Tag: Big Data

Why Marketers Need to Think About Cyber Security — Now!

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Although the Equifax hack put cybersecurity on the priority list for over 140 million Americans and scared the heck out of many others including yours truly, it is hardly a new issue for consumers. Major hacks at Yahoo and Target a few years back put many on high alert. So, you might ask, “What is new here and why should cybersecurity be a priority issue for senior marketers?”  Well, as it turns out, all that marketing technology senior marketers recently brought into their companies has created even more exposure for company data and the consumers with whom they do business. Sure enough, the pursuit of big data to optimize sales, marketing and customer experience efforts, has put companies at risk, in a remarkably big way. And of course, a data breach will inevitably become a brand breach as the folks at Equifax can attest. So batten down the hatches and have a listen as Norman Guadagno, Senior Vice President of Marketing at Carbonite, a data security company, shares his thoughts on why this is such a big problem and some of the steps that marketers can take to prevent or at least mitigate the impact of a security breach. (You can listen to this episode just by clicking on this link.)

Guadagno discussion with host Drew Neisser yields a number of recommendations for marketers:

  1. Assume you will be hacked and prepare a crisis plan;
  2. Befriend your CFO, CTO and Security experts within your company;
  3. Recognize that with each new marketing technology that you bring in, you will need to make sure that resources are allocated to secure that technology;
  4. Consider bringing in an outside security expert to identify and address your biggest points of vulnerability;
  5. Continue to make “deposits” in the “goodwill bank” with your customers by offering extraordinary customer service (this goodwill will help you weather a security storm);
  6. If you are hacked, be as transparent as possible about the problem and how you are going about addressing the problem.  That said, make sure that your efforts themselves are tough to hack!

Also, early in the show, Drew mentioned a few resources to check to see if the Equifax hack had an impact on you personally and if so, what to do about:

  • Equifax resource– To see if your data was compromised, Equifax set up this special site at which you enter your last name and the last digits of your SSN.  There are only two answers, Yes or No.

  • If Yes — You don’t necessarily have to enroll in the program Equifax offers BUT you do need take some action steps right away.  Here’s a link to Steve Faktor’s thorough post on what to do which we found to be particularly smart and useful.

CMO Insights: Digital Marketing and Customer Centricity

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Before taking the job as SVP, Head of Integrated Marketing at Wells Fargo, Michael Lacorazza was cautioned that it might take a while to get things done at this huge bank.  Much to his delight, he was able to push through a number of new initiatives in his first year that had a profound impact on the business.  Though he credits his strong team for making it all happen, The CMO Club acknowledged his accomplishments in the area of digital marketing with their Programmatic Marketing Award last fall.  Here is my interview with Michael including some timeless insights on the power of customer-centricity:

Drew: Wells Fargo is considered an integrated marketing leader in the banking industry. What is your approach to seamlessly promoting the Wells Fargo brand across multiple channels?
We start with the customer—identifying the needs and insights to define the customer journey.  The customer journey determines the channel strategy, so that we integrate in the right places.  To bring the work to life, our large-scale campaigns are headed by a marketing integration lead, who assembles the physical and virtual teams (both Wells Fargo team members and outside resources) needed to develop and launch the assignments – and is ultimately accountable for the project.

Drew: With the purchase of Wachovia in 2008, Wells Fargo became a nationwide presence. How do you stay close to your customers when you operate in so many markets and have so many different types of customers?  
While we are a coast-to-coast company now, our focus is on serving our customers and our communities at the local level. We have a strong culture of putting the customer first and strive to live it every day. And, that customer-centric culture is guided by our company’s vision to satisfy all our customers’ financial needs and help them succeed financially.

Drew: You operate in a relationship-based business. How do you improve loyalty among your customers?
It’s about living our vision and values and doing what’s right for the customer.  It’s about building lifelong relationships one customer at a time. Our team members are the competitive advantage that enables us to achieve greater loyalty through that relationship building.

