Nick Tran on How One Marketing Decision Created More Value Than Any Campaign

27:09It doesn't have to be present case because I think the framework is inarguable. It's just the execution so hard. I love talking about other people more than talking about my work, which is why on LinkedIn I always talk about... I have not found that to be the case, So far, yes. So I'm trying to think of other examples, but when I see brands taking big swings in developing either, you know, episodic content, which has been played out for a little bit, or building these like, I mean, Red Bull was a classic example, right? They brought value to people. They were able to show up in a way where they took this niche category of action sports, they brought it to the forefront of culture, and they brought you not only the products, but also the content.

27:56So that's an easy one. Every marketer would know that one. If you're thinking about in today's world, you could claim that Liquid Death is the modern-day version of that with their entertainment studio and their ability to drive entertainment. We've seen that when done right, you still have the ability to drive value, be provocative, create conversation, which is like what we're trying to do as marketers, you know, get your brand to be top of mind. But in a way that is still respectful, still, you know, fun, but, you know, hopefully less guarded. I think we were a little bit too guarded over the last few years.

28:29Yeah, which led to work. And I think Greg Hahn, you know, who's the co-founder at Mischief and one of the great creatives working today said, you don't have enough money to bore your people into buying your product. No one has enough money to bore people into buying their product. Yeah. But the competitive set, which is say the competitive set for my attention, for their attention, was so much smaller. Yeah. Right? So you could, in fact, bore people into it because there just wasn't anything else competing for it. But I think that's the thing. It's less about having enough money to bore people, but that there weren't other things competing for that.

29:08So even in the spirits industry, in the midst of COVID, the only brands that thrived were the ones that were household names because people weren't going and exploring new brands during that era. Right, called brands. Yeah, called brands. So you could literally say like, I want Don Julio or I want this. And then you would just go order that because you weren't exploring Lobo 1707 or like whatever other new brands there were. In that regard, you almost didn't need marketing. Whoever did the best marketing for the last five years before that, they were gonna win for the next five years because of just the ability to recall that brand and then call it in that moment.

29:45So I think the spirits industry got a little bit lazy. They no longer were pushing innovation or doing really fun things because in their minds, the work was done and they could see the results because they were just focusing on the bottom line. Because of that gap, there's almost this like moment where the demand isn't quite as high as it used to be. and a lot of spirit brands are things like, oh my goodness, we have not been building the brands in the right way. We need to do that now, but we also need to set ourselves up for this new generation and how they're consuming content and how they're enjoying experiences and how they're engaging with brands, which is very radically different from how it was just previously.

30:23But that learning curve is very hard because a lot of the folks have been in that space for a very long time and it's tough for them to make that shift because they're not using that day one mentality. Right, right. Right. I want to step outside of marketing specifically and talk about business generally, which of course brings me to the thesis of the show, which is that every decision a company makes, not just the marketing ones, right, either contributes in some fashion in some way to value creation or destruction. You cannot spend the same dollar twice. You cannot spend the same human capital twice.

31:00And I'm wondering, A, if you think I'm right. And if you do, why? And if you don't, why? um i'll try to use another case study but uh everyone is talking about ai making them more efficient you see the headlines of brands cutting and laying off tens of thousands of individuals because they can do it better so they think they're creating value for their shareholders let's say where i think there's an opportunity is like what i saw ikea do which i thought was brilliant. They realized that AI could make the customer service agents pretty much irrelevant. So they basically were able to bring in AI and they were like, okay, there's 8 ,500 people that would essentially be displaced.

31:47And a lot of companies would have just used that moment to just reduce their cost. What they did instead was they realized that that group knew their products better than anyone and that they would be better utilized if they were trained to be interior designers who could tell you exactly which cabinet, which table, which chair could fit in your space. And instead of letting them go, they redeployed them, taught them with AI's help to become interior designers. And now they had a whole new separate service arm within IKEA of people that are able to not only point to you to what's wrong with your thing, but actually say, here's how you should make your space come to life in a really meaningful way.

