Lightly edited for readability. Speaker 2: Welcome to The Business Marketing Podcast. I'm John Horsley, host of the show today. I have the pleasure of being joined by Harry Davies today, who is VP Strategy, uh, Investment, uh, and Marketing Effectiveness at Sage. Welcome to the show, Harry.
Speaker 3: Thank you. Good to be here.
Speaker 2: Um, I, I normally ask this question. You know, you've had a, a diverse and varied career. It'd be really great to understand how you've got to where you are today.
Speaker 3: Was a fine art graduate, and there wasn't a lot of money in fine art, and I needed to earn a living, and I started off in marketing, but I got quite obsessed with it. I saw a, I saw a talk. I think I was doing a Chartered Institute of Marketing course, and this guy was talking about direct mail, and he said, "The amazing thing is you can put one thing in one envelope and a different thing in another envelope, send those out, and see which one worked." And then I s- did a postgraduate in economics and mathematical science to really understand some more about that. I went back from that event, and I did exactly that. I, I was running a recruitment campaign to get disadvantaged young people to go to college, and we had a lot of fall off at enrollment. So people would apply, but they wouldn't turn up to enrollment, and they wouldn't join the course. And I'd literally printed out two types of letter. One that had... It was a very hot summer that year. One that said, "If you bring this voucher, we'll give you a free bottle of water." And I randomly assigned this voucher to the, I had 2,000 letters that we were sending out. And I physically did it. So I was physically printing them out and putting them in the envelope. And then we found that, actually, we had a much better turn up rate from people that had received the voucher to get a free bottle of water. It was a bottle of water. It wasn't a big thing. And I suddenly thought, "Wow, this is amazing. You can test everything." And then that sort of led on to a lot of study around, like, how marketing works and then really from that point, a kind of test and learn attitude that I've had since. And so, that really got me into it. I moved to central government. Worked on econometrics. Really loved doing that because it was something that I'd learned at college that I could apply in the real world. And so, I've always been on the sort of maybe more scientific side of marketing evaluation. And those were really big problems because, you know, you're trying to work out did our marketing get people to stop smoking-
Speaker 2: Yeah
Speaker 3: ... that they've done for 20 years. It's an ingrained social behavior. Uh, trying to change those things is a lot more difficult than trying to sell something. And so, it's really fascinating applying some of that science to those sorts of problems.
Speaker 2: Wow. So that, that's been a great springboard for you. So you went on from there to work at Google, Amazon, now Sage. Uh, you've touched on public sector as well. Um, and a lot of your career has focused obviously on measurement and analytics, marketing science. What do you think most organizations still misunderstand about marketing effectiveness?
Speaker 3: So I think often, I mean, when we talk about marketing effectiveness, quite often it gets... It ends up being media or advertising effectiveness. It doesn't really touch all of the marketing mix, and so that's something that I think businesses don't understand. And I think as media has become more technical and more specialized, more and more time from, um, marketing departments have been focused on more on the promotion mix, and so they're looking at promotion effectiveness, and they're very good at that. However, on the other things, like price, product, promotion, people don't often spend as much time thinking about the effectiveness of those things, which are probably more important to the marketing mix than the advertising effectiveness. So I think we've got a lot better at advertising effectiveness. In pockets, there's a lot of people in marketing that don't have formal training in marketing and kind of they learn from LinkedIn.
Speaker 2: Sure.
Speaker 3: And sometimes they make good decisions. Sometimes they make bad decisions. But then that expansion into the rest of the marketing mix is something that marketing teams seem to be spending less time on, and I think that's an error.
Speaker 2: Mm. And there's huge amounts of data out there. Do you think that confuses individuals as well in terms of what to measure and why? Or do you think people are kind of retrospectively measuring to justify an idea as opposed to perhaps inform thinking and inform strategy?
Speaker 3: I think you get a mix of both, and this is, is... It's interesting because it depends very much where the measurement is done. So if you have a, a measurement department or an effectiveness department within marketing, quite often there's a point where someone will say, "Well, we've spent a lot of money on that. Can you show something that's worked?" And so, you trawl through the information to find the thing that has gone up as opposed to coming up with the full truth of what's worked and what hasn't worked. I think what's interesting is that as businesses spend more and more on marketing, you get sometimes the effectiveness team will sit within finance, or it'll sit within an operations team that'll report up separately from the CMO. And I think in those organizations, you sometimes get more honest reporting because they're not... They haven't made the decisions to invest in a particular channel or a particular bit of marketing, and I think that is a lot healthier.
