Two-part interviews with successful CMOs: Their careers and how they got to where they are, and a deep dive into marketing channels for a specific business.
Companion to the Marketing BS Newsletter by Edward Nevraumont
Découvrez des podcasts liées à Marketing BS with Edward Nevraumont. Explorez des podcasts avec des thèmes, sujets, et formats similaires. Ces similarités sont calculées grâce à des données tangibles, pas d'extrapolations !
I realize there has not been an essay or a briefing in a while. I am trying hard not to let this newsletter distract me from writing comedy. It’s coming along nicely, but at some point I will pivot back to writing more here. In the meantime, I hope you continue to enjoy these short conversations I am having with Peter and we are hitting the more interesting marketing news in any given week or two.
In other news, my 1960s comic book podcast is re-branding. “Super Serious 616” is becoming “WHAT IF… MARVEL was real?”. I wrote a little about why we are making the change here. The big impedes was a big advertising push we are doing later this week that should (if all goes well) blast us to the top of the Apple Podcast charts. The hope is that after an artificial boost or two to the top of the charts, we can use the momentum to maintain that position naturally. It will be an interesting experiment. In the meantime I think the quality of those podcasts have gotten better and better. If you are at all interested, now may be a good time to jump onboard. In the latest episode we discuss just how fast Thor would have to fly in order to cross the Atlantic Ocean in three minutes, and what that means for situations like saving someone from a speeding truck.
Now onto this newsletter’s podcast:
Full Transcript
Edward: Peter, when was the last time you saw a movie in the theater?
Peter: Oh, we go every couple of weeks. Every now and again, it's a very different experience now with, the big crazy seats and having to pick your seats in advance. And it's just, it's not like it used to be, but still it's a nice getaway.
Edward: Nice. So you paused during covid, but then you're back at it the same frequency there before.
Peter: Actually, even during Covid we'd go a couple of times. There was one time we went to tenant. Only people in the theater .
Edward: My crazy tenant story is, for a buddy of mine's birthday, I rented the entire theater so the two of us could go see it.
Peter: There you go. Well, we didn't have to rent the theater, we just bought regular tickets and you still got it. Don't think or so, but during Covid when no one was going to theaters, it was like the safest place you could be cuz no one else was there. So fair it out. So we'll still do it, every now and again. But it is funny how the industry has changed and maybe not funny, maybe sad how it's changed so much.
Edward: Yeah, I think it's interesting how little theaters have changed over the years, and it feels like they're changing quite a bit now. As you said they've made changes in terms of the seats are fancier and more comfortable and they're serving better food and so on. But in terms of like things like pricing, pricing has been, Hey, pay one price. Everyone pays the price to walk in and sees the theater. When you're dealing with a product that has an expiration date, like after 8:00 PM on Thursday, anyone who's not bought the ticket, those empty seats in the theater are going unsold. It's very much like an airplane, but theaters have never been priced like an airplane.
Peter: I have never understood that. Yeah, they should definitely be using different kinds of dynamic pricing. And of course it's not just them. It's gonna be the same thing with sports venues and concerts and yeah. It's funny in those domains, you keep hearing a lot about it. Sometimes controversial, but movie theaters seem to be just clinging to their kind of dinosaur ways. Although I guess just now starting to change.
Edward: And then even things like. Not just dynamic pricing, but even pricing by title. If you go and buy books, books vary in price. Every book you buy, I don't know what the price of the book is gonna be until I look at the price on it. And they're all over the map. Whereas when you go to see a movie, whether you're gonna see a 500 million avatar sequel, or are you gonna go see a nice little small new indie. They're all the same price.
Peter: That, and that's why it's so interesting. So there's that new, 80 for Brady movie just came out and there's all this headline news about it's going to have a different price as if this is a radical. Even in the articles, it's saying this bold move just cuz they're charging a different price for movie. Yeah, they're absolutely right. That should be the way it always works. Not, this kind of one time weird.
Edward: And apparently it has been done in Europe, so in Europe they have priced blockbusters at different prices than like smaller indie, lower budget movies. But in the US there's been a tendency not to do that. And I think the logic is like right or wrong, the logic has been if we price a movie at a lower amount, it will signal that the movie is flawed in some way and therefore it'll drive, even though it's almost like the idea of a luxury good. If I go and start discounting a luxury good, then maybe. Price elasticity is a negative elasticity. It might drive people away because it's considered bad because it's a lower price and it seems like that was the fear in the US if we reduce the price of the movie, people are gonna think it's a bad movie and no one's gonna go.
Peter: And that's why we shouldn't teach economics courses cause people jump to these ridiculous conclusions, you know? You know, it was the same thing with professional sports a lot of major League baseball teams were saying, oh, no, no, no, no. We can't change the prices. Same issue that we don't want to devalue the product. And now they're doing it all the time, not only charging different amounts for different games. But changing the pricing as the game gets closer and even based on weather and who's pitching and so on, that's just become the rule. Now. It's just a matter of how you do it. It's just weird that some sectors, like movies have just stayed behind and just haven't gotten with the times.
Edward: I went and saw, David Chappelle and Chris Rock were in town here in Seattle in December, and we went to get tickets. They like most of the seats in the house were at set prices now. Like the better seats were, better prices and so on. But the best seats in the house, it said this on the website, our top seats are dynamic pricing changing on a day by day basis based on demand.
Peter: That's kind of interesting cause like go to a restaurant where they have fixed prices for everything, but then there's that, special steak or fish market price, which implies that everything else charged isn't at. Prices, everything should be in a market price and people get used to it. That's The Thing a lot of these venues hesitate to do it because of some sense of fairness or something. It's like, oh no, we don't wanna go down the same path as the airlines, but people get used to it. People understand that, as long as they're not being gouged, the fact that they bought the tickets later or they're buying better seats they should be willing to pay a little bit more.
Edward: That's right. And, I think, maybe the airlines get us used to it, to a point where now it's not a big deal when it happens in the movie theaters. I remember it was probably 2003, 2004 was the first time I went to movie theater where I bought my ticket, like I bought my seat of where I was going to sit. Prior to that, I think every time I went to the movie theater you'd buy a ticket and then it was first come, first serve for where you were gonna be in the theater, of course. And it was around that time, 15 years ago or so where they said, Hey, no, you can actually buy your seat and now you can buy in advance. And now you can show. Just before the theater, just before the movie starts. And I think the concern at the time, at least what I heard prior to that was we don't want to do that because we want people to get to the theater early so we can serve them the ads. And if we start letting them buy their seat, they can show up at the last minute and they won't be able to advertise to them.
Peter: Wow, that's such bad logic given how much of a premium they can make for those better seats. It's a whole lot more than putting a couple of eyeballs in front of ads. And in some way the psychological weirdness of having to choose the seat, I think is actually less painful, less cognitively taxing than the idea of paying a little bit more money because, you're closest to the showtime. It's a different kind of process and people adapt to it and become second nature just as dozen these other domains.
Edward: And what's fascinating too, I think is who controls this pricing. When I was at Proctor and Gamble, we could go to the retailer and say, Hey, we want Swiffer to sell for nine 90 but we couldn't tell them that Walmart would, whatever price we told them, Walmart would put it lower and we'd be like, please don't put it lower. We're like, we want this be higher. We want this be high margin product. We want everyone else to charge more money for it. But they could do whatever they wanted. We couldn't force 'em to do anything. Now, we could rent ads on television saying, go to your local retailer and pick up your Swiffer for 9 99. But at the end of the day, the retailer decided, and it's that it's the same way with theaters. And so Paramount, you mentioned 80 for Brady. They can't set the price.
But what they did is they went and spent a whole ton of market research and then put together a research pack. Basically it was a sales pitch. So they went all the big theater change and said, we did some research and it shows that the price sensitivity for 80 for Brady is really, really high. And if you reduce your price, you can fill seats with older people who otherwise wouldn't even go to the theater at all. And they had to make a pitch. And apparently, I guess that pitch. .
Peter: That's great. And that's the way it should be, to get, whether it's the theater owners or again, any kind of venue, to run experiments that take chances, I think there's a real opportunity, whether it's the studio itself or some third party to come on in and start offering that, that kind of pricing expertise. Now, the next thing you gotta wonder about is will there start being a secondary market? For movie tickets. You know it's the idea is ludicrous right now, but anything's possible.
Edward: Yeah. It just, it feels like, at least right now, the supply of seats is so much higher than the demand for seats. And also you have a zero marginal cost electronic product that you can just put more showings, right? So if you don't go and see it at a certain time, they can run another showing at another time. Like unlike live shows like a Beyonce show or Taylor Swift show, like Beyonce can only be in so many places at once. It can only be so many shows. They can keep showing avatar forever and ever and ever. And you're gonna get this almo, if not the same experience. Pretty close to the identical experience. No, no matter when you. .
Peter: No, that's a good point. That there's not as much of a necessity for a secondary market as there is for sports or concerts. But on the other hand, there's a lot of people who are becoming accustomed to buying their tickets through the secondary market. You know, they'll start by going to StubHub or SeatGeek, and to see what's available. They, don't want to go to the primary market. Maybe it's cuz they don't trust the venues who are selling the tickets, or maybe they have a good experience with the secondary market. So I think it will emerge even if it's not quite as vital.
Edward: So we've talked about this, these companies that have been very reluctant to move into this direction. Right. So Airlines did this decades ago. Hotels did it decades ago. Cruise ships have done it decades ago, like movie theaters took a long time to do it, like athletic venues like baseball and stuff took a long time to move in this direction. Is there any example of a company that started moving this direction or an industry that started moving this direction where it was a mistake? We keep talking about, everyone's like afraid to do this. They're like, oh, I'm afraid to put them, buy their seats in advance cuz they'll will miss the ads. Or we're afraid to do this cause our customers will hate us. But is there an example where they were right, where like they should have moved more slowly or not moved?
Peter: Well, in terms of the overall movement, I don't think it's ever a mistake, but there's no doubt there's specific times, you know, specific games, specific sections of seats that are either gonna be priced too high or low. That's just the chance that these organizations take. I mean, let's face it, every game or movie or concert, they're never gonna get the pricing exactly right for every seat. So you just have to hope on average that works out in their favor. But, it's not an exact science, but it's a hell of an interesting science, no doubt about it.
Edward: But is there an example of where dynamic pricing wasn't the right choice? That like, Hey, we had fixed prices. Oh, everyone wants us to move to dynamic pricing. We think it's a bad idea. Every example that we're talking about. It was actually a really good idea. Theaters are slow. They should have done it earlier, but is there an example where someone moved too fast and they shouldn't have done
Peter: Oh, yeah. I'll tell you where the third rail is. Personalized pricing. Yeah. A lot of people mix that up with dynamic pricing. Of course, with dynamic pricing, as we get closer to the date or if it's a better seat or whatever, anybody would, would pay that higher price but personalized pricing to say, based on, given your characteristics, we're gonna charge you differently than me, even though we're coming in to buy tickets at the same time. Back around, right around the turn of the century Amazon experimented with that little bit and they got caught. They were charging two different people at the same time, different prices. And they, boy, oh boy, did they back down on that? They apologized, never again. It was just a little experiment. So yeah, that's a real danger zone. Not, to say it can never happen, but given our kind of how naive we are, even with just regular dynamic pricing. That's a step too far.
Edward: Well, it's interesting you say it's funny, I remember that when that happened at the time, I didn't make the connection, but you're right, they did that. Where they got nailed, I think, was personalized pricing where some people were paying higher prices than others. We do personalized pricing where some people pay lower prices than others all the time, and no one gets upset about it. Like if rather than charging $8 for this CD for most people, but $10, if you, we knew you're like a high level, like a adamant CD buyer and you're priced in sensitive. They could have just priced it at $10 and offered $2 off coupons to a whole bunch of people. Instead of pricing at $8 for everybody and 20% of people paid 10, they could just price it at 10 for everybody and 80% of people got $2 off, and everyone would've been fine with that.
Peter: That's a great point. As long as you separate out the list price from that discount from the coupon or whatever, then it's okay as long as people have to do something. But when it's just offered. And then when the face value is different for different people at the same time. And you're right, it might sound a little, hypocritical, but, that's the reality that we, haven't yet come to grips with.
Edward: One thing I see on Amazon all the time now, not all the time, but fairly consistently, is I'll go to buy a product and on the main pages listed at one price, after I click through and go onto the product page, there'll be a little box and it says, Hey, click 5% off coupon, click here. Yeah. And I see that regularly. I wonder. If I imagine that's probably personalized that I'm getting, I'm seeing that coupon and other people aren't
Peter: that's right. And that again that's fine. That's totally kosher and people are good with that. It'll be interesting to see it. At what point though, do we graduate from that to just showing different prices and calling a spade a spade?
I still think we're a long ways away from that.
Edward: Fair enough. This has been fascinating, so think we're agreed that theaters are smart to do this. They should have done it a long time ago. The consumer backlash is going to be negligible. Theaters are just coming up with excuse, that's the word I'm looking for. It's an excuse rather than a reason.
Peter: That's right. They're not willing to do the hard work. They're not willing to figure it out. And given the state that they're in economically, man, they better do some homework. They better find these kinds of revenue opportunities if they're gonna stay afloat. Cuz the old rules do not apply anymore and they get a adapt or die.
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit marketingbs.substack.com
Marketing BS Podcast: Have Electric Vehicles Changed the Rules of Loyalty?
lundi 23 janvier 2023 • Durée 13:02
Some quick updates:
* I have an essay in progress. Will hopefully get it to you in the next couple of weeks
* Stand up comedy is coming along. My first “big show” is on Tuesday. If you are in Seattle feel free to stop by at Club Comedy.
* If anyone is interested in learning how to edit these podcasts and is willing and able to do fast turn-arounds, just reply to the email and let me know. It’s not hard and it’s kind of fun with the software I am using, but it is something I am ready to get off my plate.
* Too long/didn’t listen: EVs have not changed the rules of loyalty
Full Transcript
Edward: Peter, now that electric vehicles are around brand loyalty doesn't matter anymore. It's all the Wild West. That's what the Wall Street Journal is selling.
Peter: Oh man, I've heard this song before . It's the same old tuned men whether it was gonna be the internet, oh, that's gonna change everything. Or social media or covid. It's gonna totally upset the rules of loyalty. Yeah, those rules are pretty locked in and I'm willing to say same story here.
Edward: So what are those rules of loyalty? What are the rules that the Wall Street Journals claiming are garbage now? Or are they just missing the entire.
It all depends on how we define the rules. Where I'm coming from it coming forward it is from the top down. If we just look at actual behavior and just look at the choices that people make over time and how often they switch around and what they switch around from in two, there's some very regular patterns to that.
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit
New Marketing BS podcast: Nevraumont and Fader
jeudi 20 octobre 2022 • Durée 17:10
A new experiment!
Wharton Professor Peter Fader and I are going to try something new. Ever Wednesday (give or take) we will spend 10-20 minutes discussing the marketing implications of something topical in the news. In this first episode we discuss the parallels between P&G’s recent announcement that they are raising prices, and Netflix’s recent earnings call (and their move into a lower-priced ad-supported tier).
Some relevant links:
Peter’s two part interview with Edward in November 2020: Part one. Part two.
A 2019 essay about Amazon Prime Day and discounting where I quote Peter: Happy Double Prime Day
We would love your feedback on this experiment. Please reply to this email with your thoughts. I will forward all messages to Peter (unless you tell me not to). We do NOT have transcripts for the episodes yet, but if there is interest I will work on a solution. The provider I have used for my CMO interviews would be too slow, but there are acceptable AI solutions now that should be able to turn things around quickly at reasonable quality.
Keep is simple,
Edward
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit
Interview: Stuart Wood, CEO Carvel Law, Part 2
mardi 16 novembre 2021 • Durée 19:48
This is Part 2 of my interview with Stuart Wood (CEO of Caravel Law). Part 1 here. In this part of the interview we talked about how one goes about marketing professional services firms. Stuart marketed both the leading firm in Canada, and now oversees a “start-up” law firm. There are some similarities and some real differences in how marketing is done in these environments. I hope you enjoy this - it is a little different than our normal discussions on Marketing BS.
Transcript:
Edward: This is marketing BS. This is part two of my interview with Stuart Wood. Today we're going to dive into his experience overseeing marketing at two Canadian law firms, Caravel and Torys. He was CMO at Torys and CEO now at Caravel. You were CMO at Torys, which is a very, very established law firm in Canada. Now you're CEO of Caravel, which is a much newer law firm, relatively new. How do law firms differentiate themselves? What makes someone choose one law firm over another?
Stuart: It's a challenge for every law firm, I think. Because what you'll see, if you look at law firm marketing, there's a lot of the same language, a lot of the same descriptors that they're trying to use for themselves. There's a lot of generic terms that are used. You'll see a lot of advertising, which are things like chess pieces and these strategy images that they think are going to really differentiate their firm, but it really is a lot more and more of the same.
