us today. Guys, thank you for listening and joining us on Reimagine Marketing. This has been Justin Theng. I've been joined with Matt Kuperholz, and I look forward to seeing you next time.

Episode 1, Season 2: Marketing Planning: An Objective Without a Plan is Just a Dream

[MUSIC PLAYING]

SPEAKER 1: Hi there, and welcome to the second season of The Reimagine Marketing Podcast. My name is Steven Hofmans, and I will be your host for this episode. In today's sessions, we'll talk about marketing planning. We will try to answer questions, like can marketing planning and agility go hand in hand? What do you do when your marketing plan ends up in bad results.
And to find an answer to these difficult questions, I have invited the lovely Sandy Kirchhoff. Sandy holds a master of science in marketing and has held different marketing positions at Office Depot, from retention manager to head of campaigns and, today, senior manager of commercial marketing. She's always planning for an awesome customer experience and a good return on marketing investment, making her the perfect sparring partner for today's topic. Welcome to the podcast, Sandy.

SANDY KIRCHHOFF: Thank you, Steven. Glad to be here.

STEVEN HOFMANS: Oh, happy to have you here. So let's start with my favorite part of the show, which is your marketing quotes. Every time I invite a guest, I ask them about their quotes. So I'm very curious, what is the quote that you prepared for your audience today.

SANDY KIRCHHOFF: Well, it's not directly related to marketing, but it is related to what we're going to be talking about today, marketing planning. So my favorite quote-- probably my favorite quote life is from Benjamin Franklin. It's "by failing to prepare, you prepare to fail".

STEVEN HOFMANS: Wow. That's actually a good one for this session.

SANDY KIRCHHOFF: It is, isn't it?

STEVEN HOFMANS: If you don't plan, you don't know where you're going to. Oh, I love it. Thank you. Very surprising. Oh, it's great. I'm very excited to have you as a guest today. I'm really excited also about the topic marketing planning. It's not always a very fancy topic or sometimes the audience is looking at the topic of, OK, should we do marketing planning? Yes or no.
So really excited to have you here and also have you from your experience and your background from Office Depot. So just to allow the audience to get to know you, can you explain a bit your journey at Office Depot, where you started, and how you became the commercial marketing director at Office Depot.

SANDY KIRCHHOFF: Sure, Steven. No problem. Oh, gosh. I've been with Office Depot-- well, Office Depot Europe for about 10 years now. I started as a data quality executive that was looking after making sure all the different marketing teams were entering proper data into our campaign planning tool. And that wasn't an easy one because we were scattered across different locations, all the marketing teams were separated.
Some were looking after online, some were looking after offline. So it was just kind of making sure everybody's working in the right way in the same tool. And I think that really helped me in the role that I am today. And I think that's also why marketing planning is so close to my heart because I have been doing that since the beginning.
And I've kind of gone onto a journey over the last couple of years of just consolidating across Europe. So as part of Office Depot's history, we've been looking at creating more synergies and efficiencies by consolidating countries, consolidating channels. And I've always been part of that process and making sure everything's set up correctly and bringing all the different marketing teams together. And just having been there for the last 10 years and helping shape the Office Depot that it is today or the Viking that it is today, which is actually our e-commerce brand that we operate under in Europe, that's kind of brought me to my role today.
And I think my planning and being a little bit of a nerd when it comes to that has kind of helped me in my role today.

[LAUGHING]

STEVEN HOFMANS: What I like is that you start at the foundation, right? It's all about it starts with data, having good quality data, gaining insight from that data. And then you can steer, I assume, your marketing plan. One of the things that I find very interesting is you talked about aligning different countries. You talked about making sure that we are all going in the same direction.
Having these diverse set of cultures, what are the challenges or what is the advice that you can give? How do you align the marketing organizations with those different backgrounds or different cultures and make sure that they still have their own local touch?

SANDY KIRCHHOFF: I think you just got to do it somehow. I mean, it's really important to be aware and to be conscious about the different cultures that are in the different countries, so really understanding the mindset that particular cultures have and some don't have. So I think with me being a German, I'm very aware of the fact that I can be very direct, I don't like to smooth things over.
But I know that's not appreciated in all the different countries. If it comes to more English-speaking countries, it's much more about being polite. So a little bit having more stereotypes in your head, but I think being open is probably the most important one. Being open to understanding that things are different at different countries and just, together, trying to manage through that. And I think it's about gaining the trust of everybody.
So it's not about forcing something from one culture from one country into another one but really doing it together as a team and by including everyone as well. So I think when we started doing this, it's about involving all the different countries from when we used to be separate by country, and then just looking at what's the best way forward and trying to get people to understand the benefits because it is more efficient to consolidate across the countries.
And I think, let's say, the more natural ones-- so for example, Germany, Austria, and Switzerland are much more natural to consolidate rather than trying to combine the German or the Dutch market. So I think just by taking it step by step but taking the learnings from that, that will help in coming to a European approach. But also never forget countries are different, customers are different in the different countries. So we have a lot of 80-20 rules in place, but probably the same applies here as well.
So on average, we can probably consolidate and combine 80% of all our activities, and then we can specialize for the 20% that's needed.

