Podcast transcript: Marketing in the era of digital transformation (Agents of Change series)
31 min approx | 24 January 2019
Welcome back to the Agents of Change podcast series. I’m Roger Park, EY Americas Advisory and Financial Services Innovation Leader, and the series host. I’m joined today by Amy Summy.
Amy is a principal at EY and helps our clients envision and execute growth strategies through marketing, sales and service, with an emphasis on digital. Amy is also driving EY’s Marketing Transformation practice with our Financial Services Advisory Teams.
Amy, why don’t you tell us a little bit about yourself.
Hi, Roger, it’s great to be here with you today. I’ve been with EY the last year and having a lot of fun helping our financial services clients with some of their front-office challenges and growth strategies.
Before I joined EY, I had a couple of stints as a CMO, most recently with TE Connectivity, where I led their digital marketing brand and communications for the firm globally.
Outside of work, I spend a lot of time with my family, and I also cofounded a nonprofit with my husband where we focus on childhood cancer. So, I keep myself pretty busy.
That’s great. Thanks for joining us today Amy. A little bit of background on the session today. We’re seeing, really fueled by technology, marketing is in a time of major transition, unlike really any other time in history.
Customers are expecting tailored experiences based on high expectations through other channels and industries, and so seismic changes in media are increasing competition for attention, global regulations directly impact a brand’s value and reputation, and technology is creating more choice and complexity. These trends raise the influence of marketing with all stakeholders, customers, employees, partners, shareholders and communities. And with marketing becoming more critical to an organization’s success, the function, itself, is transforming.
Amy, as a former CMO, you have experienced firsthand the evolution of marketing over the past decade. Can you give us your view on the current landscape for a financial services marketer?
That’s a big question and, obviously, it varies by financial services entity. Ten to 15 years ago, if you just look at how marketers were measured, most marketers were measured by just how many people they reached through traditional channels, like TV, and then over time, we got into the internet.
Today, when I speak with marketing leaders in financial services and also in other industries, the kind of measures that you hear about are things like what is the customer journey and what is the experience across all the different touch points? They’re measured on things like net promoter score or customer turn, and more and more, they’re measured on sales.
So, I think the pressure on marketing has really evolved from a kind of highly focused environment where brand was really the major focus and the major measure of success, and today the measurements have just gone very, very wide. In addition, with the data breaches that we’ve all seen over the last few years, marketing has been more and more connected to the overall brand value of the company, and we do read about a lot of hacks and those hacks are leading to shareholder value declining.
So, it’s a pretty serious issue at the CEO and the board level, and marketing is right at the front of that conversation, unlike what you saw maybe a decade or 15 years ago.
It seems like with the increased need to have a tailored experience and deep relationships with the brand, but in the face of all this technological change and a lot of uncertainty around data and privacy, it seems like it’s a harder job than ever before.
It is. It’s a very difficult job and, depending on the organization, the level of autonomy and authority varies quite a lot. So I think the expectation of marketing are things like what I suggested, NPS, churn, sales and demand generation, which they’ve had for a long, long time.
Now, with this widening lens of impact across the organization and all the different stakeholders, that complexity hasn’t necessarily come with more authority in the role. So, one of the things that you will read about the CMO is the title with the most churn of any C level, and that’s still true today. And I think a lot of that is because the CMO comes into an organization with high expectations, usually from a CEO.
Yet, when they’re in the organization and they actually have to do the job day-to-day, they’re not given the full authority to actually do the job according to the CEO’s expectations.
It seems like a really challenging situation. So, I mean, if you were a CMO today and you were advising them, Amy, what are some of the specific challenges you think that they should be ready for or thinking about?
Well, I think there are some challenges that we all hear about that are surfacing now with data privacy and security. So, I would say they really need to think about where their vulnerabilities are in the marketing processes.
So, for example, when they do a campaign, do they really understand the end-to-end implications and all the different processes and the vulnerabilities they have when they’re putting something out in the market? And most CMOs do have a handle on reputation and many of them have responsibility for reputation, but this goes well beyond that. This goes into, you’re putting something into market and now your data is all of the sudden exposed because of your media partners. That is a completely different situation than say just even two or three years ago.
So, that, I would say, is a major area to shore up their skills, their staff, and even their relationships with other people such as the chief privacy and compliance officers in their companies. The other thing I feel is important is, and this is not super new, but it is becoming more important with the CMO role, is the skills that they have in technology.
I think there has been a generation of marketers that have really grown up on digital technology over the last 10 years, so that they’ve been addressing, but I still think that they are nascent in their capabilities and they’re reliant on the software vendors to provide them with the guidance. However, I also think that they need to augment those skills with really strong data and analytics people that can help them go into market more effectively with their customers.
