Igniting Entrepreneurial Sparks (#28)

Igniting Entrepreneurial Sparks,
w/ Michel JORDI

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Full podcast transcript:

 

We were four people at the launch of Le Clip. Six months later, in November, we were 50 people, and we produced 10,000 watches a day.

Ben: Michel, welcome to the podcast!

Michel: Hello, everybody! Thank you for having me here! I’m looking forward to a great talk with you!

[00:01:37.17] Ben: So Michel, in preparation for this podcast, we read your book — we read ‘Ignite That Spark’. I mean, it’s a wonderful book! You could call it a self-help book for entrepreneurs, but I think it’s more than that. I think it’s really a celebration of entrepreneurship. And so, we’re going to talk about this book, in quite a lot of detail. But I hadn’t realized, until you arrived this morning, that you’d also written an autobiography because my impression of this book was that, you know, I loved it, I would advise everybody to read it. It’s a very easy, compelling read, but the bit that it misses a bit is your life story. And then, when you arrived this morning you said, “Actually, I’ve got this massive tome, which is my autobiography.” And so, if you don’t mind, can we start there? Can we start with just a little bit of your background? How you entered the watch industry? You did your first startup at 23 in Japan — how did you end up in Japan? So, if you don’t mind, could you fill in the gaps on Ignite That Spark and tell us how you started in this industry and why you were in Japan in the first place?

my dad was my first role model, the perfect example of what I really did not want to do with my life — Michel JORDI

Michel: Yeah! It sounds interesting, thank you very much! You know, life is a journey and it’s a learning process. We learn every day. I’ve been a very, very curious person, enthusiastic, loving life. When I grew up, my dad had eight-to-five jobs, leaving every morning at 7:30, coming home for a one-hour lunch break, and go back to work until 5 PM. And when I saw him in action, my dad was my first role model, the perfect example of what I really did not want to do with my life.

Ben: Yeah, sometimes happens.

Michel: I mean, I decided right there in my teens, “This is not what I’m going to do. I want to be independent, to break free, to be my own boss in planning my day.” This was really my goal. Fortunately, I had a fantastic mother who, when I was 18 or 19, she said, “You have to go to England. You have to study English because if you don’t speak English you’ll never get anywhere in your life.” So I went to England — actually, not in London. I was at Leeds University, which was great because nobody spoke German or French there, so I was forced to speak English every day and to learn it quite quickly. I must say, it’s a great language — the language of Shakespeare, which I love very much. When I came back, my sister had already moved to Geneva because she wanted to improve her French and she said, “Why don’t you come down here?” So I still remember, 16th of April 1969, I ended up and I slept on the floor in my sister’s studio. That was my first night in Geneva. I immediately was very quickly in a company in Geneva, a watch factory. It was a time when the Japanese watches became very strong — Seiko, Citizen — and all their watches had metal bracelets, except the Swiss watches. We had only leather straps. And I remember, they put me in charge of the purchasing department there, at that watch company. And our salesmen always complained that we did not have any metal bracelets. So they told me to seek for metal bracelets. So, I looked around and I realized that the manufacturers in Switzerland, first of all, they were only very few and very expensive — 50 francs or more a metal bracelet. So, I looked around and I realized that all these bracelets came from Asia — Japan, Hong Kong, Korea.

[00:05:14.28] Ben: At that point, was the Swiss watch industry losing competitiveness because it didn’t have metal straps?

Michel: The Swiss watch industry was in deep trouble — really threatened by the Japanese watch manufacturers. As I said, Seiko, Citizen, Ricoh, Orient — these were the four big ones. But it was not only the bracelets, but technological changes. Number one, there were the quartz watches because the Swiss, although they invented the quartz watch, they didn’t believe in it. The Japanese used that technology and they made the watches always thinner, and thinner, and thinner. And the Swiss watches were big potatoes, heavy potatoes. Nobody wanted them in the world markets. And in addition, in all those warm and hot countries, humid countries, a leather strap is dead after three or four months. So that’s why the Japanese have metal bracelets. And I wanted to bring those metal bracelets to the Swiss watch manufacturers, as well.

Michel: So, I left for Japan — I was 23 years old — made a joint venture which was my first startup at age 23. And there, in Tokyo, I remember I had 10,000 Swiss francs in my pocket, and I knocked on the door of the biggest major bracelet manufacturer in Japan — 3000 people. And I remember as if it was yesterday, the president of the company, the chairman of the company, he received me there, I explained to him about my dream, what I wanted to do. He did not even let me finish my sentence. He just came out and said, “Jordi-son, you must have a big dream!” And so, he told me, “Look, if you don’t have big dreams, you never get anywhere.” You know, I expected that we would discuss five or 10-year plans. The guy spoke of the 21st century and the Silk Road long before it was a thing. He said, “Jordi, I’m going to make a silk road to Europe and you will be my first link.” That’s where it started. The bracelet was my first business. I founded that in 1971. And after about 15 years, I kind of got tired. I mean, business was flourishing, we made 25 million Swiss francs in sales with metal bracelets. I was the biggest supplier of metal bracelets to the Swiss watch industry. Everybody used my bracelets.

Michel: And then, Le Clip was my second company. The way Le Clip came along: I was always looking for new designs for watch bracelets, and we worked with a lot of freelance designers. And one day, I came into an office of designers, here downtown Geneva, and there was a drawing of a clock in the shape of a closed pack. There is a big clock, those taper clocks which you put in watch stores as advertising. And when I saw that clock — this was in 1985 — it was just shortly before the Swatch watch was launched. And when I saw that, it was within one night; it was a spark, really. A spark. I saw the whole business plan, I saw this, instead of a heavy brass clock, I saw that in plastic with colorful fancy designs, and to be clipped on and wore anywhere, everywhere except on the wrist. And so, the next day I went back to these guys, I bought the drawing for 1000 Swiss francs. And then, I developed the whole thing. And that was in September 1985. Le Clip was launched on June 10th, ’86. I mean, seven, eight months later, we were on the market.

[00:08:55.11] Ben: When did the Swatch watch come?

Michel: ’82 or ‘83.

Ben: Okay. So you were riding the wave.

Michel: Yeah. I was riding the wave. It’s true.

[00:09:06.25] Ben: Yeah. One of the anecdotes I loved from the book is that… So, you’ve spotted the opportunity to do something a bit different with Le Clip and you got some investors on board. And then, you said those investors became a bit nervous and they wanted some external party to validate the opportunity. And they called on McKinsey to do so. And McKinsey pretty much rubbished the idea, right? Or at least said that you couldn’t price it at any sort of premium. And you chose to just completely disregard the McKinsey report and just launch anyway, at the price point you’d already thought.

Michel: Yeah. I’ve mentioned this in my book, Ignite That Spark. For me, everything starts with a vision. And my vision was so clear about this Le Clip watch. I mean, as you said, I took the Swatch watch as a benchmark. But it was not a wristwatch. And our slogan, actually, was “The watch to be worn everywhere except on the wrist.” That was our slogan. And, for me, it was clear I had to position it at the same price as the Swatch watch — 50 Swiss francs. Not 49.95 or 51. It had to be 50 — exactly the same thing, with the same very, very trendy, colorful, advertising and promotions. And I was just sure. I work a lot with my guts. I listen to my guts. And I had the gut feeling that this was the thing to do. And I put 35,000 watches in production.

Michel: And in the beginning, the problem was I couldn’t find any retailers. Nobody wanted to buy that watch because it is not the watch you sell at traditional watch retailers. They didn’t look at it as a watch. So, I went to see department stores. And department stores loved the idea because it was colorful, they saw the success with the Swatch watch. And the big advantage that you have with the department stores is you get a lot of frequency. People come through. They just go through these stores, they see it, they look at it. And at 50 Swiss francs, you impulse purchase. But still, my two partners were afraid. They said, “Michel, you have to make market research.” So we did market research by McKinsey. And the report came out just about a month before the launch. It was devastating! “No one will buy the product. Totally useless. It’s a gimmick. Who the hell cares about a watch in a closed pack, and what is the watch for if you can’t wear it on the wrist?” And I used that, actually, as my promotional slogan: “The watch to be worn everywhere except on the wrist.”

[00:11:49.26] Ben: There’s a great photo in the book, with “You’re wearing it everywhere but the wrist”.

Michel: Yeah. Actually, we made the front of the People Magazine in the United States. Front page! And People Magazine into circulation is three and a half million, with 46 million readerships. We made the front page of People Magazine! It was amazing!

[00:12:10.10] Ben: So, please buy the book, but if you don’t — this is a photo of Jordi and he’s got watches hanging off his mustache, his hair, his eyebrows, his ear, his finger. It’s a very impactful image.

Michel: Yeah. And if you turn the page, you see Andy Warhol, who came as a special guest for the launch in New York, in October 1986. And, actually, he told the journalist, “I’m waiting for Michel to make a version to clip on my contact lenses.” I loved that one! He was a great guy!

[00:12:48.06] Ben: So your lesson from the McKinsey incident — we’ll call it that — was that you can’t put too much stock by market research. It can essentially prevent you from doing what your gut tells you — and your gut is sometimes a better yardstick of what might work than market research.

Michel: Yeah, for me, at least. I mean, I listen to my gut. Everything I do, I listen to my gut. Which, of course, it doesn’t mean that you’re always 100% right. I mean, sometimes you know, it is a little bit trickier. What market research does not do is it does not take into consideration your advertising expenditures and your promotions. I mean, we sponsored the Montreux Jazz Festival. We had an advertising budget of a million Swiss francs in 1985 or ’86. That was a hell of a lot of money. We had TV commercials, billboards, and the Montreux Jazz Festival. And people just loved the product! I mean, it took off like a rocket. We sold 1 million watches for 23 million Swiss francs in the first year. I mean, imagine, that’s almost 2 million per month for a startup in which the McKinsey report did not believe in the product at all. We were four people at the launch of Le Clip. Six months later, in November, we were 50 people and we produced 10,000 watches a day. I mean, just structure-wise, organizational-wise, everything was just so fast. It took off like a rocket. In all of my life, I’ve never lived anything like those first six months. It was just absolutely unbelievable! The sky was the limit — I can say that!

[00:14:42.29] Ben: And how did that feel?

Michel: It felt fantastic! It was so motivating! It was actually uplifting. We were like on a cloud. We were just running through the world on a cloud. It was unbelievable!

[00:14:59.08] Ben: One of the things I also liked about your book, which resonated with me was — I mean, it’s obvious when you talk about your dad’s life story that you wanted something that was in opposition to that rigid corporate life. But then, what you say in the book is that, as an entrepreneur, you feel the highs so much more and also the lows so much more. And so, I can just imagine how it felt to, first of all, prove all the naysayers wrong. And then, to get something out there, where you’re producing, 10,000 watches a day, and everybody wanted it. I mean, I can just imagine how that felt.

Michel: Yeah! I mean, department stores like Grand Passage in Geneva or Globus in Zurich, they had to empty their cash register on big days — Friday, Saturday — they were doing it three times a day. There was so much cash, they couldn’t put the cash anymore in. At that time, you didn’t pay by credit cards. You paid cash.

a lot of people say, “The business plan is dead, forget about the business plan.” I think it’s totally wrong. — Michel JORDI

[00:15:53.28] Ben: Yeah. That’s wonderful! So I guess, also, you were very much part of the renaissance of the Swiss watch industry at that time, right?

Michel: Yes! Which, as I said, was initiated by the Swatch watch. And this came along. It was in the same trend.

[00:16:09.29] Ben: So, in this story in the book, you talk a lot about your gut instinct. You also have this — you call it, ‘ready-fire-aim’, right? This idea that if the timing’s right, you’ve got to get something into market, and then you can iterate after that. But, at the same time, you talk a lot about the importance of writing a detailed business plan, documenting the mission, the vision. How do you reconcile the ready-fire-aim mentality with having really detailed business plans? Because this was one thing where I kept reading those two statements in the book and thinking “I’m not sure they’re completely consistent.” So I just wonder how you, yourself, reconcile those two.

in discussing with young entrepreneurs who always say “I have a great idea, I want to do this and this.” I say, “Put it on paper.” — Michel JORDI

Michel: The book is divided into four parts. Part one talks about the lucky clover, which is the first four commandments. And those first four commands are vision, guts, different, and timing. And I think these four are so important — and what I’m telling all young entrepreneurs is, “Fill this out — that lucky clover — and evaluate it with notes from zero to 10, for each of the four leaves. If you hit 40, you’re gonna have a home run.” In those three companies, I always had 40. And that’s why the three companies became international successes. I mean, Le clip, The Swiss Ethno watch, the Twins Heritage — they all were 40 point measurements on the lucky clover. But if you’re below 30, I think you should really worry about what you’re going to do as an entrepreneur.

Ben: Yeah.

The only thing that changes all the time is the market. So adapt to it. If you want to be successful and stay in business, you have to adapt to the market. — Michel JORDI

Michel: Then you have to start to measure what is missing, which of the four parts are not correct? What I’m trying to say in this book because a lot of people say, “The business plan is dead, forget about the business plan.” I think it’s totally wrong. Well, what I think is, it’s almost impossible to do and what is not right is when people ask you to make sales projections for the next three to five years. This is extremely difficult, especially for a new business. But what is important in writing your business plan is going through the thinking process of your business. It’s like what I also explained afterwards in my rainbow target, which talks about marketing, price positioning, and all these different things. It is very important, when you write a business plan, it forces you to go through the thinking process of your business, and then, suddenly, you get stuck somewhere. Did you think about distribution? Did you think about marketing? Did you think about the point of sale? All these things, you have to think of it. And I felt, in discussing with young entrepreneurs who always say “I have a great idea, I want to do this and this.” I say, “Put it on paper.”

Ben: Yeah.

Michel: The minute they put it on paper, they get stuck. They don’t know what to write on the paper. That’s what I’m trying to say, if you cannot put it on paper, that means your vision is not clear and it’s going to be very, very difficult to reach your goal. But then, as I also said, ready-fire-aim means you cannot always get all the parameters 100% the way you would like to have them, because there’s some gray zones. You don’t know exactly what to do. If you want to, just aim all the time, you can aim for 2,3,4 years — you never shoot. So there comes a time, there’s a certain factor of risk involved, you have to shoot and then aim as you go along because then, you really, in the real world, you’re in the market, and you have to adapt to that market at all times. Markets are changing. The only thing that changes all the time is the market. So adapt to it. If you want to be successful and stay in business, you have to adapt to the market.

[00:20:16.16] Ben: Yes. Jeff Bezos talks about this idea of being able to take decisions when you’ve got 80% of the available data.

Michel: Yeah. Exactly!

[00:20:26.15] Ben: So what you’re saying is a business plan for you is making sure you understand the big blocks that will be needed to be successful. So, understanding your go-to market plan, understanding how you’re going to do marketing, distribution — but it doesn’t have to be completely precise. And there’s no point in doing five-year projections.

Michel: Absolutely! I totally agree! No, I mean, as I said, you cannot always have everything right. There is a gray zone, which you only know once you’re in the market. That’s what I’m saying. Then you start to aim.

part of the problem is when you make a disruptive product — like Le Clip and also the Swiss Ethno watch — if you want to make a market research, you’re going to meet some people. They all say ‘no’. Do you know why? There are no benchmarks. They cannot compare with something existing. — Michel JORDI

[00:20:56.29] Ben: Tell us a bit more about the Swiss Ethno watch.

Michel: Well, as I said, I mean, from Le Clip, the problem with Le Clip was it grew so fast that I just couldn’t finance the whole project. I ran out of cash. So, I had to bring in an investor. And I was very naive and believed everything he said, instead of taking a lawyer or an advisor with me to make sure we all do every step properly. I trusted my two former partners, that they will take care of that part. But instead, they partnered up with the new guy, and they kicked me out. So I mean, a naivete. I concentrated on business, whereas they concentrated on what is the best way to kick him out so we can take control of the business, you know? And then, of course, I didn’t know what to do.

[00:21:55.29] Ben: You’re right! I’ve missed an important step, which was exactly this point, which is, you lost control of your own company. And I think this is, again, one of the lessons you draw in the book, which is around managing cash flow. Because this is a classic case of, you just grew so fast, there has been such working capital pressures on the company, that in the end, you had to take in what we might now call ‘vulture capital’ — you took in capital that came with, ultimately, in this case, really horrendous repercussions. So, talk to us a bit about some of those lessons. I mean, I think there’s a whole section here.

Michel: Yeah, it’s commandment number 10 — Cash Flow. Cherish your cash. Cash is your oxygen, as in if you run out of it, you die. But again, I went to IMD, I went to Harvard. That is exactly what they tell you everywhere: “Be careful. Don’t run out of cash. Grow slowly, because if you run out of cash, you may lose control.” That was the situation with Le Clip. And there was just no choice. It just went through the wall! You can’t stop it. You can’t stop it. But then, I mean, maybe today, what I would have done differently, I should have immediately taken my personal lawyer or advisor and make negotiations myself instead of my first partners doing it. Because, in the end, they just partnered up, as I said, with the new investor and kicked me out. I mean, the guy promised to invest seven and a half million Swiss francs in 1987. That was a hell of a lot of money. He brought two and a half million. The rest never came. So, I took a lawyer, I started to attack him, but I had already lost the majority when the deal was done. I was below 50%. And he brought only two and a half million. What can you after it? It was too late! I couldn’t come back. I mean, I was kicked out but as I said, in hindsight, you’re always smarter, you know what you should have done differently. I just had to acknowledge that this was one of my learning curves, one of the things which did go wrong, but I knew should have been done differently. But I can also say that had there not been Le Clip, there would never have been the Swiss Ethno watch because I couldn’t do this with the Ethno watch, without all the lessons, everything I learned from that first experience.

[00:24:34.06] Ben: And so, talk to us about the Ethno watch. First of all, where the idea came from, how you executed the idea, what you did that was different from Le Clip? So, building on the learnings from Le Clip.

Michel: Well, first of all, Le Clip was sold at 50 Swiss francs, it was a fashion accessory wore everywhere except on the wrist, but the Swiss Ethno watch was a classical wristwatch to wear on the wrist with a leather strap. But, what I did differently because after Le Clip, I made a trip around the world to see former friends, to get ideas, brainstorm what should I do next. I mean, I was devastated, I lost my ground, I had a family to feed, I had two kids. And I knew only one thing: that I wanted to remain free and independent. So, no way that I would go and work for somebody else. So I went around the world, saw old friends, and asked for advice, “What do you think I should do?” And several of them said, “Make your own watch. Why don’t you make your own watch?”

Ben: Yeah.

