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Brought to you by the founders of Chubbies (9 figure exit and 10-figure IPO) and Loop Returns, Tom Montgomery and Preston Rutherford have a single goal with this podcast: Give you new information, lessons and learnings, translated into specific tactics you can employ TODAY at your brand to help you build the strongest brand possible, which if you build that strong emotional connection, ALWAYS translates into more profit, if done well. It's our job to help you do brand building well.
You can expect 3 things from the podcast episodes:
1) share the best brand building knowledge from the best books on brand building,
2) talk with the founders and operators building the best brands today and
3) share share all our mistakes, lessons we've learned along the way.
After ever episode, you'll leave with 1-3 actions you can apply today, as informed by the best brand builders in the world (not us), our mistakes in building a brand that had an IPO, and founders of the world's best brands.
Tom (00:01)
Welcome everybody to the brand builders podcast. We are here. It is March 14th. It is a spectacular day. We are continuing our exploration of Kellogg on branding, delving into section three. And that's what we're going to talk about today. So.
Preston Rutherford (00:13)
you
Tom (00:27)
Quickly, I'm gonna touch base on what we covered last week in our podcast on section two. And that was all about bringing your brand to life. And this is how we both manifest our brand creatively and how to think about structures to bring that to life, as it were. And then also how to get it in front of customers in media and things like that. Had a great exploration.
discovered a lot about branding and about ourselves. And we are back. We are back again. And here we're talking about section three, a grouping of chapters, chapters 13, 14, 15, 16 from Kellogg on branding in a hyperconnected world. And this one is really interesting. And...
Preston Rutherford (01:04)
humans.
Tom (01:23)
One of the more kind of, I think relevant and you know, probably biggest opportunities for the Kellogg team, I think to enhance a bit is title of this is gaining insight about your brand and quantifying its stature. So a lot about like measurement and thinking about both how to track brand and how to value brand, which.
is meaty and if you follow any of our discussion on LinkedIn or whatever platforms you follow us on or you just talk to us in person, something that we think a lot about, talk a lot about, have thought a lot about. And so I'm excited to dig in. But first I want to introduce, reintroduce my illustrious co -host, Preston P. Reathy Rutherford.
Preston Rutherford (02:22)
Mm, Thomas, thank you. Pleased to be here today on the 14th year of March, day before the Ides or Eads of March. Is that something? Is that a thing?
Tom (02:35)
Ah, the Ides. I think it's the Ides of March. Is it the Eids of March? That would be a wild spelling for Eids. Yeah, it's Ides, Ides. The Ides of March. It is the 74th day, of course, in the Roman calendar, which corresponds to the 15th of March. Yes, yes, yes. It was a deadline for settling debts in Rome. Incredible. It's also Pi Day.
Preston Rutherford (02:47)
Maybe it's my ESL coming through.
So...
Yeah, which is fantastic.
Tom (03:05)
Of course! Today is Pi Day.
Preston Rutherford (03:07)
So we're in the best time of year, which is Pi Day, the Ides, and Pides and Ides. And yes, thank you for having me today. And I'm really looking forward. Thank you for having me as the guest every time we do this podcast. And I very much look forward to today. Yes, echoing your sentiments. This is some stuff that we are very excited to talk about and think it could be helpful.
Tom (03:12)
Pies and Ides.
You
our guest, Preston Rutherford.
Hehehehe
We've thought a little bit about. Yes. Okay. I'm going to take over. Um, I, cause I wanted to talk about one very particular topic that I think is probably the most pertinent topic. Let's call it in this whole damn book. Um, that is, uh, what chapter was this chapter 16 connecting.
Preston Rutherford (03:36)
little bit, little bit of hair, you know, talk about it, little bit, talk about it.
Take it.
Mmm.
16.
Tom (04:02)
Connecting marketing and finance via brand value. Great title, right? Oh, boo -yah. I'm a marketer. I'm like, heck yeah, this is what I'm looking for. Time to, you know, time to speak the same language as my CFO. Time to get all that sweet, sweet budget for all the incredible creative ideas I've got. And then in the chapter, I don't know if it delivered.
Preston Rutherford (04:08)
Great title.
And they also waited 15 other chapters in front of this thing. This is kind of like, maybe you should talk about it earlier.
Tom (04:36)
This is it. This is the book. This is the book. We'll write another book called Rutherford on brand value.
Preston Rutherford (04:41)
Right.
That's a good name, that's a good name. How about Kellogg decided to put this at 16. We're putting it as the only thing we're talking about by Tom and Preston.
