How Barclays Adopts a Challenger Mindset to Innovate a 300-Year-Old Brand

0:00I just read something the other day, the 7.26%, you know, it used to be the Pareto 80-20 rule. And now it's sort of 7.26 % of your customers actually drive 80 % of your revenues. And so we want to make sure that those folks who are most valuable to us and have an issue can actually get it resolved. I don't think we'll ever be of the mindset of, well, that's okay. You know, Eric wasn't able to get help and he's going to leave us. And we're okay with that. We're not okay with that. I'm not okay with that. We want to make sure that we service our customers to the level that they expect.

0:41I'm Eric Fulweiler, and this is Scratch, bringing you marketing lessons from the leading brands and brains rewriting the rule book from scratch for the world of today. Hey, everyone. My guest today is Lily Tomovich. She is the CMO of Barclays Bank in the United States. So this is a follow-up to a conversation, a great interview that I had with Lily at the Financial Brand Forum earlier this year. And where we start, which I think is a fascinating part of the conversation and her approach as CMO, is her background is pretty varied. she spent six years at MGM, the hospitality casino entertainment business, did a stint in DTC, and then went into banking, which is very rare.

1:25She did have a background in MasterCard before that, but still. And what's so fascinating, I think valuable about the conversation that we have around her background and how she's approached her role at Barclays is just the focus on the customer experience. When you come from hospitality, the thing that matters most and really only is the experience that customers have. And many industries are lacking in that or don't prioritize it enough. So we hear from her how she's been able to bring that into the world of banking. But also, you know, as you've heard me talk about before, kind of where's that balance with that fresh perspective, but also especially with something like banking, understanding the reality of why things are the way they are.

2:03So she's got some great advice on that. Really like the conversation around how she thinks we've kind of lost the humanity in marketing. And I think that this topic is going to become increasingly important and increasingly talked about in the world that we're going into with technology and AI. And lastly, she's got some great advice for all of us that could definitely use some help navigating internal stakeholders in conversations with the board, CEOs around marketing and the importance of not just short-term oriented marketing investments and focus. So without further ado, please enjoy my conversation with Lily of Barclays.

2:38Lily, welcome to the show. Thank you so much for making the time again after we had what I thought was a great conversation at the Financial Brand Forum in April. Really wanted to bring you back to bring your experience and your perspective and your advice to a much wider audience. So thank you so much for joining us. Thank you, Eric. Great to see you again and looking forward to the chat. All right. Let's do it. So before we get into kind of recovering the conversation that we had in Vegas, and I'm curious to hear some of the updates from your side as well. The icebreaker question that we ask every guest is, can you please tell us about a challenger brand that you're particularly passionate about right now and why?

3:21Okay, yes, I was thinking about it. And if you shop at Whole Foods, you will always see this brand on the shelf in the refrigerated section. and it's called Poppy, P-O-P-P-I. And it is a prebiotic soda with less sugars and all kinds of healthy ingredients for your digestive system. And first of all, the packaging is just eye catching. It's really outstanding in terms of the branding. And so it caught my eye the very first time. And then you start reading about it and you say, oh, great. You know, this is actually good for me too. It's not like having a sugary water. And so I was just reading recently that they were acquired by Pepsi.

4:08And so they've done incredibly well in a very, very short amount of time. I think they had captured less than 1 % of the overall category, but growing at huge rates. And so really sort of impressed with what they've been able to accomplish in a very, very short amount of time. And I think really riding the waves of consumer looking for options that are obviously healthier for you, less sugar, that actually plus up what you're eating as opposed to sort of take away from key nutrients. So that's been a fun brand to watch. Yeah, they sold for, I think it was almost$2 billion or something like that, which is crazy.

4:51Yes. Yes. Yes. And I kind of, you know, we've heard a couple times kind of liquid death as people's favorite challenger brands, and I'd almost put them in the same category, maybe a little bit less about the product. Like they've done more for the product innovation to everything you just said. There's kind of a functional reason to purchase them versus a different soda or even a water. And liquid death has been a lot more about the marketing because the water is just the water. We don't have Poppy over here. We kind of have our equivalents, but I've always thought it would be a really good idea to look at what is kind of disrupting the cpg space or other categories in the u.s particularly in kind of like taste and cultural epicenters like new york and la maybe even las vegas and then bringing that to london because oftentimes i feel like it's just a little bit further ahead over there for certain categories not all of them i'm curious with poppy go ahead go ahead i was gonna say there's another brand um chocolate bar Tony's Chocolate Only.

