AE Marketing Group CEO Brian Walker sat down with five fellow C-Suite executives to discuss the business outlook for 2018. Joining Brian was Mediafly CFO/COO John Evarts, Tide Spin CEO David VanHimbergen, Zorch CEO Mike Wolfe, ThinkCERCA Chief Partnership Officer Abby Ross, and Fiduciary Financial Partners Chief Retirement Officer Nick Economos.
The underlying theme of the conversation was how technology is transforming every industry and shows no slowing down in 2018.
READ FULL TRANSCRIPTListen to conversations with some of today’s most innovative brands to hear practical advice and insight on technology, customer experience, co-creation, marketing entrepreneurship and more. Welcome to the Brand Lab Series from AE Marketing Group. This week, Brian has an exclusive conversation at the Skyline Club with five C-level executives about b2b marketing, technology, FinTech, innovation, EdTech and Bitcoin. Our guests include John Everts, chief operating officer at Mediafly. David VanHimbergen, chief executive officer of Tide Spin. Mike Wolfe, chief executive officer of ZORCH. Abby Ross, chief partnership officer of ThinkCERCA and Nick Economos, chief retirement officer at Fiduciary Financial Partners. We hope you enjoy the conversation.
John, I know Mediafly had another really great year, congrats, four times on the Inc 5000 List, also named the best place to work by Inc Magazine. The b2b tech space, especially in the area of sales enablement, is just growing so fast. So, what kind of excites you about the year ahead, both for the industry as well as Mediafly?
Yeah, sure. So, thank you for having me, I appreciate it. I think the opportunities that we’ve seen the last couple of years, I think has just kind of accelerated. Our focus really is with the large enterprises, and rather than I’ll say the prior 10 years they really focused on bottom line growth, so EBITA focus, and return of shareholder value. Now what we’re seeing is a shift in the large enterprise, and we’re seeing a lot more focus on innovation, a lot more investment in revenue generating activities. So it’s a great time to be aligned with the sales and marketing teams within those organizations. And so as they focus on things like sales execution, which is really the space that we play in, sales enablement, sales execution, helping sales teams wherever they may be, whether it’s the direct sales teams or it’s the distributors, or it’s the partners or alliances, we are able to make sure that the sales folks really do deliver an excellent experience in the field.
So it’s both educational, it’s an interactive experience, and it makes sure that people look forward to the next sales interaction, because it’s actually valuable, right? So that you’re not avoiding the salesperson. And so we’re really excited that as people kind of think about sales enablement, and a broad definition of sales enablement, not just the direct sellers, but also those partners and the distributors, we see more opportunity for expansion and kind of growth as we look ahead. From a risk perspective as we go into 2018, I think GDPR, especially for some of the folks that we deal with, they’re really kind of focused on this global data protection regulation that’s on the horizon, especially if you’re operating in the European Union, and so compliance with that, I think, is the other piece that we’re starting to see, is a little bit of concern around when May 25th approaches, kind of what that’s gonna look like.
Well, it’s interesting that you also talked about Enterprise wide companies, but also innovation, which I think is an interesting lead into David, because David came from… I remember when you were on the show and you said you’d been 17 years at Procter & Gamble, and I can’t think of a bigger household name brand than some of the ones in that portfolio family. But your charge there was innovation, which has kind of led to this spin out of Tide Spin, no pun intended with that. But as you think about the larger organizations that are trying to innovate like some of the startup companies around this table, what’s some advice you have for trying to really tackle innovation mindset in 2018?
I think I agree with the point of there’s probably less focus on EBITA, and more focus on top-line growth. I feel like that’s certainly coming on our end as well of like we have very robust strong market shares leadership in most of the categories that are remaining in our portfolio, so now it’s like, “Okay, how do we unleash that and grow faster?” And I think a lot of that is just powered through speed and agility. So one of the things that I talk a lot about with our senior management is that it’s no longer the big eating the small, it’s the fast eating the slow, and we’re one of the slow guys. [chuckle] So we have to figure out how do we enable ourselves to build capabilities that we can be faster and more agile in the marketplace. And a lot of that times that’s just how do you use technology, like machines are always gonna be faster than people, data becomes the capital of the future that’s really valuable. And so how do you start to acquire more data and use that to then power back to the systems? So I think it’s kind of thinking about how you build capability that leverages technology to enable you to be fast and agile, because it does feel like that the winners in any given marketplace are those that can be fast and more responsive to the the customers and markets they’re serving.
