Learning from Private Equity – Marketing Society Conference part 1
This is the first of four posts on brand leadership stories from last week's Marketing Society Conference. After a slightly shaky start (the CEO of The Futures Company telling us you can't forecast the future?!), it turned into a cracking day, with some brilliant case studies.
The first post is on "Learning from Private Equity", based on an interview with Martin Glenn, CEO of Birds Eye, and Damon Buffini, Head of Permira, the private equity owners of Birds Eye.
This was a great quote from Martin. His point was that companies get comfortable and do things in a certain way because… that's the way they have always done things. Achieving growth normally means forcing and cajoling people to change. As he said, "This needs insight, creativity and courage." And I think the last of these, courage, is the one that sets apart the really successful people.
As one of my INSEAD professors said, "There is only one person who likes change. A wet baby."
2. "Marketing is not about giving consumers what they want, but rather what they value"
Another Glenn gem that rightfully kicks into touch the idea that marketing is about understanding and satisfying consumer needs. As consumers, we all want the best possible product at the lowest price. Marketing is figuring out what people really value, and what they don't. And then creating a business model to deliver this.
A good example is the work Tom Allchurch is leading at Bigham's, a food brand I posted on here. He is working on re-engineering the packaging of some of his products to cut costs, but in a way that won't make the offer less appealing. For example, by changing suppliers, or using lighter enamel ramekins for the pies.
3. "Today its not the big eating the small. Its the fast eating the slow".
This was Damien's point. I've heard it a lot in the internet world. But interesting to hear him say its also important in the consumer goods world. The rate of innovation has increased, both from branded competitors and retailer own label. And the time it takes many big companies to get anything out the door is still scary. More on this in the next post on Reckitt Benkiser, one company who do recognize the need for speed.
4. "Turning spending from general to specific"
This was Damien's response when asked the old favourite about private equity firms raping the companies they buy by cutting marketing spend. And its spot on. What he forces companies to do is to stop general marketing spending, and re-focus it on the things that, as we say, "SMS" – sell more stuff.
One example is moving from fancy brand "theme" advertising to communication that builds the brand and the business at the same time, as I recently posted on here.
5. Execution is key
Martin's final advice was to start your marketing life in sales, so you learn how to "turn a great idea into a great programme." Martin used to lead marketing at Walkers, who are grand masters at really activating and amplifying in store great brand ideas, such as their Brit Trips promotion. As Martin says, "An average programme brilliantly executed will always beat a brilliant programme poorly executed".
In conclusion, learning from private equity means being brave enough to drive change, re-focusing marketing on stuff that helps you sell more stuff and remembering that excellent execution is as important as smart strategy.