Michel: As I said, “Who is ever going to buy a watch where it says ‘Michel Jordi’ on the dial?” I just couldn’t envision that at this point. I didn’t have the confidence to put my name on the dial. It was my wife, actually, who convinced me. She said, “You have to do it!” She felt it was a great idea! She’s Korean origin, she has a big spirit and can think big. After a few months, I decided, “Okay, let’s have a go!” And then, these people I met around the world in Singapore and Japan said, “Why don’t you make a typical Swiss watch? Like the Swiss Army knife.” Now, what is so typical about Switzerland? The most typical symbols we have in Switzerland are the cows and the edelweiss. So I took to cowbell, embroidered the edelweiss on the strap, and the cows went in circle around the bezel of the watch — That’s exactly it. It was amazing! It was an amazing timepiece. But, again, part of the problem is when you make a disruptive product — like Le Clip and also the Swiss Ethno watch — if you want to make a market research, you’re going to meet some people. They all say ‘no’. Do you know why? There are no benchmarks. They cannot compare with something existing. So, they said, “This is a kitschy tourist trap. No Swiss will ever buy the product. Maybe you can find some tourists in Interlaken or Lucerne.” But I decided to do it anyway. I put 10,000 watches in production before I even had an order.

I did not sell folklore, I sold lifestyle — Michel JORDI

Michel: And, again, retailers didn’t want to buy it. I decided to make it rare and limit distribution to only 100 product sets. But each one of them had to invest in a package of 100 watches for 20,000 Swiss francs. And I managed to get them together. It was very, very hard work, a lot of persuasion, a lot of traveling, but finally, thanks to Bucherer — the big retail chain store, Bucherer — they ordered 1500 watches as a starter. And once I had Bucherer on board — the best retail in Switzerland — all the other followed because if Bucherer says that’s fine, then, I think it must be something good. So, I managed to put them together. I made an amazing launch. I invited them to launch the product to the cradle of Switzerland, at the shores of Lake Lucerne for an unbelievable launch party, for which they had to dress in their Swiss national costumes. They were all motivated and joyful. They all went home and said, “We’ve got to spread Swiss Ethno fever”, and suddenly the product took off. I can also say, one thing is, we spent one and a half million at the launch party, advertising, and promotion-wise. If you cannot advertise heavily in promotion, you don’t have a chance to bring the message across.

Commitment is 200% and you never think about the plan B, when you start. It’s impossible. — Michel JORDI

[00:28:47.04] Ben: Yeah. Because you’re trying to persuade people to change their buying behavior.

Michel: It’s a must. You have to make it a must. I wanted it to make it a must. But I did not sell folklore, I sold lifestyle. The most important thing was to sell it as a lifestyle product.

[00:29:04.23] Ben: There’s a few things to delve into, here. So, one is marketing. I mean, I’m a marketer myself, and so, I loved some of the things you were saying in the book about marketing, because my frustration or my critique of a lot of marketing efforts is they put too much emphasis on just one of the P’s — promotion. And what I liked a lot in your book is you talk a lot about the other three P’s. And one of the things you talked about a lot was these launch events and the impact you can have of getting something on the radar of people, of the consumer who’s time-poor, of the publications who are stretched in terms of resources. And so, a big launch event could catalyze the branding and the marketing of something new. So, can you talk to us about that? Because I think that, again, there’s a lot on this in terms of these launch events.

Michel: Yeah, it’s crucial. I think it’s crucial in our success. If you only advertise or communicate through classical marketing, you have those beautiful pages in magazines. But today you open a magazine, there are tons of advertising. Tons of advertising, also, of watches. But people don’t talk about an advert. They just turn the page. But when you make a crazy event, like what we did — we made a fashion show at Piccadilly Circus with cogs, a Swiss Folk group, and Swiss flags, as well. I mean, Piccadilly stood still. And then we made the Swiss Primetime Evening News. I made an advertisement at the foot of the pyramids, in Egypt. We took a sailboat up to the foot of the Matterhorn. All those crazy events. Then, what it does is, first of all, it projects the company as being very dynamic, disruptive, unusual. And, at the same time, people talk about it: “Did you see what the guy did? It was cows and edelweiss and camels in front of the pyramids or a sailboat at the foot of the Matterhorn!” People talk about things like that. So you can stretch it for quite a while. And especially, also, I always invited my retailers — the network — to these events, because I wanted them to be part of it. And very often, we didn’t just invite the owners, but the sales personnel because suddenly, the sales personnel was there at the launch with the owner of the company — with Michel Jordi. They could talk to him. You know, you have to be very humble in these situations. We’re all the same. And the retail, if you want to sell something, it is a long chain. Many people are involved and important for a sale. And I always say, a chain is only as strong as its weakest link. And, if at the front of the sales point, the salesgirl, the salesman, doesn’t believe in your product, doesn’t propose your product, you’re not going to make any sales. So, that’s what I say. Then you advertise. The last ‘p’, as you mentioned before, is the point of sale. If when you advertise, you cannot have a really optimal presentation, your product doesn’t stand out on the point of sale. You’re not going to sell it.

[00:32:29.23] Ben: And I suppose this idea of hacking — we might call it hacks or guerilla marketing — it’s actually become probably more, not less important, right? Because we’re all on our devices, we’re all even more distracted than we were in the past. So, it’s even harder to get on to the consumer’s radar because the consumer is more attention-deprived than ever. So I think the lessons in here are, you know, it’s not like because you were launching watches in the ’80s that these lessons are not applicable today. I would say they’re even more applicable today. And the other thing I liked a lot when you were talking about marketing was the importance of price on the one hand, but the other thing was packaging.

in my age, it was a shame to fail. It was a real shame. People looked down on you […] I mean, I failed four times. So what? Give yourself a chance to fail because, as I said, the most important thing when you fail is that you learn a lesson every time. — Michel JORDI

Michel: The packaging is very important. The first contact your customer has with your product it’s the packaging. First of all, you have to stand out! Of course, I mean, I’m lucky. I mean, I’m a Swiss citizen. What are the Swiss colors? It’s red and white. And red is the color of passion. Red was always involved in my packaging and everything. So red stands out. My books are red.

[00:33:39.15] Ben: Yes, that’s true! And also, for the Ethno watch, timing, again, was very important because you timed the watch to coincide with Swiss anniversary, right?

Michel: Yeah. Again, it’s part of the lucky clover — the first four commandments — as I said, vision, guts, differentiation. If you’re not different, if you don’t have a USP or a competitive advantage, you don’t stand a chance. And then, the last of these four is timing. And I realized that all these companies, which have been very successful, the timing was just perfect. And there’s a market research by American Venture Capital Group who revealed that 42% of startups fail because of bad timing. And I must say, sometimes it takes a portion of luck. I mean, the Swiss Ethno watch, without the 700 years anniversary, will probably not have been as successful as it was. Because we got a lot of write-ups from the press because we linked it with this 700 year anniversary. And if I come back to Le Clip: Le Clip was because I could jump on the bandwagon of the Swatch watch. And then, the Twins Heritage — I mean, imagine, my third watch, the Twins Heritage. I made Le Clip 50 Swiss francs. The Swiss Ethno watch, gold plate — 395. And then, after that, I come with the Twins Heritage — the price is ranged from between 70,000 to 220,000 Swiss francs for watches. When you go to any university, any business school, they just tell you, “This is simply impossible. You cannot, with the same brand, Michel Jordi — Le Clip was different — but from 395 you go up to 70,000 or 200,000!” Everybody said it’s impossible. And that’s what the press told me: “You’re crazy! It’s simply impossible. You’ll not be able to do it!” You know what? We made a fantastic launch event, with a great write-up in the Tribune de Geneve, production for Twins Heritage was booked out for a whole year within only two weeks after the launch. And we sold over 4 million Swiss francs of watches, in the first year. It was amazing! And because it was, again, something different.

[00:36:12.06] Ben: I just want to get back to the idea of guts, which is one of the four parts of the lucky clover. How do you rank guts? Because clearly, you’ve shown massive guts, putting a 10,000 order for Swiss Ethno before you’d even had a single retailer prepared to take it. It shows massive bravery. But, how do you rate guts out of 10? Because I can see how you could see what’s in the market and you get a sense for, this is 10 out of 10 differentiated. I can see how you can look at the timing and say, “Okay, there’s something I can hang this on.” There’s some market change or some technological change, and that’s the perfect timing. I can see how the vision you could rank it out of 10. How do you rank guts out of 10?

Michel: Well, I guess everybody has his own way of measuring his guts’ capacity or whatever. I mean, I just kind of developed it. Somehow I developed this and that was always very daring. I mean, guts is daring courage, risk-taker. I mean, guts has a lot to do with risk-taker. I took a hell of a lot of risks in my life. It also failed sometimes. I mean, that’s why I’ve fallen on my nose. But the good thing about guts, it’s like when you eat: sometimes you bite up a little bit too much than you can chew. So, you have to work your way through, to be able to chew it down and digest it. It’s the same thing with guts. Sometimes, you maybe took a bite a little bit too big. But it forces you to find solutions. You just have to go because giving up is no option. My book, actually, the autobiography, the English title, actually, is “Guts” and the subtitle “Giving up is no Option.” That’s the only thing, just guts. I envision things, I fix myself objectives. And then, of course, you have to weigh “How far can I go? How much can I bite up and hope to be able to digest?” And then you just have to run for it. You just have to work. It’s very, very hard work. And you just don’t give up. There’s no choice.

the best product in the world is of no use if people don’t know that it exists and where to buy it and why should you buy it — Michel JORDI

[00:38:36.20] Ben: Yeah. And another part of the book is where you were interviewed, and somebody said, “Well, what’s your plan B?” And you laughed, and you said, “There is no plan B”. So it’s gut almost like a proxy for just how committed you are to this?

Michel: That’s a very, very, very good question. As you say, correctly, this TV presenter asked me, “What’s your plan B for when you start your new company?” No. Commitment is 200% and you never think about the plan B, when you start. It’s impossible. That means you have two business plans. You have, “This is what I want to achieve” and “This is what I do when it fails.” That means that you plan to fail there in the first two weeks or the first two months. Forget it! Then you’d better don’t start. I mean, when you launch something, you plan to be there at least for a year or two or more. And since the markets are moving so much in six months, once you choose this, the market will be so different, everything’s so different than when you started out, that you cannot foresee what will be your plan B by then. So, just focus and concentrate on your success and make it happen.

[00:39:53.09] Ben: In the book, you point out that the pace of change is accelerating all the time, which is, I suppose, a good and a bad thing, right? Because more and more opportunities are opening up for entrepreneurs. And then, you say that also, that it’s become cheaper and cheaper to launch startups because the barriers to entry, the tech costs of creating a startup are falling. So, is your advice now, still the same as it was — i.e. create a business plan, have massive conviction, do the research, understand if it’s differentiated? Or is it more trial and error, now, because there’s so much change, to do more startups, to try more things?

Michel: Of course. Of course. I mean, time is now! I mean, your time is now. Of course, the thing is, you cannot stop progress, and we cannot stop where we are moving now. But I think every era, every period has its pros and cons and its advantages. I would say, today it’s so much easier to start a company, than in my time. First of all, in my time, it was almost impossible to find the money. We didn’t have the same technology. We had no computers, we had no iPhones, we had nothing. No smartphones. Today, all the tools are there. They are at your disposal. And also, I mean, in my age, it was a shame to fail. It was a real shame. I mean, people looked down on you, “Look at this guy! He failed!” I mean, I failed four times. So what? I mean, give yourself a chance to fail because, as I said, the most important thing when you fail is that you learn a lesson every time you fall. And, as I said, without Le Clip, I could never have done the Swiss Ethno watch; and without the Swiss Ethno watch, I could not have done the Twins Heritage. Everything became an evolution and was a fantastic learning curve. And what I can say, also, in hindsight, I don’t regret anything. I had a fantastic life. I enjoyed myself. I never looked at my watch. I never felt that I was working. Yeah, as a watchmaker, I never looked at my watch.

Ben: Yeah, as you say, it’s an irony.

Michel: I really had fun. I just lived my passion — and I think that’s the most important thing: people living their passion. I mean, life is so short and it gives so many opportunities. And also, when I mentioned the event marketing and all that stuff — today, things have not changed. Event marketing is still there. But it’s different because today you have the social media. With social media, you can make so much noise! You have Instagram, you have Facebook, you have all these things. We didn’t have that. So, the enormous opportunities and the advice I could give to young entrepreneurs who want to start their own business, start as early as possible. Start in your teens. The greatest thing to teens — 13 to 19 — because maybe you’re still in school, but you have peers, you have colleagues. You have no responsibility, no family responsibility, you have no kids. And it gives you a chance at 19 or 20 — you can fail two, three times and you’re still young to make it to the next point. And every time, you learn something, until you finally hit the jackpot!

in all of my companies, the most important for me was to surround myself with competent people — Michel JORDI

[00:43:31.13] Ben: I think this is, again, a really salient point, which is, you talk in the book about always being curious, always learning — which I’d say is, again, universally applicable probably more important now than ever, right? You know, you talked about your father’s life, this sort of rigid eight to five type setup and you wanting to do something different and be your own boss, and so on. But actually, almost like the option to have that rigid corporate life is disappearing, right? Because I mean, there aren’t so many jobs that you can do for your whole life anymore, right? So, it’s almost like more of a need to become entrepreneurs through necessity than was the case before. And one of your definitions of an entrepreneur is somebody who’s just constantly curious and constantly learning. Do you think you can teach that? Or do you think that’s just something that’s inherent intrinsic to individuals?

Michel: I think everybody has the ability to cultivate it. It’s an attitude. It’s an attitude to be curious. I mean, I’m so curious. I always ask a lot of questions. I want to know more, and I never take no for an answer. I want to know what is behind. And I think today, for the kids, they just have to be alert. Be alert. Eyes open, ears open all the time! And learn. Because, in the end, what is important is know-how. Through all the experiences we do, we learn a lot of things — which today we call know-how. And know-how is maybe one of the few things you don’t learn at the business school or universities. You only learn it by doing. So do it. Break your neck. Stand up and try the next thing. You know, without failure, there will never be any progress. You have to understand that. You know, the Wright brothers, the people who started to fly — how long did it take until you could fly an airplane? How long did it take until you could lift up and fly? How many people died? I mean, unfortunately, it’s the same thing, but the damages are not the same because you don’t lose your life. Those pioneers lost their lives.

[00:45:57.06] Ben: Yeah. Maybe we should talk about one of the things that didn’t work for you, which was the Swiss Icon. What was the reason it didn’t work, from an approach point of view? Did you apply the same methodology, the business plan, etc. to that business? Or was that one where you knew it was riskier because it didn’t score so well on the lucky clover? Talk to us about that.

Michel: It’s the perfect example. And I think it really rounds up my book because if I look at that lucky clover, at least two out of the four leaves were not optimal. The number one was timing — it was the worst time.

Ben: If you could just elaborate on that.

Michel: We launched it in August 2011. It was exactly when the Euro collapsed and so did the Swiss francs. And suddenly, you could buy Swiss watches cheaper in London or Paris or anywhere in the world, because the drop was over 20%. It was unbelievable! That was, even, at that point in time was almost par: one euro for one Swiss franc, for a couple of weeks. And so, of course, everybody stopped buying. I started to sell only on the Swiss market, concentrate on the Swiss market. So, time was definitely very bad.

Michel: Another thing was differentiation. It was a beautiful product. This is a beautiful product, I have it on my wrist every day, but it was not as different as all my other products. And when it is not that different, then what you need is you need very, very heavy advertising. You need a hell of a lot of advertising. And what we did, I had two partners in that company. So, what we did when the Swiss franc collapsed, we cut our advertising expenditure. Huge! We just crossed and stopped everything. And that was the first big mistake. And what we should have done is, if you cut the advertising budget, you should also reduce the price because suddenly that price — 7900 for a chronograph would only be paid if you advertised strongly so people would want to have it. But if you reduce your communication budget, your price should also come down, your retail. So maybe we should have sold it at 4900 or whatever, 3900. We didn’t do that. So it was definitely a mistake, a misjudgment, or whatever. But as I said, I also had two partners. I couldn’t do everything. I mean, the launch wasn’t the way I wanted to. And then came my bicycle accident where I lost consciousness and I had three broken ribs and things were going to get very, very difficult and more complex. And I decided, in the end, to sell the company to the partners and get out of it.

[00:49:08.10] Ben: So, was one of your learnings that when you’re launching a disruptive product, the advertising budget should never be seen as discretionary? Because it’s just trying to do something really disruptive — without the air cover of a big marketing budget is Canute-like, impossible to do.

Michel: Absolutely! You have marketing expenses — they are very, very important. You have to communicate, because the best product in the world is of no use if people don’t know that it exists and where to buy it and why should you buy it. Of course, I mean, there’s several ways of marketing. Also, what’s important is, I always try to first have trendsetters to wear your product because when you have trendsetters to go around and talk about you, it’s visibility. You need a lot of visibility. And you can only get that visibility when it’s the thing to have, which means you have to communicate.

[00:50:07.04] Ben: I would say that that trendsetter part is more important now than ever, also, right? Because we live in a world where branding is so tied to individuals. So yeah, having influencers wear your stuff. And when you were getting trendsetters to wear your stuff, did you pay for that? Or you just created a product that was so desirable that people wanted to wear it?

Michel: No we didn’t pay for it.

Ben: That’s what I expected, yeah.

Michel: But it was just so good, people bought it to have it. But we made it sexy. You have to communicate it in a sexy way and you have to package it properly. I mean, in the end, the product almost has to sell by itself. When you take it in your hand, there’s an emotion going through your body. You feel it. That’s the difference when you’re wearing a Swiss watch. A Swiss watch has a soul. If I buy a watch made in Japan or Korea or China, there’s no soul in it. It also gives the time, but it is no soul on it. I mean, the Swatch watch at 50 Swiss francs I think it’s the greatest consumer product ever made. Ever made. Because at that time, the watch was 50 Swiss francs. What other consumer product gives you technology, precision, mechanics, time, and lifestyle, for 50 bucks? It’s amazing! I think it’s a great product still today!

[00:51:42.02] Ben: Why do you say that Swiss watches have a soul in a way that other countries watches don’t have a soul?

Michel: The way we communicate it, the way we market it.

Ben: Yeah, because I think one of the things that Switzerland does brilliantly is packaging, right?

Michel: And communication. It’s communication. I mean, most big companies, they have a great slogan around. Look at the Rolex advertisement — it’s amazing!

[00:52:08.07] Ben: So, I just want to get you in a couple of other things that you talked about in the book. There’s a really nice soundbite where you say ‘talent wins games, but teamwork wins championships.’ Can you talk to us about the importance of building great teams and how you cultivate those teams?

Michel: I think it’s essential for every company to have a great team. And that’s exactly the slogan you just said: a team wins championships because, if you compare it with an army, there’s no use to be a general when the troops cannot follow you. Napoleon could never have won if the troops were not right behind him. And in all of my companies, the most important for me was to surround myself with competent people. You can read about them; I get a lot of testimonials in my book here. One of my guys is now CEO at Rolex Australia, another one is CEO at Bucherer in Lucerne, about 10 of them have started their own company. I have regular contact with them and they always tell me, “Michel, without you, I would have never been there.”

[00:53:26.12] Ben: So there’s two functions there. One is spotting raw talent. How did you do that?

It’s beneficial for the company to take a vacation, to take off. And this is what I think we have to understand. You cannot perform when you’re tired. Enjoy life! — Michel JORDI

Michel: Empowered them. Empowering people.

[00:53:37.17] Ben: But empowering people presupposes that they’re good in the first place. So how did you spot the great people? And then we can talk about how you empower them.