I think the other thing that we… The trap that we’ve historically fallen into is that we get very infatuated with solutions, and then try to retrofit those back into a business model, or solving a problem. And so what we’ve really tried to enforce and discipline is get very involved… And Howard talks about this all the time in 1871 too, I think, but get very deep into understanding what that problem is, and how you’re gonna solve for it. And also validate that there are a lot of problems that exist, and there’s certainly an infinite number of solutions that could come to market, but finding a problem that’s significant enough, frequent enough or others that someone’s willing to pay to resolve it, that’s kind of the starting point for any business model, and so make sure you kind of start there first.
Well, one of the things we talked about when you were on the show, which I love about Tide Spin, is the fact that this whole on-demand service is to provide your customers the ability to have a precious commodity, which is time.
When you think about how much the on demand economy is kind of surging, is there something that you’re really hoping for that doesn’t exist yet? Or is there something that you could see maybe really taking off in the next year?
Yeah. I think, because we’ve been at this for about a year and a half, our emphasis was that we wanted to start really simple. Make sure that you can kind of establish that there’s some traction with the business model, but keep it as simple as possible to validate that first. And then it’s the same way with agile development, only add in features once you know that it can add value back for the customer, otherwise you’re gonna be over investing in futures and whatnot. So for us, we’re just using laundry detergent and products that are off the shelf at a Target, so we’ve got 40 skews on the shelf there, there’s one that we can use, right? [chuckle] That it’s gonna be good enough. But some of the opportunities that this starts to unleash, is we’ve got 825 scientists that work for fabric care across the globe for Procter & Gamble, and they’ve got a lot of technology, the things that they’ve never been able to bring to the retail market because there are other constraints of, “I’ve gotta put product that can sit in bottle for up to six months and not cross-contaminate itself. Or affect the efficacy of it.”
So now that we’ve got this system, that’s more controlled and more of a service side things, we can start to unleash some of those technologies that we didn’t really have a home for in the past. So what I’m hopeful, and what we’re gonna start to introduce over the next year, we should be able to do a far better job with your laundry than what you can do today, because there are just fewer constraints within that. So that really then sets us up for the future. And even what we’ve eventually sold our leadership too, which was a bit of a leap of faith, but are you willing to give up that your core business is not the best performing part of your portfolio? That you’d kind of be open to cannibalizing that in some ways, and they’ve been… Yeah. So it feels like there’s a lot opportunity.
And the leadership support has been such that, “Look, if we sit around very complacently, someone’s gonna disrupt us. Wouldn’t we rather it come from the inside?” So that’s kind of the charge, not only of our team, but then there’s broader group that they’ve created around us that’s kind of looking at other opportunities and business models.
Well, what I love about how Tide Spin in particular though, is also, as someone who started a company, like some of us around the table, is you had the luxury at least of an iconic 75 year old brand.
Kind of cheated.
[laughter]
Speaking of global brands, and what’s interesting about you Mike and ZORCH is, you guys are totally changing the whole branded merchandise industry, you’re using technology to do that. You’ve disrupted the whole branded merchandise industry using technology. You see that in the fact that you’re growing at five times the industry average, you have some really big global brands there. And I can speak for everyone on my team when we come to your office, it’s like a kid going into a store, because you have some of the coolest products we’ve seen. And people are always feeling up their bags, whether or not you know it or not.
[laughter]
So as you think about the branded merchandise category today, what are some of the hot products that people seem to be gravitating towards today? And what’s kind of the outlook on that industry in the year ahead?
Yeah. I mean you’re trying to think, “What could be the next possible hot tchotchke?” Right? I mean, the industry has been around for a million years, so what could be the new things? I think a lot of it just evolves at kind of two levels, one, at an industry level, for example, things that are green, sustainable. Those are really starting to take more and more, get more and more interest from our clients. But also in an environment where they’re willing to pay more for them, it’s kind of the, “Well we’d love a collection of everything that’s made the USA.” “Great. Great, it’ll cost three times than a normal collection.” “Well, maybe not.” And the same thing with green products. And we were seeing a higher degree of interest and willing to pay for that going forward.
Tech is always hot. Again, with the continuous innovation, with everyone’s personal tech keeps evolving, your laptops keep getting smaller, your iPhones or whatever handhelds keeps changing, and you need to have new products that go along with that. So from product perspective, we’re seeing innovation there. But then also, I think if we’re looking at industry trends, it trends with the GDP for the most part. And I think we got a nice tail wind going right now. I’ve been working for 25 years, only five in this industry, and very rarely do you get the opportunity to actually say, “Hey, I think we got a tail wind, economically.” But we do. And we’re seeing a lot of our marketing contacts that they are actually getting more to spend. And you think about you’re running a business, there’s a variety of things you can cut, branded merchandise, unfortunately, is gonna be near the top of that list, right? Because you need to pay people, you’ve gotta work on investment in your own company. Typically we would be one of the first ones that they would go after to cut, and we’re seeing those budgets actually expand, which is great. So I think that’s a good indication for the overall industry, at least going into 2018, provided nothing bad happens.