32:26And that revenue stream offset whatever efficiencies they would have made on this side. So that's value creation. I had no idea. That's brilliant. It's brilliant. And that's the stuff that I think we as business leaders, so again, forget marketing, we don't talk enough about. If you are able to make those reductions before you just cut it, can you find ways to redeploy that and take the lessons and the experience and the knowledge base of that group and bring and elevate a new revenue stream, a new vertical, a new pillar within your industry or your company to drive way more value than you would have from just the efficiencies and the savings.

33:03What I find so interesting about that example is a couple of things. One, that went from being a product only company to a product and service company. 100%. Two, and IKEA, you guys can have this idea. You should train some of them to put this shit together because it's complicated. Yeah. Right? Yeah. I kid, but I don't kid. So why do you think, all right, so here's something I think about a lot. The typical CEO of a Fortune 500 company, right, let alone of a smaller enterprise, CFO board, they don't have any traditional marketing experience. They are typically coming up through finance and ops, right?

33:44Maybe some general management, obviously general management. They understand intuitively and explicitly that sentiment moves markets. Why do you think they don't understand that sentiment moves product and service bottom lines? And even furthermore, they understand that IR is a narrative based construct, right? What's the story we're telling to investors, to the capital markets, the public markets, the private markets, that they need to hear to believe that we are moving in the right direction such that, but they don't understand the import of narrative and story when a CMO brings it up in a board meeting.

34:30Sure. It kind of reminds me of this idea of the immediate reaction to something that has been caused will have more impact than something that's delayed, right? Say that differently so I get it. So let's say the IR team says something inadvertently in the earnings, and then the stock immediately takes a dive. And they can call out, like, it was that statement that you made that either created this moment for us to slide or for us to go up. Direct attribution. It's direct. Yeah. They don't have that in the world of marketing and the narratives that you're talking about. because the length of time that spans between that creates a lot of ambiguity on what is attributable to the, you know, increase or decrease of like the brand and the, you know, share price or whatever it might be.

35:29Yeah, and again, I think if you have folks that think very linearly, it'll be difficult to convince them otherwise. And I don't think it's something that we as marketers need to try to convince or push them to do. Because at the same time, I don't think it's possible. But what I realized is that when I stepped into the president role, my perspective immediately shifted from just focusing on the marketing at all to thinking about the company overall. And I realized immediately, like literally day one, that the things that the CFO and the CEO used to tell me, that I used to be like, how in the world are they thinking like this?

36:11It's so wrong. Makes no sense. It was almost like the curtain was like, you know, open. And I was like, I now understand why they think the way they do and the decisions they make. So it's less about trying to get them or convince them otherwise, but more so just contextualizing how your piece fits into the, you know, macro business. I'm really surprised to hear from you who has always been a commercial leader, that it was this moment where that unlock came from, which is to say, you know, what did you used to consider marketing's role was, if not in fact that? So marketing's role in my mind has always been like the objective is to like drive sales or drive commercial success, however you want to phrase that.

36:59But I think the way that we went about doing that only took into account marketing's levers to impact that. It didn't take into account ops or finance or the other levers. And they honestly have to all work together in order to truly achieve the commercial success overall. But when you're, you know, a CMO, let's say, the way that you think you can drive that value, it's a little bit more single-minded. So you're saying, in order for me to drive the value for the company through the marketing lens, I have to do X, Y, Z. And you almost say, like, with regard to what my counterparts need to do. Stepping into that, you know, the present role made me realize that there are levers and checks and balances that have to work together.

37:43It's almost like unlocking a lock. you can't just turn the one dial and have it unlock you have to turn all three so that they're all lined up for the lock to go out right it's got to all calibrate it has to all calibrate i think i think it's i mean you kind of prove the thesis of the show which is every decision right influences value creation or destruction um that absence of interoperability that absence of integration calibration, that's not the CMO's job to fix because even if they want to fix it, they can't because there's a COO, CEO board who's responsible for the organizational design that either gets in the way and punches integration in the face or facilitates it.