So, those would be some of the areas that I think that they should focus on, but the first one in particular, data privacy and security, I think is the one that most of them I haven’t seen equipped to address those challenges today.
So, I definitely want to double-click on your point around data analytics and technology. I think that’s going to be a big part of innovation. But, let’s start with a little bit more on privacy because I know that that’s a very hot topic across all industries, and especially in the marketing space, where you have such reliance on trust and brand and data in the marketplace.
I know for CMOs, increased privacy mandates put a lot at stake, and it’s more important than ever before to understand regulatory expectations, especially now that they’ve been shifting around a little bit and have conversations with leaders in your organizations so you understand what the impact is going to be on marketing and its effectiveness so it’s not just an afterthought.
Yeah, on the privacy front, I think there are two angles to this. There is the regulation angle and that is what most people focus on because of GDPR and now the regulations in California. I think the answer to regulations is to assume that it’s just going to be a heightened regulatory environment for customer data in the United States, and it already is around the world.
Marketers are still thinking about privacy more in terms of the terms and conditions that they put into their literature and their offers and I think need to put more emphasis on understanding what is coming, bring in lawyers and bring in their compliance officers and their privacy officers to help them understand not only what it is today, but where is it headed so that they can adjust their marketing strategies to that environment. So, that is definitely one piece. I think the more important piece about privacy is what is going on with consumer behavior and attitude.
Last year it wasn’t really that hard to see by looking at just the headlines in the Journal, for example, that the consumer frustration and complaints around their data getting hacked by large card companies or large even hotel chains, was a problem, and consumers are not informed about how their data is being used.
So, now you look at today, and more and more information is coming out in mainstream media about how data is being used when it wasn’t intended to be used in that way. And I think that’s related to a lot of consumer frustration and consumers are on guard. You see it in the way that social media sites are being used today. There’s declining usage. There’s declining subscription to those sites and to those medium. If you’re a marketer and you’re a CMO today, I would be looking at what do those changes and attitudes in consumer behavior and their preferences do to my marketing strategy? So, if I no longer have full access to social media sites, where else am I going to put my marketing efforts? I think that’s actually a bigger shift than the regulatory side. They’re coming together, but the consumer and the preferences seems to be moving a lot faster than the regulations.
That’s a great insight. I do think that you’re correct here that the changes in customer and consumer attitudes are going to shift a lot faster than the regulatory changes. But what are marketers to do? I mean, how can you maybe leverage technologies, maybe, in this space to respond better or to rebuild that trust or access different sources of data? What are some technologies that you are looking at that might be useful in this space?
I’ve asked myself a number of times what should marketers do in this landscape where data might not be as available as it once was to marketers to use for marketing strategies and what do you do in that situation? I really do keep coming back to making sure some of the basics in marketing are in place.
So, for example, truly understanding who are your target customers and prospects through data. So, I think data, and especially marrying your first-party data with third-party data, will really help you understand and get more insights into your target market. And it sounds like the basics of marketing, but most marketers today don’t do that in the way you would think.
Lots of customers who are working on segmenting their customers in very traditional ways and are not leveraging data the way they could be to target customers more effectively. So, I think that’s one thing that needs to be re-emerged as a practice in marketing. The second is really how much of your budget and your efforts are focused on new demand generation versus your customer experience? Most companies in financial services, especially the ones that have been established for a long time, they have a very, very large customer base and leveraging technology to understand the customer journey and personalize the experiences for existing customers is also still pretty early in its implementation.
Very few companies are able to look at the data, use the data to figure out personalized experiences, serve up personalized content, and then learn from that behavior and then re-inform marketing strategy. So, this is all enabled through advanced marketing technology, as well as the ability to bring in data, first- and third-party data, into a way that can be accessed by your marketing teams.
So, getting back to basics, but then also leveraging new technologies. Do you think technologies like AI could help you segment markets in a different way? Can you drill down on that a little bit?
Sure. So, you know, basic marketing would be understanding, let’s just talk about customers, understanding your customer base and there were basics around demographics, right, what age people were, gender, where do they live, etc.
You just look at retirement, for example, you still have segmentation at the 18 to 35, 36 to 45, etc., which we know is not really how humans can be segmented or should be segmented. We’re all very different in the way we behave and the things we like. If you take just the basic segmentation and you use all the information you know that you can legally get about the individual in terms of how they behave, what they like, what they engage with, that can all be systematically put into a data warehouse that can be effectively matched up against media and make real-time campaign decisions.
So, for example, and this was back in the day of the first time digital marketing came out, when you’d have, you know, multiple campaigns with, say, three different creative directions, you could do what is simply known as AB testing to understand how people behave towards each particular campaign. Today, you can take that idea and, you know, just put it on steroids with multiple creative opportunities and lots of different data that can inform what content and what media is most effective for a specific individual. And that is all enabled through AI.