Michel: You know what? It is very fun and very interesting: I believe that a lot of people have much more talent and are much more capable than they think. But you have to give them the confidence. You have to detect and see where the strength is and let them go, let them loose. You know, I realized, when you let them loose or ask for them big things to do, it’s very motivating. Because they’re like, “My boss has confidence in me! He thinks I can do that!” I mean, the one who is now in Australia, the Rolex CEO, he was a watchmaker repairing watches at a retail shop in Zurich, and he was about 22 years old or 23. I said, “What are you doing here?” I mean, you know, as a watchmaker at his age, I saw that guy had potential. And I wanted to have salesmen going out to sell my watches, who know what they talk about — watchmakers. So I took him, I trained him on the Swiss market, then I sent him with my best salesman internationally, to the Middle East to learn about the international salesman. Then I told him, “Now you’ll go to Hong Kong and you’ll open my affiliate office in Hong Kong.” He opened my affiliated office in Hong Kong, and then made a business plan. We showed him how to do it. And the guy, he was 26 years old, he was trembling. He said, “Can I do it?” I said, “You will do it! Just go!” Throw them into the water, give them a chance to maybe make mistakes. But you learn from the mistakes. Again, they learn to swim.

[00:55:28.19] Ben: The impression I get when I listen to you is not only were you very much part of the renaissance of the Swiss watch industry, but also to the longevity of that Renaissance because of all the people that you coached and all the people to whom you gave opportunities? Would you say that’s fair? I know you’re a modest man.

Michel: I’m a very, very small part of that. And in the end, it’s still the guys who have to do the job. But if we come back to Bucherer, now the guy who is CEO, his second man below is also a guy from me because he was looking for a number two man. And I had him, he was a guy who worked in another company, in the Twins Heritage. So now Bucherer’s number one and number two, both come from my team. So these guys, once you give them the opportunity, they have to see their opportunity. They have to grab it. But very often, I think a coach’s job is to detect the ability, the talent and give them the confidence to really develop all their potential. Very often, they don’t even know what they’re capable of. So, develop that potential.

[00:56:48.11] Ben: The confidence and the opportunity, right? Because you did both, right?

Michel: Yeah. See it, have your eyes and ears open.

[00:56:56.03] Ben: And then what about leadership? Because it seems like you’re the sort of leader who leads by example, right?

Michel: This is leadership. Show them the example. Exactly. I mean, for example, you know, most of the time, I was the first guy in the office. Most of the time I was the guy who closed the door. You have to show them how to do it. Get your fingers dirty yourself.

[00:57:21.27] Ben: But having said that, you also talk about the importance of work-life balance in the book.

Michel: Yeah.

Ben: So, live by example, show the level of commitment to the business, but at the same time… Or would you say also lead by demonstrating to people the importance of not burning out, of pacing yourself off, as you say, eating well, living well, exercising.

Michel: I never had anybody in my company who had to burn out. But I must admit that I have been close to burnouts a couple of times. One of them was at Le Clip. I remember I arrived once in Vancouver on a Friday night and I stayed in bed the whole weekend and on Monday I traveled on to Japan, to Tokyo. I didn’t see anything of Vancouver except the airport. I was just so completely tired. So you have to listen also to your body. When you’re down, you’re down, then you have to rest. And what I learned over time is that when I grew up, you were a hero, and you wanted to show that you work hard and you work long hours. Today, I realize — that’s what I’m also trying to tell people is that the art of doing a good job is of knowing when to relax and when to slow down. So, I started to take long weekends, and that’s what I could suggest to anybody. A long weekend, let’s say three, four days, when you’re in the 30s or 40s. I mean, it can do wonders in regenerating yourself. Or take a week vacation — whatever — because when you come back, your mind is emptied, you know, and you have just so much energy. And it’s only good for the company. It’s beneficial for the company to take a vacation, to take off. And this is what I think we have to understand. You cannot perform when you’re tired. Enjoy life! That’s all I can say. I love to drink a good glass of wine. You work like hell during the day and in the evening, a good glass of wine — hey, what a pleasure! What a relaxation!

[00:59:31.07] Ben: Talk to us about why you ended up calling it a day when you realized that you didn’t want to do any more startups — and the conditions that then gave rise to you writing this autobiography, which sadly, is only available in German, right? At some point, maybe you’ll publish the English version. So, talk to us about that realization that enough is enough. It was now time to take a step back.

Coaches are so important, because, as I said, a lot of people lack the confidence. They don’t see all their potential and that’s what a coach is for. And I think, if I can help people detect their potential and live also, as I said before, a balanced and a rewarding life, then I think it’s a fantastic way to end the fourth part of my life. — Michel JORDI

Michel: Like I said, the lucky clover has four parts. Our life has different segments. There’s our youth, there’s education, then you start to get into the corporate drive, then you become independent as me, but then, I’m 70 years old now. I mean, you have to think how much longer you have to live? It’s 10 or 20 years if I’m very lucky, if God wanted. So, what do I do with the rest of my life? And I think the rest of my life is not going to be behind the desk and doing operations stuff. But coaching people, or consulting companies, detect talents or detecting opportunities. Coaches are so important, because, as I said, a lot of people lack the confidence. They don’t see all their potential and that’s what a coach is for. And I think, if I can help people detect their potential and live also, as I said before, a balanced and a rewarding life, then I think it’s a fantastic way to end the fourth part of my life. First of all, life is not a 100-meter dash. Life is a marathon. And it’s not like a football game where you have two halves. I think it’s more like basketball where you have four quarters or something like this. So I’m maybe a man now in my fourth quarter. And I think there’s still a hell of a lot to do and I’m looking forward to it.

[01:01:40.20] Ben: Fantastic! That’s a wonderful optimistic note on which to finish the podcast. So Michel, thank you so much for coming. Buy the book — Ignite That Spark — it’s full of sage advice, and it’s really a great read. You can read it in a single sitting. I think it’s also a reference — you can keep coming back to it.

Michel: Yeah, it’s like a Bible. You can take it back anytime. But also, what I said is, the book costs 19 Swiss francs — roughly $20. What I say to everybody who buys my book is that if you don’t get 20 bucks value or wisdom out of this, write to me, and I refund it.

Ben: You get your money back, guaranteed, from the man himself. Okay. Thank you so much again, Michel!

Michel: Thank you! It was great!

Brand Conversations and Creativity at Scale (#27)

Brand Conversations and Creativity at Scale,
w/ Youri SAWERSCHEL

Podcast also available on:

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Full podcast transcript:

 

We keep on hearing about the fact that consumers are in conversations with brands. We keep on hearing that it’s a two-way street and everybody’s saying, okay, brands have to rethink everything, etcetera. And it’s true only to an extent because what people tend to forget is that yes, it’s a conversation. But as a brand, you’re the first one who speaks…

Ben: [00:01:51] Youri. Thanks very much for joining the podcast. Wanted to kick off with a pretty broad question, which is what is the role of a brand in the digital age?

Youri: [00:02:04] If we look at branding before the role of brands before the digital age, It’s very much about trust, right? If you were in the fifties, you wanted to go travel to a Hilton. So you thought, well, if I go to Hilton, I’m going to have hot shower and nobody’s gonna rob me. So a brand was very much about identifying quality service for people in the digital age. This has changed a little bit because it’s much more transparent, right? You don’t need to stay at Hilton to be sure that there’s going to be wifi. Right?

So the role of branding is a little bit more subtle. It’s more about building up association of ideas, right? If we think about B2C, right? If I buy this brand, what does it say about me? If I am a customer from this brand, what signal do I send to the people around me? And that’s pretty much the role of brand, which is going to be more about increasing the perceived value. I think fundamentally our brand is about reducing perceived risk and increasing perceived value at the same time. In a B2B setting, it’s still very much about decreasing perceived risk, right? Let’s say you want to buy machine tools for millions, from a new supplier.

It’s very hard to decide which one’s the best because you look at all the criteria. So the brand is this thing that’s going to make the difference. Thats going to make you feel “okay, I can trust them”. So I think in a digital era, the branding is a, is more and more about increasing, perceived value, and maybe a little bit about reducing the perceived risk in a B2B setting.

Ben: [00:03:42] If branding is about creating an association of ideas, then it doesn’t really work, does it, to try to micro-target? Right. And because, you know, we, we might be able to stimulate demand maybe by micro-targeting, but we can’t create brands by micro-targeting. Right. Because as you said that they are a statement of ourselves and the sort of lifestyle that we aspire to in many ways.

Youri: [00:04:07] I think all marketing practitioners will not fundamentally agree with what I’m going to say, but marketing is very tactical. You know, it’s about defining your own, your four Ps type of thing, you know, product you have or what price, which channel you use cetera. But what we miss most of the time is that these levers that we can use in market coherent with something bigger, which is what the brand is.

Right. And which is much more strategic. So what is your positioning? What do you stand for in the market? What are your key messages? How do you frame a brand? How do you present it to the world? And once this is clear, the strategic level, then you can go down to the operations of the tactic and decide, okay, we’re going to distribute our, our whiskey brand, we’re going to distribute it more into exclusive concept store rather than in duty-free to show that we are an exclusive brand because we are [00:05:00] positioned as an exclusive brand. So I think that two different things, right, and this whole microtargeting really comes at a, at a very tactical stage.

Ben: [00:05:10] So do you think that, you know, we’ve seen a rise of, you know, just on a kind of short term tactical proceeds versus the longterm strategic stuff like brand building?

Youri: [00:05:20] Well, I think we see obviously a lot of short term type of tactics anyway, but I think that they’re not going to build brand equity in the longterm. Because, you know, I mean, yes, you can increase your followers by 20% in a week, but what does it say about your real brand equity?

Maybe not much. What I think is really interesting when we speak about a digital era is that you mentioned it. We keep on hearing about the fact that consumers are in conversations with brands, right? We keep on hearing that it’s a two way street and everybody’s saying, okay, brands have to rethink everything, et cetera.

And it’s true only to an extent because what people tend to forget is that yes, it’s a conversation. But as a brand, you’re the first one who speaks you are the first one who speaks, which means you can define who you are. You can frame yourself, you can position yourself and then people can react to this. They can agree with it, not agree with it, and it’s good and it’s bad. And then the conversation starts, but the framing, you know, the positioning upfront of a brand at a digital level, it’s still a one way streets and I think people tend to really, really forget that and kind of just think that the brand is just something that you know, is going to be a completely shared, that intangible thing.

But actually first is something that is created by someone, a brand doesn’t appear because people think it’s their first, someone give a direction and then people have association of ideas. And then yes, the brand is in the mind of the people who are the audience, but. You know, to have an audience, you need to produce something first.

You see what I mean? And I think it’s something that’s completely overlooked in this digital marketing era, where you have all those digital driven agencies that just speaks about engagement and conversation, but they totally missed the point about it. What is the message you have and what is the content? Just this morning, I was in conversation with one of the big digital agencies in Switzerland and those guys trying to sell me services to take care of my Facebook ad and Google ad cetera, but by discussing with them, and you know, they were charging four, five, six, 10 K a month as a retainer. And then I’m really trying to understand, and maybe I sound a bit stupid, but what is it exactly that they do?

And then it comes down to, yeah, we look at key words and we can make recommendations and be like, well, that’s a lot of money for, for just looking at things. But then they’re like, yeah, because you know, then you’re going to push some really good content and I’m like, but who does the content? Oh yeah, this you should provide to us.

So it really goes down to something that was there before digital, and is still here after digital, which is what you have to say and do the value you offer through content is going to, in my view, definitely overtake all those short term tactical exercise you can do.

Ben: [00:08:07] What about separating products from brand. If you’ve got a great product, people will tell each other. So is in a world where everything’s more transparent. Does it shift the balance towards investing more in product marketing, you know, or to put it another way? Can you have a) a mediocre product, a good marketing team? and b) a company with good products and a mediocre marketing team?

Youri: [00:08:30] It depends what’s your internal benchmark for quality and value is, but if you have a mediocre product and a very strong brand chances that you’re not going to last forever are very high. So I think from the worst, which will be a fad to something, to be a trend to something which might be around, but then it’s going to die off.

Uh, at some point it’s not going to fly and it’s not going to be a brand that will really get people to invest in. I think, especially because then you create a gap between the messaging you sent saying, Oh, we have amazing brands, but actually product is crap. And, and this gap. Into messaging and reality needs to be managed very, very carefully in a digital era, you know, back then it wasn’t the case, but good product is a key success factor you needed to, you needed to be in the game, right.

But a good product alone. It’s not going to cut it. You know, if you have a very good fashion brand or a very good academic program, I have some example about this. Oh, you have a very good boats rental service. It’s not enough. And we sit over and over and over again. We’ve got companies big, smallest that come to us.

They have a really, really good strong offering, good customer service, good product, but they just don’t manage to try to prove them out of it. And then we can help them with the commercial work we do increase that perceived value and reduce the perceived risk of buying them. But we can [00:10:00] only do this because the base product is good.

And when the base product is shaky when, when advertising is basically a misleading and lying advertising type of thing. And that thing, it’s a very, it’s a very dangerous slope to be on,

Ben: [00:10:12] So, you know, a brand starts the conversation, but it is a two. It is, you know, it is a two way conversation and arguably the customer is much, much more influential than they were, you know, pre-digital both in, in terms of, you know, acting as a ambassador for the products, but also I guess, in a sense in shaping the product, right? Because you can get feedback in a way that you couldn’t, when you didn’t have so much direct access to the consumer. So how much, how important is it consumer become in, shaping the brand in the, you know, as in, like now that that two way street is possible.

Youri: [00:10:45] Depends. Really? Which type of companies we’re talking about in reality. Yeah. In theory, yes, consumers are involved in everything, et cetera. In reality. There’s only big, big groups that can afford, for instance, different focus groups and having different market testing, et cetera, only big FMCG companies can afford. As soon as you are in the mid side, uh, segment companies don’t have the time or the cash to do these type of things.

So yes, they’re gonna involve the customer in the sense that they will collect the feedback for instance upfront, but you won’t have that collaborative process. I think there’s two schools of thoughts when it comes to involve the customer. Actually, I am on the one that has the feeling that you should not involve them too much because people actually don’t really know what they want.

They don’t really know why they buy things. And if you ask them, they don’t give you the right reasons. The typical example is the iPhone or the iPad that everybody knows, you know, nobody would have said, uh, Well, I want an iPad or I want an iPhone. You know, I think it was Henry Ford who famously said, if you had asked people what they wanted, they would have said a faster horse.

I think we need to be careful with involving too much people in the, in the creation process, because we need to test it when we can. But from the creative inputs, I’m not sure how valuable this is. We need to understand who the people are and what they want overall. But. I wouldn’t make them co-creator. Long time ago, there was a very small business in Geneva, actually, it was called Leman Loisirs and, um, what they do is boat rental service, right?

So basically you pay money upfront in order to rent a boat over the summer, quite expensive, because you need to have a boat license. You know, you pay at least 3000 bucks minimum for the season. And the business was not going so well. And the owner asked a bit my help. We kind of had an agreement when I help him out.

It’s very small local business. If I had to ask the current customers, what do you think about the service they would have said? Yeah, it’s great. I’ve got my boad, its a good money. There’s not too many people. You’ve got nothing to be changed. So the things that is absolutely not valuable from a brand building point of view, however, what we understood was, well, there is money left on the table because this businesses is positioned as a local hobby, when it should be positioned as a private club. And if you position it as a private club, we can drive the revenue up and we can make it much more attractive for a target segments. So we rebranded the whole thing to Boat Club Geneva, and then, which is not original, but which does the trick, it corresponds to what target audience expect.

Then once we rebrand this whole thing to Boat Club Geneva and told the story about an exclusive club in the center of Eaux Vives in which you can be a member, not a client, a member, the sales picked up. And picked up because we didn’t ask the client what they wanted. So that’s why I think, yes, we need to listen to customer. Yes. If we see that something doesn’t work we definitely need to tweak and test in trials, it works a hundred percent, but at some point you need to take the cat and say, okay, we aren;t going to do it that way because that’s not how we can drive a premium. Branding is about driving a premium. And if you ask customers, they’re never gonna tell you, Oh, I would love this product was 25% more expensive because you tell me a better story about it, even though we know we can do it.

Ben: [00:13:55] Is that how you measure the success of a, of a brand to the extent to which it creates loyalty and the ability to charge a premium?

Youri: [00:14:03] The way we look at it. We look at branding from a very business perspective, which is if you do branding, you need to be able to drive a premium on your business. I need to be able in the longterm to lower your marketing cost because people want to be part of it.

So you don’t have to advertise so much because people want to speak about you, being the price et cetera. So, yeah, I mean, we see it now with an MBA program we worked on in Switzerland, we really had them reposition their brand, their whole program. We didn’t touch the syllabus because that’s not our job. And we’ve seen an increase of 30 or 35% of applicants.

And this is just by branding. And we’re talking about the MBA in a top university in Switzerland. You would think people are rational when they look for an MBA, they would look at the syllabus, look at who the professors are in the syllabus and decide based on the syllabus and the fees, whether this makes sense or not.

But that’s not how people choose an MBA. They choose it [00:15:00] because: does it tell a story I want to be part of? Is it something I’m proud to walk around with?

Ben: [00:15:04] How do you persuade people to come to you and how do you win clients and how do you also charge a premium for the work that you do?

Youri: [00:15:11] You mean us as Creative Supply?

Ben: [00:15:12] Yes. Or a branding agency in general

Youri: [00:15:15] The way we get, we manage to get clients and really build the reputation of the firm because we only are five years old company, but we really, really growing strong.

It’s really two steps process. Actually, it’s so simple, but I’m happy to share it because nobody’s going to do it. You need first to have really clear, good content. And when I mean content, I’ll speak about intellectual property, which means models, frameworks, analytical skills. We’re not selling a vacuum cleaner where I can tell you, try it, if you like it, you buy it. What I’m telling you, what I’m selling you is intellectual capacity to, to build your brand. So the best way I can do. I can do that is by sharing with you some models, some frameworks, some reports, some things where you thought, okay, those guys understand what this is. It’s very easy to do.

It’s very easy, in theory, it’s very hard in practice because one, you need to have the capacity to do it, two the discipline and three distribute it. And then once this is done, while you distribute it and you share your content to as many people as, as you can, and you use that content to open doors. And for us, the doors have been pretty much, uh, I don’t know, half of the startup incubator in Switzerland, some of the top universities, uh, in Europe and in Switzerland, the trade associations, magazine trade press because we provide them with valuable content, which is not selling our service. Right. Nobody wants to be sold. Everybody wants to buy it. Well, I read it in a book from the thirties, he was right. Nobody wants to be sold. Everybody wants to buy and we have, and we have to provide that.

