Latest / ContraMinds Podcast - Unlocking Personal Growth and Professional Excellence / Neil Hoyne on Managing Relationships in the Age of Data (#024)

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Neil Hoyne on Managing Relationships in the Age of Data (#024) · ContraMinds Podcast - Unlocking Personal Growth and Professional Excellence

0:00
SPEAKER_03: Be always mindful about the tournament that you're playing in and the skills.
0:03
SPEAKER_03: And if there is something that's interesting where you see value and you see something that you can make a great career out of, don't turn it away just because it's not a skill that you need today.
0:13
SPEAKER_03: If you think about things in a wider sense about where things could go, or perhaps consider yourself playing almost in a different tournament than the one you've been given, you'll find more opportunities.
0:39
SPEAKER_01: Today we are in conversation with Neil Hoyne.
0:43
SPEAKER_01: Neil serves as the chief measurement strategist at Google and is a senior fellow at the Wharton School.
0:49
SPEAKER_01: In today's conversation, we talked to Neil about his latest book, Converted, the Data Driven Way to Win Customers' Hearts.
0:58
SPEAKER_01: Neil was kind enough to send us an advanced copy of the book and we thoroughly enjoyed reading it from start to finish.
1:04
SPEAKER_01: Over the course of the next 90 minutes, we spoke to Neil about what the wealth of data creates a power to individual individuals, the use and abuse of metrics and corporations, and what it takes to be a wealth of the individual in the 21st century.
1:20
SPEAKER_01: If we find a conversation with Need to be disightful, we urge you to pick up a copy of this book and follow him on social media.
1:27
SPEAKER_01: As always, we have shared selected links in the show notes from this episode on the ContraMinds website.
1:34
SPEAKER_01: You can check it out at www.contramines.com forward slash.
1:40
SPEAKER_01: And now, without further ado, that is the conversation with Neil.
1:58
SPEAKER_01: Neil is the chief measurement strategist at Google, and most recently is uh the author of a spectacularly readable book uh called Converted: the Data Driven Way to Win Customers Hearts.
2:11
SPEAKER_01: Uh, Neil was incredibly kind to send us an advanced copy of the book, and uh, I would go as well as to say that um if somebody read Bhabram into the pyramid principle and wanted to know how to actually implement that, I would actually say that this is the book to do it because it was structured exactly as the way that uh she has recommended we should organize information and then how do you communicate, etc.
2:36
SPEAKER_01: So uh we'll get more uh deeper into concepts of the book, uh Neil's Germany, his thoughts and ideas about the future.
2:44
SPEAKER_01: But before all that, welcome Neil.
2:46
SPEAKER_01: How are you?
2:47
SPEAKER_01: I'm doing wonderful, thank you so much for having me.
2:49
SPEAKER_01: So we would like to kick things off by uh uh talking about a couple of core pillars uh that we uh felt that the book actually uh was built upon, some very solid foundations, because uh a lot a large swath of marketing and uh technology-related books uh are all about a very, very specific perspective about how accelerating technologies uh tend to make life easier, but uh they also tend to forget that it's about the humans who are also using these technologies.
3:23
SPEAKER_01: So, my first question to you is where did you realize that there is this gap uh between uh sophisticated data tools but a scarcity in building relationships?
3:32
SPEAKER_03: Oh boy.
3:33
SPEAKER_03: Um let's talk about data tools and software in general.
3:37
SPEAKER_03: Look, my experience with it is that data tools and software are a quick fix.
3:41
SPEAKER_03: There's something tangible.
3:42
SPEAKER_03: I joke around, at least here in the United States, uh, every January when we get to New Year's resolutions, people come in and they say, I'm gonna buy a gym membership, I'm gonna go work out, because it's a tangible sign of progress.
3:54
SPEAKER_03: It's I did something, I have something to show for it, and it makes them feel good.
3:58
SPEAKER_03: Now, we also know that most people that get a membership in January, uh, I think the average is somewhere around six times they'll visit that gym over the course of the next 12 months.
4:07
SPEAKER_03: Four of those times will be in January.
4:10
SPEAKER_03: And so, you know, there's not a lot of long-term success.
4:13
SPEAKER_03: And when you think about it from the sense of software tools, they certainly have a place.
4:17
SPEAKER_03: But the same thing in something we mentioned is that when we look at the satisfaction of things like CRM systems, a vast majority of companies that go down that path, very much like our gym goers, will say that they they really didn't get the results they were looking for.
4:31
SPEAKER_03: Most of them are dissatisfied to say it didn't meet our objectives.
4:34
SPEAKER_03: And so you take a look at it back and you say, well, is it really the software that's a problem?
4:39
SPEAKER_03: No, it's just how I think consumers and companies tend to use them is they tend to gravitate towards it again because they say, Well, this is progress.
4:46
SPEAKER_03: Look at what I did.
4:47
SPEAKER_03: I bought the software package.
4:49
SPEAKER_03: But really, you have to look at your objectives, you have to look at your processes, you have to look at your people.
4:54
SPEAKER_03: And at the end of the day, you find out that a better investment would have been made in investing in those things than the enterprise software to say, let's train our people, let's teach our people, let's get the right processes or be mindful of the processes, instead of just thinking that we can throw some software in the middle of it and it's going to fix everything about our business.
5:13
SPEAKER_02: That's absolutely a great uh starting point for this conversation, Anil.
5:18
SPEAKER_02: And uh I think you make a very pithy statement, which caught my attention, where you said uh, you know, digital marketers are good at making statements uh than conversations.
5:31
SPEAKER_02: Uh, you know, uh can you really uh you know dwell into that more given the fact that uh lots of money is going into digital marketing and the need for not making statements but building conversations is absolutely important and uh you couldn't have said it better than this.
5:51
SPEAKER_02: So can you just tell us why you think it's so important?
5:55
SPEAKER_03: Yeah, it's it's important, but it's also a legacy problem.
5:59
SPEAKER_03: Let's let's go into the history for a moment.
6:01
SPEAKER_03: One of the greatest challenges any marketer faces is accountability, right?
6:06
SPEAKER_03: Going back to the CFO and saying the money you gave me, it wasn't the product that would have sold itself.
6:12
SPEAKER_03: Um in fact, in the early days of Google, I think this was a quote uh often attributed to Larry or Sergei that you know, the the salespeople are there to pick up the check from the customer.
6:21
SPEAKER_03: It's the product that sells.
6:23
SPEAKER_03: And when you have that mindset in an organization with finance people and product people who are skeptical about the contribution of marketing, the greatest thing a marketer can have is that connection between an interaction and an immediate sale.
6:36
SPEAKER_03: And that's what really fueled the the growth of digital marketing earlier on was that somebody could click on an ad, and then you can immediately say the results they clicked, and then they bought the product.
6:46
SPEAKER_03: But what we've seen over time is that that's expanded.
6:49
SPEAKER_03: Consumers have more choices, they have more devices, they have more interactions online and offline with the same company.
6:56
SPEAKER_03: And what we start to see is that that immediate interaction really isn't what we think it is.
7:01
SPEAKER_03: In fact, there were multiple interactions that came together to join and to drive that decision.
7:06
SPEAKER_03: And if we skip all those, if we skip the hello and the introductions and getting to know our brand, getting to know our products, and we only focus on that moment where they buy, well, that's gonna lead to some really bad decisions, everything being very, very short term.
7:19
SPEAKER_03: And so with that that mention about the statements versus conversation, it's just how marketing's been developed.
7:24
SPEAKER_03: It's been developed to make those statements, single call to action, single value propositions that get people to click right away.
7:32
SPEAKER_03: But now we're starting to realize there's only so many people that are at that stage.
7:36
SPEAKER_03: And so the recognition of a conversation is to say, let's first just take a step back and realize that this viewpoint of just single interactions, single purchase decisions isn't the case.
7:47
SPEAKER_03: And we shouldn't limit ourselves as marketers just to that moment.
7:50
SPEAKER_03: And instead, what if we do have a conversation?
7:52
SPEAKER_03: What if we're able to connect all those interactions together, understand what the customer actually wants both before and after the purchase?
8:00
SPEAKER_03: Well, then we start to get more information, we start to build stronger relationships.
8:05
SPEAKER_02: The challenge uh that I see there, uh Neil, is that uh given the multiple devices, given offline and online, typically the path to purchase uh is not so easy to track and measure, right?
8:21
SPEAKER_02: So uh how do you see the challenge uh, you know, maybe a decade back?
8:28
SPEAKER_02: And how do you see the challenge now?
8:30
SPEAKER_02: And how do you see this challenge getting address maybe a decade from now, given the fact that it's I would call it the hybrid purchase behavior, right?
8:40
SPEAKER_02: So, therefore, some of it cannot be measured, some of it can be measured.
8:44
SPEAKER_02: So, how do you really bring this together?
8:46
SPEAKER_03: So, the starting point actually ties to the the question we had earlier, which was about software.
8:51
SPEAKER_03: In my experience, a lot of companies are obsessed with the software and the data collection side to say, we know these interactions are happening before we do anything.
9:01
SPEAKER_03: Let's capture everything.
9:04
SPEAKER_03: And so the obsession is measuring every single touch point, stitching everything together, and making sure we have that entire complete story, that entire picture before they use any of the data.
9:16
SPEAKER_03: And so what you see is you see a landscape of companies that are investing in all the software, all this technology to measure everything, which arguably, especially here in the United States and in the EU, is becoming more difficult because of privacy changes if consumer complexity wasn't enough.
9:30
SPEAKER_03: And they're going in and say, Well, look, here's what we really need to do.
9:34
SPEAKER_03: Let's admit that we're going to continue to understand and capture more of this data, but let's finally use it.
9:39
SPEAKER_03: And let's finally say, Well, what are customers doing?
9:41
SPEAKER_03: How long?
9:42
SPEAKER_03: Here's an example.
9:43
SPEAKER_03: Most companies can't tell me when someone comes to their website how many times they've been to that website before.
9:51
SPEAKER_03: They don't change the experience based on the number of interactions, whether it's one visit or 500 visits, you will receive the same experience.
9:59
SPEAKER_03: For all the talk about web personalization, they still miss that step.
10:04
SPEAKER_03: And so what I'm really pushing on here, and this these types of ideas is that if you admit that there's a conversation going on and that it's key to your business, you can't wait another day longer simply to say, well, we need to capture everything in that conversation.
10:18
SPEAKER_03: The challenge I have to marketers is to start using that data to treat a customer how like they're interacting with your business.
10:25
SPEAKER_02: Interesting.
10:26
SPEAKER_02: And uh it's almost like uh, you know, what you really write there.
10:31
SPEAKER_02: You talk about the fact that this single interaction marry me syndrome, right?
10:36
SPEAKER_02: Uh, which is really, I thought, was also a very interesting concept because uh uh I think there is a real push towards efficiency, and how do you really balance that with effectiveness, right?
10:50
SPEAKER_02: So literally that's the balance that uh the marketers of today have to balance in this digital world.
10:57
SPEAKER_02: So, how do you really uh, you know, don't end up having a single interaction, marry me syndrome, to actually saying, let me have a date with the customer and let me now have this conversation.
11:10
SPEAKER_03: It's uh so I'll mention to you both in in full transparency.
11:14
SPEAKER_03: Whenever I use relationship metaphors because they're things that we can relate to in the real world and they extend very well.
11:22
SPEAKER_03: Now there are limits to it, of course.
11:23
SPEAKER_03: We we still want to know there's not always going to be perfect matches and perfect conversations.
11:28
SPEAKER_03: But understanding, first of all, how we're going in.
11:30
SPEAKER_03: When we first say, is this a viable approach to just go up to somebody and just say, you know, in the book we use as instance of marriage, be like, Will you marry me?
11:38
SPEAKER_03: You start thinking, wow, that's a serious commitment for just meeting someone.
11:43
SPEAKER_03: And then you think about it from say you're selling B2B software, you click on an ad, and immediately they want your name, your phone number, your email address.
11:51
SPEAKER_03: They want to call you to pitch their software, and you're like, whoa, that commitment is way too high.
11:57
SPEAKER_03: And you start to see the contracts, you start to say, well, this is a bit of a problem.
12:02
SPEAKER_03: And so that's why we use it, and that's why it works really well.
12:04
SPEAKER_03: Now, to the question of efficiency uh and effectiveness of marketing, there's look, we all want to be efficient with our marketing spend.
12:13
SPEAKER_03: We want to know exactly where that next investment is going to pay back in return.
12:18
SPEAKER_03: But the problem with that approach is that it limits risk.
12:22
SPEAKER_03: Right?
12:22
SPEAKER_03: If you s if you have a marketing organization that's focused on efficiency and you're saying, well, we want to make sure that we're maximizing every dollar that we invest here, then if there's something that introduces risk, which by nature is often less efficient, your company's going to stay away from it because you spend so much time getting to this point where you feel like everything's optimized.
12:43
SPEAKER_03: Or imagine building one of those new electric cars where you're talking about how efficient and how low the drag is.
12:49
SPEAKER_03: And then someone comes in, they're like, hey, let's just put this on the hood and give it a try.
12:54
SPEAKER_03: It could be a great new technology.
12:55
SPEAKER_03: It could help the driver and you have the efficiency.
12:57
SPEAKER_03: People being like, no, no, no.
12:58
SPEAKER_03: Do you know how hard we work to get to this point?
13:00
SPEAKER_03: We don't want to do it.
13:02
SPEAKER_03: And that's the challenge when we look only at efficiency, is that companies can't move.
13:06
SPEAKER_03: And I don't care whether you're going into looking at customer relationships and customer lifetime value, which we're going to probably talk about, or if you're looking at going into a new ad format, as soon as you lock onto that number and that becomes a mission statement or organization where you want to be that that finely developed aerodynamic car, you're suddenly boxing yourself in where you can't move.