Tom (05:02)
good. That's good. I can tell you thought a lot about about this title. Yeah, yeah. Yeah, it's got to be a coffee table book, but a really in depth coffee table book. So it's actually only going to be about 30 pages, but size 12 font. Super easy to read.
Preston Rutherford (05:07)
It needs to be a big book though. The sizing has to be big because it's a very long title.
Right. Really small.
Tom (05:29)
At any rate, marketing and finance. I think it's a major topic. To me, this is the topic, right? Like, and they kind of bury the lead, right? Like if you can value your brand and understand how you're growing the value in your brand, well then shit, you've solved it, right? Like you and the finance, you and your CFO can sit down and plan out your budget. And so like, hey, we're performing this way. We're investing this. The brand value growth was this. Does that make sense or not?
And both of you will say yay or nay based on economics. The problem we have so frequently in this world is that it's not that easy. And all of the methods they lay out are kind of non -viable, right? Like they mentioned a few different methods here that Preston, I'll let you recap, but not necessarily the most viable of methods. And yet if you could figure out a method to kind of valuing brand and understanding even like in a, like,
None of these methods are perfect, but like if you had a dynamic way to measure any of these methods, great, like cool start, because it's better than the goose egg of not having that and it all being kind of a religious discussion, which is CFO says, what's the value of brand CMO says, well, shit, I don't know. Like no one knows the answer to that question. Kellogg on branding has some thoughts, but have we been acquired recently?
Preston Rutherford (06:50)
Hahaha
Tom (06:55)
But, uh, and conversation dies and maybe you'll tee up a little bit of budget for a test. You'll run the test. You won't see revenue come in immediately. CFO and CMO gets scared. CMO is scared of getting fired. CFO is scared of wasting money and they just drill it back into performance marketing. The cycle continues. Anyway, I'll get off my soap box.
Preston Rutherford (07:16)
CMO gets fired and they find a new one or they get rid of the position entirely. Yes, and the cycle continues.
Tom (07:23)
Exactly. And then it's just, did they get hired in the right market cycle? That's really the job of a CFO is get the good job during the right market cycle where you're correlated with success as opposed to causing success.
Preston Rutherford (07:31)
Right.
Yeah, if you were hired in April 1st, 2020, you have had a lot of tailwinds. You are the best marketer on planet Earth.
Tom (07:45)
It was you.
It was you. You did it. Yeah, if you got hired and then you proactively left, let's see, when? April of 2021, when was it? Is that when the wheels fell off? 22, yeah. Yeah, no, it was 2022, you're right. Yeah, 2022. Yeah. And you went on sabbatical, generated billions in cashflow. Anyway.
Preston Rutherford (07:58)
Maybe April 2022? Yeah, you had just two killer years where you just were the best marketer.
Exactly. And you're just biding your time until the bottom. Until April 2025. And then you're going to come in for two more years.
Tom (08:19)
Until the next one. It's so damn good. Oh man, that's good. Anyway, so Preston, I said a lot about this in advance and was nonspecific. So why don't you do a quick rundown of their thoughts on this alignment with finance and marketing and how to do that and what are these various methods? And then we can kind of...
Preston Rutherford (08:42)
Yeah, let's do it. Let's do exactly that. So first...
Tom (08:49)
Dick in.
Preston Rutherford (08:56)
One of the things that I did mention was this idea, and I think it's one of these hot topics in the world of marketing, which is either the short tenure of the CMO or the transition of the CMO to more of a CRO or Chief Revenue Officer, with the idea being maybe the difference.
Tom (09:01)
you
Preston Rutherford (09:19)
between a CMO and a CRO is that the CRO is maybe has a little bit more of a financial alignment with the CFO or a little bit more finance chops, which first of all, so many qualms with that, but one of the things that we've talked about is just this general idea that if you're a marketer and you just ignore the finance side of things, then.
kind of just, it's not marketing, it's not brand building, right? It's doing brand stuff for brand sake is just maybe one of the biggest waste of times on planet Earth, wastes of time on planet Earth. And that's a little bit of the vibe that maybe it's just me projecting, but that I started to take out of this, which was just sort of like the completely,
furthering this narrative around how brand building starts to fit into this bucket of something that you are skeptical about, that there isn't accountability of these efforts in this spend and therefore is only something that is invested in when you have extra dollars to spend. So anyways, there's this general idea.
Tom (10:44)
you
Preston Rutherford (10:46)
that in some ways there's this notion that a marketer is not finance savvy or a CMO is not, that there's somehow this complete separation of skill. And in some ways this is true. I mean, there is this sort of like marketer bury their head in the sand sort of thing.