And we’ve been very, very good from the beginning from day one in investing in content. And I’m not talking about just writing random articles to crowd everybody’s Google, but really think what are the models? How do we look at branding? How do we do branding for B2B, for instance, and then we’ve done interviews of 20 executives across Switzerland about the question: B2B branding. And the result is a report on the topic that we’ve made in collaboration with the eMBA of EPFL. And once you have that and you go to clients and you say, Hey, you want us to help you in BTB branding? Oh, if you want, you can have a look at our report on B2B branding that we’ve done with, guess what, the second best technical school in Switzerland. The pitch is very high. So now you can have someone who just become a B2B branding consultant, but what premium can you charge? And we are basically reducing the risk, right? Earlier in the discussion, I was saying a brand is about reducing the risk and increasing the perceived value by bringing those discontent pieces, we reduce the risk.

You think if you’re a potential client, okay. Those guys are able to actually publish something with EPFL, they cannot be that bad. So they trust us.

Then step two for me, so one is content. Two is a channel if you want to stay in contact. Oh, yep. Yep. So it’s content channel and then the third is closing, because then you get the clients.

Ben: [00:18:18] Yep. And then after that community, right?

Youri: [00:18:21] Yeah. If you want a four, you need the currency because you know, it’s getting project is as much about getting than giving. And you cannot have a short term mentality where everybody you meet is about selling them a project, because then you are a traveling sales guy.

Nobody wants that. But if you look at it, we look at it a very long term and we say, what is the vision for Creative Supply in 10, 15 years? And our vision in 10, 15 years is we want to be the reference in branding, at least in Europe. And if we want to become the reference in branding, we cannot have a mentality where we just moving from one project to the next, because that is just called cashflow.

It’s not called being the reference. So we grew an ecosystem, a community to pick up on what you said, and this community is made of what… people we teach at universities pro bono work we do with young startups that are promising. Direct coaching, publication, et cetera, and need to have all of these as part of our ecosystem, some will drive projects some months when in the longterm we can become a reference.

And a lots of our competitors don’t think that way because they have such a high payroll that they’re just driven by getting the next project to pay the bills. But since we have a very different structure, we don’t have that. I don’t need to send you a 3D rendering because my 3d guys are sitting, doing nothing, I don’t care.

So I can focus on, on growing Creative Supply as the reference in the industry rather than just getting more projects, which is a very short and we are looking at [00:20:00] it.

Ben: [00:20:00] So community view is a bit also a bit about creating multiple revenue streams. Right. But one of the things you just said there, it was quite interesting. Cause I was going to ask you that when you said you were working with startups, which is how do you monetize relationships? And I think you answered it right by saying a lot of it’s pro bono, because I guess, you know, you help them as they grow, you know, they come back to you.

Youri: [00:20:18] The way we did, with startups, we actually had to draw the line is we do pro bono work with startups which are involved with sustainable developments. That is very clear. Any startup that has, that has something linked to green startups, sustainable development. We work, we do typically workshop program with them. But other type of startups. We don’t do pro bono, but we cannot, uh, do full project for them because. We are too expensive and it doesn’t make sense for a startup to spend 50k on a, on a branding project.

You know, you just need to, you’re very smart with your resources. What does make sense for a startup is to do half a day workshop where we can give them the key tools to direction, the clarity. One, two hours of coaching here and there. The budget remains very, very valid and then they can grow with it. And actually a lot of startups weve had and some of them, you know, two, three years down the line, they come back and then they got the funding funds. That’s going to say, well, now we need to professionally. And then they come back. So I think different types of options, clients of companies have different types of needs and you cannot just sell a full branding and a strategic audit to a mid company in Neuchatel. You know what I mean? So we need to adapt.

Ben: [00:21:28] And how repeatable are some of the, some of the work you do? Because I think it’s know it’s interesting. You’ve created all these different revenue streams, which is great, but the sort of core engine of, of your business, which is branding work, you know, how, how often, how, how longterm is that? If you find a client, you know, or do you just do a rebrand and then move on to the next client

Youri: [00:21:46] Interesting that you ask this because you really hit the spot in term of how we’ve changed our strategy in the last six months is we used to be, I call it a Tinder agency, a one night stand or one type of project, right.

They come to us, they have a problem. The burn is not clear. The message is not clear. We do the work and then we bill and we disappear. And then we move on to the next one, right? The next swipe to keep the Tinder analogy. And, um, couple of months back, we realized that there’s a few problems with this.

Well, The lack of stable cash flow is one, but also from the client’s side, we realized that we did really good work at the strategic level and then implementation really failed because they went for the wrong provider. The one supplier didn’t manage the process well, or they didn’t have the skis all the time.

And it was not so much a question of budget, more question of focusing coherence. And so we thought it’s really stupid because then we do all this work, which is very good, not a shiny powerpoint and then comes to reality and it just doesn’t look like that. And we thought, okay, let’s, let’s, let’s go away from being a Tinder, uh, agency.

And let’s, let’s become a true creative partner, branding partner for all our clients, where we handled everything from strategy to implementation, uh, in agency jargon, we speak about the long tail, which means that you don’t do, you also do the small things, you know, like kinda like a motion design and a webpage design.

So we do these things now. It;s just that we’ll never do it for a client that needs just this. Right. So if someone comes to us and say, Oh, we need a poster design. We;re definitely the wrong agency to do that. But if someone comes to us saying, we need the branding and then we need someone to work throughout the year for our needs.

Like we can really, really be good at that and make sure that we, we ensure all the touch points. we werked for example with a private school in Geneva, we’ve reached a level where we have this role of kind of final think. All the branding and communication efforts. And I think it’s, it’s really a, it’s really paying off

Ben: [00:23:53] In preparation for this podcast I was watching something, a video of you talking about storytelling. What’s what’s the role of storytelling in branding.

Youri: [00:24:00] The role of storytelling in branding is essentially storytelling is a tool to explain, share what your positioning is to your audience. So storytelling alone depends from your brand positioning.

And depending on the story you tell, you can influence again, the perception and the, uh, association of ideas that people have with your brand. I think the main difference between storytelling, where we speak about branding versus, uh, you know, movie stories and movie, is that a story in a brand should never have an ending.

Cause, you know, in all the movies you have type of a linear structure, right? The hero does something. They have some challenge in fights and again, he wins and the printer stops there. And then it’s the end. But as a brand, you can;t think like this because you’re a brand, you don’t want yourtbrand to end. So your story at its heart at its center must have an idea, a concept that a brand can never, never fully [00:25:00] reach.

Right? I did ask there’s as for instance, impossible is nothing. Which means there’s always a way to get something further. So it’s a story that never ends. Yeah.

Ben: [00:25:11] And you don’t feel like some of these, some of the storytelling’s a bit kind of contrived? Like it’s a fabrication. It’s like, it’s, it’s clearly a marketing tool for us to engage with the company. It doesn’t feel authentic.

Youri: [00:25:26] Storytelling is a bit like a, I guess, a murder, you know, as long as you don’t get caught, it’s fine. And I think if you take, I can mention you at top of my mind, a couple of brands that I know Ted Baker, have you heard of them Ted Baker? There’s no Ted Baker, right? You would assume that that’s the name of the designer, right? this guy doesn’t exist simple as that. Right. So there is, there’s so many, so many brands that, how can I say this? That. That are telling story that actually are not true. Or Hollisted, maybe you know, it’s like a bit of a teenager fashion brand. It says that Hollister is from California and it was founded in 1922, but actually the brand is not from California and it was not founded in 1922.

It’s just that, you know, people don’t check because imagine how many decisions you have to make every day. And if you had to do a full due diligence on every brand, you buy. This would take you a lot of time and consumer don’t do it. They don’t one because they don’t have the time, but two, they also don’t do it because they don’t want to because, you know, it’s so nice to, to be, to buy from this Hollister brand from California since 1922, you don’t want to know that this is a lie, right?

It gives the fenders to the brand, especially in consumer branding. What I’m talking about is more consumer branding. I think when it comes to storytelling in B2B, we’ll have to much, much more careful with the reference that we use, but the logic is the same. There’s a very strong example in B2B, actually from Holcim, a cement company and I love it because really you would not expect a cement company to be, actually be a benchmark in branding. So when you sell cement, you basically sell stones, crushed stones, right. And those, those are called ready-mix and. They all have very rubbish numbers, right? They call Alix 205 Alix, 206, and those are the product number.

And that’s how they’ve been known in the industry. But in one day, one guy in Holcim thought, well, what if we give names to our cement? So let’s call the very strong one Robusto and let’s call the one that’s a bit red Rosso. And then they spinned those names, those Latin name for each of the products or some of the product line… and all the industry laughed at them.

They took the piece saying, can you believe you are selling ALX200? Why do we need to call this Rosso? What do you think you are, an espresso? Right, but the client didn’t think that way. This, this is very good. The red one is Rosoo, everybody knows what I speak about. I like it. So then what happened next is the clients of Holcim but also other cement company went to other cement company and say, Hey, we would have to buy some whole Robusto or some Rosso from you, but the company had no choice but to say, Oh sorry those ones are from Holcim, but we have Elyx 205 for you. If you like. So the story is very different. I will speak about ingredient branding in technical terms.

And so I think you can tell a story at so many levels. It’s just a difference, right? From a B2B or B2C.

Ben: [00:28:25] What makes a good hotel brand? Because I notice that you guys work with a lot of different hotels. What stories should a hotel be selling? What, what, what are the association of ideas? What’s the lifestyle association that’s important for a hotel?

Youri: [00:28:38] Hotels have a high in a very difficult situation because at the moment it’s a, I think it’s a whole different topic actually, but overall, it’s very tough to build brands in the hospitality industry. For the one reason that people only stay with you once and even the best hotel brands out there. And they will never want to share the numbers, but maybe five, 10, 15, 20 for the best one for us of the customers actually returning customers. But most of them are just out of one to one nightstand for literally. So how’d you be the brand with people who never come back. The industry just doesn’t want to accept that, but they still try to build brands based on that operational proposition, which is so dumb if you think about it, because nobody cares about it since you only stay once. So what would hotels have to think about? And I think it’s, this, this, this virus is gonna really help them think through. And I think the strongest and the more, agile we’ll really be surviving. After that, they have to think if we were not selling rooms, what would we be about how do we there attract people to us?

And that’s a very, very tough question for most of the hoteliers, because most of the hoteliers branding pitch, or the communication pitch is. Hey, come to a hotel. Great for family, business, couple or whatever you want. We are good. We have a nice swimming pool, fast wifi, and a [00:30:00] breakfast is included. Come stay with us.

This is pretty much the messaging of every virtually, every single hotel brand in the world. Some will throw the word luxury in there or exclusive in there, bespoke or tailored, but they’re telling you the exact same story. You take an advert of Ritz Carlton vs an advertising of Four Seasons.

Those things are the same. Just the room designs, slightly different. One is beige than one is blanc. You know what I mean? So once you start thinking about what the hotel is doing, you know, check-in checkout and housekeeping. When you start to think what is our role? Can we be a creator of something? Can we be an educator?

How can we contribute to our larger community? Not just the local one. Right. What role do we take and find, since we worked with these clients in Paris, building a full new brand for them called French Theory and. We thought about it saying, well, it’s not a hotel brand with something between a, probably a media company, a retail company that happens to have rooms.

And our role is to relay the culture and intellectual life of Paris fifth district. So once you think about a place like this, you not about your role is not about selling rooms. That’s the outcome. That’s what happens next, but issue about relaying. The cultural life of a district.

There’s so many more things you can do. And that’s where I think you can build strong hotel brands because people don’t come to you because you have a room with wifi anymore. So yeah, I think it’s a bit, I know I have a slightly controversial view on stuff. If we actually just published it, talking about publication, we’ve recently published last week, a full hotel concept handbook in collaboration with the École hôtelière de Lausanne which really shows what other, those trends happen in the hospitality industry coronavirus aside. And then what are the steps you need to take in order to build a strong hotel concepts, strong hotel branding, ultimately,

Ben: [00:31:58] is that what you propose enough to see off the Airbnb phenomenon? Let’s pause for a second about how Airbnb fairs posts lockdown, but like just ignore corona for a second.

Youri: [00:32:12] I love that you bring this because you know, what’s what have Airbnb been doing? It’s it’s dematerializing the hotel offering. It’s saying, well, you don’t need to go to a hotel in order to have a room, you can do this through different settlements.

And a lot of attention has been focused on Airbnb in the past years because most of the hotel revenue comes from rooms, right? 70, 80%, most of the time. However, what hotels failed to realize is that. It’s not just the rooms business that is being dematerialized. Hotel pickup is now called Uber. The in room entertainment is called Netflix.

The concierge service is called Google maps. The business corner is called zoom, et cetera, et cetera. So the entire offering an added value of a traditional hotel is actually being dematerialized. So if you think about it, you can book yourself an absolutely amazing Airbnb in Paris, top luxury, you can get picked up with a limousing from Uber. You can have delivered to you some of the top Indian food with a delivery of uber eats. You can have your personal trainer that comes in to, with you to help you to the thing you can use your meditation app in the morning. So do you still need to go to a hotel, questionable right? So once hotels agree to that analysis, they need to say, what is our role?

What can we offer that those digital, uh, offerings cannot. And that’s when branding starts to be very interesting because branding becomes a compass for what’s next, maybe to draw around, not to completely speak just about hotels, if you’re a hairdresser, for instance, right. Depending on how you frame yourself, depending on how you position yourself.

You can also have very different types of services. So a hairdresser typically before the coronavirus would say, I’m a guy who cuts hair in a hair salon, right. That’s how it will be positioned right now. There’s no salon anymore. So what are you? Well, you can be a guy who does cuts hair without the salon, but that’s not a good value proposition.

So you could say, well, actually I’m a guy who knows how to take care of hair. So that’s a very different brand promise. So once you reframe it and you say, I’m the guy who knows how to take care of air, what are the things you can offer, where you can have? I don’t know. an e-shop that shows people how to do that, or that sells a shampoo to people.

You can have a tutorial about taking care of your hair. You can sell a home kids to do braids yourself. I don’t know. It’s endless because your branding is different. And I think hotel, you have to understand that it’s tough. 80% of your business comes from rooms. Why change?

Ben: [00:34:53] Not to go down this rabbit hole too much, but how should marketing branding respond to [00:35:00] the pandemics? So you’re saying, you know, post pandemic, you probably have to reposition a brand reposition the brand promise in some cases, but what about during the pandemic? You know, look. We can take an example of the hotel if you want. But right now you’ve got, you’ve got very little business, I would say. almost zero business. Therefore do you just stop marketing or do you, or do you market knowing that eventually customers will come back and this is the chance to, you know, to gain, share a voice, for example, what are you telling your clients?

Youri: [00:35:30] I’m obviously biased, right? Because the more you’re stopping marketing the more we are going to go through that crisis as well. Okay.

Ben: [00:35:37] So make the case, so we know your biased, you have to make a really good case.

Youri: [00:35:40] But I can make the case by simply telling you that we put our money, where our mouth is. And we are doubling down at the moment. Everything into marketing, as a company, we are changing our website. We are pushing up new content. We are reaching out to new partners and we really doing this using a timeline that, that is really fast because it’s very easy now to just like, Lack the discipline and just let it slip through one day, two day, five weeks type of thing.

I really want to use that time to, well, number one, top of the mind of everybody we work with, number two, prepare the, after, you know, a seat like the army was not fighting now. So let’s make sure those guys really retrained instead of just having everybody chill. And I think that’s a good moment to, uh, to get in you call it share of voice, we call it awareness share, but same thing, right when everybody’s panicking you need to make sure you’re not, and we can get more visibility. You get more publication out there. Get more leads. I don’t expect much in term of business conversion in the next six months. I think it’s unlikely that we’re going to. We’re not going to do a record. Yeah. These being said, we just had a very, a major project coming in literally next week that we just signed in middle of the pandemic for a client. Who’s launching a robot, a co-bot is called, which is about automatization of supply chain for foods. So some industries are very resilient and those industries will need branding as well. And those ones are also pushing the branding.

So yeah, I think that’s what, that’s what brands have to do it, you know, I mean, besides the obvious survival thing, which is about protect your cash and make sure I don’t go do anything stupid, if you can afford it. I think it so much to reach out, but nothing to a, let me try to sell you my product to survive type of way, because you know, you should never try to sell something when you are needy because people feel it.

However, you can share a lot of value to a lot of people. We’ve been organizing a couple of online sessions for free, actually to kind of give people advice about how to run with the brand during this time of crisis, simple, personal branding, et cetera. We have grown our audience. I think you have three, 400 new people in our database since the beginning of the pandemic.

I don’t know if Icould sell out a lot,or not, but it’s definitely people that we would not have reached out if we hadn’t moved our asses. So I think that’s what really brands have to do. And we’re going to double down on branding and marketing efforts in the next six months. We’ll see how it goes for us. I mean, we have a very, very strong pipeline and we have the chance to be very diversified, actually, something I was very often critical criticize for by my peers.

Uh, because, you know, we acted in so many different things, different countries, different industry, and it’s always something that people kept on telling me, you need to focus. You need to focus. You cannot be an agency doing hotel industry and luxury and education, investment branding. But right now I’m very glad that we have doing this because some industries are picking up, some are not, and we have those levels,

Ben: [00:38:38] would you work with tobacco companies? Would you work with arms. Where do you draw the line in terms of the ethics?

Youri: [00:38:45] We don’t draw. We don’t work for tobacco and anything weapon related. We had to turn down a couple of times and it actually would, you know, from a fees point of view, you know, that they pay you for your loss of soul, so it’s very profitable, but then you gotta tell me well if you worked for UBS, which we do well, some of the money they invest is maybe not in the best place.

So then for us, it’s very, very hard to draw the line. We tend to have better conditions for companies that are involved in sustainable development. So we want to emphasize that with having a check out and saying anybody who’s not in a sustainable development, we don’t work with, for instance, while it’s economically not viable.

So, yeah, it’s a bit of, um, you caught me a little bit here because as I think as a, as an industry, the marketing and branding industry as a whole, we are really guilty for, uh, the, the state of the world in which we are. Right. Because you should look at global warming, which now is less of a topic because there’s something called COVID-19.

But if you look at global warming, this is so much linked to over consumption, right? If people were not traveling as much buying so much clothes and eating so much beef, we would not have a problem. And the reason why they buying so much is because they are incentivized to do so by the branding and marketing [00:40:00] industry.

So yes, we are not the one who pulled the trigger, but we provide the gun.

Ben: [00:40:03] Part of the, of the solution to that over consumption will be marketing related, right. I mean, we’re going to have to create a new narratives.

Youri: [00:40:12] The problem at the moment is the whole narrative about green consumption is only, it’s a very negative narrative basically saying, don’t do this, don’t do that.

Don’t do this, can’t do that. And this is really so not attractive. And if you, if I tell you all think about the sustainable fashion brand for instance, They kind of all look the same and you have this image of, you know, something with the linen badly cut, and then you look like some sort of hippie, so the association of ideas linked to anything sustainable are not sexy.

So how can we reengineer the narrative, change the story so that we can emphasize consumption that are more reasonable. I know I’m issue, issue, uh, do much more wellness and meditation. This is consumption, but it’s not hurting the planet. So I think there’s a lot of things that can, that can be done at that level.

And we’ve been doing a bit of work with Climate Kick, which was one of the major European agencies, which is funding and giving grants to sustainable projects. And we really saw the potential because you know, it’s people in those industries, they are, so they are in there because they want to make a difference.

