March 5, 2020 • 35 mins
As a kid, Macy's CMO Rich Lennox had two dreams: to be the next Chuck Yeager, or to be a veterinarian. But after a “bizarre series of accidents,” he took a different path: joining J. Walter Thompson before leading a series of incredible brands. Listen to Rich as he discusses why hypnotizing a focus group might be a good idea (spoiler: it helped him crack an entirely new diamond market for De Beers!); why he's been so effective at turnarounds at places like Zales ("you have to be the type who runs towards fires rather than away"), and what it means to be responsible for not only the Macy's brand, but also one of America's most beloved traditions: the Macy's Thanksgiving Day Parade.
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Episode Transcript
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Speaker 1 (00:01):
You're listening to Math and Magic, a production at I
Heart Radio. When I arrived, sales were running a very
promotional approach to meeting their jewelry and it was a
simple truth and a man ever got down on his knee,
put his hand out and said, here, look, darling, I
got you a deal. Stop doing that. It doesn't mean
(00:22):
that value isn't important, but the brand has to mean
something more than just simply bashing out jewelry at low
price points. Hi am, Bob Pittman. Welcome to this episode
of Math and Magic, Stories from the Frontiers and Marketing.
(00:44):
On this episode, we have someone who's made his mark
in one of the toughest sectors retail, and he brings
a wealth of experience and insights for us, the CMO
of Macy's, Rich Lennox. He was born in the UK
(01:06):
a military kid. He studied animals in college, worked with
some big cats at the London Zoo for a year,
but wound up in advertising against He joined J Walter
Thompson right after Sir Martin Sorrel took over and went
on to a terrific career in the agency business that
got him to the US. He was on the de
beers business and probably knows as much about diamonds as
anyone can. From there, he moved on to his first
(01:29):
CMO job at sales and eventually to Macy's, where he
has created ads that even Saturday Night Live has parodied.
The ultimate mark of success. He loves horses and rugby.
Welcome Rich. There's a lot to talk about, but first
I want to do you in sixty seconds. Ready? Do
you prefer beer or wine? Twitter or Instagram? Instagram? New
(01:51):
Jersey or New York, New York, U S or UK US.
We won you over twenty years here. I think it's
about time. Kentucky Derby or Belmont, Belmont Country or City Country,
lions or horses, horses about to get harder. Secret talent
staying calm under far I think favorite City Florence. The
smartest person you know, My dad was probably the smartest
(02:13):
childhood hero. Chuck Yeager historical idol, probably Nelson Mandela proudest
career achievement. I think the turn around it Els is
probably my proudest career achievement to date. Proudest personal achievement.
My daughter's quote to live by one of my favorite quotes.
His courage doesn't always rule. Sometimes it's the quiet voice
at the end of the day saying I will try
(02:34):
again tomorrow. Who would play you in a movie? Probably Shrek?
Shrek with an English accent. Let's go for that first
job consultant. I hated it. I was terrible. Okay, here's
the last one. What did you want to be when
you were growing up? I wanted to either be in
the military or I wanted to be a vet. I
sort of described my career as a sort of bizarre
series of accidents. After that. I never really imagined myself
(02:58):
working in corporate and certainly not behind a desk. And
here you are, and here I am. So with that,
let's get going. Let's start with Macy's. It's really an
amazing and historic brand in retailing, and I think it's
probably the only retailer with those really big consumer franchises
that are actually embedded in American culture. Macy's Thanksgiving Day Parade,
(03:18):
Macy's Fourth the July Fireworks, and really the big one,
your flagship store at Harold Square here in New York.
You didn't invent these, that you inherited them when you
took the job. You look at those things, how did
you think about them. The first thing you think about
as a marketer is Wow, they're amazing. The Macy's Day
Parade is sort of unique in the fact that it's
(03:40):
not something that Macy's writes a check for. It's something
that Macy's built. We have a parade studio, We engineer
the flats, we engineer the balloons. The vast majority of
people who are in the parade are our colleagues and
our friends. The first thing you do is you begin
to understand the tradition. What is it that makes it
so powerful and makes it so beloved by America? Were
and a half million people on the streets of New York,
(04:01):
fifty million people spending a very important day with their
family watching it. Growing up in rural Mississippi in the
nineteen fifties and then eighteen sixties, every Thanksgiving, turn on
the TV. And that's what we did. And I think
that's as true today as it is for a lot
of America. It is part of their Thanksgiving a tradition.
And so my sort of role within both the parade
(04:22):
and the far work and operating around Harold Squares to
constantly ask a very talented group of colleagues, how do
we move from good too extraordinarily good. How do you
think about what brand permission you have to move it?
I mean, there's gotta be some limitations, and I suspect
you've hit some of the boundaries somewhere and something you've done.
How do you think about that? Your challenge is how
(04:44):
do you evolve? But mainly true to those core brand
trees that are sort of bait into the brand's DNA.
And certainly when I was doing that with de Beers,
it was something I was very very conscious of. I
was running a campaign that was ranked as one of
the top in the last hundred years, a diamond forever,
So you were seeped in the brand's DNA, and over time,
and certainly at Macy's in the last three and a
(05:05):
half years, you begin to get an intuitive grasp for
what is brand right and what is pushing the boundaries
a little bit? But every so often you sort of
have to go and flirt with those boundaries. And I
think that's what makes it fun. So when you first
started saying okay, let's think about this or this, did
it scare people? Yeah? I think so. Macy's was a
company that had run a very successful retail model for
(05:26):
a very long time retail marketing model. My job was
to come in and create an environment where the established
people stopped the new people doing daft stuff, and the
new people stopped the established people from doing the same
old stuff. And that's a very powerful combination if you
can get it right. But absolutely central to being able
(05:46):
to create that dynamic is building trust with the teams
that you're listening to both sides and that you're not
just going to blow everything up, and that you are
highly appreciative and respectful of the work that has come
before you. My job is to carry the torch for them.
You and the entire Macy's team have been very aggressive
and clearly spending your time looking through the windshield, not
(06:07):
obsessed with the rear view mirror. How did these institutions
like the parade and the fireworks and Harald Square play
into that plan. We run a complex model that's really
designed to sort of engage customers, to move them into
acquisition and then to get them to purchase either on
the e commerce platform or in the stores. But right
at the center of it, we have these amazing properties
(06:27):
that really are huge acts of brand generosity. The fact
that Macy's puts on a parade for America. For America
is a hugely generous act. We don't charge anyone any
money to come and see it. I've always said to people,
if you can begin to win the emotional high ground
around brands, a lot of the re engineering we've been
doing at Macy's is moving it from a transactional model
(06:48):
to a relationship model. Part of a relationship model is
making people like you as a brand and listening to
them and having conversations with them, as opposed to just
bombarding them with messages. And the best examples of us
engaging with the public in a really a non commercial
way is the parade and the fourth of julyfe art Works.
You're in the middle of many trends of Macy's, and
(07:09):
we touched on a few of them here, and I
want to get into that, but first I want to
rewind the young rich. Let's talk a little bit about
being a military kid. What branch of the service, by
the way, was your father in My father was in
the Royal Air Force. He was an odd combination because
at the time in the Royal Air Force, although he
trained as an engineer, they decided that it would be
a good idea to allow some engineers to fly plane
(07:31):
so they could get into them to see what was
wrong with them. They don't do this anymore because it's
too expensive to train pilots. But because of that, he
spent time actually flying fast jets, which was amazing, and
then after a couple of tours of duty, transferred back
to being an engineer. So I spent three years of
my life in Sweden, three years of my life freezing
to death up in Yorkshire, being moved around the country.
(07:53):
It was an amazing way to grow up. I was very,
very fortunate to have that childhood. Being a military kid.
