Glenn: Hi, everyone. I’m Glenn Gow, Founder & Advisor of Crimson Marketing. Welcome to Moneyball for Marketing where we talk about the incredible changes happening in marketing organizations around big data and marketing technology. We feature marketing technology insights from the top marketers in the world. The reference to Moneyball is from the story of how the Oakland A’s baseball team were able to win and win and win because they figured out how to use data and technology to their advantage. If you’d like to learn about how to use big data and marketing technology and marketing to help you win visit us at CrimsonMarketing.com or email us at info@CrimsonMarketing.com. And now on to our podcast.
Today I am very pleased to welcome Russ Mann, the CMO of Nintex. In this role Russ is responsible for the global brand, demand, digital product, and field marketing initiatives of the company. So, how does Nintex describe themselves? Nintex is the global standard in workflow automation software for mobile, Cloud, on-premises, and hybrid environments. Russ, it’s a pleasure to have you here.
Russ: It’s great to be here. Thanks for inviting me, Glenn.
Glenn: Russ, I’m excited to have you as a guest because I know you are a fan and passionate about using analytics to manage marketing and you have some stories for us. So, why don’t we jump right in?
Russ: Absolutely. I worked at analytics companies like FICO. I developed analytics companies in marketing like Covario who is the leader SEM, paid search, and SEO, software analytics and services, and now I’m at Nintex and I hope I can add a couple of good anecdotes for your listeners today.
Glenn: Awesome. So, where would you like to start?
Russ: Well, coming from those different analytical companies and software companies and having worked in marketing for almost 20 years now there’s a couple key lessons that I’ve learned, I thought I might share, and one, in fact, refers to the originator of the phrase of the name of your blog. So, I know the blog is called “Moneyball for Marketing.”
Glenn: That’s right.
Russ: And the person—the podcast, sorry, and the person who coined the phrase “Moneyball” originally was Billy Beane, the general manager and coach of the Oakland A’s, and he used that phrase to describe baseball and the hiring and selection of a baseball team, and the management of that team. And so, one of the things I learned from Billy Dean who actually spoke at one of the Covario conferences for our customers was, “When you’re doing analytics in any discipline try to create your own unique metric for the analytic. Don’t just try to use the general analytic.” I’ll come back to that in a second.
The second thing we might talk about today came from Jeff Ma. Jeff Ma may be a little well less known, but Jeff Ma was on the MIT blackjack team that was known for basically card counting and for making a ton of money until they were outlawed from the Vegas casinos, and Jeff was featured in the movie “Bringing Down the House” where his alter-ego was named Kevin Lewis, but it’s a true story. And Jeff came to spoke to my clients back at Covario about how they applied their card counting analytic in a consistant manner to make all that money.
And then, finally, here at Nintex we’ve been learning that once you have your unique analytic and one you’re applying it consistently you, of course, want to automate that. So, learning from Billy Beane, the author of “Moneyball,” and Jeff Ma who was featured in “Bringing Down the House,” we’ve learned that you want to have your own unique analytic, you want to apply it consistently, and then you want to automate that, but there’s some great stories I could tell you of how different companies have used those lessons if you’d like to hear them today.
Glenn: I would, and I do have a story before—or a question before we jump in which is a lot of companies that we talk to want to compare themselves against benchmarks, right? They want to say, “Well, if the industry average is X and we want to be a little bit better than that,” and that’s a little bit different than what you’re saying. I’m sure that you would agree that some benchmarks are appropriate, but you’re also saying, “Hey, guess what? In your company there are probably metrics that are going to help you beat the competition if you find those metrics.” Is that what you’re saying?
Russ: Absolutely, absolutely, and that ties right into—Billy Beane did not throw away all the regular metrics for the Oakland A’s. He still measured home runs, hits, and RBIs, but the unique metric they came up with was times on base, and now that seems like a no-brainer, but back then when he invented it times on base was not a metric that people tracked. So, he and his analyst featured in the movie with Brad Pitt came up with this unique metric and they tracked that and correlated that with the other metrics to then make that their most unique metric. So, similarly when I was working with Procter & Gamble as a client they were interested in SEO, that’s ranking on Google, and at that point there weren’t a whole lot of SEO metrics so there weren’t even a lot of things to compare to except your rank on Google.