And so they think that their value proposition is the fact that they’re making a difference. And this is true for very small niche audience, but for the mass, it’s not the case. I met a couple of years ago, I think the co founder of Fairphone, a smartphone that use like material that are sourced responsibly? Not, not destroying the planet, but the whole pitch they have is we are, we are nice and we are fair. And I told him, well, the problem with that. I said, who are you clients? You say, well, 70% of our clients are people with PhDs. So highly educated people who think the cause matter, which is great, but you’re not going to make an impact.

Because in order to make an impact, you need to get the mass. And the problem as sad as it is, is that the mass will not react to a message of restriction. So the messaging has to be difference.

Ben: [00:42:09] The answer is probably not to consume less, but to consume more sustainably, right?

Youri: [00:42:14] Yeah. Constant, more sustainably, constant things that mostly dont need resources. Yeah. If you consume education, for instance, if you were consuming lentils instead of beef, if you consume a super fancy, uh, secondhand shops like they have in Tokyo. It’s different. Right. So I think there’s a lot that can be done at that level. And it’s not, I make it sound like it’s very easy to solve or actually so many different facets and dynamic in that, in that question.

But. I think that’s actually the contribution that the branding industry can do to that. I think that’s why I said,

Ben: [00:42:46] I want to talk to you about your business model. Cause this is, this is really interesting and it’s, um, it’s something that we have talked about quite a lot on this podcast. Right. Which is essentially you’re moving away from a sort you know, static kind of hierarchical model, to something which is much, much more networked, right?

Because, so I’ll give you the chance to describe how it works. But basically if I’m in the marketing team of a company, the likelihood is overtime my skill set is going to, you know, going to diminish because I’m not challenged because I’m working for the same company doing the same thing every day.

Right. And then there’s, and then you’ve what you’ve also understood is that there’s a sort of, there’s a gap, right? If I, if I try to sort of unbundle my, my marketing team and source them using freelances via Upwork. I still have to manage the overhead of managing all those people. So what you’re doing is you’re sort of creating some sort of platform that mediates and transfers risk from both parties, right?

Because, because you are matching the best companies with the best creative talent, but you’re doing it in a way where you take responsibility for the deliverables, you take responsibility to make sure the people that work on your platform are looked after financially in terms of mental health and so on.

So it’s, it’s like a new category of platform company. That, of which there aren’t many examples yet. That’s the way I would describe it. How would you describe it?

Youri: [00:44:06] I think we’re definitely a hybrid actually in the sense that we do work with independent creatives. I tend not to use the word platform because it’s too associated to a kind of peer to peer type of model.

And we don’t offer this a client who worked with us. Don’t get to choose which designer they work with. Right. So we don’t have. Were not a matchmaker, we, the best we come up with so far is that we are a branding company as far as it, as it goes. And the fact that we work with this creative network, it just about how we do it, the client come to us because they trust Creative Supply to be the best partner for them, to meet their branding meets.

And how will you make this happen? To an extent is secondary. It’s secondary because we run the entire project from strategy to implementation. We project manage it. If there are problems on the client side or actually creative [00:45:00] side, we handle that. So from a client it’s super smooth, they will never have the feeling that they are working with independent creatives.

You know what I mean? They don’t get that field. So yeah, we, we bridge both worlds because we can access too. We really kids specialists, you know, let’s say top 3D guy motion design. Copywriting transaction services. Illustrators is a good one. And, but even graphic designer, because the graphic designer who is very good for a food festival is not going to be the best person for a corporate website for banks.

It’s most of the traditional agency they’re stuck with one or two art director. You know what I mean? Like the things chef in the kitchen, and then they all, they just send the same person over and over and over again. And then one day the art director leave and they have no design capacity anymore. And this is something we wanted to avoid from beginning.

We work with a pool of different people who have different skill sets, different interests. You know, we have people who are really good art director, but they just cannot do web. But that’s fine because we have someone else that can do web et cetera. And this, this really allows us to assemble like genuinely the right team for our clients.

And because we don’t have a hidden agenda of sending certain skills or discipline because we have to pay for it because you know, we study first and then we source them your way. The way it works is very nice because we have standardized processes, you know, in term of what type of project of products of services we sell, what is the process for a brand platform, a brand entity, all of these things have been super streamlined, you know, so we like a product company in house,uh, the timing needs the number of rounds of review, et cetera, in all the people who work with us, you know, down to how you save your files. Everything has been streamlined, which means that we can not actually just, just a couple of hours before our call. I had a kickoff with a team of seven people, uh, for new projects and everybody’s remote.

And everybody’s on board and in what’s going to be happening, et cetera. So we have the capacity to have very big creative team, like the biggest agency, right? You never have more than 10 people because it’s just, it’s just not needed even for very, very big projects. And, and we have that capacity in watch.

The amazing about this is that now we have this 10 people working on something tomorrow. We have another big project that we have. We don’t have a major capacity issue. Because we have a pool of people. Where we get the bottleneck is in the project management and the core consulting team is Zurich so far we are managing and the company we grow, we grow its core as we go.

So yeah, I think it’s a very good model and the client love it because you know, they have one point of contact, they have one email address and they say, Hey, we need to do some 3D renderings for a new machine. Oh, we need to do a photo shoot for our new offices. Or we have some transition done to be done. And they know that we pick the best people.

So they come to us and the quality is there. The pricing is right. Yes. There’s a premium of price, but you pay the premium for us because we reduce your perceived risk. Now of course, all of them know about Upwork, but if you try to book a designer on Upwork, good luck. You’re going to spend half a day, just sorting out another half a day, discussing with them half a day to brief them, but then you’re not even trying to get it.

And then it works. If you’re a small startup makes total sense. If you’re a small to midsize company or big company, it just doesn’t make any sense. You better have strong partner that handled this for you.

Ben: [00:48:26] A hundred percent because you don’t know if they’re good or not. So. You don’t save any time there. And then when you actually want them to do something, cause you say, no, you have to brief them.

So there’s not a time saving with the briefing. And then if you want to make them part of a team, then you have to assemble the other parts of the team. And then you have the overhead of managing that team and managing the outputs. So it’s like, yeah, it Upwork for me doesnt work. it doesn’t work.

Youri: [00:48:45] I think it works for very specific clients

Ben: [00:48:48] or very specific projects, very narrowly defined projects, but where you really want to run marketing at scale or branding at scale, it doesn’t work.

Youri: [00:48:57] Yeah, because, you know, I mean, if you think about it, if you have a company you don’t want to rely on random people. To do your brands. You know, it’s a bit like who handles your files? You know what I mean? Is this secure? If you need something, is she on holiday or is she still around, or is she now doing other freelancing work too?

You know what I mean? You don’t want that as a partner, you need something that’s more stable and that’s the role that Creative Supply have for those clients.

Ben: [00:49:23] But I also think the converse, which is everybody works for me is on my payroll. It doesn’t work either, because as you say. You know, you don’t have access to a large enough pool of people to deliver everything that a customer might want or everything your, your, your company might want.

And secondly, the people that work for you because they, because they don’t have, they don’t see the variety of projects that, you know, they stop learning and they stop developing new skills. And so I think it’s got to be, you’ve got to create this arbitrage, right? You’ve got this concept. You’re uncomfortable with platform, but there’s gotta be some party that sits between the sits between [00:50:00] the body of freelancers and the corporates.

Youri: [00:50:02] In any case, you need it? Either its a client who does it directly, or it has to be someone like us who handles it for, for big projects or midsize project, for sure.

Ben: [00:50:13] Was it like on your part, a major insight that, you know, if you want to get the best people, then you know, you have to, you have to look outside of your company,

Youri: [00:50:22] you know, it’s funny. It’s very personal actually, because I started my career in a small consulting firm where I was one of the junior partner. So it was a very traditional type of company. And then I moved to a big branding agency and I only stayed two months and I just quit the place.

And I realized that the agency model is dead and it took me two months? Actually it took me a week when I tried to convince myself for the remaining weeks that everything was going to be ok but then I realized there’s no point because you know, the typical agencies, everybody shows up on Monday, there’s a brief, then everybody has lunch together on this big, long communal table.

And then there’s beer ping pong on Friday afternoon. And if you look, thats the cliche of creative agency and from Sydney to Shanghai, they have the same pitch. And I was like, this is so weird. We, as branding company, we are meant to help our clients stand out yet we all communicate in the exact same way. We do the exact same thing than all of our competitors.

How can we be trusted by our clients to help them stand out if we’re not able to do it for ourselves? No. It’s like all the people who tried to sell me digital services, but I have more LinkedIn followers than they have and be like, Hmm, not sure I can trust you on that. And I saw all these people who are so comfortable in the job, you know, you have the creative, you know, he’s a bit there, then a bit coffee, a bit chill.

And then the copywriter and they be cheap and nobody has their ass on fire because they are hired. And if you, and so the connection between the work you do in the results gets loosen up. it is even more true in a big company, but even already in an agency of 30, 40 people, you see it, you know, and then people have to fill in time sheets, they have to say, Oh, on Monday morning, I work four hours in this project. So everybody’s cheating on those sheets to make sure they look like they’re doing some work. Right because you don’t want to be the one that has not the right profitability ratio as they call it. And I was thinking, this is so dumb.

It’s treating people like children. It’s making sure they’re very comfortable. So when people are comfortable they are not out of the comfort zone, which means they don’t get creative and at the end they don’t develop themselves. And they’re just gonna, you know, be there. So I quit that whole time. And then I promised myself that I will never go back to any agency that works like this.

And then I saw that I need to create mine. And that’s how Creative Supply was born. Actually, it was born out of frustration, a frustrating experience, which give me the, the courage. If I’m honest, the courage to go out and say, well, Let let’s do this. And then I went out there and I really looked for people, it took me so much time, middle creatives.

You know, you have to fill them, test them. Some are good, some are bad, some say they are, but they’re not, you know, announcing and build a team, which now can grow because you know, people know good people and the people are going to bring new people. Now it’s very easy to grow, the beginning was tough, but now it’s very, very easy.

And once we had that, now we are able to deliver. And it’s funny because I see sometimes those agencies that were on my radar as dream employer, like five to six years ago. And now we are winning pitches against them because we have a proposition which is to some kind more attractive, some kind of more, the more conservative one are very hesitant because they’d be like, wait, what how does it work cetera. But, you know, it’s a very good filtering mechanism because the client who reacted that way, we know they’re not for us, because if they cannot accept already this, how are they going to accept that we will transform the business branding. It’s too much. So they are out already.

Ben: [00:53:57] I mean, I don’t want to, I do want to revisit the conversation we had earlier or in any way undermine the importance of branding, but what you’re telling me, and I totally agree with is that you’ve got a business model that’s winning in a market because it’s superior to everybody else’s business model.

Cause it’s based on a distributed workforce that allows you to get just access to better people at scale.

Youri: [00:54:17] Yeah, that’s it. And that allows us to scale as well, because if now you tell me, Oh, we have a three major projects coming in tomorrow. Well I’m going to be in a rush for three, four days, just to arrange the project plan and to line up sthe resource.

But after that we can run it. There’s no problem on time on track because everything has been, so, yeah,

Ben: [00:54:36] I mean, you’re, you’re in a way you’re bringing a sort of, you know, sort of digital phenomenon to the non digital world in a way, right. Because you know, why, why is Amazon so successful? Because it delivers better quality at scale.

And it’s, it’s kind of difficult to do that in a service industry, but that’s what you’re doing here. You know, you’re taking a technology business model and applying it to the service industry and that’s why it’s trumping the others.

Youri: [00:54:58] Yeah. I mean, I wouldn’t say that [00:55:00] it’s fully done yet because I think we have so much room for growth ahead, you know, and saying that this is done now, it would be. Yeah, it would not be correct you. Yeah. It’s not like done. And now we can just relax. I think from a backend point of view, from a, you know, it’s always in development, you know, from how you communicate with the team, how your quality, quality control is a huge topic with us. Yeah. Yeah. You know, how do you make sure that the designer don’t misspell the client name?

You know, those very simple things. So operationally, you know, how to make sure that the consultant puts the right dates on the documents, you know, in those little things at the moment, the core consulting teams spensd too much time policing around. So we will have to. The client doesn’t say this because at the end we deliver something that’s great. But on our point of view, we could be much more optimal. So I think that’s where this whole internal streamlining has to, has to get much, much, much better, but, you know, we are so much far ahead than the others well, competitors, I think because they are. Now, they;re just, after coronoavirus, I think a lot of agencies are just panic because they don’t have the usual place where they all meet.

The canteen is no longer there. Uh, all their files were on an internal folder. Some of the employees don’t even have their own computer. So they used to work on a desktop, you know, and you have all that thing in there. They must be so challenged. And for us, it’s a bit like business as usual, you know?

Ben: [00:56:24] How do you create an adequate sense of belonging with the team that’s distributed?

Youri: [00:56:28] Yeah, we, we spoke about that. The choice we’ve made early on is to not to pick creatives from everywhere because you know, the tempting thing to be say, Oh, let’s get creatives from anywhere. Right. Because we can. We can but, there’s a couple of problems with this. The first one is a timezone problem, right? If you have the best guy in Mexico in Shanghai, good luck coordinating the project because we mainly work in Europe.

The second one is from a cultural point of view. It’s nice. If people can, can see each other sometimes. So we made the deliberate choice to build the creative networking in, Paris, Paris, because it’s, who’s the strongest market after Switzerland. And because the, the level of people you get in Paris is so high.

There’s so much competition that if you are a director in Paris and you survive, you must be good. In Switzerland you just sit there in Zurich, and you know Stefan, Fabienne and Urs. And you went to school together and you charge everybody 200 bucks an hour and nobody blinks. Because the market is so protectionist.

If you are in Paris, you cannot do this. If you are in Paris, you must deliver. And that’s why we build the network in Paris, which allows us to actually have 90% more or less of the creative skills in Paris. So typically we can do every year, a Christmas party in Paris, we bring all of them together every night.

And then we have meetups where not always everybody meets, right. But some people meet physically in Paris to try, you know, dissolve the zoom lifestyle that the whole world is used to now. It’s actually very strongly in building a culture. You know, you have the internal Slack channel and et cetera. Uh, so it not that bad.

If you think for a big company. Yes. If you have your colleague that you see severyday, but you don’t see, you see you every day. Right. So I think. I think we manage it fairly well. In the future I would love to be able to offer much more value to the people who are the member of our network. Right. So that’s, can we offer them discount on further education? You know, what are the things that we could offer them? Could we help them with their accounting, for instance, you know, what’s the service we could offer, not, not as a revenue source for us, but more as a strengthening the link we have with our people. Cause you know, you have people you’re working with for four or five years now and, and it’s going strong and they just love it.

They still do their thing sometimes next week, sometimes they have their client, their own project, but they like Creative Supply because it gives them access to projects they could never get otherwise.

Ben: [00:58:46] Yeah. And then you take care of the customer acquisition costs.

Youri: [00:58:48] Exactly, they’re not so deep then, you know, when the client don’t pay on time, which happens at the moment 95% of the time we are running after the bids, but we are paying the creative sometimes.

So yeah, there’s, it’s a very, it’s a win, win situation for everyone actually.

Ben: [00:59:03] Definitely. Great. Thank you very much for taking time out of your busy schedule to speak to us.

Youri: [00:59:07] Thanks Ben. It was a pleasure.

Putting Marketing Strategy Above Tactics (#14)

Putting Marketing Strategy above Tactics, with Paul MELLOR

Putting Marketing Strategy Above Tactics,
w/ Paul MELLOR

How often does advertising motivate you to buy? According to our guest, ad and branding expert, Paul Mellor, advertising fails 89% of the time. Hosted by Ben Robinson, this episode unpacks what has gone wrong with advertising and what companies must do to turn things around. Don’t be a bland advertising wallpaper! If you like swearing, then you’re in for a treat. Fair warning.

Full podcast transcript:

 

Ben: [00:00:00] We are with Paul Mellor, one half of Mellor&Smith, which is a London based advertising and branding agency. Paul, welcome to the podcast.

Paul: [00:00:14] Cheers mate. Thanks for having me.

Ben: [00:00:16] We’re recording this in Geneva, and the reason you’re in Geneva today is because you don’t live very far away, right? You’re now living in Annecy?

Paul: [00:00:22] Yes.

So what is the job of marketing? The job of marketing is to create demand. And the job of advertising is to get noticed. Now, people managed to confuse the two.

Ben: [00:00:23] How is it running a London based advertising agency from Annecy?

Paul: [00:00:27] It poses its challenges. I mean, I only moved here just over a year ago. I’d been in London for 15 years, more than that, 15–16 years, and I just got a bit bored. I got stale and I was on the M25 with my wife and kids, and we were stuck in traffic.

I just sort of had had enough… I was telling my wife, I’m sorry, I’m just not doing this anymore. I’m not sitting in the traffic. Let’s go, let’s go and have an adventure. Let’s go do something different. And we met in the mountains. We were both seasonaires, as doing ski seasons years ago. So we, we loved the mountains.

And so we, yeah, we decided to move to Annecy and then I commute back to London every week. So I do a couple of days in the studio in London, and then I do the rest of the week in Annecy and actually my creative is massively improved. In London, I’m… you know, managing the studio and I’m meeting clients, pitches, presentations, whatever it is, the three days that, I mean, so the Wednesday, Thursday, Friday, that, I’m in Annec, it’s just writing. I’m doing the things that clients buy and that is, you know, what do they get?

They get, “creative”… the things that will change their businesses. So that’s what they get three days a week. And that clarity has massively improved. I kind of almost gone back to why us, you know, it’s real in a fire and it’s good.

Ben: [00:01:47] I can see how that could work. So two day are dedicated to sort of meetings, getting stuff done, and then three days are dedicated to what?Marketing is about raw, which is being creative.

Paul: [00:01:56] Yeah. So our, the whole shtick of our business is we get you noticed, so an agency, the vast majority of agencies don’t get people noticed. They create guff. This is meaningless wallpaper. And we get brands noticed, that’s what we do. So how do you do it? We have to like dedicate some time to do it, it’s a really difficult thing to do.

Ben: [00:02:15] Yeah. And the challenge in a way has become harder, right? Because we as consumers are increasingly time poor and more importantly, attention poor, right? So is marketing getting harder, do you think? And therefore is it you’re doing a better job and everybody else has just sort of carried on doing the same? Or do you think that people have got worse?

Paul: [00:02:39] So there are not… This is a very big question. I mean, I could talk probably for an hour on that question. There are a number of factors. The first factor is that the media landscape is ever more fragmented.

If you rewind to the 70s you had a handful of channels available to you, you know, and of which the biggest by absolutely miles was TV. Whereas now the media landscape is really fragmented. You know, there’s a myriad of different channels that marketers can choose, and it’s almost, they don’t know where to go.

And that feeds into the second point. There is a massive dearth of talent in marketing, and that’s because the vast majority of marketers are not trained marketers. They’ve come out, they’ve come out of university having done some bullshit degree. And they go, wow, marketing is cool, isn’t it? And I’ll go be a marketer.