And I think that's where the problems start because I think the CMO role or the marketing role is inherently a financial role. It is a business driving role. It is a profit growth role. So without that connection,
and that's where the problems come into place. But Thomas, to your question and to your point, one of the things we wanted to do here was just give an outline of some of the methods of valuing brands that were taught here. And you'll find, I mean I think one of the takeaways is that some of them are, well, many of them are not very actionable nor,
do we think they're that correct? But let's talk about them. So clearly when you look at a balance sheet, you've got these things that are intangibles and clearly if you're an accountant, you're trying to be as risk averse as possible because you don't want to get sued. So one of the main...
provided is just this notion, well, I guess just understanding the context of how these values show up in financial statements kind of helps to provide a little bit of clarity on the methods that are then used. But basically valuing this intangible asset, if you are an accountant, you want that to be the lowest, most defensible, most conservative value possible. But some of these methods are associated with
with, yeah, to your point Tom, have you been purchased recently? Because you had to kind of value the thing when it was purchased. Okay, great. So if you were just purchased, yeah, then maybe you do have some semblance of a value of your brand.
Tom (13:12)
Well, and then it was the entire purchase price, right? Like, and that's not it, right? Like, yeah, but yeah, if you've been acquired, well, we got something.
Preston Rutherford (13:16)
Right, right, right.
the idea that yeah, we got something, but it doesn't change over time, it's just going to stay there regardless of what you do. And the...
There's this income approach, right? And then there's sort of like this notion of that and price, but again, not this, yeah, price sensitivity, this notion of like a royalty valuation. So if you were to, if you were to have to license this brand in theory, what is the royalty that you would have to pay?
Tom (13:46)
Precincts for thee.
Preston Rutherford (14:02)
in order to make use of this brand.
Tom (14:04)
which is just an insane one. Yeah, I mean, it's so funny that this is what I would deem the most important chapter and their methods are, it's an intangible asset and so we won't have a valuation, kind of, or it's just gonna be really small. So valuing them as assets, right? And there's two ways, intangible asset, and I don't even know how that comes to life. And the second is, it's the entire purchase price of the brand. It's like, well.
You could come up with a range of multiples on profit, on EBITDA, on revenue, whatever, like depending on your market. And you kind of know what the purchase price of it, but that's not brand. Like that's not the net value of brand. Otherwise, like now the market is responsible for the entire acquisition value of the business. And that's not entirely true. And then it's this like, okay. And so they're beyond the asset idea and they say, okay, let's value it off of income. How much income does the brand generate? Great idea.
Preston Rutherford (14:50)
Right.
Tom (15:02)
That's awesome. And how does that change? But then they're like, okay, here's the way we'll do that. What if you licensed the brand? What would you pay for that? You're like, how would you ever figure that out? We're not renting our brand out to anybody. And so they're basically saying, well, what about another brand? Well, then maybe that's the value of that brand, but not your brand. And then it's pricing power, right? So like how resilient are customers?
Preston Rutherford (15:13)
Thank you.
Mm -hmm.
Tom (15:28)
to pricing changes and how much income can you forecast based on your ability to flex price up? Okay, maybe that's worthwhile, maybe that's a piece of it, but like, are you changing your price that frequently? Are you really jacking with that so that you have a model for how that's changing dynamically? The answer for most brands in our world is no. And okay, well that one's out. And then there's the other one that is basically the excess earnings method.
Preston Rutherford (15:38)
Right.
Tom (15:56)
which sounds like it's more like marketing variability of like, we can assess some value to brand when we have no other reason that our revenue changed. And it's like, ah, I don't, that's not it, right? So then you're left with no valuation method, but with this concept that's so enticing of how to unify these two. And it seemed to the most important thing about this whole book and yet, um,
Preston Rutherford (16:09)
Right. Totally. And then the other just small detail is that there are these consulting firms that have come up with their own branded
Tom (16:25)
Not anything that anybody's paying a lot of attention to.
Preston Rutherford (16:38)
brand valuation methods like Millward Browns, Brand Z, or Interbrands. I don't even know what the name of it is, but these folks have this crazy perverse incentive to then have you then become their client or whatever, and they will then do things to then increase your brand so they can validate.
the impact that they had. So anyways, it's just sort of like this interesting, there are a bunch of perverse incentives in this world as well for the folks who maybe have created some sort of a proprietary brand valuation model. Clearly it's gonna be lower before you engage with them and then it'll be higher after you engage with them based upon the skills and capabilities of this particular consulting firm or agency or whoever it might be. But yes, so.