Well, as we were talking about before we rolled, about some of us around the table are parents and have kids in a varying range, some of us are even empty nesters, but Abby, one of the things that we talked about in your episode, which I think is great, is how much ThinkCERCA is changing the way kids are learning today. And just within the last couple of years, if you had told somebody at work in ed tech, they probably would have been like, “I don’t know what that is.” And now you’re seeing this entire industry coming online that is really changing and making some necessary changes in the way people learn. What I’m curious about is how is ed tech actually being received by teachers in the classroom, and how are kids are embracing it? I know you guys are all around the country, so what does that look like in the year ahead?
Yeah. It’s been kind of like a wild ride over the past five years from when we started. I always tell the story that 20 out of our first 30 customers bought technology, so they could use our product. Whereas now our sales team is calling people, and they are calling into schools and districts that have made the investment into infrastructure, whether that’s bandwidth, or in broadband, or the actual devices. Chromebooks are super affordable and really have been deployed at the level of kind of one to one, every student has their own device, which has been… We’ve been talking about technology and education for the past 20 years, but now it’s finally happened, they’ve made the investment because they realize the importance of technology and digital literacy in 21st century skills. And so what’s interesting kind of from our perspective is you talk to some people and they’re like, “Oh, textbooks will be replaced by digital.” But you also have to remember that people go to school for a reason, to have that kind of social emotional learning, to get knowledge from a teacher and from peers, and you can’t just hand a kid an iPad and an app and expect them to come out college and career-ready and ready for the workforce.
So really kind of where innovation sits with our business and really kind of the wave of ed tech, is figuring out the human behavior design in schools, so that teachers don’t feel like they’re being replaced by technology, but that they can now become the facilitator of learning for their students, which is what every teacher wants, is they want for students to be engaged and collaborate with each other, and for them to kind of be met at their own level of readiness. So how can we empower teachers and empower students to essentially reach all the levels of learners? So if I’m a 7th grade teacher and I have students reading at the 3rd grade level, 7th grade level and then 10th grade level in a classroom, one lesson is not gonna fit all of their needs. So how can you use technology for what technology is best for, which is personalizing some experience, but still allow that teacher instead of kind of like… We call it sage on a stage, where you’re just kind of like lecturing to students for an hour at a time, one lesson and one lesson only. How can we use the technology, but mobilize the teacher so here she’s working in small groups with students, facilitating discussions, and that kind of project-based learning collaborative environment, so that sometimes they’re on technology, but the moments where they’re not on technology, there’s an enhanced learning experience.
So that transformation of teaching, I’d say we’ve invested in the infrastructure and we’ve got the goods in the classrooms, now the pace at which that innovation is happening at the individual classroom level, you have three million teachers, so the scale is happening very differently across the country. And so we wanna be the thing that kind of pushes people into that space of innovation, and then causes the change in the shift in instructional practice, so that a teacher is changing their lesson plans, but never losing that connection with students.
Well, and I know you love being a fly on the wall in the back of classrooms around the country, so it’s been five years, you described it as a wild ride, but it’s gotta be an incredibly a proud moment when you’re in the back of a classroom of a ThinkCERCA classroom. Talk about what that experience is like?
Yeah. Well, we were in about 250 districts across the country. And what’s great about it is that that means that there’s 250 different implementations. It’s not a one-size-fits-all, it’s meant to be flexible. But kinda the fixings are always there in different classrooms, you’re always gonna see a couple different scenes. One is, you will see students looking up at the ceiling with their hands on a keyboard, thinking really hard, and you can see kinda their brain on fire a little bit. And then you’ll also have really noisy classrooms.
I love walking into classrooms where it looks like just absolute chaos, but students are having discussions and debates about the Fourth Amendment, about the future of farming and technology, and innovation. We have a social entrepreneurship unit, where they’re talking about how to build a business and constructing knowledge together. It’s awesome to see what it looks like, and then to know that based on third party studies, it’s not just a kind of what’s happening in the classroom, but that this is causing impact for students, in growing their reading and writing ability. So to look at our data and see here are students’ writing at the beginning of the year, and here’s their writing at the end of the year. And to sit across from a superintendent who has tried to do this for 20 years, and now has the proof, is incredible.