So, do you think that companies are going to get to know us better so they can give us better options? Or is this more from a pricing or efficiency of marketing spend perspective?
I think it’s both. I think AI can help with pricing and marketing efficiency for sure, and it already does. So, media, for example, has become more effective and, frankly, cheaper if you just look on the cost per engagement than it used to be years ago because media is much more effective with things like programmatic media, where you can automatically target what media goes to which audience and what’s most effective and you don’t need human intervention to figure out what media is best for which audience.
So, in the media space, that has already put a lot of pressure on media companies and their margins because of the automation that’s in place. In terms of the customer experience, absolutely I think it can be, and it already is in some companies, very personalized, but not most companies. If you’re investing, for example, you’re an individual investor, the articles that you get and the content you get could be personalized based on where you are in your life journey, what your spending habits are, say through your financial accounts, things about your family history that could also say, you know, you’re saving for college or you’re paying college tuition or you’re about to retire or even, like, the job change situation where you change your profile on social media and that triggers different actions.
So, all of that example is very personalized to you versus sending you a generic pdf that says here is what’s going on in a specific bond market or the equities market, for example. We do see examples where our customers are getting more sophisticated by using data to personalize content; however, most companies are really, really struggling with still getting that data together. So I’ve heard a couple of clients talk about AI and machine learning and kind of the ideal state of where those technologies can lead them, and then dig in and look around and they’re still struggling with getting basic information about what’s going on, on their website, or can they bring their customer data across their different products together.
So, I think we’ve got to realistically help our customers to understand where they are on that journey. The basics of getting your customer information together, if possible, across products, there are some regulatory challenges with some companies so you can’t always do it perfectly, but bringing customer data together across those different touch points and products, that is step one. And then applying third-party data and then machine learning and AI to make better experiences is kind of the next step. But you can’t do the AI and machine learning with good data, it’s garbage in, garbage out.
Roger, I’d like to give you a couple of examples of where I’ve seen companies doing it really well in terms of using data and AI to employ and deploy their marketing strategies.
The example that comes to mind quite a lot is in banking, and a couple of banks are doing this, where they’re using data real time to adjust their campaigns, and that includes the creative strategy, the media strategy, as well as the customer targets that they go after with a particular campaign. And there are a couple of companies that are actually doing this in real time. So, for example, you create a campaign with some informed thoughts on who the customer is, what’s the best media strategy to employ, and what’s the actual messaging and the value proposition of the campaign. And then you go into market where people, including compliance, including creative media and data, and the head of marketing, if you think about a war-room-type environment where they’re looking at information and the information is suggesting that certain types of behaviors are occurring, say, through social media.
If you’re in this type of setting, and I’ve heard of this done in banking, in particular, you can adjust within a 24-hour period and change your entire strategy and get into market within 24 hours. So, the technology has been in place for a long time. Digital media has been around for over a decade. The difference today is that companies are realizing that it is a collaborative process where they have to bring people together in their organizations to actually use that real-time data to execute campaigns in real time.
So, it’s not just about the data, the data is all there and has been for a number of years. What’s changing now is the organizational model, and in marketing we call it agile marketing, which is essentially a cross-functional group of people getting together, looking at information and then making adjustments pretty much on the fly and then doing that on a continuous basis.
Amy, so what you’re telling me is, if I work with a company and they can give me exactly what I want when I want it, then I should give them all of my data, right?
Right, Roger. I think, though, that a lot of people would not want to do that, but it depends on what they give you in return, I would say, right?
Of course, of course.
And if you look at some of the consumer brands that are not in financial services, we give data to a lot of those brands pretty regularly, and what we get in exchange are things like convenience or send it to my house fast or customize the offering for whatever I need in that particular moment.
It kind of started with the retail. Now we’re getting food and meal packages to your home, and there are multiple examples of this. and consumers are happily giving their information, but they are getting some major value in return. That is where we need to go. I think this idea of brands that stick with pushing out messages and the way they want to engage with consumers has gone. Today’s brands understand that the consumer is in front of that steering wheel, the consumer is driving the engagement, and so the brands that get that and are where they want with what they want are the ones that are going to succeed.
We do see that in a number of industries. They become the examples that brand marketers use all the time; however, we have a long way to go, I think, in financial services and some are really showing us good examples. I think in wealth management, for example, there are some great examples where the wealth managers are providing more and more value to the customer and helping them with their lives.
There’s a lot more about how they can help with their life journey and understanding the customer better. So, you do see some good examples there. If other types of products or financial institutions can take a look at those examples, I think there’s a lot to be gained for them.
Yeah, I think you’re right. And based on my social media feeds, there are a lot of people I know that are providing way too much information online. So, I know that there’s a wealth of information out there.