Broadly, the point I think we wanna make here is that the connection between brand building and financial results is the topic as it relates to brand building and the way, at least the way it seemed like it was approached in this book.
in terms of coming up with just this maybe singular value of the brand left a little bit to be desired and did so in a way that
Not not very actionable if you're sitting in the CMO seat and you're trying to figure out or any if you're sitting in the founder seat you're sitting in the VP of marketing you're sitting in the manager of media buying seat and you're trying to just understand how the heck do I allocate my resources to Effectively just drive more people to purchase from me because they thought about me And they've already decided that I'm the solution to their problem when they're in market versus having to be convinced
because ultimately that's what building the brand is and that's how it connects to financial results. It felt like, and maybe we should reach out to these folks and say, hey, we would like to rewrite chapter 16 if we could, and then we'll put it at chapter one if we could. Maybe that's the output of this podcast, which could be kind of fun. Who knows? Maybe we should start writing books. It's a book deal. Turns out it's a book deal.
Tom (19:01)
It's a book deal.
Um...
Preston Rutherford (19:08)
I think this quote might be helpful, and this kind of echoes what I was sort of mentioning before, and I imagine it's preaching to the choir a little bit, but here's the idea that here it is. Marketers see their role in the organization as strategic. There is an expanding array of functional activities, including social media, content marketing, sponsorships, activation events, mobile apps, and more, but the overriding strategic goal is brand building.
Brands have strategic value because they are valuable to consumers, customers, clients, et cetera. Marketing activities build brands, but brands exist in the mind of a consumer. A brand is the idea or meaning of the product. And so the thing I wanted to just call out with that quote is that in some ways it talks about like the goal is brand building rather than the goal being.
to drive particular financial results, which ultimately should manifest in profit increases, whether it be on the margin side or on the dollar generation side. That is the goal. Everything ladders up to that. Brand building is just a name of a certain set of inputs that lead to outputs that then lead to more profits. And kind of the...
I would love to have a little bit more of that framework talked about where the ends aren't the brand building work as much as what we're ultimately trying to accomplish, which I think helps solve this CMO being this person toward which we have skepticism rather, and you've written about this, the new CMO is central to owning the growth of
Tom (20:51)
you
Preston Rutherford (20:54)
owning the profitable growth of the business or the profit growth of the business and brand building brand building happens to be one of the ways to to accomplish those goals, so
Tom (21:09)
Yeah. Yeah. And I think the lens of let's figure out the financial value of this brand is the right lens to then go back to the rest of the chapters and think about measurement. Right. And so I think when we look at it, we're like, okay, well, if we're trying to assess the financial value of the brand, then we need to start to look for measures of brand and try and link those to financial value. Um,
Preston Rutherford (21:23)
Mm -hmm.
Tom (21:35)
And so I think that's like the lens that I thought was an interesting lens to start to put to this problem, that maybe then we can go back and kind of think through these methods and how, or if you can start to link these to brand. Cause I think the reason for this problem is not that marketers, you know, as, as they kind of put it in the book,
marketers think their role is strategic invest not related to finance. No, of course not. They understand that that's their role, but they also understand that they don't have any tools to link certain of their marketing activities to financial outcomes. Certain of their marketing activities they do. And those are the marketing activities that currently are ruling the day. Performance marketing, bottom of funnel marketing, Facebook, Google, et cetera. And no matter how far you run from them, you always end up coming back.
because the moment you try and veer, you try a test, you allocate 500 grand to go do a big interesting push in linear TV or in billboards or in whatever, you allocate it, you start running your test, results aren't that great, you start to worry about it, CMOs worried about their job, CFOs like, what the hell is this doing?
You don't have any measurables and maybe you see a little bit of growth, but you know, a month in you're like, you know what, let's just cut this and shift it back into direct response, Facebook, et cetera. Facebook's coming up. Come back.
in a big way, they've got a new marketing campaign type that smushes all my audiences together and they'll do targeting for me and it's paying out big time, like that sort of stuff. And so it all has this air of defensibility. You can always say, well, the numbers were there. You want me to focus on finance, like the numbers were there. And so I think it's for lack of tools that marketers are...
Preston Rutherford (23:20)
Yes.
Tom (23:30)
pushed into this place where the only way to fight back to that is an intuitive, an intuitive battle and an experiential battle. Like I've seen this before and like, this is the way to win. And, um, barring a few really notorious examples of recent kind of, um, lore, there's just not that many people who can say that. Right. And so then it's an intuitive take and it's like, well, what the hell, you know, sort of thing. And that's why the CMOs have short 10 years.
And so, but I think it does start with measurement and I want to kind of, you know, use that lens to think through the rest of this section. And so we can kind of tie it back to Preston. I know a topic that you had teed up that was some of the measurement piece. So I'll turn it over to you to kind of now let's dig into kind of brand measurement. And then maybe you and I can think of how can we relate this to financial outcomes.
