Aired May 6, 2015
On the most recent edition of Marketing Matters, WFoA Executive Director Catharine Hays welcomed back Jenny Roony, editor of Forbes CMO network, to co-host the show. Jenny, who helps connect Marketing Matters with a wealth of CMOs through the Forbes network, will now be a monthly co-host for “CMO Spotlight” sessions, of which this episode was the first. This week, Catharine and Jenny talked to four guests about the start-up mentality, and how a start-up approach informs the marketing ethos of a company
Their first guest was Peter McGuinness, CMO of Chobani. Chobani started producing all natural Greek yogurt seven years ago, and, with a great product and no direct competitors on the market, experienced incredible growth. “Speed is a natural outcome of being in a start-up position,” explains McGuinness. Other companies quickly caught on to the Greek yogurt market, and Chobani had to realign its marketing to address the increasingly competitive and congested space. “We launched with ‘Nothing but Good,’ meaning, nothing but good ingredients, attitude, taste,” explains McGuinness. But after a few years, Chobani switched its campaign to ‘Go Real.’ “That campaign was designed to ratchet up competitiveness,” says McGuinness, “it was designed to lay a claim to our authenticity in contrast to the newcomers.”
The next campaign, “How Matters,” launched in 2013, coincided with a mold recall on Chobani products. “The recall was a huge setback and a very important growing experience,” says McGuinness. “How Matters’ is about how we make a product, how we treat our consumers, how we treat the community,” he explains. “We could have started adding preservatives after the mold recall, but we didn’t: our food is natural, and always will be. That campaign pushed that. It was authentic.”
Chobani sees being a natural product as crucial to its brand identity. “Better food for more people is central to Chobani, and is the future of food,” says McGuinness. “We call this our DNNNA: Delicious, nutritious, natural, and affordable. Chobani wants to be good quality, and available to all—not an elitist product.” This emphasis on authenticity, and the clarity of Chobani’s founding values, clearly contributes to the company’s start-up outlook.
Innovation is another staple start-up quality. Chobani has a café in SOHO, “Or what I call our inspiration incubation center,” explains McGuinness. The company is always working to produce innovative new ideas, many of which come from the SOHO location. Chobani’s Executive chef and flavor scientists are working not just to develop new flavors, but to “think creatively about what can be done with yogurt.” A final ingredient to the start-up mentality is trust in instinct. “At the end of the day, if the three or four top people sit down and say ‘this is beautiful food that’s better than what’s on offer out there,’ we go for it,” says McGuinness. “We only make things we’re proud of, and we trust our gut. If we lose the gut, we lose the competitive advantage—its what our customers love and expect from Chobani.”
Catharine and Jenny next welcomed Liza Landsman, Chief Customer Officer at Jet.com. Jet.com is a start up in the purest sense—it is still in the process of starting. “I always say that if Costco and Amazon had a baby, it would be Jet.com,” explains Landsman. “It uses the great insights around the membership model, and matches them with the ease and accessibility Amazon is known for.” Jet.com is set to launch this summer, and, as Landsman explains, will disrupt and innovate the retail space. “At Jet.com, we are deconstructing all the places where inefficiencies sit today, and imagining how things could be done totally differently.”
Central to Jet.com’s business model—and a mentality that reflects a start-up approach—is a focus on the value of the customer. “At Jet.com, customer’s aren’t just along for the ride, they help drive,” says Landsman. “We can have the best marketing in the world, but if the experience isn’t right, if the savings aren’t there, if brand personality and customer service aren’t excellent, customers will know really quickly.” Going through the process of developing and planning this customer-focused experience, Landsman sees the start-up mentality as hugely beneficial. “The great luxury of being in a real start-up is you can fail fast, iterate, and try interesting new things pretty quickly,” she says. “You can sit down to brainstorm an idea, and two hours later have an working prototype in front of you.”
Using data to understand what customers will respond to has played a big part in building Jet.com. “The true gift is we are getting to build this company, and service, from scratch,” says Landsman. “Of course, that means that we don’t have years of customer data to draw on.” This limitation is, however, something Landsman sees as liberating—her team can focus on very specific aspects of data and not get carried away with the density of information. “The focus is very freeing,” says Landsman. “I always say data gets you to the two doors, but it’s up to your gut to figure out which one is the lady and which one the tiger.” By being able to see clearly, and to trust your instinct, more creative decisions can be made.