5:48Yeah, we had Sadira, who's the CMO. She was on the podcast a few episodes ago. Oh, fantastic. I'll have to listen to that. I'll send it to you. Yeah, please do. I'm a big fan of that chocolate. And it just came to me as we started talking about CPG. And I really love, I read their story somewhere about what they're doing with the cocoa farmers, et cetera. And so sort of tapping into culture and the whole sustainability and making sure that people are in fair wages for their work. I think that's a really, really interesting brand as well. So I'd love to. Please do share it with me. Yeah, I will.

6:25And there might even be a conversation to be had. I think that both you and I know something that we're going to get into with your experience at MGM coming to Barclays and Financial Services, but both you and Sedira, because she was actually at PepsiCo before going to Tony's. but I think of you both as someone that's always kind of interested in taking on different perspectives and learnings from other categories. And I actually, sorry to go off script before we've even started the conversation, but do you, you know, obviously the move from MGM ending up at Barclays US, very different category.

7:02And we're going to go into kind of like how you've brought the things that worked in entertainment and hospitality to the world of banking. Is there any kind of like formal ritual or routine that you go through to look at different categories like a beverage company like Poppy to think about how it can affect the work that you do in your full-time CMO role? Or is it just you're a consumer of all these products, you're tapped into culture, some things bubble up. Is there anything more formal that you do to take learnings from other categories into the ones that you're in? Yeah, that's a really great question.

7:33I don't know that there's a formal process that I would say that I do. I'd probably be lying if I said there was a formal process. But I do tend to, like all of us, get absorbed and go down rabbit holes in terms of reading articles and things that pop up either through social media or ad week or ad age, et cetera. And so trying to learn as I read, I think, is most most important really yeah it's just kind of being curious i remember i obviously worked for gary vanderchuk for seven years and not that he had much downtime but i remember literally any minute that he would have that was not booked he would spend it reading the comments or reading posts in social just to kind of constantly absorb what people are saying and what they're thinking that's right um all right so marina's back on track so before we actually get into the questions about what you're doing at Barclays.

8:27Obviously, I think everybody listening has heard of Barclays, even in the U.S., but could you please give us a quick overview of the state of the brand in Barclays, U.S. right now? Sure. So we are, I mean, we are a global bank over 300 years old. So when you really think about it, I think we're over 330 years old, actually. And so the fact that we are still around and doing incredibly well, I think is a testament of all of those behind us who have led this organization through tremendous change over the years and decades. And so we are predominantly a investment bank in the US, but we also have four other divisions.

9:13So an investment bank, a corporate bank, private wealth management, our UK bank in London, obviously where you are, And then we have a large consumer bank in the U.S. as well. And so we are, like most institutions, constantly going through transformation and growth. And certainly that's what sustained us 300 plus years is always looking to the future and how we can continue to evolve and meet the changing needs of both our B2B clients and our B2C clients. So I'm curious before we get into the first chapter is going to be how you came to banking from entertainment and hospitality. But I'm actually curious, you know, to your point of kind of looking to the future, constantly trying to innovate, even as a 300 year old business, were they intentionally looking for a CMO from outside the category?

10:04And how did you approach that conversation? Because of course, there's a lot of interesting opportunities and upside to coming from a different category into something like banking. But also there can be risk if it doesn't translate or if the business isn't willing to adopt kind of new ways of thinking about things and doing things, which let's be honest, banking is not necessarily known for. So what was the dynamic around like you being hired and you choosing to go work for Barclays? Yes, so it's certainly, well, the good news is, although I'd spent, you know, the last call it six plus years, in the hospitality, casino and hotel industry, I did have some history, quite a bit of history, actually, in financial services with MasterCard.