38:28And it requires cultural incentives and cultural behaviors, et cetera. And I'm wondering if you You can think of an example, a case study of an organization whose design just created value, just facilitated destruction, not growth. Where the design of the company. Yeah, just got in the way of success. Oh, I would say we probably are seeing that turnaround with something like Starbucks, right? Like I think the lack of foresight that the previous regime had into how the decisions that were made to drive efficiency were destroying value into the brand is why they - Destroying value for the customer.

39:26Yeah. Which then accrued to the detriment of the brand. Right. And I don't want to call out just Starbucks. I'll use this as like a - I mean, Nike is a fine example too. Nike is also a fine example. And again, I didn't work at Starbucks. So this is more of a from an observation standpoint. It felt like their path to success and to drive shareholder value was in, at one point, just driving pure efficiency and cost reductions. And in that game where you have, you know, a management consultant, call it with like a finance background coming in. I mean, he was, that's the narrative for, I'm spacing his name, the guy who preceded Brian as CEO.

40:12He was running PepsiCo like Europe or some such thing for years. He's, getting painted as just a management consultant, he was a real operator. And I'm not saying him. I'm just saying in general, if we're using that as like a case study. When you get into a seat at the CEO level, I generally feel that the best brands are driven by and inspired by someone with a vision to create and innovate. As soon as you put somebody, doesn't matter who it is, at the top seat, and they look at the path forward as being how to reduce, how to be more efficient, and how to save, I think it creates a very different dynamic and culture within the company that doesn't yield creativity and innovation.

41:06And that alone, in my mind, is one of the things that will destroy value because they stop thinking about what consumers want. They stop thinking about where can they add value. They stop being like the Ikeas of the world where they're like, okay, in this moment where we can reduce here, let's use that to create a whole new area over here. You win and you score points by how much you reduce. That to me is inherently flawed for a CEO. Now, if you need a CFO to be that checks and balance for you, great. If you need a COO to also step in and do that periodically, no problem. But when it's the CEO that's doing that, I find that more value is destroyed than created.

41:43And in what we saw, whether it's Nike, whether it's Starbucks, whether it's whoever it is, the goal of the CEO should be to inspire innovation and a path forward for the people to do their best work in their careers. I don't think reducing costs is the best work that anyone could do in their career. Especially if it's not reallocated to things that do create value. And I think that Starbucks to me is an interesting example simply because its explosive growth when it had explosive growth was based on the very simple articulation, the Scott Bedbury napkin math of we are the third place. right in defining itself as the third place or up and up place right it put itself in the experience business going back to the very first thing you talked about right and if you're in the experience business and you fuck up that experience and you make it a bad experience you fuck up and make bad your business it's the same thing with any product driven brand right that's right if you make a shitty product when you're just a product-led business it's going to create value destruction now but but i think it's interesting about that right it's it's easy to say yes if you create a shitty product you're not going to have much but we live in a world where across most categories products and services oftentimes they're all good enough right all good all good enough you compete in two categories right now with many worthy liquids right and so so in a world where many competitors are good enough, meaning becomes the ultimate differentiator, right?

43:23I think it's sometimes the only differentiator. Yeah. Yeah. And that's where I think seeing what the team at Starbucks is doing, the team at Gap is doing, the team at - Nike is trying to do. Nike is trying to do. It's encouraging to see big, huge global brands recognize how important bringing value to the consumer is and reshaping their approach to how they spend. Like, I love seeing the headlines that like they spent X hundreds or millions of dollars on Sharpie pens or whatever it is. It seems Sharpie pens. Yeah. They dropped a boatload of money. Oh, riding on the cups. Yeah. But like, that's just a means to an end.

44:03Yeah. To build that value, to build that. Again, I could talk about what they're doing right all day long because, you I used to work for Tracy and I used to work for Brian. They are brilliant at being maniacally focused on the customer and bringing value to them, which will then bring value to the company. And that's where I think I would always bet on the folks that have a CEO at the helm doing that than the ones that are at the helm trying to figure out where they can reduce. Yeah. And the two shouldn't be a binary, but again, it goes back to what I, or mutually exclusive rather, but it goes back to what I said.