We try to differentiate ourselves in a few ways. But one of the keys for us is to try to differentiate through innovation and our business model. We've taken a lean approach to legal services, the same way that I applied lean principles to different businesses when I was a consultant, playing them here at Caravel as we take out everything that doesn't add value to the client as a way of trying to get the costs as low as possible.
We practice in a different way where our lawyers—well before COVID hit—all practiced remotely as a way of eliminating the cost of a large expensive office on Bay Street. That means that we attract talent—great lawyers that have 15+ years of experience and just for whatever reason are looking for the flexibility of being able to work remotely.
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit
Interview: Stuart Wood, CEO of Caravel Law, Part 1
mardi 5 octobre 2021 • Durée 17:38
Thank you for your patience as I take time with the new baby. It has been pretty great barely working (professionally) for the last six weeks. I have half-written a briefing that I keep thinking I will finish and send, but it continues not to happen. I have not decided when I will really ramp back up. In the meantime, here is another Marketing BS interview. This one is pretty unique. Stuart was CMO of the largest law firm in Canada without ever being a lawyer (and is now the CEO of a newer firm). Part one, like always, is about his career. Next week I will drop Part 2 which explores the mechanics of how he thinks about marketing a law firm (with all sorts of learnings for service businesses). Enjoy.
The Transcript:
Edward: This is Marketing BS. My guest today is Stuart Wood, CEO of Caravel Law. It's a leading law firm based in Toronto, Canada. Today we're going to cover Stuart's path becoming a CMO and now CEO of a law firm, but not actually a lawyer himself. He was at Loblaws, McKinsey, Torys, Exact Media, and more. In the next episode, we'll dig deeper into what it means to run marketing for a law firm. But today, I want to focus on Stuart.
Stuart in 2005, you were an engagement manager at McKinsey. It's not uncommon for people to leave McKinsey when they're engagement managers, but it is fairly unusual to leave and become a CMO immediately. It's also extremely unusual, I think, to leave work for a law firm. Tell me exactly how that happened.
Stuart: The main reason that it was unusual was that I joined a client that I had been serving as a consultant. I had a consultant's worst nightmare. You put forward a series of recommendations and then the client turns around and says, well, hey, why don't you come on board and do all this stuff that you said we should do? The list of recommendations that I had made was now recommendations to myself. I was in a unique situation of trying to take all the analyses that I've done and all the recommendations that I had put forward, and now put them into action.
It was a unique opportunity, a chance to implement what I had seen. I'd had a chance to work with the team for three and a bit months. I really had a good feel for the people. I really liked the environment. I really liked the leader of the firm, Les Viner. I jumped at the chance to join the management team at Torys.
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit
Interview: Vineet Mehra -- Former CMO Walgreens; Chief Growth + Experience Officer Good Eggs -- Part 2
mardi 14 septembre 2021 • Durée 18:47
You can find Part One of my interview with Vineet Mehra here.
In Part Two of the interview I spoke with Vineet about his time at Walgreens. We talked about what makes Walgreens/Boots different from CVS and their other competitors. We dove into how Vineet used the vast amounts of data Walgreens was collecting (>80MM people in their US loyalty program) to fairly radically change business processes (including eliminating the flier completely). Enjoy.
Transcript:
Edward: This is part two of my interview with Vineet Mehra, Chief Growth and Experience Officer at Good Eggs. Today, we're going to dive into his time as CMO of Walgreens Boots Alliance.
Hey Vineet, I think we can safely assume that our listeners are familiar with Walgreens. Walgreens is slightly behind CVS in terms of number of pharmacies in the US, but you're way ahead in terms of number of pharmacists. You can say the similar thing in the UK. Boots has almost twice as many locations as the number two player, but more than three times the number of pharmacists.
Let's start there. Why do Walgreens and Boots have so many more pharmacists per location than their major competitors?
Vineet: At the very core of Walgreens—and we'll focus on there for now—is this idea that the biggest asset the business had even in a digital age was that Walgreens had the best corners in America in terms of where our stores were located. You go to any major city, any suburb of a major city, places where you least suspect a Walgreens, and it's on that perfect corner. It's easy to get in and out of. It's centrally located. We had a Walgreens within 2–5 miles of every single person in America.
That makes a really big difference in a business. Even in a digital age, believe it or not, physical location matters. I'm sure we'll get more into that, but that was a big part of what our difference was.
: Does that explain why you have more pharmacists? Because every location you have is a busier location than where your competitors are placed?
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit
Interview: Vineet Mehra -- Former CMO Walgreens; Chief Growth + Experience Officer Good Eggs -- Part 1
mercredi 8 septembre 2021 • Durée 22:02
I delayed this week’s edition on the hope I would spend Tuesday after the long weekend completing a briefing. I have a ton of great stuff to share with you all, but the time to write it all down did not happen. Instead I want to share with you a great interview I did with Vineet Mehra. In part one we talk about Vineet’s big break to a head of marketing role in his early 20s, and how he leveraged that into the career he has today. Lots of great stuff in here on how to think about things like “General Management roles” vs. “Functional Area Leadership”. Part Two will cover some of the fascinating work he did at Walgreens. As always you can listen to the interview in any podcast player (click on the link next to the imbedded audio for the links.
Transcript
Edward: My guest is Vineet Mehra, Chief Growth and Experience Officer at Good Eggs. Today, we're going to cover Vineet's path to CMO: P&G, General Mills, Novartis, Avon, and Johnson & Johnson. He was a CMO of Ancestry, CMO of Walgreens, and now at Good Eggs.
Vineet and I worked together two decades ago at Procter & Gamble. Super pumped out on the show today.
Vineet, let's start off: You've had a killer career, but I'd love to talk about a few of the big leaps that you had. If you want to start, in 2008, you went from a Marketing Manager at General Mills, and then you took on the Head of Marketing job for all of Canada for Novartis. Talk to me a little bit about how you made that transition happen.
Vineet: First of all, Ed, thanks for having me. Obviously, it's so great to see you after almost two decades. I remember us playing foosball in a room as account managers trying to grow our businesses at retail over there in Canada. It was a real highlight of my career, I remember. It's great to see everything you've done as well.
I have definitely had a couple of leaps that have happened. This specifically that you're talking about—going from General Mills over to Novartis Consumer Health in Canada where I had the opportunity to run that business—was honestly a little bit of good luck and a little bit of knowing the right people at the right time, which truthfully, if anyone tells you anything differently, that's how a lot of us get our first big leaps.
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit
Interview: Angela Rizzo, CMO eSentire, Part 2
mardi 31 août 2021 • Durée 18:51
This is Part 2 of my interview with Angela Rizzo. Angela was the CMO of eSentire, a leading company in the cyber-security space. Since the recording of this episode she has left eSentire and is looking for her next opportunity. If you would like to get in contact with her, please just reply to this email. (For all interviews you can click on the link next to the audio player to add the stream to a podcast player).
I expect to be back with an essay or briefing next week. I will also be going back to dropping a second post per week with interviews shortly. Enjoy!
Transcript
Edward: This is Marketing BS. This is Part 2 of my interview with Angela Rizzo. Today, we're going to dive into her experience as CMO of eSentire.
Angela, can you start by explaining what eSentire does?
Angela: Yes, I'd be happy to. At eSentire, we provide an affordable, premium cybersecurity service with end-to-end proactive protection. eSentire invented a new category of cybersecurity. We call it Managed Detection and Response and I'll refer to that as MDR. MDR was invented to do two things—detect the fact that bad actors are attacking a customer environment, and then take action to contain the attack before the bad actors can do any harm.
We think of these attacks in three categories—vulnerabilities, threats, and breaches. Vulnerability is defined as a weakness in a customer environment like a bad patch management practice. A threat is an exploit of the weakness by the bad actor. That's where they're trying to get into the environment. A breach is the successful exploitation of a threat. That means they're successfully able to get in. We monitor and manage for vulnerabilities, threats, and breaches. Time is critical to detect these things. Once we detect something, we then isolate and contain the attack.
Edward: There are thousands of cybersecurity companies out there now. What are you doing? What is eSentire doing that's different? Or is it a matter of you're doing the same as everybody else? You're just doing it better?
Managed Detection and Response is its own unique category. We have to think back to the fact that cybersecurity is a massive data analysis problem. In order to effectively provide cybersecurity protection, you have to be able to find the needle in the haystack. This is the simplest understanding of what we do.
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit
Interview: Angela Rizzo, CMO eSentire Part 1
mardi 24 août 2021 • Durée 16:36
I wasn’t sure I would have a new essay for you this week. Unfortunately the new kiddo has had to spend more time in the hospital (nothing serious, but out of caution “just in case”). I’m not worried about him, but it has taken up a fair amount of time (beyond the normal baby-taking-care-of time). Rather than leave you with nothing this week (and next) I am polishing off this interview that has not been released yet. Angela WAS the CMO of eSentire, a leading company in the cyber-security space. Since the recording of this episode she has left eSentire and is looking for her next opportunity. If you would like to get in contact with her, please just reply to this email. (For all interviews you can click on the link next to the audio player to add the stream to a podcast player).
Transcript
Edward: My guest today is Angela Rizzo, CMO of eSentire. Today we cover Angela's career and path to CMO—Sprint, EDS, Hewlett-Packard. Angela is now the CMO of eSentire, the global leader in managed detection of cyber threats. I'm super pumped to have this discussion.
Angela, you were recently promoted from VP of marketing to CMO. How has your job changed? What did you do to get that promotion?
Angela: I joined eSentire as VP of marketing in July of 2018. When I came on board, most of the marketing focus at that time was on face-to-face events. We knew that we needed to add more programs that delivered higher quality marketing-qualified leads.
I realized that the team was really talented. They just needed a bit more direction and leadership support. I moved quickly to work with the team to expand our focus from an events-only focus to include integrated campaigns, focused on what issues the customers were really grappling with, and how eSentire MDR could solve those issues.
We started doing more paid promotions—Google display ads, paid social media, SEM, SEO. I put in a lead-scoring program. We also started doing a lead-nurture program. We started to build transparency in reporting by creating new marketing dashboards in the sales force that covered everything from where were these MQLs being created to how much pipeline were we actually generating that was marketing-attributed.
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Interview: Sam Heath, Head of Retail and CPG, Tim Horton's
jeudi 24 juin 2021 • Durée 19:56
Sam Heath and I worked together at McKinsey many many years ago. He is now responsible for marketing Tim Horton’s in Canada (where it is by far the largest quick service restaurant chain), and Timmie’s fledging business of selling its product in grocery stores. Last year, out of nowhere, Sam’s heart stopped and he “died”. Last week we explore how that event affected him and his overall career in this episode. This episode dives into Tim Horton’s - both the stores and the CPG products - and how he is growing the two inter-related businesses.
Edward: This is Marketing BS. This is part two of my interview with Sam Heath. Today, we're going to dive into his experience as head of retail for CPG and Tim Hortons. Sam, we're both Canadians, and every Canadian in the country understands Tim Hortons down to their bones. But for American listeners, can you describe a little bit what Tim Hortons is and what it does?
Sam: This might be a little bit of a long answer and I'll come at it in two ways. One way, our former CEO tried to describe this to everyone at Burger King right before the merger happened. He said, imagine if Coke operated restaurants in the US and there was no Pepsi, which is a pretty good idea of how important the brand is. Fundamentally, it's a coffee shop/ breakfast/ lunch space that has about a 50% share of the QSR market in Canada, which for context is the sum of what the next 13 chains combined. The next chain is McDonald's. It's just absolutely massive in terms of what it means for Canadians who want to eat.
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Peter:
And we could talk about it, but all if you go a level deeper and say, what are they thinking? How are they making these decisions? Sure. Maybe the psychology's a little bit different, but from a business standpoint, that's all cheap talk. All we really care about is what are people doing?
And in that regard it's no different than people rolling a dye to say, which, which of these different items am we gonna buy?
Edward: What they're, so let me quote from the actual article. It says that basically in the past, whenever someone bought a Ford vehicle, 58% of the time it was a Ford vehicle. Now, when they're buying the Ford Electric vehicle, 66% of the time, it's not a Ford vehicle. So there's significantly more people switching to Ford to buy the electric vehicle than we're switching to Ford to buy the non Ford vehicle.
Peter: Yeah. First of all, we don't even know if it's significant or not, but second of all, it's cuz the set itself is changing. The number of electric vehicles out there is really different. It, no that's just nonsense. It's cherry picked, rubbish.
Yeah. The way it's interesting that we talk about cars cuz the people who first set out these rules that I'm referring to and I know you know it well. There was a guy in London called Andrew Berg and his heir Byron Sharp at the University of South Australia.
They basically say that it's you have your die. I have my die. And what drives our choices is, It's just as if random, and it's remarkable how well that story works. The do sleigh model as we call it. And there's no reason to believe it'll be any different here. Do you think So?
Edward: You say it's random, but that's not entirely true. It's weighted random, right? Because if I have, if I bought, if my last car was like a Subaru Forester I think when I go buy to buy my next car, I'm more likely to buy a Subaru Forester than amped. Whatever the average of all the other market shares are. I assume
Peter: you are so right about that.
It's, yeah. It's not that we're all rolling a six-sided equally way to die. In fact, it's not like we're all rolling the same dye that, that there's gonna be this distribution of dice and even that is gonna be well described by again, a. Jewish lay distribution. Look that word up. And yeah, you, but you have your die.
And the important point is that your die doesn't change very much over time. So whether it is covid or internet or EVs, you're rolling pretty much the same die. And there's just so much randomness around the choices that you make that it appears that there are some patterns, but there's really.
Much to it. The only thing that could be going on here is that we might sometimes. what these like guys like to call a structured submarket. So it could be that though that that just as gasoline split off into leaded and unleaded, then people would move into one corner of it. Maybe we'll see something like that.
But it's not some kind of fundamental change in the way that people make decisions.
Edward: So again, I go back to. We're talking about, there's no, like the brand loyalty is not a thing, but brand loyalty in that example is right. There's something to, even if it's not oh, I love my Subaru Forester.
It's the fact that. That I had a Subaru Forester before, I'm more comfortable. I'm the type of person who would buy a Subaru Forester the first time, which means I'm probably still the type of person who's gonna buy it a second time. Plus the fact that now that I'm used to using it, right? So I'm the, and I know it works and I know it.
Presumably it operated the way I wanted it to operate. And so when I go to buy my next car, my default choice is the same car I had before. Now it could change, but the default choice is there, and that's a form of brand loyalty.
Peter: But, so there, there's two pieces to brand loyalty and you described them really well.
One is just that you just have this natural propensity for whatever reason, to buy some things more than others. That part Absolutely. Positively. And that's why your die might be, a little bit weighted more towards the Subaru Forester. And mine might be weighed a little bit more towards, I don't know, a Tesla or something.
Edward: And is that the selection effect? The fact that I bought a Subaru Forester means that, I'm probably the type of person who buys Subaru forests.
Peter: Exactly. Yeah. Cuz then the second piece to it, which is the part I take issue with is this idea of lock in this idea that my propensities get shaped by my behavior over time.
There's not much evidence to that. Again, if you're a supervisor person Yeah. Then you're gonna lean towards it more than most people would. But your propensity to do it isn't gonna get higher over time. It's pretty. Maybe, but it's gonna pretty much stay at that same level no matter how many times you, you roll that die or buy a car, that's the big piece of it.
We don't see that kind of lock in. We don't see that kind of learning. We don't see all of that romantic stuff that we like to talk about where the customers learn to love us and we learn to serve them better. There's not much to that
Edward: really. But I feel like. Say I'm doing, let's switch to a new category.
Let's say I'm doing laundry. Let's say I moved to a new country, so now I have no brand loyalty at all. The first time I go in I, I look at the shelf and I pick one effectively at random, and I take that home and it works. I feel like the next time I go to the store to buy laundry, I'm gonna go and buy that same one.
Just cause I know No, it works. Rather than trying to gamble on something that I don't know that.
Peter: First of all, what you said effectively at random, there's gonna be a lot of influences on it. It could be the brand name. It could be where it's located on the shelf. It could be the colors, it could be stuff that you heard about, but you haven't even thought about, seeing ads for it on the subway or hearing people talk about it.
So there's a lot of influences there that. Things look random, but they're not. And those messages, one way or another got through to you. So it might be less about the actual experience you had with the product and more about the, some of that implicit prior exposure you had to it, that's gonna drive those choices that you make.
That's, that, that's the real important point.
Edward: Sure. And so I, so you say, Hey, the, whatever those influences were the first. They're gonna influence me the second time, but doesn't, the fact that I used it and it worked influenced me like I feel like it does. I feel like. Once I have a chocolate bar that I like, I'm more likely to buy that chocolate bar again.