Drew: Innovation is a sexy word but not as sexy to a CEO as ROI.  Have you been able to link your innovative marketing activities to the kinds of business metrics favored by CEOs?
Measuring the impact of the marketing investment is critical in a data-driven company like Wells Fargo.  We create scorecards with KPIs for all of our large initiatives and leverage tools like media mix modeling to help us quantify the economic value of our investment and make optimization decisions.  Further, we share the results transparently with business lines and senior management.

Drew: A lot of financial services firms have tiptoed into social.  Do you see social as viable channel for your business and if so, in what capacity?  
Absolutely.  Our customers live digital, mobile and social lives.  We are continuously investing in social infrastructure to enable us to serve our customers and connect with them where they are.

Drew: A CMO has a lot of choices in terms of where they invest their time.  What have been your top priorities in the last couple of years?
My first priority has been to enable Wells Fargo to design and execute fully integrated marketing campaigns that engage the customer and drive measurable business success outcomes.  We’re very proud of that work. We have made a lot of progress and have more opportunities going forward.

Drew: Have there been any big surprises in terms of what’s worked really well and what hasn’t?
I joined Wells Fargo just over a year ago.  While preparing for the assignment, I received a lot of guidance to expect both change and projects to take a long time to matriculate in a matrixed, regulated company.  The magnitude, quality and impact of the work that the team has produced during my rookie season have been very impressive and much faster than anticipated.

Drew: Content marketing is hot topic at the moment.  What’s your perspective on content in terms of its effectiveness?  Are you increasing your investment in this area?
We view all of our communications as content – even our paid advertising.  And, more than ever, there needs to be a value exchange with the customer.   Marketers can no longer “message” at the customer at scaled weight levels.  The customer expects much more and look to us to deliver relevant content on their terms.

Drew: Big data as a big part of the CMO conversation these days.  How are you tackling big data?
It’s top secret, so I could tell you, but…all kidding aside.  What’s fundamentally important for us is to protect our customer’s data and operate in a spirit of transparency.  And we need do this in a tightly regulated industry with substantial uncertainty on where the privacy dialog will lead us. At the end of the day, we want to use data to improve our customer experience and deliver more relevance—that’s our focus.

Drew: Do you agree with that notion that “marketing is everything and everything is marketing” and if so how have you extended the boundaries of your job beyond the normal purview of the CMO?   
Yes, the key marketing leaders in the organization are deeply involved in helping to shape our future customer experience initiatives.  Because we are often so close to the customer and have unique insights to share, marketers can add a lot of value.  In my opinion, it’s not the sole domain of lines of business or product teams.

CMO to CEO in One Knight

Posted on by Drew Neisser

Sir TerryWith the world abuzz about the newborn English prince George, it seems appropriate that I finally feature my interview with a real-life knight of realm, Sir Terry Leahy. Sir Terry was the CEO of Tesco, a company he helped build into a global retailing powerhouse. I caught up with him after his keynote address at the IBM Smarter Commerce Summit earlier this year where we discussed his new book, Management in 10 Words.  Although this edited interview is longer than most of the ones I post, I expect you will find it well worth your time, since Sir Terry is one of a handful of CMOs who not just rose to the CEO position but also became one of the most effective in recent years.

Drew Neisser: Simple is one of my favorite words in your book. But Simple is hard, especially for big businesses. Why is that?
Sir Terry Leahy: Yes, simple isn’t easy. But, it still is the right thing to do. I think it’s a mindset. You have to accept that as organizations grow, they will become more complex. So, you got to counter that by deliberately navigating in search of simplicity. As organizations evolve, they do so around a series of decisions. And it’s when you make those decisions, you have the opportunity to choose a more simple route, as oppose to a more complex route. And in a way we have to counter the way we all educated.

In education sometimes you’re rewarded for length. I was reminded of the old Mark Twain story when his editor asked him for two pages in two days. And he came back and said, no can do. I can do ten pages in two days. But it’ll take me two weeks to do two pages! And what’s that getting at is you have to think about it. You have to think about how you can actually simplify the way you deliver a product or a service to a consumer.