STEVEN HOFMANS: Yeah, it makes sense. I think also that the way you explained it is everybody needs to-- everybody has his own culture, but also the customer has his own culture. I remember you talking about having like-- is the French customer, is it the same customer as the German customer? Is it the same customer as the Dutch customer? Or do they all shop differently?

SANDY KIRCHHOFF: At least what we can see in our customer base is they're all kind of different. So we can see French customers, for example, they have a much higher affinity for free gifts and for things being more colorful when it comes to free gifts. So there, if we choose-- for a backpack, for example, we'll typically go for a colored one. Whereas in Germany, a black backpack would be working much better.
But we can also see the decision makers are quite different. So again, a typical situation that we have is the secretary will be placing the order in Germany, whereas in the UK it's much more the head of the business or one of the managers that will be placing orders. Also, the genders can differ quite a lot across the countries. The Dutch market, for example, is a very gender-neutral market where we have equal share.
So the customer is different in the way the customer likes to place orders, the way the customer likes to be incentivized. All of that needs to be taken into account into a marketing plan. And we'll make the adjustments and the adaptions that's needed across the different markets.

STEVEN HOFMANS: So, actually, when you look at the planning perspective, you have indeed a fixed amount 80-20, but actually what I'm hearing now is that that 20% can go very specific because every market has its very specific needs, you need to adapt your promotion strategy to every market. So probably customer journey, also, you have a very specific customer journey strategy per country as well as they shop differently in the different countries.

SANDY KIRCHHOFF: Yeah. So we'll standardize where we can. For example, we might be standardizing certain email campaigns, certain printed media, but then we push it out differently to the different segments depending on the market. So even though, within a channel, we can adapt to that specific country or to that specific customer, it doesn't mean the material cannot always be standardized. Or we might decide to do a promotion on paper, but what paper we promote might then, again, be different per country.
So it can go down to a very detailed level, but from a high level point of view we will standardize and then adapt. But it's true, so it can be in the channels, it can be in our promotions. So there's a lot of different angles that you can look at it from.

STEVEN HOFMANS: So every country can still have a number of freedom in how they implement their promotion budget or the promotion assets. Sometimes when I discuss with companies I hear that rigidity goes hand-in-hand with planning, while I think there should be room for agility. And I think, with COVID-- So we are in December 2019, your plan and budgets are ready. And then you kick off the first quarter and everything works fine, seems promising because you built that whole nice marketing plan based on your 80-20% rule.
You have a local strategy. But then, at some point, COVID kicks in. And you need to or you need not-- I don't know-- to adapt your whole marketing plan. How do you handle such a situation?

SANDY KIRCHHOFF: I think for us, we handled it very well. And I think this is where people sometimes get the wrong thought in their head. Just because we plan doesn't mean things are set in stone. And I think that's one of the first things that I'm hoping I can eliminate through the session today, is to get that out of people's mindset, is that planning doesn't mean you can't change anything. So what we'll do is, yes, we'll create a 12-month plan.
We'll create that ahead of time. And obviously, COVID was something nobody had foreseen or at the speed that it came up. But if it's not called COVID, it was called something else. It just might have been smaller or slower, but something will always come along that will make you adapt your plan. So we've handled it within our regular process which, again, brings back that 80-20 rule.
So we have a 80% fixed campaign plan or marketing plan where we leave 20% room for adjustment. But even when we talk about that 80% plan, it's quite high-level. And we'll go through refinement sessions throughout the year. So, even though I have a 12-month plan, I'll revise it and refine it every quarter to make it more specific. I'll do that again on a monthly basis.
And then I'll even break it down onto a weekly basis. And by going through those different refinement sessions, I'm much closer to the campaign goal. I have dates, and I can adapt either my target group, my offering, my promotion, whatever it is that needs to be altered for that specific period of time. So even though I have an 80% fixed plan, there's still a lot of room for us to change. And we've handled COVID that same way.
We've gone through those refinement sessions. We've just done them slightly more frequently or give a little bit more room for ad hoc than we would have previously done. But in general, our standard campaign planning cycle that we've implemented a couple of years ago-- and that's really been kind of trial and error proof-- we've been able to use during this time. And that's given us a tremendous amount of security.
So as much as I run or, within my department, have a marketing planning team that does all of that, that creates this huge marketing plans for the next 12 months, I think we're very agile and very flexible in the way that we're running our activities because we always leave room for doing this.