Even if it was, let's say it was gifted to me. Let's say someone gave it to me rather than me choosing it. Once I have something that I know works, it feels like why wouldn't I stick with what works
Peter: well? Because of all, you might, you just might have a propensity to, to stay with that chocolate bar, but there's all kinds of reasons why it might be just variety seeking, that let's just try something different.
I like this thing, but, ,
Edward: that may, maybe that makes sense for chocolate bars, but I. For cleaning my clothes. You know what, let's just .
Peter: But, but it could be a situational thing that, oh, my mother-in-law is staying with us this week. And, and she only likes certain kinds of things.
And so there could be things that, that might be perfectly rational. Why you're switching around. But to, to me, as an outside observer, I'm just looking at that sequence of choices. And man, oh man, it looks an awful lot. , rolls of the dice. Now to be fair I mentioned all this work by Aaron Bergen Sharp, and they basically said, you have your dye, and it never changes.
Now, I myself have written a bunch of papers that show that, that model's a pretty good first pass. But every now and again, people. Do throw the old die away and do start with a new one. So I don't rule out the idea of changes, what we technically call non-stationary. But the times that you do that tend to be relatively infrequent and they tend to be dare I say, random.
It's not like necessary because of a pandemic or a or change in the macro economy. It's just, there's just something in your life that. Be related to anything anyone else is doing that just causes you to shift your preferences. And it doesn't happen that often.
Edward: What about sampling? So say I'm a I'm a loyal, I don't know, strawberry jam eater, and I'm doing it all the time. Not because I'm loyal, but because I have a propensity to eat Strawberry Jam. And then I go into the grocery store and they give me a sample of, I don't know, grape. , does that have no influence on the chance of me eating crypto jelly?
Peter: I did say that in, in fact, I'd say it's stuff like that. It's sampling, it's word of mouth. It's seeing a Super Bowl ad that sometimes we'll have people switch around a bit. It could be just a change in which things are on which shelf in this store. And and that's why to, again, to me as an outside observer, I see some switching around again there.
Perfectly good reason. It's cuz someone, forced that grape jelly on me. But it makes it seem like that you are rolling a die. And so yeah, a lot of these influences will will have some impact on it. But to the outside observers, it looks pretty random and it looks relatively steady over time.
Edward: But if, again, if I outside observer, if I'm the marketer who's running the sampling program, , I r I go and start sampling a bunch of these jams stuff. Can I expect that my jam sales are gonna increase and that the people who switch over to start buying that grape jelly are more likely to buy grape gel in the future? Like the impact is more than just the next purchase, but it might be like a series of purchases after that.
Peter: This starts where it gets really interesting. So again, a lot of this. Great. Work by Aaron Berg and Sharp. And Byron Sharp has this book that I'm sure some of your listeners would know called How Brands Grow. And they talk about a thing called Double Jeopardy, which again, I know you know Ed, which basically says if you can get more people to buy it, if you could increase the penetration, the footprint, just the overall number of people who tried The Thing at least once. That in and of itself is gonna be associated with higher degrees of loyalty. So yeah, your point is pretty good. You get more people to buy it, they're gonna tend to buy it more often. They're gonna appear to be slightly more locked in having a slightly higher propensity to buy it. It's really counterintuitive, this idea of. Double jeopardy. But it's really powerful. It's pretty much universal. And it's something you should expect to see instead of it being the exception.
Edward: Yeah. So then looping back to the wall Street Journal Electric car article sounds like they're doing the right thing by introducing the electric cars, they're getting people, so Ford introduces an electric car and it's getting people who didn't buy Ford before to be more likely to buy them now.
So it's a customer acquisition play it brings and it brings 'em into the Ford fold. And then once they're in there, Ford's market share increases because they now have more customers they acquired with a electric vehicle. And then once that happens, the double jeopardy kicks in and they should. Those people who have bought those four vehicles the first time, more likely to keep buying them in the future.
Peter: So you will see some of that. Absolutely. The big key is how to get that wonderful cycle going. And in other words, how do you do the acquisition? And again, going back to the great work of Aaron Bergen Sharp and others, you can't just lean on one attribute. You can't say, this is the coolest, newest electric vehicle. You gotta. Broadly appealing. You gotta really punch up a number of different attributes that, yeah, it's gonna save the environment. But you know what? It's all, it's also fun to drive and it's very safe and and your friends will like you better. So you don't lean too heavily. Don't nichey yourself.
You want to make yourself broadly appealing and that's gonna bring in more people and just, implicitly get them to do to. Or to roll your side of the die a little bit more often. It, it really is amazing how counterintuitive that he did. Double jeopardy is, but you just see it it's funny to see a lot of companies stumbling upon it as if it's something new and unexpected, it's been there all the time.
Edward: And what's neat about this is it does hint at that, the next paragraph in the article talks about how these people buying these $70,000 new electric vehicles it what says they're, I dunno if this is actually true, but this is what the journalist is saying. They're as likely to own a $30,000 Subaru Outback as they are to buy, as they are to have previously owned a $100,000 Porsche 9 1 1 sports car. And whether that's true or not, the idea that we should make these vehicles to appeal. Everyone rather than just some sub-segment. Sounds like a step in the right direction for the marketers anyway.
Peter: Yeah, it, and it goes against the grain of so much of what we've taught and learned in the marketing 1 0 1 s. We just figure out what your distinctive attribute is and hammer that and find people who care about that instead. We're trying to say, not so much be all things to all people, but a step more in that direction.
Edward: Great. Anything else to add, Peter?
Peter: We just want people to appreciate that this is the way the world works, whether it's electric vehicles, whether it's soup, whether it's hotels we expect to see these kinds of patterns.
Nowadays, that's something that all law firms are trying to do, but for the founders of this firm 15 years ago, it was a pretty innovative idea to get rid of the office and have all the lawyers practicing remotely.
We try to essentially implement legal technology in a way that actually delivers value for the client as opposed to just looking good in a press release. We use contract automation software and different things so that it feels different when our law firm is working with you versus when you're working with a traditional firm. We're not trying to just be a less expensive version of a traditional firm. We're trying to feel different from the client when we provide our services.
Then lastly, I think law firms really try to differentiate on service. It's hard for me to compete with a big firm that has a team of staff on a client floor—the art collection, the filtered water, and everything like that that gets delivered.
We have a director of client happiness and another person who works in our client happiness department. We really try to distinguish ourselves in the way that we care about our clients and pay attention to what's going on in business and how we can be helpful.
Edward: A lot of those things sound like great ways to make your clients happy and to keep your clients from churning, from sticking with you. They don't sound like top-of-the-funnel ways to get people to even know about your firm, to consider your firm, or to select your firm when they're deciding which firm to choose. How does someone know? Do you do marketing to let them know that, hey, we have a different model, come and check us out?
Stuart: Yeah, we do. Some of that is through the types of work that we do. We really try to grow through referrals. We try to do as much as possible to have our existing clients help us grow and be a part of building the firm, but we try to market ourselves in different ways as well.
We have a podcast, which is called Business Decisions where I talk to entrepreneurs and speak with them about their businesses, how their businesses are evolving, and the kinds of challenges and business decisions that they're facing. Then, I talk to one of my lawyers about one of those business decisions and the legal implications of that. So bringing together the startup world and the small business world with the legal challenges that they have to deal with.
One of the ways that we try to reach that audience is by showing that these are the kinds of clients that we work with and the kinds of things that we help people with, and hope that that resonates with people.
Edward: Does that work? There was a company here in Seattle called Avvo that was basically a marketplace for lawyers, but where they did fairly well were these Q&A things where people would post questions and lawyers would answer those questions. The reason why lawyers are answering those questions for free was the idea of someone who would read that answer and be like, oh, that's the problem I have. I should go and talk to that specific lawyer who answered that question. Is that what you're trying to do with the podcast?
Stuart: Yeah, a little bit. Most law firms are trying to do content marketing as much as possible. It's one of the things that lawyers are particularly good at. This has just happened, this development and this new legislation. Here are what the implications are for you. That's one of the things that all law firms try to do and what we're trying to do with our podcast, but also with some of the things that we put out.
We try to really think about it from the perspective of the clients and what actual business decisions they're facing right now. In particular, if you look at the COVID-19 situation, there were a lot of questions at the beginning, which were not huge legal challenges but I don't think I'm going to be using my office for quite a while. Can somebody help me understand what my options are for my commercial lease? If I have to renew my lease in the next little bit, how should I be thinking about that, one of those challenges are?
We tried to show up at TechTO events. We sponsored one of the TechTO events and had four lawyers there just to answer questions from entrepreneurs. We created a free legal help desk for people to contact us with COVID-19-related legal questions, which were largely employment, real estate, those sorts of things, and contract analysis. What does this mean? Just things that people hadn't considered until they were forced to consider them due to the circumstances.
We'd really try to just put ourselves in the shoes of our clients. What are they wrestling with? What's top of mind? What do they need help with? How do we put something out that's helpful and useful to them?
Edward: Does that work? Have you been able to track that top-of-mind awareness you get from doing that type of work through a new client coming in the door?
Stuart: I don't really try to get all that granular with my tracking on some of these things so I couldn't tell you specifically which of these initiatives is working.
The firm is growing pretty quickly. In particular, in 2021, it has been a pretty dramatic growth year for us. It's an endorsement that the things that we're doing are working. But if you were to ask me how much of that comes from the podcast, how much of it comes from the client's happiness efforts, and how much of it comes from the monthly newsletter that we put out and the content that we share to try to be helpful to our client base? I couldn't tell you what percentage belongs to each, but they all add up to a recipe that's working well for us.
Edward: When a new client comes in the door—not expanding on an existing client, but a brand new client comes in—do you ask them, how did you hear about us?
Stuart: Yeah. It's almost always from someone. Hiring lawyers is a little bit different. There are certain types of law where maybe you're going to go onto Google and just type in personal injury lawyer or something like that, and maybe you get leads that way.
In general, what we're really trying to do is make sure that we are a law firm people have heard of that have some familiarity with it so that they'd speak to one of our clients and they hear what a great experience that client is having. That we're not a name that they've never heard of or a firm that they're not familiar with. That we're in the consideration set already so that when they hear more about us, they'll reach out and get in touch.
Edward: Stuart, do people even hire law firms? Going on a little bit of a tangent, are they hiring law firms or are they hiring the individual lawyers? We talked about this referral, I’ve heard of you. Are they hearing about Caravel, or are they hearing about an individual lawyer at Caravel?
Stuart: It's definitely both. It's a little bit different than other professional services businesses. In consulting, people generally will talk about the firm and will mention the firm name. You see a lot of lateral hiring in law firms of lawyers moving from one firm to another, and the clients go with them to their new firm because the loyalty is really to that individual lawyer as opposed to the particular firm.
Sometimes it is, but a large part is the relationship with the person who's actually doing the work matters a lot more in legal services than it does potentially in other professional services for sure.
Edward: How do you do that as a running marketing for the firm? Are you trying to reduce the amount of marketing to the lawyers, or do you increase it and then leverage it for the firm?
Stuart: At the firms I've worked at—in particular at Torys—I started an initiative where we did video podcasts. We were the first firm to do that. That was really to get my lawyers out in front of people. They could see them, they could hear them, and they could see that they're not intimidating.
Torys is a pretty strong brand in legal services in Canada. In some cases, it can be an intimidating brand, so I really wanted to put people front and center so that you could see our people, hear them talk, and hear what it's like to have a conversation with these people. I think that was very effective at humanizing the firm and getting some inbound interest in the firm that way.
We would do dinners with CEOs to try to get and have speakers come in as a way of getting exposure so that more people who talk to one of my lawyers had a chance to see that they were both excellent lawyers but also excellent people to work with in difficult situations. I thought that was really important.
We do the same thing at Caravel. I have just an amazing team of lawyers. I just want more people to know about them and to have a chance to listen to them or see them in a video, at a conference, or something like that. Because the more exposure people have to my lawyers, the better the firm is going to do because we have an incredible group of lawyers.
Edward: Is the idea then that you have to have a group of lawyers at a time? It's almost like you're going to sell them as a bundle rather than as individuals. I can imagine that if you start raising the profile of any given individual lawyer, they can take that with them. That brand equity takes the elevator down from every evening at 5:00 PM.
Stuart: Yeah. To a certain extent, you have to rely on the culture of your firm and the firm that you're trying to build, that you give them a reason to choose to practice with you as opposed to going someplace else.
Certainly, you can read all these stories in The New York Times about partners that are moving from one firm to another for what I think seems like outrageous sums of money. They're worth it because they bring all that work with them.
That's certainly something that you have to be mindful of. I had one client that said to me, I'm sure you have a basket full of stars at your firm. I just don't know who any of them are. That's going to work against you if you don't put your people upfront and give people a chance to see that you do have excellent legal talent that can really help them, and that would be thought partners, real support, and trusted advisors for those clients
Edward: Are all these top law firms priced the same, or is it significantly different from law firm to law firm?
Stuart: There are definitely differences. Caravel is a lot less expensive than a traditional Bay Street law firm in Canada. It depends on the market. The rates are different in Vancouver than they are in Toronto, for example. To a certain extent, people want to feel like they're getting great value more than they want the cheapest lawyer for sure. I think legal services have signaled quality through rates.
How do I know this woman is a great lawyer? It's because she charges $1000 an hour. She must be a great lawyer to be able to charge that much for her time. That's a really important signal that they send to the market through their rates.
I'm not sure that clients want to find a lawyer that has the lowest rates because they will associate that with lower-quality either work product or service. What they really want to find is that person who feels like an excellent value. I'm getting that lawyer who's a great lawyer and who I know is going to do a fantastic job for me. I feel like what I'm paying is fair.
Edward: How does Caravel get around that? You guys are cheaper than (say) Torys. Does that signal that you're lower quality? How do you manage that?
Stuart: I don't think it signals that we're lower quality. I have a huge amount of respect for the big traditional law firms. Having spent time in one for a long time—six-plus years—I feel like I have a real appreciation for all the things that they are very good at.
There are the types of files that big, traditional, national law firms can handle that we would not be the right fit for. But I do think it means that we have to explain and share with people what is different about us and why we are at the rates that we're at. That is different than just lower quality because I tell all of the clients that I speak to that I don't want anybody to be holding us to lower standards than they hold their traditional law firm to just because we're less expensive.
We think that we provide as good or better service than all those firms, and our lawyers are all experienced great lawyers who have relevant industry experience and exceptional training. They are every bit as good lawyers as what they would find elsewhere. You have to do some education to make sure that people don't just see that it's a lower-cost law firm, but a different way of practicing.
Edward: How much of your marketing has to go towards lawyers rather than clients? I imagine, to your point, what you're selling as a business is effectively the people that are working for your business as a service firm. Having really strong lawyers is really, really important. Is marketing a part of that to make sure you can attract really strong lawyers?
Stuart: Absolutely. There's certainly a virtuous circle that gets created. The best clients attract the best lawyers, and the best lawyers attract the best clients. Once you get that virtuous cycle going, it's a nice flywheel effect that you end up with.
The matters that you're handling, the financing rounds, the IPOs, and the M&A deals that you're doing, people notice that and you end up attracting talent as a result of being seen as being in the mix and serving the kinds of clients that people want to serve.
The nice part about Caravel is we serve a lot of innovative leading startups across Canada. In a lot of cases, the fact that we serve some of these technology companies or what have you that have garnered headlines and attention over the last decade is a vote of confidence from one of those startups. It carries a lot of weight with other clients that then consider Caravel to assist them.
Edward: I see that. If you go and say, hey, we serve Google, Facebook, and Apple, that's a really good signal for clients to be like, oh, I want to go and be with a law firm that serves those guys. It's also a good signal for the lawyers to be like, hey, I want to go and work for the guys that serve those guys.
Are there other other types of things that don't have that flywheel effect? Is there a trade-off? Is there marketing that you can send out to be like, hey, this is going to be good for the clients but bad for the lawyers, or bad for the lawyers but good for the clients?
Stuart: There's always the tension in a professional services firm that jumping through a lot of hoops to make your clients happy can often come at the expense of the consultant who's asked to travel more than you would say is a reasonable amount or late nights for a lawyer that may affect their work-life balance.
To a certain extent, if you're trying to market to both at the same time and you're sending a message out to lawyers that, hey, we have a flexible model that allows you to practice from wherever you are, you have to be mindful of how that message is going to be received by any clients who are seeing that marketing.
If you are talking about what exceptional lengths to go to to provide service that goes above and beyond to your clients, that may have an effect on lawyers thinking, well, that sounds like long nights that maybe is not what I'm looking for. You do have to manage that trade-off for sure.
Edward: It's interesting. Google doesn't have that problem. Google can advertise that they have free lunches, pedicures, massage therapists, volleyball courts, and laundry on site—all these employee benefits. But that doesn't make me be like, oh, their staff is going to be coddled, therefore, I'm not going to use their search engine.