Preston Rutherford (24:20)
Mm -hmm.
Perfect. So yeah, one of the interesting sections or let's call it subsections within section three was in this realm of, and I kind of talked about it in it's chapter 15. It's kind of like the third section in 15. So 15 is called Measuring Brand Relevance and Health. And then this section focuses particularly on digital data, which,
When I read that, my ears perked up because that's just something that we've thought a lot about ourselves in our own experience and thought that, yeah, there is something there. We've seen that there are some things there as it relates to measuring brand. And so non -digital, just to sort of like lay out the context, non -digital methods of measuring brand, relevance in health.
be surveys, probably not surprising to you to hear just big survey programs, talk to a lot of people. They get paid to take the survey, answer questions, et cetera, et cetera. And they are asked different things. Do you know the brand? And then it's framed in different ways to give you an aided and unaided number or answer. And then they ask you a bunch of different things that help you get feelings on preference and all of these sorts.
So that's in one camp, very expensive, slow, not really actionable, but in a lot of ways, still the gold standard on getting an understanding, especially in the enterprise level, let's call it, big companies, in terms of your brand relevance, health, awareness, et cetera, et cetera. Okay, so that's to set the stage. A lot of brands, like Chubbies or Smaller, maybe spent some.
Tom (26:14)
you
Preston Rutherford (26:25)
on surveys and maybe probably too much, you know looking back on it, but we also look at a bunch of digital markers now not necessarily to or at least I didn't for a long time think about how it laddered to some semblance of Objective measure of brand health brand relevance, etc Over time maybe getting more into that place, but
That's sort of what this section talks about, where the general idea is digital data and the tracking of brands, but the idea being that there are, we had to learn a lot about what digital data matters and what maybe in some ways can be seen as vanity metrics or less connected to actual business results or,
Tom (26:58)
Yeah.
Preston Rutherford (27:24)
were maybe some of the things that were digital metrics that we used to really prioritize and think were the be all end all in the earliest days. And then over time, I think as we learned, made some mistakes, maybe deprioritized or put in context of a broader set of digital metrics. So the couple of things that I thought were interesting, and again, this is, this is,
coming from a sort of like educational institution, probably more within the context of more established, more traditional older brands, but not, because they're also like the framing of a lot of this book is in this new digital age. So, but one of the things that continues to be maybe something I somewhat take a little bit of an issue with is just that this whole notion of digital metrics are only,
to support your survey results, that the survey results will continue to be that main source of data for you. So that was one thing I thought was interesting. But some of the metrics, like the digital metrics that they mentioned, were just some of those basic ones that I think we as, all of us as digital marketers,
look at something like your digital advertising performance, like your click through rate, your conversion rate on your website, or just some of these basic ad stats that all of us get and have looked at. And in some ways it was kind of like, oh, that's interesting. And in some ways it seems like, huh, we could have potentially gotten a little bit.
deeper into some of the things that actually represent not clicking on ads and maybe that the fact is that they didn't really know that the click through rate if optimized in a vacuum is in really not in service of building the brand or increasing the probability that someone will come to you because they've already decided to purchase from you. You know maybe they just hadn't been able to
see that necessarily, but some of these stats I think that were mentioned just sort of seems like, okay, tracking your CAC, okay, yeah, for sure. I think one of the things that we've learned is that it would have been great to fill this out a little bit more. What are all of these non -purchase behaviors that are taking place that are digital trackable behaviors in the realm of social engagements or search behavior or behaviors on your website or joining your list or?
Also thinking about these things in the context of your market, your share of on these fronts. These are all things that as you dig deeper, we think at least could more closely tie to the notion of brand health, brand value, that some of the digital metrics that were mentioned here maybe did not. So anyways.
I'd be curious Tom to get your thoughts, but I think the notion of simply focusing on these cost -pers, sure, that's a good start, but there's a lot there on the digital side that we can use, and I think that's sort of like one of our core pretty strongly held beliefs on this front that...
Tom (30:42)
Yeah.
Preston Rutherford (31:07)
We might even suggest that survey results are simply to support the digital metrics in a lot of ways and save people a lot of money.
Tom (31:15)
Yeah.
Preston Rutherford (31:19)
Anyways, some interesting things that I kind of took away there.
Tom (31:20)
Yeah, my, yeah, my take was kind of, um, twofold, but for first I want to summarize like how they thought about it. So they, they kind of recommended two forms of measurement generally qualitative and quantitative. Um, which is like a funny distinction given the, the methods they were thinking about, but the qualitative format they were thinking about was like interviewing customers and going deep with them and asking them lots of questions. And, um,
And they then juxtaposed that with like the famous Henry Ford quote of like, if I asked, if I would have asked people what they wanted, they would have told me a faster horse sort of thing. And that MFer invented the car, not a faster horse. But so he was kind of poo -pooing the idea of using that as some great indicator.