Speaker 2: Yeah.
Speaker 3: And it sort of comes down to when people talk about marketing, they often talk about what people with marketing in their job title do, as opposed to taking products to market. And you've got, like, Tim Ambler, uh, who used to be an LSE professor, talks about three types of marketing. There's the marketing that a company needs to do. There's the marketing department, who are the headcount that is associated with marketing activities, and then there's marketing activities and tactics. And I think we often conflate all of those three things as opposed to thinking about, right, we need to take things to market. We have specialists that do that, and they use a bunch of tactics.
Speaker 2: Mm-hmm.
Speaker 3: We kind of blend those all together. We give the marketing team a target, and then the marketing team want to show that they've hit that target, which drives that behavior of proving what we did worked-
Speaker 2: Yeah
Speaker 3: ... as opposed to working out what's the right thing to do.
Speaker 2: Mm, mm. Yeah, because you... It comes down to the adage, doesn't it? Um, lies, damn lies, and statistics. You're go- always going to be able to find something out there to justify and, and almost pat yourself on the back.
Speaker 3: Yeah, and, and ultimately, we're not academics. You know, we're practitioners, and we like to think about that academic level, but we haven't got the time, and there's too much risk involved to always go to that academic level.
Speaker 2: Mm.
Speaker 3: And so, sort of what I try and promote is just making slightly better decisions, not necessarily getting to the right answer, but heading in that direction each time. And so, that sort of test-and-learn culture is, I think, probably the most important thing for marketers to focus on-
Speaker 2: Sure
Speaker 3: ... or businesses to focus on.
Speaker 2: Sure. At state that... Yeah, at Sage, one of the changes that you've led, or I understand that you've led, has been moving away just slightly from a demand generation model to a more balanced brand and activation approach. What prompted that shift? It's actually been quite a big reoccurring theme this way.
Speaker 3: Yeah, so, so mainly the reason we were driving that shift, and, and, you know, this is in progress. We were having arguments about it yesterday.
Speaker 2: Sure.
Speaker 3: Um, but the reason that we shifted that way is when you look at particularly business-to-business marketing for software-as-a-service, and we sell software as a service, um, people come into market between every five and eight years, and we can't control when they come into market. Now, if we don't do any marketing to them when they're not in market, then they come into market, and we have to spend more than the competitors to win that sale. However, if they come into market thinking about us first, it's a lot easier and a lot cheaper to convert them. And so, pragmatically, my argument for doing more brand advertising and more brand marketing, they're not always the same, um, is to reach those not in market buyers, so that when they do come into market, which they will do fairly randomly, they think of us first. And so, thinking about reaching them at their category entry point, so when they start thinking about finance, and having a message that shows that we can help them with their pain points and do that consistently over time, the theory is that that will mean that when they come into market, they will be putting us on the list first. We'll be on the shortlist. Hopefully, we'll be the first people they call, and that way, we don't have to spend as much on activation media.
Speaker 2: Yeah, 100%. I actually saw one of your ads on the tube on the way in today, and that's because there's obviously a change in reporting for sole traders, um, and, you know, kind of micro-
Speaker 3: Yep
Speaker 2: ... business individuals.
Speaker 3: Yep, making things digital.
Speaker 2: Having to, uh, report on a quarterly basis.
Speaker 3: Yeah, and that's an enormous category entry point, bringing millions of people into market. So suddenly, with that, actually now we needed to do a lot of brand advertising before the deadline.
Speaker 2: Yep.
Speaker 3: Now we're getting very, very close to the deadline, it'll be much more switching into activation to get those people to consider us and to get them to our website, get them to trial.