13:29
SPEAKER_03: And that's a little bit of a problem.
13:30
SPEAKER_03: So it's not to say that I don't recognize the benefits, and certainly none of us want to waste marketing money.
13:35
SPEAKER_03: I agree with that.
13:36
SPEAKER_03: But also that objective in an organization can be dangerous because some of the most ambitious, adventurous things you can do require that risk.
13:44
SPEAKER_03: We say we don't know what's going to happen.
13:46
SPEAKER_03: We may lose some money, but we're going to learn.
13:49
SPEAKER_03: And that I think is just a better way to look at a culture is to say to give people that that room to learn and let whatever develops outside of it be.
13:59
SPEAKER_02: So uh so, which brings me to this concept that you talk about, which is the art of making simple conversations, right?
14:07
SPEAKER_02: Uh, which I thought was brilliant, which is to say, uh, you know, I would call it uh, you know, you talk about today, you talk about micro APIs and things like that.
14:18
SPEAKER_02: I think conversations also need to be simple, and that's the point that you make.
14:22
SPEAKER_02: So, what do you think is the uh you know broad framework to start off a simple conversation and how do you really build it up?
14:31
SPEAKER_02: I think you make very important points about the art of making simple conversations.
14:36
SPEAKER_02: And can you elaborate a bit about that?
14:40
SPEAKER_03: Sure.
14:40
SPEAKER_03: The the idea is this is that while I I share, as I mentioned, that interest in capturing everything that happens along the journey, there are fundamental questions and problems that just need to be taken care of first.
14:52
SPEAKER_03: So, in the sense of conversation, I make this joke in the book to say it's having a conversation very much as we are, or that we may have in in the real world, in the physical world here.
15:02
SPEAKER_03: We don't remember every single nuance of the conversation.
15:07
SPEAKER_03: What people order, how they move in their chair, what they're wearing.
15:10
SPEAKER_03: In fact, I probably couldn't tell you the last time I went out to eat.
15:12
SPEAKER_03: I don't know what the other people ordered.
15:14
SPEAKER_03: I don't know what the other people wore.
15:15
SPEAKER_03: I don't need to collect that data.
15:17
SPEAKER_03: I just need to focus on the things that are going to matter most to my business, and I need to do them incredibly well.
15:24
SPEAKER_03: One of the points that I push on is simply identifying and knowing who your customers are, getting them to log in or identify themselves, providing value or a reason for them to do so, as opposed to just allowing them to be anonymous.
15:37
SPEAKER_03: Again, looking at the real world, somebody sitting down, you're having a meal with them, and you have no idea who they are.
15:43
SPEAKER_03: We're having a great conversation.
15:44
SPEAKER_03: We're like, I don't know who you are, or worse, knowing who they are, and then seeing them the next day and pretending like it's a brand new conversation.
15:52
SPEAKER_03: You have no idea, hi, who are you?
15:54
SPEAKER_03: We we spoke yesterday.
15:56
SPEAKER_03: Uh oh, did we?
15:57
SPEAKER_03: I'm sorry, my my cookies only last for 24 hours, and then we have to start over.
16:02
SPEAKER_03: Those are very simple things companies can do, but they miss.
16:05
SPEAKER_03: And so that's the emphasis was really to get for the readers to say, let's take a step back and get some of these basic elements right that are helpful.
16:13
SPEAKER_03: And when you start looking at that, companies also start to realize what are some of the poor practices they shouldn't do.
16:20
SPEAKER_03: So, as an example, there's a retailer I love in New York City.
16:23
SPEAKER_03: Whenever I go to their website to buy a product, what do they do?
16:27
SPEAKER_03: They put up a coupon code for 10% off if I give them an email address.
16:32
SPEAKER_03: They probably know me as 40 or 50 different people by this point.
16:36
SPEAKER_03: Because the motivation is there for me just to say, well, give me more coupon codes, give me more discounts.
16:41
SPEAKER_03: If that company is really committed to knowing who I am as a person, then they need to get that right.
16:47
SPEAKER_03: And they also need to understand, as part of that simple conversation, what's in it for both sides.
16:54
SPEAKER_03: All too often companies are saying, Well, we want to capture this data, we want to understand what's happening in this conversation, but they forget to think, well, what's a consumer going to get for it?
17:03
SPEAKER_03: If you want my name, my information, if you're claiming you're going to personalize a service, are you?
17:10
SPEAKER_03: Or are you simply so focused internally on capturing all that data that you don't really think about what consumers are getting?
17:16
SPEAKER_03: Here's an interesting statistic for you.
17:18
SPEAKER_03: Uh, Salesforce did a survey and found that nearly 70% of consumers are willing to provide more data to companies.
17:28
SPEAKER_03: Think about that.
17:29
SPEAKER_03: In an era of privacy where everyone's clamping down on their data, and there's regulation and technical change to limit how much data we have, consumers are raising their hand and saying, I'm happy providing more information.
17:42
SPEAKER_03: But what their request is they want to know what's in it for them.
17:46
SPEAKER_03: If you're gonna take my information, if you're gonna learn about me, if you're going to ask me a question about something, what's the relevance?
17:54
SPEAKER_03: You know, maybe make the joke in the book if someone says, Well, well, do you ski?
17:58
SPEAKER_03: I don't know, are we going skiing?
18:00
SPEAKER_03: No.
18:00
SPEAKER_03: Well, okay, then why why do you need to know that?
18:02
SPEAKER_03: Oh, well, we can ask.
18:04
SPEAKER_03: Well, that's it's that that kind of exchange.
18:06
SPEAKER_03: And as ridiculous as that sounds, I I actually received an email from uh my my cell phone provider last week where it was like, we want you to opt in to a new program that will allow us to track every website you go to.
18:20
SPEAKER_03: That was the gist of it.
18:21
SPEAKER_03: They weren't really more articulate in the email, but that was what they said.
18:24
SPEAKER_03: They're like, we want you to opt in.
18:26
SPEAKER_03: And like, so we can personalize these experiences for you.
18:29
SPEAKER_03: But they didn't provide any context.
18:31
SPEAKER_03: What are you doing with that data?
18:32
SPEAKER_03: How are you making my life better?
18:34
SPEAKER_03: And if you probably looked at it, I'm not sure there is a lot of value personally.
18:38
SPEAKER_03: And so that's that's when we when we drill all of it down.
18:41
SPEAKER_03: This is what we're talking about.
18:42
SPEAKER_03: We're saying you want to respect the other person, you want to capture the information in that conversation that matters, and you want to make sure that as the conversation progresses, that both sides are seeing value for the information exchanged.
18:55
SPEAKER_03: It's not an interrogation, it's not a survey, it's not a research project.
19:00
SPEAKER_03: It is a conversation just like you would have with a customer that came into the store.
19:05
SPEAKER_03: Capture the data that you need to make a decision, to understand the next step, where the relationship is going, and make sure along the way you're giving something back to those people so they stay engaged.
19:15
SPEAKER_03: If they walk away, you lose.
19:18
SPEAKER_03: So that's what we want to focus on.
19:19
SPEAKER_03: And when you start to look at things from that perspective and say it's not just about abject data collection all the time, it's just a better way to do business.
19:27
SPEAKER_03: You feel things start to feel a lot more natural.
19:29
SPEAKER_03: It's not like, well, how do how do we connect to A to B?
19:31
SPEAKER_03: No.
19:32
SPEAKER_03: How do you start using the data you already have?
19:35
SPEAKER_03: And so your customers give you more of it.
19:38
SPEAKER_01: Right.
19:38
SPEAKER_01: But uh let me just take it a step back.
19:41
SPEAKER_01: This is under the premise that an organization already knows who its customers are, right?
19:47
SPEAKER_01: Uh let's say that you are in an early stage company and you're trying to figure out what your product market fit is, and you're trying to also scale and you're trying to grow.
19:55
SPEAKER_01: So you are bound to make mistakes in those situations in even trying to identify who your customer is, because the implicit bias to a certain extent is to focus a lot more on how awesome your deep learning algorithm is or how cool your machine learning algorithm is actually running.
20:11
SPEAKER_01: Right?
20:12
SPEAKER_01: So, in those kinds of situations, what are certain common uh mistakes that you've seen founders or sales folks make, marketing folks make in trying to even identify who the customer is, uh despite all the data that you can actually gather with today's tools and technologies?
20:30
SPEAKER_03: Oh boy, the mistakes that startups make.
20:33
SPEAKER_03: Actually, the the first one we which we joke around is it seems like every startup is using machine learning.
20:38
SPEAKER_03: Because let's be honest, you get much better valuations if you're a machine learning startup.
20:43
SPEAKER_03: You know, I joked, I had um about a year or so ago I was meeting with one of those mattress startups, an international company, you know they sell the mattress in the box.
20:52
SPEAKER_00: Yeah.
20:52
SPEAKER_03: And I just we were talking about their core business model.
20:55
SPEAKER_03: And I was like, okay, so I'm like, you're you're a D2C company, you sell mattresses.
20:59
SPEAKER_03: And they're like, no, no, no, no, no, no.
21:01
SPEAKER_03: We are a sleep technology company.
21:04
SPEAKER_03: Walk me through this.
21:05
SPEAKER_03: And they're like, well, we use we use machine learning.
21:08
SPEAKER_03: I'm just thinking as they're going through this, I'm like, this is brilliant.
21:11
SPEAKER_03: I'm like, this if if you're just if you're just shipping mattresses, there's one valuation, but if you're using machine learning in AI, you're about two to three times higher.
21:19
SPEAKER_03: This is phenomenal.
21:21
SPEAKER_03: But let's talk about the mistake that those companies make.
21:24
SPEAKER_03: The the mistake that they often make, in my opinion, is that they lose touch of those customers.
21:30
SPEAKER_03: They start looking at customers entirely as data that they feed into an algorithm.
21:35
SPEAKER_03: And that's not necessarily a bad thing in some cases, especially for some of the use cases they're exploring.
21:40
SPEAKER_03: But sometimes what happens is they become boxed in so much by their data and their techniques that they fail to see again the larger conversation that's happening around them.
21:49
SPEAKER_03: So with machine learning in particular, we always subject ourselves to that bias that comes from the people that do raise their hand and collect information.
21:57
SPEAKER_03: So with early startups, they usually have those early.
22:00
SPEAKER_03: Early adopters, the natural people that fit into their product, the friends, the family, the people they built the product for initially, and they're enthusiastic and they love the product and the algorithm works really well because that's who they are.
22:12
SPEAKER_03: And then once they start to explore outside of that, then it's a different story.
22:18
SPEAKER_03: And so they start to lose touch with what's actually happening.
22:20
SPEAKER_03: How do you collect the data?
22:21
SPEAKER_03: How do you overcome that bias?
22:23
SPEAKER_03: And instead you start building to a very small, very niche market.
22:27
SPEAKER_03: And that's just one of the limitations.
22:29
SPEAKER_03: Now, some companies are very good.
22:31
SPEAKER_03: They recognize these biases early on, they build plans to overcome them, effectively saying, I'm only hanging out with these types of people.
22:38
SPEAKER_03: I need to go meet other types of people.
22:40
SPEAKER_03: And then that goes back to the efficiency problem.
22:44
SPEAKER_03: If they've promised their investors that they can acquire customers at a certain price point, and now they're going in there saying, Well, we've never had a conversation with this part of the market.
22:52
SPEAKER_03: We've never spoken to these people.
22:54
SPEAKER_03: Do they have the latitude to be less effective, less efficient?
22:58
SPEAKER_03: Or do they simply look at the dashboard to say, well, these people we've always targeted, they're working really well.
23:03
SPEAKER_03: These people are really expensive.
23:06
SPEAKER_03: Most startups will cut back and then immediately they're boxing themselves in where they're trying to grow with a segment that's already capped instead of learning new capabilities to engage people outside of that audience.
23:17
SPEAKER_02: So one challenge, uh Neil, that I see uh is that uh digital marketing by nature has a foundation of data as its core value, right?
23:29
SPEAKER_02: So uh so you pretty much uh move from an era of you know broadcast marketing to uh you know what I call as data-driven marketing, right?
23:40
SPEAKER_02: So you there's a big transition that happened, and uh so when you're really looking at this transition, uh the way you did uh you know the 30 second commercials uh was all about not knowing the customer but uh building certain aspirations, right?
23:59
SPEAKER_02: Uh but when you come to digital, uh and especially with data being the foundation, uh your challenge always is uh I should know the customer, right?
24:10
SPEAKER_02: So therefore, is you know, he or she has come to my website, or somebody has filled up a form, or uh, you know, what's my cost per lead, what's my cost per click?
24:19
SPEAKER_02: Uh so uh so literally, uh you know, I haven't seen a metric.
24:24
SPEAKER_02: Uh we'll talk about metrics uh sometime later because you talk about it a lot, but uh you know what's my cost per engagement, right?
24:31
SPEAKER_02: Uh which is really a metric where I've never never heard people uh or marketers talk about it, right?
24:38
SPEAKER_02: So, therefore, one uh challenge that I see is given digital marketing is all about data, uh uh there's an eagerness to just go and uh you know identify this customer, right?
24:51
SPEAKER_02: So, therefore, it's it's that cookie, it is that form, it is that.
24:56
SPEAKER_02: So, therefore, how do you really then play the game of conversation by having a conversation with an anonymous prospect, moving them to a suspect, moving them to uh uh customer, and then making them an advocate, right?
25:13
SPEAKER_02: So, if there are uh you know a kind of a uh you know a uh a ladder that I would see, uh I think uh digital marketing from what you seem to be saying is has to practice this.
25:25
SPEAKER_02: And uh uh you know how you know, given the fact that you've seen large brands, uh, you know, you run the measurement, uh, you know, practice uh at Google, you also do other uh work with uh universities, you talk about, you do many things.