Does that make you different? I think say, military people
are amazing. They are all about service. It sort of
ambuse you with a sense of the importance of the
team and in the Spruto Corps, and even though I
wasn't in it, I was sort of immersed in that
from a very very young age. And the other thing
(08:13):
is you become very flexible because you moved literally every
eighteen months to three years. Up until I was nine,
I was moving, and then when I was nine, I
went away to boarding school, which makes yourself reliant. You
came of age in the seventies. Can you paint the
picture of England in the seventies that era? It was
a tough time. You had thatcher, you had the coal strikes,
(08:34):
you had the unions. England was tearing herself apart. But
despite it all the English have an amazing sense of
human and an amazing sense of resilience. Everything is always understated.
It doesn't matter how bad it is. Everything is always understated.
And that has been a thing that is very much
in my DNA. Anything from that stage of your life
that you use today. Absolutely. I spent the majority of
(08:56):
my youth playing rugby, which I loved. I always can
help when I work with people, whether they ultimately played
in team sports or individual stores. It sort of colors
how people play. Because you're in such a pressure cooker
in these schools, you have to learn to live with people.
You have to learn to be accommodating and to be collaborative.
(09:17):
So off you go to university. Stories are right, You
want to be a vet? I did? And where did
that come from? I just love animals. I've always loved animals.
I grew up with labradors and I grew up with horses.
In England, there was a famous series called James Harriet,
which was about a Yorkshire vett and the sort of
trials and tribulations. It was a wonderful series. It was
a really romanticized view of what being a vet was.
(09:39):
But the result was, you know, I spent six weeks
treating ring worm fleas and not romantic. I realized it
was actually quite a lonely job. That wasn't the type
of person I was. What in your university years shaped
you the most and it stays with you today. What
you gotta understand, it's British univer Steve was very, very
(10:01):
different to American university. In British university, you essentially teach yourself.
You turn up to lectures, you have a couple of
tutorials a month. My professor wouldn't recognized me if his
life depended on it. Just do what you want to
do and we'll give you a set of exams at
the end of the year and if you pass them,
you get to stay, and if you don't pass them,
you fail. And it's really sort of entirely up to you.
(10:22):
But what undoubtedly shaped me it was my friends of
friendships that I made. So you spent time at the
London's who with the big cats tend to be some
That was Corey. That's probably a podcast in itself. Yeah,
what did you do working with the cats? Well, part
of my zoology degree in my final year was to
do a dissertation and I was specializing in behavioral studies,
(10:43):
and really quite cheekily, I wrote to the head of
the Zoological Society at London Zoo and basically said, look,
I'm really interested in this phenomenon called stereotypical behavior, which
is how animals exhibit and relieve stress in a captive environment.
How do they really manifests a lot through the pace patterns.
So when you're seeing an animal walk a very repetitive
(11:04):
pattern around its pen is a symptom that it is
highly stressed and what it's trying to do, if you
think about it, is get normality. With polar bears, you'll
see them weaving their head. So I got to spend
three days a week for about nine and a half
months working with a young Lana's called Anaka, who was
an Asiatic line. They are trying to integrate into a
pride of African lions. Lions are amazing and they are
(11:27):
so beautiful when you see them up place. Now I
want to jump a little bit. Time for us to
get your how I got started in advertising story. Okay,
you joined j WT just after Sir Martin took over
and began to build w p P and really was
a big shift in the advertising industry as a result
of that. Did you feel like you were at the
beginning of something big a shift? I joined j WT
(11:49):
as an account planner, which is basically a business strategist
or a brand strategist. At the time, JWT had a
rule that in order to be in the the account
planning teams the brand strategy teams, you had to have
ten years industry experience, either as a marketer or an
advertiser or a media person. And then the guy who
stepped in to run the department after Stephen King had left.
(12:11):
Stephen King is like a legend in the advertising industry.
He basically invented the discipline of account planning. In the UK,
a guy called David Baker basically decided I'm going to
see if I can train baby planners. So I was
an experiment myself and a really good friend with the
first junior baby planners that they ever brought in to
train from scratch. Did you prove it work or fail? Well?
(12:33):
I think my friend proved it work. I think, let's
put it this way. I didn't mess it up so
much that no one else ever got the opportunity. But
my colleague that was brought in, a lady called Mary Stowe,
went on to be a very very talented planner. And
when I came into j WC, they sort of looked
at me and said, look, we could put you an
account planning or we could put you an account management.
So I did my first five years in account planning
(12:55):
and then I transferred to account management. How did you
get an advertising or how do you even think of it?
It does sound like you had any interest in it
in high school or college. And why did you pick
up a magazine and say, yeah, that's me advertising. Well.
I came out of university and I thought I was
going to go into the army and do a three
year short term commission. As luck would have it, I
kept damaging my shoulder, which meant I couldn't take up
(13:16):
the short term commission that I was being offered. As
a stock gap, I joined a company in London that
was a consultancy and didn't really like that very much.
And my sister is a graphic designer, was spending a
lot of time in and around ad agencies and said
to me, look, you're either going to go off and
try and be an investment banker, which you will hate,
or why don't you go and talks some ad agencies.
It was as simple as that. At the time, advertising
(13:40):
was amazingly fun. Joining JWT in the late eighties, it
was like arriving at the end of a really, really
good party. You realize that there had been one hell
of a massively fun party, but it was sort of
waning down. And I think that's what Sorrel did. Sorrel
came in and took these amazingly creative companies but not
really very well run companies, and put a lot of
(14:02):
professional discipline into them. How did you learn advertising? Who
taught you? Some of the best marketing strategist brains were
sitting in the Jade pet account planning discipline as I arrived,
people like f Jenkins and Bernadette Knox, unbelievably talented brand strategists.
Every lunchtime they used to sit in the open area
(14:24):
and we'd eat sandwiches and I would just sit there
and listen to them talk about brand strategy. It was
like a PhD about how do you create compelling lee
differentiated brands and how does strategy and creativity play together,
what's the inside and how do you then find a
compelling expression of that inside in order to bring those
(14:46):
brands to ignite in customers minds. And knowing you as
a marketer, you still use that today. Yeah, they sort
of ingrained it on me. I was incredibly lucky to
train that way. A lot of people come in through
marketing they do junior brand management or they do junior
account management, and it's there's so much process work in
doing that. I got injected straight into the strategy side
(15:08):
of it, which looking back on was just incredibly fortunate
place to start. So how did you wind up at
the Beers and Diamonds. I did seven years at JWT London,
operating across London and Europe, and this was a time
when JPT London, i think, was ranked as the top
agency in the world. The Daily Mail used to do
the top ten favorite campaigns in England. JWT had seven
(15:31):
of the ten. It was ridiculous. But I always had
this really huge desire to go to New York to
come and work in New York. So I went to
speak to Chris Jones, who was the worldwide head of
j w T at the time, immensely talented individual and said,
to anyone, I want to come to New York and
he said, okay, that's very interesting. Came back to me
three weeks later and said, actually, we want you to
go to Tokyo. So I spent two years of my
(15:52):
life in Tokyo, which was an amazing working on Warner Lambert.
Warner Lambert was the largest affiliate outside the U ask
for Japan. I really only wanted to do two years
because I didn't want to sort of become a far
Eastern Asian expert. I wanted to come and work in
New York. And when I came back, Chris Joan said
to me, I don't have a job for you at
the moment, but de Beers have just started working with
(16:14):
being consultants and they need someone who has a sort
of bran strategy within that pod. Would you want to
do that? And I said sure, but it really was
a parking strategy. It was like until another big global
jw T account came up. I was about thirty one
thirty two at this stage, and I spent nine months
working with de Beers and I was walking down the
corridor one day and they're worldwide. CMO and CEO stopped
(16:36):
me in the corridor and said, the individual who runs
the New York operation has just resigned. Would you be
interested in the job? And I just went sign me up.