Maybe I do that if it's a lawyer who talks about, hey, we have all these special things that make people super relaxed and so on on-site. That doesn't make me want to use those lawyers anymore.
Stuart: When you hear all that, oh, that's going to be expensive might be the first thing that comes to mind. You do have to manage that.
To a certain extent, as you are out there in the market trying to tell clients about your services, it certainly is always in our mind that the people we want to come work with us are also reading those ads, reading that content, and are learning about our firm at the same time. We do always have both audiences in mind with whatever our marketing efforts are.
Edward: Which is more important? If you had to choose between marketing to lawyers or marketing to clients, which one wins?
Stuart: I generally think of most of my marketing as being towards the clients, but I am always aware that if I don't have lawyers, I have no business. I really try hard to make sure that I'm always respectful to my lawyers and trying to create an environment where they feel appreciated and respected for the skills that they have and the hard work that they put in.
Then, I rely a lot on the fact that my lawyers have all been practicing for a long time. They know a lot of the people in the market. In general, if a lawyer is considering coming to work at Caravel, they're most likely going to know somebody that works at Caravel and are going to call that lawyer and ask them what it's really like to work here. I expect that a lot of the marketing or the representation for the firm is happening without me knowing anything about it or being aware that it's even happening.
Edward: It seems like referrals are extremely important for your clients, but also extremely important for your lawyers. It feels like that's the number one marketing channel for both sides.
Stuart, before you go today, tell me about your quake book or quake article. What quake content have you read that has fundamentally changed the way you think about the world?
Stuart: In the startup world—which I came to later in my career—I would say one of the books that really had the biggest effect on me was The Hard Thing About Hard Things by Ben Horowitz. I actually take a great deal of comfort from the fact that it's supposed to be hard. I think that's true at the law firm as well.
The challenges that we've talked about today are all challenges that all the law firms face for sure. Law firms are unique businesses maybe because of the nature of the services that we provide, but they're at the core of their businesses.
We have to take care of clients, and we have to take care of our talents to make sure that they are there and ready to do a great job for our clients. We have to market. We have to worry about pricing, where we are, and what our competitors are doing. We have to think about innovation, technology, and everything like that.
A lot of times, it seems very hard, and there was a part where I took a great deal of comfort in the message that it's supposed to be hard. That's actually a sign that we're on the right track.
The piece that I always go back to and I share with people the most is this Fast Company article from the '90s which was by a world champion juggler. It was all these lessons from juggling that he shared in the article, which I thought was really insightful. It was all the things like you touch something, you let it go, and then you have to trust it's going to come back into your peripheral vision at the right moment to deal with what agony does, and then you have to let it go again.
This idea of, how do you manage all the things that you have to manage when you're a CEO or when you're running a team—as I was early in my career of a couple of hundred people? You can't watch things all the way into your hand and watch that because everything else will fall if you try to do that. You have to trust your process. You have to trust that you'll see things at the right time and have the right systems in place. You have to trust your team to do good work and manage those things.
I've shared that article with probably 40 or 50 people, I would say, in the course of my career.
Edward: That's a great way to end it. Thank you so much, Stuart.
Edward: You came on at that project work, the McKinsey work you were doing for them. Was it a marketing project?
Stuart: No, it was really a full strategy review for the firm. The firm had expanded into the US and had done a number of interesting things. We're five years onwards, wanted to take a look at some of the decisions they've made, whether they still made sense, whether there were execution issues that they could tighten up, that kind of thing. So I came in and led that project to make a set of recommendations overall for the firm.
Edward: Who was the individual at the firm that was your client? Who was thinking through the strategic problems that you're giving these recommendations to?
Stuart: I've worked most closely with the managing partner at the firm. But I really worked closely with the entire executive committee, which was made up at the time, I believe, of seven senior lawyers at the firm including a managing partner.
Edward: They were all lawyers. They were all practicing lawyers who were presumably trying to hit billable hours, targets, and billing clients and managing teams, and then they're doing this on the side, which is like, what is the strategy of our firm going to be?
Stuart: Yeah. The managing partner at that firm doesn't actually practice and doesn't work with clients any longer. His full time job was running the firm. But the other six members of the executive committee were active leading senior partners inside the firm who ran practice groups, had responsibility for the most important clients at the firm, that kind of thing. So they had to juggle all the strategy responsibilities and talk through all the business decisions at the same time as maintaining an active practice.
Edward: Then why bring you on as a CMO? Why not head of strategy or chief strategy officer?
Stuart: I was essentially in charge of business development, marketing, and strategy for the firm. I became a non-voting member of the executive committee. So I had an opportunity to attend all the executive committee meetings and participate in all the decision making that went on from that point forward.
Edward: Why call it marketing? The three months you spent were doing strategy work for the firm and now you come on board to implement it, but they're calling you marketing.
Stuart: I think the intention wasn't for me to do a lot of marketing work, but they had a 14-person marketing department. I was nominally replacing the person who had run the marketing department. The thought was at the time, it's a high-performing group, it won't require a lot of your time. But a lot of the stuff that you're going to do with clients and with the overall strategy we want of the firm, we want that to dovetail nicely with what the marketing department is doing.
Edward: Got it. When you were at McKinsey, were you a marketing specialist, or are you more of a strategic specialist?
Stuart: I was more on the strategy side. The first marketing job I ever had was chief marketing officer, which is an odd path for sure.
Edward: Yeah, I get that. Now you're at Torys and you're the CMO. How much time are you spending on marketing versus what you'd call strategy?
Stuart: I would say it changed. I was there for 6 ½ years. I would say the first two or three years, there was a lot of strategy work, there was a lot of organizational work, getting the office in New York and Toronto to work well together. We ultimately then went on to open an office in Calgary while I was there. They've since opened a couple more, but there were three when I left.
There was a lot of work like that that I did. But ultimately, positioning the firm in the market became a big important part of my job. How we represented the firm out into the market and a lot of the things that I think of is marketing like pricing, how we treat our alumni from the firm, and things like that. That became a bigger part of my role over time.
Edward: How did you learn those skills? Was it just learning from your direct reports, the people had been doing marketing?
Stuart: Yeah. I would say I had some learning from the team. It was a strong team, so I was able to leverage that. In particular, for things where you don't have a lot of experience naturally from just being part of companies and working your way up. There are things like running events and some of the marketing stuff. I had very good outside advisors. I had an excellent advisor who I really trusted and came to rely on heavily who was helping me with public relations and some of the other things that I didn't know very much about.
In my second week at the firm, there was a situation where the firm was in all the newspapers, and reporters were calling me, and I went out to talk to my assistant. I said, why are all these reporters calling me? She informed me that I was the chief spokesperson for the firm, which hadn't come up in the interview process.
I ended up having to deal with this situation and having never been trained on any of that stuff, just really at the start trying not to make any horrible mistakes. But pretty quickly, I realized that I needed someone to come in and give me some media training and how to be able to handle those kinds of questions without inadvertently making the problems worse for the firm.
Edward: That's crisis communications. It's not just a CMO specialty. It's a subspecialty within public relations, which was a specialty. It's right down there. You thrust into that without any background in it, it's got to be challenging.
Stuart: It was challenging for a couple of reasons. One was—this is going back a little bit but—blogs were coming out. I'd have the Wall Street Journal Law Blog calling me about this situation looking for a comment within just a couple of minutes because they're about to go live with this. It wasn't like these or newspaper articles that were going to come out the next day. These were a lot of things that were going to be going online within minutes and you have to provide a comment.
Oftentimes, with regards to a courtroom situation, I had people in the courtroom who were providing me with updates. But if I hadn't gotten an update by the time reporters were already reaching out to me, I was in a certain sense flying blind. I had two individual lawyers who were really involved in this case who were providing testimony. I felt a lot of responsibility for their situation, their individual careers, and how their reputations were going to come out of this.
Because I believed then, I believe now that they hadn't done anything wrong. But there were a lot of things that were being suggested and you want to be very careful about how you manage that because it wasn't just the firm's brand that I was trying to protect, I was also trying to protect those two individuals and make sure that the things suggested about them weren't accurate.
Edward: I want to go back a little bit on the path that you took to get there. What were you passionate about when you were 12–14 years old?
Stuart: I would say I had two passions, which were really just sports and music. I was either outside playing sports or I was inside listening to music. Those were the two things that I was really passionate about.
Edward: Where did that lead? You did a lot of music at that age. I tend to believe that the stuff you do at that age does carry through the rest of your life. Did it for you? Is music still a thing and it didn't affect your career in any way?
Stuart: It is still a thing. I still have an active band that we play in clubs around Toronto when pandemics aren't stopping us from doing so, which is a great outlet for me, and write songs and things like that. It gives a creative outlet for me for sure. I ended up going on to play sports all through university. I was the captain of my university volleyball teams. I was on the university hockey team.I played that way.
I think you'll learn a lot of skills in terms of teamwork, leadership, overcoming adversity, and things like that when you're playing sports all the way through.
Edward: Related to this, is there anything that you believe strongly that many other people don't?
Stuart: One of the things that I came away from McKinsey really thinking was that most of the time when I would go into an organization and spend time with the senior leadership, there was really not a lot of magic to it. You meet these people, they'd be smart and talented people. But a lot of the business challenges that we were working on were not enormously complex. Sometimes that outside perspective was really valuable or the ability to look at a lot of data and pull out some insights that they could action were. But actually, it was really taken by how straightforward a lot of the business challenges that we were working on were.
In particular, one of the things that really, I think, separates good consulting from bad consulting is the degree to which people are actually bringing creativity and ideas to the table. That's carried forward in my legal law firm career. I used to say to the lawyers at Torys, and I say it to my lawyers now all the time, that if you want to demonstrate thought leadership, it actually involves thinking. You have to sit down and think about it.
If all you're doing is reporting like, well, here's what the government just announced and here's what the rule is now, that's not really thought leadership, that's reporting. But if you want to actually demonstrate thought leadership, you take the time, you put some thought into it. I really enjoyed that part of my consulting career. Where I had an opportunity to take a problem and try to come up with a creative or innovative solution to it, or think about it in a way that they hadn't thought about it before, as opposed to just, well, this is a strategy study so let me get out the slides to have the pillars in it because that's what we do on strategy studies kind of thing. I think that's one of the things that I've tried to bring to the rest of my career following consulting.
Edward: What did you do when you graduated college? What were you thinking at the time? Where did you go?
Stuart: I'd had two plays that I wrote in university that got put on, one by the Halifax Theatre Explosion Festival or whatever. I had the opportunity to sit in the audience and listen to actors on stage saying my lines and reciting the rants, speeches, or whatever I had told my jokes. I just found that intoxicating. I really loved it.
When I graduated from university, I wanted to be a reporter or a writer of some kind. I did think about going to journalism school. I actually went through the steps of applying to journalism school but ended up concluding that actually creative writing, screenplays, a novel, or something like that were more what I was interested in doing. That's what I thought I was going to do after I graduated from university.
Edward: Did you say thought? So you did not go that path. What happened?
Stuart: I did one of those traditional post-university backpacking trips across Europe visiting a lot of countries and journaling through a lot of that. Doing a lot of writing while I did that and then I came back and determined that I really wanted to focus on this. So I ended up actually moving to Hawaii, really just as a place that I thought would be a lovely place to spend some time where I wouldn't know anybody and I could really focus on writing and just see if I had things to say and things that I wanted to express.
The interesting part was that you're right, I did finish a few things. I was pretty critical of my own writing, I would say. I wasn't really sure that I had the right career path for myself and ended up after about a year coming back and then starting to get a job.
Edward: You chose Hawaii. Do you think you would have had more success if you'd gone to a colder or more miserable place?
Stuart: Maybe. Actually, I found the environment pretty inspiring. I took up running and eventually became a scuba diver. I lived with three guys who were all surfers. There was a certain uniqueness to the place, which I think also was helpful to the effort.
Edward: So then you came back to Canada and you started working in the supply chain. Is that right?
Stuart: Yeah.
Edward: How did that carry through to the rest of your career? What did you learn there that was valuable?
Stuart: I think supply chain logistics was a great foundation because it's all about problem-solving and it's all about problem solving under difficult circumstances or constrained resources. I would be faced with challenges like, this truck is hitting 8 hours north with 21 pallets of groceries and 1 pallet of meat was left behind. Now, what are you going to do because you can't have the grocery stores that are six or eight hours north of the city not have meat to sell?
You can't just put that one pallet on a truck and ship it up there because the economics don't make sense. You got to get creative and figure out how you're going to solve that problem.
I did some really interesting projects there. We opened up a new distribution center for slow-moving goods. I got to design those systems for Loblaws across the province of Ontario, which was great. I eventually got to lead a three-shift operation for Loblaws where I had 230 people who I was responsible for. I had to learn how to communicate with people on other shifts that I wouldn't actually see and have a chance to speak with directly before they started their work that day.
There were a lot of things that I learned from that experience, which I think have helped me throughout my career for sure.
Edward: What was the biggest failure point in your career? Where did things not go as expected?
Stuart: Definitely after I left Torys, things didn't go as expected. I would say there were two things. One was I was really disappointed after I left Torys to then start to look at what my career choices were at that point and to learn how little that law firm marketing experience was valued outside of the law firm world. I really thought that Torys was the best law firm marketing job in the city of Toronto. I wasn't looking to do that again after I left.
After 6 ½ years, I really felt like the partners had heard everything I had to say. They would know what I was going to recommend to them with regards to a client before I even opened my mouth. I really felt like the impact I was having was a lot less after six years. It's the right time to leave, but going on to do something afterward, there was really a sense of, it's not the kind of marketing experience that you're looking for.
You're senior enough that you can't go into the junior marketing roles that maybe would give you the chance to get the experience to move into the senior marketing roles in a consumer goods company, for example. You can't go into those roles, but also, you haven't done all the jobs coming up that would prepare you to be the head of a marketing team that's much larger than when I was managing at Torys.
That part, I came to view as, I didn't necessarily make the best choices as to what to do with my career next. I ended up going out and starting my own company, which was a learning experience, but it didn't go well. There were a lot of things that I, in retrospect, could see that I did wrong that I could redo. It was really when I got into the chief operating officer roles that I moved into next that my career went in the right direction again.
Edward: Is there any learning from that? Is it like, hey, you learned that, maybe you can pass it on to somebody else? But going forward in your career, is there anything to take away from that like, hey, don't get yourself trapped in a situation like that again?
Stuart: I'd be curious to see what happens next. I may have done the exact same thing to me now being someone who's not a lawyer but is the CEO of a law firm. The firm has done very well. I think Caravel Law has been very successful in my three-plus years as CEO. However, I'm not sure what opportunities there will be for me after this.
If there's a next act, what that would be is a little bit unclear. I guess maybe I haven't learned that lesson as well as I should have. But for sure, I think, to make those choices intentionally, and I'm thinking about it more than I did the first go-around.
Edward: What are your productivity tricks? What do you do to be productive that most people don't do?
Stuart: One of the things that I think was particularly helpful early on in my career—when I had things happening on another shift that I wouldn't actually be there and see—is I don't try to overly control what my team is doing. I'm fortunate at Caravel. We have a great team. I have people that work with me that I really trust and rely on. But I'm not scared of mistakes, something getting out that doesn't go particularly well, or an ad that maybe comes out and some of the lawyers are not big fans of.
These are all things that you learn not to stress too much about and taking the time to try to get complete control over those sorts of items so that no mistakes happen, nothing gets out that shouldn't have, that the team is perfectly managed at all times. I think one of the keys is to trust. I trust my team. If they make a mistake, we work through it, we come out the other side of it, and everything's going to be fine.
Edward: Stuart, this has been great. We're going to pick this up in part two when we dive into some of the work you did in the law firms.
Vineet: Yeah. We had some extremely busy locations and good corners where there's a lot of traffic. That probably does explain some of that for sure.
Edward: How does the business do that? Is it just because you guys were around longer? It feels like every pharmacy would want to be in the best location. Why did Walgreens get the better locations and your competitors did not?
Vineet: I definitely wasn't around for that period, but I'll tell you that the history of the company is fascinating at Walgreens. That idea of the best corners in America has been something that's been permeating in the company for multiple decades. While it sounds obvious, it's also not the cheapest play to go and acquire the best real estate in the country—the best corners—and build those out.
I wouldn't say that that is the most obvious play in terms of economics, but Walgreens always had foresight. The team that built up this business up to almost 9000 stores across the country really focused on that fact.
Isn't that how most great businesses are built? There are two or three things that initial leaders and founders think about, and they're uncompromising about it. In the case of Walgreens, it was all about finding the most convenient and easy locations for customers and patients to take care of their health.