And then I think rightfully the team at Kellogg pointed out like, Hey, the use case of this is not to deterministically, whatever they say, we're just going to do. It's to find a new insight. It's to find a new test to run. Like that to me is the value of the qualitative piece. It's like, Oh, whoa, cool. That they kind of have this perspective. This gives me an idea to act this way as a campaign test or a creative test, but acknowledge that like high odds that it's completely wrong and completely gonna whiff.
But I think it's a great and valuable source of inspiration for a team that's trying to do really creative, impactful things. I think importantly, what it's not is a performance indicator of asking a person, what do they think? And then saying, oh, they thought this. So that means that we're doing this and whatever. This is our progress towards how they thought about us last year. That's not it. And so I think they rightfully called that out.
Preston Rutherford (32:51)
Right, right, right. Right.
Right.
Tom (33:15)
I think the interesting piece to me is that then when they went to surveys, they called that quantitative. The only difference between a survey and an interview is that you're just asking more people the same sort of questions. And so it's still the same problem of people are generally unreliable about understanding what they want in the future for sure.
Preston Rutherford (33:23)
Mmm.
Right.
Tom (33:44)
but also unreliable about thinking about how they make decisions. There's a ton of documentation on this and the whole world of behavioral economics of like people not really understanding how they actually behave, even though intuitively they think they behave in certain ways and they think they have all of these different opinions. When a push comes to shove, they act in completely different ways than they would tell you they act. Which is why similarly, when I think about surveys, they're awesome, they're valuable, but again,
Preston Rutherford (33:57)
Right.
Tom (34:13)
I think of them as these sources for inspiration of action and what to do next, not as performance metrics. Also, because how you ask questions is so critical in all of these things. Like it's very dependent on methodology. And the reality is, is there's not like a perfect science to this. There are a lot of people who spend a lot of time thinking about how to construct surveys in unbiased ways, but like frankly,
Preston Rutherford (34:28)
All right.
Tom (34:42)
If you wanted to construct a survey that showed higher or lower or higher affinity, lower affinity, you could do that. If you want to show something that said higher brand awareness, lower brand awareness. Net promoter score is a notorious survey that you can really affect. If you send your surveys the moment after they've purchased your product, they're going to be higher. If you send your surveys 180 days after they purchased your product, when they've had time to have issues with it, they're going to be lower. Like these are relatively obvious things, but there's not a standard practice. And thus, if you just quote an NPS number, it's...
Preston Rutherford (35:07)
Right.
Tom (35:11)
like relatively meaningless. Like people kind of know that, but still it's like the most they mentioned in this book. Um, and it's like one of the most well -known measures of kind of quote unquote brand. Um, and it's like, damn, like it's like, still that's where we're at. Um, and again, like what, what we like is behavioral data. And we all know this now when we talk about shopping, right? We talk about like revenue generation. We're like, yeah, like what do they click on? What product pages that they visit? That's the stuff we care about.
Preston Rutherford (35:18)
Right.
Right.
Right?
Tom (35:41)
And so I think a lot of like modern marketers are now no longer paying attention to this qualitative stuff. Um, but that's kind of meaning that they're not paying attention to brand. Um, and that to us is the problem because there's all sorts of sweet, sweet behavioral data on how people are acting towards you. Um, and so, so anyway, like, I think the thing to me is like, definitely these things are cool and awesome and valuable. And if you've got nothing else, do them. Um, but make sure one, your methodology is tight. You feel good about it.
And then two, you're using them for what they're useful for, which is like they're not performance indicators. They're great for driving insight and new action and ideas and things like that. Not awesome as performance indicators. I also have the framework that they were playing with, which was like they had kind of three vectors they were thinking about on how to kind of give yourself a scorecard and.
Preston Rutherford (36:29)
you
you
Tom (36:39)
certain scores mean certain actions. So they were saying like effectively a scorecard of how good you're, how well you're doing from a brand perspective is one, how many people know about you? So that's brand awareness, that general idea. And there's a lot of different ways to measure it and a lot of different ways to play with that metric. But that's the general principles. How many people know about you? The second is how many people like you? So not just know about you, but also like your business and respect you and all that good stuff. And then the third is what's your market share?
Um, and that would be a more financial thing. It's like, what's my sales versus sales of overall category. Um, and I thought there was some interesting combinations of like, okay, if you've got a low brand awareness brand that has high likeability and low market share, that math equation leads us to say expand brand awareness, like make more people like your brand. Um, and that will increase your market share sort of thing.
