Don Schultz, professor emeritus-in-service at Northwestern University, is often considered the pioneering thinker in the discipline of integrated marketing communications. At 80 years old he is still actively challenging conventional wisdom and advocating for change within the marketing profession. I was honored to have a one-on-one conversation with him at the recent BMA conference in Chicago. I found his ideas refreshing and frequently aligned with my point of view. Here are the highlights of our discussion.
Ellett: What marketing lessons from the past still apply, and what do we need to rethink?
Schultz: What still applies from the past, which unfortunately very few organizations have learned, is it all starts with the customer. The big problem that most organizations have is they’ve all fallen in love with their products and they want to go tell people about it. They want to say, “Look what we’ve done. Look what we’ve made. Look at how important we are.”
What we’ve converted to over the last half a dozen years is starting with the customer. The digital stuff and the technology have allowed us to look at customers and customer behavior. What we’re doing is trying to read behaviors.
Schultz: What they do. I don’t care what they say because they have no clue what they’re going to buy anyway. That’s even true in a B2B situation. You must look at their behaviors over time, and this is what I think many people don’t understand: You’ve got to look at data longitudinally.
We are so focused on snapshots. What happened last quarter, what happened last week, what happened the last six months? You can’t understand what’s happening to the market by looking at snapshots. You got to look at longitudinal data. We’re trying to work with data that’s got six, eight, 10 years; and if you can look at that and start to look at the patterns, you can start to understand what’s going on. So that's what we’re doing.
Now the other thing that has changed pretty radically is B2B organizations have so much data. But they don’t do a bloody thing with it. I mean it just lays there. It comes in, it piles up and nobody looks at it because they’re all so busy trying to figure out what to do next.
To a certain extent they are blinded by the way they’ve historically done things. I don’t have any trouble training students. They’re easy to train. You can give them the tools, you can give them the techniques, you can give them the concepts, they’ll pick them up and they’ll run with it until they get inside the organization and the organization is not ready to accept it.
It’s this same old, “that’s not the way we do it here.” So I believe the biggest challenge today is, how do you retrain the management of organizations?
Ellett: Which companies come to mind that have seen the light and are doing things right?
Schultz: Obviously Amazon. Amazon knows all of this stuff. They’ve already got all of it. To a certain extent some of the technology companies are getting pretty good at it. The one I continue to watch is Apple because Apple really seems to understand. Apple ignores all of the traditional things. You’ve been to an Apple store, what’s it like? No flashing red arrows, no big signs, no discounts, none of that stuff. You walk in and the first thing they ask you is, “What are you trying to do? What problem are you trying to solve?” They start with the customer and then work from there. Very few organizations are prepared to do that.
That’s particularly true in B2B because the sales force is all designed and all trained to go in, grab a bite of throat and convince [the customer] to buy. If you don't close you’re a failure.
Ellett: I’m working on my next book [a blueprint for modern marketing] and Block One in the framework is “Put the customer at the center.” This seems so obvious to both of us.
Schultz: But it’s so difficult.
Ellett: Why do you think it’s so hard for companies?
Schultz: Organizational structure. Command and control systems. Hierarchies. They cannot break away from it. You’ve got managers and senior managers who want to control. They don’t want to do hands-on, but they want a controlled system so that they can look and see what’s happening all the time. If things go wrong they want to be able to point out who did it.
Ellett: If you were advising a CMO on the one or two things they should do to become more customer-centered, what would they be?
Schultz: What you have to do is build the organization around the customer, not around lines and boxes. That’s the biggest issue, because as long as you’ve got lines and boxes, as long as you’re putting people in cubicles, they’re going to stay there. You kill all their ambition, you kill all their incentive, you kill all their inquisitiveness; all that goes away. The biggest problem, certainly in the U.S., is command and control. It’s been with us for a long time and we can’t get rid of it.
Ellett: One of the techniques that we’re fans of at nFusion is mapping the customer decision journey.
Schultz: It sounds good; it doesn’t work.
Ellett: Why do you believe that?
Schultz: Your premise is that they take a journey. And a journey means I’m going to go from here to here to here to here, and that’s not the way customers work. They go here and they go there and then they come back over here. And they go this way and they go up/down and they start over. It’s a real mish mash.
The big problem is almost every marketing tool we’ve got is linear. Customers live in a Tinker Toy world. We keep trying to force them into a linear process.
Ellett: What if you’re able to describe that nonlinear process, however random that is, and turn that into models?
Schultz: Well I’m not sure you can model it. I think what you can do, and this is where the big data comes in, is if you have enough of them you can look for patterns. It’s all about patterns. We haven’t trained ourselves to recognize patterns and certainly not in the marketing arena. Look at every marketing communication model and think about how we develop the marketing plan. It doesn’t fit the market, it doesn’t fit the people, it doesn’t fit the customers.
Ellett: What have you learned about how customers really make decisions?
Schultz: About three or four years ago we started a neuromarketing group. What we’re doing is we’re trying to figure out how you think and how you make decisions. It’s been a really interesting trip.
Neuroscience has gotten all hung up on taking pictures of people and watching their brains light up. Well you can see that but you don’t know what the hell it means. So we’re trying to figure out how people actually make decisions. The guy that comes closest to it is Dan Kahneman. Have you looked at his book Thinking, Fast and Slow? What he says is that everything that we’re exposed to goes into the subconscious. You can’t draw it, you can’t pull it up, you can’t figure it out, you don’t know what it is, but it’s there. All the things that have happened to you and all the experiences you’ve had. So that’s “System 1” and that’s the intuitive emotional side.
The other thing that you do is look at how you make decisions. I’ve got to make a decision to go buy a car. I’m going to write down what is good for Mercedes, what is good for Ford, what is good for Toyota, and so on. I make a list and I think about it. People don’t like to do that. That’s like work.
So what they tend to do is rely on intuition and previous experience. And one thing you can add is impulsiveness. I’m convinced that damn near everything people are buying today with rare exceptions is on impulse.
Ellett: How much does the perceived status of a purchase within their social community impact what they buy?
Schultz: It depends on where you are. In the U.S., maybe. In China, yeah. In India, really strong.
Ellett: Do social networks influence that intuition?
Schultz: We’re working on a book right now about consumer behavior in India. Here’s a country with a billion people and nobody has ever written a book on how Indian consumers behave. One of the things we’re finding is the young people — and 50% – 60% of all the Indian consumers are under the age of 35, so it’s a very young population — they go into a store and they don’t just buy a product. They go into the store, they pick a product, they take a picture of it and what do you think they do with it? Send it to their friends, and their friends then tell them, “Yeah, that’s a good buy, that’s a good value or that’s a good brand.” Or, “No, I have tried that and it doesn’t work,” and that sort of thing.
So they’ve created this incredible network and not just in India; they’re all over the world. They’ll ask their cousins in London, and you’ve got all this stuff in your hand. They can ask their friends immediately: “What do you think of this?” The friends come back and say, “Well, go ahead and buy that, that’s okay.” So it’s all driven by social circles and I think increasingly we’re seeing more and more of that.