Speaker 2: Mm. Makes sense. What's the approach before... Well, actually not necessarily the approach. I think the pressure that, um, CMOs or marketing operation is under was short-termism to a certain extent. A lot of pressure to bring in revenue on a quarter-by-quarter basis, so the budget swang to demand lead generation, um, performance marketing. Uh, and at a compromised brand because you've only got so much money to, to invest and, and brand is slightly harder to measure and is a much longer term activity. How do you go about m- measuring brand impact, uh, and, and brand growth?
Speaker 3: So how we go about measuring it is we do brand tracking. We put that into our econometrics. We do econometrics. Um, we also look at the changes over time in our cost of acquisition and whether we see organic or base growth, so sales that seemingly come out of nowhere. Because if we're doing the right job with our brand advertising, we should see that growing. So our mix between Paid sales and organic sales, and they're never really organic because there's got to be some kind of trigger to buy. But what we hope to see is with that range of metrics, we see the positive results. Um, but it's very difficult. It is very difficult.
Speaker 2: Yeah.
Speaker 3: And it's... And, you know, like part of the thi- the problem is that, um, businesses tend to be led by a marketing strategy. So you might have a CMO that joins that says, "Right, we really need to invest in brand." And they know exactly why they've done that. They've done that because maybe they were successful doing that in their past roles. Also, they've read all the marketing theory. They understand that having a, a sensible balance between brand and demand is sensible. In business-to-business companies, it's very difficult to explain that to the sales leaders. The sales leaders have a lot of power in the decision-making, and also the finance teams do, and they consider marketing in the same way as they consider sales, which is essentially, "We've got this target. How much is it gonna cost to convert this target?" Now, with sales planning, that's very straightforward. You'd say, "Okay. Well, what is our quota for a salesperson? What's our target? Let's divide our target by our sales quota. We get the number of salespeople we need. Do we have that many people? No. If not, let's hire some more people." Marketing works differently. So what I've been trying to push is instead of talking about brand and demand advertising or brand and demand marketing, I talk about building our pipeline today and building our pipeline of tomorrow. And explaining to salespeople, "Wouldn't it be nice that when you speak to someone, they say, 'Oh, you're from Sage. You sell the finance software. That does all that AI stuff that I want to do.'" And when you start using that sort of language in salespeople's language, things that they understand, pipeline, when you make a call, someone knows who you are, those sort of things can ease that conversation. Where when I first joined Sage, I probably spent the first year meeting with the finance teams weekly explaining how marketing worked. I would do a talk about attribution and say, "Right, I've got a terrible hangover. That's because I had a glass of water last night." And they said, "What? No, that doesn't make any sense." I say, "Well, yes. Okay. So before I had that glass of water before going to bed, I had two whiskeys. But I had a glass of water in between those, so maybe it was two glasses of water and two whiskeys that made me hungover." They say, "No, no, no. That's ridiculous." And then I say, "Well, okay. So maybe it was the two glasses of wine I had with dinner after work and the pint I had at lunchtime." I don't drink anymore, but this is the story I would tell them. And then I'd say, "Now, if I do that repeatedly over many days and I work out whether I've got a hangover or not a hangover, then I'm doing data-driven attribution." And then suddenly you start to see them understanding it, and then they say, "Well, why do you do econometrics?" And I'd say, "Well, in the way I've described my hangover, that doesn't take into account whether I was tired, whether I, um, didn't have a good lunch." All of the different elements outside of my drinking mix also will impact whether I have a hangover. And it's very true with marketing as well that the current economic climate will impact, the weather will impact, all of these different elements will impact the number of sales we make. And in order to understand that, we use econometrics. And that was a helpful way of explaining it in a way that finance teams understand. I don't know about you, but every time I go out with the finance team, they're the last people standing on the dance floor, and they've definitely spent the most money on drink. So they, they really seem to, um, like that-
Speaker 2: Yeah
Speaker 3: ... analogy.
Speaker 2: That's normally my buddies who work for insurance companies or, or places or banks, frankly. So yeah, that resonates with me. Um, in terms of your sort of outlook, so, you know, account-based marketing is obviously important for you guys. Have you m- shifted it slightly and moved to more of a, an ABX approach?