Edward: Does that philosophy continue? I know you used the word convenient. Clearly, most drugstores, pharmacies, and convenience stores—convenience stores even have the word convenience in their name. How much of that flows through the company, this idea of convenience? Being in those great locations is convenient. Are there other things that pushed you in that direction?
Vineet: It's really about enabling people to take care of their health, but this idea of convenience is something that—as you see today—is all over the place. Convenience is taking different shapes and forms. Especially in a world like today where we live in an omnichannel world, people want to either pick up something. They want something delivered. They want something dropped off.
There are so many different ways that people want to acquire the goods and services today that convenience remains a big part of not just Walgreens but of the industry. You think of the entire categories and businesses designing themselves around getting goods to you as quickly as possible, on demand as possible.
I'd say that the Walgreens real estate strategy was just V1 of a world and human nature where people want things when they want them. That's especially true in healthcare and when you want to take care of a family.
Edward: Let's talk a little bit about you coming on board. Clearly, the real estate play has already happened, but you got to keep this business growing. What are the next levels? What do you do as CMO to get this business growing? Because again, that's what you're responsible for inevitably, getting this thing to grow faster than it was before you came along.
Vineet: It comes down to any job you get into. You look at what are your differentiated assets when you enter a role? Probably, that's part of selecting whether or not you join a company as well. Do you believe that if you join, there are differentiated assets that you can really leverage to drive competitive advantage?
In this case, one of the things Walgreens Boots had was an unbelievable loyalty program membership. Walgreens had close to (say) 80 million, 90 million people in this loyalty program. Boots had—from a ratio standpoint—a similar percentage of the UK population. Let's call it 15 million–20 million.
You put all that together. What I saw in a world where marketing was becoming increasingly digitized and increasingly programmatic was that we had access and understanding of what customers were doing because the vast majority of purchases happening at Walgreens were done as "logged-in users" of the Walgreens loyalty program. When you have access to that many customers and you have a platform like that, the opportunities in today's marketing ecosystem are endless.
Step one was really thinking about what was the future of that loyalty program? How would we leverage our understanding of consumer behavior at the identity level in the most powerful way possible? That's where we went with our strategy. We call that mass personalization.
Edward: Before you came on board, this loyalty program already existed. They already had these members, but you saw an opportunity to leverage them in a way they weren't doing before.
Vineet: Yeah. The program was extremely successful, but it was largely a couponing program. You would log in and then get access to different coupons. You could use (if you recall) the Walgreens flyer or the paper pamphlet that will come into your mailbox every single week. There was a lot of that happening.
You would get Walgreens points. You could use them to drive further discounts off the products you were buying. That's actually what it was. It was a promotion and discount program.
Coming out of Silicon Valley myself right before the Walgreens opportunity, I saw an opportunity to drive personalization and not use such blunt instruments as general couponing, general paper flyers, and things going to people's homes.
In today's world, if you get the right ad and MarTech in there, you can do things in a much more customized way. That's where we went off.
Edward: This couponing program was not personalized coupons. If it was a diaper coupon, it went to everybody, whether or not they thought that person had kids or not.
Vineet: There was some level of personalization, but it was things like you were part of a parent's club or you were part of another club. You were opting into different sorts of things where—as you know where the world's going today—can you almost predict what that person's next purchase is going to be and almost delight them before they're even thinking about the topic? It's all about can brands delight customers and do that at scale? That's what this strategy that we put in place called mass personalization was all about.
Edward: That mass personalization, was it effectively hey, we're going to keep doing the coupon program we're doing before, but now, instead of sending everybody the same coupon or coupons based on their affinity groups, we're going to change those coupons up per person in a way that we think is going to drive conversion higher?
Vineet: That was part of it, but it was so much bigger than that. It went all the way from shifting our media mix from being 70% bought in the upfronts—many of your listeners will know the upfront TV network buying situation—to 70% programmatic where we would buy most of our (let's say) CTV work and radio all programmatically because we could literally match customer cohorts through The Trade Desk and through DSPs into the the media world and get much more targeted in the messages we were sending.
It went all the way from the media down to things like how we were doing couponing which became much more personalized. We actually eventually ended up eliminating the paper flyer and roto completely which was quite a big move at Walgreens because that was a huge part of the shopping experience and journey at Walgreens. Our coupons and our personalization became so much more effective from a redemption standpoint than just a blunt instrument and then all the way down to creating new revenue streams.
We launched something called the Walgreens Advertising Group which was a way for CPG companies who really struggle with direct attribution of their marketing spend to actually buy into us almost like a media network and be able to track conversions with every dollar they spent.
It went all the way from completely transforming our promo and couponing world, to programmatic media becoming the source of our growth dollars, to an advertising network, through to (lastly) the launching of a new app which was irreplaceable.
I was in a retail pharmacy business at the height of COVID. People have to do vaccine setups, vaccination appointments, and testing. We created an app where personal health became the center of that app as opposed to couponing. The app became the digital front door for Walgreens which would then show you that you could go into shopping. You can go into healthcare. You can go into finding care. It was a total reinvestment in our app as well that became personalized to you as a user.
Digital front door, media, couponing, and programmatic advertising really just transformed the infrastructure of the company.
Edward: There's so much meat there. I want to dive into bits and pieces of this and we'll see how much time we have today. Let's talk about killing the flyer first. You had this flyer that existed for 100 years at Walgreens, and you killed it.
First of all, how do you get that decision through internally to go and kill something that's been around for so long? Then, how do you know what it's costing you after you do it?
Vineet: I don't know if it was really around for 100 years, but it's definitely around for quite a while. We're in this new golden age of marketing. What I love about this age we're in is that everything is measurable. Nothing has to be done with a blunt instrument.
This was done very simply. We first ran A/B experiments. We took certain areas where we might have pulled the flyer, and we ran only couponing programs. We looked at redemption rates. We talked to manufacturers who were supporting a lot of those coupons. We basically looked at raw data and the cost of producing that flyer—which is not cheap. You've got to print it and there's a lot of labor that goes into planning this. It's almost like you're releasing a little mini magazine or you have local paper every single week because you got to pick every box. There was a lot of cost involved in that.
We compared that cost to the upside of personalized couponing. We ran that in a very controlled way across the country in different areas with different cohorts and with different segments, and eventually got to the conclusion that hey, the data is now indisputable. The time is now.
We made that call. Was it an easy call? No. Was it data-driven? Yes. Was it a popular call? I'd say with half the company, the people understood it. Probably, the other half of the company, to this day, would want it back because there are just no perfect decisions. You're inevitably going to leave some customers not happy with the fact that you make that call. But you take all of the costs and more importantly the mindshare of people who are investing weekly and making that flyer happen every week and you repurpose that to the future of what retail is going to be that also pays dividends. Less hard to measure, but sometimes as a leader, you've got to make those calls.
Edward: Yeah. That's your limiting factor always, the number of smart people you have working for you and what they're spending their time on. What's the difference between couponing and flyers? Are those like electronic coupons? What do you mean by couponing?
Vineet: The flyer was essentially something that would go into your home and you'd see all the sales at Walgreens that week. Couponing would be like you get those paper coupons you can cut out. What we moved to was much more digital couponing. Literally in your inbox, here are the best coupons for you this week. We would use that instead of the flyers themselves.
Edward: Let's talk next about buying a television. You're buying 70% upfronts and then you switched to 70% programmatic television, is that right?
Vineet: Programmatic media in general.
Edward: A lot of programmatic media are things like digital paid social, Google Ad Network, and so on. Does that mean you shifted your spending from television to online digital?
Vineet: Not necessarily. Programmatic is a word that gets used and abused in many ways in our industry. At least the way my mind captures it, there's the direct response which are AdWords and some of the social media networks that are there. We continued to do that. That was never going to change in our mix.
What I'm talking about is more of the mid and the upper funnel where we did a lot of radio buys, TV buys, and some of that area that a lot of companies call brand media, a bit higher up in the funnel. A lot of that money was actually spent in the upfront. We would upfront-buy a whole bunch of TV inventory and lock that in. The problem with that is you don't have flexibility. If you try to cancel it, you get all these giant fees.
It was really in that space around TV which we moved a lot more to things like CTV, over-the-top players, full-episode players, and things like Hulu, YouTube TV, et cetera.
We started to shift a lot more money into still linear TV played on your screen but done through tools that were much more precise like connected TV and radio. Instead of going from general radio, we'd use things like Spotify and other ad networks that were much more logged-in, ID-based networks.
You got to remember, because we had this loyalty program, we had IDs. We could actually match IDs in a much more powerful way than most companies could. For all intents and purposes, we almost created our own walled garden media network in a way. We were able to do that in a pretty powerful way.
Edward: When you do that, do your CPMs go way up? When you're buying connected television or Spotify ads versus all city radio on the big station, your CPMs must be a lot higher.
Vineet: CPMs will go up just due to scale. Frankly, a lot of those audiences in CTV are more expensive to buy than linear, but ultimately, effectiveness goes up. That's why I think you've got to really look at things like attribution and those kinds of things more than CPM to make these kinds of decisions.
Edward: You could measure the lift when you started doing connected television because you could apply it to 80-million people on your loyalty program. How do you compare that to what it was before though? When you're running a national television ad, how do you know how effective that was?
Vineet: It's what everyone does. What's that saying? Fifty percent of your marketing is wasted, you just don't know which half. I think the way you look at it is you look at things like foot traffic. You look at things like redemptions. You look at things like online site visitors.
In the past, they were largely just multi-touch attribution tools that I would say are 60% at best. Even the best vendors in multi-touch will tell you these are not perfect tools. They're directional tools. But once you can get to ID-based and you can actually look at behaviors of groups of people that have been exposed to these ads within your own ecosystem, you can literally see what action they take after looking at that ad. It's almost taking a direct-to-consumer playbook to retail at scale. That's why we call it mass personalization.
Edward: Is there a risk though that now, because you're doing these connected television, that's a lot more trackable? You spend $1 and you know you're making $1.50, whereas before, you were spending $1 and you didn't know how much you were making. To your point, you're 60% accurate. Is it possible that you end up trading accuracy for impact? Is it possible that television before was more impactful and you just didn't know?
Vineet: It's possible. It's not that we moved out of TV. We were just rightsizing the amount of investment. We still did it upfront. I think that upfront TV is always going to play a role in large companies' marketing mix because you've got to raise top-of-mind awareness especially in a category like ours which is a high-frequency category.
It played a role, but again, everything is A/B tested. We would take control groups, we would remix things, and then we would go to the next one. As long as as a marketer, you're focused on experimentation and A/B test-based decision-making, you can work your way through this world of imperfect data that we have. That was the approach that we took.
Edward: Vineet, this has been fantastic. I would love to spend more time talking about basically the advertising group that you're building. I feel so many retailers are doing that now and I think digging into how you guys were thinking about it would be awesome, but we are going to wrap it up.
Before we end, can you tell me a little bit about a quake book that you read that changed the way you think about the world?
Vineet: Yeah. There's this amazing book by Bharath Anand—who I actually asked to join my board at Worldwide Effie—called The Content Trap. We live in a world now where with personalization, what's happening is we have so many channels we need to fill with content constantly. You've got journey after journey of email. You've got all these programmatic channels. You've got all these direct-response channels.
The key really is how do you not get wound up in this trap of infinite content and instead focus very clearly on what the role of content is meant to do in every channel and really enable your business to not focus on volume but impact?
It's a great book that is a great distraction of our time as marketers, which is how much content do I need? He really calls that the content trap. It's something worth talking about and reading.
Edward: Vineet, thank you so much for your time today. This has been fantastic.
Vineet: Thanks, Ed. Really appreciate it. Good to talk to you again.
In this case, there was actually a headhunter or a recruiter in Canada who knew me from the time when I was an assistant brand manager. She happened to be doing this search and just thought, hey, why not? Why don't I just throw his name in the hat? It's a long shot, but you know how recruiters need to build this portfolio of candidates—the young up-and-comers, the established players, and the people in the middle.
I think I was just thrown in as the young up-and-comer. Like yeah, we'll just give you the high-energy 20-year-old and see what happens. It just so happened that the President of Novartis, Canada at that time—who, by the way, is still at the company, running the Global Oncology business now, he's an unbelievable talent—took a liking to me.
We met a couple of times. One way or another, the headhunter's long shot, 20-year-old candidate ended up getting the job. There I was, I ended up becoming the Head of Marketing for Canada.
For those of you that are Canadian listeners, Novartis has brands like Buckley's, NeoCitran. These are just unbelievably Canadian brands.
It was such a great opportunity to spread my wings for the first time. But knowing the right person, luck, and just going for it (I guess) played a big part in that leap.
Edward: I definitely have been in places like that where the headhunter brings you on and you're like, I am clearly not the right person for this role. You totally have me there so that you can show them a balance of range of, hey, here's the person that's much less experienced than the person you need and here's the person who's much more experienced but way too expensive. Let me just show you what they're like out there so that when I show you what you really need, you actually jump at it.
They're almost giving you people that they know you're going to reject because they know you want to reject somebody. They make it a lot easier themselves.
Vineet: There you go. It's like going around and looking at houses with real estate agents where they take you into the cheap house to the expensive house that you can't afford. I was definitely the cheap house that she didn't think anyone would want, but also, I wouldn't harm the process or her reputation as we were going along. That's definitely what I was. There's no doubt about it.
Edward: That's how you got in front of him. Apart from just being personable, why did he take you versus the one that she was trying to sell him on?
Vineet: I think energy is everything. I really do. I'm a big believer in positive energy and connecting with people through energy. You see a lot of books, and I'm not saying these are wrong around things like active listening and all these tools to connect with humans. You need to do those things. Those are important, of course. But in this case, I was just really excited. I was the underdog. I was just excited to even have a chance to talk to someone like this.
I think that energy just rubbed off on him. He very much took a chance. It's a true story I'll never forget. Even though there's always a gap between when you get the job and when you start on the job, there's always a little bit of space there.
I remember that the head of HR at that time had told me that when my name was announced to the organization, because I was essentially the youngest person in the marketing organization as the head of marketing at that time, people went to the CEO of Canada and said, is this what it takes to be the head of marketing of Canada? They looked at my resume, saw how short it was, and were like, I can't believe that this is who you choose.
I remember him telling me in a conversation later on, he said to me, I just told them do you not trust me? It was an amazing thing where this is totally a thing of him taking a chance and him believing in the energy I had to really make a difference. I think he saw in me a desire to make an impact and grow the business.
It just came down to him making a bet on frankly, my excitement, my energy, and the impact that I could make. It was really that.
Edward: When you came into that interview, how did you prepare for that interview? Did you give him like, hey, here's my five-year plan for how I'm going to run marketing for Canada, given that you've never run marketing before?
Vineet: I wouldn't have even known how to do that. I could do that for a brand or two, but I wouldn't have known how to do that for an entire department.
There were a couple of things. There was a brand in Canada—which you'll remember well, Ed—called Buckley's. The tagline was "It tastes awful. And it works." It was this huge cough syrup in Canada.
I remember growing up with that. I told him a story—I still remember this—about my experience with Buckley's when I was a kid. My dad was a pediatrician. He used to give it to me, and it was the nastiest thing I'd ever had. I told him some ideas I had which was specifically, hey, why don't we turn the bad taste—if I just get technical for a second—into a reason to believe in the product as opposed to making that benefit?
We talked about that a little bit. We just went deep. We talked about what a creative campaign could look like. From there, we just connected and we actually ended up doing that. Buckley started growing crazy. That all came out of that conversation in the interview.
Some of these brands I have deep familiarity with, we did some riffing on what these brands could be and how we could position them. That's pretty much as much prep as I need to do because you got to remember that at that stage, all I really knew was brand management, not necessarily department leadership. I stuck to what I knew, and we did that.
Edward: You come on, and you take on this role of running marketing for Canada. What did you not know that you had to pick up on the job?
Vineet: I didn't know anything.
Edward: You knew how to run brands. You've been a brand manager. Now, effectively, you've moved from running a brand to running all the brands.
Vineet: Yeah. Even more than that. I had people that were running those brands. Actually, what I didn't know is how to onboard onto a business. Onboarding as a department head is very different from onboarding as a person taking over those brands because the last thing those folks wanted to see was I was going to come in and do their jobs for them. These are smart, empowered folks that I had to figure out how do I onboard and set the right tone appropriately? That was a big part for me.
The second part that I didn't know was the role of a department head across a company in terms of creating followership, not just inside your department but across the company. That's another really misunderstood thing that you don't see. When you're growing up, you don't realize that the department head has to create followership, not just from within marketing but IT and all the other functions that need to support customer-centric growth of a business.
Frankly, I had to learn a lot about hiring and making the right talent decisions. I made some early mistakes because I just hadn't hired at that level before, and I was looking for the wrong things.
