Brutally Misunderstood

Marketing, that is. Sergio Zyman is still on a crusade to change that.

HE HAS ALREADY TRASHED THAT E-MAIL FROM THE TRINKET SALESMAN.

Sergio Zyman sits in his modest office on the outskirts of Atlanta, looking for yesterday’s e-mail to prove his point that promotion is still about trinkets and trash. He is an unlikely advocate for promotion marketing, yet his mantra — “Sell more things to more people more often for more money” — sounds suspiciously like promotion strategy.

Zyman is still fighting his jihad against “lazy marketing,” artful commercials and price cuts that don’t tie back into the brand essence. Since his mid-1990s heyday as Coca-Cola’s chief marketing officer, Zyman’s rant has been mostly against advertising. The nickname “Aya-Cola” (a badge he carries with casual pride) came from Madison Avenue types unhappy with being treated like vendors and being held accountable for sales.

My, how times change.

These days, Zyman travels widely as ceo of Zyman Marketing Group, whose clients include the NBA, Bombardier, and cement maker Cemex Mexico. He still talks about rewriting the rules for marketing, but the world has caught up with the “radical” ideas put forth in his 1999 book, The End of Marketing As We Know It — mainly, that marketing is about selling.

“I sold sugar water with bubbles for a long time,” he says. “You have to tell stories to do that.”

Zyman argues that marketers lack direction and passion. “Coke has more people working at the company than for the company,” he says. “It’s more like the Red Cross than a marketing company.”

Mostly, he opines, marketers lack a process for systematically setting strategy and following through. And he’s the first to say it ain’t brain surgery.

“Crossing the street is the best business plan we devise every day,” Zyman says. “You set an objective: Get to the other side. You analyze the environment: Look both ways. You calculate how long it will take to cross, what the risk is, and you come up with an alternative. If a car comes, you don’t stand in the street and say, ‘I’m committed to the business plan.’ You run to the other side. Changing your mind is a sign of strength.”

His latest tome, Building Brandwidth: Closing the Sale Online, furthers Zyman’s discussion of a scientific, results-based approach to marketing. In the book, he derides promotion as “cups and fleece pullovers with a logo” and “bribes.” That’s where the conversation with PROMO began.

PROMO: What’s wrong with promotion?

ZYMAN: It is not grounded in strategy. It’s grounded in the event, in the trinket — the Beanie Baby — not in figuring out what you’re trying to do. Am I trying to rent volume? That’s what most promotions do. Or am I trying to find something consistent with the essence of the brand? [I’m on] a holy war to bring discipline and recognition to the function of marketing, and promotions is a critical part.

PROMO: Promotion has been more disciplined than advertising for a long time, and much more accountable to results and sales than other marketing disciplines.

ZYMAN: But it’s hit and miss in many cases. Many promotions start like this: I’m sitting in my office at Coke and I get a call from someone who says, “I have exclusive rights to the traveling exhibition of the Titanic, and I have a great promotion to give away replicas of the Titanic.” I have an e-mail that just came from a guy that says, “I have a promotion device grounded on the Pearl Harbor movie and I think it will be spectacular for Coke.” Where is the strategy for this?

[In the mid-‘80s,] Michael Jackson decided to sell his rights to somebody and came to see us at Coke. What was I going to do with Michael Jackson? I couldn’t reconcile it. He ended up selling his rights to Pepsi.

Look at Beanie Babies. Was McDonald’s sitting around saying, “I have to find a way to connect with moms and kids at the same time and I want to go look for a promotion?” No. Beanie Babies existed on their own. They went searching for someone that was willing to accept the product as a property.

PROMO: But that’s looking at it from the salesman’s perspective. It’s up to the brand manager or promotion manager to say whether the trinket is on strategy.

“Go back to the core essence in everything you do. People don’t do it. People go for the trinket.”

ZYMAN: Right. I was in Cairo a few years ago and saw a promotion that gave away bicycles. I asked, “Why did it work?” My guy said, “Because people love bicycles.” And I asked, “Why did you decide to do it the way you did it?” He didn’t know.

I started promotions big-time at Coke when I was there the first time [from ‘78 to ‘88] because my objective was to have people open bottles. I was looking all the time for devices that would help me sell more product.

In my later years [‘93 to ‘98], I looked for things that would go to the core essence of the brand. I wanted things that would talk about the greatness of the can and the taste of the product — that would actually embody the strategy. The first element is destination: What is your core business?