It’s dead easy. Just pictures, maybe some words. And that’s why the vast majority of is rubbish. And is it ineffective? And doesn’t work because the people that are commissioning it don’t know. They’re not trained marketers. Do you ask them, what are the four P’s of marketing, they look at you with a blank face. You know, you fucking moron.

And that then transpires or like moves into briefing agencies. Because you know, if you don’t know what you’re doing, how can you write a decent brief to get an agency to give you the best work? So the agencies get poor briefs, then they produce poor work. The flip side of that is the leaderships within agencies… just Yes Men. You know, I pride myself on being a pain in the ass. I shouldn’t just be a Yes Man. I should challenge and question and, and be difficult into getting to the answer of why this client has a problem. Rather than just accepting, well, this is what I think my problem is, and if, and if a client is prepared to have those difficult conversations, then that is when the best relationships and best work will come out of it. But that’s a whistle stop tour of, you know?

Ben: [00:04:39] Yeah, no, there’s a few things to pick up on there. It’s the first one. Is that what you said there about, you know, everybody thinking they could do marketing resonated with me, right? Because yeah, I remember in the time that I did marketing, it’s like. People feel there’s like, there’s such low, some barriers to being a marketer because it’s really about, you know, colours and you know, everybody understands it, and so it feels really accessible to everybody and therefore everybody has a strong subjective opinion on marketing, which makes the job very difficult. There’s no objective way to spot good work.

Paul: [00:05:10] Well, there it is. So what is the job of marketing? The job of marketing is to create demand. And the job of advertising is to get noticed. Now, people managed to confuse the two. So marketing is if you’re in the B2B side, generating leads, and if you, if you’re really good, like sales qualified leads, like ones that are actually worthwhile.

And if you’re on the B2C side, its shifting more products in the supermarket or you know, whatever it is they sell. That’s the job of a marketer. Create demand. The job of an advertiser is to get noticed. You can’t create demand if nobody knows you exist. So that’s why marketers use advertising. One of the biggest problems there is that marketing budgets have come under a lot of scrutiny and attention and have been cut over the last, there’s a trend over the last sort of 20 years or so that marketing budgets are, in the main, cut. They’re one of the first ones to be cut. When a business comes in, the pressure, which is madness. Why the hell would you cut a budget that gets you noticed if you’re in trouble? Don’t understand that.

Ben: [00:06:18] That’s very cyclical, yeah.

Can you imagine if 89% of an architect’s buildings fell down because they weren’t very good at their job? There’d be a complete outcry, but it’s somehow, okay that 89% of ads are forgotten and money is wasted, like just poured away.

Paul: [00:06:21] Which it shouldn’t be in if you’re in, if your business is, is struggling, don’t cut the thing that gets you noticed, I don’t understand

Ben: [00:06:29] Yeah, cut the oxygen. If we accept, which I’m not sure everybody would, right, but the objective of marketing is to create demand. How do you actually demonstrate causality, right? Because this is a field where I think in addition to everything you’ve said, right, about the fragmentation of the media landscape, the dearth of talent, I think people have become a bit obsessed by ad tech, right?

Because, because ad tech. You know, offered this promise of being able to precisely calculate the exact impact of your marketing. Right? So I would add to your list of sort of ills. You know, this obsession with ad tech, which is…

Paul: [00:07:04] It’s not just ad tech, but like digital marketing as a whole, but ad tech is definitely the problem child within that.

Thepremise that you can serve the right message to the right person at the right time is bollocks. Like, that’s how strongly I feel really strongly about this. Um, delivering a, a message, a perceived targeted message as a perceived, you know, targeted person at this targeted moment. It goes against all accepted marketing, fucking like the fundamentals of marketing, but that doesn’t matter if you’re selling ad tech, you can save a company money because you don’t get any…. The the sell is, there’s no wastage. Well, of course, the flip side is… no one notices what you’re saying because marketing works on broadcast, not narrow cast.

So the difference being, if you serve one message to one person that’s narrow, it’s narrow cast. I don’t know what that message says about me to my peers. I don’t know where I make what I’m signaling… virtue signaling… I hate that term… but I’m not able to demonstrate what I am telling my peers about myself by buying that product.

Whereas if it’s broadcast, everyone knows that that product exists. So if I buy that product, then I am telling my peers something about myself to them about what I stand for. You know, how much money I earn, what I, you know, what things I’m interested in, you know, like what am I, what my values, whatever it is.

And that’s why it’s effective. And of course, just by, just by being broadcast doesn’t mean it is effective, but it is an effective medium and effective channel. You then need to lay it out. With something that’s going to get someone’s attention. So that’s advertising. That’s creative. How do you get someone’s attention?

We do the complete opposite to everybody else. If you are the same as everybody else, you are wallpaper. You are, you are. It’s incredibly difficult to get someone’s attention if you’re the same as everybody else. Whereas if you’re different to everybody else. You will be noticed. And so the, the research that backs this up or sort of steadfastly supports this is the IPA did some research a couple of years ago, the average Londoner, and it’s the same for any built up urban area, but the, the research was done in London.

The average Londoner sees a thousand ads a day. TV, radio, print, social media, digital, whatever it is, a thousand ads. Of those thousand ads, 89% of them are immediately forgotten. 89%! Only 4% of them are remembered positively. 7% remembered negatively You, it’s to get in that 11% is so difficult. I mean, you’d rather be remembered negatively than ignored.

Yeah. To be ignored is, I said. It’s, it is a joke how bad our industry is at its job. Can you imagine if 89% of an architect’s buildings fell down because they weren’t very good at their job? They’d be complete outcry, but it’s, it’s somehow, okay. The 89% of ads are forgotten and money is just poured in and and just wasted, like just poured away.

You would get more traction by just, if you’re going to produce ads that are inside the 89% it’d be better off taking that a hundred grand that you’re going to spend, burn it, film it, and put it on YouTube. You would get more from that. The new world just…

our bland is the result of many bland meetings and brainstorms where no one in the bland team or the rest of the business could agree on anything. We’re like any other bland, unremarkable. It is our point of indifference, our USP, our unoriginal selling point. Why stand out when you were born to fit in? Our promise is to always go on noticed.

Ben: [00:10:53] Which is the band that did that? You remember they got loads of publicity because I think they burnt a hundred thousand pounds. But what I like about, well, I like everything you’re saying, but…

Paul: [00:11:03] Okay, that’s very kind of you

Ben: [00:11:05] But, a couple of things I want to pick up on that really, again, I thought were really on point, right? One was.

Let’s say just hypothetically I could target you precisely with exactly the right message at the right time. Probably the fallacy is that even if I did all that, you probably have an ad blocker on. And even if you didn’t have an ad blocker and you wouldn’t remember it cause it wasn’t very good advert in the first place.

So in a way, this is what I’m talking about, this obsession with adtech because we’ve got so obsessed with the tech and the ability to micro target that we forget that actually you still need to stand out and it still needs to be a good ad in the first place. And then the other thing that I liked about what you’re saying was… There was an academic study at, I don’t know if you ever saw it, but it was like the part of marketing that works is the wastage, the wastage works, which is, because you said, it’s like, you know, when you see a really expensive production on TV or whatever, that has a signaling effect that says, this company has money, this company can afford good actors, you know?

So, so in a way, just because we can’t measure the impact of it doesn’t mean that it’s wasted. Right. Yeah. And then the other thing you said, which I think you’ve referred to… Which is we’re not just trying to build demand, right? We’re also trying to build loyalty because loyalty creates sort of priced inelasticity and allows you to charge more.

And so at its root, it comes down to what you said, which is get noticed, which is one of, you know, we help you to get noticed as one of your taglines. The other one. Which is “take fucking risks”. Right? And the two go hand in hand. Right? Because you can’t stand out unless you’re prepared to say something and stand for something that’s a bit different from your peers, right.

It’s like, yeah. Tell us what mediocrity looks like because you referred early run for this bland guidelines that you came up with. Just just talk to us about that. Cause there’s this, I really liked this when I, when I found this on your website.

Paul: [00:12:50] I produced this with one of the most well known, best regarded, well-regarded copywriters in the world, I would say.

So, Vicki Ross, she’s @vickirosswrites on Twitter. She’s incredible. And so the two of us teamed up and we worked with Grace State, who’s one of our designers in our agency at Mellor and Smith, and we produced that, what we call our “bland guidelines” as a satirical view of the garbage that we see on a pretty much daily basis.

So brands will have their brand guidelines, and that is the, you know, the, the Bible almost, this document that cannot be deviated from that is the thing that that brand stands for and it will contain their vision, mission, you know, their purpose statement. It will, what fonts they’re using, what colors, what imagery, that tone of voice, all of the things.

Right. So you use that and we would get sent that…

Ben: [00:13:54] It is like an inverse correlation, right? Between blandness and the length of the brand.

Paul: [00:13:59] Yes, of course. Yeah. The, the, the, the more bland than longer… And so I get sent these, whenever we’re working with a new client that, you know, one of the conversations we write, send us your brand guidelines so we can see what it is that you think you stand for and all this kind of stuff.

And I, so I see them every day. I would say four or five a week. And they’re all the same. Uh, they all say the same old rubbish that’s so bland and vanilla and meaningless, and they think that they’re being profound and different. And so, you know, I’m in a really good position in that I see lots of them, whereas a brand will probably only see their own.

Um, or maybe a couple of others. And so we, we made the “bland guidelines” as a, almost like a bit of a piss take to these things. Satire. People see it and they go, shit, that’s, yeah, that’s, I was, you know, it’s, I mean, you can post it, but it’s, it says, you know, it’s kinda goes in our bland story. You know, our bland is the result of many bland meetings and brainstorms where no one in the bland team or the rest of the business could agree on anything. We’re like any other bland, unremarkable. It is our point of indifference, our USP, our unoriginal selling point. Why stand out when you were born to fit in? That’s the positioning statement and our bland purpose is to share bland communications with the world.

Our promise is to always go on noticed. The bland personality is we are always Daft. With D standing for Dedicated, A for Authentic, P for Passionate, H for Helpful, T for Trusted.

Ben: [00:15:37] I think Passionate is one of those company values — de rigeur. Like, if you don’t have it right, you miss. You know?

Paul: [00:15:43] It’s like saying you’re honest. Yeah. It’s like trusted. Like the minute someone says that, I’m. Trust me, I’m, yeah, I’m really trustful, trustworthy. Like you are obviously not trustworthy.

Ben: [00:15:55] Like, “I’m not a racist, but…”

Paul: [00:15:58] And then, you know, our bland color is blue and classic ivory. Cause you know, nobody’s that… there’ll be, there’ll be a picture of a millennial. Oh yeah. Yeah. I mean, cause you know, and no, no, no plan is worth…

Ben: [00:16:15] This is worth delving in for a second… because essentially people have pivoted so much of their messaging and targeted to millennials who…

Paul: [00:16:25] Who don’t have any money

Ben: [00:16:27] Yeah, they don’t make decisions in organizations, don’t have any money.

Paul: [00:16:30] Yeah. But they’re cool. And they eat smashed avocado on toast? No. The point, I mean, it’s a serious point. When was the last car ad that you saw that didn’t have a young person in it? Like when was the last time you saw a car ad that had an old person in it? If the over fifties in the US where their, their country in their own right.

They’d be the fifth richest economy in the world yet. And they’re the people that buy all the cars. The new ones. Yeah.

Ben: [00:17:00] Millennials rent them.

Paul: [00:17:01] Yeah. And you don’t see an old person in a car ad, but you’re expecting this old person to buy your car. Like it’s not hipsters that are buying Teslas. It’s 50 year olds. But you wouldn’t think that.

And that’s a serious point. Uh, you know, I mean, obviously it flippantly delivered, but it’s like millennials don’t have any money. They don’t even exist. I mean like they’re not even a thing. The idea that anyone between the age of 18 and 35 is exactly the same. They’ve all got exactly the same.

Yeah. But you know, they, those people don’t have any money yet. You wouldn’t think that for all the advertising that is targeted at them, especially expensive things that costs loads of money.

Ben: [00:17:43] Let’s talk about some of your own work where you, uh, where you’ve taken risks or you’ve, you know, you’ve pursuaded the customer to take risks and you’ve done stuff that’s really stood out.

So for example, on your website, you have this video of the Faulty Towers show in London, and that’s great. So could you just tell us about that, because that is, I mean, it’s, I imagine it was really successful, but it was certainly super distinctive. Right. Whoever saw that would never forget it.

Paul: [00:18:08] Yeah. So there was one of our clients is the immersive theater experience, Faulty Towers, so the TV show, Faulty Towers, they’ve made a theater experience, but you can go for dinner at in like the Faulty Towers Hotel, and they have the actors, the characters playing the part, and you have your dinner there.

It’s been going for 20 years in London, in the West End. Really, really successful. Um, and then there was a new entrant into the market about a year and a half ago and they started to erode market share as you would expect. A new Faulty Towers engine, backed by John Cleese. John Cleese made his own one.

So you think that that’s, that’s clearly, that’s a big powerful competitor in that respect. Cause it’s like the guy that wrote Faulty Towers has gone, well, I can make one of those. So our client came to us and said, you know, we’re seeing that ticket sales to starting to erode. You know, we’re not selling as many tickets as we were, so we need to get out there and tell as many people as possible that haven’t been to this show.

Probably mostly in our audience for people that hadn’t been to the show before, rather than trying to get repeat purchase to come by the show. So we looked at the problem and it, it came to is, you know, our creative answer to that problem was that you needed to get people to experience a little bit of the show.

All right. Okay, let’s do that. What we did was we put the show on the Tube on the Bakerloo line, and we chose that specifically because you can turn it into a dining room because of the way that the booth is kind of laid out and in the middle of rush hour, so we did it. We ran it from five o’clock until eight o’clock in the evening.

The actors on there made the tables essentially put a dinner party. On the Tube in the middle of rush hour, and we didn’t ask for permission. I mean, if we’d have asked, we’d been told no,

Ben: [00:19:53] Imagine the Health and Safety loops, you would’ve…

Paul: [00:19:56] And we ran it and it was incredibly successful. The amount of people that saw that, that was sharing it, the ticket sales, like immediately jumped.

They sold, they completely sold out in the most difficult couple of months. So the next couple of months after that stunt. Artificially, their most difficult months to sell this sold out. They’ve resolved the problem, they’ve taken the fight to the competition, and they’re back to selling out every night when, you know, when they, when they put the show on.

So it completely answered the brief. I’ve got a lot of attention, lots of press attention. So earned media rather than bought media. Um. Really, really successful. I mean, I had to bang out a couple of, you know, a couple of notes to the, the attendance on the, on the Tube, you know, because they were like, what’s going on?

And there was some sort of, Brian and I… In a nice way, you know, like as in, could you just turn and look the other way while we do this? And they did, but they got it. And you know, the commuter in London is notoriously grumpy and they don’t want to be there. They’ve got their face in somebody’s armpit, they’re bit cheesed off, and they absolutely loved it. They absolutely loved it. And it’s real. That’s, that’s pretty risky. And that’s a relatively small, a relatively small client, but I think it’s a really good case study for…

we started talking about Take Fucking Risks, telling clients one at a time — this is what you have to do.

Ben: [00:21:19] Just to come back to this point again, because we’ve completely, I think we’ve agreed upon about 90% of things, but what you, what you are doing there is not only taking risks, not only getting noticed, but you’re also adapting to the new world, right?

Because that’s one in which you’re getting in front of people. Yeah. I mean, you’re not using traditional media to do this. Right. And then also, you know, the, the act of them sharing it and become very memorable and them sharing it on their channels was very important. Success, I guess. Right?

Paul: [00:21:48] So, yes… Yes and no. I mean, there is a difference between digital marketing and, you know, people sharing, just because you share like word of mouth out to your 500 followers on Instagram, it doesn’t mean it has power. Yeah, it has some power, and I’m saying it, it’s just not as powerful as it was. You know, in years gone by. Yes, it is definitely a new, not a new method, but not a traditional method doing a stunt like that, but people have been doing stunts for years.

The, the point here is we shouldn’t be choosing the media before we’ve settled on the idea. The idea comes first and then like the best possible way of bringing that idea to life is that then the media that should be chosen there. We wanted people to experience, you know, a little snapshot of what it’s like.

You know, they, they enjoy that. That little moment. And then they’re going to say, Right, I’ll go and buy tickets for Saturday night for, you know, to go out with the, with the wife for dinner, and you know, on a Saturday night. Right. So that’s, that’s powerful. And the best way to do that, the best way to show that experience was a live event.

It was a stunt, if the, if the best way of showing that was a TV ad. We had done a TV ad. If the best way of doing it was to put it on a billboard, we’d put it on a billboard. We didn’t start with, let’s do a stunt. You know, cause that’s tactics before strategy. You can only get noticed if you’re prepared to take risks.

And we’re not talking by turning the dial one notch away from the competition. We’re talking about doing 180 degrees different. You have to be completely different. But that takes guts to, you know, to, to do that, you have to be really sure that it’s the right thing to do. And it’s far easier just to sit in the crowd in the congested central middle ground in a, in an industry.

And you never gonna get noticed. You never going to get decent return on the time and investment that you’re putting into your marketing, if that is what you’re going to do. So is risky. Now, risk mean different things to different people. And I’ve been talking, I mean, I’ve been running my agency now for nearly 11 years.

Um, and the first four or five years we just kind of getting things off the ground and. Yeah. About five years in, we started talking about Take Fucking Risks, telling clients one at a time, you know, you, this is what you have to do. And selling that methodology and that mantra and that mindset. And what transpired was that it took a lot of effort to tell, you know, one boardroom, you know, one meeting at a time.

And so what, three and a bit years ago, we set up an event series called take fucking risks. And it’s now. Does that mean we started in a pub, which is where all the best ideas start. We were in the pub and we were talking about how could we do this? We set up, we said, well, let’s do an event. The first event, 50 people came along to it.

I couldn’t believe we’d convinced 50 people to come along to an event. You know? No one had never even heard of the event, and that over three years is now grown and we get over 400 people to an event there every quarter. They’re probably the largest creative event series in London. And it’s a, it’s a, it’s a joke.

It’s a side hustle on the side. You know, we’re, we’re an ad agency. We’re not an event company, but we put on. Probably the biggest events series in London for the creative scene, which is, you know, if you think about where the real hotspots of advertising and creative are in the world, it’s London in New York, and we’ve managed to grow an event series in one of those two, which is the biggest, and it’s really, really successful.

And people come along and they, they’re inspired and they should be because it’s, it’s, it’s in your face. It’s not bland. It’s not. It’s not your usual kind of corporate patter. It’s snared lights just smack you in the face and actually make you think, no, we don’t give you all of the answers. You know? We give you a a challenge almost.

It challenges you to think. And I’ve had people come to the event and then email me at like three o’clock in the morning having left the event, had a few beers. Right. And tearing up what I’ve been doing for the last six months. And you know, this might be a marketing director, a brand director, a big business in there, started again and then scribbling in the middle of the night and they’re phoning me or messaging me.

And that’s pretty cool. I mean, that’s like. Yeah, I’ll have a bit of that.