STEVEN HOFMANS: So the impact of COVID is more about the fact that, OK, the plan, you put in more agility and more flexibility in this case but you also increased the frequency of planning reviews, maybe, to adapt to the ever changing market. Because that's what I understand, is that the market is changing faster. So the frequency goes with it. The faster the market is changing, the more frequency you'll have reviews of your planning session in comparison to before COVID. Is that correct?

SANDY KIRCHHOFF: Yeah, absolutely. And I'm sure, as for the majority of retailers, we could really see product life cycles changing as well. So the demand in certain assortments that have been there before have decreased. At the same time, demand has come up for assortment that wasn't as big before or as popular or new assortments. For example, with those rapid tests that you can do at home, that's something that didn't exist before. How do you market that and make that available to your customers?
But I think for us, the most important thing as we have been able to rely on our existing processes that we have implemented over the last years as having planning a fundamental part of our business.

STEVEN HOFMANS: I found very interesting the fact-- and this is, I think, a reality that many retailers had during that COVID period. You said some demand was higher, and then the demand got lower for other products. So how do you handle that from a marketing perspective? Do you start promoting certain products that nobody wants anymore? How do you-- because you have that stock, so I'm very--

SANDY KIRCHHOFF: Yeah, obviously, I don't think anybody ever expected we were going to have a worldwide crisis and running out of toilet paper

[LAUGHING]

STEVEN HOFMANS: Yeah, that's true. Nobody wants to starve without toilet paper.

SANDY KIRCHHOFF: Exactly.

[LAUGHING]

STEVEN HOFMANS: That's funny. No, good. Interesting. Next, so you have the planning aspect. And then what comes in with planning is also being able to track marketing activities, being able to track in what state your campaigns are. How did people react to the fact that you could see, OK, we are in this planning stage, you need to spend this amount of time on campaign? We're going to track where you are on your marketing plan and we're going to evaluate.
How did you succeed in that specific change? I don't think it's something that you can do over a day. But how did that work? How did you go to that tracking perspective and being able to allow an evaluation of the things you're Doing?

SANDY KIRCHHOFF: When it comes to measuring our campaign success or our marketing success, overall, there's a lot of different things that we would be looking at. So whereas, historically, we've been much more focused on looking at product performance or looking at the performance within individual channels, as part of the transformation that we've been undergoing at Office Depot Europe to transform into an omnichannel business, which very much means breaking down the silos of looking at channels individually but looking at the customer and what the customer needs and, to a certain degree, not looking at the channels anymore. And I think by doing that as well during the last year, that has helped us understand the customer better and also what works and what doesn't work. Because it doesn't make any sense for us to measure, for example, catalog performance when we don't know if our catalogs are reaching our customers anymore because we're not sure if they're at home or if they're still going into the office because we're still sending most of our material into the offices. So it's really looking at it from a customer point of view and measuring the customer, not the channel, and then bench-marking ourselves against competition or against what the market is doing.

I don't think looking at traditional office supplies-- obviously, during COVID, they've been decreasing. So it's not only that they're decreasing with ourselves, but they're decreasing overall. So it's how do we benchmark against what's happening in the market, but what other categories can come in to compensate for this? Which is then perfectly fine because, if we can compensate our sales through new categories or through increasing things like disinfectants, toilet paper-- I think that's going to be one of my favorite examples out of COVID times, is the amount of toilet paper we sold.
No, but you're going to have to start counterbalancing your product sales by shifting your focus into categories that weren't as high on your radar as previously. And then, in terms of your campaigning or your channels, it's going to be different. We've had a tremendous amount of increase, obviously, on our website; customers coming more to our website than potentially calling in to our call centers, which has also been still quite popular in some of the countries. And it's understanding that shift that customers are going through, and then trying to make sense of it, and also accepting it, that this is the way that things are going and times are changing.
But by not looking at an isolated channel anymore, so potentially looking at certain call center KPIs, they just might not be relevant anymore. So as we've gone through this change and the customer changing and the market changing, it was really important for us to also change our KPIs and the way that we measure because some of the more traditional KPIs are just not as applicable anymore as they've been before. We've been testing quite a bit to see what works, what doesn't work.