10:49So I'd spent about nine, 10 years there. However, MasterCard is not a bank. So it's very, very different. And I think credit to the CEO, he was very open and intrigued sort of by my multi-institutional background in terms of the categories I had worked in. I think he saw that as obviously an advantage. But I can tell you, I recall when I was interviewing there, I know there was a few individuals that were sort of giving me that eye, like, really? Are you going to be able to do this? Because you're not a banker, and banking is very, very different, which it really is. But I think that there was enough openness to say, look, She's got some experience in financial services, but we think that she can probably teach us a finger to certainly around how to modernize a marketing organization and how to think about customer experience from a different lens.

11:43And so I believe I have brought that to the table the last four years. But to your point, it kind of starts with the top with somebody saying, listen, we want to do things differently here. And the best way to do that is to bring in new thinking. One, just another quick interruption. If you're listening to this podcast and you're not already part of our AMP community on WhatsApp, would love for you to get involved. So AMP is a community that we started at the beginning of the business, really, just to kind of bring together some of the interesting people that we were talking to, the marketers that we were coming across, many of whom have been on this show as well.

12:18And so now AMP is about 300 senior marketers from around the world, from various categories, different stages, challengers, incumbents. and it's really a place where people can share questions, can share resources, can make new connections, can use folks as sounding boards. And for those that are in it, you know it is a very vibrant community. It's really taken on a life of its own, which is amazing. So if you're listening to this and you want to get involved, please go to our website, wearrival.com. There you can find the application form or reach out to me or someone at Rival directly. Thanks so much.

12:53Yeah, I think especially at the CMO level And this definitely came out in the research that we did around this future, the CMO documentary that we released a couple months ago. A lot of it is really about choosing the right CEO as well as the right brand, the right category, the right opportunity. Because at the end of the day, you know, they're the one that's going to have to kind of work with you to define the role in remnant marketing internally, but also kind of give you the support that's needed to drive through the changes or the vision that you actually have. Okay. So you've been at Barclays for almost four years.

13:28You did about a year in the DTC sector, which is interesting as well. But obviously before that and after MasterCard, it was six years at MGM where you were the chief marketing and experience officer. So how did your time at MGM affect your mindset coming in as CMO of Barclays US? Yeah, well, first of all, I guess I would start with a couple of things. One is I love the fact that in my mind, and I hope many people agree that marketing has, you know, first of all, is industry agnostic now, right? I remember years ago when I started my career, you had to be a packaged goods marketer or you weren't.

14:05Like if you didn't grow up in Pepsi or Kraft, you couldn't really jump in 10 years later into those categories. I think those kind of walls have been sort of smashed down. But in terms of, you know, what I learned at MGM and bringing it to Barclays, listen, the hospitality industry is, you know, it is called hospitality because we are completely maniacally focused on the end customer, right? We are customer obsessed. We care very deeply about the experiences that the customer has. It is all about loyalty, repeat purchase behavior, and delivering experiences that make them want to stay, you know, at the Bellagio versus the Wynn, et cetera.

14:48And so that kind of constant focus, and I will say at MGM Resorts, the conversations were much more, you know, outward focus than inward. It was always about what can we do for the customer? How can we bring more customers? How can we drive more loyalty? How can we get better at personalization? Where are trends going in hospitality? What do we need to deliver from a hotel room or casino or entertainment. And so that mindset, and it really is a mindset, was something that I was able to bring when I came to Barclays, which historically banks, in many ways, can be very inward focused, right? They're thinking about controls and compliance and the regulatory environment and managing, obviously, the money that we are privileged to manage on behalf of so many of our customers.

15:37And so I was able to sort of pivot the conversation a bit to be much more focused on, you know, how can we make things better for the customer? And that really started the customer experience transformation journey that we've been on for the last four years. Yeah, it's interesting. I was having a conversation with my wife over the weekend. Bear with me for a second. My oldest daughter is 13, almost 14. And we were like, I feel like in the UK, kids don't get high school jobs like we did in the US. Not full time, but you know, my wife worked at a bakery, I worked in a music store. And I was like, I actually think it's really important at a young age or even an older age just to get experience in retail or hospitality.