Ben: [00:26:09] So in a way, you’re sort of with this, with this events series, in a way , you’re eating your own dog food, right? Because you, you’re using the events series a/ to stand out and b/ as a marketing tool of your own, right. Because, cause it seems to me that what’s disappeared a bit in the marketing… Because, you know, I don’t want to go into this territory of marketing is dead or whatever.

But it seems that some parts of marketing don’t work like they used to because. Because, um, if this attention deficit problem, and I would agree with you, the advertising is still as important as it was and brands are more important, they are than there were. Because, you know, because we need the signaling effect and have super busy environment.

It’s a crowded environment. But then the stuff that was more targeted, I don’t think, you know. Press releases work particularly well, or webinars or any of these things. But what does seem still work really well is actually getting in front of people and on a personal level, having quality time with them, doing really high quality events.

So you’re kind of in a way, you know, living or you know, are subscribing to your own self doctrine.

Paul: [00:27:11] If you have a different. I am one of the very few people that talk like this in our industry, so you know, Oh, I’m going to get challenged. And so I should, the easiest way to combat that or that scrutiny in that challenge is to practice what I preach and we do.

Ben: [00:27:30] And so it’s a good lead generator for you? The event series?

Paul: [00:27:33] I mean. You know, people aren’t like coming along to the event and be like, Paul, here’s a million quid. You know? But it’d be lovely if they did, but it’s definitely a lead generator. It’s an interest generator. We are, people are aware of. Who we are and what we stand for.

And so then we are hopefully top of mind when the opportunities come along, you know, where they want to reach out to a review, their agency that they’re working with and that kind of thing. So it definitely has generated business and, and, and we’ve won business off the back of it that we wouldn’t have won otherwise.

You know, I think we can be fairly confident of that.

Ben: [00:28:09] And a general brand awareness that’s outsized compared to the size of the agency, right?

Paul: [00:28:14] Yeah, we’re really small, yeah.

Ben: [00:28:15] When you talk on the website about keeping a purposely small team, which I mean, certainly it’s something I would, you know, adhere to as well.

Right. Which is, I think you can’t produce really high quality work on a consistent basis if you’re running a massive team.

Paul: [00:28:31] If I spend all my time managing people, then how can I produce the best work. No, it’s a, it’s a blend of the two. So we are a team of 10 and we’ve never been more than 10 and we’ve been going 11 years.

Ben: [00:28:43] And even if, you know, even if people were coming to the, I’m going to call it TFR cause I keep saying you split the TFR events. Yeah. And they were giving you million dollar checks. You still wouldn’t go above 10 right. You just think you’d just be more selective about who you worked with.

Paul: [00:28:57] And we are selective over who we work with as it is not because you know, we’re Johnny big time and therefore we can pick and choose.

But you know, you have to. You have to want, you have to fancy it. We’re not just going to take the check. We’re going to want to produce the best work, and so if you, you as a brand that you as a marketing director or CMO aren’t interested in actually producing the best work, then we’re probably not going to get along.

We were really clear about that and what actually makes us really easy to work with because. Do people know what they get? You know there’s, there’s no kind of hidden agendas. So people were really clear and obvious up front about what we’re like to work with the, the benefits of working with us. There’s no obscurity, and that’s the, I think people value that.

I mean, how many times the big brands, you know, choose a vendor and then actually, you know, three or four months down the line, it, it’s, it’s, it’s my head in arguments and debate and, well, I didn’t know you’re going to do this. I didn’t know this was going to cost more or whatever it is. Now we’re just really clear upfront and I think people appreciate that.

Ben: [00:30:02] Where do you stand… I mean, what’s your measure of success in terms of, I mean. We can come back to generating the minor stuff like that. But do you have broader measures of client success and you know, do you, are you like really fixated on client retention, or do you actually think it’s quite healthy when clients change agencies from time to time because they get fresh perspective?

Paul: [00:30:23] I have no time for brands or clients that change agency for no reason. Yeah. The average tenure of a CMO is now 18 months. The first thing that the CMO does is put the agency out for review. So you’ve got agencies pitching for work every 18 months. It takes about, if you, if it’s a big brand, and we work with some massive brands, we work with the biggest… Branding a lot. We worked with Amazon, you know, as one of our clients, and we worked with some small startups and sort of everything in between. You know, if you, if you go for big pitches with these big, big brands, you have Fortune 500, FTSE100 businesses. It takes a year to recoup the pitch cost.

So if you, if you’re on review every 18 months. The agency can’t make any money. And so then what’s the incentive, you know, to actually produce the best work and to go above and beyond. So that’s, that’s a really big problem in terms of how do we, you know, what do we fixate on other than getting brands noticed, client retention 100% so, like I said, we’ve been going nearly 11 years.

Our longest client relationship is nine years. We, we. Absolutely, to the point of paranoia about working with clients and understanding their business. We work with some of the biggest brands in the world, some of the smallest ones, and we are fixated on serving them, but not, but not delivering a service that is just, yes, yes, yes, yes, yes.

It’s now, well, let’s produce the best work. You will see the best results, you’ll then want to work with us more. Yeah, it’s really, it’s a really simple equation in my book, and I hate complexity, so I want to keep it really simple. Clients have got difficult enough job as it is, and it makes it sound like I’ve got a problem with clients.

I really don’t. I’ve lot of empathy with their situation. Like I said, like the average tenure is 18 months for the person at the top of a marketing organization with the big brands, you know, that is, and they’re under a lot of pressure to deliver. So I’ve got. A lot of time, a lot of empathy for the situation that essentially my client is in.

This isn’t me just bashing the person cause that’s really lazy. Um, fucking yes. No, it’s no good. You know, you’ve got to understand the pressures that they’re in. I mean, I might speak to my client for two or three hours a week. You know, so that what, let’s call it 5% of their week, that’s got to be the most thought provoking, the most challenging, but also the most fun 5% of their week because the other 95% let’s be honest, you know, corporate life can be really dull and really challenging at times.

So why the hell would I make my 5% it should be fun. It should be challenging and should be the the reason they’re in the business in the first place. Why would I make that the same as everybody, you know, same as the rest of their week.

Ben: [00:33:16] We should add, so into your initial list of all the ills in the industry, we should add sort of shrinking time horizons and shrinking tenure because you know there’s a definitely a positive return on time.

You work with the client because you understand that business better and you’re able to sort of craft the messages better. You understand the industry better, you know? Do you think this shrinking tenure of CMOs is. I mean, first of all, why is it happening? Is it because people are more and more impatient to see this, you know, return on investment?

And then do you think it also contributes to this, you know, this sort of returns and you know this like. Returned to mean what everybody wants to do something that’s a bit blind because they don’t want to lose the, you know, you don’t want to be kicked out after 18 months is do you think that’s also part of why you know so much marketing is indifferent and…

Paul: [00:34:09] I think it’s definitely, it’s a contributing factor, no doubt.

Like I said, I’ve got a lot of sympathy for the situation and that’s because that CMO is under a lot of pressure. There’s a board to report to the might. They might be on the board or they might report into the board and there are shareholders to satisfy, you know, you’ve got quarterly earnings reports, you know, to deliver on.

If a new CMO comes in, they’ve probably got three… Or they’ve got a month to tear it all apart because that’s the first thing they do. They’ve then got three months to come up with a plan. You know, this is what I’m going to do. Having, you know, again, torn up the plan and then they’ve got six months to implement that and start to see some results.

So they’ve got less than a year having come in fresh, knowing nothing about that business, potentially having no track record within that business. They’ve got a year to deliver some results. So of course, you know, their natural instinct is to put a lot of time pressure on their suppliers, their vendors of which an ad agency is going to be one of them. To, to get results immediately, but then you think that’s, you’re not going to get the best out of an agency if you go, you’ve got a week to come up with something. The fucking all right. Yeah, I can, I can think of an idea. We can find an insight and we can create an idea based on that inside a week.

Yes, we can. Is it going to be the best one that you can have? No, probably not, because it takes time. These things take time and you have to trust that you’re speaking to the right person. You need to trust in their skill and let them do their thing. And I’m not saying we need a year, we just need slightly more than no time.

When I, when I started in this industry, I mean, how long have I been in the game? 16–17 years, something like that. There was definitely more time when I started and it, and that really was the last part, you know, sort of the last moments of time. Being allowed for agencies. And I’ve just, I’ve seen it been eroded from that moment.

And there’s, it’s, it’s no coincidence that that was when the, uh, the internet really started to take off digital marketing to air, to go ad tech followed up a few years after that and then budgets started to be cut and, and, and all of those things happen at the same time. It’s almost like a bit of a perfect storm of components all coming together.

And, and we’re now at a moment where more and more ads. I just, it’s just a waste, like I said, 89% it’s just wallpaper. You walk down the tube in London and you walk anywhere. People are just walking past. Yes. This is wallpaper.

Consensus creates mediocrity. I’m not interested in consensus. Hate compromise. I’m interested in producing the best possible work.

Ben: [00:36:45] This shrinkage in marketing tenures and shrinking timescales and impatience to get returns is because of what you said, which is people have become obsessed that because we’re in a digital age, marketing has to be done very differently.

What’s your advice to a CMO? You know, it’s, it’s, you know, it’s a well remunerated function, but it’s a function where, as you said, right, the tenure is shrinking, how do you do, how does this, what are the characteristics of a good CMO? What, what should a good CMO do what I mean? When you work with good counterpart style CMOs, like what do they like?

Paul: [00:37:21] There is a mutual respect both ways. I think that’s the first thing. They don’t just. Treat me as a a doer.

Ben: [00:37:28] Supplier.

Paul: [00:37:29] Yeah. Like I’m like, I have a value and conversely, I have a lot of empathy and appreciation for the pressures of their job. So like a mutual respect going both ways. That’s the first thing.

The second thing is an understanding that they can’t solve all of their problems immediately. They need to assess what are their biggest problems. Uh, the ones that are the most critical and solve those ones really in, if we’re being really honest, they should do a complete assessment of their, uh, of the landscape in front of them when they join.

And then they should pick three biggest problems that they’ve got solve those three problems. Don’t try and solve a hundred, solve that, put all of their effort, all of their money, literally every ounce of focus into solving those two, three, or four problems. Yup. Solve those. They clearly, if they’re the biggest ones, they’re going to have an impact on their job and the desire to keep the role that they’ve got and to, you know, grow their influence and impact on that business. But that takes leadership, that takes experience, that takes a desire to actually solve the problems.

Being a D2C brand isn’t the same as therefore throwing the rule book out the window and going, well, because we’re D2C, we can avoid traditional media. We’ll do everything digitally. No.

Ben: [00:38:40] Do you think educating the other management and the board is a function? Because I remember when I was a CMO, right? I mean, we were killing it on all the sort of metrics that you, you and I would agree are important, right?

Lead generation, conversion of leads, share of voice. And then, you know, you’d be presenting on this kind of stuff. And then someone would say, yeah, but was in the Dubai office and I didn’t like the poster in the toilet, you know? And it’s like, how do you get everybody to the same level on marketing?

Paul: [00:39:05] So let’s just say the person that said that was the CFO.

I be like, I don’t like your accounts. The point there is he then go, Whoa, I’m a trained accountant. So, and I go, well, I’m a trained marketer. So, you know, I’m not antagonistic for the sake of it. Like I would make the point that you don’t have an educated opinion about that poster.

You don’t, like, I’m the marketer. I do. I make the poster in that instance. Yeah. I didn’t tell you how to do the accounts. Have some respect for what I do, and I have some respect for what you do.

Ben: [00:39:45] Yeah. And I think it comes back to the same point you made earlier on, which is, it’s, you know, it’s, it’s. It just feels so accessible.

So it feels like everybody’s entitled to have a strong voice about marketing, but you’re right, it is actually a profession.

Paul: [00:40:01] Yes. Consensus creates mediocrity. That’s Oliviero Toscani’s quote, I’m not interested in consensus. Hate compromise. I’m interested in producing the best possible work. And so that isn’t a team, that isn’t the board.

You know, 15 people signing off on the campaign. That’s one person, the CMO signing off on a campaign.

Ben: [00:40:24] So somehow she needs to have massive autonomy when it comes to,

Paul: [00:40:28] Yes. Because in the same way that all of the other people that make up that board also have autonomy. Like the chief tech officer has autonomy.

The head of product has autonomy. The CFO has autonomy. The head of supply.

Ben: [00:40:42] Yes. It’s so true because, and then when it comes to brand, there’s you in these endless workshops seeking conformity and you end up with the, with the kind of work that doesn’t stand out. You know, just want to revisit for a second this idea of ad tech, right?

Because one of the things that people say is that it’s launched a whole bunch of. New companies direct to consumer companies will be parked when people like that, and when I hear that, you know, I think part of it’s true, right? Definitely the internet has created a new route to the customer. Yes. But I think the bit this misdiagnosed is the somehow the actual marketing effort, the messages and all those things don’t matter anymore because what is in a way, or listening to you, I’m thinking.

What people like Warby Parker had was sure, they had a D2C, you know, a direct route to customer and they could listen to the customer and the feedback that, you know, those insights into the products and these, you know, and in a way, companies historically had itself more in direct relationship with the customer.

So that’s changed. But, but really what’s changed is that the big companies are changing their CMO over 18 months. They’re not standing out. They’re not coming up with personality and interesting messages, and so that’s created an opportunity for smaller companies to do it better. I think it’s almost like, I think we’re almost misdiagnosing the problem by saying it’s…

Paul: [00:42:07] Being a D2C brand, so direct to consumer. Isn’t the same as therefore throwing the rule book out the window and going, well, because we’re D2C, we can avoid traditional media. We’ll do everything digitally. No, this D2C just means you don’t put it in a shop. It’s not sold to a retailer. That doesn’t mean all other rules and all other practices that work should be thrown out the window and it’s, it’s, it’s madness. The reason why Dollar Shave Club, incidentally, are sold to Unilever. They sold, they didn’t for… Maybe it was maybe a billion, huge number.

Ben: [00:42:52] You sort of, you know, you unbundle Unilever and then you can rebundle on the Unilever. So it’s this massive transfer of wealth from Unilever.

Paul: [00:43:00] The reason that was successful. I mean, it was successful because it was a D2C brand, but the reason it was known and was successful wasn’t because of their digital media, because they didn’t do a great deal of that.

It was because the launch video has been watched 100 million times on YouTube. Like that is, that is the reason it’s successful. That’s the reason why you know about that brand. And I know about that brand because the launch video was a piece of genius and it got noticed. It was different to every single other launch period.

Ben: [00:43:32] But I think there’s also the business model change as well

Paul: [00:43:35] Right. Cause he changed the game. I get that. But that wasn’t the reason for success. The reason for success was because millions of people had heard about it. And then they were like, Oh, and I don’t have to go to the shop and I don’t have to spend 25 quid every time I want to buy a razor.

No, I can spend a couple of dollars a month and they get delivered to me and they’re decent razors. That’s the reason why they delivered direct to me. That was the reason. You know it grew, but the reason was because everyone had heard of it. And the reason everyone had heard of it was because they got noticed.

And the reason everyone saw it was because they were different in how they pitched themselves. They took a risk.

Ben: [00:44:16] But do you think that within marketing, the sort of relative importance of the four Ps might have changed a bit, i.e. That maybe promotion isn’t quite as important as it was relative to the product, cause the product, you know you have or visibly price or visibly place because.

In a world where the consumer has a bigger voice and the consumer has a bigger impact on sales, you might argue that product matters more.

Paul: [00:44:49] Is your point that the weighting…. Did you have a point that I haven’t though that that’s, that sound fair is the point is the weighting change.

Ben: [00:44:59] It seemed to me that in the past, right, and the, let’s call it the industrial age, right?

You could have pretty crappy product and you, if you spend enough money on broadcasting it through, you know, through mass communication channels, you could sell it. And part of what’s changed is the. That those same communication channels don’t work as effectively as they used to, which we’ve talked about.

And then part of the problem is, is also the, you know, the consumer has more power than they had cause it was, consumer has a big voice and the, and we know more about a consumer. And so we have to make better products as well. And I think this is. Alongside the, the desire for something more sustainable, locally sourced products, or I think the whole sort of hipster movement in a way, it’s like a desire to have just better quality stuff because we can, because we can afford it because…

Paul: [00:45:47] No, I don’t agree. So the, the, the, I think people have been bothered by, you know, decent products since the dawn of time. And actually, you know, if you, if you go back to where really, where like consumerism started.

Probably in the US you know, at the turn of the turn of century, the products were really good. They were built to last. It’s only as you know, product semantics and the, the idea that we’re designing a product. To last a year so that then somebody buys another one and then another one we can make more money like that.

You know the idea that really only came in over the last sort of 20–30 years or so, I think, you know, if we think back to where consumerism has started… the products were built to last and they were really good products. Now there were less products, there was less competition, there was a far more open competitor landscape. You know, it wasn’t as crowded, but I don’t agree that the, the, the weighting has changed. I think it’s really important to stick to those and give them the weighting that we always have. The, the, the, I suppose the, the slightly larger point here. Is that it’s way easier to sell a dream if you can say, this old thing is dead.

I have the answer to the new world, like, who the hell is ? Oh shit, I don’t wanna get left behind. Let me listen to this person. And it’s a snake oil salesman and I think no, like, and nobody ever got rich by saying it’s largely going to stay the same next year and that’s it. Sticking to traditional methods is what will grow businesses and brands, but that doesn’t, that doesn’t grow agencies, and that doesn’t keep CMOs in tenure. They need to be able to go, what you’ve been doing for the last 18 months is all rubbish. Right? I’m here to save the day. And that’s, that’s not, don’t do that. You look at some of the most successful brands in the world.

They don’t swap and change that senior leadership that often, you know, it is really stable tenure. These are the really senior levels and the trust in those people.

Ben: [00:48:01] I think the point I was trying to make, which is I guess there’s a truism and you wouldn’t contest, which is that in the past you could have relatively mediocre product and great marketing and that would work.

And now you could have, um. I think it’s just, it’s harder with an mediocre product and great marketing. I think you need it. Great. But I think great marketing is what I’m saying.

This idea that influencers are this brand new, shiny magic bullet that are available to marketers is rubbish. It is the wider point that word of mouth and having advocates that, you know, people that are a consumer of that product and then they advocate it to their friends. That is incredibly powerful.

Paul: [00:48:22] Yes. And that’s always been true. Yeah, I agree.

Ben: [00:48:24] So you’re just saying it was a universal truism. And for a while it wasn’t true because, because you know, the TV was just such a dominant, yeah.

Paul: [00:48:32] It’s like TV is still very dominant. It isn’t quite as dominant as it was. You know, it might slip a percent in terms of the, the amount of eyeballs that it gets over a period of time. And then, you know, the minute it slips from 90 to 89% or something like that, you know, the TV is… like, are you, are you insane?

No, it’s just ever so slightly, not quite as dominant as it was. Is there a general trend that, that the media landscape is changing and therefore you have? Yes, but we like, it moves really slowly those types of behavior changes. Not nearly as quickly as people think that it is. And if you’re selling ad tech, then you’re like, this is the end of the world.