In that job, while in the end, we were very successful, we had great business success, and it took me around the world—that opportunity at Novartis—initially, I'll tell you that that year was tough. I was working tons of hours and I thought that outworking everyone would solve my problems. What I learned really early was that it wasn't about the work. It was what I was focused on, the talent I was bringing in, and how I was leading. I learned a lot in that first year.
Edward: How did you learn that? Did you have a mentorship? The CEO that brought you on, did he sit you down and say, hey, Vineet, you know what, for the first month, I need you to go have lunch with all these people so that you can build your relationships? Oh, by the way, I want you to talk to the head of HR about how to hire people. How did you pick up those two skills?
Vineet: It's really interesting. I didn't really have mentorship because frankly, I didn't have a network at that stage in my career that was "high-powered" enough where I could just call people and say, how did you do this? Actually, this CEO or president of the Canadian business was very high-performing and team-oriented.
What I mean by that is we would do all these high-performing team sessions where we would go offside, give each other candid feedback, and do these round robin-style feedback sessions. I'm sure you've been in those before. I got my butt kicked in those sessions. I would literally go through these sessions and my peers actually would just give me feedback.
Vineet, I know the business is growing, but stop doing this. They were brutal with me. I was 10, 15 years younger than everyone, and they just let me have it.
I tell you, in many cases, I thought it was inappropriate—the way they were giving me feedback—but at the same time, it's entirely warranted. To be honest, Ed, it was situational. Again, a little bit of luck, a little bit of me being really open to listening, but I happened to be on a team where high-performing team norms, feedback, and candid peer feedback were a core part of how this leadership team ran.
If it wasn't for that, I'm not sure I would have learned lessons as early as I did in my career. I'm not perfect by any means at this stage as well, but man was that a crash course.
Edward: It's interesting. I came from the consulting world where you receive harsh feedback all the time. There were times when I was at McKinsey where I'd come home and I'd cry. It was so brutal. But as terrible as that was, you're still forced to learn even from some of the bad feedback I was given at McKinsey.
One time, I had a partner that told me that my notebooks were too small. He was very insulted by my small notebooks. I think even in situations like that, you can say, hey, even if I don't buy his feedback, I can still understand that now, I know that somebody thinks small notebooks are inappropriate. Now, I have that piece of information in the back of my head.
I wonder, in the situation like you're in where all your peers are maybe a little bit threatened by you because you're 15 years younger than they are and you're all reporting to the CEO, they feel like, hey, I can be negatively constructive on this guy because I'm not threatened by him in the same way that it would be with a similar-age peer. While it becomes negative and hard on you, it allows you to learn at a faster rate than you otherwise would from people who are more polite.
Vineet: I think you're right. It was well said, Ed. The other part is what people don't always internalize, which I learned in that. We talked a lot about deep, personalizing feedback. That was huge to the point where it's like, this is feedback. It's not an insult.
As a young kid in your mid to late 20s—I think I was 26 or something—that's a hard thing to figure out. To this day, many of those peers of mine on the leadership team are still dear friends, and I would have had it no other way.
Edward: I want to talk a little bit as you're moving on through your career. You spent a lot of time in marketing in packaged goods, but you also had some GM roles. If at all, how did you think about managing your career moving back and forth between pure marketing roles and general management roles in terms of advancing?
Vineet: My whole career theory is all about chasing experiences, not necessarily titles or pay. What I mean by that is if you dug one layer deep into my career, I've taken three pay cuts in my career. I've just been chasing experiences.
To me, those general manager types of roles—my biggest one was later in my career where I became the Global President of the baby care division for J&J, that's a big role—were just about continuing to learn and continuing to grow. That's really how I thought about it.
I'd be lying to you if I would say I was playing this perfect chess game where I perfectly planned it. I was literally just chasing learning. I was always curious. If general management was the thing that was going to teach me a lot at that moment, that's what I was going to do. If going international was the thing that was going to teach me a lot at the moment, that's what I was going to do. That's essentially how I played that.
Now, in hindsight, general management teaches you amazing skills because by definition, as a general manager, you're not an expert at really much of what you're leading and you have to rely on others. It teaches you a lot. I was just really simply chasing experiences as a curious person.
Edward: Is a lot of that being opportunistic about pull opportunities? A recruiter comes to you, and you say, hey, you know what, that's too similar to what I've been doing before. I'm not that interested. Oh, that's really different. Let me go, throw my hat in the ring, and jump for that.
Was it even more aggressive where it's like, hey, if I want to advance my career, I need an international opportunity, so I'm going to go out and look for one?
Vineet: It wasn't really that aggressive. People say, hey, what's the secret? How do you get a good career? How do you move quickly through your career? I know it sounds cheesy, but I just answer by staying curious and exploring learning.
A lot of my moves were internal moves. The company would take me international or give me a general management assignment after a marketing assignment. In other cases, it was a recruiter or a headhunter giving me a call. In both cases, those were enabled because my curiosity led me to build a network, to ask people for help, and to be really open-minded to things that others wouldn't be open-minded to.
Ultimately, it came down to not necessarily chasing things, but definitely chasing experience. I wasn't actually chasing an international career because that would unlock a move or two moves from now. I was definitely paying checkers, not chess. I guess that's the way to put it.
Edward: Sure. But even with those international opportunities, was it a matter of you saying, hey, current manager, for my next role, I'd really like to do something international? Or was it a matter of Emma's going to nail this role, this international opportunity comes up, and they say, Vineet, would you be interested?
Vineet: It happened one time in my career when I was an intern where I asked for an international assignment. That was at P&G, I recall. I went to India with P&G. I was just like, hey, can I do something international because I had nothing to lose. I was a university kid on my second internship with P&G.
Every other role was happenstance. When I went to Europe for the first time with Novartis, there was a new CEO who had come in. She saw me in a meeting and said, Vineet, I need you to go to Europe.
My story was I literally bought a house with my family, my first house in New Jersey. We never even moved into the house. Two weeks before closing, I moved to Switzerland. I was definitely not planning to buy a house. We moved to Switzerland two weeks before that. My wife was pregnant. I got asked. I got tapped on the shoulder. This is what has happened constantly in my career.
I think it's just that energy. It's the focus on impact. It's just being open-minded—when someone asks you that question—to say yes. I think people would be surprised how many times where if you really look at it, you might have had an opportunity that you just might not have been listening for. That's an important thing to think about.
Edward: I love that. That's really great. Vineet, what are the biggest failure points in your career? Where did things not go as expected?
Vineet: We've all had plenty of those. I would say for me, I already told you the Novartis story, that hard lesson of learning to be a department head and a leader. That was honestly a really tough time in my career. Because my career was moving so quickly, that happened multiple times in my career. I had to take 6–12 months and really just make that work. I went to Switzerland. I became the head of marketing for Europe there. Big job. I was 29 years old at that time.
I'll never forget that I had onboarded with my team. I was living in Switzerland trying to lead an organization, all of whom are sitting in their countries. I was sitting in Switzerland by myself, so it's remote leadership for the first time. I really struggled with that as well.
I'd say in my first six months, I got pretty challenging feedback on how I was leading remotely and how I was connecting with folks in terms of just not being able to make the same connection I could in person.
I had a boss who (today) is a great friend. At that time, I thought I was going to lose my job in my first six months over there in Switzerland. Again, it just came down to that side of it.
I've also had really challenging moments during business and brand launches, product launches, and things like that where things don't go the way you want in your first six months. You're literally fearing for your job because at a certain point—and you know this Ed—you're paid to deliver. There's nothing like feeling when you're going out in the world, trying to deliver on your business, and essentially, you just don't hit the numbers. I've had moments like that through my career as well. You just learn from each and every one of them.
Edward: It's interesting. One of my early managers told me to think of your career as two-year chunks where you come into a new job, you spend a year really learning the job, then a year delivering on the fact that you figured out how to do it, and then you move on to your next thing.
Looking at your LinkedIn profile, it seems you've done a lot of that. These two-year chunks where you come in, the first six months challenging and trying to do the job or you're going to get fired, the next six month learning the job, getting better at it, spend the next year delivering, and then you go and repeat the process again.
Vineet: It's just been the way it's been. I was at P&G for eight years. I was at Novartis for seven or eight years. I was at J&J for four years. It just so happens that every company, every two years, they were either moving me or I got pulled into my next challenge. It actually has worked out that way.
Every couple of years, I've been in a new role because the company sees the impact exactly like you said in that second year. They're like, hey, can you do it in another spot in this company, and someone pulls you on the other side.
The faster you can get up that learning curve in those first six months, the more impact you can have at speed. That's really what I focus on, the learning curve which again goes back to that notion of curiosity and just being willing to listen.
Edward: Vineet, do you have any productivity tricks? Do you have things that you do to be productive that most people don't do?
Vineet: Yeah. I'm really fanatical about productivity. I have one mindset and one trick, I would say. I'm sure one of your listeners have listened to this and have experienced this idea of energy for performance. I definitely do not focus on managing time. I focus on managing energy. It really is this idea of being a corporate athlete. How do I feel about myself? What do I eat? When do I eat? How do I sleep?
One of my most productive uncertain tasks—which is a very different way of managing things than managing just a calendar and your time—is I'm very focused on managing energy and managing the different roles in my life, whether that's being a father, a husband, a leader in a company, an advisor, or a board member. I've had all these different roles that I have and I think about how do I keep my energy high for all those things? That's the mindset.
In terms of actually managing and hacking a calendar, for a lot of your listeners who have either admins or their own processes for managing things, I read this book that changed my life. It's called Getting Things Done. I'm sure many of your listeners have listened to that.
There's this total tactical hack here, this app called To-Do. Shameless plug for the app. I am relentless. Any time I ask for a follow-up, any time I want to book a meeting, everything goes into that place.
What it does is it clears my brain. Everything is in that place. A lot of people work off lists. I don't have lists. If I have something to do, I'll put it on the date that I think it needs to be done. A lot of people will put it today. I'll put it two weeks from now. I open up my app and it's staring in front of me like, oh, I have to get that done. I never feel this burden every day of looking at a giant list and checking things off. It's much more planned and I don't get overwhelmed by the day.
The second hack is that my admin has the same app. We have this amazing system where she has the same view that I do, so she knows exactly which codes are hers to take care of and which codes are mine. She takes care of all of that. We're almost in-sync with each other without thinking. That's a huge part of it.
I've seen a lot of people bring in admins and executive assistants into their lives as they get more senior and they're just ineffective with that person beside them. That's another thing. Find someone you appreciate, show them tons of respect, and create a system that is invaluable. As you get more senior in your career, that also matters.
Edward: Vineet, this is great. We're going to pick it up with part two shortly.
We do this in combination with three key things. First, we have our Atlas platform. There is a term that is going around right now in the analyst community and in the market called extended detection and response or XDR. This is the platform that is needed to ingest, normalize, and analyze all of this data. The second thing we do is called multi-signal ingestion. There are some cybersecurity companies out there that just ingest one signal. They'll do endpoints, or they'll do logs. We ingest multi-signals. We monitor customers' networks. We work with best-of-breed third-party companies, and we ingest their endpoint signals.
We just announced our alliance with Microsoft to ingest the Microsoft Defender endpoint signal. Customers who have Microsoft licenses can work with eSentire and eSentire can manage the MDR associated with the endpoint.
Edward: If a company isn't using you then, are they not analyzing these endpoints? What are the other cyber companies doing?
Angela: I mentioned there were three things. You've got the platform, the multi-signal, and then the people within the SOC, within our Security Operation Center, and within our threat response units. You have to have the combination of these three things to be considered MDR, Managed Detection and Response. Many cybersecurity companies are either selling a point solution, or they're selling software, or they're claiming that they're selling MDR, when in fact they don't have all three of these things working in unison.
Edward: Does a company need to use you in addition to someone else? Are there other elements in cybersecurity that you guys don't handle that they need to supplement?
Angela: Yeah. Companies need to have basic security controls in place. They need to have firewalls. They need to have next-generation antivirus software. They need to have multi-factor authentication. They need to train their employees to understand phishing and not click on emails, if they don't know who these emails are from, and not click on any links. If they have these four things, these are like table stakes from a security perspective. You add an eSentire to provide this overall MDR service. That allows us to fully understand what's going on in the customer's environment so that we can hunt and contain those threats on our customer’s behalf on a 24/7 basis.
Edward: If I were to use the metaphor of a house, which people would understand. Someone needs to train the people in the house to lock the door when they leave, and that's not you. Someone needs to build the walls to make sure they're super secure and strong locks on the doors and plexiglass windows, and so on, guard dogs. All of that stuff is protecting the house. Your job is, hey, someone is going to actually breach the house. They come in and they try to open the door. You know when that happens and you set off the alarm so you can react.
Angela: You can think of it as a house or you can even think of it instead of a house, as a small business. You've got all of this traditional security—the locks on the doors, the guards sitting at the desk, the dogs barking. Sometimes employees will open the door, like my example on phishing, employees will open the door, and let these guys in without knowing who they are. Now, the bad actor is in the building, and we can detect when they're in the building. But now they're searching. Is there personal identifiable information of the employees that I can gather? Is there a bank statement and information on customers that I can gather? Is there an intellectual property that I can gather?
You think about this. We’re in the digital world, and we're able to see who is actually doing these types of things in the customer's environment and have the ability to determine this isn't an employee looking at this stuff. This is somebody who got in via a backdoor. We have the ability through eSentire Managed Detection and Response to isolate that person, and to contain the threat so that this bad actor doesn't start moving laterally through the company to continue to gather more data and more information.
Edward: Your company gets better as you get more clients, as you get more signals.
Angela: Exactly. If you’re customer number 1025, you have all the learnings from customers 1 through 1024. All of the learnings that we have had up to date are now applied to your environment.
Edward: But more than that, that new customer now, because just the fact that they're on your platform, if anybody attacks them, that information gets shared to all the customers that came before them. There are positive externalities in both directions.
Angela: Exactly.
Edward: What do customers do that don't use you? It sounds like your product is pretty essential for protecting against these threats. Presumably, you don't have 100% market share, what is everybody else doing?
Angela: There's some confusion in the market because there are a lot of people, a lot of companies that claim they do Managed Detection and Response. They're slapping the MDR label on their service, when in fact they don't. We invented MDR as I mentioned earlier. We have a very strict description and definition of what MDR is. We believe that, again, they don't necessarily have the combination of all three things and do the three things the way in which we do it—the platform, the multi-signals, and the people.
There is some thought out there, and I think about that, too, as the CMO, as to why are they not banging our doors down, knocking our doors down to get our service because it is something that is very unique in the market and our customers are pretty happy.
Edward: That brings me to my next question. When companies are seeking you, I know they are, is your product sold or bought?
Angela: It's a service. Typical customers are small and midsize enterprises, SMBs, and small enterprises. We target companies from 250-5000 plus employees. Typically, the CISO, CIO, or head of IT are the people that are looking to buy this service.
Edward: Are they out there looking for your solution? Or is it a matter of your sales calling them up and making sure they're aware that the solution exists and they should buy it?
Angela: I see what you mean. Yes, absolutely. Sorry. It really gets sold. We have to sell it. We're a private company in Canada and one of the things we're working on right now is improving, and increasing our brand awareness. We do that via a variety of methods. But yes, some customers will come to us via customer references. A customer works with someone in the same industry and they've had a very positive experience. They'll refer them.
We also have roughly 100 channel partners that are out there, selling eSentire to their customer base. Roughly 40% of our new bookings come from our channel. We're constantly educating the market. Part of the problem, Ed, is that a lot of people don't think that they have a problem, and a lot of these SMBs don't think that they're going to be a target. These bad actors aren’t going to come after me. They’re after the Marriotts and the bigger companies, and we're saying no. These bad actors are going after all companies of all sizes, and SMBs are targeted because they aren't putting these types of protections in place.
Edward: I would imagine, again, you're an SMB. You have a lot going on, a lot of decisions to make, and your cash is very valuable to you because you have a high cost of capital. Going in putting money into security is downside protection rather than upside growth.
Angela: The other thing is we have to convince people that they have a problem because they don't think that they really have a problem. Quite frankly, the industry has confused a lot of buyers. You go to a trade show like RSA. There's 3000 plus security packages software you could purchase. But what they don't tell you is you have to have people behind whatever you buy.
Let me give you a great example, I'm sure you've heard of SIEM, Security Information and Event Management software. You put this SIEM software on your environment and it basically logs, then sends you alerts. If you're an SMB, you can be flooded with up to 10,000 alerts a day. What is a small business going to do? When I talk about finding that needle in the haystack, there's no way they're going to find that needle in the haystack if they're getting 10,000 alerts a day. You cannot hire enough people to actually do that work. That's why having a platform, being able to ingest all the signals, and then having the right people focus on those things that are truly the red flags, that's really what companies need.