Speaker 3: Yeah. I mean, we say that, but essentially the reason that I pushed Sage towards account-based marketing was that we were having a lot of arguments between our brand team and our performance team, and the nice thing when you start buying in the data about all the different businesses that you're trying to sell to, so you can also buy intent data. Now, this intent data is not perfect, but it enables you to say there's this many people not in market, there's this many people at different stages of their buying journey, and we need to use different marketing tactics depending on where they are in their marketing journey. So it was a, a way of essentially bringing the performance marketing teams and the brand marketing teams together to work and point in the same direction. So, uh, very much, you know, we talk about account-based marketing and understanding the buying group and things like that. Those are all really important things, but it was just a model to explain how marketing works.
Speaker 2: Mm.
Speaker 3: In reality, you can apply the same kind of model saying, "Okay. Well, do you want to tell... Do you want to only sell to people that want to buy a chocolate bar right now, or do you want to sell to people that might buy a chocolate bar over the next year?" Well, probably I want to sell to all those people that will buy a chocolate bar over the next year. So- The same approach or the same philosophy of thinking about what do you talk to... Do you talk to just people in market, or do you just talk to people who are not in market right now as well?
Speaker 2: Yeah. And w- within B2B, we're obviously aware that the buying committee's ever-expanding and increasing. Just out of curiosity, how many decision-makers are, are part of the buying committees that you, that you need to target?
Speaker 3: I'd say about 13, 14.
Speaker 2: Okay.
Speaker 3: Um, we generally see that by the time we've closed one, we've reached about 14, 15 people. Um, that changes over time, and that's quite a difficult thing to plan for. So if you think about at the early stages, the company, um, you're not gonna be getting the decision-makers doing a whole load of research. You might get the end users doing some research. You might get potential champions doing some research, and that changes over time. And so if you just look at the people involved in signing the contract, you're only talking to a very small part of the buying group.
Speaker 2: Yeah.
Speaker 3: And if you're only talking to them, you're probably missing all the people that will influence that decision earlier on. And so you then run the risk of missing them completely. So we tend to try and go quite broad when people are earlier on in their buying journey, um, in order to reach more of the people that will be the advocates-
Speaker 2: Yeah
Speaker 3: ... for our products when they come into the company, and then we focus more on the decision-makers at the later stages.
Speaker 2: Yeah. And has that changed your approach in terms of the content that you create? Why the actions that you want these individuals to take, uh, and the complexities of the different stages, 'cause it's obviously not linear of that customer journey?
Speaker 3: So, yes and no. I mean, in pockets, we're doing it really, really well. Um, but that's a journey we're on. You know, it's not... It would be really good if we could automate everything, and it would just be perfect the whole time-
Speaker 2: Mm
Speaker 3: ... but that's not reality. Um, we're definitely starting to think about the types of content that people would want at different stages and the different types of buyers that would need different types of content. Um, but then working out how we do that in a cost-effective way. You know, n- we're bringing in a lot of AI, um, tools. We're building our squads that are building out content tools internally in order to kind of have that more personalized message for the right type of buyer.
Speaker 2: Yeah.
Speaker 3: Um, but it's, you know, it's quite tough.
Speaker 2: Oh.
Speaker 3: And also, I think there's an element where it works really well on PowerPoint if we draw out a linear journey. In reality, you might jump from being not in market to making a decision very quickly if you're very aware of the different tools around. Um, if you are... And you might jump into consideration, and then you might get a budget cut, and you jump out for a year. So there's a lot of allowing people to make their own journeys and find the content that's right for them, and that's more, that's more challenging because it doesn't work on PowerPoint-
Speaker 2: Yeah
Speaker 3: ... because people want to see that linear journey. They expect it to be a system that people follow, but I just don't think people do that.
Speaker 2: Yeah.
Speaker 3: I don't do that. Do you do that?
Speaker 2: I don't think so.
Speaker 3: No.
Speaker 2: In terms of... And we've touched on AI. I, I believe that 95% of business searches now start on a, a ChatGPT or similar. So things have shifted enormously. Um, how are you looking at, uh, optimizing for the LLMs?