Russ: So, we came up with a 50 point analytic score kind of like a FICO score that you could use for assessing your health on Google. This came from the CEO of P&G at the time, A.G. Lafley, asking his CIO, “How are we ranking on Google? What’s our Google strategy?” No one asked what the SEO strategy? They wanted a Google strategy.
Glenn: Right, right.
Russ: So, we created the Google metric, basically the SEO metric, and it was a unique multivariate score based on those 50 points, and we were able to patent that score eventually. And not just P&G, but other companies ended up using that single score, the SEO Audit Score, to determine their SEO health, and to manage their website presence across many languages and many sites to improve their SEO, their traffic, and eventually their conversions and their business objectives. So, that’s an example, of course, you don’t want to get rid of the prior metrics, but you want to create something that’s unique to your strategy and unique to your discipline.
Glenn: And I’m going to guess in that example P&G then had a competitive advantage over other consumer packaged goods companies.
Russ: They absolutely did, and of course, because we created and patented the metric we ended up selling it to other folks, but that then leads to the second thing. You can have a metric, but if you don’t apply it consistently, or if you don’t use it appropriately then you make it more or less an advantage out of it, so while P&G did a great job of applying it consistently other companies might have used that score a little differently, might have tried to combine other unique metrics.
So, a great example from a different case, which I had mentioned, so Jeff Ma in “Bringing Down the House,” in his life story, got roped into becoming a card counter basically, it’s a great story, everybody should read “Bringing Down the House.” And so, it wasn’t just that they created a unique way to count cards, which is very simple, it was +1, 0, -1 depending on the faces that they saw coming up, but then they had to apply that very rigorously and very consistently across a team, that was the other unique thing about “Bringing Down the House” is that all the people on the team had to know the system and they all had to apply it religiously, and they had to communicate well when they were applying it.
So, similarly, I can tell you when I was running my FICO as a division of Fair Isaac, which is the credit scoring company, we had the FICO score which was a unique analytic and we were trying to sell the scores to consumers. And at that point we weren’t doing a whole lot of visual marketing and I asked my Chief Financial Officer, “I’m sure all marketers out there want more budget. I needed more budget to market my unit.” And the CFO said, “How much do you need?” And I said, “I need $2 million.” He said, “I’ll give you $200,000. Don’t lose it all in one place.”
Russ: Yeah, because CFOs, of course, they look at marketing as just the bottomless pit of spend. They don’t look at, necessarily, as true marketing ROI, MROI, is that right?
Russ: So, I said, “I’m not allowed to lose $200,000? Or I’m only allowed to lose $200,000 or spend $200,000?” He said, “Just don’t lose more than $200,000.” And I said, “Ah-ha!”
Glenn: That was the key question, right?
Russ: Exactly, the key question. So, I got some of my guys on my team, I said, “Let’s start focusing on paid search and SEO,” because the team wasn’t doing that yet as well as some email marketing, “And let’s be very analytical about—let’s access single session transaction value and lifetime value transaction, right? So, lifetime value of the customer.” So we, in the first 90 days or so, we lost about $50,000 on single session transactions. So, we were acquiring customers unprofitably, but I was trying to dial it in. I had not lost more than the $200,000 yet, so after we dialled in using our SEO and SEM metrics and single sessions statistic and the lifetime value statistic, I told my guys, “Make that money back up and then dial it up so we’re always acquiring customers profitable.” So we, in the first 90 days or so, we lost about $50,000 on single session transactions. So, we were acquiring customers unprofitably, but I was trying to dial it in. I had not lost more than the $200,000 yet, so after we dialled in using our SEO and SEM metrics, and single session statistic and the lifetime value statistic, I told my guys, “Make that money back up and then dial it up so we’re always acquiring customers profitably.”
So, around the middle of the second quarter the CFO kind of came down to our floor and said, “What are you guys doing? You haven’t lost any money. You’re making money like crazy and you’re growing the group like crazy.” And I said, “Well, you told me I wasn’t allowed to lose any money and, in fact, I’m not losing any money at all. I’m making money on every transaction on every click that we pay for we know which words, which phrases, how much, how fast.” And so, that became—well, he said, “If you can prove that you can acquire customers profitably then you can spend as much as you need,” because we were acquiring it. And so, the funny thing was—well, two things.