STEVEN HOFMANS: So what I find very interesting here is that people behave like they're KPIs. I understand. So you went from maybe a less customer-centric organization if you look at KPIs because its channel performs, a lot of that amount of people that are coming on the website, amount of email opens. But if you start evaluating people in that way, I understand that what you're saying is then people start not thinking about the customer but thinking about the performance of their channels.
And you guys made a total shift to saying, OK, those channel performance, it's a negative. It's interesting to know, but what we actually want is we want to put the customer at the center of our organization and start working with customer-centric KPIs. Is that correct?

SANDY KIRCHHOFF: Correct.

STEVEN HOFMANS: Yes. So, from my perspective and from the audience perspective, what are good examples of customer-centric KPIs that you would track to allow to understand how good the customer is in relationship to Office Depot?

SANDY KIRCHHOFF: Well, two fundamental things for us that we're looking at is customer journey analytics; how many touch points, how is the customer interacted with before they place an order with us. Because that really gives us a good understanding of the combination of channels or touch points that are needed to get that conversion, the same as with attribution modeling. So really, how much of the final sale can we then attribute to those different touch points?
But then it's really looking at what percentage of customers are active and actively coming back to us. How many multi-buyers can we generate? How many of the new customers that we gain during this COVID time are staying loyal customers with us? Have we been able to increase the share of wallet of specific customers?
Breaking it down to the different customer segments or not looking at the entire customer base, but looking at the smaller customers or the larger customers. Do they behave differently? Because it's quite easy-- and I think this is the trap that a lot of people will fall into, especially on a more senior level, is they tend to look at the sales. How much sales do we generate? But sales is a product of different things coming together.
How frequently does your customer come? How high is the order value of that customer? That's what makes your sales. And those are the KPIs you should be a lot more focused on than just saying 'I want to grow my sales' or 'I want to do more'.

STEVEN HOFMANS: That makes sense. How do you measure brand awareness, for example, if you run brand awareness campaigns because you want to be top of mind. And you want to say, OK, give me two office suppliers. The first one should be Viking or Office Depot.

SANDY KIRCHHOFF: Of course, always.

STEVEN HOFMANS: From a marketing perspective, you need to invest but I understand that it potentially doesn't immediately generate a sale. So you need share of wallet. Very important, I understand. Amount of customer journey touch points, attribution modeling is very attractive. So those are techniques you would recommend to the audience to use to look at, really, from a customer journey perspective.

SANDY KIRCHHOFF: Absolutely.

STEVEN HOFMANS: I have another important questions there that I sometimes across. So the attribution modeling, it helps you-- which team helped to consolidate the sale or which channel or campaign contributed to a specific conversion. The question I often get is, how do you make the link to, OK, we have the attribution modeling, do you then use those results to adapt your marketing budgets in the different channels for each country? Because I can imagine that every attribution model in every country could be different.
Or how do you work with the results of your attribution modeling and journey KPIs? How does that get fed back into the marketing planning system?

SANDY KIRCHHOFF: Oh, I was already afraid you were going to ask me a very analytical question.

STEVEN HOFMANS: No, no, no.

SANDY KIRCHHOFF: Or you're going to get me into trouble with my data science guys on how they built the attribution model. No, but indeed. So we do look at attributed sales across the different countries, across the different channels, and how that shifts on a month-by-month basis. And then we will adjust our budgets accordingly. So we do very actively work with this.
So, again, we have a process in place of reviewing this on a regular basis and then looking at do we invest or not invest into specific channels. So we will adapt our budgets based on this, yes. And the same goes with our journey analytics. But it's been a process of getting to that point. It's not something that just happens from one day to another.
Everybody has to learn to work with the data differently because there's-- in the first instance, it seems like there's winners and losers because some channels will get more sales attributed, other channels will get less sales attributed. So there's a degree of change management that needs to go with this.

STEVEN HOFMANS: No, makes sense. But you talk about your 80-20 rule, and we've talked about it in the beginning about you set your marketing plan and your campaign planning 80-20. Then we talked about adapting agility, flexibility in your planning. It's also 80-20. So you have your marketing plan set 20. But then again, at the budget level, you're saying, again, every evaluation round or every time you sit together, you also there, I assume then that your budget is partly fixed but, based on the outputs of the attribution models, you start shifting your budget to get better conversion and results.