44:38If you're going to create efficiency, reinvest at least some of that efficiency into things that are effective enough to create value and drive. And I would love for a year from now for us to have a dozen of those examples. Because, you know, as we see more brands looking at the ones that will truly step change and win won't be the ones that just reduce. They'll be the ones that reduce, deploy elsewhere, and then find new value that they didn't even anticipate. And I think the turnaround that we're seeing now is a result of leadership recognizing that they need to build value back for the customer.

45:16They need to bring meaning back to the brand through the customer. And that's what's going to drive that commercial success. And that's where you need all those parts to work. Because that's not just a marketing problem. That's an ops problem. That's a finance problem. That's an everything problem. It's a value creation problem. Correct. And it really is just stunning to me that it seems that we as a ecosystem of businesses and of business people, we've become so myopic. We have lost sight of the end. For sure. But I also think, and I've said this, and I think a lot of other people said this, we're working in an environment where the marketing challenges and the way to achieve our objectives are shifting.

46:05Yeah. Like we've talked about this before where it's not like the objectives are changing for what markets need to do, but the way to succeed in doing that is so different three years ago, five years ago, 10 years ago. I mean, there are conversations we've had in this conversation that would have been unimaginable two years ago. 100%. And yet the finance role and the ops role are more or less unchanged. Yeah. So when you're working in that environment, the CFO and the COO, there's no reason for them to change their approach or their perspective on things because their whole world hasn't shifted at all.

46:40So unfortunately, or maybe fortunately, the CMO role, because of how dynamic it is and how much they've needed to adjust their approach to achieving their objectives, they're the ones that need to be almost like the bridge into the other leadership roles to guide the company to be interoperable and in a way that can help them to have commercial success. because the other folks, there's no incentive for them to see things differently because nothing has changed. Whereas like with the CMO, if they don't shift everybody, the whole thing doesn't work and then they're the ones that are blamed anyways.

47:14Well, the CMO should be the voice of the customer and the organization should be customer centric. Therefore, right, like it makes sense for that person to be that bridge, to be that facilitator, orchestrator.

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48:58i'm wondering as as we get towards the end of of the conversation um is there something that that you used to think was was i don't mean it tactically i think i mean it more structurally right tactically television was an example of an answer to the question i haven't yet asked which is is there something you used to think was essential to growth, was essential to driving value and capturing it, that you don't anymore, that the world's changed. Your perspective has changed. And so you don't see it that way. Ooh. I mean, I've been fortunate to be in places that were always in a crisis for the most part.

49:45So because of that, there was no rule or playbook or template that I felt I had to stick to. So it's always kind of been different each time. At a high level, I think the things that we assumed were the proverbial or metaphorical campfires where people gather around and discuss things, they're going away because of the technology advancements that we've made and the screens that we're now addicted to. So I don't even think just focusing on social or like digital is the keys to success anymore, even though like that's where a lot of people spend their time. So if you were chasing data, you'd say like, okay, if that's where everyone's spending their time, I'm going to invest there.

50:31I think we need to be a little bit more insightful and find new ways to create those gatherings, those moments where people are talking about the same thing. And it's in that, that will bring almost like a new wave of innovation. And I actually think AI will help us figure that out sooner. It'll help us uncover those things and allow us to do it at scale. Whereas like we might not have been able to do it before. But it just really takes, and the fun thing is you can't ask your LLM to tell you what those are because it has no idea because those aren't things that have precedent. So I think that the ability for us to think outside of the box and identify the things that made us tick or emotional or excited in the past.

51:16We just need to uncover all of those elements and then think strategically, how does our brand now cover that in the same way that like Gap is doing what I think MTV used to do for us. So I think I see it more as opportunity and more and less about like what's not working well and just seeing that this will open up a whole new wave of marketing innovation that we have not seen in the last 10 years. You're so glasses half full. I'm always. Yeah, it's true. Your glass of tequila is half full. And my glass of vodka. And your glass of vodka. Look, I'm old and I've been doing this long enough because I'm old enough that when I grew up, reach was everything.