Um, and they, they also had like, uh, and so I thought that, like, I really liked the way that in this book, they break down esoteric things into these like binaries and say like, well, if this is the case and you can measure this however you want, but if this is the case, here are the actions we might recommend. If this over, if this other thing is the case here, actions we might recommend. So one was, um, uh, brand expansion. So they had Lego as an example. They said, okay, Lego, um, has high brand awareness.
high affinity, people really like Lego and they dominate their market. What's next for them? Category expansion. And so like that's an interesting lens to think through as you're thinking about this. And I would recommend like digging into that piece of the chapter because regardless of how you're measuring these things, if you say, Hey, I think we have, and maybe you've measured it with surveys, maybe you've measured it differently, but I think we have high awareness, high affinity, and then, you know, whatever your market share is, it kind of predicts a different action.
Preston Rutherford (38:10)
Right.
Tom (38:37)
And I thought that was a useful framework to think about like strategically next steps.
Preston Rutherford (38:42)
Right. Especially as...
I don't know if this is before Old Spice did all of their stuff, but I assume to a certain extent, but just the idea of Old Spice being one of the example brands that is sort of like not well known, not well liked, not high market share. And it's sort of like change everything. And as being one of your options, you're just going, well, okay, at least.
Tom (38:52)
Yeah.
Back to the drawing board. I thought that was funny. I think that the update maybe happened like after, because I know that this one was revised in the 2000 teens. But the earlier one I think was, was.
Preston Rutherford (39:26)
I thought it was pretty recently, yeah.
Tom (39:33)
14 years prior to that. I think this one was maybe 2012 or 2010 or something like that. And then maybe it's 2012. And then the first one was in whatever 14 years prior to that is, so 98. So that would have been before Old Spice. But yeah, to us, we're like, wait a minute, you've got extremely high brand awareness, seemingly high market share, and people do like them. So.
Preston Rutherford (39:33)
Right.
Yeah, so funny.
You
This action plan doesn't really... Right.
Tom (40:02)
But that's not what they did. What Old Spice did was different from what these guys recommended. It's kind of an interesting case study where Kellogg was like, they've got low brand awareness, nobody likes them, nobody knows who they are, and they suck. And then Old Spice basically just used their same brand, did a good marketing campaign, the man your man should smell like, and then Blammo. They dominated. That maybe they like, maybe it was category expansion, because I think it was soap.
Preston Rutherford (40:09)
Yeah, that's good.
Tom (40:32)
that guy was talking about. So maybe that's what they did. But yeah, goes to show. That all the talking heads, even us, don't know our butts from a hole in the ground.
Preston Rutherford (40:46)
No nothing. No nothing, nothing. Well, how about this? How about this, Tom? So, okay, so in today's conversation, you know, we've looked a little bit at the ideas around connection between brand, brand building, brand value, and finance, and the financial value of all of this branding, and then we also talk a little bit about...
digitally quantifying using digital indicators as a way to quantify, track brand health, brand value, and then different ways of doing so. And interesting takes on what is qualitative and what is quantitative. But why don't we sort of turn this into how folks can leave this conversation with something.
either to chew on or to do or that they can take to kind of apply in their Monday marketing team meeting as they go into the end of Q1 and start thinking what the hell am I gonna do in Q2 to hit these numbers? This peanut butter spreading, 45 % growth every month. What are some things that they could talk about, think about, implement going into the next quarter or week?
Tom (42:07)
Yeah. What I thought was like put brackets on your metrics, right? So you've got like the way that one of the ways that they framed it here in Kellogg was to think about these different buckets, right? So I want to think about my awareness. I want to think about my attitudinal perspective, like how people perceive me, do they like me? And I want to think about my market share.
And I think it's useful to bracket those and have a measure that means that for you. That says, okay, here's my awareness measure, here's my attitudinal measure, here's my consideration measure and start to bracket those things. And, you know, effectively give yourself a dynamic way to understand your full funnel. Not just when people hit your site and are actively shopping for you, but how are they becoming aware of the business?
and how are they showing their affinity for the business? How are they showing that they're entering consideration? And I think like step one is bracket those things and start measuring them. And I think that's a really powerful activity. Then you can start the stuff that we all like to do as marketers is experimentation, like play with over inflating one section of the funnel to see what happens downstream, but without like risking the biscuit, right? Like.
