Flaunt your humanity: P&G’s former CMO Jim Stengel on the Next Era of Marketing
How different would our world be if we judged brands the same way we judged our healthy personal relationships? Let’s say you compare your relationship with a brand to your relationship with a dear friend—would you look forward to seeing them? Would you care about what they had to say? Do you both share the same values? Do you praise them around others, even when they’re not around?
It’s a thought-provoking analogy from Jim Stengel, CEO of the Jim Stengel Company and former Global Chief Marketing Officer of Procter & Gamble. Jim sat with the Economist Intelligence Unit to discuss his vision of the next era of marketing, and what marketers need in order to drive engagement—the new currency in brand relationships. According to Jim, without measures on engagement and customer loyalty, businesses will not be sustainable. I couldn’t agree more. Here are some of the themes he shared that struck a chord with me:
- The rise of the ‘innernet’: Yes, you’re reading that correctly. At last year’s Cannes Lions Festival, people used the word innernet: the idea that things will be coming to you, rather than you seeking them. I thought this was interesting because of how closely it is tied to personalization and marketing automation; as we see the shift toward engagement marketing, a personal experience from brands is becoming the norm rather than the exception. Jim says as much when he notes, “The processes are going to be automated. The whole industry will go the way of Amazon.”
- Brands will embrace ambitious purpose: It’s not just about revenue any more. Companies will aspire to have a much bigger impact on their customers, consumers, and the world. As I’ve noted in the past, the entire mission of marketing is shifting—from an era of mass and transactional marketing to an era of engagement marketing. Engagement marketing is about building relationships—which is much bigger than just selling a product. Many leading brands that are launching initiatives are going in this direction, like Marc Mathieu’s Project Sunlight initiative for Unilever. Embracing your brand’s ambitious purpose is the antithesis to broadcast or mass marketing. It speaks to the human elements of your brand and acknowledges your customers as humans instead of targets or impressions.
- Flaunting your humanity: In the same vein as ambitious purpose, companies will see the importance of bringing a sense of humanity among employees and customers. Jim cites an example from Skype, whose goal was to show the human impact of people connecting through their technology. Skype created a heartwarming video of two girls living in different countries, each born with one arm, who formed a friendship on Skype. To my ear, this echoes another key aspect of this new era of engagement marketing—listening. Nothing demonstrates and highlights our humanity more than when we listen to our customers, to each other. The ability to then respond and interact thoughtfully, sincerely, and compassionately will separate the great marketers from the good marketers. This sort of humanity in marketing will come from enterprises and start-ups alike as consumers’ expectations of their brands change.
In thinking about “what are the most effective marketers going to be doing five years from now?”, Jim’s themes were clear—personalization, automation, ambitious purpose, humanity, and the visual aspect of communication.
I encourage you to read Jim’s full interview below and weigh in on the terrific insights. And add what you think about the rest of Jim’s 2020 predictions in the comments below. Do you think marketing will be stronger, more powerful, and more serious in the next five years? I sure do. That is what we mean here at Marketo when we describe this as a “Marketing First” world. And as always, for more of these great interviews with industry luminaries like Seth Godin, Aditya Joshi and John Hagel, visit www.marketo.com/next-era.
Economist Intelligence Unit: Think about 2020. Five years out. What will the big trends in marketing be over the next five years?
Jim Stengel: Personalization is a big one. At Cannes this year I actually heard the word “innernet”, I-N-N-E-R-N-E-T, how the Internet is becoming the innernet—the idea that things will be coming to you instead of you going out and searching. It’s already happening, but we’re only in the beginning. When things come to us in a personalized way, it will simplify things for us. Google knows where I’m about to go and what I might want to eat because I let Google have my personal data. Personalization is going to happen big time. A lot of innovation. And a lot of startups.
The second theme is automation. There’s still a lot of human involvement in things like advertising. The processes are going to be automated. The whole industry will go the way of Amazon. If you believe in the drive for efficiency, automation is the way to get it. Google is well placed. AOL is well placed. Others are vying for a place.
On the softer side, the idea of ambitious purpose is a huge theme. Companies aspire to have a much larger impact on customers, consumers, and the world. It’s where so many of the leading brands are going and have gone. And these are brands that have experienced sustained growth.
Flaunt your humanity
Jim Stengel: I guess it’s related to ambitious purpose, but there is also this idea of a strong sense of humanity among employees and also with customers. A lot of the start-ups are leading this. Skype is no longer a start-up, it’s owned by Microsoft, but it’s working to show the human impact of people connecting through their technology. They did a wonderful video of two girls in different countries, one each born with one arm, who became friends over Skype and got through life exchanging tips and hints. They finally ended up meeting in person. This sense of humanity is a really strong theme in marketing.
The last one is the fact that everything is becoming more visual. The web is turning into a visual medium. That’s why Snapchat and video advertising are exploding.
EIU: You already bridge to the second question, which is “What are the most effective marketers going to be doing five years from now?” The themes you listed are personalization, automation, ambitious purpose, humanity, and the visual aspect of communication. When you talk about automation, you’re talking about marketing automation obviously. But you’re also talking about an online marketplace for advertising that could displace ad agencies from their traditional function.