51:55And, you know, there are a lot of people who will argue, Ehrenberg, Bass, I believe amongst them, that reach is still everything. And of course, reach matters because if you reach no one, nothing else matters. But I think the shift from reach to relevancy and from reach to resonance is a new framework that, you know, reach is a prerequisite, but it isn't in and of itself anything. And we used to be like, reach and frequency, reach and frequency. I don't, I don't, I, in the academics come at me, by the way, please do come at me. in this because I can learn. But yeah, I think it's the wrong metric.

52:37I think it depends. Like I would say, when I was at either Hulu slash Disney slash TikTok, reach did matter because of the scale you needed. Yeah, it's a prerequisite. It's a prerequisite. But most or very few brands are operating at that kind of scale. I think most will find that reach might be a thing that they're chasing that might lead to more inefficiency than the things that you're talking about. I think that's a great note. Yeah, you don't need reach as much when you have a million users and you can win. Reach isn't that significant. You need a billion users. To your point about reach potentially creating inefficiency, I think that kind of marries with my point about relevancy.

53:25And I think probably what I'm trying to say, thinking out loud, is the words we use matter because the words create a perceived destination. And reach without relevancy is useless. That's inefficiency. And so if we focus on relevancy first and then expand the reach, so maybe it's cart horse. All right, I got two questions for you that I try and bring to the end of each show. So, and I'm wondering if, and putting on, you know, maybe it's what you've learned since you've been president of this company. What do you think all, most many organizations need to reimagine about marketing that has nothing to do with the marketing department?

54:15Ooh, that feels like an existential type of question. Well, I am nothing if not existentially oriented. Very wisdom-ish. Yeah, yeah, yeah. Thank you very much. I mean, to your point, marketing has always been the driver for commercial success within a company. So that doesn't really... Is it always been or always should be? I can't imagine an environment where it wasn't the actual... I mean, don't you think the folks in Silicon Valley would have a pretty different take on that. So what's an example of one? Yeah, Dropbox, which is say PLG, product-led growth as opposed to marketing or brand-led growth.

55:04Again, I'm separating as I think they have product and marketing. Yep. And maybe that's the answer. The product is the marketing sometimes. Exactly. Maybe that's the answer to the question, which is it's all fucking marketing. I think it's all marketing at the end of the day. Um, but I mean, how should people think about the function or the quote unquote marketing differently? Um, I find it interesting that the brands that are in a crisis and are being asked to turn around lean on marketing pedigreed leaders to run their companies. I've seen this more than once. So I do think that this perception that marketing is a function within the greater thing and not the folks that might step up into the CEO president roles is ironic when we see that when shit hits the fan, they normally lean on a ex-CMO to come in and run the business overall.

56:11So I think they should see the marketers as the folks that are almost being groomed because of how much dynamic changes and shifts that are happening. They're technically the most well-primed to carry a brand forward into the future rather than just being someone to make things look pretty. Yeah, well, that's its own conversation for sure. But as we bring this one to a close, here's the last one for you, Nick, which is what's one thing you'd create tomorrow? Tomorrow, not next week, not next year. One thing you create, you can answer it as a human being, as a marketer, as a business leader. You can answer it any way you want.

56:56And what's one thing you'd destroy tomorrow? Okay, one thing I'd create. I love the communities that we're in. we were able to you know join Joe Marchese at his human attention summit yesterday and I thought it was an amazing you know first like attempt at bringing some very eclectic folks together to talk about this issue it was great I would create some kind of I don't want to create another summit I don't want to create like another you know conference that's not what I'm talking about but like the joy that I get in having the discussions and the camaraderie that we all have and being able to push each other to do better work is amazing.

57:47I just don't know how to bottle that on a 365 basis to like, other than these like moments where we all get together, like, I feel like there's something there that I would love to create. And sometimes it's like text with like Musa and Ricky, like literally we were texting each other today because - How am I not on that chain? Good question. Yeah. We were, I was speaking on some Patau forum and they were just shitting on me in like a fun way. Yeah, no, I get it. And it's something, there's something there where we don't want to do this alone. It'd be very lonely. And like having that banter that we could have, I would love to create something that allows us.