16:18because being on the front lines of being able to communicate with people, talk to people, but understand how to help them solve whatever problem they have, I think is really valuable. Maybe more relevant to people listening. I remember we had one of these interviews, I forget if it was for Future of the CMO or Just Scratch, and the CMO said that part of the role of CMOs is or should be to help the organizations that they work for be more customer-centric. And that's always stuck in my mind because one, I think it's really true. But two, I actually think most CMOs don't think about that as part of their role.

16:56And most organizations don't think of that as part of the role of marketing. They think of positioning and promotion and maybe product and pricing, but not. My job is to help this whole company better understand, spend time with, draw insights from, and ultimately help solve the problems of the customers that we're reaching. So I almost feel like it's a bit of like a cheat code for the companies that are set up to be able to bring in somebody from hospitality or retail, especially someone who was operating at the levels that you were, because you automatically have someone that is so customer centric and customer oriented.

17:34And part of it, Eric, it's true because, you know, when I was working in that industry, I could literally go walk into any lobby and ask somebody, like, how did you feel about your meal at that restaurant? How long did it take you to check in? Can we have a discussion about that? I mean, I literally could walk out of my office and get consumer feedback right there, real time, or just sit and observe. Sometimes I would sit in the lobby for two hours just observing the check-in process, which is how we ended up launching mobile check-in. But when you're working in a bank, unless you're sitting in a branch, which we know is less and less frequent these days that customers are going in there, how do you get that feedback?

18:16Like how do you make sure that all employees understand what customers are thinking, doing, experiencing? And so that was one of the things that I brought to Barclays is we have an executive meeting with our CEO every Tuesday afternoon. And I brought in call listening. So every Tuesday afternoon, we listen to a call every week from our customers. Sometimes they're great calls, sometimes they're not so great calls, and sometimes they're really painful and ugly calls, right? But then it starts this whole dialogue where we listen to the call and we start going, well, wait a minute, why did that happen?

18:53How did that customer get caught in that vortex, that swirl, as I call it, where they can't get out? And we kind of dissect it and we make sure, obviously, that we have plans in place to execute against it. But it's a real eye opener when you're sitting there with your chief legal counsel or your chief risk officer or your head of fraud or credit because they don't get to hear those stories every single day. And so just starting a meeting by making us all listen to customer calls is incredibly powerful. And it was my way of bringing the lobby and the hotel experience into the boardroom. Hey, everyone.

19:31Just want to take a quick minute because we've actually heard from many of you that you want to get a better understanding of what it is that we actually do here at Rival. You know us for the content. Obviously, you're listening to Scratch right now, but everything else that we put out, the events, the community, but actually our core business, just so you know, we are a marketing consultancy for Challenger brands. We partner with brands, big and small, to gain category share with a Challenger approach. We develop and execute strategies and campaigns across four main areas of the marketing function.

20:01Brand strategy, creative in production, paid media planning and buying, and customer data and MarTech. And then of course, as you know, the mission that's wrapped around Rival is to understand and share our learnings about what drives the growth of successful challenger brands. That's it. Sorry for the interruption. I'll let you get back to the show. So what are some of the other things that you've done differently since you joined to help Barclays become more customer-centric? Because I feel like Like, you know, one of the things that always goes through my mind is I think at the end of the day, all growth comes from being able to deliver on customer needs in a differentiated way that, of course, generates revenue for your business.

20:38But it comes from customer centricity. And it's a word that gets thrown around a lot, but typically at the principle level of like people should build products that are more customer centric. You have more marketing that's customer centric, although actually you don't hear that as much. But practically, what else have you done differently or how has this experience and kind of grounding that you have in this affected how you've made decisions as a CMO? Yeah, gosh, there's so many things. The first thing we did was, I won't get into too much detail, but really developed a whole transformation plan.

21:13And it started with changing the mindset. So we actually, one of the things that I did, and this was very tactical and it goes back four years ago, but we sort of launched this, I'll call it internal rallying cry, North Star. And it was very, very simple, Eric. But it was make it better. And that was what we talked about for years and we still do today. So, of course, we did the typical when we launched, you know, the elevator doors, everything was covered. We had a huge launch party around make it better. The call center folks loved it. And the notion was to want to use something really simple in terms of language so everybody understood what was expected of them and what was expected of every single employee, whether you were answering the phones, developing digital capabilities, whether UX, UI designer, whether you're working on fraud alerts, your job is to make it better for the customer.

