Financial services marketers have lamented their industry’s regulations for years now, claiming all those rules hinder agility. But, according to Rob Pinkerton, CMO of invesment research firm Morningstar, FSI’s “agility problem” is “just an excuse.”
“Agile actually de-risks our marketing, and risk is the primary challenge regulated industries fear with digital marketing. We reduce the amount of opportunities to fail with a test-and-learn approach,” Pinkerton told CMO.com in an exclusive interview. “So agile actually favors a regulated industry. The issue is, culturally, financial services organizations have been very top-down in a command-and-control management style. And that doesn’t work for agile. Morningstar doesn’t have that problem.”
CMO.com caught up with Pinkerton to talk about the current state of FSI marketing, the industry’s biggest challenges, and what he sees as the next frontier for FSI.
CMO.com: Tell me a little bit about yourself and your career in marketing. How did you end up at Morningstar?
Pinkerton: About 10 years ago, I took a job with a little company called Adobe, which managed to figure out where the world was going in marketing before most of the world figured it out for themselves. One of the things that I spent a lot of time doing at Adobe was going around talking to CMOs and CIOs about the coming changes--things like digital marketing and the effects of mobile, social, and the way customers are buying and what their expectations would be once empowered with new technologies.
At one point I figured out that I would enjoy being a CMO more than just building for and marketing to CMOs. So I went to try it out at a little startup called HelloWallet, where they gave me the charter to build a modern marketing organization in line with all the things that we’d been talking about at Adobe. Overall, HelloWallet did well, and we got acquired by Morningstar, Inc. Morningstar has a strong brand, but at the time had never actually had a CMO. They were looking to future-proof their brand and their business for the next wave of investor technology innovation, and they liked what we had done for our customers and prospects at HelloWallet. So they offered me the role as their first CMO.
CMO.com: Who is Morningstar’s typical customer?
Pinkerton: Anyone in financial services at some level has been a Morningstar customer. We have been around for over 32 years. Most people identify with us because of our ratings, for when they are going to go buy stock or a mutual fund or do any kind of financial analysis at any level. They recognize Morningstar’s brand and trust our design whether they are an investor themselves or maybe an aspiring investor, starting with a retirement account, like a 401(k) in the U.S., from their employer, a financial adviser, or someone in an asset management firm constructing investments. Those are our primary customers. But most folks in the financial services world interact at some level with the content and research we create, with the data that we produce, the software applications we deliver, and the investments we manage.
CMO.com: What’s the biggest challenge for you guys in marketing today?
Pinkerton: Morningstar is like all the companies out there that had effective marketing before digital became omnipresent. We are dealing with the transformation to digital marketing and what digital marketing represents, which is just the total paradigm shift for all marketing. So it means new challenges with technology, new skills, new responsibilities. Marketing has largely become a software development job in addition to marketing, which means everybody needs new skills, new tools, new processes. And that requires a lot of change management. For us at Morningstar, that’s been a process and one the company has fully embraced.
But it’s tough to ask people who entered the career of marketing with the idea that it was kind of a “Mad Men” model to shift to a model where you have to be a full-stack marketer. They still have to have all the traditional skills that marketers had, from project management, creativity, event management, and campaign management in the physical world, and [now they have to] immediately validate and deliver their work product in the digital world, which requires a whole set of new digital skills because the customer now controls the pace and place where we market.
Technology mediates every single part of the story that Mad Men marketers used to tell, and customers want to participate in the story. Marketers are in an arms race to gain the skills and tools to deliver. It’s a huge change of management challenge to train people on new skills, in marketing and across the organization, especially when those skills are still so evolutionary.
CMO.com: Any challenges specific to financial services marketing?
Pinkerton: If you’re referring to FSI’s “agility problem” because of all the regulation. I think that’s an excuse, to be honest. Regulated industries have figured out how to get agile. You can’t watch commercials during a sports event anymore without seeing an example of how the pharmaceutical industry has responded to regulatory change. I think that’s more of an excuse not to be agile.
CMO.com: How were you able to figure out agility? Does your team work closely with legal?
Pinkerton: We have a great compliance team who is super-engaged. They want to participate and don’t look at their job as the “voice of no.” So I’m fortunate in that, culturally, we have a compliance team that is collaborative.
It doesn’t make the regulation go away or the dialogue go away. Every time we are successful in terms of building new things, we create a new problem to solve with compliance, and we solve them together. Actually, on Tuesday, I hosted a CMO-to-CMO forum up in our office in New York, and there was one CMO of a major financial services brand who was explaining that they brought compliance into the marketing department. You have to change your relationship with compliance, for sure. And that requires significant management and leadership from marketers.
CMO.com: What do you see as the next frontier for financial digital marketing?
Pinkerton: I think that FSIs are generally behind the rest of the marketing. What financial services has to do right now as an industry is get more persona-oriented. The customer is not at the center of the financial services marketing mix; it’s always product. That’s just not going to work, especially if you look at other industries and where they are headed.
