Interview w/ Lou Hughes

“Image perpetuation will always be an important aspect of marketing, but at Moving Minds we see it as the froth on top of the latte, the proverbial icing on the cake.”

Q: Does the world really need another advertising agency?

Lou Hughes, Strategic and Digital Marketing Expert Consultant with Moving Minds

Interview with Lou Hughes, Strategic and Digital Marketing Expert Consultant with Moving Minds

Lou Hughes: No, certainly not. Not as most people would define an advertising agency — a firm that is solely focused on building brand awareness through traditional mediums such as TV or radio. Image perpetuation will always be an important aspect of marketing, but at Moving Minds® we see it as the froth on top of the latte, the proverbial icing on the cake. Today, companies need more than an advertising agency; they need a marketing partner who can help the client make the latte or cake taste better so that the experience lives up to the expectation created or what we call the brand promise. This is a fairly pedestrian analogy, but it works.

Q: Are you saying that marketers are focused on the wrong things?

Lou Hughes: Not at all. Our vision of marketing is just bigger. Moving Minds‘ bring a more holistic, more strategic view of a client’s entire business and how operational performance and interdependencies play a dramatic role in shaping the customer’s perception of value and thus, the success of marketing in growing the business.

Formulating image is just one aspect of marketing. But what good does it do if you spend millions of dollars to generate demand only to realize that the rest of your business — your people, your systems and your processes — can’t live up to the promises made in your catchy ad campaign. It’s a total waste, because the likelihood of that customer ever returning to do business with you again is lost, most likely forever.

It means that marketing plays a larger role in the organization because it should own the customer experience. And the customer experience is impacted by every part of an organization, from the people and departments to systems and processes. This is a major mind shift for many companies because it requires them to get out of a functional role mentality and wrap themselves around the customer; their view of your company, products and services from start to finish. This truly represents the next generation of marketing.

Q: Yes, this definitely changes the scope of what one traditionally thinks of marketing’s scope. So how do companies put this new worldview into practice?

Lou Hughes: First, you can’t overcomplicate things. At Moving Minds, we see the entire customer relationship as a lifecycle or a business process that needs to be nurtured and optimized. Our tagline, ‘Attract, Retain, Deepen®’ was Interview with Lou Hughes, Strategic and Digital Marketing Expert Consultant with Moving Mindsconceived to articulate the customer lifecycle in a succinct, compelling way. By breaking it down into these three distinct, interconnected phases the customer experience becomes easier to understand and thus, to apply resources and people to manage and nurture the process.

The ‘Attract’ phase is all about generating demand and acquiring customers. This is where traditional advertising agencies are solely focused, and where 90% of marketing dollars are spent. We are seeing a monumental and I suspect a permanent change in where those dollars are being directed. The internet is beginning to overtake traditional marketing mediums because of the ability to target better-qualified prospects — and do it more cost-effectively. This leaves out traditional agencies and requires a marketing partner who is well-versed in new media and can bring a web-centric perspective to the table.

The ‘Retain’ phase is all about customer retention. Once you’ve landed a new customer; are you making them happy? Are you delivering a differentiated customer experience consistently? Are they getting value out of your products and services? Regardless of company size, I continue to be amazed at the lack of attention, focus and budget that retention marketing receives in contrast to other marketing investments. A new customer may not be profitable for 6, 12 or even 18 months so for businesses with high churn, revenue from established customers has to subsidize new customer costs. If you’re burning through 20% of your customers on an annual basis, you’ve got a hole in the bottom of your boat. You won’t necessarily sink, but you’re not going to get to where you want to go as quickly.

The ‘Deepen’ phase is about extending the customer lifecycle by listening to your customers, engaging them and turning them into advocates. Many businesses only talk to their customers when it’s time to renew the contract or fix something that is broken. This is reactive and typically means that your customers can be picked off by competitors because the relationship is unattended to. Your customers are the best source of feedback and input for developing your next generation of products and services.

Q: When you refer to the customer lifecycle as a business process, one thinks of supply chain or manufacturing, not necessarily marketing. What exactly do you mean?

Lou Hughes: It’s really all about the customer experience. A marketer’s role doesn’t end with the creation and publication of a print campaign. That’s just the beginning of the process. Image and awareness play a vital role in the acquisition of a new customer, but marketers need to think beyond marketing communications. They need to understand the performance of other business functions and how the critical business processes they perform impact the customer, positively or negatively. Most marketing focuses solely on the brand promise, but by thinking of a marketing as a process with three components, not just acquisition, it helps to ensure you’ve got resources allocated to nurturing the customer experience and living up to the brand promise you originally made.Lou Hughes, Strategic and Digital Marketing Expert Consultant with Moving Minds

The scope of marketing and its role within the organization has to be change, not in terms of span of control, but in getting the rest of the organization to focus on areas that impact the customer. Marketing can help bring these inter-dependencies to light, and elevate their importance.

Frequently, the problem is that CMOs aren’t given enough time to really drive change throughout the business; the typical Chief Marketing Officer lasts only 23 months. So it’s no wonder they aren’t able to focus on fundamental change or process improvement. They have to focus on the big bang — the new ad campaign — when they should instead be focused on fixing foundational problems that will inhibit growth and allow the business to serve the customer more efficiently and effectively with an improved outcome. This doesn’t always come naturally for marketers because it falls outside their traditional role of responsibility and requires a different type of business acumen. Moving Minds brings this sensibility to every engagement and can help customers identify core issues that will impact the effectiveness of their marketing investments.

Q: How does ‘attract, retain, deepen’ philosophy play out in real life?

Let me give you an example. One of our clients wanted to generate more orders through their web site. For many years, they didn’t understand why they could only generate 1-2% of their overall revenue through the e-business channel. They did everything a traditional view of marketing would call for; They sent e-mails more frequently, they advertised, they distributed print catalogs and they redesigned their web site, all to drive more new customers and web traffic, but it had no measurable effect. No sustainable, long-term increases in web traffic or sales.

After getting under the hood and looking at their entire business, we discovered two critical issues that were at the core of their inability to grow: first, their supply chain was broken. In contrast to their competitors who could ship product the same day, our client took anywhere from 5-10 days just to process the order. The other concern that needed to be rectified was that their sales force felt threatened by their web site and told customers explicitly not to use it, but rather to call them directly instead. When we told executive management of this scenario, they simply didn’t believe it.

So rather than sending more e-mails and spending more in marketing deliverables, we helped address this client’s supply chain proficiency and sales compensation structure. And once these foundational issues were resolved, the number of orders and revenue took off.

A traditional approach would have been to try a new campaign or to spend more to generate more traffic. This would have been a common approach by most advertising agencies and is a superficial approach to marketing. The problem was operational and required not only marketing savvy, but also a strong business acumen. Rather than burning through a bunch of cash, we permanently fixed two business processes, at relatively little cost. This had a permanent effect on helping the company grow while serving the customer more efficiently.

Q: So how would you describe Moving Minds?

Lou Hughes: Moving Minds is a global strategic marketing and web consultancy focused on helping companies grow by attracting, retaining and deepening relationships with prospects and customers. We bring award-winning sensibilities in creating big, bold brands and developing integrated, multi-channel marketing programs. However, when our clients engage Moving Minds they are getting more than just marketing expertise — they are getting a hybrid of business intellect, creative genius and a customer-centric perspective that combines to deliver long-term, sustainable growth.