Most marketers will tell you they’re customer-centric. But, in reality, said Richard Davies, few are.
Since taking over as CMO of Newell Rubbermaid last year, Davies has been making big changes in the marketing group of the consumer goods manufacturer in order to create such customer focus. The goal is to rev up the product innovation engine at the company that makes everything from Calphalon cookware to Paper Mate pens.
Davies started with a reorganization that resulted in a marketing group that is one-third smaller, but, he told CMO.com, much re-energized. He led a global marketing agency review process that narrowed the field from 70 partners to just two. He sped up the expansion of the marketing group within emerging markets in Asia and South America. He doubled the ad budget and doubled the market research investment. It’s all toward creating, as Davies said, “a brand- and innovation-led company famous for great design and product performance.”
CMO.com recently spoke with Davies about the transformation under way, why the agency pitch process doesn’t work, going global, and partnering with market research and R&D to come up with the next, big thing.
CMO.com: Before becoming CMO at Newell Rubbermaid, you led consumer insight at Unilever. How has that helped you as you’ve stepped into the marketing role again?
Davies: My background is as a marketer and brand developer. But I’ve always had a fascination with understanding what consumers want and figuring out how to meet or exceed those expectations.
I was lucky at Unilever to work in Japan. The Japanese consumer is one of the most discerning in the world. The quality of work in Japan is incredibly high, and that has conditioned them to expect very high standards. There was a sense of satisfaction in being able to market to consumers like that and get it right.
I was asked to pull consumer insight into a global function in the service of improving what we do in marketing. The CEO wanted to make sure what the insight folks do is relevant, and it made sense to have a marketer bring that together. I’m not a market researcher—as any market researcher will quickly point out. But I do know what I need to know from a marketing point of view.
That experience has helped me. The reality is that a lot of marketers are not overly interested in understanding the consumer. They’re just playing lip service to the consumer. But at the end of the day, it’s the depth or complete lack of consumer understanding that will determine your success or failure. That was true 40 years ago, and it will remain true 40 years from now.
CMO.com: What were the biggest challenges facing Newell Rubbermaid when you arrived?
Davies: The company is a collection of amazing brands. But many of them were undersupported in recent years. The innovation funnel was not as full as it could have been. And the company had underinvested in consumer understanding.
Our CEO, Michael Polk, arrived in 2011 and started a companywide transformation to correct much of that and unlock the potential of our brands globally. We doubled the market research budget. We invested heavily in new ideation processes. We will nearly double our advertising spend this year.
In marketing, we had a huge number of suppliers, and we reduced that to just one advertising agency and one media agency to improve the quality of our creative. We’re just 18 months in, but the early signs are encouraging.
CMO.com: You whittled your agencies from 70 down to two. How did make those selections?
Davies: We were keen to work with agencies for which we would be reasonably important. We needed partners who were global in nature. We wanted outstanding creative. And we wanted long-term relationships. I’ve seen the benefits of having enduring relationships with agencies instead of changing every year. And I’m skeptical of the pitch process. It’s not a good way to determine whether you’ll get great creative going forward. And if you want true partners, it starts you off on the wrong foot.
We went to agencies we knew by reputation and talked candidly about process: how they come up with ads that resonate in the marketplace, what they do when things go wrong. It wasn’t rocket science, but it gave us much better insight into the agencies.
CMO.com: What’s the trick to enabling a true agency partnership?
Davies: There’s no magic. It’s just hard work. We jointly brief our creative teams. When we take material to the consumer, we do it together. My ambition is to make sure that every creative team wants to work on our business. That’s not always easy in the heat of the battle. It’s hard to generate enthusiasm sometimes if they feel always under the hammer. But that’s where we want to get to. And so far [agency] BBH has exceeded our expectations.
CMO.com: What is marketing’s role in strengthening product innovation?
Davies: We have a couple of partners in the business. One is consumer insights and the other is research and development/design. Together we are working to fill the innovation funnel.
The money we spend on market research is a great source of insight, which leads to new product ideas. We’ve developed our own in-house approach to brainstorming that’s run by our colleagues in a new design and R&D center that we just opened in May. We also look to countries outside the U.S. for inspiration. Last year we took a team from all three of our home solutions brands to Tokyo to get ideas from products the Japanese use. No one has the sole responsibility for coming up with ideas. We take them wherever we can get them. The challenge is converting them into a successful proposition. But we’re at a stage now where we have a funnel that’s pretty full again.
CMO.com: What sorts of new products have come out of that process so far?
Davies: We’ve rejuvenated our line of scented Mr. Sketch markers with a subrange of themed products around the movies; we introduced the Nacho Cheese scent, for example. We just launched a new highlighter from Sharpie called Clear View that makes it easy to see where to start and stop highlighting, and a new Graco 4 Ever All-in-One car seat, which is the first to grow with your child from infant to booster seat up to 10 years old. It’s early days, but we have many new innovations hitting the marketplace soon.
CMO.com: How difficult is it to understand the customer as a mass manufacturer of so many brands?
Davies: We operate across many consumer and business segments—writing instruments, cookware, professional construction tools, to name a few. The challenge is trying to come up with the best processes for insight and mix development.
CMO.com: Is it tricky to market in both B2B and B2C segments?
Davies: We have approaches that travel pretty well in both directions. For example, in the consumer environment everyone talks about shoppers—those who buy the product—and consumers—those who actually use it. We coined similar phrases—choosers and users—for our professional markets. But now we’ve realized it makes sense to use this language for both our retail and professional customers. So now it’s universal across all categories.
Some of the promotional mechanics may vary, but many of the marketing principles are the same. You need the ability to understand what the customer wants, how they make their selections, and how our brands perform in the market. Their perception of value is the same. They want a bundle of benefits at a price that reflects that.
CMO.com: Tell me more about the reorganization you did of the marketing organization. You’re a considerably smaller than you were before.
Davies: Our strategic goal has always been clear. We want to be the pre-eminent consumer durables company in the world. The way to achieve that is to create a brand and innovation led company known for great product design and performance.
Very early on, we went through a restructuring. We were also in the middle of an enterprise transformation from a holding company to an operating company. We reduced our marketing head count by 25 to 30 percent by creating fewer, bigger roles in a leaner global structure. We also had to identify those who we felt wanted to be part of the journey and, unfortunately, parted ways with those who didn’t.
We went through a lot of changes in the past year—changing partners, changing processes, changing people. But, as a consequence, we have an energized, competent, and highly motivated team with the shared aspiration to deliver on our corporate goals.
CMO.com: You’ve recently become a more global team as well. What’s driving that?
Davies: About 71 percent of our business is in North America, but we see significant opportunities particularly in South America and Asia. We are building marketing hubs in Sao Paolo and Shanghai, as well as in London. It started before I arrived, but we have accelerated it in the past 12 months. We’re recruiting local professionals to help us on that journey. Our ability to be able to build marketing hubs in the future will be critical. But one of the great things about co-locating is that we can offer more opportunities.
CMO.com: A year from now, what will you be looking at to measure the success of these changes you’ve made?
Davies: We’ve seen some brands, like Paper Mate, start to respond extremely well to our new advertising and build market share. We also have several exciting product launches hitting the market.
Within marketing, we’re also looking at people development measures, like engagement and retention. I also track our ability to promote people from within. I feel really good about the fact that I can now offer interesting career paths across our brands that would have been difficult in our old structure. From a brand perspective, market share is our No. 1 metric. Are we better than our competitors? In some markets, our ability to grow the market will be more critical than conventional measures of awareness.
We set targets for ourselves, and we hold ourselves accountable on a regular basis. And we’re seeing some encouraging signs.