Drew Neisser: With all the big data that’s out there, does this make it harder to get to simple or does it make it easier?
Sir Terry Leahy: Well it potentially makes it harder. There’s a real danger that an organization can be flooded by data. And information can get in the way of actually accessing the things that really matter for the consumer and what will really drive your organization forward, if you make decision on those things. Our data is so complex now. So, powerful. It’s even a danger that it can become detached from most ordinary people. And that can be very harmful for an organization. You want data to be more accessible and to be placed right at the heart of the organization. Right where the decision are made.

Drew Neisser: How do you get to where data becomes simple?
Sir Terry Leahy: I think it became simple once we were able to know things about customers. That was the big breakthrough for us. We had product data with the [advent of the] bar code. Which transformed our retail industry. But, we didn’t know anything about the people who bought the products.

Once we launched Club Card that allowed us to gain information about those individual customers. And their shopping habits. What they bought when they shopped. And that really illuminated the world for me because then we knew more about how customers shopped and what they needed. And what they’re interested in. We could tailor [messages.] We could target our products our services to meet those specific needs.

Drew Neisser: One of the words that you used was Courage, which is another great word. I would use the word chutzpah but that’s because I live in New York. And a lot of companies don’t have the courage to make big bets. In fact, they sort of go for incrementalism. Talk to me about the importance of courage and big bets, and the risks of such an approach.
Sir Terry Leahy: Courage is an unusual word in the context of business. But, I think it’s at the heart of business. And in fact, I think entrepreneurs would understand that. They take the biggest bet of all with their livelihood, when they start a business. But, in an organization it still applies. Many people are fearful of upsetting their boss and affecting their promotion prospects.

Actually, you’ve got to be prepared to risk everything. Even your career in order to do what you think is right in a situation in the job that you hold. One of the big bets that I made was the launch of Club Card, which gave this information around customers. In order to do it, we had to incentivise customers. That was going to cost us at the time a quarter of our entire profits. If this had gone wrong, and many predicted it would go wrong, I was finished.

Drew Neisser: So, one of the things that really distinguishes you particularly in the world of big data and CTOs is that as a marketer, you became CEO. Why do you think you were able to beat the data guy to the CEO spot, and what could marketers who aspire to be CEOs, learn from that experience?
Sir Terry Leahy: Yeah, it is unusual. And I think we need more CEOs who come from marketing or come from technology. It happens obviously in the technology industry, but outside that industry, it’s pretty rare. And, I think that’s a great shame because those are the two most valuable commodities for business systems to work with–customers and data knowledge. I was able to use Club Card and some other innovations to be the voice of the customer in the business. So, I was able to give leadership for the company from the marketing position. And that, therefore, was a small step into the CEO office.

And I think other CMOs can do that. I think that they can step forward and lead the business from the marketing position. Particularly, if they harness the customer. And the customer is the biggest power base within an organization.  And if you use it in the right way, it’s hard for [a colleague from] Finance or Operations to challenge the voice of the customer. If you have the customer on your side, you’re the most powerful guy (or woman) in the organization.

Drew Neisser: Interesting. So, one of the words that’s not on your ten words, is the word intuition. And in this world of big data does intuition still have a role?
Sir Terry Leahy: I think it does. You read the psychology books like I do, and they look at how the brain works and what would probably happen is that we’ll all be better at absorbing data about the things that we work on and work in. And then we’ll have an intuitive response that seems like a gut instinct.

But, actually it’s drawing on all of that data. All of that information that you’ve been putting in there over the last weeks and months and years. And largely, that’s probably the right way for it to come. A combination of the two sides of our brain, if you like. And that’s how most people will work.

Drew Neisser: Let’s get back to the CMO for a moment. How does that CMO who’s not a data person, make sure that they are looking at the data or getting the data they need to really inform their strategies?
Sir Terry Leahy: I think the days of the CMO not being data person are passed. I don’t think you [the CMO] have to be a math genius. The technology right now is making [data] so much more accessible. It’s about the CMO who’s curious about the world around them and how they use data to inform them about that world. And that’s what CMO’s are naturally are. Their naturally interested in people. Interested in how the world works. And they just need unlock data to inform their decisions.