First of all, the next quarter the CFO would come down to me and at the beginning of the quarter he would tell me to acquire customers profitably at the lifetime value metric, which was great because we could actually acquire customers unprofitably on the first transaction because we knew it would be profitable over time, but the other interesting thing was at the end of every quarter, because we were a smaller unit in the grand scheme of things, he’d come down and he’d say, “We need more revenue. Dial up your revenue machine. Don’t worry about profitability.” So, he realized how powerful digital marketing could be and how real-time with the analytics that we had we could dial it up and dial it down at the beginning of the quarter and the end of the quarter.
And, finally, the third lesson from this anecdote was by the end of the year we had spent $2 million on digital marketing. It was almost exactly the number that I had asked him for up front, but we had done it all profitably. So, there’s some sub-lessons in that one. You know, make sure that you can measure what you’re spending, for a single transaction, lifetime value metrics, and make sure to be partnering with your CFO and explaining the marketing ROI when you’re looking for budget. Don’t just be asking for a bunch of Budget without a real hardcore analytical reason.
Glenn: Well, Russ, I really love that story for a lot of reasons. One of them is that more and more we’re seeing the CFO play a key role in marketing, and asking the hard questions of marketers about how are you really going to prove the return, and it sounds like that’s exactly what you did here.
Russ: Yeah, a lot of CFOs still look at the CMOs as—they look at marketing as finger-paints for adults and, I think, if there’s a new school of marketers, I call them the “Gen X CMOs.” The baby boomer CMOs, in general, used to prefer TV ads, a lot of creative. The Gen X CMOs really are a lot more do-it-yourself, a lot more digitally oriented, a lot more analytical. And so, the new breed of CMS, I think, is much more focused on these types of analytics and Moneyball marketing like you’re talking about, Glenn.
Glenn: Fantastic, that’s a great story, and congratulations on making money for the company and still spending your $2 million.
Russ: Yeah, exactly. And then, of course, that was 10 years ago, that was 15 years ago, that was, I mean, literally when Google was just spinning up, it was before Facebook, believe it or not, and before Twitter. And now we have even more channels for marketing, we have more ad types than ever before. We’ve got display ads, you’ve got rich media, we’ve got video, we’ve got paid search, SEO, there’s so many—and that’s just online. When you think about still, offline, like I mentioned, there’s still TV ads, there’s print ads. There’s so many media channels that you really have to have your analytic, you have to apply it consistently, and then there’s no way one person, or even a team of people, can keep it all in their brains and do that consistently 24-7 in a global real-time world unless you’re automating.
Russ: And that’s where my new company that I’m working with, Nintex, comes into play as I appreciate the little intro you did on Nintex on global standard and workflow automation, and we can take both analytical and non-analytical processes whether they are in marketing, sales, service, or back office things like HR and legal and finance, and automate those workflows because there’s still, any company out there, there’s a lot of things that are not automated and they aren’t available in the off-the-shelf packages like Salesforce.com or Marketo which we use here, both of those packages, but even in those there’s a bunch of workflows that we’d like to have automated. We’re doing that here at Nintex. And I can tell you there’s some great examples, in fact, from the financial services and banking world that are using Nintex along with their analytics like credit scoring to improve the customer service and revenue and customer engagement experience.
So, for example, in Australia and New Zealand the ANZ bank is using a combination of credit scoring analytics, marketing analytics, and Nintex workflow to decrease the time and increase the probability that they can open lines of credit for businesses that are looking for lines of credit to grow their business, they were able to decrease their qualification and open process from a week down to, basically, a day and half, you know, 24 to 48 hours through the use of analytics and workflow automation. Similarly, they did it for consumers too where they can now even better market to, score, and open consumer accounts basically in real time using analytics, marketing, and workflow automation.
Another great story here in the states is UTI down in Scottsdale, UTI is a school for mechanics, fleet mechanics, automotive mechanics, and they’re taking young men and women and helping them start their careers off. Well, to do that a lot of those students need financial aid, student loans, coming from the Federal Government. So, to help these students get started UTI uses a combination of analytics, marketing, and workflow automation to assemble these financial aid packages and to help the students get their loans which, of course, which is also the UTI, it’s a big piece of UTI’s revenue and growth.