Jim Stengel: That’s absolutely right. And it enables a tremendous amount of analytics to be done with that data because as pushing out ads and content becomes automated, datasets are created that are much easier to understand. That’s why you’re already seeing and explosion in predictive analytics. Marketers are getting much more specific information about where to put their resources.
I work with a company called MarketShare out of Santa Monica. They were an early company in that field and they’re just growing exponentially. Cheap computing power, huge growth in data, marketers who need to understand their spending, and that’s why there’s a real explosion in start-ups in the space.
Use the tools of marketing to get spectacular results
EIU: So all these big trends have helped to elevate marketing into a more important function than it was in the past, when it was synonymous with advertising. Will marketing continue to grow in importance as a function in the next five years?
Jim Stengel: I think so. Marketers are going to be executing against the themes we talked about, but they’ll increasingly come to be seen as people who can help companies with their growth strategies. Companies are growing earnings faster than they’re growing sales, and that can’t go on forever. The market places a huge value on growth.
There are incredible companies with strong legacies that don’t have a growth culture. Those companies can use the tools of marketing to get spectacular results. They need to attract talent. They need to build the right capabilities for the future. That requires a strong marketing organization with an understanding of its role in the enterprise, of the consumer, of what about their product or their service is attractive and what that can lead to. Getting insights into the consumer is huge, and that’s marketing’s role. Marketing used to be seen as the communication department. But marketing is really at the center of strategy, and strategy means where the company is going and what choices it is making to get there–how it is going to win. When marketing takes a leadership role on those questions, there is a more robust and customer-centric strategy. The company has a clear direction.
Pivot from your ambitious purpose
EIU: The traditional idea of marketing is that it comes at the end. After the product is created, they ask marketers, “How do we sell this?” What you’re saying is marketing comes at the start.
Jim Stengel: Absolutely. Marketing helps the organization clarify and articulate its ambitious purpose, and everything pivots around that. The CEO and the entire enterprise need to ensure that marketing is part of the team that brings the ambitious purpose to life. Marketers that do that well can really distinguish themselves.
EIU: Let me go on a brief tangent. We hear more and more about the impact of privacy, especially in Europe. Google is now being asked to erase people’s pasts based on their requests. Will that interfere with personalization or the other trends you’ve talked about?
Jim Stengel: It’s a big issue and I don’t want to minimize it. But if you look at consumers, especially the generation now in their 20s or late teens, they’ve grown up sharing everything and have no qualms about it. They see the value tradeoff to be very positive for them. Consumers want to share their information. They want things to be personalized. This is going to happen.
View brands as relationships
EIU: How would you define the concept of “engagement marketing”? How does it differ from traditional ways of relating to customers?
Jim Stengel: If you think about the customer using the metaphor of a relationship, you can’t go wrong. At P&G we used to say that if we measured our brands the way we measure healthy relationships with other people, it would lead to a high market share. So think about your relationships. Do you look forward to seeing that person? Do you care about them? Do they share your values? DO you speak well of them to others?
That metaphor is powerful. It works in every category. Ask those kinds of questions to a leadership team about their customer and you get a whole different way of approaching a customer. When you start getting to things that drive engagement, your relationships change. The specific ways you measure engagement change based on the product category, but it’s a good way to start.
How to get the CFO’s attention
EIU: Engaged customers are an asset that you’ve invested in and built up over time. How do you explain the value of that asset to a CFO who wants to know about ROI? Do CFOs care about softer metrics?
Jim Stengel: CFOs do care. But a lot of marketing people don’t fully understand what drives engagement. If you can quantify engagement, any CFO in the world will pay attention. And not just pay attention, but say “How can I help?” But too many marketing people don’t understand what drives growth, what drives market share and what makes their company preferred over others.
EIU: So that brings us back to the question of what capabilities does a company need in order to drive engagement. Is it customer centricity? Is it the focus on the customer experience? Is it consistency across channels and touch points? Are they all equally important?
Jim Stengel: The most important is a culture of customer centricity. “Culture” is not just a soft word. You can break it down into how people work and what they do. It is rituals. It is processes. It is who is getting a raise and who is getting promoted. What are the measures on personal work plans? What are the measures on the business? And if there isn’t some measure of customer experience, customer engagement, customer loyalty in those measures, it will not be sustainable.
One thing you can look at across categories is the experience. What’s happening when people go online to buy you? What happens when they search your name? What happens when they walk down the aisle? Are you easy to find? To distinguish from others? Are you priced about right? Are you easy to carry? Are you easy to use once you get home? Are you easy to recycle? When you get into a more personal sale, like Zappos or an automobile, this idea of the consumer experience can be rich. There are many interactions and touch points where the consumer can be engaged, annoyed or indifferent. But this idea of paying attention to the consumer experience crosses every category, and that’s often where I start with clients. The process is always rich with insights.
Stronger, more powerful and taken more seriously
EIU: Do you think marketers are getting better at engaging customers? Is the quest for engagement becoming more widely accepted, both inside and outside of the marketing profession?
Jim Stengel: Yes, I do. Look at the books written now. Look at what start-ups are spending on marketing and what investors are paying for marketing start-ups. Look at the quality of the people in the jobs. Look at the number of brands that have broken away and differentiated themselves. Marketing is becoming a stronger, more powerful, more talented and more serious function of business. Everyone in the world wants to figure out what’s going on at brands like Red Bull and Nike. They are winning by being consumer-centric and driven by ambitious purpose.