Drew Neisser: One of the words in your book is “Values.” Let’s talk about that. Every company that I know has values. They put them on their website. They put them on a wall in the kitchen. But, they’re not realized. They’re not activated. They’re just platitudes. How did you make sure that the values that you established for Tesco became a real part of the organization?
Sir Terry Leahy: I think you have to look at the organization. And you’ll find in the history of the organization or in the narrative of the business the core values. And if you can draw those out and articulate them and build on them, I think that’s a much more solid foundation. I think after that it’s — you obviously have to live those values. People will listen to what you say, but they’ll watch what you do. Integrity comes from a consistency between the words and the deeds.

And you’ve got to live it every day. It’s incredibly powerful in business as in any institution or organization. The foundation are a code of values that says this is what we’re here to do. And in any situation, this is how we’ll behave. And people can identify with them. It’s so much easier for people to sign up for that.

Drew Neisser:  One of the words you have in the book is, “Compete.” When some companies see what their competition is doing, they try to replicate it. How do you compete and look at your competition, but make sure that you remain true to yourself?
Sir Terry Leahy: What’s interesting in the first ten years of my career, essentially I copied the competition because our competitors in my industry were outstanding firms. The best in the country. Arguably the best in the world at what they did. So, I didn’t have to look far for ideas. I just copied them.

But, what I found was as we got closer and closer to this benchmark, we could never overtake them because, you know, if you just like the original people will always choose the original. And it was only, when I stop copying the competition and started following our own customers and letting they be my lead, that we overtook them within a year.

It was an amazing thing that I learned. From that day forward I respected and learned everything I could from the competition. But, I never followed competition. All the focus was on the customer. And then what you did was much more original. Much more authentic. And customers spotted that you were doing it first and doing it for them. You weren’t doing it because some other competitor did it first.

Drew Neisser:  To wrap up here, let’s talk about the future.  If you were training now for the CMO job ten, fifteen years on the horizon, what would you be focused on?  
Sir Terry Leahy:  Well, I think it’s a really exciting time now because back when the Club Card started, Tesco was one of the first in the world using data, as soon as computers were powerful [enough.]  Now, the opportunity to access data from social networks, from shopping data and from so many other things, from operations, it’s without limit.  And, yet, organizations don’t use that data.  They don’t bring it in and use it to inform the way products are developed, to drive the direction of the business.  So, I think that still is the opportunity.  How do we make business decisions on the basis of knowledge–knowledge of the world around us.

Thinking Big About Big Data

Posted on by Drew Neisser

Rogers_bookThe term “Big Data” has quickly become the buzzword du jour garnering its own Wikipedia page and showing up in 21 million search results.  But frankly, every time I hear the phrase, it is lumped into a string of buzzwords that makes my head spin, making me wonder, could any self-respecting forward-thinking technology company present their transparent vision without paying homage to the game-changing paradigm-shifting potential of Big Data?

Fortunately for me, I got a chance to hear professor and author David Rogers speak about the genuine potential of “Big Data” (without a single cliche) at the recent Columbia Business School Brite Conference.  Rogers explained how IBM’s Watson (artificial intelligence computer system) has been fed exabytes of medical information that it can sift through in seconds to help doctor’s more accurately diagnose and treat patients.  Another example Roger’s mentioned is Waze, a mobile map app with 30 million users, that gets real world traffic information from users and then processes that information to re-route other users in real time.  Wanting to know more, I caught up with Rogers after the event yielding this informative interview:

Neisser:  Leaders have always been challenged to get the right information to make good decisions.  How do modern leaders take advantage of the excess of data available to find the truth they need?
Rogers: There is actually no excess of data. That’s a myth attached to the term “big data.” Digital data has been growing exponentially since the birth of the computer era. Before that, recorded data grew exponentially since the invention of human writing. I don’t think Napoleon complained that there was “too much data” as he pored over reports of historic battles to conceive his next campaign strategy. What he needed was insight, and the right questions to ask of the data available.