Russ: And so, those are all examples in financial services, but you can see that also happening in travel and hospitality. You can see that in any kind of B2B services. We see that, basically, in every industry, in chemicals and manufacturing, every industry can combine analytics, marketing, and sales automation like Marketo and Salesforce, and workflows like Nintex, to really create an end-to-end new form of experience for customers whether it’s in sales or in service to improve that engagement and increase the value of their company.
Glenn: That’s really interesting. So, there’s a lot more data available to companies now and now that we have software available to help automate that we can take a look at how we can be smarter about the customers that are approaching us and I think that’s part of the story you’re telling, but then you layer it onto other processes in the business and you really are improving the whole customer experience because customers want everything as quickly as possible, and if you automate it you’re just enabling them to buy from you more easily.
Russ: Right, and as personalized as possible. So, yeah, if I could sum up the three things from today at least is that, so Billy Beane in “Moneyball” taught us that we should try to use the industry standard metrics, but also create your own unique metric and analytics. Jeff Ma in “Bringing Down the House” taught us to take those unique metrics and apply them consistently and rigorously, not just with yourself but with your team, and have really good communication about what you’re doing. And then, of course, here at Nintex and what we’ve seen at other companies is that if you can take that unique metric as well as the other benchmarks, apply them rigorously with communication, and then automate them, you can really get global real-time personalized scale with what you’re doing for any business, and that any CMO can measure that and then go confidently to their CFO, ask for more budget and prove that you’re generating real ROI.
Glenn: I’m sold! You know, more and more we’re working with clients that focus on what we call “Marketing Performance,” and that’s exactly what you’re talking about is we can prove, according to your stories, you’re proving the value that marketing is providing at the financial level and I think ultimately that’s what CMOs need to drive for. So, Russ, let me ask you one additional question, we have a few minutes left, on where do you see the next year or so? What do you see in the evolution of marketing analytics? What are some things we should be looking for as marketers?
Russ: Wow, that’s a great question. I think we are still at the early ages, or early innings using a baseball metaphor, of marketing analytics. There’s some great packages out there and I think folks are still developing the automation and the analytics. Originally, for example, the last company I was with, we developed the unique metric just for SEO and that was Covario and now Rio SEO has the SEO metric and we started doing cross-channel from SEO to SEM paid search. There are companies out there like Adometry which was acquired, C-4 visible here in Seattle, and others that are doing attribution analysis. And there’s companies like—oh, shoot, market share partners down in Los Angeles that are doing cross-media kind of media—I’m trying to think of what it’s called. The media analysis from the top down, so there’s some folks who are looking from the top down do a media mixed analysis trying to tell you how to spread your media over the course of the year or cross-channel. And there are folks doing it bottom up from the cookies, from the cookie level at the individual level, trying to figure out what’s the best way to attribute, and transaction whether you’re a B2B or B2C customer. I’ll also probably give out another shout out to Tealium down in San Diego which is actually—they started off focusing on tag management, and tag management, if you’re managing your tags across all your sites you can start doing some really interesting digital marketing. And one of the best authors out there and bloggers besides yourself, Glenn, on marketing analytics, Scott Brinker from Ion Interactive.
Glenn: Oh, yeah, sure.
Russ: Doing some great work in marketing analytics. There’s, of course, Landing Page Optimization, Tim Ash is doing some interesting stuff. And, oh, the guy from Google who’s always fun to listen to. I have to look up his name, but there’s so many areas that we can apply analytics and we haven’t even started getting into how we combine the machine analytics like the IOT-type analytics where we’re taking data from machines and applying that and working with human interaction to then do even better real-time personalized leverageable and scalable marketing. So, I think those are some unique spots for you for today on where it all might go.
Glenn: That’s fantastic. You make me excited for the future and thinking we are in the early innings of a long game.
Glenn: So, Russ, thank you very much. These were great stories and I’ve learned a great deal, so it’s really appreciated.
Russ: Thanks for having me, Glenn.
Glenn: If you like this podcast please subscribe and rate us on iTunes and tell your friends about us. You can also go to our website, CrimsonMarketing.com, and sign up for our free monthly newsletter featuring the very best of our marketing insights, featured Moneyball for Marketing podcasts, and one of our favorite features called, “Bad Marketing,” or email me at info@CrimsonMarketing.com. Thanks for listening to Moneyball for Marketing from Crimson Marketing. Have a great week and let us know if we can help you in any way.