I often think if I hadn't walked down that corridor
at that moment, what would have life been. Just hold
on a second, because we've got so much more to
talk about. We'll be back after a quick break. Welcome
(16:59):
back to matth and Matt. Let's hear more from my
conversation with Rich Lennox. Tell us about this iteration of
a diamonds for every campaign. I mean, we talked earlier
about the parade, the fireworks. You've got Harold Square. You
can either be afraid to touch them or you use them.
And it sounds like you touched a diamonds Forever campaign.
(17:19):
Talk about it and talk about how you managed to
persuade people to let you do that and what the
impact was. The Biers is a really amazing organization, and
it's a very unusual organization because essentially it was a
group of miners fused to a group of marketers, so
they were digging it out of the ground and then
they were persuading people that they needed it. And all
of that was done in a j V venture with
(17:40):
South Africa and Botswana and NBS. So the company that
was really quite ahead of its time in terms of
benefication and working to make sure that a natural resource
was benefiting both the country and being commercially successful. When
they asked me to come to America, the US market
had stalled. It was essentially growing out. I think about
two percent a year at the time of the World's
(18:01):
wide diamonds were being sold out of America, So that
was pretty scary. I can remember being briefed by the
worldwide CMO de Beers, a guy called Stephen Lucia, who's
immensely talented. Is brief literally was we don't think the
US market is going to grow much more, but don't
screw it up. Your job is not to blow it up.
But when I got there, we started to go, look,
(18:21):
you know, Diamond Forever is an amazing campaign, but what
if we built big products stories that went underneath it,
and what would those products stories be. We started to
engineer products rather than campaigns. The best example of that
was The Past, Present Future. We did a lot of
in depth research with consumers. We actually hypnotize men. I
kid you not. We kept asking people in quant do
(18:44):
you agree it's a good idea to give your wife
a diamond anniversary gift? Yes, I do. Eight percent of
men agree with that, but only temper cent and member
actually actioning on it, So there's obviously quite a big gap.
So we got really fed up with this gap between
what they were saying and what they are actually doing.
And so what we did is we arranged a hypnotize
a group of men, and literally, one of the exercises
(19:05):
we had them do, we had them say, you're looking
out over a valley. Imagine that valley is a vision
of your marriage. Draw a picture. So all the people
who had given diamond jewelry, you had green pastures, snow
capped mountains, clouds, and literally some of the guys who hadn't,
(19:27):
we had volcanoes, rivers with sharks in them. It was
absolutely fascinating. But what that led us to do is say, look,
you can't fix marriages, but what you can do is
find a very good articulation of what men want to say,
because men really aren't that articulate, and what we found
women wanted to hear was I love where we've been,
I love where we are, and I'm committed to our future.
(19:48):
That translated into the thought your past, your present, in
your future, which then translated into a three stone diamond ring,
which by the way, was fantastic as rather than selling
one diamond, you're selling the right, and was even more
fantastic because it was easy to manufacturer. So we essentially
went on a road show with the trade and basically said, look,
we think we've got a good idea, and they said, now,
(20:09):
we've been trying to sell three staying rings forever. They
don't work. We said, well, what if we called it past, Present,
future and ran this advertising campaign behind it, and they went, oh,
that's interesting. So we did it. The trade aligned and
it became a billion dollar success literally within three months
of launch. It was unbelievable, But that, to me was
a good example of how we stopped being marketers and
(20:31):
what we became is sort of like cultural engineers and
product engineers to basically, okay, there's a need here, we
can build a solution and then we can market the
hell out of it. So let's talk about another solution.
I love market expansion ideas. Right hand diamond rings. Yeah,
that turned out to be, what about a three billion
dollar business? Yeah over time. Yeah. Who came up with
(20:52):
that idea? I mean it sounds like a risky idea.
That was a really interesting one because essentially mines are
on per pictable things. One month they'll be producing lots
of large, rough diamonds that cut to one carrots, and
then they can suddenly start producing a whole little diamonds.
The beers basically, we're producing too many small diamonds and
(21:12):
we needed to find a way to create some market
velocity underneath them. Someone had the really revolutionary breakthrough observation
that women have two hands. The left hand could be
about commitment marriage, and the right hand could be an
expression of the individual taste and who I am. When
we initially went to the beers and said, we've got
this idea, we're going to make the right hand about
(21:34):
self expression. You can buy it yourself. It's very design intensive,
which is great because that will use lots of little stones.
A lot of the de Beers people thought it was heresy.
They were like, hang, on a minute, A diamond is forever,
It's all about love women buying rings from them. That
this sounds ridiculous now, but you know we're dealing in
fifteen years ago, and there was a lot of nervousness
(21:56):
around the idea. So of course we did the sensible thing.
We went and spoke to women, and women went, don't
be ridiculous. I can absolutely reconcile in my mind that
there are diamonds that are brought for love and there
are doumonds that vought a self expression. That's a great idea.
Let's do it so on the simple premise of torture
your customer. Don't go in with preconceived ideas. That was
a really good example. And then the creative team came
(22:19):
up with this really really good idea of women in
the world razor right hand. It was a beautifully crafted
campaign with great product that really it was sort of
pushing on an open door. That's a great case study
for market extension. Let's go to a case study for transformation.
Turnaround two thousand nine. You make a jump, but this time,
(22:40):
Mr Client, your first CMO job sales, you had fourteen
consecutive quarters of positive comparable same store sales growth until
Sales actually was acquired in two thousand fourteen. How did
you do it? I mean, this is your first time
in the lane. Now it's you're the client, you're making
the cause. What did you do well? Firstly, I was
(23:01):
hired by a really, really talented CEO, Theo Killian, just
an enormously talented, generous, smart leader that makes all the
difference in the world. And second, if you're going to
get involved in turnarounds, you have to be good in
a firefight. You have to be the type of person
who actually runs towards far as rather than away from them.
And you've got to have that sort of combination of
(23:23):
arrogance and naivety. Arrogance that you can succeed where others
fell and naivety that you can succeed where others have failed.
There's a very talented group of people who were brought
in to help fix a very beaten up company. But
at the end of the day, the sort of the
core of the brand was still there. We started to
do things, really the simple things, and I took a
(23:44):
lot of the lessons from the beers and that made
the transition easier because I understood the category. When I arrived,
sales were running a very promotional approach to meeting their
jewelry and it was a simple truth. And a man
ever got down on his knee, put his hand out
and said, here, look, darling, I got you a deal.
Stop doing that. It doesn't mean that value isn't important,
(24:05):
but the brand has to mean something more than just
simply bashing out jewelry at low price points. I was
very lucky and the fact that THEO absolutely got on
board with that very quickly. A chief merchandizing officer, Gil
Hollander got on board with that very very quickly. Zelles
was a case study of a small company. I mean
it was about two billion dollars. It wasn't big in
(24:27):
real trouble, but a team of people coming together and going,
we're going to get this done. And we're going to
get this done because it's not just about share price,
but it's about people's mortgages and it's about car payments.
There is a responsibility here as a group of leaders
to get this right for the people that work for us.
There were seventeen thousand people that worked at Zelles and
one of my proudest things is that the first year
(24:49):
I was there, there was a barely significant riff, and
then there was never one after that, So we got
it right. What Zales allowed me to do is not
just be a marketer. It was about brand engineering, It
was about business engineering. It was about team dynamics. You
spread your wings a little more. You jumped from this category.
You're comfortable with being the CMO at toys r US
(25:10):
for two years? Yeah, one insight? Did you get there?
Did you still keep with you today? As a marketer?