25:41
SPEAKER_02: The fact is that how do you really uh build this uh you know thinking in marketers?
25:47
SPEAKER_03: Oh boy.
25:49
SPEAKER_03: So the the first the first part is just the realization of what we think we're capturing what versus what we are capturing.
25:58
SPEAKER_03: So for instance, some of the terminology in analytics is baffling to me where they talk about uh some companies that build their entire business around unique visitors.
26:06
SPEAKER_03: Like this is how many unique visitors we have.
26:10
SPEAKER_03: Is that really what we're looking at with that number?
26:13
SPEAKER_03: I mean, how many calculations, how many distillations went into that?
26:16
SPEAKER_03: But are these people really okay?
26:18
SPEAKER_03: So if I use different devices, okay, so different browser sessions, these are unique visitors, but I'm the same person.
26:25
SPEAKER_03: And they start to realize some of the limitations of their own metrics.
26:29
SPEAKER_03: And that's I think the first level is to say I think companies oftentimes drop back to say, oh, well, this is what this metric is, this is what this metric means, regardless of marketing or not.
26:39
SPEAKER_03: And few people around the table know how it's calculated.
26:42
SPEAKER_03: And when they find out how it's calculated, they're frightened by it.
26:46
SPEAKER_03: Now, that's not to say that the purpose of that exercise is to break credibility of this measurement.
26:51
SPEAKER_03: It's just to recognize that there's limits to what that measurement will capture.
26:56
SPEAKER_03: So when we talk about cookies being reset, when we talk to someone say, look, every day they're going to become a brand new customer.
27:01
SPEAKER_03: You say, Well, that's a problem with this metric.
27:04
SPEAKER_03: But that challenges us to find a better way to measure and understand.
27:08
SPEAKER_03: And if you found out, say, well, we we acquired 10,000 new customers, did you?
27:13
SPEAKER_03: Or did you just acquire 10,000 people who are willing to provide different email addresses to you to get the coupon code to register for your site?
27:21
SPEAKER_03: Or sometimes we'll do an exercise to say, well, how many social media followers did we get?
27:26
SPEAKER_03: And I actually have a few Twitter accounts where I've purchased followers just as an exercise to show you to say, well, look, I have 50,000 Twitter followers on this account.
27:34
SPEAKER_03: And somebody raises their hand and says, Yeah, yeah, but those are all bots.
27:38
SPEAKER_03: Yes, they are.
27:40
SPEAKER_03: But how do you know where your traffic came from?
27:43
SPEAKER_03: You're just giving them a general goodness because of how you attempted to acquire that traffic.
27:49
SPEAKER_03: And so as long as people know the weaknesses behind their existing data, they can go that next level down to say, all right, how do we improve this?
27:55
SPEAKER_03: How do we capture more?
27:57
SPEAKER_03: Or at least what are the limitations of what we can and cannot measure?
27:59
SPEAKER_03: So it's not undercutting the premise of data, it's simply acknowledging the weaknesses and the challenges that we have.
28:05
SPEAKER_03: The next question we have to ask ourselves is about this issue of first party versus third party collection.
28:11
SPEAKER_03: Where we're getting this information, who we're relying on.
28:14
SPEAKER_03: And again, I drop back to the personal metaphors.
28:17
SPEAKER_03: When I first met my wife, um, it'd be a question to say, all right, I really have some options.
28:22
SPEAKER_03: I can ask somebody else what her phone number is.
28:26
SPEAKER_03: Right.
28:27
SPEAKER_03: I can ask a third party, I can ask a friend to be like, hey, yeah, I don't know if you have permission to share it, but can you?
28:32
SPEAKER_03: And some people be like, yeah, sure, you give me money, I'll give you, I'll give you the phone number.
28:36
SPEAKER_03: But then that's kind of a strange relationship.
28:38
SPEAKER_03: Now I'm calling her up and she's like, what are you doing?
28:40
SPEAKER_03: Or I can ask her.
28:42
SPEAKER_03: Now, arguably, asking her is a much higher barrier to cross, right?
28:47
SPEAKER_03: I have to have that conversation.
28:48
SPEAKER_03: I have to get to know her.
28:48
SPEAKER_03: I have to build up why do you want my phone number?
28:50
SPEAKER_03: What are you gonna do with it?
28:51
SPEAKER_03: Do I like you?
28:52
SPEAKER_03: This is a much harder line to cross.
28:55
SPEAKER_03: So most companies avoid doing it.
28:59
SPEAKER_03: They say, Oh, we we just go outright and we say, Can you give us our phone number?
29:02
SPEAKER_03: We notice people don't participate.
29:03
SPEAKER_03: Yes, because they don't know what's in it for them.
29:06
SPEAKER_03: A phone call from a salesperson, you're gonna connect their data to something else.
29:10
SPEAKER_03: The companies that are succeeding nowadays are ones that have figured that out.
29:14
SPEAKER_03: They figured out how to collect those phone numbers directly from the person instead of relying on third parties.
29:19
SPEAKER_03: Over the past decade, you could probably get away with that third party approach.
29:24
SPEAKER_03: Now you see the intersection of privacy.
29:26
SPEAKER_03: Privacy's coming in and saying, hey, we're not gonna allow you to talk to your friend anymore.
29:31
SPEAKER_03: Like, oh, what do I have to do?
29:33
SPEAKER_03: I guess I can't use phone numbers anymore.
29:35
SPEAKER_03: No, you can, but what these rules are saying is that consumers are saying, hey, if you really want my phone number, if you really want this data, come and talk to me.
29:43
SPEAKER_03: Let me trust you, let me know.
29:44
SPEAKER_03: And this is just a muscle that most marketers are saying, wait a minute.
29:47
SPEAKER_03: No, no, no, we were just about the collection.
29:49
SPEAKER_03: Look how many phone numbers I gathered.
29:50
SPEAKER_03: No.
29:51
SPEAKER_03: Now you have to take that other step forward.
29:53
SPEAKER_03: And so if they you combine those two, you say, first of all, we know the weaknesses in the data.
29:57
SPEAKER_03: We haven't been able to capture, say, phone numbers, the phone number data we have is going away.
30:02
SPEAKER_03: It's imprecise.
30:04
SPEAKER_03: But what if we could capture it?
30:05
SPEAKER_03: And then you get to that second part, which is to say, now companies are building up those capabilities to say, we need this data, this data is important, but it's not simply about just this uh this overwhelming collection.
30:17
SPEAKER_03: It's about saying we need the customers to participate and to willingly share.
30:22
SPEAKER_02: Interesting.
30:23
SPEAKER_02: So what you're really saying, Neil, is uh you're inverting the uh you know, uh, the concept, and you're saying first have a conversation, you'll anyway get the phone number, right?
30:34
SPEAKER_02: That's the in the real world, that's how it happens.
30:37
SPEAKER_02: So start the conversation, have an authentic conversation, and soon you'll realize uh, you know, there is a uh, you know, there's a reason why customers will then start uh trusting you to say, you know, I want this conversation.
30:53
SPEAKER_02: So that's really the big change that you are seeing uh with all the big uh you know uh work that UCMT be doing.
31:00
SPEAKER_02: That seems to be the big takeaway that I am taking out of this point, right?
31:05
SPEAKER_03: That that is that is exactly it.
31:07
SPEAKER_03: That the companies today are saying, first of all, they're saying we need that trust, we need to learn how to engage our customers, we need to be able to share that value, and that's how we improve our data, our collection, our understanding of them.
31:19
SPEAKER_03: It's not, and then going back to that original point, it's not buying more technology and buying more software packages that allow us to extract that data and to pay attention to everything the consumer is doing.
31:29
SPEAKER_03: It's saying, let's simplify things down.
31:32
SPEAKER_03: What type of trust do we have to build with these customers who are the core to our business so that they willingly share that information?
31:39
SPEAKER_03: And the answer is you not only need to learn when to ask those questions, when is it appropriate, you don't propose on the first date.
31:45
SPEAKER_03: That's a mistake.
31:47
SPEAKER_03: And then letting that conversation unfold.
31:50
SPEAKER_03: And a lot of marketers haven't developed those skills.
31:52
SPEAKER_03: The market the companies and the marketers that are succeeding nowadays are ones that have.
31:56
SPEAKER_03: So when they go up to a customer and they say, I need this data point, the customers are okay sharing it.
32:02
SPEAKER_03: Or if they want to get in touch with the customers, they have better, more reliable data simply because it's been a conversation, not simply a hi, thanks for coming to my website.
32:11
SPEAKER_03: Give me everything that I need to know.
32:14
SPEAKER_01: So if if I if I'm sort of asking, okay, so I'll let me phrase the question this way that uh at one point of time, uh the archetype of the salesman or the marketing person or somebody like a it might sound pejorative today, but it would be like a used colour salesman, right?
32:34
SPEAKER_01: Because they knew how to build that relationship with you, that ramp up with you within an instant, and uh and then they would make the sale and you would fall for it, right?
32:44
SPEAKER_01: And then you move to an entire section where you said, I don't know about that there is a used color salesman, I don't want to go to him and stuff like that.
32:50
SPEAKER_01: Then you've gone from an extroverted version of relationship building uh skilled marketers to an almost introverted uh set of product marketers and uh solutions experts who are more comfortable crunching data instead of really going about and understanding how my name is Neil, how my name is Swami, how are you doing, how many kids you've got, only got five, only got six.
33:14
SPEAKER_01: You're building that relationship with them, right?
33:17
SPEAKER_01: And they've instead gone back and said, Hey, have I got 565 people who logged in within the last 12 minutes on the Sunday?
33:23
SPEAKER_01: This is the engagement rate, etc.
33:25
SPEAKER_01: Right?
33:25
SPEAKER_01: So, my question is on one end of the spectrum, you have extreme authenticity to some extent, and on the other end of the extreme, you have very solid data-driven thinking skills, right?
33:37
SPEAKER_01: So, how do you actually marry these two where there is a lot of authenticity, a lot of care, a lot of concern, and a good degree of conscientiousness that is there with your ability to very objectively break down the number in a very intellectually honest way?
33:53
SPEAKER_01: Oh boy.
33:54
SPEAKER_03: So you say car salesman.
33:56
SPEAKER_03: I actually think in more modern times, I think politicians.
34:00
SPEAKER_03: So I've spent some time in our country's capital, and I remember a couple of years ago, uh I was uh I was sitting down a hallway and in walks a politician of pretty high stature, uh, who, at least from an external policy side, I disagree with in every conceivable way.
34:20
SPEAKER_03: Not somebody I would want to be aligned with, not somebody I would vote for.
34:23
SPEAKER_03: And I was surprised, he didn't know who I was.
34:25
SPEAKER_03: He actually stopped, he introduced himself, and we spoke probably for about 40, 45 seconds, and he walked away.
34:32
SPEAKER_03: And I just kind of sat there for a moment.
34:33
SPEAKER_03: I'm like, I disagree with everything that this person stands for, but he's also pretty damn cool.
34:38
SPEAKER_03: Like it was just that short of an impression.
34:40
SPEAKER_03: I realized that that's what politicians have down.
34:43
SPEAKER_03: So they have that short, I can get some, I can get a voter to love me and then leave, regardless of everything I've done in the past.
34:48
SPEAKER_03: And I'm like, that is an incredible skill.
34:51
SPEAKER_03: It's like the the salesman of the the the 1980s that could go out and just be like, Well, I don't like necessarily how you look or what you do, but you're really good at getting to know me.
35:00
SPEAKER_03: Here's some progression.
35:01
SPEAKER_03: Here's what happens.
35:02
SPEAKER_03: There are people that build these skills, and then invariably what happens is we try to figure out how do we scale them.
35:08
SPEAKER_03: So with politicians, I'm sure there's training courses.
35:11
SPEAKER_03: Here's how you do it for salesmen, here's how you sell.
35:15
SPEAKER_03: And what happens is we get a generation of people who don't necessarily need to know why those things were done or have their own intuition.
35:21
SPEAKER_03: They just know to repeat the process.
35:24
SPEAKER_03: We will call them best practices.
35:26
SPEAKER_03: Here's the best practices for collecting that customer information.
35:30
SPEAKER_03: Here's the best practice for putting that call to action together.
35:34
SPEAKER_03: And that's fine.
35:35
SPEAKER_03: And that will carry us to a certain extent, very much like transaction-based marketing has carried us to a certain extent.
35:41
SPEAKER_03: It's built huge industries, it's been successful in selling products.
35:45
SPEAKER_03: But then eventually it becomes all too familiar.
35:48
SPEAKER_03: Everybody's doing that.
35:49
SPEAKER_03: That's the same line everybody's using.
35:52
SPEAKER_03: And then the industry collectively, as we see people pull away from the pack and say, I can't do what everyone's going to do because I'll just get the average results.
36:00
SPEAKER_03: So it could be like everyone finds a perfect way to get an email address.
36:03
SPEAKER_03: Well, everybody has that data, so it's not unique.
36:05
SPEAKER_03: You have nothing you're competing on.
36:07
SPEAKER_03: And you see a small portion of firms, whether they're established companies or startups, say, we're going to start challenging that.
36:13
SPEAKER_03: We're going to start doing something differently.
36:15
SPEAKER_03: Now, when that happens, if it's better, consumers recognize that.
36:20
SPEAKER_03: And it's the same thing that happened with the car salesman approach, right?
36:23
SPEAKER_03: It may have worked before where you're like, wow, this is okay, this guy's really good at selling me this car.
36:27
SPEAKER_03: And now you move past and you say, you know, I actually prefer a little bit less pressure.
36:31
SPEAKER_03: I remember I want to get to know those people.
36:32
SPEAKER_03: That, and now all of a sudden that technique falls out of favor.
36:36
SPEAKER_03: And everyone looks back almost with a critical eye to say, I can't believe that actually worked.
36:40
SPEAKER_03: Well, it worked at that time because that was the best that we had.
