There are two types of marketing people in the world, according to Sergio Zyman, founder of the Zyman Group: Those who spend their lives at agencies playing around with commercials and drinking latte, and those who are driven to grow a business. It is members of that second group, he says, who become the general managers and leaders in companies.
“Marketing is misunderstood,” Zyman says. “Marketing is something that is relatively new; it really hasn’t been adopted by a lot of companies. People basically just kind of do it because they think that they have to.
‘As you look at the future, you’ll start seeing the stuff that we are doing and the stuff that we are preaching is probably going to be the foundation of how a lot of companies are going to have to operate.”
Zyman has the credentials to make that bold claim. The author of four books on marketing, he was named one of the top three pitchmen of the 20th century by Time magazine. He was the man behind the ill-fated New Coke, but in a second go-around with Coca Cola Co., was credited with the resurgence of the brand in the ’90s.
Today, he leads Zyman Group, named by Inc magazine as one of the fastest-growing businesses in the nation.
“We have been extremely successful,” Zyman says of his young start-up. “We continue to grow as fast as we can grow. Eventually, we want to become the pre-eminent strategic consulting firm in the world.”
Smart Business spoke with Zyman about what companies do right and wrong when it comes to marketing, and how he applies his principles to his own company.
What does a company need to consider as it develops a brand?
Brand is guidance and navigation for consumers. It’s how consumers identify with the total benefit, the total package of attributes that brand has. It has to consider the target audience, of course. You need to understand what consumers are looking for and what kind of benefit you’re are going to try to (provide).
When you launch a new brand, you’re trying to get a larger share of disposable income of that individual consumer. You have to understand who your consumers are and what they do.
What are the biggest mistakes companies make when developing a brand?
I think companies get carried away with a category or a brand. Instead of launching something that consumers want to buy, you launch something that the company wants to make.
I think a great example is this new Coca-Cola product, this C2. It’s lazy marketing. You saw you cannot continue to sell the brand that you have, so you seek refuge in this pseudo market and say, ‘People are not going to buy the (old) product any more. We’ve got to launch a mid-calorie market.’ They come up with a name; they put in a lot of money. They buy a song and all that stuff.
And the consumer sits there dumbfounded. They don’t understand why (Coke) is doing this.
What led to the disastrous launch of New Coke in the 1980s?
What the company needed to do was change position. Those were the days in which advertising agencies were very dominant.
The advertising agency at the time was very political and very involved. They had sold everybody on the idea that Coke was one-sided, one look, and the company needed to change its positioning because being part of the pack, teaching the world to sing and all that, wasn’t selling any product. People believed that was something the company couldn’t change, but nonetheless, they allowed me to change the formula, which, when you think about it, is pretty absurd.
The consumers came back and said, ‘No, no, no, no. We don’t want you to change the formula. We don’t want you to change the product at all. We don’t understand what the (new) product is and how it tastes.’ That was not the launching of a brand; that was a product change.
What did you learn from that experience?
I learned that you have to really understand the DNA of a brand, the reasons why consumers buy a product. That was probably the beginning of my maturity as a businessman that did marketing, as opposed to just a marketing guy.
It was about growth. It was not about activities, it was not about commercials, it was not about any of those things. It was much more about trying to figure out what it is consumers are looking for and trying to give it to them and renovating the core essence of the brand that consumers were looking for.
What is the difference between renovation and innovation?
A brand starts and becomes relevant in the marketplace on the basis of what is asked of consumers. What a lot of people forget is, a lot of the brands — take something like McDonald’s — McDonald’s is a company that has done an extraordinary job of going back and just retooling what it is that they are vs. trying to invent a brand new brand.
You have to understand what is the core essence of the brand that you have. Innovation is inventing something totally new. Innovation comes as a function of not having a core essence or not being able to reactivate the core essence of a brand and having to go into a whole different marketplace.
What metrics do you use to measure the success of a brand?
Sales and profit. At the end of the day, all these things are not about whether you have a nice advertising campaign or all that B.S. It’s all about sales and profit. That’s it.
Which companies do it best?
I don’t think any companies ‘do it’ the best. I don’t think anybody does it the best. Have done it the best is a different story. McDonald’s did a good job of renovating its essence. I think the value proposition and the business model of Apple is another great example.
The bad ones — the airlines, for sure — Delta, Greyhound, AMF (did) a terrible job of renovating their core essence. Nike does it really well all the time.
I think the ultimate renovator is Madonna. She just keeps on changing what it is that she does and makes a return to relevance. If you want to see a great story of renovation, go to the Web to La Scala in Milan, the opera theater.
The theater was built in 1772. The mayor of Milan decided it was time to renovate La Scala. He almost got impeached for wanting to change La Scala. He raised $87 million of private money, closed La Scala for three years and reopened it on Dec. 4. And guess what? It looks exactly the same, except now it works. Now it’s going to become the pre-eminent opera theater in the world.
Can you make marketing a science without any art?
I really don’t mind keeping the art as long as the art is a way to enhance the value proposition of a communication that you have in a brand. I think when everybody says, ‘It’s all about creativity, and it’s all about advertising and promotions and big ideas,’ that’s when I say, ‘B.S.’
It’s not about that. It’s all about relevance, and it’s all about scientific analysis of what it is you’re trying to get done. It is about metrics, and it is about segmentation, and it’s about all that stuff.
How do you apply these principles to your company?
Oh boy, I am a pain in the neck. I’m very insecure when it comes to our success. We challenge ourselves constantly; we challenge the models all the time. One of our models is, ‘We in the business of helping clients sell more stuff for more money to more people more often more efficiently.’
And then we basically say the longer we are with a client, the better we have to be, which means we constantly change how we staff, who works on an account. A client calls and says he or she is not happy with an individual on an account, that person is taken out, reassigned. We are very scientific about it.
What is your most successful product?
In the beginning, Ariel, in Mexico, which was an enzyme detergent that we introduced as a product that made every bucket a washing machine. It’s now the No. 1 selling detergent for Procter & Gamble worldwide. Of course, the restaging of Coke in ’93, I was very successful.
It was a brand that everybody was giving up for dead, like today. We prov
ed
we could actually increase volume. We took volume from 9 billion cases to 15 billion cases per year with the same marketplace. We went out and reinstated the essence and the value of the brand.
Is the business side of running a marketing company new to you?
I was not a cross-functional marketing guy. I was a marketing businessman. My metrics, when I worked for Coke, especially the second time around, were about volume and profit. We took the market cap of the company from $40 billion a year to $160 billion. We increased profit significantly; we increase volume significantly. It’s all about results.
I’ve always been a business guy more than a trinkets and trash guy. However, running your own business is a very hard thing to do. It’s difficult. It’s uncharted territory. It involves assets — people and physical assets.
You have tremendous risk and, at the end of the day, (unlike) when you work in a company, you’re responsible for the payroll. When you are the founder and owner of the company, you’re the only guy who cannot quit. You have the responsibility for the employees that you have. I think it is much more difficult, and it requires a whole different set of skills.
Have you ever worked with politicians as a brand?
A lot. I have been given credit for orchestrating the campaign and strategy that elected Vicente Fox president in Mexico. And I have worked in other minor campaigns in the U.S.
That is a very interesting marketing challenge because in that one you cannot say, ‘Sorry, we didn’t do it right this time. Wait until next year.’ In that one, you don’t do it right the first time, they send you home for four years.
HOW TO REACH: Zyman Group, www.zmarketing.com or (404) 2600-3000