Well, it’s so funny though, kind of the underlying theme of technology and innovation around the table. Because as you’re describing how technology is enhancing classroom, I’m thinking of Mediafly, and how the technology is not replacing sales and marketing people, it’s just making them more relevant in that given moment, which kind of really creates a lot of win-win experiences for everyone.
Yeah, and I was actually thinking of the same thing. A lot of, I’ll say historic industries, and education is a historic industry. They’re all getting disrupted right now, whether that’s merchandise, or whether it’s CPG. A lot of our customers are CPG, and so, you have these brand-new generation who requires technology, technology, technology, but you can’t forget about everybody else that is working right now, and that may not have the opportunity for understanding and being educated on the new technologies that are out there. And so, the way that we think about it is the user experience has to be so simple, and so strong and so good, that you’re educating and that you’re entertaining at the same time, with the experience in the field.
And so, whether for us that’s like, for instance, Chicago-based companies like ConAgra, or MillerCoors, where we’re working with those teams to make sure that the adoption of all the folks that have been there for 30 years have a very, very strong experience in the field. I was thinking about the tenured teachers that are like, “Okay, whoa. Now I have all this technology and all these tools, how the heck am I gonna do that?” Clearly you have to have a great experience. You have to have the great opportunities to relate to all the material in such an intuitive way that doesn’t change their understanding of the material, but it enhances their ability to deliver the material.
Yeah, at scale.
At scale.
[chuckle]
That’s the hard part for sure. Even having Tide on your name isn’t gonna help you with the scale. [laughter] Well, the other thing that’s funny since, Nick, the time you were on our show with the whole rise of technology hitting every industry. It’s even hitting the type of currency we talk about today. And I know a big thing that you do is you help organizations on the employee side of the brand, like making sure that those companies are providing good benefits, both short-term/long-term balancing needs of younger generation workforces with older generation workforces as well. I know you talked a lot about how people are working more now than they ever did before. But what’s so interesting in about a year since you were on our show is like every day you hear something about Bitcoin or something in the area of cyber technology, or cyber currency I should say. Talk about that as someone who has spent a career in financial planning. Where do you think that’s gonna go? And I know that I’m asking you to look into a crystal ball.
[laughter]
Yeah, I certainly don’t have the ability to predict the future and certainly crypto is like it’s everywhere, you can’t avoid it. To bid or not to bid I guess is the question, and certainly when you see prices rise like they have I think that that creates a lot of sensationalism, a lot of attention. So really unlike regular money, metal based money or paper based money, it’s computer-based money, it’s a digital wallet, so that’s really what it is, is a form of a currency, that currency isn’t really backed by any form of government, it’s not regulated certainly or anything like that. So understanding what it is I think is important and how do you get it, it’s basically either exchange some fiat currency, some dollar or whatever your currency du jour is, and you purchase it or you participate in the mining of it, that’s kind of how it works.
But I think the way to think about it, is it gonna go to 300,000 or all this fluff, I think the real context that people are missing is you have really like three major asset classes. You have stocks, you have bonds, and you have cash, or currencies, and stocks really what you’re doing is when you purchase a stock, you’re purchasing the right to the future earnings of that company, the future profits of that company. And so, I can value that, I can maybe anticipate what those earnings may be either by looking at history or some type of formal evaluation or something like that.
So there’s that piece of it. Bonds, it’s kind of the same thing, I have a future cash flow that includes the return of my principal, I’m gonna get interest payments and then I return my principal at some point so I can kind of value that. Crypto, or any currency for the matter, a dollar, just because I have a dollar doesn’t mean I’m gonna have more dollars in the future or it’s gonna be worth more, and so, really what it becomes is what does somebody wanna pay for that or how does it compare to other currencies, it’s really purely speculation and it’s hard to value that. So that’s kind of what, I think the context you have to look at, the lens you need is understanding that. And Bitcoin is a popular one, there’s a lot of them. I kind of joke about something about when he’s like, “Oh I got this thing, seven-minute abs,” and then somebody, he’s like, “What about six-minute abs?” So there’s a lot of currencies out there…
No! There’s no six-minute abs.
[chuckle]
Yeah. So which is similar. So that’s kind of what I see out there. I think just caution, if you look at it, at the price of like $16,000 a Bitcoin, all of the Bitcoin in circulation, which I think is about 16 million give or take would have the value of 1/10th or 1% of the global stocks. So it’s pretty small in the frame-set of overall investing. It’s a small piece to the pie. So you certainly won’t wanna run in, guns ablaze, and typically… And just be careful and really understand what it is and what you’re trying to accomplish and how it aligns with your goals. So that’s my take on crypto.