My job is to convince them that they have this problem, and once they understand it, the sale is actually pretty easy. But we really have to get people to understand what we do, and how we do it, and how it sets us apart.
Edward: I imagine many companies treat security as a checkbox of the CEOs sees to the CTO, or the CIO, do we have security in place? The CIO goes out and finds one of these packages and buys the package, and slaps it on, and tells the CEO that they're good. Unless something goes disastrously wrong, nobody asks the right questions.
Angela: That's a good point. I also think that you've got a couple of other things that are occurring. You have people that say, in order to be compliant, I have to put A, B, and C in. You go ahead and put in A, B, and C, but just because you're compliant, doesn’t mean you're 100% protected.
Edward: That's right. People are jumping through hoops rather than actually solving them for the problems. Frankly, most of the time, when they don't solve the problem, they’ll be okay. But in some percentage of the time, they won't be. If that happens, the CIO probably points to the attackers and says, this was unavoidable. There's nothing I could have done and nobody knows any different.
Angela: It's interesting because people know that they need to have basics. They need to have the next-gen firewalls. They need to have antivirus software. They need to have multi-factor authentication. They need to train their employees around phishing. Don't open an email, and don't click on a link if you don't know who it's from.
You have all those things, then, you also need eSentire on top of that to provide the MDR service so that you have a service that understands fully what is going on in your environment. Again, when the red flags pop up, you have the resources at eSentire that hunt and contain those threats on behalf of our customers.
Edward: You mentioned before that once you get the conversation started, your conversion rate is pretty high. How long does that take you to convince somebody that this is a real problem that they need you to solve?
Angela: It depends. If a customer has already been breached, we can probably get in there and up and running in a matter of a few days. If this is a new lead that has come in through one of our webinars, or they've engaged with the website or content, it could take anywhere from two to three months to get them on board.
Edward: If the first thing happens, if they've just started being breached, they feel a sense of urgency where like, we need to fix this so that it doesn't happen again, whereas if a breach has never actually happened, it feels like this is something that can always be put off to tomorrow. It might be important, but it's not urgent.
Angela: Exactly.
Edward: Do you need internal champions? Do you need multiple people in the organization to buy in before sales happen or if the CIO says, hey, let's do this. Does this just happen automatically or do you need to provide the CIO with materials to help convince the CEO and other people in the organization that it's worth investing in?
Angela: It's interesting because typically, we work with the CISO or the CIO. From a technical perspective, they get it and they understand the value. Now, they have to go get the CFO or whoever has to approve the purchasing decision to sign off on it. I don't know if the CFO is really going to care that much about the technology. What they need to understand is, what is the risk that we are avoiding by having eSentire? What is the return on investment by making this investment in eSentire? How many people do we not need to hire? How do we ensure it again? This is basically a risk in our ROI.
We provide that information to our prospects in the selling cycle so that they can go back and articulate that back to the buyer—the person who has to make the buying decision, and approve the final buying decision.
Edward: How do you divide your marketing budget? How much of your budget is spent on the direct acquisition of trying to get those people that just had a breach, and they're searching for a solution to come to you, versus brand-building and content, and creating a perception in the marketplace that you're out there?
Angela: It's probably 50/50 right now, in terms of building the brand because even though we have been working with MDR, even eSentire's been around since 2001, the term MDR was coined five or six years ago by Gartner. Internally, we think that we know MDR, but we still have a lot of education to do in the market especially, when you have other companies like MSSPs or other companies that are adopting the MDR term, but they're not really doing MDR. We have to educate people that, no, when we say MDR, it really means this. The people that you're talking to, our competitors, are not really doing what we define as MDR.
There's still quite a bit of education that we need to do. We're spending a lot of time, quite frankly, in PR—driving more earned media, getting our experts in our threat response unit, in our operations teams, in marketing—to go out and talk about what we do and how we do it. We’re getting those stories published in tier 1 and tier 2 publications to get the word out in terms of what we do and how we do it.
Edward: How do you know if that's a good ROI, good-spent ROI in your spend? On the direct acquisition stuff, you can measure it. You can measure whether your click on paid search led to a lead, which led to a SQL, which led to an opportunity or a sale. But when you do that PR and the top-of-the-funnel stuff, how do you know you're not wasting your money?
Angela: We watch our share of voice, which as you know, identifies how many times we get the mentions and our share of voice. We're about 20 points ahead of any other competitor in the MDR space. We measure that.
Edward: Angela, a lot of companies that sell products like yours—these SaaS bit products to these SMB businesses—swear by account-based marketing, but you guys generally have not had a lot of success there. Why do you think so?
Angela: For account-based marketing, I'm not simply seeing the ROI at this point. I suspect that one reason is that we rolled it out to the entire sales force and then we declared victory.
Edward: You basically did what you're telling your clients not to do, which is don't just buy a software solution and check the box, and say you're done. That's what you guys did for ABM.
Angela: Exactly. Guilty as charged. ABM requires focused attention and alignment for marketing and sales. You've got to have the right targeted personas, you have to have the right content. We went too big, too fast. We rolled the program out to all of the sales without a real clear focus plan on, are these the right segments? Are these the right personas? Do we have the right content?
Sales reps get busy, especially, you get to the last month of the quarter, they're going to focus on closing those deals. They're not going to be focused on the ABM. They need marketing to help bring them along. What we've done is we've scaled back our efforts on ABM. We're now focused on one rep in one specific segment and she's totally bought into the ABM program.
What I believe we need is we've got to build a successful program. Let's start small. Let's build this program. Let's understand what we need to do to make it work, and then let's figure out how we roll it out more widely.
Edward: That makes a ton of sense. Figure out how to work at a small scale, and once you have it working, then scale it up, rather than trying to scale it up, and then figure it out after big.
Angela: Exactly.
Edward: Forty percent of your leads or your revenue come from these partner relationships. As a marketer, do you spend much time trying to help the partners sell more, like providing the partners themselves with tools?
Angela: Oh, absolutely. I have a field marketing team that is tightly aligned with our regional vice presidents in the field. Then also, we're aligned with our vice president of channels. We are working very closely to not only enable the channel partners. We think of our channel partners as an extension of our sales team. If we're going to go out and build content for the field sales reps, we think about, how is the channel going to use this? How do we create this in such a way that if we modify it at 2%, then any channel partner can use it? They can slap their logo on it and they can leverage it.
We also work with our channel leader to look at how we recruit more partners. How do we ensure that we're getting the right partners to continue to drive because the goal this year is to drive 50% of our bookings through the channel? We need to grow it by another 10%—really super tight alignment with the sales teams in the field, and with the channel sales team.
Edward: Angela, thank you so much for being on the show today. Before you go, tell me about your quake book and how it changed the way you think about the world.
Angela: Oh yeah, my quake book. I read this book a while back. It’s called A New Earth by Eckhart Tolle.
It was very eye-opening for me. His perspective is that we're so caught up with our ego and we allow ourselves to get caught up in our own thoughts. Our thoughts really are not reality. They're just our thoughts. He encourages you to focus on the present moment. The present moment is all we have. The past is gone, the future is not here yet. It's all about the present.
The other thing is to help me realize that we really have no idea what other people are really going through, especially now. We just need to be kind. Be kind to each other because we just don't know what people are actually dealing with in their own lives.
Edward: That's a great note to end on. Thank you so much, Angela.
Edward: You were doing all that as the VP of marketing, or you didn't start doing that until you became CMO?
Angela: That's correct. That's what I was doing as VP of marketing that I think led to the promotion to CMO.
Edward: What happened when you became CMO? How did the job change? Did you take on other responsibilities, or was it just an escalated title and compensation package?
Angela: No, I did take on more responsibilities. I actually took on the corporate comms function which I had never run before. That included analyst relations, public relations, community relations, and employee relations. This was January of 2020. I get the promotion at the end of the month, and then COVID hits at the end of February. Now, I'm finding myself focusing on how we need to communicate to our customers on what's going on with the company so they can be assured that we're still going to have 100% operations.
Edward: Did you have any experience doing those things before you became CMO?
Angela: No, I did not. Along with putting together the customer communications, we also worked doing employee communications. We were at a point prior to the pandemic where we were doing quarterly employee all-hands. We actually went weekly once the pandemic hit in March.
We were actually pretty fortunate, Ed because the company was prepared to have every single employee work from home. Everybody started working from home in mid-March, and we were doing weekly all-hands meetings. As the CMO, I was actually pulling together the content, making sure that these meetings got scheduled. Our CEO and entire leadership team participated in every meeting because we felt that it was just critical that we kept everybody up-to-date on what was going on.
If you recall, a year ago nobody really knew what was happening day-to-day. We have employees all over the world. We have employees in North America, Ireland, London, and Canada. We just needed to have this regular cadence of meetings to keep folks informed. I think at the end of the year, we ended up doing 20 all-hands meetings starting in mid-March.
Edward: It worked out great. Obviously, you stepped into the role and you did fantastically. How did they trust you to do that though? You had no experience doing that particular part of the job. Why did they thrust you into that role?
Angela: I demonstrated as VP of marketing when I first started that I could look across the organization and figure out what are the things that are either broken or need some TLC. In addition to the marketing function, I actually took on the business development reps when I first took on the VP of marketing role.
I did that because I thought we could do a much better job flowing all of our leads and MQLs into the business development reps if we were part of the same team. I was demonstrating as VP of marketing that I could take on roles that might not have traditionally been part of marketing, and almost, I would say immediately, within a few weeks or a few months, start to show progress.
Edward: When you took on those BDRs, you had never led a team of BDRs before. Is that correct?
Angela: I did have some experience at HP. We had an SDR team down at Conway, Arkansas when I was running the cloud team. I worked with a small group of those SDRs. But this was a little bit different because the entire company was focused on this group of BDRs. They did nothing else other than support what we're doing at eSentire.
They were aligned with sales, and I had convinced leadership that if we could align these BDRs with marketing, I really felt like we could improve productivity. We could make sure that they're focused on all the inbound leads as well as doing the outbound, and it would probably help us with better alignment across the employee base. I have to tell you, I'm proud to say that we did exceed all of our key objectives in the calendar year 2019 as we were going into 2020 when I received the promotion in January of 2020.
Edward: Your success there with the BDRs, do you think that was instrumental towards the organization taking a risk on you, bringing you in as CMO, having you oversee these areas that you'd never overseen before?
Angela: I was able to demonstrate that I really like to get my hands on the things that are most broken, and see what we can do to really fix them, and move them forward. This was an area at the time in the business that we really weren't getting what we needed out of this team. To turn it around and to see the progress within the first 30 days, and then to really see it mature over the next several quarters was really a feather in my hat. It really did help move the business forward in terms of providing more top-of-pipeline opportunities for sales reps.
Edward: I want to go back now to see the path that got you to where you are now. What were you like when you were 12-14 years old?
Angela: I'm number six out of seven kids. I was the entertainer in the family. I always had the ability to make people laugh. I love the crowd. When I was in junior high—I guess that would be when I was 12 or 14—I ran for student body president of the school and won. That was the beginning and maybe close to the end of my political career.
I was a pretty happy kid. I was very upbeat, and I just loved surrounding myself with people. Back in the time I grew up, Ed, it was in the 60s and 70s. There wasn't an internet. There weren't iPads. There weren't cellphones. We played outside. We were always active, always engaged with other people. My dad worked, my mom stayed at home. It was pretty much a traditional family at that point.
Edward: A little later on when you were about 18, you started doing stand-up comedy?
Angela: Yes, 18 or 19 years old I did stand-up. People always encouraged me to try to do it. They thought I was funny. I thought I'll give it a shot. I have to tell you, the first time I was on stage and told a joke and got a laugh, it was amazing. It's like a drug. I have done stand-up comedy off and on throughout my life. The first time I did stand-up I was 19 years old, and then I didn't do it for a while.
When I started working at Sprint, we started going to a local bar down the street from the office. I was going there doing amateur comedy nights once a week. I probably did it for a couple of months and then I thought, I want to focus on my career. I don't think being a standup comedian is really going to make it for me. I really want to focus my time and energy on building my career.
Edward: What did you take away from that time, if anything, from years of comedy? Was it a pure distraction, or did you learn anything there that you use today?
Angela: Back then, I was really struggling with my sexuality. I was gay and was having a hard time dealing with who I was and being my authentic self. I found that back then, I really couldn't talk about the things about my life because anytime you start to talk about your life you expose who you are and how you feel. The comedy that I was doing was very surface-level.
Fast forward a few years later, I realized that once I could get on stage and just be myself, talk about my life, and be authentic, I think having that level of authenticity is really important because if you're hiding something, whether it's something personal about you or something you don't want people to know, you can't be truly authentic.
What I learned from comedy was, yeah it's fun to get up, tell a joke, and get a laugh, but if you really want to do stand-up comedy, you really have to talk about your life and talk about who you are. I didn't really do that until probably, fast forward 15-20 years later when I was in Kansas City doing stand-up comedy and then really just being able to be my authentic self.
Edward: Let's jump ahead a little bit. Where were you in your career when you were 25?
Angela: This was a tough time in my life. I just mentioned being gay, and I was actually married when I was 19. I got recently divorced at 25. I was very disconnected from my family. I was unemployed at the time. I was having trouble finding work. I only had a high school diploma. I did not go to college because I got married at a very young age. It was a very difficult time and one of my brothers is a podiatrist, and I convinced him to hire me part-time just to help him in his office. He had an office in San Francisco.
I would schedule the appointments for him. I'd do the billing. Those were the other key roles. One of the things that I had to do in this role is I had to rub lotion on the feet of old people. His patients were really old. I recall the moment that I was doing it for a patient and I just said to myself, this is not my life, I can't do this.
It's circa 1987, Sprint at the time was headquartered in Burlingame, California and they were running a job fair. I applied and I was hired at Sprint as a customer service rep. That really was the big change in my life when I was 25 years old. I ended up getting on at Sprint, and then three months later, I was promoted to supervisor. Eighteen months later there was an opportunity to move to Kansas City.
There was a huge contract that Sprint won that I thought, I can just start up my life over. I can start in a new city with a new job at this company that I've been with for a few years. Let's go for a few years. Let's see what happens. The rest is history. I've never looked back from that time.
Edward: You spent 12 years at Sprint, moving up progressively more senior the whole time you were there. What skills did you develop there at Sprint that serve you now as CMO?
Angela: It comes back to building great relationships with the people that you work with especially with customers. I love working with customers. I work very hard so that people—not only my peers and people who I work with but also customers—know that they can count on me. I took advantage of every opportunity that I was afforded at Sprint. I really developed this reputation as someone who could get stuff done.
When I had the opportunity to move to Kansas City, I jumped. I thought I would be here in Kansas City for a few years. I was actually here for 10 years. I moved back to San Francisco and then back to Kansas City, but we might get into that. I have to tell you that in order to think about what skills I learned as a CMO, I was in a support position after I moved to Kansas City. I'd learned over time that the best thing that I could do is find ways to say yes when somebody came to you with a problem.
Somebody wants something, how do I get to yes? It wasn't always that way. At first, when somebody would come to me with an issue, I would find all the reasons and excuses why it couldn't be done. Back at that time, I was really the office of no. It was because at that time, I had a boss who had very adversarial relationships with his peers. I realized I was modeling his behavior. He left Sprint. I started reporting to a new boss, and this is probably one of the people who has had the most influence in my life, my new boss at that time.
Again, this was 1990-1991. Her name is Nancy Cole, and she taught me that in order to succeed, I need to focus on what could be done, not what could not be done. How do you say yes when somebody brings a problem? They don't want to hear why it's hard. They need you to figure out how to get it done. That approach and perspective changed everything for me.
It was also at a time where I was encouraged to get my undergraduate degree. Nancy wanted to promote me to director but she couldn't do it until I had my degree. At the time, I was actually in a non-traditional college. I was going to school at night taking an accelerated program every five weeks, earning three credits. I needed to go faster so I doubled up on the course work in an accelerated program, two classes a week. These were four hours every evening and I was still working full-time.
I ended up graduating with honors in '94 with a Bachelor in Business Administration, and then shortly thereafter, I was promoted to director. It really was this lesson of someone in sales, a customer, or someone in another department comes to you and they need something, how do you say yes? How do you figure out how to solve their problem?
Edward: I want to jump ahead to your time at HP. You were there for a decade, advancing in sales, getting progressively more senior in sales, and then you switched into marketing. How did that happen?
Angela: My entire career to date spans over 34 years in technology. I've had the opportunity to lead many functions in my career—sales, operations, customer service, product management. Marketing was the one area that had always interested me, and I'm always up for learning new things. When the opportunity presented itself for me to move into a leadership role from sales to marketing, I really jumped at the chance.
Edward: I want to talk about how that happens though. You, obviously, at that point had demonstrated your ability in sales. Marketing is very different from sales, and you jumped in at a fairly senior level. What did they see in your sales skills that they thought you would excel in a marketing role?