The wealth of information, Roger, imagine a day when you’re sitting in your office and you’re a marketer and you’ve got multiple screens from whatever technologies are on your desktop with a lot of data. It’s pretty overwhelming right now for marketers, and this is where, I’m going back to your question about AI, this is where I think AI and machine learning can help the marketer in their job to cull through all of that data, which is immense, it’s coming from everywhere right now, and figure out what are those real key points of data that make a difference to that value exchange between the brand and the customer.
Thanks, Amy. We’re coming up to the end of our time here. What’s the one thing you want audiences to remember after listening to this podcast?
I think the marketing job itself is an amorphous role these days. And I think it’s important for marketers to really ask what is the expectation of them in their role, whether you’re a new person on the team or you’re the head of marketing for an organization, to make sure that you understand what your stakeholders are really expecting from you. And I would say then to also understand what is your role with your customer and are those customer expectations also in line with what your stakeholder expectations are?
I think that’s where the conflict can happen in marketing, is you’ve got a lot of expectations internally with your organization, yet your customers are telling you something very different. And those two are the most important constituents when you’re in marketing, and making sure that you understand both of those and aligning those so that, you know, really you can win in your day-to-day work and you have strategies that make a difference to both sides of the equation.
That’s great. Thanks, Amy. You shared a lot of information with us today. I hope you won’t mind, but I’d like to get a little bit of a personal perspective from you. What’s one thing that you do every day to challenge yourself?
I read at least two to three hours a day, I would expect, between articles and looking at a book or just the news media. But I read about just about everything related to business as much as I can, and it’s just a personal habit. I don’t know if I have to challenge myself anymore, it’s just part of the way I work and who I am.
So, you’re the best person to go to for book recommendations, huh? Is there a book that you would recommend on marketing transformation? Or innovation?
I do have some go-tos in marketing. First, I would always say Seth Godin, if you’re kind of a marketing wonk. He has some great books on marketing and he’s got a good blog. So, his readings have gone from, everything from pricing to customer wants to customer experience and innovation. So it’s quite all over the map, but some of the classic books in marketing, Seth Godin has been the author of. One book that I go to once in a while to remind myself just about business, I don’t even necessarily think it’s marketing only, is a book called Lead with a Story, and it really talks about the importance of storytelling when you’re in any role. It’s great for marketing, but it’s also great for leadership.
I think storytelling is really important. People remember stories, don’t they? So, looking into the future, see how crazy you can get Amy. What’s a headline that you think we might see in 10 years?
It could be that marketing is the path to the CEO. And in financial services, in particular, that, I think, is a pretty big change to today’s leadership and the path to CEO in most financial services companies. The reason I think that headline will happen is because I think marketing is the function that is most naturally close to what is the customer doing and what do they care about, and that will become the question of the day. It is now in some organizations, but it will become what is the customer doing, what do they care about, how are they behaving, and that’ll be an expectation of the CEO. So, I think that could be the headline 10 years from now.
OK, you heard it here first. Amy Summy says that if you want to be the CEO, you have to understand customers’ wants and needs. I don’t think that’s too much of a jump. So, Amy, we heard a lot from you today on marketing, but what’s one piece of advice you would give to us on a skill that we think we should be teaching our kids?
So, my advice around what kids should have today is not really that different from what I would have said a decade ago. I’m a huge believer in the power of words and using words to set a vision, motivate and innovate. I think we’re a society that is highly focused on devices and technology and at some level, we’ve lost the ability to communicate and communicate effectively.
So, I have a 17-year-old son. I think the most important thing he can learn is how to use language and words to express himself, to set a vision, and to motivate other people on something that matters most to him or to your organization. Words really, really do matter and in my education. I have a finance undergrad, I have a graduate degree in finance, yet I’ve spent the last decade in the marketing world and the number one thing I think I’ve learned in that move to marketing is the power of words. And I’ve gotten to see some great CEOs and great leaders, and usually they’re the ones that really understand how to leverage language to set a vision.
I love that answer, especially in such a technological age. I think the power of language and communication to connect with people, more important than ever before, and it really does help shape our thoughts and actions. So, thank you for that advice. I know the audience, the listeners are going to want to connect with you after this Amy. What’s the best way for them to reach out to you, connect with you online?
So, I’m very active on LinkedIn. So I’d just say go to my LinkedIn profile, Amy Summy. You’ll find me there.
Awesome. Thank you so much, Amy, for joining us today for this podcast. I know I learned a lot about marketing and how technology and data and customer expectations are going to shape that.
And I am going to take your advice on reading those books. Listeners, going forward, listeners can make suggestions on topics, guests or questions using Twitter. Use #agentsofchange. Thanks for your time, and our next podcast will be in three or four weeks.