36:42
SPEAKER_03: We're like, oh, that's pretty nice.
36:44
SPEAKER_03: And then we became accustomed to say, it's all a technique, it's all a guide.
36:48
SPEAKER_03: We're being played.
36:49
SPEAKER_03: And instead you say, Oh, well, look at this person, they genuinely want to get to know me.
36:53
SPEAKER_03: It could still be a guidebook.
36:55
SPEAKER_03: But that's what we're seeing is we're seeing that shift where companies are saying, look, this old way of doing business is gone.
37:00
SPEAKER_03: And in 10 years, we'll look back and we'll be like, Did we really do that?
37:04
SPEAKER_03: Is that how we used to sell online?
37:07
SPEAKER_03: Because other companies are embracing.
37:08
SPEAKER_03: And the companies that embrace these new techniques to build these relationships, they will be formidable competitors.
37:14
SPEAKER_03: And people say, Well, that's a new guide.
37:15
SPEAKER_03: And then, yes, and then in 10 years we can get together and we're going to see that next evolution of where people say, Well, this is how we're going to get even better.
37:22
SPEAKER_03: But this is the process that we're in right now, is that companies are just moving past and saying, this is the way things were done, we found a better way, and now that transition is happening.
37:32
SPEAKER_01: So this is a I think this is the perfect jumping off point to get into a discussion about CLV.
37:39
SPEAKER_01: So I think before we get into the uh nitty-gritties of what's been documented in your book.
37:46
SPEAKER_01: So just for our listeners, can you give us an overview on what is CLV and why is it such a powerful and relevant metric uh in its own way uh in today's world?
37:57
SPEAKER_03: I I look at CLV.
37:58
SPEAKER_03: I'm gonna continue with the relationship thing until it's absolutely destroyed and we never want to talk about it again.
38:04
SPEAKER_03: It's like everybody has in their in their life somebody, it's it's it's usually an older relative.
38:11
SPEAKER_03: You know, for me was my grandmother.
38:12
SPEAKER_03: I think it was the same for my wife.
38:14
SPEAKER_03: Or someone can kind of look at somebody and size them up and say, Well, they're gonna be good for you, or or they're gonna be terrible.
38:21
SPEAKER_03: That that's what CLV is to a company.
38:23
SPEAKER_03: It's it's a metric that can look at a customer and say, I think they're gonna be really good for you, or I think this is someone that's probably gonna hold you back.
38:32
SPEAKER_03: What it's gonna do is it's going to predict at an individual customer basis what type of value that customer is gonna contribute.
38:38
SPEAKER_03: That's all it does.
38:39
SPEAKER_03: It's not an average to say, if you meet a thousand people, this is where they're gonna fit, you're gonna have some good friendships.
38:45
SPEAKER_03: It's saying these people are going to be more valuable than those people.
38:49
SPEAKER_03: It gives you something to pay attention to.
38:50
SPEAKER_03: It tells you very much like you have friends and family members, the the close people in your life that are going to be meaningful, contribute a lot that you could not see yourself living without.
39:00
SPEAKER_03: And there are people like the the the the driver who brought you home from the airport, who it's like, all right, well, we had a good conversation, but I'm never going to see you again.
39:07
SPEAKER_03: Having that understanding is key to businesses because it allows you to decide who you want to listen to, where you want to devote resources, where you're going to see the greatest growth.
39:17
SPEAKER_03: And it's simply a way just to focus instead of just saying how many customers I have, this volume, to just say what's the quality of the relationships I have with each person.
39:26
SPEAKER_02: So uh one of the questions uh that I have for you, uh Neil, is that uh it's always great to measure CLV in a product where you have a lot of repeat buying, right?
39:38
SPEAKER_02: So uh it could be a hotel or it could be your uh you know, subscription businesses where you know the ability to really measure lifetime value is uh something that you could look at, or even a bank or a financial services business.
39:53
SPEAKER_02: Uh, but a lot of marketing budgets are with CPG companies, right?
39:59
SPEAKER_02: Uh, which is really, you know, I'm buying a soap and I'm buying a shampoo and I'm buying uh you know cosmetics and uh literally uh you know the fact that there is uh you know I would call it uh uh you know uh you know what do I call it?
40:17
SPEAKER_02: I call it there is fickle loyalty, right?
40:19
SPEAKER_02: Because I I really uh love the other uh you know new uh you know concussion that has been done, so I switch at the supermarket or whatever, or at Amazon or whatever.
40:30
SPEAKER_02: So now the challenge to calculate CLV for a company of that nature where I'm deploying a lot of budgets, but I really don't know my customers, uh, versus a financial services company which probably does CLB, but we'll come back to the deployment strategy issue that you talk about in the book.
40:49
SPEAKER_02: Uh, how do you how do they, you know, really the CPG companies, how should they look at CLV uh given the fact that they've probably not done it in the last you know 100 years, right?
41:02
SPEAKER_03: It it's a challenge.
41:03
SPEAKER_03: Uh you're right.
41:04
SPEAKER_03: Repeat buying rate is some companies will have an easier time than others.
41:09
SPEAKER_03: Large established firms with years of data are going to have an easier time than a startup.
41:14
SPEAKER_03: A company that's selling a retail product that people are buying every couple of months versus, say, a furniture store that may see their customers every three to five years, everyone's going to have a different scale, a different ideal.
41:26
SPEAKER_03: The the focus on CLV is to say this is the end point.
41:30
SPEAKER_03: This is where you want a company to end up.
41:33
SPEAKER_03: Now that's not to say that all companies are ready to get there right away.
41:36
SPEAKER_03: That startup may need several years of data before they have a good handle on what that lifetime value is.
41:41
SPEAKER_03: A CPG company may not get all the data from the retailers.
41:45
SPEAKER_03: But the question should still be important.
41:47
SPEAKER_03: Who are your more and most valuable people for your customers?
41:51
SPEAKER_03: They do have that separation.
41:52
SPEAKER_03: Every time we look at the data, we see that to that point, there are some people that are loyalists.
41:56
SPEAKER_03: They're not going anywhere.
41:58
SPEAKER_03: And maybe if you're not using CLV, are there any metrics that can help you on that journey to get closer, to use that data as opposed to just simply treating all people as being equal?
42:08
SPEAKER_03: We know all people aren't equal.
42:09
SPEAKER_03: We accept that right away.
42:10
SPEAKER_03: Some people are just, well, whatever product you give to me, whatever product's a lowest price, I'll buy.
42:15
SPEAKER_03: We know those people exist.
42:16
SPEAKER_03: We know the loyalists exist.
42:18
SPEAKER_03: CLV is the ideal as to where we want to get to.
42:20
SPEAKER_03: But it's not dogmatic.
42:22
SPEAKER_03: It's simply posing that question to say that's where we want to end up.
42:25
SPEAKER_03: So if that data is available, if you have the opportunity to capture that from a retailer, yes, do it.
42:30
SPEAKER_03: But if not, don't feel bad.
42:32
SPEAKER_03: Just work with the data that you have.
42:34
SPEAKER_02: So uh so if there's an alternative that you, you know, having worked with uh large CPG firms, having done fundamental academic research, uh if CLV is something that uh a CPG company cannot do, uh how do you how do we really approach uh the alternative to a CLV measurement in a digital world?
42:57
SPEAKER_03: Right now, I I have seen probably more strategies than I can count.
43:02
SPEAKER_03: And I'm always intrigued by it because these companies are saying, well, we need to get there.
43:06
SPEAKER_03: What can we do to get closer?
43:07
SPEAKER_03: And I'll give you an example.
43:09
SPEAKER_03: I actually worked with uh several years ago with an appliance company.
43:13
SPEAKER_03: This appliance company was like, we're going direct to consumer.
43:17
SPEAKER_03: I was like, how does this work?
43:18
SPEAKER_03: And they're like, well, it's gonna be low volume, one to two percent of our volume.
43:22
SPEAKER_03: And I was like, and you're gonna pay a lot for shipping costs besides using regular retailers.
43:27
SPEAKER_03: And they're like, yes.
43:28
SPEAKER_03: And they're like, but our goal is to have that customer conversation, to capture that data, to at least start to get closer to lifetime value than what we currently have, which is nothing.
43:39
SPEAKER_03: We just have volume, number of units sold.
43:41
SPEAKER_03: We need to bridge that gap.
43:43
SPEAKER_03: Others do it simply at the point of sale, where they say, look, you're gonna buy your product from whoever you buy your product.
43:48
SPEAKER_03: We're going to try to give you an invest in more incentives to get you to come to our website and log in.
43:54
SPEAKER_03: I said, Well, wait a minute.
43:55
SPEAKER_03: I said, Who buys a CPG product?
43:58
SPEAKER_03: And we see this all the time, right?
44:00
SPEAKER_03: Come to our website.
44:01
SPEAKER_03: And I am surprised, first of all, at the millions of people that write reviews on CPG products that actually engage with CPG brands.
44:08
SPEAKER_03: But on their side, they said, this is what ups the value for us.
44:12
SPEAKER_03: Because of how valuable this customer information is and how core it is to our business.
44:16
SPEAKER_03: That gives us more of a business case to raise the incentives until where we have that value.
44:21
SPEAKER_03: They'll say, if you looked at a product and you said, I'm not going to this website, they said, we're looking exactly at you.
44:27
SPEAKER_03: What do we have to give you to build that relationship to get you to engage?
44:32
SPEAKER_03: And right there we see two different business models.
44:34
SPEAKER_03: One company saying, we're going to start moving a portion of our volume directly to consumers where we can manage it, even though it will be expensive.
44:41
SPEAKER_03: Other cases, we want to find the right incentives to get people to engage with our products.
44:46
SPEAKER_03: We also see some companies saying, look, when we're negotiating with our retail partners, we're going to be more aggressive, not necessarily on price or on shelf placement, but the data that we need to understand who's buying our products because the future of our business depends on it.
45:03
SPEAKER_03: So, yes, when you look at the historical model, there's not a lot of data.
45:06
SPEAKER_03: There's volume-based data.
45:08
SPEAKER_03: But a lot of these companies are saying, look, if we want to compete, not only for our customers' business, but we also want to fend off a lot of these D2C startups that are carving out their own categories, whether it's toothbrushes and toothpaste or razor blades, we need to have that same type of data.
45:22
SPEAKER_03: And it's either we're going to buy those people that have the data or we're going to start investing in initiatives that can collect it ourselves.
45:30
SPEAKER_01: Which uh which sort of uh brings me to a very specific part in the book, which I personally enjoyed a lot, which is those little citations that you gave at the bottom of the uh page where you were referencing specific studies and specific surveys and stuff like that.
45:48
SPEAKER_01: Uh and um you made multiple references to engaging with academia, and towards the final section of the book, you talk about standing on the shoulders of giants where you were talking about the work that's being done by Peter Fader, etc., etc., right?
46:03
SPEAKER_01: At all and all.
46:04
SPEAKER_01: Uh so my question is uh being in this uh line of professional activity, uh, how might someone leverage the incredible amount of insights which are being generated by institutions and academic uh research units and sort of really apply them uh into everyday business?
46:24
SPEAKER_03: So uh more than a decade ago, I'm afraid to say, when I was uh leaving UCLA for my master's, I went to a lot of my former professors and I just said, okay, done being a student for now.
46:36
SPEAKER_03: I said, I'm going out into the real world.
46:38
SPEAKER_03: One more lesson.
46:39
SPEAKER_03: What do I need to know?
46:41
SPEAKER_03: Some of the best advice that I received.
46:42
SPEAKER_03: In fact, one of them said, if you're ever doing market research, start with the second page of Google.
46:49
SPEAKER_03: I said, Well, that's strange.
46:50
SPEAKER_03: Why would I turn down the best results?
46:52
SPEAKER_03: Say, no, no, no, it's not that you're turning down the best results.
46:54
SPEAKER_03: It's that every person in your market, when they're searching for a data point, they're going to use that first page.
47:00
SPEAKER_03: How big is the mobile market in going to be in 2025?
47:04
SPEAKER_03: Whatever Google says, they're like, ah, got it.
47:07
SPEAKER_03: They said, if you want to use all that assumption, by all means, use a first page.
47:10
SPEAKER_03: But they say start going to the second and third pages to look for alternate data, alternate points of view, alternate predictions.
47:16
SPEAKER_03: So that way your world is more robust.
47:18
SPEAKER_03: A second piece of advice was they said, read academic literature.
47:22
SPEAKER_03: So that's strange.
47:23
SPEAKER_03: Like, if you read any, I'm like, no, I've been here for two years.
47:25
SPEAKER_03: I haven't picked up a single paper.
47:27
SPEAKER_03: A lot of case studies haven't.
47:28
SPEAKER_03: And because I'm not the audience for it, right?
47:31
SPEAKER_03: You read the stuff and you're like, what are you what are you talking about?
47:35
SPEAKER_03: You can get the abstract and the conclusion, but you look at the math in the middle and you're like, I have no idea.
47:40
SPEAKER_03: And that was exactly the professor's point was that because it's not meant for me, because it's not written for me, I'm likely to ignore it.
47:49
SPEAKER_03: And so that's what the business community does at large, is that you have some of the most brilliant academics in the world who are studying these concepts around customer behavior, CRM, customer lifetime value.
48:01
SPEAKER_03: And their papers sadly are ignored because we pick it up and we say, this is not for me.
48:05
SPEAKER_03: This is my not written for me.
48:08
SPEAKER_03: But if you can overcome that, what you have is you have access to an insight that was arguably better researched than most of the stuff we see coming out of corporations nowadays, especially most of the stuff we see on social media.
48:21
SPEAKER_03: So you have really great research that was published, peer-reviewed, and is worth a shot to implement.
48:29
SPEAKER_03: And it's all just sitting there.
48:30
SPEAKER_03: Most of the the lag time in my experience, from something that is published to when it's actually implemented in a company, is five to six years.