Toys r Us was an amazing brand and it had
some really talented people working at it, but it was
laboring under a debt burden that was just crippling, just
absolutely huge, And I think it was a sort of
victim of the acquisition models that were developed in the
(25:33):
early two thousands, which made a lot of people a
lot of money, but left the companies that were standing
really really struggling. I've been in the jewelry industry, in
the diamond industry for about fifteen years with to Beers
and with Cells, and what I needed to prove to
myself was that I could take the core marketing skills
as a CMO and transfer them to a category that
was about plastic and I p ideas. So I went
(25:56):
from talking to diamond suppliers to Disney or Hasbro or Mattel,
and I learned a lot of good lessons. Some of
them were very useful, some of them would don't do
that again. Those are usually the best lessons we they
really are. So we're back to Macy's. Yeah it's two
thousand and sixteen. Yeah, you're in the new CMO. Yeah,
(26:16):
you made some big changes early on. Can you describe them?
Talk a little bit about the big successes and also
talk about some of the things you tried it didn't work.
When I joined Macy's, I was sort of the first
external C suite how they're brought in in a long time.
Macy's has been enormously successful as a retailer. I mean
they were putting on astronomical growth rates right up until
(26:39):
about and they've been doing that by running a very
high frequency promotional transactional model that was really the absolute
central core of their marketing model. And what we started
to talk about was this isn't the old model was wrong.
It's just it doesn't work today. And it doesn't work
today because the media landscape is changing. So we can't
(27:01):
run the same model. The media vehicles that we need
were beginning to falter underneath them if we were going
to run that same model. Consumers shopping habits are changing profoundly,
so we need to invent a new model. We said, look,
we've got to get out of the transactional business and
we've got to get into the relationship business. And that
really then said, okay, if we're going to design a
marketing model that's predicated on building strong customer relationships and
(27:24):
looking at CLV rather than what was the last transaction
that you did, then lots of things flowed out of that.
We had to launch our own loyalty program. At the time,
we were part of the Annex assortium around plenty, and
we had to exit that and launch our star Wards program.
We had to start not just offering things at alert price.
(27:45):
We had to talk about our product and editorial authority,
reinforce the fact that Macy's has got good stuff so
that when we put it on discount, that pulls harder.
And when we put it on discount, there's a model
where our best customers can be constantly engaged. Brian the
brand and then sort of on top of that we
had to blend in the parade and everything like that
and all make it sort of work together. One of
(28:06):
the things I love about retailer is the marketing ecosystem
is so incredibly complex. You have a high frequency promotional
model which changed weekly. You then have a loyalty model
and a credit model lead into a product authority in
a brand model with co op running right through the middle.
It an e coom demand tactics on the other side.
So what that does is it creates almost like a
(28:28):
Rubik's cube of decisions that you have to flex between
in order to get the optimum balance in your marketing models,
and that Rubik's cube will flex based on the cycle
that you're in in that year. The Rubik's cue position
that works a Black Friday looks nothing like the Rubik's
cube that you're running for full fashion or Spring fashion.
So it's a sort of endlessly fascinating ecosystem to try
(28:51):
and get that perfect point of calibration in which, of
course you never succeed in getting the hallmarks of your career.
Seemed to be big ideas transformation, not afraid to take
a chance. Probably many of things don't work, but as
you say you learn a lot from it. I know
that's kind to be scary to the people there. You've
alluded to it a couple of times here. What kind
of culture is necessary? What kind of culture you have
(29:12):
to build within the marketing group? And what can I
culture does the company have to have to allow those
things to happen. Well, I think the role of cmos
today is to do two things. You call it maths
and magic. I call it the art of persuasion and
the art of precision targeting. But what cmos also have
to do is they have to be able to talk
to their peers in the c suite, particularly the CF
(29:35):
and CFO, and translate what marketing is doing into business results.
You have to be able to explain how you are
driving marketing productivity and the investment decisions that you are
making across complex media ecosystems and complex marketing tasks in
order to make sure that every dollar we spend is
returning as highly as it possibly can. And you have
(29:57):
to be brave in those decisions because I don't know
many more cutters today, if any, who are getting budget increases,
which means that you've got to bring analytical teams and
data science and all of the things that allow you
to make data driven decisions around your marketing decisions. And
then at the end of the day, you've got to
understand is you can have the best targeting in the world,
you can have the best decision and you can have
(30:17):
the best personalization. If you don't have good ideas to
put through them, you are minimizing the impacts of this campaigns.
I forget who said it, but it's absolutely true. The
best way to make a smaller budget work harder has
had bigger ideas, and I think part of that is
because I came from a culture where ideas were absolutely king,
and I saw the power of big ideas to transform businesses.
(30:41):
I'd like to get some insights what is different about
being on the client side from being on the agency side.
You've done both successfully. Agency side, you have a responsibility,
but you don't have the same degree of accountability. I
also think agency side the sheer breadth of marketing disciplines
that now in play, the involvement marketing and ad tech.
(31:03):
Cmos and senior plant leaders have to be such really,
really good generalists. Now, creativity and production of content is
a very small component of what we actually do. It's
a very important component, but it is a small component.
How has that changed what you look for in an
agency partner. That's a really good question. First and foremost.
(31:25):
They have to be capable of creating big ideas that
just have the ability to go wow, I would have
never thought of that. That's fantastic. And the relationship discipline
to push you when you need to be pushed and
listen when you're going well, I know what I'm about
to do is a bit daft, but bear with me.
There are methods in the madness that I think requires
(31:48):
really good account management skills. You have to be able
to push on people but at the same time support them.
When you work with the good account leaders, they are
exceptionally good at doing that. If you could give some
advice to your eighteen year old stelf thinking back, looking back,
what would it be, don't worry so much, take risks.
(32:08):
And I think one of the things I'm proudest in
my career is I have taken sort of risks. I've
done things that people said to me at the time,
we're best silly, but worse foolish. What advice would you
give for somebody who would like to be a CMO
of a major brand like you. Cmos have to do
two things simultaneously. They have to be, for want of
a better word, a really good cheerleader within an organization.
(32:31):
And they have to be able to be very quick
learners and editors. They need to be able to come
into a room add value to a conversation that they
have not necessarily been part of. You've got to be
fast enough on your feet, really good understanding of brand management,
really good understanding of consumer insight generation, and a really
good understanding of how you work with creatives to edit
(32:53):
good ideas, and then really good understanding of media and
investment decisions. So you've got to chase breadth of experience,
not just depth of experience. Because the role is so
broad now and has so many disciplines within it, you're
never going to be the master of all of them,
but you've got to have a pretty good working knowledge
of most of them. And then you find people who
(33:15):
are subject matter expertise and you figure out a way
to work with them in a way that empowers them.
We always in math and magic. With math and magic shoutouts,
you've seen a lot of marketing and business folks who
is the best one. On the analytic side of the
math side of the marketing equation, people like Terry Prue.
(33:36):
We're really at the forefront, really beginning to develop the
marketing mixed models that we all now take for granted.
Give us the best. Now on the magic side, the
creative there's just some campaigns that I absolutely admire. The
amazing old campaigns. You know Nike when it first came
out we just did. Is that amazing book that Scott
Bedbry wrote about the origin of the just dird idea?
(33:59):
That campaign was. I wanted to get inta appetizing Rich,
You've got a great story, you tell it well. The
accent helps. Thanks for joining us. Thank you so much.
There are a few things I picked up in my
conversation with Rich. One, don't just be a marketer, be
(34:19):
a cultural engineer and the beer's. Rich saw an opportunity
to help men do a better job articulating their feelings.
So he created a product, the three Diamond Ring, and
a campaign past, present, future around it to talk to
your customer without preconceived notions. When Rich's team talked to
women about their desire for self expression, it led to
a whole new product the right hand diamond ring, which
(34:42):
became a cultural phenomenon, not to mention a business success.
Three ideas are still king, As Rich says, you need
data to translate marketing into business results, but without big
ideas behind them, the data is useless. Just look at
what he's done at Macy's. Thanks for listening. I'm Bob Pittman.
(35:05):
That's it for today's episode. Thanks so much for listening
to Math and Magic, a production of I Heart Radio.