Routine is the largest enemy of growth and creativity. You don’t question what you do. Look at what happened at the Four As: [meeting in April: WPP chairman] Maurice Levy stood up and said, “We screwed up.” The new president [FCB Worldwide ceo] Brendan Ryan is saying, “Creativity is not the way to go, we have to sell product.”

PROMO: When that happened, a lot of people in promotion said, “Duh. That’s what we’ve been doing all along.” Promotion has been a results-driven business, partly because it’s measurable. It has become more strategic the last several years. Do you agree?

ZYMAN: (Pause) I think it has become partially more strategic. I don’t think it has become totally strategic.

PROMO: Where do you think it needs to go?

ZYMAN: To 100-percent strategic. We need to get to the point where we recognize the power of promotion. Fundamentally, you have a product, which eventually becomes a by-product. Promotions are supposed to add value. I pick up the Sunday paper and see 150 pounds of promotions and coupons and I’m still seeing the same old stuff. What I want to know is, if I have the Olympics or NASCAR as a property, how do I put together a promo that actually says to consumers, “If you buy this thing, you’re going to get something that’s going to link to the brand for a longer period of time.”

Am I seeing a positive trend to more strategic stuff? Yes. The problem is not in the promotions industry. The problem is in the advertising and marketing industry.

PROMO: A lot of our readers would agree with you, and say that the problem is starting to go away as clients hold their ad agencies more accountable. At the same time, promotion — especially experiential marketing — has become much more image-oriented.

ZYMAN: Here’s one of the greatest promotions I’ve ever seen. In the late ‘70s, Barclay gave away a carton of cigarettes to everyone who called their 800 number. It’s what I call “conscious trial,” because consumers had to go through an activity. People spent all night dialing to get through. When you got that carton of cigarettes, you wanted it. You wanted to smoke those cigarettes, think about it, look at the packaging — you were buying the brand.

PROMO: Were they buying the brand, or just a free carton of cigarettes?

ZYMAN: You were so committed to the thing, you had to actually be thinking about the thing for a long period of time. It was well thought out, because they were forcing conscious trial.

PROMO: Or self-selecting, which is really standard for sampling these days.

ZYMAN: Maybe today it’s all fixed up and I haven’t kept up with it.

Look at Coke’s Olympic Torch run. When we did it in the U.S., it was unbelievable. When we did it in Japan, it was repetitive. The difference was, in the U.S. we created celebrations and hired political advance people to knock on doors before the run. We gave product away, and coupons. We could actually see the rise in sales afterwards because we connected with the consumer on something important. It actually went to the core essence of the brand: sharing, hoping, and community.

In Japan, it was a joke. They were more interested in having a torch you could carry underwater.

PROMO: A lot of your examples are tie-ins, borrowed equity. What about promotions that are only about the brand – and sometimes become brands themselves? Like the Pillsbury Bake Off, Campbell’s Labels for Education, or Happy Meals?

ZYMAN: Pillsbury Bake Off I like; Labels for Education I don’t get with regard to the core essence of the brand.

In Mexico, I was working for Cemex, the largest manufacturer of cement, and the Pope was coming to Mexico. They donated all the concrete to build a cross that the Pope was going to bless. I said, “Are you going to give miniature crosses to construction workers (who are incredibly religious people)?” They hadn’t thought of that. I said, “Are you going to have a celebration where you allow the people who actually buy the cement to come and see the cross blessed?” They didn’t think like that. But that’s the essence of the product.

We came up with a promotion giving away floors in poor cities — actually go put a floor in a house that was basically dirt. That’s the core essence of that brand. I love those kinds of promotions.

PROMO: It speaks to the product, its usage, and what the consumer needs. Those are the tenets of the way you look at marketing.

ZYMAN: Sorry, but that’s marketing: Selling more stuff more often to more people to make more money in a more efficient way.

The reason I suffered in my career for not being heard or not being able to make a contribution is that marketing was perceived as unnecessary, a budget to cut to make the numbers.

My model of marketing is dairy, where you have the stupid cow that doesn’t speak the language you do and produces milk everyday. Either you sell it, or you throw it away. You can’t go to the cow and say, “Tomorrow, half.” The cow is going to give you all the milk. Every manufacturing facility should believe that everything they can make needs to be sold.

PROMO: Isn’t that where people get caught in price promotion? If the cow is going to produce more milk tomorrow, we better sell all she’s given us today.