SANDY KIRCHHOFF: Yeah, absolutely. And I think, again, that's one of the major benefits that we have of being a centralized European organization, is we can not only shuffle and move our budgets around across the different channels, but we can also do this across the different countries because there's very few decision makers that come together for all of Europe. So we can really see how markets are shifting, how our sales are shifting across the different channels. Because there's going to be a lot of country-specific impacts, such as seasonality and holiday periods.
And we can-- constantly might be a little bit too much-- but on a regular basis, we can review the numbers. And then we can, together as a group, decide if we want to start shifting some of those budgets across. And that really makes us much stronger as a group. But here, again, the most important thing is I think we do this-- it's a joint decision. So we have the owners of the channels, we have different marketing teams coming together and kind of reviewing this together.

STEVEN HOFMANS: That makes sense. That makes a lot of sense. We talked a bit about evaluation attribution modeling is a way to evaluate your marketing efforts. Whenever you put in measurements in place, people are a bit scared. And then they ask you "we've been doing marketing for five years and we got good results, now you start measuring. What should I do when the results are bad?"
It's a hurdle that people are afraid of to take. They say, "but maybe I don't want to show you that I have bad results. So what do you do as a marketer when you have bad results, right? And how do you communicate that to your manager? And how should an organization look at that?

SANDY KIRCHHOFF: Well, it's a culture change. So you need to let your people know that it's OK to fail sometimes or to make mistakes sometimes. So I think, before you start changing those KPIs or also be aware that people might be afraid of, all of a sudden, you start measuring something you haven't done before, you start measuring things differently. Because, ultimately, you're trying to do something better for the company and trying to get better results for the customer.
So if somebody does deliver bad results or not as good as they have been previously, as long as you understand why they've changed or what didn't work and you then optimize and move on from there, there's no reason anybody should be worried about things being measured. Because you can obviously only improve and get better if you know what's gone wrong and if you can start measuring it but then also afterwards measure the success if you've done something right. So I don't think anybody ever needs to be afraid of putting those measurements in place.
But it's very much the responsibility, I think, of all the different management levels to let people it's OK for things to go wrong sometimes.

STEVEN HOFMANS: When you change that, when you communicate, when you allow people to have bad results, did you see an impact in the organization? Was there more experimentation, more creativity? Or do you see any benefits of having these type of cultures where you foster fail fast, actually, it's almost, right?
SANDY KIRCHHOFF: Yeah, it is. And we can see people are a lot more open, willing to share. But we have been testing quite a lot in all the different campaigns or channels, so we very much have an established test and learn culture. But again, that's taken time to grow. Somebody needs to take the first step and say 'it's OK, and I'm willing to do this.' But it also sometimes takes management to stand in front of the employees and say, you know, I've made a wrong decision or we've done something that wasn't right, but we've learned from it and we've moved on.
So I think if you lead by example as a manager, then your people will start to feel that. But also don't punish people. Don't tell them something's gone wrong or something's bad. But give them that comfort blanket of it's OK sometimes if things don't go as planned. And one will catch on from the other.

STEVEN HOFMANS: It makes sense. It's leading by example. I assume you, as a manager, also sometimes have bad results or take wrong decisions.

[LAUGHING]

SANDY KIRCHHOFF: No, of course. And at least the way I like to manage my team is, or just the way that I am is you can hold me accountable for everything I do. if I've done something wrong or something didn't go as planned, I'll just say it as it is and move on from there. Don't dwell on the past, but look at the future. What can you do because you can't change anything that's happened in the past anyway?

STEVEN HOFMANS: No, that's true. You can learn and build together, I think. Build together on the roads to success. We're coming to the end of this episode. What can you say to organizations that are at the start of implementing marketing planning processes? And what are your best tips and tricks for those people that are starting that marketing planning journey?

SANDY KIRCHHOFF: Start small. Don't try to cover everything at once. Start off with one channel, one market depending on where you're coming from. And really find the best way for yourself of how to organize the different teams, and then start adding on.
Because if you try to do everything at once, it becomes overwhelming and it seems like an impossible task to do. But if you really start small with consolidating two countries, for example, then you'll start to see the natural and right next step. And don't have your mind set on planning means you need to fix things. Always make sure that you have enough head space to say there's flexibility and room to change things.

STEVEN HOFMANS: OK, interesting. So Sandy, I really learned a lot during these sessions about having customer journey KPIs, having your 80-20% rule is something I'm also taking home. And then the last one is don't try to eat the whale at once. Try to drop it in pieces.

SANDY KIRCHHOFF: Exactly.

STEVEN HOFMANS: Do it piece by piece. Thank you for joining this podcast. It was really fun for me. Thank you for that. And on this bombshell, we'll end this episode. Have a great day, everybody.

SANDY KIRCHHOFF: Thanks, Steve.

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What defines today’s customer experience, and how will consumers and brands evolve through the year 2030?