This show is hosted by Bob Pittman. Special thanks to
Sue Schillinger for booking and wrangling our wonderful talent, which
is no small feat Nikkiatore for pulling research bill plaques,
and Michael Asar for their recording help, our editor, Ryan Murdoch,
and of course Gayle Raoul, Eric Angel, Noel Mango and
(35:27):
everyone who helped bring this show to your ears. Until
next time,
You're listening to Math and Magic, a production at I
Heart Radio. When I arrived, sales were running a very
promotional approach to meeting their jewelry and it was a
simple truth and a man ever got down on his knee,
put his hand out and said, here, look, darling, I
got you a deal. Stop doing that. It doesn't mean
(00:22):
that value isn't important, but the brand has to mean
something more than just simply bashing out jewelry at low
price points. Hi am, Bob Pittman. Welcome to this episode
of Math and Magic, Stories from the Frontiers and Marketing.
(00:44):
On this episode, we have someone who's made his mark
in one of the toughest sectors retail, and he brings
a wealth of experience and insights for us, the CMO
of Macy's, Rich Lennox. He was born in the UK
(01:06):
a military kid. He studied animals in college, worked with
some big cats at the London Zoo for a year,
but wound up in advertising against He joined J Walter
Thompson right after Sir Martin Sorrel took over and went
on to a terrific career in the agency business that
got him to the US. He was on the de
beers business and probably knows as much about diamonds as
anyone can. From there, he moved on to his first
(01:29):
CMO job at sales and eventually to Macy's, where he
has created ads that even Saturday Night Live has parodied.
The ultimate mark of success. He loves horses and rugby.
Welcome Rich. There's a lot to talk about, but first
I want to do you in sixty seconds. Ready? Do
you prefer beer or wine? Twitter or Instagram? Instagram? New
(01:51):
Jersey or New York, New York, U S or UK US.
We won you over twenty years here. I think it's
about time. Kentucky Derby or Belmont, Belmont Country or City Country,
lions or horses, horses about to get harder. Secret talent
staying calm under far I think favorite City Florence. The
smartest person you know, My dad was probably the smartest
(02:13):
childhood hero. Chuck Yeager historical idol, probably Nelson Mandela proudest
career achievement. I think the turn around it Els is
probably my proudest career achievement to date. Proudest personal achievement.
My daughter's quote to live by one of my favorite quotes.
His courage doesn't always rule. Sometimes it's the quiet voice
at the end of the day saying I will try
(02:34):
again tomorrow. Who would play you in a movie? Probably Shrek?
Shrek with an English accent. Let's go for that first
job consultant. I hated it. I was terrible. Okay, here's
the last one. What did you want to be when
you were growing up? I wanted to either be in
the military or I wanted to be a vet. I
sort of described my career as a sort of bizarre
series of accidents. After that. I never really imagined myself
(02:58):
working in corporate and certainly not behind a desk. And
here you are, and here I am. So with that,
let's get going. Let's start with Macy's. It's really an
amazing and historic brand in retailing, and I think it's
probably the only retailer with those really big consumer franchises
that are actually embedded in American culture. Macy's Thanksgiving Day Parade,
(03:18):
Macy's Fourth the July Fireworks, and really the big one,
your flagship store at Harold Square here in New York.
You didn't invent these, that you inherited them when you
took the job. You look at those things, how did
you think about them. The first thing you think about
as a marketer is Wow, they're amazing. The Macy's Day
Parade is sort of unique in the fact that it's
(03:40):
not something that Macy's writes a check for. It's something
that Macy's built. We have a parade studio, We engineer
the flats, we engineer the balloons. The vast majority of
people who are in the parade are our colleagues and
our friends. The first thing you do is you begin
to understand the tradition. What is it that makes it
so powerful and makes it so beloved by America? Were
and a half million people on the streets of New York,
(04:01):
fifty million people spending a very important day with their
family watching it. Growing up in rural Mississippi in the
nineteen fifties and then eighteen sixties, every Thanksgiving, turn on
the TV. And that's what we did. And I think
that's as true today as it is for a lot
of America. It is part of their Thanksgiving a tradition.
And so my sort of role within both the parade
(04:22):
and the far work and operating around Harold Squares to
constantly ask a very talented group of colleagues, how do
we move from good too extraordinarily good. How do you
think about what brand permission you have to move it?
I mean, there's gotta be some limitations, and I suspect
you've hit some of the boundaries somewhere and something you've done.
How do you think about that? Your challenge is how
(04:44):
do you evolve? But mainly true to those core brand
trees that are sort of bait into the brand's DNA.
And certainly when I was doing that with de Beers,
it was something I was very very conscious of. I
was running a campaign that was ranked as one of
the top in the last hundred years, a diamond forever,
So you were seeped in the brand's DNA, and over time,
and certainly at Macy's in the last three and a
(05:05):
half years, you begin to get an intuitive grasp for
what is brand right and what is pushing the boundaries
a little bit? But every so often you sort of
have to go and flirt with those boundaries. And I
think that's what makes it fun. So when you first
started saying okay, let's think about this or this, did
it scare people? Yeah? I think so. Macy's was a
company that had run a very successful retail model for
(05:26):
a very long time retail marketing model. My job was
to come in and create an environment where the established
people stopped the new people doing daft stuff, and the
new people stopped the established people from doing the same
old stuff. And that's a very powerful combination if you
can get it right. But absolutely central to being able
(05:46):
to create that dynamic is building trust with the teams
that you're listening to both sides and that you're not
just going to blow everything up, and that you are
highly appreciative and respectful of the work that has come
before you. My job is to carry the torch for them.
You and the entire Macy's team have been very aggressive
and clearly spending your time looking through the windshield, not
(06:07):
obsessed with the rear view mirror. How did these institutions
like the parade and the fireworks and Harald Square play
into that plan. We run a complex model that's really
designed to sort of engage customers, to move them into
acquisition and then to get them to purchase either on
the e commerce platform or in the stores. But right
at the center of it, we have these amazing properties
(06:27):
that really are huge acts of brand generosity. The fact
that Macy's puts on a parade for America. For America
is a hugely generous act. We don't charge anyone any
money to come and see it. I've always said to people,
if you can begin to win the emotional high ground
around brands, a lot of the re engineering we've been
doing at Macy's is moving it from a transactional model
(06:48):
to a relationship model. Part of a relationship model is
making people like you as a brand and listening to
them and having conversations with them, as opposed to just
bombarding them with messages. And the best examples of us
engaging with the public in a really a non commercial
way is the parade and the fourth of julyfe art Works.
You're in the middle of many trends of Macy's, and
(07:09):
we touched on a few of them here, and I
want to get into that, but first I want to
rewind the young rich. Let's talk a little bit about
being a military kid. What branch of the service, by
the way, was your father in My father was in
the Royal Air Force. He was an odd combination because
at the time in the Royal Air Force, although he
trained as an engineer, they decided that it would be
a good idea to allow some engineers to fly plane
(07:31):
so they could get into them to see what was
wrong with them. They don't do this anymore because it's
too expensive to train pilots. But because of that, he
spent time actually flying fast jets, which was amazing, and
then after a couple of tours of duty, transferred back
to being an engineer. So I spent three years of
my life in Sweden, three years of my life freezing
to death up in Yorkshire, being moved around the country.
(07:53):
It was an amazing way to grow up. I was very,
very fortunate to have that childhood. Being a military kid.
Does that make you different? I think say, military people
are amazing. They are all about service. It sort of
ambuse you with a sense of the importance of the
team and in the Spruto Corps, and even though I
wasn't in it, I was sort of immersed in that
from a very very young age. And the other thing
(08:13):
is you become very flexible because you moved literally every
eighteen months to three years. Up until I was nine,
I was moving, and then when I was nine, I
went away to boarding school, which makes yourself reliant. You
came of age in the seventies. Can you paint the
picture of England in the seventies that era? It was
a tough time. You had thatcher, you had the coal strikes,
(08:34):
you had the unions. England was tearing herself apart. But
despite it all the English have an amazing sense of
human and an amazing sense of resilience. Everything is always understated.