Speaker 3: So we, I mean, we, we have a leader within performance marketing who, um, about two years ago kind of freaked out and went, "Shit, we need to really get on top of this AI thing fast." And so we've been experimenting a lot in that area. Um, we've developed a bunch of squads to focus on those things, and that's starting to pay dividends, uh, both in our visibility on LLMs but also within our own use and being able to cut a lot of costs on low-value tasks. Um, we're also seeing some experimentation which really fascinating. We enabled a bunch of sales development reps with AI tools. That overnight saved them one day a week per person at doing research on businesses and also converting their call transcripts into sales qualified opportunity hand-over documents. So that was great from an efficiency point of view. Once we'd enabled them, I sat and listened in to a whole bunch of their calls. And at the end of one of the calls I was listening to, the prospect said to the sales development rep, "How long have you been at Sage?" And she said, "Oh, I've been here for four years." And then he said, "Was that when you left catering manufacture?" And she said, "No, I've never worked in catering manufacture." But because she was enabled with insight from the prospecting agent that we'd created, she knew more about catering manufacture, more about the prospect's company, more about how our solutions solved problems for that prospect company, to the point where he thought that she was so knowledgeable she must have worked in the same industry. And I suddenly thought, "Oh, okay. Now, like, we can be more effective with this. We shouldn't be thinking about how do we cut costs. We should be thinking about how do we drive more effective marketing with these tools- And cut costs. And so, you know, there's generally within B2B marketing and sales, there's a strong relationship between your revenue growth and your headcount growth. And I think what's interesting is that you can continue to keep the quality very high and decouple that relationship between growth and headcount growth, which I- I'm very excited about.
Speaker 2: Yeah. Yeah.
Speaker 3: And I'd probably go further that for a lot of business-to-business companies could probably get to the point where you install marketing as opposed to hire a marketing team that, you know, you can build up, you can give an LLM your product release documents. You can give them information about prospect companies, and it can probably do a better job than, you know, unqualified marketeers at building the value propositions, defining the ideal customer profile, working out what channels they're going to be using, and then automating all of that. So I- I- I really think that it's g- there's gonna be a very significant change where a lot of the marketing tasks and a lot of the marketing, um, work can be fully automated, and fully automated at a better than average level. I think in industries like FMCG, where the products are very, very similar, you probably need that human creativity to be your differentiation and to be distinctive. A lot of B2B, certainly in early stages as they're growing, you can probably automate all of that.
Speaker 2: Yeah.
Speaker 3: And I wouldn't be surprised if you can get full service marketing teams built and installed as opposed to hired.
Speaker 2: Yeah. Or, or build your own.
Speaker 3: Yeah.
Speaker 2: Yeah, 100%. Just thinking about content. So I, if I look back 20, 30 years, and I was doing software sales right about that point in time, I think it was very hard for businesses to differentiate themselves. So they all looked a little bit vanilla. They all kind of offered the same thing. They were poor at differentiation. Um, they spoke in jargon, gobbledygook, three-letter acronyms. White papers looked the same. Sales decks looked the same. Uh, and to a certain extent, it was a commoditized purchase in terms of decision-making on the other side. Unless you obviously had the art, the craft, and the skill of a great marketing team sat within sales, because it used to be sales and marketing at that point in time, uh, and were properly enabled. Do you think there's a danger of sameism when B2B businesses are looking at AI to help craft, create content, and deliver that content through automations?
Speaker 3: I mean, there definitely is, but I'm not sure that the whole of the B2B industry is not doing that now anyway.
Speaker 2: Mm.
Speaker 3: Like, I remember recently I was at a, a conference, and a B2B brand marketer was talking about brand. He was saying all of the right things, saying, "We need to have distinctive brand assets. We need to have, um, amazing creative. We need to have repetitive views of our distinctive brand assets through the advertising." And then he showed a video, and I looked at it, and I thought, "I could just change the logo on that, and nobody would know." And so whilst a lot of people understand what it means to be distinctive, and they've, you know, read the Ehrenberg-Bass work on distinctive brand assets, and they're fully on board with it, actually delivering that is really, really hard.
Speaker 2: Yeah.
Speaker 3: And it's also really hard getting that through internally because the thing with marketing is everybody in a business has an opinion on it. Often distinctive brand assets can really turn people off because they don't look like the category, which is the point-
Speaker 2: Yeah
Speaker 3: ... to be distinctive.
Speaker 2: Yeah.