48:38
SPEAKER_03: And someone like Malcolm Gladwell has to write a book about it.
48:41
SPEAKER_03: And then people find, ah, I get I should do this now.
48:44
SPEAKER_03: And I even say that's a good approach.
48:47
SPEAKER_03: So generally, where a lot of my work starts is to say, let's see what's already been done.
48:51
SPEAKER_03: A team of brilliant professors spend three years researching a problem.
48:55
SPEAKER_03: I am not going to be able to replicate that level of rigor in my own work.
48:59
SPEAKER_03: If any of Google's leadership gives me three years to study one single problem, I'd be impressed if a business world moves too quickly.
49:07
SPEAKER_03: But these insights just sit there and nobody uses them.
49:09
SPEAKER_03: And so the first thing we recognize is to say for the business leaders, the marketers of tomorrow, they have to tap into this resource that quote standing on the shoulders of giants.
49:19
SPEAKER_03: You have to take advantage of what's already been out there and even more importantly, what's being ignored by most other marketers.
49:26
SPEAKER_03: You learn something different, something that's already been proven.
49:30
SPEAKER_03: And then the other part, and this is what I tried to get to in the book, is that you owe it to yourself, to your organization, to make that information accessible to other people.
49:40
SPEAKER_03: This is why I included those types of insights in the book.
49:43
SPEAKER_03: You're not reading the book and saying, oh, well, here Neil goes talking about an act abstract.
49:48
SPEAKER_03: You miss that.
49:49
SPEAKER_03: It blends with the story to show the reader that it can be done.
49:52
SPEAKER_03: Sure, there's data and there's research behind it, but we need to learn how to tell those stories to other people in our organizations so that they can share in the benefits of that knowledge.
50:02
SPEAKER_03: But your role, and this is a challenge for the reader, is to start to say, challenge yourself to read these types of insights, what's already out there, and think about how they could apply to your business.
50:12
SPEAKER_03: Some of the best research, it's just sitting out there and nobody does anything with it.
50:16
SPEAKER_03: I'm just surprised by it.
50:17
SPEAKER_03: And hopefully through the book, when they see that, be like, wow, this research is out there.
50:22
SPEAKER_03: Somebody proved this, and they proved it six years ago, and we still haven't done it.
50:27
SPEAKER_03: Now, uh, for the listeners out there, you may be like, Well, what is one of those insights?
50:31
SPEAKER_03: Uh, just something that they found, and this was a study several years ago, I think it was about five years ago, uh, Stanford University.
50:38
SPEAKER_03: Some professors found that adding the first name of the email recipient in the subject line of the message.
50:45
SPEAKER_03: Uh so if you're sending out an email campaign saying, hi, Neil, and putting that in the subject line, personalizing it that way, uh simply having the first name in the subject line significantly increases, and we're talking almost 30%, the open rate of that email.
51:00
SPEAKER_03: It significantly increases the click-through rate of the email, and it significantly decreases the likelihood that that person will unsubscribe in a published paper just for adding a first name to a subject line.
51:14
SPEAKER_03: Now I want you to think next time you open your inbox, how many companies actually use that insight?
51:21
SPEAKER_03: And you should be frustrated if you see people sending you messages to say they know my name and they're not using it.
51:26
SPEAKER_03: You should be frustrated if your company is marketing to people and not personalizing in that way because the evidence supports that it leads to better results.
51:33
SPEAKER_03: And that's the disconnect between the academic insights and people applying it.
51:38
SPEAKER_03: Most people have never heard of that paper until they either read the book or they listen to us talking and they're like, oh, that's what the research says.
51:46
SPEAKER_03: Yes, it does.
51:47
SPEAKER_03: Go do it.
51:49
SPEAKER_01: Which is it's it's absolutely amazing that you're raising this because I was listening uh to Andrew Wing's talk.
51:56
SPEAKER_01: He was giving a talk at the uh ACM Turing conference, uh, and he for advice on how to break into machine learning and uh the AI community.
52:06
SPEAKER_01: And one of the pieces of advice that he actually gave listeners was an example from his own life, where he said that I make it a point to read three papers every week.
52:16
SPEAKER_01: And this is a guy who founded and was running Cobra 7 at that point, and he's still saying that, hey man, I have to be absolutely I need to know what is happening in the field to actually uh implement what's actually uh cutting edge and up to date in my own business.
52:30
SPEAKER_01: So, which actually ties to your point.
52:32
SPEAKER_01: And as a follow-up, absolutely, and as a follow-up, I would like to know can you name a couple of papers that really influence the way that you actually think about how you conduct life or how you actually are uh implementing and becoming more productive in your business?
52:45
SPEAKER_01: So, can you talk a little bit about a few of those papers?
52:47
SPEAKER_03: Oh boy.
52:48
SPEAKER_03: So I'll tell you a lot of my work revolves around people in the customer analytics space.
52:53
SPEAKER_03: So uh as mentioned in the book, uh Peter Fader, Bruce Hardy, Dan McCarthy, Eric Bradlow, Ava Scarza, I'm sure we can put a link to all these people.
53:01
SPEAKER_03: They they publish some of the best papers in my world.
53:05
SPEAKER_03: What I like to do, and they're all connected.
53:07
SPEAKER_03: Dan, for instance, uh is over at Emory.
53:09
SPEAKER_03: Uh, he's working on how customer lifetime value intersects with the finance function of a business.
53:14
SPEAKER_03: So getting outside of marketing.
53:16
SPEAKER_03: But he started as a marketing student under Peter Fader.
53:19
SPEAKER_03: So they all share the same methodology, the same tools.
53:22
SPEAKER_03: Uh, they publish things together.
53:23
SPEAKER_03: So that's that's my little bubble.
53:25
SPEAKER_03: Where I extend outside of that is really anything that I can find about how human beings behave and respond.
53:32
SPEAKER_03: So if you're looking for starting points, uh journal of consumer psychology, uh, that I love.
53:40
SPEAKER_03: And just understanding how people connect and behave.
53:43
SPEAKER_03: So uh how they're interacting when they have multiple devices on at the same time, uh, how people behave based on look at just product positioning, whether you have pictures on the left side or the right side.
53:55
SPEAKER_03: If you have people looking directly, like when you use stock photography, should the person be looking at the consumer or should they be looking off to the side in an advertisement?
54:06
SPEAKER_03: As many of those insights as possible because the cumulative effect, the same thing that you're mentioning with someone reading three uh of these articles each week, that cumulative effect just gives you a better understanding as to how the world is behaving.
54:18
SPEAKER_03: One of my favorite ones, and this just repeatedly comes up because it's so it's so brilliant, and it's been proven, I think, in a half dozen, maybe a dozen papers, is simply how we ask survey questions.
54:30
SPEAKER_03: Which is strange because a lot of people think about surveys and they think, oh, okay, well, how was your experience with us?
54:36
SPEAKER_03: What could we do better?
54:37
SPEAKER_03: They want to collect that data, right?
54:39
SPEAKER_03: They probably have somewhere, if they're lucky, a dashboard that says people like our experience, it goes up or down.
54:45
SPEAKER_03: And I was surprised to find out that surveys themselves can be a method for guiding behavior.
54:52
SPEAKER_03: So not just data collection, how they're used for, but what if you thought about a survey as influencing consumer behavior?
55:00
SPEAKER_03: How does that work?
55:02
SPEAKER_03: Well, when you ask somebody a question, you make an idea in their mind salient.
55:08
SPEAKER_03: So if I ask you, well, what do you what do you think what do you think about my VC setup?
55:11
SPEAKER_03: Well, you're gonna look and you'll be like, well, you got a lot of books on your shelf.
55:15
SPEAKER_03: I don't like some of those books.
55:17
SPEAKER_03: But you're paying attention to it because I brought it up.
55:19
SPEAKER_03: If you're consumers and you say, What can we do better?
55:21
SPEAKER_03: They start thinking to be like, well, where are all the areas I was disappointed?
55:25
SPEAKER_03: So carrying with that, the hypothesis was, what if we ask consumers what they loved?
55:31
SPEAKER_03: So you bought a product from us, what do you love most about your product?
55:33
SPEAKER_03: It sounds kind of boastful, right?
55:35
SPEAKER_03: And we start to think from a data science side, I'm not gonna learn anything from that.
55:39
SPEAKER_03: I'm doing that stuff right.
55:40
SPEAKER_03: Tell me where I can improve.
55:42
SPEAKER_03: But it turns out in the same spirit, asking somebody about what they enjoyed makes those memories salient.
55:49
SPEAKER_03: And on the retail side, what they proved, uh, what they proved out was that it actually increases lifetime value by about 7% simply by asking somebody what they enjoyed about buying products from you.
56:01
SPEAKER_03: In a B2B setting where somebody had a trial product, they asked people halfway through that free trial, that 60-day trial, how's the trial going?
56:09
SPEAKER_03: What do you love most about this product?
56:11
SPEAKER_03: And they found out that people that were asked that question, they saw a 30% improvement in people that went on to buy the full version when their trial was completed.
56:21
SPEAKER_03: Even in financial services, the most boring of it all, they asked people these questions what do you like about your bank?
56:26
SPEAKER_03: And they watched these people over the next year.
56:30
SPEAKER_03: So I think it was 12 or 18 months later, they looked at those people and they found out that those people that received just that individual question were using more products and services, had higher deposit balances in the bank, and reported greater levels of customer satisfaction.
56:47
SPEAKER_03: And what you start to take away not only is the power of that research, because research is sitting out there, and if you haven't read it, this research was published more than a decade ago and been validated by subsequent studies.
56:58
SPEAKER_03: But it also gives you the sense to say how every interaction with your customers has the ability to change and influence their behavior later on.
57:07
SPEAKER_03: So something that we think as soulless as a survey, data collection, capturing another data point can change the relationship to be better.
57:18
SPEAKER_03: And so now you think how many interactions do you have with your customers from the surveys to those ridiculous net promoter score surveys people send out an email to the checkout pages on your website?
57:29
SPEAKER_03: Every moment, every form that you have is an ability not simply to collect data, but to change their behavior, their perception.
57:36
SPEAKER_03: If you're asking for information, how do you phrase it?
57:39
SPEAKER_03: If you're asking for, by the way, one of the more recent studies that I came across, asking people for questions during the checkout process, bad, slows down the checkout process, abandonment.
57:50
SPEAKER_03: But asking people for more information after the checkout, after the purchase is confirmed, is starting to emerge as an ideal time because that's where trust is going to be the highest.
58:02
SPEAKER_03: They already gave you money.
58:04
SPEAKER_03: I better trust you because I need this product from you.
58:06
SPEAKER_03: They found out that's the best time to ask more questions, not when they're signing up for an account, not when they're trying to buy their product, but immediately after.
58:14
SPEAKER_03: Again, moments that we wouldn't have thought of, we wouldn't have customized, just a little bit more focus because of what's happening in academia.
58:21
SPEAKER_02: So given this uh, you know, deep rigor that you talk about, uh, where literally you're talking about fusion of academic research with various conversations and measurement metrics that uh you know that can be used?
58:38
SPEAKER_02: How do you build that thinking within your team and how do you cross-pollinate it in a company like uh Google, which is huge and you know, it's not easy for uh product managers and engineers who largely are very rational.
58:54
SPEAKER_02: Uh, so how do you really uh you know uh get this uh you know momentum or uh you know thinking going?
59:02
SPEAKER_03: The easiest way is you need to learn how to tell a good story.
59:06
SPEAKER_03: That's the easiest way.
59:07
SPEAKER_03: And here's the case: if I take that paper, that let's take that email one that I mentioned.
59:14
SPEAKER_03: If I send that email out and I say, here's some great research from Stanford about personalizing our email marketing campaigns, what's gonna happen?
59:22
SPEAKER_03: Someone's gonna look at it and be like, okay, here's 30 pages, another email in my inbox, maybe I'll get to it.
59:30
SPEAKER_03: Distill it down.
59:32
SPEAKER_03: Hey, did you know some professors at Stanford found out that if we add a first name to our email addresses, uh our open rates will go up by 30%?
59:39
SPEAKER_03: We'll see 20% fewer uh unsubscribes.
59:44
SPEAKER_03: Now all of a sudden that's a point.
59:45
SPEAKER_03: Now there's data behind it, and if they want to go into the data, but now they can't forget that, as long as there's credibility in the storyteller.
59:52
SPEAKER_03: And that I think is the role when we look at marketing leaders is to say, how do we get people to pay attention?
59:58
SPEAKER_03: And it's surprising because when you think about this, this is supposed to be our job.
1:00:02
SPEAKER_03: Our job is supposed to be how do we take a complicated product or a tool and sell it to consumers?
1:00:09
SPEAKER_03: And now we're just doing the opposite.
1:00:10
SPEAKER_03: How do we take a complex complicated research project or data set and sell it to internal stakeholders?
1:00:16
SPEAKER_03: And if I can't get that done, I'm not gonna be a great marketer externally if I can't sell internally, if I can't build that trust, build that compelling story, and get people just to naturally remember what I'm bringing in front of them.
1:00:27
SPEAKER_03: If they forget my research, if I bring up and say, oh, and uh, if we do X and Y, then we'll see better performance.
1:00:34
SPEAKER_03: Yeah, all right, great.
1:00:35
SPEAKER_03: And they write it off.
1:00:37
SPEAKER_03: How am I gonna convince myself that somebody that sees a display at online is gonna remember my brand?
1:00:42
SPEAKER_03: It's like, oh, I couldn't get anybody to remember anything I say internally, and they get paid to do it.
1:00:47
SPEAKER_03: I'm gonna go get some uh, you know, some unsuspecting consumer to remember.
1:00:51
SPEAKER_03: They're all one and the same.
1:00:52
SPEAKER_03: Uh it's the same skills, the same storytelling.