It doesn't matter how bad it is. Everything is always understated.
And that has been a thing that is very much
in my DNA. Anything from that stage of your life
that you use today. Absolutely. I spent the majority of
(08:56):
my youth playing rugby, which I loved. I always can
help when I work with people, whether they ultimately played
in team sports or individual stores. It sort of colors
how people play. Because you're in such a pressure cooker
in these schools, you have to learn to live with people.
You have to learn to be accommodating and to be collaborative.
(09:17):
So off you go to university. Stories are right, You
want to be a vet? I did? And where did
that come from? I just love animals. I've always loved animals.
I grew up with labradors and I grew up with horses.
In England, there was a famous series called James Harriet,
which was about a Yorkshire vett and the sort of
trials and tribulations. It was a wonderful series. It was
a really romanticized view of what being a vet was.
(09:39):
But the result was, you know, I spent six weeks
treating ring worm fleas and not romantic. I realized it
was actually quite a lonely job. That wasn't the type
of person I was. What in your university years shaped
you the most and it stays with you today. What
you gotta understand, it's British univer Steve was very, very
(10:01):
different to American university. In British university, you essentially teach yourself.
You turn up to lectures, you have a couple of
tutorials a month. My professor wouldn't recognized me if his
life depended on it. Just do what you want to
do and we'll give you a set of exams at
the end of the year and if you pass them,
you get to stay, and if you don't pass them,
you fail. And it's really sort of entirely up to you.
(10:22):
But what undoubtedly shaped me it was my friends of
friendships that I made. So you spent time at the
London's who with the big cats tend to be some
That was Corey. That's probably a podcast in itself. Yeah,
what did you do working with the cats? Well, part
of my zoology degree in my final year was to
do a dissertation and I was specializing in behavioral studies,
(10:43):
and really quite cheekily, I wrote to the head of
the Zoological Society at London Zoo and basically said, look,
I'm really interested in this phenomenon called stereotypical behavior, which
is how animals exhibit and relieve stress in a captive environment.
How do they really manifests a lot through the pace patterns.
So when you're seeing an animal walk a very repetitive
(11:04):
pattern around its pen is a symptom that it is
highly stressed and what it's trying to do, if you
think about it, is get normality. With polar bears, you'll
see them weaving their head. So I got to spend
three days a week for about nine and a half
months working with a young Lana's called Anaka, who was
an Asiatic line. They are trying to integrate into a
pride of African lions. Lions are amazing and they are
(11:27):
so beautiful when you see them up place. Now I
want to jump a little bit. Time for us to
get your how I got started in advertising story. Okay,
you joined j WT just after Sir Martin took over
and began to build w p P and really was
a big shift in the advertising industry as a result
of that. Did you feel like you were at the
beginning of something big a shift? I joined j WT
(11:49):
as an account planner, which is basically a business strategist
or a brand strategist. At the time, JWT had a
rule that in order to be in the the account
planning teams the brand strategy teams, you had to have
ten years industry experience, either as a marketer or an
advertiser or a media person. And then the guy who
stepped in to run the department after Stephen King had left.
(12:11):
Stephen King is like a legend in the advertising industry.
He basically invented the discipline of account planning. In the UK,
a guy called David Baker basically decided I'm going to
see if I can train baby planners. So I was
an experiment myself and a really good friend with the
first junior baby planners that they ever brought in to
train from scratch. Did you prove it work or fail? Well?
(12:33):
I think my friend proved it work. I think, let's
put it this way. I didn't mess it up so
much that no one else ever got the opportunity. But
my colleague that was brought in, a lady called Mary Stowe,
went on to be a very very talented planner. And
when I came into j WC, they sort of looked
at me and said, look, we could put you an
account planning or we could put you an account management.
So I did my first five years in account planning
(12:55):
and then I transferred to account management. How did you
get an advertising or how do you even think of it?
It does sound like you had any interest in it
in high school or college. And why did you pick
up a magazine and say, yeah, that's me advertising. Well.
I came out of university and I thought I was
going to go into the army and do a three
year short term commission. As luck would have it, I
kept damaging my shoulder, which meant I couldn't take up
(13:16):
the short term commission that I was being offered. As
a stock gap, I joined a company in London that
was a consultancy and didn't really like that very much.
And my sister is a graphic designer, was spending a
lot of time in and around ad agencies and said
to me, look, you're either going to go off and
try and be an investment banker, which you will hate,
or why don't you go and talks some ad agencies.
It was as simple as that. At the time, advertising
(13:40):
was amazingly fun. Joining JWT in the late eighties, it
was like arriving at the end of a really, really
good party. You realize that there had been one hell
of a massively fun party, but it was sort of
waning down. And I think that's what Sorrel did. Sorrel
came in and took these amazingly creative companies but not
really very well run companies, and put a lot of
(14:02):
professional discipline into them. How did you learn advertising? Who
taught you? Some of the best marketing strategist brains were
sitting in the Jade pet account planning discipline as I arrived,
people like f Jenkins and Bernadette Knox, unbelievably talented brand strategists.
Every lunchtime they used to sit in the open area
(14:24):
and we'd eat sandwiches and I would just sit there
and listen to them talk about brand strategy. It was
like a PhD about how do you create compelling lee
differentiated brands and how does strategy and creativity play together,
what's the inside and how do you then find a
compelling expression of that inside in order to bring those
(14:46):
brands to ignite in customers minds. And knowing you as
a marketer, you still use that today. Yeah, they sort
of ingrained it on me. I was incredibly lucky to
train that way. A lot of people come in through
marketing they do junior brand management or they do junior
account management, and it's there's so much process work in
doing that. I got injected straight into the strategy side
(15:08):
of it, which looking back on was just incredibly fortunate
place to start. So how did you wind up at
the Beers and Diamonds. I did seven years at JWT London,
operating across London and Europe, and this was a time
when JPT London, i think, was ranked as the top
agency in the world. The Daily Mail used to do
the top ten favorite campaigns in England. JWT had seven
(15:31):
of the ten. It was ridiculous. But I always had
this really huge desire to go to New York to
come and work in New York. So I went to
speak to Chris Jones, who was the worldwide head of
j w T at the time, immensely talented individual and said,
to anyone, I want to come to New York and
he said, okay, that's very interesting. Came back to me
three weeks later and said, actually, we want you to
go to Tokyo. So I spent two years of my
(15:52):
life in Tokyo, which was an amazing working on Warner Lambert.
Warner Lambert was the largest affiliate outside the U ask
for Japan. I really only wanted to do two years
because I didn't want to sort of become a far
Eastern Asian expert. I wanted to come and work in
New York. And when I came back, Chris Joan said
to me, I don't have a job for you at
the moment, but de Beers have just started working with
(16:14):
being consultants and they need someone who has a sort
of bran strategy within that pod. Would you want to
do that? And I said sure, but it really was
a parking strategy. It was like until another big global
jw T account came up. I was about thirty one
thirty two at this stage, and I spent nine months
working with de Beers and I was walking down the
corridor one day and they're worldwide. CMO and CEO stopped
(16:36):
me in the corridor and said, the individual who runs
the New York operation has just resigned. Would you be
interested in the job? And I just went sign me up.
I often think if I hadn't walked down that corridor
at that moment, what would have life been. Just hold
on a second, because we've got so much more to
talk about. We'll be back after a quick break. Welcome
(16:59):
back to matth and Matt. Let's hear more from my
conversation with Rich Lennox. Tell us about this iteration of
a diamonds for every campaign. I mean, we talked earlier
about the parade, the fireworks. You've got Harold Square. You
can either be afraid to touch them or you use them.
And it sounds like you touched a diamonds Forever campaign.