The amazing challenges and opportunities of the Big Data era really don’t stem from the sheer quantity of data. They come from the new kinds of data that we are getting, and our new tools for analyzing them – especially for analyzing unstructured data like video, images, and social media conversations.

My first advice for business leaders is: don’t meet with anyone who wants to sell you some great juicy set of data they’ve got. Don’t be that sucker. Only work with people who want to help you solve a genuine problem, or capitalize on an exciting opportunity, using data.

Neisser: I think it was Einstein who said, “information is not knowledge.”  Can you provide a real world example (or two) of how this data/info is being harnessed by marketers right now?
Rogers: Sure, data is now being used to answer many of the most critical questions that marketers face. Who should I market to? When and where should I spend my budget? Which are my most valuable customers? How should I personalize my offer? What impact did I get from my marketing?

Many of these answers are coming from the domain of predictive analytics. When a customer makes their very first purchase on an ecommerce site, it is now often possible to predict, with decent accuracy, how many more purchases she will make this year, her total spend, and if she fits in the top 5% of your customer base in terms of lifetime profit to the firm. You might be wrong on a given customer, but on average over the entire behavioral segment, you’re quite accurate. That’s extremely powerful.

Neisser: Are these Big Data technologies going to be used just by big companies? Will they pose a competitive disadvantage for small and mid-sized businesses?
Rogers: Not necessarily. One of the key drivers of the big data revolution is cloud computing and the SaaS (software as a service) model. That means that hospitals around the world will be able to start accessing IBM’s Watson, the most powerful natural language processing algorithm in the world, to assist in their cancer diagnostics. Watson is an incredible supercomputer, but your local oncologist will just access it over the web via an app of their tablet.

In the marketing space, the startup Optimizely is providing incredibly cheap entry points for small business to start using its web-based tools to test and gather data on the effectiveness of direct response marketing. You don’t have to be the big boys to start reaping the benefits of the Big Data era.

Neisser: Bringing it back to the C-suite, what do you see as the challenges for leaders adapting their skills, and their teams, to the “Big Data” era?
Rogers: Firstly, formulating the right questions to ask of data will be a key leadership skill for the future. That also means knowing when and how to balance intuition and judgement versus data-driven decision-making.

CMO’s in particular will need to hire some new talent – data scientists who can apply these emerging data tools to unlock value for the enterprise. There will be a lot more math PhDs in the marketing divisions of firms, and not just where you used to find them, in the market research companies. But CMOs also need to train the rest of their team – the creative copyrighters, the ethnographic insight hipsters – to be facile with the world of big data, so they know what questions they should be posing to the data geeks in the next room. It’s really going to be a cultural change as much as skill training.

Neisser:  What about the CEO and strategy? You said at the BRITE ’13 conference that leaders need to see data as a strategic asset. Can you explain?
Rogers: Yes, truly successful leaders will see data not just as a tool to assist decision-making, but as a core strategic asset.

Think about e-tailers like Amazon or media companies like Netflix. They have spent the last few years building amazing data sets about the behaviors and preferences of consumers.  These are incredibly valuable assets, just as much as their hardware, their software, and their licensing and partnership deals. Amazon is using its data assets to not only improve its core retail business, but to offer incredible targeting to marketers. Netflix has used its immense data on what stories, actors, and creative teams its viewers have preferred, to plan and commission entire new TV series, like “House of Cards,” without having to go through the normal process of paying for a bunch of pilot shows and options with no clear idea which one will resonate in the market place. That’s a huge market advantage and risk reducer.   The best leaders in every industry will be those with a strategy for building powerful datasets around their markets and customers – and then leveraging these assets to drive innovation and value creation for customers.

David Rogers is founder of Columbia Business School’s BRITE conference on brands, innovation, and technology, and author of “The Network Is Your Customer: 5 Strategies to Thrive in a Digital Age.” His next book will show why businesses that use big data effectively will survive in an era of disruptive change.  You can find him at www.davidrogers.biz.