1:00:55
SPEAKER_03: What we're looking at here is simply different products.
1:00:58
SPEAKER_03: So unfortunately, a lot of people internally, they think their product that they're selling is a dashboard, or they think that it's a presentation that's 60 slides long.
1:01:08
SPEAKER_03: That's not what you're selling.
1:01:09
SPEAKER_03: You are selling that story.
1:01:11
SPEAKER_03: You're trying to get people to care.
1:01:13
SPEAKER_03: And that's why we see more and more companies, in fact, even more universities, investing in programs for analysts to teach them how to tell stories.
1:01:21
SPEAKER_03: To say all that data that you're collecting, all that knowledge that you have, and it's a lot, is meaningless if nobody else can share in your ideas or share in those stories.
1:01:32
SPEAKER_02: So, uh, how do you build this uh, you know, uh uh campfire-like environment uh uh, you know, in your own day-to-day role that you do?
1:01:42
SPEAKER_02: Because uh these campfire uh, you know, uh environments are where people learn, right?
1:01:47
SPEAKER_02: So, therefore, uh how do you do that and how often do you do that?
1:01:51
SPEAKER_02: And what would you recommend uh for companies to uh you know start to uh you know kick off this process?
1:01:59
SPEAKER_03: You know, it reminds me of something we were talking about, this this transition when we were talking about the used car salesman.
1:02:05
SPEAKER_03: I said, look, that strategy worked for a time.
1:02:08
SPEAKER_03: Now customers expect more.
1:02:10
SPEAKER_03: They expect a different type of approach.
1:02:12
SPEAKER_03: The same thing I think is happening with internal storytelling.
1:02:16
SPEAKER_03: There was a time where companies consolidated around this is how you tell a story.
1:02:20
SPEAKER_03: And you saw an entire industry of executive coaches, presentation coaches be built around it to say, all right, title slide, agenda, executive summary, right?
1:02:31
SPEAKER_03: Everybody knows what's coming, right?
1:02:34
SPEAKER_03: But it's also boring.
1:02:35
SPEAKER_03: You want something different.
1:02:37
SPEAKER_03: And that's where I think the storytellers have come in, is they said, look, this is what people expect.
1:02:41
SPEAKER_03: I need to give them something that's more compelling.
1:02:43
SPEAKER_03: I need to work to develop the next iteration of that.
1:02:47
SPEAKER_03: Now, where do these where do these skills get developed?
1:02:50
SPEAKER_03: Oddly enough, this is an intersection, at least you know, here in California, has been built a lot on the entertainment industry.
1:02:56
SPEAKER_03: So I see more and more companies saying, we want to go with people that are in entertainment.
1:03:00
SPEAKER_03: These are people that tell stories for a living.
1:03:03
SPEAKER_03: And no one's ever thought about fusing the entertainment quality, the quality of building plots and narratives into building presentations.
1:03:11
SPEAKER_03: Steve Jobs was masterful at this.
1:03:12
SPEAKER_03: Steve Jobs had never started and said, okay, so for our big reveal today, we're going to be talking about the new iPhone and bullet point number one.
1:03:19
SPEAKER_03: And then number two, we're going to cover price points.
1:03:21
SPEAKER_03: You were naturally engaged with those stories.
1:03:24
SPEAKER_03: And I think he did a huge job at getting people to realize what a great story looks like.
1:03:29
SPEAKER_03: And you see a lot of people replicating that style, right?
1:03:32
SPEAKER_03: Someone does something innovative, a lot of people follow it.
1:03:35
SPEAKER_03: We're part of that pattern right now.
1:03:38
SPEAKER_03: So even I'll be honest, one of the people I work with this gentleman, Mark Dannenberg, who's out of Chicago.
1:03:44
SPEAKER_03: I work with him because he's actually an actor.
1:03:47
SPEAKER_03: He has no experience in digital marketing at all, which means not only does he bring a different type of presentation, a different type of storytelling, but he's also the first one to raise his hand to be like, you're using obscure terminology, technical terminology that nobody outside your field will understand and you will lose them.
1:04:05
SPEAKER_03: And that was valuable for me because we think about hits and clicks and conversions and attribution models and throwing around machine learning.
1:04:12
SPEAKER_03: And as soon as he do that, he's the first person to raise his hand and be like, you've lost me because I have no idea what that sentence means.
1:04:19
SPEAKER_03: And so what we're looking at really here is just introducing new ideas, academic literature, typically the domain of professors and researchers, and now marketers saying, I want to start infusing what I know to tell better stories about your data.
1:04:33
SPEAKER_03: And then you see those same marketers going out and saying, and I'm going to get some people in entertainment who know how to build compelling stories and narratives and help them improve my storytelling ability.
1:04:43
SPEAKER_03: This is just the next evolution of it.
1:04:45
SPEAKER_03: But people need to be aware that it's happening.
1:04:47
SPEAKER_03: Otherwise, what happens is people expect that nice, you know, that nice narrative presentation.
1:04:54
SPEAKER_03: They expect a story that engages them.
1:04:56
SPEAKER_03: And instead they run into someone that looks like a used car salesman.
1:05:00
SPEAKER_03: And that just, and you know right away that turns it off.
1:05:02
SPEAKER_03: That is not the way that we sell.
1:05:04
SPEAKER_03: That's not the way we tell stories.
1:05:06
SPEAKER_02: Which is really what I call as death by PowerPoint.
1:05:10
SPEAKER_03: Exactly.
1:05:10
SPEAKER_03: There was a time I'm sure PowerPoint was great.
1:05:13
SPEAKER_03: Remember, we had those transparency slides that people would put down, or like, you know, they have someone with like the slide next slide click, or they'd write something, or they'd have a sheet of paper and we're like, wow, PowerPoint, that is amazing.
1:05:22
SPEAKER_03: And that was a great evolution.
1:05:24
SPEAKER_03: And then everyone replicated PowerPoint.
1:05:26
SPEAKER_03: And I'm like, no, we need to tell stories.
1:05:29
SPEAKER_03: Otherwise, people are just tuning out.
1:05:30
SPEAKER_03: There's way too much out there.
1:05:32
SPEAKER_01: Just to just as a natural continuation of this discussion, uh, towards the end of the book, uh, you laid out uh six archetypes that uh I'd like you to talk about because I think it'll be very powerful to our listeners uh as you know, models and for someone else to actually assess and analyze and uh judge and invest in people, uh, which is uh you talk about the detract the detractors and the different.
1:06:00
SPEAKER_01: Makers.
1:06:00
SPEAKER_01: So can you give a little short overview on that?
1:06:04
SPEAKER_03: I'll give you in the same spirit we've been talking about, there's some profiles of people who I would argue are less valuable than others.
1:06:12
SPEAKER_03: And that's really what those profiles come into.
1:06:14
SPEAKER_03: It's not about building a perfect team.
1:06:16
SPEAKER_03: It's not saying these are the the absolute people you need.
1:06:19
SPEAKER_03: It's just to say, for instance, there's some people still that push that we spoke about earlier on efficiency.
1:06:25
SPEAKER_03: There are some people in the organization that are overly focused on that.
1:06:28
SPEAKER_03: And again, you don't need to get rid of those people.
1:06:30
SPEAKER_03: That's not the argument in the book.
1:06:32
SPEAKER_03: But the argument is you need to be aware that these archetypes exist, that these profiles exist.
1:06:37
SPEAKER_03: And you need to make sure that you do the most you can with those people, but they should no longer drive your organization because they will limit you.
1:06:44
SPEAKER_03: The same thing on the research side.
1:06:46
SPEAKER_03: There are some brilliant researchers I work with, but the level of rigor that they want, they want to study problems for years.
1:06:53
SPEAKER_03: They want rigorous conditions that are not going to be sustainable in the real world, especially during this time of this nasty pandemic where things seem to be changing every week.
1:07:03
SPEAKER_03: You have some people to say, well, I'll run a test, but that test will take me eight months.
1:07:07
SPEAKER_03: I have no idea what I'm going to do be doing in eight months.
1:07:09
SPEAKER_03: How does that merge with the reality of my business?
1:07:12
SPEAKER_03: And again, these people have value, and we talk about that in the book.
1:07:15
SPEAKER_03: It's just you need to be aware that these types of people may be more of a liability going forward than they were in the past.
1:07:22
SPEAKER_03: At the same time, there's different people that you need to bring into your organization, people with specific skills that, at least from my experience, are particularly helpful.
1:07:32
SPEAKER_03: Now it seems almost at the end, I'll share with the listeners here, there's a plug for specific people who have worked under some of these professors that I mentioned.
1:07:43
SPEAKER_03: But they have been wonderful.
1:07:44
SPEAKER_03: And in fact, we we often will look for them when we're trying to hire into these roles.
1:07:48
SPEAKER_03: But people that already have a background in understanding these areas of customer analytics that we've been discussing, or at least that learn them in academia at schools like Wharton, at schools like Emery, those are great because those are students that already understand the mindset of where marketing is going.
1:08:03
SPEAKER_03: They don't need to be taught the models.
1:08:05
SPEAKER_03: They don't need to be retrained.
1:08:06
SPEAKER_03: They don't need to throw out all those transaction-based ideas.
1:08:10
SPEAKER_03: They come out of school with those ideas in mind.
1:08:13
SPEAKER_03: And again, it's put in there not necessarily to say to companies, just uh that I want to create just a hiring frenzy around these people, as much as it is encouragement to invest in people to learn the skills that are going to be necessary for tomorrow.
1:08:26
SPEAKER_03: So we always talk about job training and retraining people.
1:08:29
SPEAKER_03: This is kind of that nudge to say these are the skills that are going to sustain modern marketers.
1:08:33
SPEAKER_03: And so there's that, there's four of those archetypes that are really saying these are people just to be careful about, to be mindful about, uh, and that you may want to move away from in the future.
1:08:42
SPEAKER_03: And then there's four to say, if I had to, these would be the people that I would lean towards because you're going to see an outsized benefit from these people, not infinitely, but just in the times that we're going into and the transitions that marketing is seeing today.
1:08:56
SPEAKER_02: The other uh area you talk about uh, which I think is very, very important for marketing, uh uh is this whole concept of the testing culture, right?
1:09:07
SPEAKER_02: Which is uh marketing inherently is biased.
1:09:11
SPEAKER_02: So uh, you know, they don't tend to uh, you know, uh test a lot.
1:09:16
SPEAKER_02: And you talk about this big point on uh a marketing-wide testing culture uh and all the processes.
1:09:24
SPEAKER_02: Uh can you throw some light on that?
1:09:27
SPEAKER_03: Uh easiest way that I try to position it is that testing, experimentation, that's your research and development division.
1:09:36
SPEAKER_03: That's what's going to fuel your future growth.
1:09:38
SPEAKER_03: But it's not research and development for the products you're going to build or some new scientific innovation.
1:09:44
SPEAKER_03: It's research and development to understand what's working with your customers, which means that it's meant to be bold.
1:09:51
SPEAKER_03: It's meant to be risky, it's meant to explore.
1:09:54
SPEAKER_03: And it also means that the metrics that you should look at testing are not defined by immediate sales, but by applicable insights.
1:10:02
SPEAKER_03: Did you learn something else that's going to strengthen your campaigns?
1:10:05
SPEAKER_03: How your customers are responding, what they're likely to do next, what they want from your brand, not whether it's sold more or less products.
1:10:12
SPEAKER_03: And if you invest that money in a safer channel.
1:10:32
SPEAKER_03: It sounds like an obvious case, but I still just felt the need to call that out to say, unless companies can get to those cultures that support it and that support taking those risks and trying new things and understanding the intricacies of running these tests, there's going to be limits in terms of their growth.
1:10:47
SPEAKER_03: Their growth would be limited how long their current strategy can carry them forward.
1:10:52
SPEAKER_01: Yeah.
1:10:52
SPEAKER_01: So as a product manager, a lot of my life is dependent on metrics.
1:10:58
SPEAKER_01: So when I was looking at the book and the comments that were being made, uh one of uh one there was there was a book that uh the philosopher Nietzsche wrote back in the day.
1:11:10
SPEAKER_01: Uh, a very small and obscure book.
1:11:11
SPEAKER_01: It's called uh On the Use and Abuse of History for Life.
1:11:15
SPEAKER_01: Right.
1:11:16
SPEAKER_01: And when I saw that entire metric section, I was like that entire section on metrics, and I was like, oh my god, this is on the uses and abuses of metrics for life.
1:11:24
SPEAKER_01: Because you were actually talking about the way that you know people are gaming how metrics which are supposed to define what is the positive direction that uh a product should be uh or a business should be running, and they end up gaming it for personal gains and stuff like that, and not for the proper purposes for which they were set up.
1:11:46
SPEAKER_01: So, can you talk a little bit about why that sort of culture persists?
1:11:50
SPEAKER_03: Whenever you hear a company mention that a data is a sort of a particular data set and application is a source of truth, that should be a red flag.
1:11:59
SPEAKER_03: Data, data is rarely absolute.
1:12:02
SPEAKER_03: We're not we're marketers, we're not physical scientists, right?
1:12:06
SPEAKER_03: There's not like okay, I can I can measure and I can understand gravity, and there's equations that I can apply almost anywhere in the universe.
1:12:13
SPEAKER_03: Shit, I'll be lucky if I can change if uh anything in marketing is predictable five years from now.
1:12:18
SPEAKER_03: It changes that quickly.
1:12:20
SPEAKER_03: Because we realize that, we realize that data itself and these metrics are imperfect.
1:12:24
SPEAKER_03: They're subject not only to the biases as to how we collect it, but the biases is to how we use it.
1:12:29
SPEAKER_03: If you tell me to optimize a particular metric, let's go back, I had that example with social media followers.
1:12:36
SPEAKER_03: If my goal is to optimize that metric based on how it's captured, I'm not going to try to measure the truth in the metric, right?