Angela: I've always had a knack to be able to translate really technical concepts to non-technical teams, look at what customer requirements are, and then translate what the customer requirements are back into the technical teams. We thought the skill would bode well in marketing, really understanding what is it that we're trying to deliver to the customers and how do we translate that back into not only the technical teams but into how we market the offerings.
Edward: What are your productivity tricks? What do you do to be productive that most people don't do?
Angela: I really believe that people do not need to be micromanaged. Most people and most people that I have come across in my career, there have been very few instances where I have come across an employee who doesn't want to do a good job. Most people want to do good. They want to succeed. They want to work hard. They just need guidance. They don't need to be micromanaged.
I treat my relationships with my employees almost as a partnership. These are the things that we need to accomplish. This is the time frame of when we need to accomplish these things. Let's figure out how we're going to get there. Let's establish these goals. Let's measure. Let's adjust. Let's repeat. It really boils down to just trusting my team to do their jobs and being available to them when they need my support.
Edward: Angela this has been fantastic. We'll pick this up tomorrow with a dive into your time at eSentire.
Edward: In the US, McDonald's has the number one share of the QSR market, is that right?
Sam: Yes.
Edward: What percentage would McDonald's have in the US roughly?
Sam: I'm a few years away from this, but probably 20%, 25%.
Edward: Got it. McDonald's is in the US, Tim Hortons is at 2 ½ times that in Canada.
Sam: It's the only market McDonald's operates in globally where they're not number one, and they're a distant number two to Tim Hortons in Canada.
Edward: Got it. Tim Hortons is almost even more than that in Canada. I don't think there are many Americans who define themselves by McDonald's, but it almost feels like there are Canadians that define themselves by being a part of the Tim Hortons community.
Sam: Yeah, and this is the other way that I wanted to try to get at it. If you're a big fan of an NFL team, or maybe even better, a college football team in the US—that type of just extreme buying of what that brand means to you, what that team means to you—that's the place that Tim Hortons takes in Canada. College sports are just much less important. People get Tim Hortons tattooed on themselves regularly. Weddings happen at Tim Hortons every year or two. People choose to get married there. It means things in a way that I don't think anybody truly understands.
Edward: How does that happen? At the end of the day, they serve donuts, coffee, and sandwiches. Why are people getting married at Tim Hortons?
Sam: In the 80s and 90s, a big problem for Canadians is who are we as a country, as a people? All of the answers up until that point, it's we're like Americans, but—we're less this than Americans, we’re more this than Americans. Sometime in the mid-90s, there's a book published called Timbit Nation that tried to answer this. The book said we’re a nation of people that have Tim Hortons and go to Tim Hortons, to a lesser extent Canadian Tire.
The way the brand got there is it is a brand by Canadians for Canadians. It's always being 100% franchised. The people running Tim Hortons restaurant have been members of the local community. There’s been this really intuitive sense of how you make coffee, donuts, bagels, breakfast sandwiches, and things for the people that are around you that are like you. No one ever planned strategically. It just evolved. But after 40 or 50 years of that, you end up looking around going, Tim Hortons represents us because it's just us trying to do the best we can for each other.
Edward: How does Tim Hortons think about marketing in Canada? I can imagine awareness is not a problem. What problem are you trying to solve with marketing in Tim Hortons?
Sam: That's a good question, and no, awareness is not a problem. It's 99%. I keep saying, I want you to introduce me to a person who's not aware of Tim Hortons in Canada. It's more a matter of how you express that Tim Hortons is Canada in a way that does not come across as seeming arrogant.
Canadians feel like we're part of them and we're in us. We are number one. Canadians don't want to hear us tell them that we are number one. We're Canadians’ favorite coffee and if we tell Canadians we are your favorite coffee, there’s dissonance. There's a clash between how people think about us and how we're talking that comes out there. They want us to be humble and they want us to serve them. That's the difficult part in all of our advertising, is reflecting that humility, which is tough when you are so big and when you are 50% of QSR.
Edward: What is the goal? What metrics do you measure to say like, hey, our marketing is doing well?
Sam: Ultimately, we measure the same thing that everybody in marketing does, which is sales. Are sales going up? But that's often a trailing metric for what really matters. We're also looking at brand health, brand connection, and share of preference. Do people say that we're their favorite coffee? Do people say they look forward to going to us? Do people trust us? All of the things you can imagine to define a brand and how people feel about the brand that we know, end up over months or a year leading to declines in visitation or in sales.
Edward: If you run those correlations, do you look at how much people trust Tim Hortons, then look at what the sales are six months after that, and see whether or not there's an R-squared that you can measure?
Sam: We do. We try and find them in simple marketing ROI metrics that try to tease out all the different factors that go into your marketing that will often reveal things like this. But ultimately, the link ends up being soft. This is one of the arts of marketing. You have to take it on faith. There is a general correlation. But nobody can say that if trust drops six months later, this goes down because trust can also be affected by macro factors that have nothing to do with Tim Hortons specifically.
Edward: You can imagine a world where even if trust goes down, people continue to shop there because McDonald's has a bad quarter or because of something else that happens with your competitors.
Sam: That's exactly right.
Edward: You operate on trust a little bit, or you just have a certain belief that these are the good things to do. Those good things sound like, hey, creating advertisements that drive up trust, creating advertisements that drive up, would you say, that this is my favorite coffee. Is that a statement that you measure and track overtime?
Sam: Yeah, we do track favorite coffee, that’s the exact wording of it. It’s now lost to me. We track, favorite coffee. We track, it’s a place for people like me, which is one of the standard brand metrics. That one tends to be quite important for the crowd, people, feel about the brand, overall.
Edward: How do you build marketing that does that? What do you do that's different from many other places that are trying to build awareness or consideration? You're trying to build, hey, this is a place for me. What does that look like?
Sam: This gets into the qualitative pieces of marketing a little bit. There's a weekly comedy show called This Hour Has 22 Minutes. They fairly regularly, for a while, would produce parodies of Tim Hortons’ ads. Tim Hortons would make an advertisement, and the comedy show would recreate the advertisement as a comedy sketch, and air that for free in one of the country’s most popular comedy shows. Imagine if McDonald's US and Saturday Night Live will recreate your latest ad and air it on Saturday Night, it's a pretty big deal. That tells us we're doing the right things. We look for those types of ads.
Other ones literally pull on the heartstrings. There's a series of ads that we ran over a while that made people cry watching them. An immigrant father taking his kid to hockey practice, and then his kid growing up, and taking his kid to hockey practice, and how Tim Hortons played a part in that whole. There's one about Wayne Gretzky meeting Tim Horton at the first store he opened, and talking about how he went into hockey, partially because Tim Horton told him to keep playing.
Those are the ads that we know are driving the brand. Ultimately, we also have to launch our latest cold brew coffee, which is really important. But we know that if people are crying or making fun of our ads, then they're linking to people on a pretty deep emotional level.
Edward: Tears and laughter. Is that the metric?
Sam: Tears and laughter. Although we found that one hard to get a quantitative measurement of.
Edward: Tim Hortons is this dominant player in Canada. I imagine your brand has not succeeded as well in the United States. Why do you think that is? Is it just too tied to Canada?
Sam: We've done really well in a few US markets—Buffalo, where we're number one by market share similarly to Canada, Detroit, Columbus, Rochester, a few of these, Upstate New York, Ohio, and similar locations. We have close to 800 restaurants in the US and they do quite well in the markets that we’re in.
I think a lot of our success in those places may be due to the fact that we entered at a time when a lot of brands are pulling out of these rust belt cities when manufacturing is getting hollowed out. We came in and there's a lot of emotional goodwill towards the brand from locals in those US cities who remember us coming in when a lot of other brands won’t. We have had some success in the US.
Edward: These are all franchise models in the US as well?
Sam: They are. Yeah.
Edward: The same thing that happened in Canada, where it was the local people building this business happened in these upstate US markets where it was local people—maybe in a time when the community was struggling—local people were stepping up and running these things, and they connected to the local community.
Sam: We ended up with a similar type of connection as we had in Canada in those markets. But when you look beyond those markets, you're right. We have struggled to move out, to establish the brand. In some parts of New England where we've expanded two or three times had been forced to retrench. We just couldn't make our stores profitable, and we had to pull back.
Edward: It's interesting that these markets that you are successful in, tend to be almost like border cities. They're very close to Canada. Is that something to do with it or do you think it was just the timing? If you had entered Alabama at the same time period back when these other markets, other quick users were pulling out, would you have been as successful there or does it tie to the fact that these people know what Canada is because they live on the border?
Sam: When I write my alternative history book, I will explore that in-depth and until then, I'd just be guessing.
Edward: Let's talk about the CPG business. You've been running the CPG business for a while now. Even for our listeners, describe a little bit. What does the CPG business mean for Tim Hortons?
Sam: I’ll give it a quick history which describes what it is. We started selling some of our packaged coffee in grocery stores in Canada around 10 years ago because the grocery store came to us and said, hey, would you consider selling it as your packaged coffee? We'd like to put it on shelves. Which is not normally how grocery stores interact with their vendors.
Edward: This sounds an awful lot like how you've managed your career. The Tim Hortons-CPG business grew the way Sam grew his career and they came to you.
Sam: It's just, oh, I guess we can do this if someone does it. Exactly. From there, in 2015, we decided to get strategic, small as strategic, and say, what if we actually went to the grocery store and asked them to list our product and that led to just pretty rapid growth between 2015 and we decided to do this. By late 2016, we became Canada's number one CPG coffee brand, neck-and-neck with the other two.
Since 2017, 2018 with a couple of adjustments, strategy, and more products, we now have probably doubled the market share of the next largest coffee brand on shelves in Canada. We've also expanded into soup, granola bars, through licensed deals, and ready-to-drink coffee, and cereal. In 2017, we entered the US CPG market, although so far really just with coffee.
Edward: Let's start with the Canadian business first, how do you think about growing the CPG business from a marketing perspective different from retail? Or is there a difference? Do you just basically coast on the back of the retail brand?
Sam: In terms of brand strength, we are a very small part of Tim Hortons’ total sales, what it means in Canada. We're not having a significant impact on the brand. Clearly, the overall brand strength which comes from restaurants is why we've had success in CPG? What we really try to do is make sure that nothing we do can harm the master print. If we started selling Tim Hortons pencils and USB chargers in retail that would probably annoy Canadians like, what are you doing? You're just putting your name on everything? We try to do what we can to reinforce it, but we're a small force overall for what Tim Hortons means in Canada.
Edward: The purpose of CPG then is it's almost like, hey, we've already built this brand in retail. Let's go into CPG. From the minimal additional effort, we can make some profit. Every time you see Tim Hortons on a shelf in a grocery store, it's the equivalent of a billboard on the side of the street advertising the retail.
Sam: From a marketing perspective, it absolutely is. We've got some pretty good research that says, the more you see our soup on grocery store shelves, the more likely you are to go to a restaurant to add soup for lunch.
The other thing though, is 80% of coffee is still consumed at home, despite how much coffee we sell in our restaurants in Canada. We didn't want Canadians going home and going, I want to make myself a nice cup and then have to look to our competitors for their at-home coffee. If you're reaching for coffee at breakfast in the morning when you don't go to Tim Hortons restaurant, we wanted to make sure we were there so that we stayed present [...].
Edward: Got it. CPG is a lot more of a defensive play then than an offensive play?
Sam: It's a bit of both. The sales and profit are nice, but it's also a matter of people expecting us to be there. Again, you look at the brand, it's about being humble and doing what Canadians want us to do. They want to drink Tim Hortons coffee at home. I'm not going to tell them they can't.
Edward: Do you do any marketing specifically for your CPG side of things, or is it just a matter of like, hey, you've done the marketing for the retail and CPG is just a distribution channel?
Sam: It's largely just a distribution channel, and the marketing that we do for CPG products tends to be to raise awareness that they exist in this format or just getting more prominence in the grocery store aisle. When you are shopping for your coffee, we want to have our displays, our signage, our offers jump off the shelf. Unlike with restaurants, you've got to decide where you're going for coffee well in advance of picking up the coffee, or either walking down the street one way to Tim Hortons and the other way to go to McDonald's. On the grocery store shelf, you just raise your hand 6 inches and you're buying a different brand. The more permanent we can be there, the better our sales will be in the grocery.
Edward: Yeah. I know you're not a digital marketing guy, but I kind of think a little bit like your retail business is top of the funnel. Do marketing, do brand, do television, but then your CPG business is almost all direct response stuff. It's like this equivalent of paid search or by the corner display or getting on eye level or hitting the person with the flyer as they're walking in the door to say, hey, it's $0.10 off today.
Sam: Or a $1 off. That's exactly it. If we can get the display or in the aisle that interrupts the shopping experience that gets it in front of you. The reason that the brands do this and why we do this is we know that it works. The more display space you can get, especially outside of the coffee aisle, the more likely you are to pick up sales from people that otherwise might choose to buy a different brand.
Edward: Do other direct response stuff work for you? What about something like direct mail? Could you use direct mail to drive this business?
Sam: We've used direct mail in a couple of specific instances and they're basically new product launches. We launched instant coffee in 2019, and we mailed sachets to people to sample at home to drive awareness and trial. We're doing something exactly equivalent with a granola bar, food lunch. If you're in Canada listening to this, you might get a Tim Hortons double chocolate granola bar in the mail. You might have received one. That is designed overall awareness where that's a new category for us and awareness is 17% for our granola bars. We know that we can drive it higher. We've got a great product and we want people to try it.
What we've found is absolutely no correlation of those activities with sales. Again, we're taking it on faith. We know that 50,000 people tried the product within the country of 40 million people. That's not many.
Edward: That's interesting. When you run those direct mail tests, you don't do them like, hey, we're going to do some in the East side of Toronto, not the West side of Toronto, and then see what happens to sales over the next three months?
Sam: We have tried those and we cannot find a signal among the noise of our sales data. We keep doing it because we know that it does mean 50,000-100,000 more people have tried the product and the demand made by. Some things you just have to take on faith. In the tests that we've done, we can't get a response high enough to actually measure.
Edward: That's interesting. Is that because you don't do it at the scale necessary to measure a response? Or do you think that the response isn't there?
Sam: It could be both, getting to the scale necessary is either fabulously expensive. If you're mailing out instant coffee to be in the households who would never consider buying instant coffee or wasting a lot of your marketing budget on people that just aren't in the category, or it could be that it's just not there. Having sent the infinite marketing budget to get to the scale that we need, it's really hard to say.
Edward: How do you think about marketing the US differently than Canada on the CPG business because you don't have that giant retail brand behind you that's giving you 99% awareness? Do you need to do things differently in the US?
Sam: I love this question because we have a very specific answer to it. We re-did all of our packaging 1 ½ ago. In Canada and the US, we tested a set of about 10 different taglines. In Canada, the tagline that we put on all of our packaged coffee now says, “Roasting in Canada since 1964.” Which is correct, we've been roasting our coffee here. We haven't changed the blend since 1964. Canadian thought, you've been here for a while. You're like us.
I've been in Canada since 1964 when I was born here. People liked the sort of comfort routine of that. In the US, that was mediocre at best. What the US liked, whether it was in a market where they know as well like Buffalo or a market where much less known like Texas is, “Canada's Favorite Coffee.” Which, if you recall, we tested in Canada. Canadians hated that. It probably would have hurt sales if we used it. In the US our bags say, “Canada’s Favorite Coffee.” We've got the research to back up to make sure we're telling the truth, but in Canada, it says, “Roasting in Canada since 1964.”
What that's reinforcing is we realized we needed to tell Americans something about our coffee. We couldn't just say, hey, we’re the stuff you get in the coffee shops. We need to say there's a reason to buy this and Canadian coffee is a unique selling proposition. It may not be the strongest possible way, but again, we didn't design this brand.
We have to sell what we have and that's worked really well. We're growing at something 25% per year, five years straight in the US grocery market. In March, we're number two by dollar sales growth, 2021 versus 2020. It seems to be working.
Edward: Sam, this has been great. Thank you so much for being on the show today. Before you go, can you tell me about your quake book? The book that you read that changed the way you think about the world.
Sam: Absolutely. It is The Three Marriages by David Whyte. He is a poet-philosopher who does an awful lot of corporate speaking engagements. He basically says work-life balance is [...] for two reasons. It implies that there's a static balance point that you're trying to get between work and life and two, there's no place left for the self. He says that in life you have three marriages. One, your traditional marriage with your significant other, two with your lifelong work, and three with yourself. Each of those marriages is a conversation, and each of the conversations is in conversation with each other. It sounds high-level, highfalutin poetic. It was one of the most profound things I've read. It helped me get more effective at work and think about work differently and the relationships for the rest of my life.
Edward: Sam, thank you so much for being here today.