(17:19):
Talk about it and talk about how you managed to
persuade people to let you do that and what the
impact was. The Biers is a really amazing organization, and
it's a very unusual organization because essentially it was a
group of miners fused to a group of marketers, so
they were digging it out of the ground and then
they were persuading people that they needed it. And all
of that was done in a j V venture with
(17:40):
South Africa and Botswana and NBS. So the company that
was really quite ahead of its time in terms of
benefication and working to make sure that a natural resource
was benefiting both the country and being commercially successful. When
they asked me to come to America, the US market
had stalled. It was essentially growing out. I think about
two percent a year at the time of the World's
(18:01):
wide diamonds were being sold out of America, So that
was pretty scary. I can remember being briefed by the
worldwide CMO de Beers, a guy called Stephen Lucia, who's
immensely talented. Is brief literally was we don't think the
US market is going to grow much more, but don't
screw it up. Your job is not to blow it up.
But when I got there, we started to go, look,
(18:21):
you know, Diamond Forever is an amazing campaign, but what
if we built big products stories that went underneath it,
and what would those products stories be. We started to
engineer products rather than campaigns. The best example of that
was The Past, Present Future. We did a lot of
in depth research with consumers. We actually hypnotize men. I
kid you not. We kept asking people in quant do
(18:44):
you agree it's a good idea to give your wife
a diamond anniversary gift? Yes, I do. Eight percent of
men agree with that, but only temper cent and member
actually actioning on it, So there's obviously quite a big gap.
So we got really fed up with this gap between
what they were saying and what they are actually doing.
And so what we did is we arranged a hypnotize
a group of men, and literally, one of the exercises
(19:05):
we had them do, we had them say, you're looking
out over a valley. Imagine that valley is a vision
of your marriage. Draw a picture. So all the people
who had given diamond jewelry, you had green pastures, snow
capped mountains, clouds, and literally some of the guys who hadn't,
(19:27):
we had volcanoes, rivers with sharks in them. It was
absolutely fascinating. But what that led us to do is say, look,
you can't fix marriages, but what you can do is
find a very good articulation of what men want to say,
because men really aren't that articulate, and what we found
women wanted to hear was I love where we've been,
I love where we are, and I'm committed to our future.
(19:48):
That translated into the thought your past, your present, in
your future, which then translated into a three stone diamond ring,
which by the way, was fantastic as rather than selling
one diamond, you're selling the right, and was even more
fantastic because it was easy to manufacturer. So we essentially
went on a road show with the trade and basically said, look,
we think we've got a good idea, and they said, now,
(20:09):
we've been trying to sell three staying rings forever. They
don't work. We said, well, what if we called it past, Present,
future and ran this advertising campaign behind it, and they went, oh,
that's interesting. So we did it. The trade aligned and
it became a billion dollar success literally within three months
of launch. It was unbelievable, But that, to me was
a good example of how we stopped being marketers and
(20:31):
what we became is sort of like cultural engineers and
product engineers to basically, okay, there's a need here, we
can build a solution and then we can market the
hell out of it. So let's talk about another solution.
I love market expansion ideas. Right hand diamond rings. Yeah,
that turned out to be, what about a three billion
dollar business? Yeah over time. Yeah. Who came up with
(20:52):
that idea? I mean it sounds like a risky idea.
That was a really interesting one because essentially mines are
on per pictable things. One month they'll be producing lots
of large, rough diamonds that cut to one carrots, and
then they can suddenly start producing a whole little diamonds.
The beers basically, we're producing too many small diamonds and
(21:12):
we needed to find a way to create some market
velocity underneath them. Someone had the really revolutionary breakthrough observation
that women have two hands. The left hand could be
about commitment marriage, and the right hand could be an
expression of the individual taste and who I am. When
we initially went to the beers and said, we've got
this idea, we're going to make the right hand about
(21:34):
self expression. You can buy it yourself. It's very design intensive,
which is great because that will use lots of little stones.
A lot of the de Beers people thought it was heresy.
They were like, hang, on a minute, A diamond is forever,
It's all about love women buying rings from them. That
this sounds ridiculous now, but you know we're dealing in
fifteen years ago, and there was a lot of nervousness
(21:56):
around the idea. So of course we did the sensible thing.
We went and spoke to women, and women went, don't
be ridiculous. I can absolutely reconcile in my mind that
there are diamonds that are brought for love and there
are doumonds that vought a self expression. That's a great idea.
Let's do it so on the simple premise of torture
your customer. Don't go in with preconceived ideas. That was
a really good example. And then the creative team came
(22:19):
up with this really really good idea of women in
the world razor right hand. It was a beautifully crafted
campaign with great product that really it was sort of
pushing on an open door. That's a great case study
for market extension. Let's go to a case study for transformation.
Turnaround two thousand nine. You make a jump, but this time,
(22:40):
Mr Client, your first CMO job sales, you had fourteen
consecutive quarters of positive comparable same store sales growth until
Sales actually was acquired in two thousand fourteen. How did
you do it? I mean, this is your first time
in the lane. Now it's you're the client, you're making
the cause. What did you do well? Firstly, I was
(23:01):
hired by a really, really talented CEO, Theo Killian, just
an enormously talented, generous, smart leader that makes all the
difference in the world. And second, if you're going to
get involved in turnarounds, you have to be good in
a firefight. You have to be the type of person
who actually runs towards far as rather than away from them.
And you've got to have that sort of combination of
(23:23):
arrogance and naivety. Arrogance that you can succeed where others
fell and naivety that you can succeed where others have failed.
There's a very talented group of people who were brought
in to help fix a very beaten up company. But
at the end of the day, the sort of the
core of the brand was still there. We started to
do things, really the simple things, and I took a
(23:44):
lot of the lessons from the beers and that made
the transition easier because I understood the category. When I arrived,
sales were running a very promotional approach to meeting their
jewelry and it was a simple truth. And a man
ever got down on his knee, put his hand out
and said, here, look, darling, I got you a deal.
Stop doing that. It doesn't mean that value isn't important,
(24:05):
but the brand has to mean something more than just
simply bashing out jewelry at low price points. I was
very lucky and the fact that THEO absolutely got on
board with that very quickly. A chief merchandizing officer, Gil
Hollander got on board with that very very quickly. Zelles
was a case study of a small company. I mean
it was about two billion dollars. It wasn't big in
(24:27):
real trouble, but a team of people coming together and going,
we're going to get this done. And we're going to
get this done because it's not just about share price,
but it's about people's mortgages and it's about car payments.
There is a responsibility here as a group of leaders
to get this right for the people that work for us.
There were seventeen thousand people that worked at Zelles and
one of my proudest things is that the first year
(24:49):
I was there, there was a barely significant riff, and
then there was never one after that, So we got
it right. What Zales allowed me to do is not
just be a marketer. It was about brand engineering, It
was about business engineering. It was about team dynamics. You
spread your wings a little more. You jumped from this category.
You're comfortable with being the CMO at toys r US
(25:10):
for two years? Yeah, one insight? Did you get there?
Did you still keep with you today? As a marketer?
Toys r Us was an amazing brand and it had
some really talented people working at it, but it was
laboring under a debt burden that was just crippling, just
absolutely huge, And I think it was a sort of
victim of the acquisition models that were developed in the
(25:33):
early two thousands, which made a lot of people a
lot of money, but left the companies that were standing
really really struggling. I've been in the jewelry industry, in
the diamond industry for about fifteen years with to Beers
and with Cells, and what I needed to prove to
myself was that I could take the core marketing skills
as a CMO and transfer them to a category that
was about plastic and I p ideas. So I went
(25:56):
from talking to diamond suppliers to Disney or Hasbro or Mattel,
and I learned a lot of good lessons. Some of
them were very useful, some of them would don't do
that again. Those are usually the best lessons we they
really are. So we're back to Macy's. Yeah it's two
thousand and sixteen. Yeah, you're in the new CMO. Yeah,
(26:16):
you made some big changes early on. Can you describe them?