22:11because oftentimes, you know, people are like, okay, we're, you know, doing X, Y, Z, and they're not sitting there mindfully thinking about how can I make this experience better? And so what I loved is I would start going into meetings and we would start asking, okay, well, how are you making that better? And people would start saying, well, we're making it better this way. I'm, you know, we're making it better by doing this. We're making it better. And so that started to take real hold. And just the other day, somebody sent me a note saying, you know, I love how we really kind of turned the passion around to be much more focused on the customer.

22:48And it started with this mindset of make it better. So that's one example. The other example, and I could talk for hours on this, but we have pivoted to customer journey approach, right? So now we have an accountable executive. Every individual that sits, that reports directly to our CEO is responsible for a customer journey. And then they have a journey owner. So I, as an executive to the CEO, I'm responsible for the apply journey. So if you're applying for a credit card, applying for a deposit account, applying for a loan, I'm responsible for that entire end-to-end journey. And of course, I've got an agile team supporting that journey.

23:32I have a journey owner. We report on it monthly to the executive committee. We then, for example, have a journey owner who's responsible for rewards, the entire rewards platform, end to end. If anything goes wrong in redeeming rewards or in the points distribution, that person owns it. So there's been a lot of things that we have implemented to really focus and drive accountability, most importantly, around customer experience. Yeah, I love that. So you have kind of your marketing responsibilities across the business and then you own this customer journey all the way through. And I'm a lot responsible for journeys as well.

24:17My team, customer experience reports to me and I'm responsible for journeys. But we basically federated the responsibility amongst the executive team because we felt it's really important that every executive is responsible for a journey because that's how important we feel it is and that it gets the right attention by the business. Yeah, I think it was, I think Nationwide over here did that. Yeah. But it is interesting because the thing I think about all the time is why we're integrated as a consultancy, as an agency, meaning strategy, creative, paid media, and data are all under one roof. We don't do that for every client, but that's our initial approach and default position because the idea of those being separate or the reality of those being separate or UX being separate within Barclays or marketing or customer support or whatever it is, it only exists on the inside.

25:10on the outside to the customer it's just one experience so the more oriented a business can be internally which oftentimes does just come down to how it's structured or that can be maybe not an easy thing to change but in theory a less complicated thing to change to try to allow how try to align how you structure and how you focus people internally on what the actual customer experience is going to be. And then measure outcomes, right? We're trying to be much more outcome-based. Like what is the outcome we are trying to drive? And the other thing I didn't mention is we are very focused on not only internal benchmarking, but competitive benchmarking.

25:54So I'm constantly looking at various tools and resources that we have to look at our competitors and how are they doing against those journeys. So I actually know the episodes within the journeys where we're falling behind a Chase or an American Express. And so I know exactly where to pinpoint our energy so that we can get better. Get better. It's customers better. So customer, also known as a human being, one of the things that you said in our prep call initially is that you think with all the focus on digital and technology over the last 10 to 15 years plus, we've, quote, lost the humanity in marketing and probably banking more broadly.

26:38Can you expand on that and how that position has changed how you've gone about your role as CMO? Well, I think it's no surprise to any of us here that try and pick up the phone if you're in trouble with your internet provider or whoever is providing your cell phone service. if you've got a unique use case and you need help, good luck trying to get to a live agent, right? You literally want to pull your hair out. And then sometimes when you do, they're not particularly trained to handle it or helpful. And so in many ways, as most organizations have looked for efficiency and looking at their cost basis and trying to grow revenues.

27:31We have done things like digitizing, which I'm all for most of our journeys and experiences. And in many ways, that's been brilliant and incredibly helpful. And who doesn't want to be able to pay their bills through a banking app? Right. We all do. And we all love that. And when it works seamlessly, it's a plus up. It's fantastic. We're excited. But when it doesn't work, it's very, very painful. And so when I say we've lost the humanity, many times we don't give people the right opportunity to actually have a discussion with somebody. And most people, you know, are craving that. Certainly in the society we live in today, most people want to have that interaction and crave that interaction.