Speaker 3: But that can be very challenging if you haven't spent 20 years reading the marketing science. And so I think there is a risk of AI being a little bit bland and a little bit vanilla, but I don't think it's replacing this sort of wonderful world where every business-to-business brand is being really, really distinctive, and you know exactly what they mean and who they are from their creative right now. So I think there's... You probably, like I say, I think you probably get better than average by automating a lot of stuff and taking a lot of human bias out because a lot of the people in market... When you look at marketers in B2B, they have really varied careers. They've come from very different backgrounds, but they don't necessarily have... You know, you talk to a, a senior marketer at Unilever, they've spent 20 years. They went on the grad program. They learn all about the latest marketing science. They're continually driving that muscle. That doesn't really exist in B2B.
Speaker 2: No.
Speaker 3: And so I think the quality of marketing is probably lower than in business-to-consumer brands because actually the point of differentiation for business to communication, uh, business-to-consumer brands is the marketing Whereas with a lot of B2B, actually, in some ways our AI implementation is better than our competitor's AI implementation, and in some ways their back end is faster and more secure than our back end. Like, there's lots of... That i- that, those were examples. I'm not saying that about Sage.
Speaker 2: Sure.
Speaker 3: Um, but there is differentiation within the product, and so it's a more... There's more to go around there, and so that goes back to the wider marketing mix because if you're marketing as a business and you're looking at the product, the price, placement, and the promotion, you're balancing across all of those things, and often dialing up your investment in your product is gonna give you a better brand impact than dialing up your creative advertising.
Speaker 2: Yeah. Do you feel that more B2B businesses are starting to develop a, a personality or a, a brand tone of voice, whereas before... Yeah, th- that's maybe more akin to consumer marketing.
Speaker 3: Yeah, I think so. I, I think so, and I think also you see... I mean, there's a lot of talk in B2B businesses about product-led growth. Um, people say PLG. So basically this is where you have very low cost product, and people use that. That then drives that, um, that growth, and then they start jumping into, "Right, okay, well, how do we then sell that to enterprises?" And what you see there is that they have to do more of that kind of business to consumer type marketing, often at a very low cost, so they're doing less advertising, but they're thinking about, "How do we get people to talk about our products to each other?" That generates that personality that they then transfer over when they go into enterprise marketing. I mean, a, a really good, quite old case study for that is Salesforce.
Speaker 2: Yeah.
Speaker 3: Um-
Speaker 2: I was thinking of Salesforce as you were talking.
Speaker 3: Yeah. And then, and I think, you know, they, they are very distinctive and, you know, probably they're not the best product on the market, but they certainly are the biggest, and they certainly are distinctive, and you're certainly not gonna get fired for bringing in Salesforce.
Speaker 2: No.
Speaker 3: I like Salesforce as well.
Speaker 2: Yeah.
Speaker 3: They're a good product.
Speaker 2: Yeah. Yeah, that's, that's actually making me think as well. I mean, Salesforce is very much for the lifetime as well. And do you think that some B2B businesses or, you know, quite a lot frankly out there would concentrate more on acquisition rather than the full lifetime cycle?
Speaker 3: Yeah. Yeah, yeah, definitely. So I'm a, I'm a big fan of the work of an organization called Winning by Design, and they have this, um, data model that they call the bow tie. The bow tie is you have essentially a funnel that starts with kind of marketing and brand awareness at one end, and then ends, the middle of the bow tie is the sales, the mutual commit, and then they do the right-hand side of the bow tie where they look at retention, expansion, and that's all about delivering, um, impact on a, on a recurring basis, and that will drive quite significant growth in revenue. And what's interesting is that quite a lot of people understand that from a sales or go-to-market team perspective, so bringing the sales people closer to the customer success teams, but actually marketing has a role across that whole journey. So yes, they're generating the kind of brand awareness. They're generating the, um, leads and the opportunities, but then if you continue marketing through the sales pipeline, you can accelerate the pipeline using marketing. You can defend about losing to competitors. You can reinforce people's views during that sales process. And then also, if you continue marketing to your existing customers, then you continue to drive that value, and there's a big role for marketing within expansion as well. Um, that's a, that's a longer term argument. I, I think most B2B businesses consider marketing as the acquisition engine. They don't necessarily think of it as the recurring revenue engine-
Speaker 2: Mm
Speaker 3: ... and I think that will change.