1:12:43
SPEAKER_03: How many of these are unique people?
1:12:44
SPEAKER_03: I'm going to say, if this is what I'm measured on and this is where I get my bonus, this is what I'm going to optimize for.
1:12:50
SPEAKER_03: If I am an affiliate program and you're telling me you're going to pay me whenever I'm the last click before somebody buys, that is a part of the funnel I will play in.
1:13:00
SPEAKER_03: If you say I'm the first click, I'll do the same.
1:13:03
SPEAKER_03: And so metrics naturally take on the form as to how we measure them into the people that are optimizing it.
1:13:07
SPEAKER_03: And there's nothing unethical about it.
1:13:09
SPEAKER_03: This is human behavior.
1:13:10
SPEAKER_03: If you tell me to improve X, I will improve X.
1:13:13
SPEAKER_03: I'm not going to consider say, well, is X actually the right metric?
1:13:16
SPEAKER_03: And how does X interact with Y?
1:13:17
SPEAKER_03: If you want me to do that, incentivize me to do that.
1:13:20
SPEAKER_03: Tell me, Neil, your job will be to find the truest form of X imaginable.
1:13:25
SPEAKER_03: Then I will do that.
1:13:26
SPEAKER_03: But if you're telling me to maximize X, then I will maximize X.
1:13:30
SPEAKER_03: And so what we look at with metrics is that when we just understand that, what we start to see is we start to see all the strange things that have happened.
1:13:38
SPEAKER_03: Some companies presented to Wall Street the total number of ad impressions they show.
1:13:43
SPEAKER_03: Now, Wall Street appreciates this because they say, ah, more ad impressions means you're selling more inventory, which means you're making more money.
1:13:51
SPEAKER_03: They weren't thinking that the particular site just kept adding more ad impression slots on their sidebar.
1:13:58
SPEAKER_03: Wanted to go up 25%?
1:14:00
SPEAKER_03: Add one more.
1:14:01
SPEAKER_03: Now, the counterbalance on that is effectiveness goes down.
1:14:04
SPEAKER_03: Consumers aren't going to click on 25% more ads.
1:14:07
SPEAKER_03: Your relationships with the people that buy those ads is going to decrease.
1:14:10
SPEAKER_03: The price they pay will decrease, and it ripples through.
1:14:13
SPEAKER_03: It's the same thing with any metric.
1:14:15
SPEAKER_03: We had one example in the book where somebody was overly optimizing because they saw customer lifetime value was tied to how much time people spent on their website.
1:14:26
SPEAKER_03: They thought that was great.
1:14:27
SPEAKER_03: You're engaging with more products and services.
1:14:29
SPEAKER_03: That means you know what we offer, you're going to be more connected with our brand.
1:14:32
SPEAKER_03: We want people to do that.
1:14:34
SPEAKER_03: And so what happened, what they weren't paying attention to, was that they deprecated, in this case, their search functionality that made it easier for people to find things.
1:14:42
SPEAKER_03: Because from the data, if you could find something quicker, the time that you spent on the site went down, which should mean lower lifetime value.
1:14:50
SPEAKER_03: Now we know that's not the case.
1:14:52
SPEAKER_03: We know a better experience.
1:14:54
SPEAKER_03: We know that's not the case because we're talking through the metric.
1:14:58
SPEAKER_03: We're talking through the data.
1:14:59
SPEAKER_03: And so the lesson really to pull out is to say that leaders in any organization need to not only understand how those metrics are calculated, but they also need to know the weaknesses of how the metrics are calculated, what's not included, what can be improved.
1:15:13
SPEAKER_03: Otherwise, you simply sit there and you say, What was our time on site?
1:15:17
SPEAKER_03: And you don't have enough information to equip yourself to say, is this really the right direction?
1:15:22
SPEAKER_03: Is there something we could improve?
1:15:23
SPEAKER_03: Again, tying this to everything we've been talking about.
1:15:26
SPEAKER_03: How many new customers did we acquire?
1:15:28
SPEAKER_03: Did you really acquire new customers, or did you acquire new email addresses because you had a coupon code?
1:15:34
SPEAKER_03: Understanding those dynamics doesn't necessarily mean that you're going to try to find honest purveyors of marketing tactics all the time, but at least you know the questions to ask.
1:15:43
SPEAKER_03: You know the blind spots you're facing.
1:15:45
SPEAKER_03: And at the end of the day, it allows you to manage that risk.
1:15:49
SPEAKER_03: We're going to launch a new feature.
1:15:51
SPEAKER_03: Our time on site is going to go down.
1:15:53
SPEAKER_03: We think it's a better experience.
1:15:55
SPEAKER_03: That is a risk we're taking.
1:15:57
SPEAKER_03: But we're taking it and we know how our metrics will change.
1:16:00
SPEAKER_03: Sadly, most companies don't do it.
1:16:02
SPEAKER_03: They simply look at the metrics and they look at the lines that result, up or down, and that's how they're managing today.
1:16:08
SPEAKER_02: Thanks.
1:16:08
SPEAKER_02: Thanks, Vignesh.
1:16:10
SPEAKER_02: Uh, so these are a set of uh, I would say, uh, you know, rapid fire rounds, as we call it, uh, you know.
1:16:16
SPEAKER_02: Uh, and uh the first question that I would uh you know ask you is uh what are the three, four things that you would recommend an 18-year-old studying at a university?
1:16:28
SPEAKER_02: Uh, you know, what should they do today?
1:16:31
SPEAKER_02: What should they learn?
1:16:33
SPEAKER_03: Uh I think at any university, the the value of universities is that they have time-tested curriculums.
1:16:38
SPEAKER_03: They're going to teach you what you need to know about accounting and marketing and business.
1:16:43
SPEAKER_03: But I encourage anybody at the university level, I say the first thing is you need to get out and understand areas outside of your core discipline.
1:16:51
SPEAKER_03: So we even spoke about you may learn in your coursework how to do a business presentation.
1:16:57
SPEAKER_03: But it's also helpful, and I've seen business leaders, I've even been through courses on improvisational comedy.
1:17:02
SPEAKER_03: And I'm not a comedian.
1:17:04
SPEAKER_03: Perhaps it's even more important that I take classes on it.
1:17:06
SPEAKER_03: But to build ancillary skills that are going to differentiate you outside your outside of your peers.
1:17:11
SPEAKER_03: Or if you assume everybody has these same skills, what does that leave you to compete with?
1:17:15
SPEAKER_03: It leaves you to compete with really those same skills to say, I'm better at mathematics than everybody else in my class, which could be hard, especially for me, or you go outside and you say, I'm going to have other skills that people don't see.
1:17:26
SPEAKER_03: In my case, I was also involved heavily in computer science while I was also learning business.
1:17:31
SPEAKER_03: Not because I was a great programmer, mind you, but because I knew how to communicate and understand the people that were programming, which is something that my peers didn't have.
1:17:40
SPEAKER_03: That's why I have more of a technical bent in my career, simply because I know how to engage with those people where others don't.
1:17:46
SPEAKER_03: And so when we talk about three to four things, I say one is look for diversity in terms of not only what you're studying at your core, but how you can look at other skills and capabilities to bring them in.
1:17:55
SPEAKER_03: And it doesn't have to be all business related.
1:17:57
SPEAKER_03: Some people, it's graphic design.
1:17:59
SPEAKER_03: So they're not only masterful at understanding marketing analytics, but they also know how to create creatives, which shortens the time for them to deploy tests.
1:18:08
SPEAKER_03: Second thing, learn wherever you can how to bring it out into the real world.
1:18:13
SPEAKER_03: So there's that disconnect where sometimes marketing case studies in particular, I think when I was in school, they were still doing technical case studies from 10 years ago.
1:18:22
SPEAKER_03: Like, wow, that product is already obsolete and we're studying about it because it takes time and there's still value in those cases, but make sure wherever possible that you do have tie-ins to the real world.
1:18:32
SPEAKER_03: Third thing, even though you have these tie-ins to the real world, be very clear or at least open to what you might learn.
1:18:40
SPEAKER_03: So oftentimes I do data science projects with students, and students come in and they actually get a little bit frustrated.
1:18:46
SPEAKER_03: They say, I'm like, well, how's the project going?
1:18:48
SPEAKER_03: And I say, well, not well.
1:18:50
SPEAKER_03: Well, why not?
1:18:51
SPEAKER_03: And they're like, well, we can't actually get to the data science stuff because there's no clear agreement on what we're trying to solve for.
1:18:57
SPEAKER_03: And they're like, can you help to fix this?
1:18:59
SPEAKER_03: Like, this is what makes a successful project.
1:19:01
SPEAKER_03: We want to do this data science.
1:19:02
SPEAKER_03: And take a step back and say, no, I said, this is the reality of the world.
1:19:06
SPEAKER_03: If you think you're going to get into an organization where everyone's going to be aligned on your objective, I was like, the reason why you're going through this project is because this is the same frustration that data scientists have.
1:19:16
SPEAKER_03: Nobody's going to come through.
1:19:17
SPEAKER_03: And if they do, it's a boring job to say, solve for this.
1:19:20
SPEAKER_03: Everybody's perfectly aligned and we're ready to take action.
1:19:23
SPEAKER_03: It doesn't happen that way.
1:19:24
SPEAKER_03: And so what you're seeing from those real worlds, and this is why I say be open to it, a lot of people, especially in marketing, get frustrated.
1:19:31
SPEAKER_03: They're saying, I'm not able to do the marketing stuff because there's disagreements and there's politics and there's bureaucracy and there's unclear objectives.
1:19:38
SPEAKER_03: Say, no, this is this is marketing.
1:19:40
SPEAKER_03: Welcome.
1:19:41
SPEAKER_03: This is business.
1:19:43
SPEAKER_03: Let's let's move back.
1:19:44
SPEAKER_03: Let's move past that.
1:19:45
SPEAKER_03: So those, those are the three that I look for is I say, look, a diversity of experiences, I say, get real-world application and then be also open to what you're learning.
1:19:55
SPEAKER_03: That it's not always the direct lessons and the direct application of marketing, as fun as that may be, and you'd be ready to be like, I can't wait to run my first test.
1:20:02
SPEAKER_03: This reality, even, you know, I work with some of the most brilliant machine learning engineers on this side.
1:20:10
SPEAKER_03: And some of them spend 80% of their time not building models, but cleaning data.
1:20:16
SPEAKER_03: And you think about how frustrating that is.
1:20:17
SPEAKER_03: You come out, you have a master's or a PhD in a quantitative field, and you're like, I'm ready to build some models.
1:20:22
SPEAKER_03: It's like, wait a minute, you mean this company didn't properly format all this data and now I have to clean several million rows before?
1:20:29
SPEAKER_03: This is not why I went to school.
1:20:31
SPEAKER_03: I should be building models.
1:20:32
SPEAKER_03: True, but this is the reality of the world.
1:20:36
SPEAKER_03: And so just being accepting of that allows you to say, look, I don't, I'm not trying to say you need to build tolerance for this.
1:20:42
SPEAKER_03: I'm saying that if you look at the problem you're being confronted with, you don't have organizational alignment on your project.
1:20:49
SPEAKER_03: The learnings are how do you build organizational alignment?
1:20:53
SPEAKER_03: How do you work through that?
1:20:54
SPEAKER_03: So when you do get that job, when you do get into the real world, how do you build that?
1:20:57
SPEAKER_03: As opposed to running away from it and saying, I want to find a company that doesn't force me to confront this challenge.
1:21:03
SPEAKER_03: Because then you're going to be looking for a role for quite a long time.
1:21:06
SPEAKER_01: Awesome.
1:21:07
SPEAKER_01: So, Neil, uh, can you tell us a few of the books that have influenced you over the years, your thinking, the way you live, etc.?
1:21:15
SPEAKER_01: I love my book.
1:21:19
SPEAKER_01: It's taken we'll put in a word on the website.
1:21:24
SPEAKER_03: It's taken me so long to write it.
1:21:26
SPEAKER_03: Um it's about a two and a half year project.
1:21:28
SPEAKER_03: Just when I actually, I mean, it's it's actually about a five-year project, but it's been so long.
1:21:32
SPEAKER_03: It's like, what's the most influential book?
1:21:33
SPEAKER_03: It's like, you probably ask my wife at this point.
1:21:35
SPEAKER_03: She'll be like, this damn book he keeps talking about because that's all he talks about.
1:21:40
SPEAKER_03: Uh outside of that, books that I particularly love, one that I mentioned in the book is Peter Fader's customer centricity playbook.
1:21:45
SPEAKER_03: He also has a precursor to that customer centricity, which I love.
1:21:49
SPEAKER_03: There's also a book by Jim Novo called Drilling Down.
1:21:53
SPEAKER_03: It's it's a rough read, but one of the reasons why I love Jim's book, first of all, is because the first couple chapters are online through his website, but because it shows the very simple application of data uh in a small business context.
1:22:06
SPEAKER_03: Now you might think I'm a large enterprise.
1:22:08
SPEAKER_03: I'm surprised that most large enterprises haven't done this type of analysis that Jim's recommending on their own customer data.
1:22:14
SPEAKER_03: And it's not overly complicated analysis, it's just brilliantly intuitive.
1:22:18
SPEAKER_03: And so I recommend those types of books.
1:22:20
SPEAKER_03: Uh separately, uh, I also enjoy this book, How to Lie Uh About Statistics, which is fantastic because when we were talking about those metrics and the questions that result from it.
1:22:31
SPEAKER_03: This book, by the way, it's a little bit dated.
1:22:33
SPEAKER_03: I think they talk about, you know, housing prices back in the 1920s.
1:22:37
SPEAKER_01: But it's wonderful because it's fantastically short, though.
1:22:40
SPEAKER_01: Oh, yeah.
1:22:41
SPEAKER_03: It is.