I think when you start to measure these things, I think you start to realize, hey, there are ways that I can affect this without needing it to be a million dollar campaign in Times Square sort of thing. And I think that's one of the things that modern marketers are very good at doing is how to be scrappy, but test new ideas. But I do think it takes a little bit of a mindset shift towards how do I define my brand funnel? So I thought that was one of the interesting lessons. And then, you know, I guess,
Preston Rutherford (43:39)
Mm -hmm.
Tom (43:59)
For me, it's every marketer should know how to read a P &L. And I think these are table stakes. A lot of people talk about this in writing out there these days, but marketers should understand finances and they should not be.
This is something that I think a lot about, but marketers shouldn't be existing to justify their existence. That shouldn't be what their work is doing. They should be existing to drive the entire business forward from a profit perspective and a long -term profit perspective, which means they have to understand how their activities affect profit, how their activities interact with gross margin, how running a sale actually impacts gross profitability and impacts contribution and impacts net income of the business in a really dynamic way.
be very well versed in all of those. And that starts the conversation that ultimately leads to, okay, well, we got all these brand events over here. Can we start to link those to value? And as I experiment with inflating them and start to measure over some amount of time, can I start to detect relationships between growth in these and growth in, you ultimately profitability is the ideal one. And that to us starts the conversation, you know, to me starts the conversation around.
brand value and I think it starts with being well versed in the P &L, starting that conversation with your CFO and recognizing that you are a business driver and you are responsible to not spend money if you're not understanding how to measure it, but that you need to expand the way you think about measurement.
Preston Rutherford (45:38)
Yeah. Yes. Yes. Yes. Yes.
Tom (45:41)
What about you? What were your takeaways?
Preston Rutherford (45:44)
That, I think that last one, if I were to just sort of say one, and if you were going to put your to -do list or prioritization list together for Q2 of 2024 and you're on the marketing team, even if your individual contributor just got hired, you're just optimizing, I don't know, the CTA on static assets or you're tracking your social posts or whatever, it's...
look up some couple things. Watch some YouTube videos on how to understand financial statements. P &L, absolutely. Understand how cash flows into the business. Get a better understanding of your business. Opt into the monthly financial closes. See if you can get a copy of your monthly operating models and just get a feel for these sorts of things. Because that's the context in which...
you operate and that coupled with just being accountable to daily contribution, both on the margin and dollar side, will be, I think, I would posit, far more effective to helping you accomplish your goals for your business, driving sustainable increases in profit over long periods of time than...
spending an incremental moment figuring out how to drive your click through rate from X to 20 basis points above X or figuring out how to hack that required hook to get your TikTok video to do X or X. Because these are the sort of, to your point, it's not about justifying why you exist, it's about truly driving the business and being a fundamental partner to the business. So.
I think if there's one thing you can do, it's yeah, opt into that. Just get as close as you possibly can to your finance and accounting team and get an understanding of that financial feedback loop. And I think that's the way that if you're listening to this and you're kind of thinking through what maybe your next gig could be or you're thinking through like you own the business and you're trying to figure out what the hell do I do to get to that next level and you're on the marketing side, it's...
Tom (47:57)
you
Preston Rutherford (48:07)
It's that, it's this connection to finance, because it's possible. And it just, I think, requires a little bit of reframing in terms of why we're here in the first place, why build brand in the first place. What does it actually mean? Because it's in service of profits, it's not in service of, to your point, creating some big advertising campaign that inevitably you look back on, you're like, what the heck did we, why did we do that? We're never gonna do that again. And...
Tom (48:14)
you
Preston Rutherford (48:36)
because we've been there, we've lived all that stuff. So with that, I think we should close, shall we close?
Tom (48:45)
Let's close. You know, uh, in closing, one of the things I'd like to say is we're good at closing. It's like I'm good at saying goodbyes at parties. No, I like to Irish exit. So we should just exit just quickly. Uh, no, we appreciate everybody who's listened. Um, we, we think these are a bit kind of the ramblings of mad men, but, uh, hopefully they're getting a little bit more, more co, uh, cohesive and coherent.
Preston Rutherford (48:46)
Let us close.
Hehehehe
Yeah, just stop recording and on a high note.
Tom (49:15)
And hopefully this is useful. You know, it's been useful, useful for us to kind of bang our ideas against some things that actually in our past were very formative. And so I think it's cool to see how evolution, how our thoughts have evolved relative to some texts that were really informative for us. We'll continue to do so, but I, I thought this was a really important section of the book. Really important thing for everyone to read.
and get familiar with kind of the way that it's traditionally been thought of and then that kind of tees you up to think about it maybe slightly differently in the future. So please reach out, let us know how all this stuff is hitting you and otherwise we will see you on the flip side.
Preston Rutherford (50:00)
flippity flip. Thank you very much and have a lovely day.
Tom (50:02)
Preston.