Speaker 2: Yeah.
Speaker 3: I hope that will change.
Speaker 2: Do you think that's because marketing in, in many organizations doesn't sit close enough to CX or, um, you know, customer services teams and departments?
Speaker 3: I mean, I think with, with smaller businesses, they sit everywhere and they do everything. In larger businesses, you have much more complicated systems. You have more specialization. You have teams that are experts at working with agencies. You have teams that are experts that are working with email.
Speaker 2: Mm-hmm.
Speaker 3: And so they don't necessarily have that full view of the whole customer cycle. I mean, one of the things that I learned at Amazon is, so once you reach a certain level at Amazon, they force you once a year to spend a week listening into calls. And, you know, look, I was selling advertising at Amazon, and I was listening to customer calls, people phoning up saying, "This bed arrived, and one part was missing." But- Since then, I've tried to spend as much time listening to customers at every single stage, and also being able to speak the language of those teams. Um, I recently been doing a whole bunch of go-to-market, um, certifications. Go-to-market seems to be the modern word for sales and customer success. Um, I would include marketing in that go-to-market as well. So, um, that's another conversation. And by understanding more and more of the sales strategy, the customer success strategy, you can then play a better role when you're talking about those things.
Speaker 2: Yeah.
Speaker 3: Because ultimately, I kind of... If I take the sort of internal politics away-
Speaker 2: Mm
Speaker 3: ... all of that is marketing, because marketing is just taking your products to market. So it's, you know, those are all parts of the marketing mix, it's just they don't happen to report into the marketing department.
Speaker 2: Yeah. I love the point about listening in to calls. So it, it was making me think of Verizon, and their CEO would listen in to, you know, complaints, customer success calls. He would take the calls.
Speaker 3: That's brilliant.
Speaker 2: I think that's fantastic. Yeah. And that's the only way to know what the problems are that are going on in your business, and so, you know, in, in my mind, being able to lead correctly by example. Um, it also made me think about Jason Fried. There's, there's a book out called REFRIED, and it's, it's an old one. And, uh, he had 36 Signals, was his business base camp.
Speaker 3: Yeah.
Speaker 2: And that was a fantastic example, again, of a product-led business, and he'd do exactly the same. Take support calls, speak to the community, um, go and speak to developers, um, take the complaints.
Speaker 3: Yeah.
Speaker 2: And again, use that to inform the product roadmap and, and where they need to go, and the, the strategy and the position of the business.
Speaker 3: Yeah. Yeah. I think that... I mean, that, the more time spent with cu- I, the... I've never not learned something from spending time with customers or as a customer. I remember when I was working in the Central Office of Information, and I enrolled in a stop smoking clinic. I didn't smoke at the time, and I wanted to do that because I wanted to know what we were sending people to do, so that I could understand it, which was fascinating. And I, I think thinking like that will really help marketers. I think, I think to be a good marketer, you probably need to read a few books, read some of the academic papers on how marketing works, and spend an inordinately large amount of time with your customers. And then not make knee-jerk reactions. I think that, you know, that ultimately marketing is not that complicated. You do stuff consistently over a long period of time, and you see the benefits from it. Often, because of the short-termism we talked about earlier, people jump between one and another thing, and it... I think probably the, the role for marketers is just to tell the business, "Right, we need to hold our course. We need to be consistent over the long term." You know, CMO tenures are generally pretty short, so that's problematic for that. But ultimately, if we can drive more consistency over the long term using the right evidence to make those decisions, we end up in a much better place.
Speaker 2: Mm. Why do you feel those tenures are so short?