1:22:41
SPEAKER_03: And it allows people to know this is how I participate in the conversation.
1:22:46
SPEAKER_03: This is what I look out for, this is how numbers can be changed.
1:22:50
SPEAKER_03: And so it's not necessarily here's how to become an unethical practitioner of data, but I love the book because it's a simple thing to say: not only here's what to look out for, but you have enough skills already to participate in a data-driven conversation if you just give yourself some room to do so.
1:23:05
SPEAKER_02: Um what does the word uh successful mean to you, Neary?
1:23:10
SPEAKER_03: Success, oh boy.
1:23:13
SPEAKER_03: I'd say it's uh it's really about just helping others and building good relationships.
1:23:18
SPEAKER_03: I mean, at the end of the day, I don't want to be defined by how many data sets I run through uh or how many people I convince to buy a product.
1:23:26
SPEAKER_03: That's not it.
1:23:27
SPEAKER_03: Um, it's really how we learn collectively as people and how we share that information to help the next generation.
1:23:34
SPEAKER_03: Uh I tell people this.
1:23:35
SPEAKER_03: I am not a self-made professional.
1:23:39
SPEAKER_03: Uh everything I've learned has been at the benefit and the insights of other people.
1:23:44
SPEAKER_03: Uh and Pete Fader, he's mentioned several times in the book because we met more than a decade ago, where for no reason, except for just his approach, he's he's just a brilliant teacher, was like, I will help you learn this stuff.
1:23:55
SPEAKER_03: You're not a student of mine, you're you're a professional, but I just I want to teach you.
1:24:00
SPEAKER_03: And I've brought that to say, well, I'm happy to teach the next generation of people that come through.
1:24:04
SPEAKER_03: And when I look at that model, it just seems like a more satisfying way to go through life, to say, here's what we're learning, especially now at a time where we're connected at a greater depth at any point in human history, how much information we can share and how greatly we can accelerate the next generation to say, we've tried, we failed, these were mistakes, but these were learnings.
1:24:24
SPEAKER_03: And so I look at success.
1:24:25
SPEAKER_03: I don't think I'll ever be able to quantify it, to say these are how many people I impacted, nor would I want to, but just to say that I spent a majority of my time, you know, learning these lessons and then sharing them with the next generation to make them their own and do some more big things with.
1:24:41
SPEAKER_01: Neil, if you could invite four people for a dream dinner, who would they be and why?
1:24:47
SPEAKER_03: Four people for a dream dinner.
1:24:49
SPEAKER_03: You know, I'm not sure I'd ever have a good answer to this question.
1:24:55
SPEAKER_03: I'll tell you what I think because it's tied actually to the book.
1:24:58
SPEAKER_03: Because they asked me, oddly enough, they said, what does success look like for you in this book?
1:25:04
SPEAKER_03: Like, is it is it money?
1:25:05
SPEAKER_03: No, it's not money.
1:25:06
SPEAKER_03: We're donating all the profits from the book.
1:25:08
SPEAKER_03: Um, is it, is it, is it bestsellerless or accolades?
1:25:11
SPEAKER_03: And I said, I would be, I would be happy just hearing from somebody in a random corner of the world that I've never met before, that happened to come across this book or come across this podcast, sharing these ideas in this conversation and reach out to me.
1:25:27
SPEAKER_03: And that's what I consider to be success.
1:25:29
SPEAKER_03: Someone that I wouldn't have met physically through my day-to-day interactions, especially now that we're on quarantine in California, someone that I otherwise couldn't connect with.
1:25:36
SPEAKER_03: That I find to be the most satisfying.
1:25:38
SPEAKER_03: That's why I love the internet.
1:25:38
SPEAKER_03: You can meet these people that otherwise you wouldn't have come across.
1:25:41
SPEAKER_03: So, in terms of if I have time for a dinner, what I always find the most satisfying dinners, especially when I travel, are meeting people that I know under no other circumstances could we have possibly come together so I can share in their story.
1:25:53
SPEAKER_03: That's what I love.
1:25:54
SPEAKER_03: Like politicians and famous people, I know their story, and I may have some nuanced questions.
1:25:58
SPEAKER_03: I prefer just people that were entirely random to say, apart from this dinner, there is no chance the the three or four of us would ever have gotten together.
1:26:06
SPEAKER_03: And that that I find to be more enriching.
1:26:09
SPEAKER_02: And uh, what's the one piece of uh best advice somebody has given you, Neil?
1:26:15
SPEAKER_03: Best advice that people have given me.
1:26:19
SPEAKER_03: I would say that the what's one of the best pieces of advice is um that that I've received.
1:26:26
SPEAKER_03: I actually I'll tell you a brief story on it.
1:26:28
SPEAKER_03: I was um, you know, I was meeting with a professor's TICE, uh university students in particular, so applied them.
1:26:33
SPEAKER_03: And I was just a little bit frustrated, just in terms of careers, where I was kind of saying, what's the point of politics in different areas?
1:26:41
SPEAKER_03: Why do we have to play this game versus that game?
1:26:43
SPEAKER_03: Doesn't that seem remarkably inefficient, especially as a data guy?
1:26:46
SPEAKER_03: I was like, why should we do this?
1:26:47
SPEAKER_03: And he had an interesting approach, and he said, uh, he availed me to an idea that's called tournament theory, uh, which came out of the University of Chicago, where they were trying to understand why executives were paid so much.
1:26:59
SPEAKER_03: Like they were looking when someone gets promoted from an SVP to a CMO, does their utility really double?
1:27:06
SPEAKER_03: Well, if not, why do they double their salary?
1:27:08
SPEAKER_03: That seems irrational to a group of economists.
1:27:10
SPEAKER_03: And so they studied it.
1:27:11
SPEAKER_03: And what they found out was this idea of a tournament, which is that in this tournament model, your CMO is not going to be creating as much value as they're getting paid for.
1:27:22
SPEAKER_03: But because of the disproportionate pay, it encourages everyone underneath them who's fighting for the CMO position to work harder.
1:27:29
SPEAKER_03: And if you have 50 people who are now working disproportionately harder to get that promotion, then that utility justifies why the salary, the prize of winning the tournament has to be so high.
1:27:40
SPEAKER_03: And think about it below the SVPs, you have the VPs, you have the directors, you have the managers, you have the analysts, all looking to say the next level of the tournament, right, is what they want to win.
1:27:52
SPEAKER_03: And what his argument was was that unfortunately, a majority of people only play in the tournament that they're given.
1:28:00
SPEAKER_03: They don't explore all the possibilities of their life.
1:28:02
SPEAKER_03: They simply say, Well, if I want to get promoted, or if I want to get to this next stage of my career, this is what everybody tells me I need to learn and I need to do.
1:28:12
SPEAKER_03: And then what they do is they shut off everything.
1:28:13
SPEAKER_03: They almost become have tunnel vision around, well, what is it to get to the next step that somebody else sets for me and somebody else tells me.
1:28:21
SPEAKER_03: If I look back at my career, people say, Well, how did you get into customer analytics?
1:28:24
SPEAKER_03: How did you get into this field?
1:28:26
SPEAKER_03: The most successful moments of my career have been when I was able to break apart from that and pursue something, not because I saw how it was going to help in terms of winning any particular tournament, but because I saw that there was potential just in the field and the idea itself.
1:28:40
SPEAKER_03: And I worry all too often that students, when I talk to them, they're focused, well, how do I get a job with this company?
1:28:46
SPEAKER_03: Or how do I do this particular job?
1:28:48
SPEAKER_03: And they turn off things that are naturally interesting to them, things that they would be passionate about and would love to do, because it's not part of the tournament that they've been put slotted into.
1:28:57
SPEAKER_03: And so that advice is just to say, be always mindful about the tournament that you're playing in and the skills.
1:29:02
SPEAKER_03: And if there is something that's interesting where you see value and you see something that you can make a great career out of, don't turn it away just because it's not a skill that you need today.
1:29:12
SPEAKER_03: If you think about things in a wider sense about where things could go, or perhaps consider yourself playing almost in a different tournament than the one you've been given, you'll find more opportunities.
1:29:23
SPEAKER_01: Neil, uh, what is something that you believe in that nobody else agrees with you on?
1:29:31
SPEAKER_03: Sense of universal optimism.
1:29:33
SPEAKER_03: I that's a good question.
1:29:35
SPEAKER_03: I don't have that's kind of say, well, what what if if I make a prediction on anything, I'll tell you, I'm gonna be invariably wrong.
1:29:40
SPEAKER_03: So it's gonna make a great sound quote.
1:29:42
SPEAKER_03: I'm like, you know, you could say Bitcoin's gonna drop to zero or Bitcoin's gonna go up to 100,000.
1:29:48
SPEAKER_03: And one of those quotes, what's it caused with me the soundbites?
1:29:51
SPEAKER_03: Like, let's just say both of them, somebody can crop out the the one that that that works best for the narrative.
1:29:57
SPEAKER_03: No, um in terms of things I I don't believe in, I tend to have just uh generally here's here's what where if I have to make a prediction about the future, um, which which other people may see difficult, is I I think that where we're headed, uh, this is this is I I think one of the things that I'm challenging a lot of Silicon Valley companies on is that in Silicon Valley, there's a big emphasis on scale, right?
1:30:21
SPEAKER_03: Everything has to be done and built to serve 10, 100 million people, a billion people.
1:30:29
SPEAKER_03: And I'm starting to come to the conclusion that I think that most companies that believe they're succeeding in scaling out their businesses and their processes are wrong.
1:30:38
SPEAKER_03: And so here's one of the things, and this is just where where my thinking is at the moment, and this is just some of the work that I'm doing.
1:30:42
SPEAKER_03: If you're wondering what I'm into in 2022, once this book comes out, it's actually addressing part of this question, which is to say, in my mind, scaling is being able to have that conversation, that relationship with one person, with two people, and being able to reach a thousand people, ten thousand people, or a million people in the exact same way, without sacrificing that intimacy, without sacrificing that trust, without sacrificing that conversation.
1:31:11
SPEAKER_03: I think what's happened is that a lot of technology has just gone to be like, no, we're not doing that because it doesn't scale.
1:31:17
SPEAKER_03: And we've cut so much back that this idea of scale really is, no, let's see how much we can strip away from a product so we can deliver it to a million people.
1:31:25
SPEAKER_03: Where I think true success and true scaling a product and a strategy is saying, no, the difficulty is can you deliver what you can do as great as you can to one person?
1:31:34
SPEAKER_03: Can you do it to a million in the same way?
1:31:37
SPEAKER_03: And that's a much harder challenge.
1:31:39
SPEAKER_03: Um, but I think right now, just that scale is purely about numbers.
1:31:42
SPEAKER_03: Can we reach a lot of people?
1:31:43
SPEAKER_03: Can we hit a lot of numbers?
1:31:44
SPEAKER_03: And so it's a popular mindset.
1:31:46
SPEAKER_03: And so to your question, uh uh to be very direct with that, I think one of the things that not necessarily nobody believes, but I think is a minority position, is that companies are getting it wrong, that they're looking purely what they're doing is not necessarily scaling.
1:31:58
SPEAKER_03: It's they're hitting high volume, but they're sacrificing and leaving a lot behind, and they're implicitly making trade-offs as opposed to a deliberate strategy.
1:32:06
SPEAKER_02: Thanks.
1:32:07
SPEAKER_02: That's that's fantastic, Neil.
1:32:09
SPEAKER_02: I think uh that insight is brilliant.
1:32:11
SPEAKER_02: And so I come to my last question, uh, which is uh if you were to think of inviting and looking at a guest for Contramines as a podcast, who would you uh say, given that now what you've heard for about uh you know one and a half hours, uh, you know, who would be the guest that you uh that you would uh like to see featured in Contramines?
1:32:37
SPEAKER_03: You know, if if I were to write a guest list, and I'm happy to do it, I I can't help but think about all the people that have been influential to me in my work and my career.
1:32:46
SPEAKER_03: So certainly my mind would go to some of the academics we've already spoken about.
1:32:49
SPEAKER_03: The people that are working on this cutting-edge research are fantastic teachers and storytellers.
1:32:55
SPEAKER_03: Also, go into that gentleman I mentioned, the the actor slash coach that brings in those experiences for marketers.
1:33:00
SPEAKER_03: And this guy, Mark Danenberg, who's like, this is how we can tell better stories.
1:33:05
SPEAKER_03: Uh, those are the people, uh almost a motley bunch of people who just have different skills that I find valuable because we see so few of those types of personalities in core analytics and core marketing, the storytellers, the professors, the teachers, those are the people that I would recommend.
1:33:21
SPEAKER_03: And I'd probably draft up a list for you if you wanted.
1:33:23
SPEAKER_02: Thanks a lot, Neil.
1:33:25
SPEAKER_02: Uh, it was absolutely brilliant talking to you.
1:33:29
SPEAKER_02: And uh most importantly, uh, you know, the right chords that you touched for me was almost like an orchestra, right?
1:33:38
SPEAKER_02: So you enjoy the music, and that's really how this conversation was.
1:33:43
SPEAKER_02: And um, it was phenomenal.
1:33:45
SPEAKER_02: Uh, the humility and the uh you know the groundedness with which you spoke was something which is amazing.
1:33:53
SPEAKER_02: And I would like to thank you for giving us the time and sharing with us your thoughts, your stories, and your journey, which is invaluable.
1:34:03
SPEAKER_03: It's entirely my pleasure.
1:34:05
SPEAKER_03: Gentlemen, thank you for having me.
1:34:10
SPEAKER_02: Thanks for listening to this episode.
1:34:13
SPEAKER_02: For selected links and detailed show notes, visit www.contramines.com slash blog.
1:34:21
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1:34:27
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1:34:33
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1:34:35
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1:34:45
SPEAKER_02: Thanks for listening and stay safe.