Beyond the currency issue, talk a little bit about how technology is really changing the financial services industry. FinTech is as big as EdTech and many other technology isms today.
I just think, from my perspective, we don’t make a technology product, we utilize technology and the innovation in FinTech is just been unbelievable. And people now, human capital is, people are trying to unlock… You’re talking about unlocking intellectual property in a sense, right? I think people are really gonna be focused, smart companies of the future are gonna be focused on their human capital and how they’re managing that human capital. And I think from our perspective, the technology is available. I think employers are having a hard time understanding how to integrate some of the technologies that are out there to help them manage their human capital more effectively, and it then translates down to the bottom line, a lot of it, as our aging workforce increases or moves through their life cycle. There’s certain things you need to be aware of as a financial officer of a company. There’s also the human side of it, the basic HR side of it, getting the right people, attracting them, helping them to stay.
And the trends that we’re seeing in our industry is the convergence of the technology with a lot of the problems, student loans are a big problem, certainly creating financial independence is a big problem. We talked about some examples on your show. But I think that how do we change behaviors is another one that we’re gonna see through the technology, but how do I leverage all that technology to create financial wellness is something I think that is a struggle for employers. You’re gonna see student loans, healthcare, retirement, all that start to consolidate at the workplace, and people are looking to make it easy for me to deal with these issues so I can focus on and maybe innovating or creating a better sales experience or whatever it may be. That’s what I see from our seat in the mix of things.
To that point, I think those companies that can figure that out. One of the things that we’re thinking about right now is there’s a Chicago-based company based out of 1871 called Peanut Butter. That’s what they focus on. They talk about taking care of student debt and helping to pay down; rather than focusing on 401K, they’re focusing on retiring student debt. So I’m always fascinated by that side, when there is innovation, there is an opportunity for employers to do something right by the employee and optimize what you call your benefit mix. Where you have your comp, you have your title, you have then 401K, is that the right mix anymore? Long-term disability, sometimes that’s the right mix sometimes it’s not. Do you offer more or less PTO? But as you think about the entire matrix of what you’re gonna be offering somebody and you think about these new products that are coming out and technology allowing that to happen. I’m fascinated by adding that to the mix: When do you that? How do you do that?
And which pieces? Exactly. There’s a lot of different technologies out there and how do we deliver so that we can take care of the human capital, reinvest in it, get rid of their stresses. If there’s a lot of evidence out there that says, if their mind is elsewhere, they’re not giving you their best. So how do we use the technologies that are available? And some of it’s gonna be some old school rules that were written years ago, that are gonna come back into play because now we have the technology to make consolidating and managing a lot of that stuff, make it easy, and that’s the key thing.
And if you can make it easy, you have such an amazing advantage. A competitive advantage, because you’re onboarding and your retention capabilities… As the economy improves, everybody’s gonna need to hire, and if everybody needs to hire, how do you differentiate, and your experience to say, “Hey, we’re the right employer for you.”
Yeah, and it starts, I think, with an examination of what are your values as a company, and as it relates to your employees. And then I think it’s some of that co-creation of like, okay, how do we innovate with our objectives as a company and our values? How do we interweave that with the demands of our people or the needs of our people? So it’s pretty fascinating. And it’s really, really cool the amount of data that we’re being able to extract from those systems and how they’re all starting to connect and talk to each other and the implications are pretty important, I think.
Well, I know you two in particular have heard me talking about co-creation for years and years and years, but I actually was smiling when Dennis Boecker, Global Innovation Head at Bosch, and Howard Tullman were saying that you can no longer avoid co-creation, that any individual in any company will not have all the solutions. So how do you find the right partner companies? How do you find the right people? How do you bring the right people in to solve some of these new market realities?
And on the technology side, what’s also interesting that you talked about is, I look at marketing, obviously, I know we all touch marketing in one way or another around the table, but the core principles of marketing haven’t really changed, it’s just how do you harness what technology now allows you to do and how do you integrate that in the way that you redistribute the channels of marketing? It is really interesting that obviously the underlying theme of all this today, I think is technology, innovation, creating good experiences, whether it be for your employees or for your customers in terms of creating some brand success. So I think with that said, it’s been a great conversation. I super appreciate you guys giving more of your time, as great guests on prior episodes of the Brand Lab Series. I’m thankful for you guys to be with us at the Skyline Club today, and I look forward, and wish all of you and all your companies great success in the year ahead.
Tags: B2B, B2C, Customer Experience, Employee Advocacy, Entrepreneurship, Technology
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