Speaker 3: I think, I think there's sort of, you know, particularly with US companies, the quarterly reporting cycle drives that. With, um, British companies, you see that as well, public companies having to demonstrate that they're hitting their growth and their margin, um, commitments to the city, and you want things to change very quickly. Again, I think a lot of businesses still think marketing is coin operated like sales, and so they think, "Right. Okay. Well, we wanna grow. We'll chuck in a whole load of cash. Now can you win market share?" In reality, that's a 5 to 10 year job. That is not something that you're gonna do in the next financial year. And so having longer planning cycles would be much more sensible. Uh, if you were thinking about, "Right, what do we want to be in five years' time? What are we doing that drives that over the next five years?" Planning for five years as opposed to one year. Now, it's very difficult to do that because P&Ls mean that you do have to report on a six-monthly basis, and you have to show the city what you're doing, and I think that drives the short tenures. Because people come in, they've seen success historically, they say, "Right, I'm gonna do this, this, this, and this," and then they restructure the marketing team, they change the media mix, they try new channels out. There's so much change in such a short period of time, and it... Any one of those changes might take 6 to 18 months to do. You try and do them all at once, and you end up in a lot of a mess.
Speaker 2: Yeah.
Speaker 3: And then you get through that first year and people say, "Well, things aren't heading how we thought we- they were gonna head. We'll give them one more year." And then after two years, people are then starting to say, "Well, what... Where's the evidence that you've turned the business around?"
Speaker 2: Yeah.
Speaker 3: So I think- Kind of probably to be a successful long-term CMO, you need to have a lot of trust amongst the board, and you need to be able to say, "Right, this is the transformation that we are going to do over five to 10 years. We're gonna make some changes now, but then we're gonna do that consistently over the long term." But you need to, you need to kind of win that argument. I would personally, because I work in marketing effectiveness, I would say, "Right, okay, well, that is an evidence-based, based presentation that we then show, and then we show the gates that we're gonna go through, and we're gonna do that." But, you know, five to 10-year planning is hard.
Speaker 2: That very much brings us back to where we were early in, earlier in the discussion, where we were talking about obviously the pressure for short-term outlook. Um, let's just start wrapping things up now. So I'm gonna ask you a few quick fire questions.
Speaker 3: Sure.
Speaker 2: So one marketing metric that people rely far too heavily on.
Speaker 3: So within, within business to business, I would say it's cost per lead because it's fairly meaningless. Um, because one lead doesn't necessarily lead to an opportunity, it's multiple leads. So I, I don't like that metric at all.
Speaker 2: Yeah. Yeah. I mean, yeah, clearly it's not... I mean, you could pay 1,000 pounds for a lead, or you could pay 50 bucks.
Speaker 3: Yeah.
Speaker 2: Yeah. Uh, it's about what turns into business at the end of the day, and how's that, and how's that measured. Um, one of area of marketing that you think is most undervalued.
Speaker 3: So I would say, um, inbound product marketing. Now, by inbound product marketing, outbound product marketing is, here's the product, what's the value proposition, what's, like, how, what's the ICP or ideal customer profile for that product? Inbound is where you go out, you talk to users, you talk to potential customers-
Speaker 2: Yes
Speaker 3: ... you find out what they need, and then you bring that back to the product team. And I think that skill is very much undervalued and underutilized because understanding what customers need and feeding that back into products really will generate products that work well for those customers, and they become a lot easier to sell.
Speaker 2: One skill every... I'm not sure I like the term modern, but every modern marketer should develop.
Speaker 3: I think right now I would want people to be very curious about how they can apply marketing science through artificial intelligence. So I think it's very easy to apply that kind of easy marketing thinking, uh, kind of the latest thing on LinkedIn, like how to automate something. What I'd really love to see is people building engines based on really solid marketing science so that the marketing gets better as a result of AI. And so that kind of skill would be very valuable.
Speaker 2: And then lastly, just to wrap up, you know, a word of advice that you'd provide to a, a younger individual who is looking to either enter our industry or is perhaps a part at, at the start of their career.
Speaker 3: I'd go read the academic literature. Uh, there's a lot of really, really good marketing scientists in academia. The Ehrenberg-Bass, but then there's loads and loads that you can pull out of journals. Really understand how marketing works in an academic way because then you'll be able to apply that in a practical way, and that will generally improve your marketing.
Speaker 2: Yeah. I, I 100%, 100, 110, 120% agree with this. I think it's been a fantastic conversation. Thanks, Harry. It's been great to have you on the show.
Speaker 3: Oh, I've really enjoyed it. Thank you, John.