You must, you must change. Like, no, that is not the case is the, is the point you’re making. Sorry. The point you’re making is. If you had a mediocre product, you could just put it on TV in the 70s you could do that and you’d get away with it. Yeah, you could. Now, if people see through that and the consumer is more powerful, but that doesn’t mean that the four P’s don’t, sort of sit as well as they did.

Ben: [00:49:36] And then on that point about, because it seems to me that a lot of where marketing’s changed as well as maybe, maybe again, it’s not true. Maybe I’m sort of exaggerating, but this idea that. You know, we’ve gone from something having a mass consumer it to what people call now multitude, right?

So multitude and this idea that the consumer is networked. The consumer therefore becomes way more important is an advocate of the product. And I guess anticipating we are going to say you need to create that emotional pull. You need to get the consumer excited through marketing, but where do you stand on things like influencers?

Paul: [00:50:14] I think it’s bollocks.

Ben: [00:50:16] I suspected you were going to say that…

Paul: [00:50:17] But yeah, no, I mean that. Eh, this idea that influencers are this brand new, shiny magic bullet that are available to marketers is rubbish. But brands have been paying celebrities to endorse their product for decades. And that is an influence. Is that is the wider point that word of mouth and having advocates that, you know, having people that are a consumer of that product and then they advocate it to their friends. That is incredibly powerful.

Ben: [00:50:49] But in a way, it’s like everything that we talked about, it’s true. Right. And it has been true forever, which is if I love the product, I’ll tell my friends.

Yeah. I suppose we’ve amplified the voice of the consumer now. So the consumer kind of advocating on your behalf has more impact than it did in the past…

Paul: [00:51:03] Why?

Ben: [00:51:04] Well, because the consumer is connected.

Paul: [00:51:06] But that would be to suggest. That just because they’re connected, it has value in that connection.

And I don’t think that’s true. So the 1960s housewife. Ah, that would sit around with their friends. Let’s say they got, you know, a bunch of other housewives round for a cup of tea and there’s five or six of them that is very influential. Like they’re able to, like you said, like look them in the eye.

I’ve got this thing probably holding the thing that they’ve bought. I bought this thing and it’s great. That is really powerful. I’m putting on Instagram. I bought this thing and it’s great… Doesn’t have the same power and resonance. And just because it’s then broadcast to your 500 followers on Instagram doesn’t mean then that you’re influencing 500 people rather than five.

I don’t agree. I don’t, I don’t think that it is anywhere near as powerful or have as much resonance just because it’s on social media. I agree that it has bigger reach as in like it goes further, but I don’t think it’s as powerful.

Ben: [00:52:10] In a way, whether we agree on that or not, the conclusion is the same, which is you want a product that people love and you want a brand that people love.

Paul: [00:52:18] That should be the starting point.

Ben: [00:52:19] Yes.

Paul: [00:52:20] And not, let’s get lots of people to put on Instagram how much they love our product. Just get them to love your product and they will do a lot of the leg work for you.

Ben: [00:52:28] What’s next for you? So. What are you working on now? So I guess you’re already planning the next TFR event for next year or the other events for next year.

Are you going to do anything with this “bland guidelines”? You’re going to turn that into some Mock Award ceremony. That’d be hilarious.

Paul: [00:52:47] So I was speaking on a panel with Vicki, the copywriter that wrote it when we produced it with, and I was speaking on a panel last week, and we’ve become really good friends and we speak on relatively regular basis, but actually we’d never spoken on the same panel and we were getting drunk on the panel cause it was in a pub and we just kind of turned to each other and said it would be great to present The Bland Book together at conferences and things and actually take people through the book and present it to them together.

So the, the copy side of it and the art direction side of it. Shakara advertising in a duo to, so anyone out there runs conferences that wants us to present The Bland Book should get in touch because that would be a really good fun thing to do. And I think it’s really powerful because I think it’s almost like a shock tactic.

People go, wow, right? And they see themselves in it and it’s really. I think one of the powers of, of the satire, so anyone that wants to book me for that, me and Vicky will, will definitely come along. It’s a plan for next year. We’re going to do more TFRs. We don’t have the date for the next one, but it will be probably in March.

We did. We don’t really do things January, February because, well, I’ve got to think about what we’re going to do…

Ben: [00:53:57] Skiing, right?

Paul: [00:54:00] And then what’s the plan for us? We’ve got quite a few. Really cool projects in the pipeline that we’ll be launching in Q1 of 2020 so yeah, we’re going to be doing that, getting, you know, getting our name out there as much as possible.

Ben: [00:54:13] By the time this goes out, I’ll probably already be February. Yeah, you wouldn’t have to wait for this.

Paul: [00:54:18] So there is some work launching right now. Insert project.

Ben: [00:54:23] Great. Paul, thank you so much for your time. So I’ve, I’m going to attempt, I think, badly to try to summarize what we discussed, but, and I think what you’ve told us, right, is you’ve, in a way, you’ve brought us back to first principles, right?

You’ve debunked a lot of the crap that people talk about. You’ve highlighted that marketing is a discipline. It is a profession that brings demand, gets you noticed. It can be measured, but can never be precisely measured. And that’s, you know, that’s a rabbit hole that we shouldn’t go down. Right.

Paul: [00:54:51] And that’s Okay.

Ben: [00:54:52] Yeah, that’s okay.

And then the tool set may have changed, but it’s not about the tools anyway, which is my ultimate conclusion, which is Strategy and Craft matter. And they matter more, probably more than they ever had. Right. Because consumers are more attention-poor than ever. Yeah.

Paul: [00:55:09] It’s more important to be really good at what we do than it has ever been.

Ben: [00:55:13] Amen to that, thank you very much for coming in and doing the podcast with us.

How Marketing Adapts to the Networked Age

How Marketing Adapts to the Networked Age (spoiler: it’s not adtech)

by Ben Robinson | Sep 12, 2018 | 13 minutes read

For father’s day this year, HP released a specially commissioned advert. It depicts a father telling his baby son there’s someone he’d like him to meet. He then introduces the baby to his grandfather for the first time. As the baby seemingly touches his grandfather’s face, the camera zooms out to reveal he’s just looking at a photo. The father says, “I really wish you could have met him.” The ad finishes with the tagline, “Keep memories alive”.

This is a moving ad for sure, but prevailing wisdom tells us it’s a total waste of time. Platforms like Facebook have changed the marketing game, they say. Rather than spending on big-budget, brand-building ads shown to wide audiences, companies need to embrace the new paradigm of perfectly targeted, perfectly measurable micro-messaging. This is, after all, what won Donald Trump the US election, delivered Brexit and launched Warby Parker.

But is that really true? There can be no doubt that digitization is changing marketing. Marketers can gather more data on their customers, which can help them to target more effectively. But, in the digital era, attention is increasingly scarce, making it harder for marketers to land those targeted messages, let alone build engagement. And, some aspects of marketing remain stubbornly true, like customers will pay more for brands with which they feel an emotional connection.

The truth is, in the digital age, marketing craft and strategy matter more, not less. And, as if to underline this point, Facebook — the virtual embodiment of the micro-targeting phenomenon — has just hired Antonio Lucio, the man behind this father’s day ad, to be its global CMO.

Attention

In his superb Long Now talk, Paul Saffo eloquently explains how our economy has moved from one centred on maximizing production (to meet a shortage of “needs”) to one centred on financialization and mass marketing (creating and fulfilling “wants”) to one centred on engagement (to hold people’s finite “attention”).

In this context, it is clear that firms can no longer rely on supply-side economies of scale to mass-produce commoditized goods at the lowest possible price nor enter into undifferentiated mass marketing to boost demand. Instead, in the digital age, demand-side economies of scale (network effects) are the golden source of competitive advantage. And while network effects rely on personalization, it does not necessarily follow that the corrective to mass marketing is personalized marketing — or, at least, not in the form the adtech world purports.

Even if you can microtarget the right message to the right person, there is no certainty the ad will get through (as ads have become more prevalent, so have ad blockers); if the message isn’t compelling it probably won’t be viewed; and even it is viewed, it probably won’t be enough to change customer buying behavior (which is essential to grow market share).

The fact is that to trigger network effects and overcome attention scarcity, marketing needs to be highly strategic and highly crafted. It needs to focus on the macro and the micro, the long term and the short term. Practically, this means customer activation needs to take place under the umbrella of brand-building. The reason is that marketing has to do more than getting one customer to buy something, it needs to leverage the power of networked buyers to improve the product and induce others to buy.

Virality & Big ideas

In his autobiography, Confessions of an Advertising Man, David Ogilvy talks of the importance of big ideas. He says,

“Unless your advertising contains a BIG IDEA, it will pass like a ship in the night…Once you decide on the direction of your campaign, play it loud and clear. Don’t compromise. Be strong. Don’t beat around the bush. GO THE WHOLE HOG”

He wrote this in 1963. But is remains truer now than ever. Where once spending enough on TV commercials and newspaper ads could get the blandest advertising onto the collective consumer radar, now the name of the game is rising above the attention deficit and activating the power of network effects. And big ideas are core to this.

Donald Trump Big Idea

To illustrate this, compare the two 2016 presidential campaigns. Donald Trump’s campaign was built on a big idea — that globalization had left millions of Americans feeling left behind. And he went the whole hog — grabbing people’s attention with polarizing messages delivered directly through social media, producing strong emotional responses that mobilized his network of supporters. In contrast, Hilary Clinton led a much more conventional campaign with safer, focus group-driven policies, an anodyne slogan “Better Together” — all of which relied on heavy, TV-based mass marketing for reach. And, as much as we like to point the finger at micro-targeting, it was a big idea that won Trump the election.

The best brand campaigns are also built on big ideas. Nike is exactly the kind of brand that adtech should have theoretically seen off, as micro-targeted new shoe brands picked off its heterogeneous consumer base. But it continues to flourish in large part thanks to its willingness to take risks and embrace big ideas (look at its decision to hire Colin Kaepernick). With Nike+ Running, a groundbreaking campaign kicked off in 2006, its BIG IDEA was to realize that sport is more fun with others. But it went beyond just an advertising campaign. It used technology — allowing people to record, track and share their runs — and wrapped it with the experiential layer of taking part in races all of the world — to unlock the power of connected consumers and create an engaged global community.

Nike’s latest “Just Do It” campaign shows it is not afraid of stirring controversy or going the whole hog

And we shouldn’t underestimate the impact of content marketing to build brand and create an engaged community — all the more so when based on big ideas. Andreessen Horowitz, the VC firm, is a great example. Its content isn’t just informative, but frequently leads and shapes opinion on major new trends – just consider Marc Andreesen’s seminal article “Why Software is Eating the World”. As such, the content isn’t just consumed and valued, but sees people actively engage with and share it, turning them into the distribution engine. In turn, this generates massive long term brand equity, which while not directly or immediately convertible into revenue, creates the bedrock for mobilization and monetization (in AH’s case, raising money, attracting the best people and finding the best portfolio companies).

False precision and displaced spend

Adtech is to the marketing profession what mathematics is to the economics profession — a bogus attempt to make something precise that inherently isn’t.

For a thorough and entertaining debunking of many of the adtech industry claims, I recommend following Mark Ritson on twitter and reading his weekly column. Suffice to say here that, beyond the issues of reaching the audience, there are problems in measuring the impact, not least separating causation and correlation. For example, if someone clicks on an ad for a Porsche and then buys one, the data would indicate causation. But the likelihood is that the person was already intending to buy one since, for most, this is not an impulse buy induced by an online ad. And so we must be cautious not to overstate the effectiveness of online targeted ads — noting that many big companies have seen little impact on sales from reducing their spend. As Marc Pritchard, P&G’s chief brand officer, said in a WSJ interview,

“As we all chased the Holy Grail of digital, self-included, we were relinquishing too much control — blinded by shiny objects, overwhelmed by big data, and ceding power to algorithms.”

Another inconvenient fact of paid advertising is that while it may have once been a relatively inexpensive customer acquisition channel, this is no longer the case. This excellent Inc article on the rise of Direct-To-Consumer (DTC) startups makes the point that the price of advertising on Facebook is increasing fast — by nearly 200% in the first six months of 2017 alone. To quote the article:

“ Comcast’s Gulati has a phrase for this phenomenon: “CAC is the new rent.” In other words, for companies reliant on paid marketing, their digital customer acquisition cost (CAC) is a lot like paying for brick-and-mortar stores in the old model, or selling wholesale. Essentially, this undermines one of the most basic precepts of the DTC movement, that these companies are cutting out the middleman and therefore can afford to charge much less for higher-quality goods.”

The analogy with the wholesale sales model is especially interesting since, if social networks become the shopfronts for many companies, these companies lose the direct customer relationship. This not only locks them out of many demand side network effects, but also — like their indirect-to-consumer forbears — means that brand-building becomes critical as a means of creating loyalty and repeat purchases.

Wastage works

If you fly into Geneva airport, you’re likely to see one of several giant billboard advertisements for Nespresso featuring George Clooney.

According to proponents of adtech, these ads are wasteful — they’re expensive, there’s no way to track their effectiveness and they’re reaching a much broader audience than the narrow segment that a brand should be targeting.

This is wrong, for several reasons.

First, there is a signalling effect. George Clooney is expensive to hire. George Clooney is well known and respected. Thus, we infer Nespresso is a high quality product.

Second, there is a value in broad targeting. As Byron Sharp illustrates in his book, “How Brands Grow”, buying behaviors are much more skewed than we may think between heavy buyers and the long tail of light buyers, such that there is more scope to get a large number of light buyers to buy a bit more than to get heavy buyers to increase spend. As he puts it, “sales growth won’t come from relentlessly targeting a particular segment of a brand’s buyers. Yet this targeting fantasy continues to appear in marketing plans.”

Lastly, brand-building through above-the-line promotion remains important to create an emotional connection. This emotional connection is born of common social and cultural associations which, by extension, need to be created at a collective, not solely individual, level. It is triggered through distinct imagery and carefully crafted copy — since making us think, laugh or cry is key to making a brand memorable. And it is this collective emotional connection which translates into higher loyalty and the ability to charge more.

Emotions and pricing

Indeed, one could make the case that brands as a navigational device are even more important in the attention economy, since we are now so overloaded with choices and content. However, that said, the ability of advertising alone to create a reliable signal of quality, to change buying behaviors and to create an emotional connection is not what it was. This is a great quote from Jeff Bezos in an interview with Charlie Rose,

“Before you could win with a mediocre product, if you were a good enough marketer. That is getting harder to do. The balance of power is shifting toward consumers and away from companies…the individual is empowered… The right way to respond to this if you are a company is to put the vast majority of your energy, attention and dollars into building a great product or service…If I build a great product or service, my customers will tell each other.”

It’s difficult to argue that product isn’t more important than in the past, nor that a great product with mediocre marketing wouldn’t win most of the time over a mediocre product with great marketing. However, even if we accept the power of advertising might not be as strong as before, this doesn’t necessarily change the importance of marketing overall. Instead, it places more importance on doing marketing well — what you want is a great product and great marketing — and it changes the relative importance of promotion vis-à-vis the rest of the marketing mix.

Hidden marketing

Such emphasis is given to promotion that we sometimes forget that marketing has three other P’s — price, product and place. And such is the emphasis given to promotion that companies that market in other ways — like Tesla — often claim not to spend anything on marketing.

But all companies spend money on marketing, even if it isn’t recorded in the sales and marketing expense line. Every time Elon Musk tweets about Tesla, this is marketing but isn’t recorded as such. And Tesla — like Zara — does most of its marketing by dint of its stores. Strategically located in the most prestigious parts of town with giant windows showing off their prized products, why would either company invest in billboards? Even Brandless, the SoftBank-backed retailer which as the name suggests has jettisoned branding (but which is in itself a conspicuous act of branding), is engaging in lots of marketing — from price promotions to product curation.

Zara store at 666 Fifth Avenue in NYC: a building which was once the most expensive ever sold in Manhattan

The fact is that so much of marketing gets overlooked because it is practically invisible.

The customer feedback loops it provides get translated ever more seamlessly into product design, development and placement — think of Amazon’s personalized recommendation engine.

But it is in customer acquisition, notably pricing, that marketing is maybe most underappreciated. Since customers today represent not just consumers, but an essential part of the product itself, customer acquisition and retention is both critically important and highly strategic. Many of the tools marketers use today, traditional ones like email campaigns or new-fangled ones like paid online ads, don’t cut it. Instead, new levers are needed to get the flywheel of network effects started. Here are some examples:

Giving the product for free. One obvious way to this is to charge advertisers instead. But, not only have advertisers been oversold, but this model creates a conflict of interest between customer and advertiser. There are better alternatives, such as freemium pricing. If you have a great product, then letting customers experience it for free is an excellent way to spread the word. And once a customer is hooked on the product (and since the relationship is direct), the firm can upsell them premium features (e.g. Dropbox) or give them access to a premium service (e.g Spotify).

A Facebook advertisement
A Facebook advertisement in a non-digital medium apologizing for its use of customer data (illustrating the conflict between advertiser and consumer)

Shared-value transactions. Perhaps a better model still than freemium might be what Eric Feng calls shared-value transactions. This a pricing model wherein a firm gets almost all revenues from the heaviest users of its service and uses this revenue to improve the product for all. This in turn attracts new users, most of whom will pay little or nothing, but some of whom will become heavy, very profitable customers. It is superior to ad-based marketing, where increasing revenues involves hitting all consumers with more advertising (i.e. making no differentiation between customer types) and gives an advantage over many subscription-based models, where all users — again regardless of level of usage — tend to pay the same amount.

Spotify is the king of Freemium — its conversion rate is almost 27%

Giving money away. Cruder, but still effective are referral fees. Paypal built its network of customers in part thanks to giving money to people for referring their friends (which were paid into the recipient’s PayPal account). Dropbox does the same — only giving referrers extra storage as compensation

Making customers investors. One way to build initial excitement for a product launch and acquire an early group of engaged customers is to give them to chance to invest through crowdfunding platforms like Seedrs. This is what challenger banks like Revolut have done. Another way, still nascent, will be to issue utility tokens to simultaneously raise money and build a customer base. By meshing together investing and consumption, tokens provide a way to reward financially the users on which network effects are built.

The future

It may be that one day, we have surrendered enough data about ourselves for a bot to be able to make better choices than we can. But up until that happens, marketing remains critical to attracting and engaging consumers.

Marketing has become harder. Many of the marketer’s tools have been blunted. The media over which to reach customers have both changed and proliferated, putting attention at a premium. But this calls for greater craft and more strategy, not a search for snake oil.

Marketing has also become more important. Marketing today is more than just about finding a buyer for a service. It is about activating the power of networked consumers, which form a central part of the service creation, promotion and distribution.

To be effective, marketing needs to do more than translate consumer insights into more accurate targeting. It needs to work above and below the line -building brand equity and mobilizing consumers – as well as making full use of the marketing mix. And over time it is likely to rely more on behavioral science, a move from objective analytics to a rational understanding of irrationality and what drives an emotive response to capture attention — building on Tony Schwartz’s idea of “the Responsive Chord”.

But, for now, marketing is definitely not dead.