ZYMAN: That’s lazy marketing. We don’t spend any time coming up with how we can connect with consumers. An idiot can do a price promotion. A monkey can do it.

“The biggest problem we have is those damned consumers. They’re not cooperating with a lot of these companies.”

In 1993, Coke sold nine billion cases, and by 1995 we were selling 15 billion. By the way, we spent $5 million a year on marketing throughout. How did we do it? We aligned promotion strategy. We got stuff that was recurring. It was about discipline, every single time. And it was about continuing to do the things that work.

Remember Cairo, the bicycles? The next year they did something else. I asked, “Why don’t you do bikes again?” He said, “We did that last year.” They gave away 10,000 bikes. And I said, “How many people are left without bikes?” If bikes work, why not do it again?

PROMO: Say 10 people see 10 versions of a “relationship marketing” message. What’s the balance between brand essence and customization? Who defines the brand essence, the brand manager or consumers?

ZYMAN: The brand manager. The core essence of brand Coke is continuity and stability — nothing to do with refreshment or taste. Pepsi’s core essence is choice and change. Apple’s core essence is community. McDonald’s’s is: You always know what you’re going to get. You don’t expect it to be spectacularly good, and you don’t expect it to be crappy. You know you’re going to get a meal for a reasonable price.

PROMO: Do you think Disney’s brand is being damaged by its relationship with McDonald’s? You talk in Building Brandwidth about Disney diluting its brand via Happy Meals.

ZYMAN: I don’t understand why they want to get together, strategically. Similar audience? Lazy marketing. McDonald’s has all the consumers they need — 46 million transactions. The question is, how do you get to 47 million?

PROMO: Customer service plays a role building brands. It’s the emerging piece of marketing strategy right now.

ZYMAN: Everyone talks about CRM. We say, “It’s customer understanding before you can actually manage the customer.” Airlines don’t feel manning gates is worth the effort because customers only want to buy cheap tickets. So airlines don’t want to invest in treating customers better. It eventually hurts the brand. We just had a little bump in the economy and all of a sudden you see promotions cropping up — and it’s all price. Ninety-nine dollars, anywhere you want to go.

PROMO: But that’s easy to do fast. It’s hard to do value-added promotion quickly.

ZYMAN: If you were doing value-added promotions already, you’d be the one who doesn’t suffer [in an economic slump].

What I argue for — which you don’t like — is, “Give me 20 percent more product in my detergent. Then tell me you’re giving me 20 percent more so I can experience how white this detergent really cleans my shirts,” which is the core essence of that brand. Go back to the core essence in everything you do. People don’t do it. People go for the trinket.

PROMO: Do you think there are too many brands?

ZYMAN: Absolutely. They’re going to go out of business. The biggest problem we have is those damned consumers. They’re not cooperating with a lot of these companies. By not cooperating, they’re putting companies out of business. Vlasic didn’t go into Chapter 11 because they built too many plants [but] because consumers didn’t buy enough pickles. Consumers know their No. 1 right is to choose, and that means also to not choose.

PROMO: If the essence of marketing is making it a value proposition for consumers and still profitable, is it too expensive to make it valuable to consumers?

ZYMAN: No. You just have to make sure whatever you’re doing has recurring value. If it’s a one-off, you have to pay more to rent value the next time. If you discount 20 cents, next time you have to discount 25 cents.

Look at what happened with the contour bottle at Coke. It cost us 20 percent more to put the product in contour bottles, but we could sell it for about 50 percent more. We were selling 20 ounces at 89 cents and two liters at 99 cents. I never wanted a six-pack because that communicates “discount.” I want to sell at full price, thank you very much.

People were taking 20 bottles off the supermarket shelf and putting it in their carts. The bottlers were making money like thieves.

PROMO: Where will we be in five years?

ZYMAN: Fewer companies, fewer brands. It will get harder and harder to have product differentiation. You have to find new ways to connect. You can’t say, “Drink it when you’re thirsty,” because they already do. It’s about finding new ideas. We are animals of consumption. If people give us reasons to consume 20 different things, we will.

Marketing is still brutally misunderstood, in every business. At Apple, at The Gap, marketing is product. Marketing has always been surrounded by a veil of mystery.

I believe we have to bring stuff up to a [higher] level, and I scratch my head when I see people doing it the wrong way.

Click here for a transcript of the full conversation.