58:28And I'm not saying it's like the Tinder of this or whatever. Like, I don't know what it is, but like, if I could create this and bottle this like camaraderie that we have that pushes us to do better work. Well, I would like to point out the camaraderie you, Ricky and Musa have, because I was left out. So I don't know what the fuck you're talking about. All right. One thing you'd destroy. One thing I would destroy. I don't want to make it like lofty and say, I want to destroy like fear and all that stuff. Like, I think if I could destroy something specific, I would destroy short form media. But isn't, what's your definition of short form here?

59:06Uh, I would destroy YouTube shorts, TikTok, and Instagram. And why would you do that? I think there has been less creative innovation because of the development of these platforms. The consequences. And the consequences on these attention. And it's just been like, so if I could destroy one thing, if you could just push a button and have all of that go away tomorrow, the amount of creativity that would come back into the world of marketing would be insane. Because right now, I think every marketer is optimizing towards those three channels and those three feeds. And I think it's watering our ability to create down to like the lowest common denominator.

1:00:00And I think if you get rid of that tomorrow, and I'm saying that within this window of time that we're in, the amount of proliferation of creativity and innovation and insightfulness and inspiration would be unlike anything we've seen in a long time. All right. I said that was going to be the last question. I have one more. It's a fill in the blank. You ready? Value creation is? More campfires. Value destruction is? Screen time. Nick Tran, thank you so much for being with us. And please add me to that text channel. I will. Thanks, Seth. To wrap up this episode, consider this. It's 1959, and a Volvo engineer named Niels Bohlen invented the three-point seatbelt, which is arguably still the single most important safety innovation in the history of the automobile and is credited with saving more than a million lives.

1:00:56Volvo patented the seatbelt, and then Volvo gave the patent away and made it available to every automaker on Earth for free because the company decided the invention was too important to keep to itself. On paper, that could look like value destruction, right? You invent something with mad commercial potential and then give it to your competition. A typical CFO might call this irrational and a board might call it negligent. But here's what actually happened. This single decision, one made by engineers and executives who'd never have described what they were doing as marketing, permanently and irrevocably associated Volvo with safety.

1:01:31not through a campaign, not through a tagline, but through behavior, through an action, through an enterprise decision that said more about who the company was and what it stood for than any advertisement ever could. And 66 years later, Volvo still owns safety in the minds of consumers, people worldwide, which is symbolic capital that compounds across decades created not by the marketing department, but by a patent decision, which is an engineering decision, which is a legal decision, which is a board decision, and which didn't just save millions of lives, but turned out to be the most consequential marketing decision the company ever made.

1:02:07That's what this show is about. The decision nobody calls marketing, the turnout to be the ones that matter most. That's something to consider. Today's episode was produced by Art Chung, Jim Mackle, Manolo Moreno, Brandon McFarlane, and Ashley Futterman from the Vox Media Podcast Network and the Wisdomist Company. Support for the show comes from Injun. Running a small business means every dollar has to work hard. But if your team is still booking travel the old way, it's costing you more than you think. Injun is the fastest growing travel and spend platform in the country, built specifically for businesses like yours.

1:02:44Book a trip in as little as two and a half minutes. Earn up to 10 % back on hotels. And in 2025, Engine customers save more than$300 million on travel with zero booking fees, no contracts, and no BS. More than 1 ,000 businesses join Engine every month. Join them and get$500 when your business signs up and starts traveling at engine.com slash Vox. I'm Josh Muccio, host of The Pitch, where startup founders raise millions and listeners can invest. For our sweet season 16, we're giving you more of what you love and less of what you don't. I definitely start to blank out when we're talking about like middleware AI wrappers.

1:03:28Software is out. Actual cool stuff is in. We've got consumer brands. We're building Eight Sleep for daytime. Hardware that helps blind people see. They kept asking for middle finger. Next thing we knew, we had like 10 students running around flipping each other off. We've got deep tech to change the weather. Our big vision is to make it rain and snow on demand. What if you wanted to not make it rain somewhere else? Like one day we're just like, screw Arizona. And dairy? I never imagined my life journey would be milk. Season 16 of The Pitch is out now. Listen wherever you get your podcasts. This season is presented by Engine.

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