The next guest on Marketing Matters was Alan Gellman, CMO at Esurance. “Esurance is 15 years old, which is young in the insurance world,’ says Gellman.“When Esurance was founded the question was ‘what would it mean to build a business in the insurance world and change the nature of it?’ The company was formed specifically from an innovative technology perspective. That is very much the start-up mentality.”
Today, the start-up mentality persists at Esurance. Gellman described this year’s April Fools marketing campaign, which was developed six days before April 1. “The idea was Presurance—coverage that protects you from what we predict will happen,” says Gellman. “The advertising firm came in, we loved the idea, and we said, ‘ok, lets do this!’ Thinking you can pull off something like that in six days is certainly start-up mentality.”
Esurance has just announced a partnership with Major League Baseball, the biggest partnership it has made to date. “MLB is intent on modernizing the sport of baseball, make the game go faster, and engaging in digital. That’s where we’re helping them,” says Gellman. “What makes it such a good fit for us is that MLB is human and passionate but increasingly digital-centric.” Esurance, which runs campaigns that appeal to the individuality of each person and offers very individualized digital insurance, also straddles that boundary.
“The ‘aha’ moment for me was realizing the MLB knows that people don’t have time to watch three hour games, and that baseball is a sport where moments really matter,” Gellman explains. “Moments—the unbelievable catch, this walk off home run—are amazing to engage in, and only take a couple minutes, and that’s what we’re now part of.” The MLB app provides these moments: each of the 7 million times it is opened a day, users want to see highlights. Now Esurance is part of the app, and helped MLB develop what the user experience should look like. “After watching a cool clip, users are prompted to vote for the Esurance All Star Ballot,” explains Gellman. “Our sponsorship is interactive, we’re partnering with baseball in ways no one has before. That’s what it means to be a modern, innovative brand.”
When asked what larger brands could do to embrace a start-up mentality, Gellman replied, “Be as nimble as you can within your environment. Have ideas, launch them, then optimize and innovate. Don’t try to profess before you move.”
The final guest on Marketing Matters was Robert McDowell, SVP of Marketing and Distribution at Choice Hotels International. ChoiceHotels is the largest lodging franchise in the world, with more than 6,300 hotels globally. Over the past year, Choice Hotels have been working to create a positioning statement, and push Choice Hotels as an iconic brand. “If you look at hospitality marketing campaigns, everyone was focused on marketing amenities, on price, Wi-Fi, or free breakfast. We stepped back and did a lot of research of why people were travelling, and realized it was more about connecting with people,” explains McDowell. “Customers aren’t travelling to a hotel or a destination, they’re travelling to a business meeting or to see family and friends: hotels are about the people they are going to see.”
Based on this observation, Choice Hotels re-developed its brand identity, produced an advertising campaigns for television and internet, and updated its website. “By approaching all three facets of the brand together, we aim to create a break out in the sea of sameness of the advertising is out there,” explains McDowell.
Embracing a more digital world—a key feature of the start-up mentality—also played an important role in the recent Chase Hotels campaign. “The modern day device explosion means you customers expect the same experience in a range of formats,” says McDowell. “If you’re trying to tell them something, the look and feel always has to be the same, no matter what screen they’re looking at. We had to adapt our aesthetic and service to meet that need.”
That McDowell sees his data analysis team and his IT organization as crucial to the new Choice Hotel image is no surprise. “The relationship with IT just gets more and more important,” he says. When Choice Hotel’s partner Trip Advisor was looking to develop a mobile app, Choice Hotel’s IT team were able to do just that. “We sat down together, and they actually crafted a program called Instant Book,” he says. “They saw what was needed, and were able to produce it.”
As a franchise business, convincing franchisees to adapt to the new marketing approach may have been difficult, but McDowell explained that this was not the case. “Everything we’ve done, from our corporate logo and identity, to our ad campaign, to our website, is truly backed by research,” he says. “We screened our ad campaign to over 4,000 customers. Doing this bestows ownership of the changes and new ideas to the customers. It’s what appeals to them.” With such rigorous data, presenting changes as valuable becomes easier. “The customer was really the voice at the table that helped us guide where we were going,” says McDowell. And, as each of the guests on the show reiterated, the guiding principle of all successful start-ups is that the customer must always be respected.