Talk a little bit about the big successes and also
talk about some of the things you tried it didn't work.
When I joined Macy's, I was sort of the first
external C suite how they're brought in in a long time.
Macy's has been enormously successful as a retailer. I mean
they were putting on astronomical growth rates right up until
(26:39):
about and they've been doing that by running a very
high frequency promotional transactional model that was really the absolute
central core of their marketing model. And what we started
to talk about was this isn't the old model was wrong.
It's just it doesn't work today. And it doesn't work
today because the media landscape is changing. So we can't
(27:01):
run the same model. The media vehicles that we need
were beginning to falter underneath them if we were going
to run that same model. Consumers shopping habits are changing profoundly,
so we need to invent a new model. We said, look,
we've got to get out of the transactional business and
we've got to get into the relationship business. And that
really then said, okay, if we're going to design a
marketing model that's predicated on building strong customer relationships and
(27:24):
looking at CLV rather than what was the last transaction
that you did, then lots of things flowed out of that.
We had to launch our own loyalty program. At the time,
we were part of the Annex assortium around plenty, and
we had to exit that and launch our star Wards program.
We had to start not just offering things at alert price.
(27:45):
We had to talk about our product and editorial authority,
reinforce the fact that Macy's has got good stuff so
that when we put it on discount, that pulls harder.
And when we put it on discount, there's a model
where our best customers can be constantly engaged. Brian the
brand and then sort of on top of that we
had to blend in the parade and everything like that
and all make it sort of work together. One of
(28:06):
the things I love about retailer is the marketing ecosystem
is so incredibly complex. You have a high frequency promotional
model which changed weekly. You then have a loyalty model
and a credit model lead into a product authority in
a brand model with co op running right through the middle.
It an e coom demand tactics on the other side.
So what that does is it creates almost like a
(28:28):
Rubik's cube of decisions that you have to flex between
in order to get the optimum balance in your marketing models,
and that Rubik's cube will flex based on the cycle
that you're in in that year. The Rubik's cue position
that works a Black Friday looks nothing like the Rubik's
cube that you're running for full fashion or Spring fashion.
So it's a sort of endlessly fascinating ecosystem to try
(28:51):
and get that perfect point of calibration in which, of
course you never succeed in getting the hallmarks of your career.
Seemed to be big ideas transformation, not afraid to take
a chance. Probably many of things don't work, but as
you say you learn a lot from it. I know
that's kind to be scary to the people there. You've
alluded to it a couple of times here. What kind
of culture is necessary? What kind of culture you have
(29:12):
to build within the marketing group? And what can I
culture does the company have to have to allow those
things to happen. Well, I think the role of cmos
today is to do two things. You call it maths
and magic. I call it the art of persuasion and
the art of precision targeting. But what cmos also have
to do is they have to be able to talk
to their peers in the c suite, particularly the CF
(29:35):
and CFO, and translate what marketing is doing into business results.
You have to be able to explain how you are
driving marketing productivity and the investment decisions that you are
making across complex media ecosystems and complex marketing tasks in
order to make sure that every dollar we spend is
returning as highly as it possibly can. And you have
(29:57):
to be brave in those decisions because I don't know
many more cutters today, if any, who are getting budget increases,
which means that you've got to bring analytical teams and
data science and all of the things that allow you
to make data driven decisions around your marketing decisions. And
then at the end of the day, you've got to
understand is you can have the best targeting in the world,
you can have the best decision and you can have
(30:17):
the best personalization. If you don't have good ideas to
put through them, you are minimizing the impacts of this campaigns.
I forget who said it, but it's absolutely true. The
best way to make a smaller budget work harder has
had bigger ideas, and I think part of that is
because I came from a culture where ideas were absolutely king,
and I saw the power of big ideas to transform businesses.
(30:41):
I'd like to get some insights what is different about
being on the client side from being on the agency side.
You've done both successfully. Agency side, you have a responsibility,
but you don't have the same degree of accountability. I
also think agency side the sheer breadth of marketing disciplines
that now in play, the involvement marketing and ad tech.
(31:03):
Cmos and senior plant leaders have to be such really,
really good generalists. Now, creativity and production of content is
a very small component of what we actually do. It's
a very important component, but it is a small component.
How has that changed what you look for in an
agency partner. That's a really good question. First and foremost.
(31:25):
They have to be capable of creating big ideas that
just have the ability to go wow, I would have
never thought of that. That's fantastic. And the relationship discipline
to push you when you need to be pushed and
listen when you're going well, I know what I'm about
to do is a bit daft, but bear with me.
There are methods in the madness that I think requires
(31:48):
really good account management skills. You have to be able
to push on people but at the same time support them.
When you work with the good account leaders, they are
exceptionally good at doing that. If you could give some
advice to your eighteen year old stelf thinking back, looking back,
what would it be, don't worry so much, take risks.
(32:08):
And I think one of the things I'm proudest in
my career is I have taken sort of risks. I've
done things that people said to me at the time,
we're best silly, but worse foolish. What advice would you
give for somebody who would like to be a CMO
of a major brand like you. Cmos have to do
two things simultaneously. They have to be, for want of
a better word, a really good cheerleader within an organization.
(32:31):
And they have to be able to be very quick
learners and editors. They need to be able to come
into a room add value to a conversation that they
have not necessarily been part of. You've got to be
fast enough on your feet, really good understanding of brand management,
really good understanding of consumer insight generation, and a really
good understanding of how you work with creatives to edit
(32:53):
good ideas, and then really good understanding of media and
investment decisions. So you've got to chase breadth of experience,
not just depth of experience. Because the role is so
broad now and has so many disciplines within it, you're
never going to be the master of all of them,
but you've got to have a pretty good working knowledge
of most of them. And then you find people who
(33:15):
are subject matter expertise and you figure out a way
to work with them in a way that empowers them.
We always in math and magic. With math and magic shoutouts,
you've seen a lot of marketing and business folks who
is the best one. On the analytic side of the
math side of the marketing equation, people like Terry Prue.
(33:36):
We're really at the forefront, really beginning to develop the
marketing mixed models that we all now take for granted.
Give us the best. Now on the magic side, the
creative there's just some campaigns that I absolutely admire. The
amazing old campaigns. You know Nike when it first came
out we just did. Is that amazing book that Scott
Bedbry wrote about the origin of the just dird idea?
(33:59):
That campaign was. I wanted to get inta appetizing Rich,
You've got a great story, you tell it well. The
accent helps. Thanks for joining us. Thank you so much.
There are a few things I picked up in my
conversation with Rich. One, don't just be a marketer, be
(34:19):
a cultural engineer and the beer's. Rich saw an opportunity
to help men do a better job articulating their feelings.
So he created a product, the three Diamond Ring, and
a campaign past, present, future around it to talk to
your customer without preconceived notions. When Rich's team talked to
women about their desire for self expression, it led to
a whole new product the right hand diamond ring, which
(34:42):
became a cultural phenomenon, not to mention a business success.
Three ideas are still king, As Rich says, you need
data to translate marketing into business results, but without big
ideas behind them, the data is useless. Just look at
what he's done at Macy's. Thanks for listening. I'm Bob Pittman.
(35:05):
That's it for today's episode. Thanks so much for listening
to Math and Magic, a production of I Heart Radio.
This show is hosted by Bob Pittman. Special thanks to
Sue Schillinger for booking and wrangling our wonderful talent, which
is no small feat Nikkiatore for pulling research bill plaques,
and Michael Asar for their recording help, our editor, Ryan Murdoch,
and of course Gayle Raoul, Eric Angel, Noel Mango and
(35:27):
everyone who helped bring this show to your ears. Until
next time,
Host
Bob Pittman
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