At Morningstar, we are going to charge into the next frontier. Personalized and accessible (PDF) is really where we want to go. The whole idea with personalization and cognitive computing is that it really enables better marketing. The fact that I went and looked at a new TV on Amazon does not mean I want to see that same TV on every website on every device I go to. But as that enabling technology evolves, I think personalization and really prioritizing marketing contextually by place, by person, and by problem has great potential.
That can be incredibly meaningful for FSI, because our industry has been generally known for products that are too complicated, with very opaque pricing and predatory marketing that takes advantage of people who don’t really know what they need at the time that they think they need it. What I’d love to see in financial services marketing, in this next martech wave that we really believe in, is to help people self-direct to the solutions they really need at a personal level. We’ve invested substantially in behavioral sciences as a discipline, we have four Ph.D.s in marketing alone, another eight members of an esteemed advisory board of university researchers and professors, and we’ve trained hundreds of employees on testing personalization techniques ethically and effectively. We see this as a big area of opportunity to help investors and aspiring investors to reach their goals.
CMO.com: Any consumer trends that you are really keeping a close watch on and why?
Pinkerton: I think the most interesting ones I’m watching is the virtual concierge concept. I don’t know if it’s Alexa, Cortana, or Siri, but I think about the implications of what those could possibly do for simplifying our lives and finding different ways that you can reach users in a way that’s meaningful. My kids are starting to expect computers to talk back to them now, which is interesting.
There’s a whole world that could open out there. And it’s neat, I suppose, if Alexa can have a drone send me a new gallon of milk when a sensor in the refrigerator notices that the milk is almost empty. From an FSI standpoint, the amount of need that you have during financial distress, the amount of opportunities there might be to give people ideas, to change the whole nature of how you interact with your finances and debts, is pretty extraordinary because virtual concierges can take the emotion out of the decision making. Perhaps people will be more likey to listen to Alexa when the stock market goes down that it’s a better opportunity to buy than sell.
CMO.com: Financial services isn’t the sexiest industry, right? I personally find mutual funds and 401(k) plans very difficult to understand. What are you guys doing from a content perspective to change that?
Pinkerton: Financial services, when it comes to the content, I call it “dead, raw fish,” which is what we would name a Japanesse restaurant if a marketer hadn’t first named it sushi. The content is accurate and completely unappealling. But, actually, for Morningstar, content is our bread and butter, and, frankly, from a content marketing perspective, it’s a huge opportunity in front of us. That’s why it’s been so important that we get Morningstar digitally enabled, because our core heritage is illuminating investing and making financial services accessible and empowering. 401(k)s and mutual funds are inherently inaccessible, but what they represent are personal responsibility, financial freedom and confidence, and the nobility of self-empowerment. That is a lot sexier than eating candy bars and applying for your eighth credit card. But I don’t think that story has been told or accepted very well since the Great Recession. We hope to change that.
CMO.com: Would you say Morningstar is a data-driven organization?
Pinkerton: I’m going to qualify my answer because we technically are a data company, and we collect and disseminate a lot of data as part of our business. The company as a whole is very data-driven.
When I first got here, marketing was still in the qualified side of the world. Everything was really successful, and it was very empirical. But we had to really change the culture to be data-driven. On a scale of one to five, we are a five for intent. In terms of execution, we are probably at a three or so now because there still is a lot of work to do.
We’ve built up a data-science team inside of marketing. We have made it a part of everybody’s job to get certified or understand at some level the ways that you measure marketing, from CTR to MQL and all the alphabet soup in between. Adobe Target has been great for this.
But you find sometimes you have so much data that it’s hard to make all decisions based on data. We are data-motivated, but sometimes we have to kind of cut corners on that while we are changing the systems that we rely upon. So again, data-driven, we are a five, but execution, there’s still a lot of skills required to really be data-driven and data-effective.
CMO.com: What skills are those? I suspect data-science skills, but what other skills are you looking for?
Pinkerton: We trained over 100 people on how to do randomized controlled trials. And that is not a phrase that people are typically expecting when they work at marketing or near marketing. It sounds like you are back in science class. But if you don’t know how to run or interpret statistically significant tests, it’s pretty hard to be data-driven. You can look at the data. You can say, “Oh, I know how many people open my email or I know how many MQLs we generated,” but you don’t really know if it’s good or not.
That’s something that I actually find most organizations don’t understand. Regardless of what marketing automation tools you use, it’s computer science. We are learning if/then statements and loops and concatenation, which are hard-core computer science skills. You have to learn computer science logic to do search engine optimization. You have to learn technology skills and application skills. I have the design team in marketing, and Adobe Creative Cloud is basically table stakes, right? Five or six years ago, you could be an expert in Photoshop, InDesign, or After Effects, and that was fine. But now you have to be able to use every Creative Cloud application and have a super power in one of them as well. Every designer has to be a UX designer. It is an arms race for technical skills in marketing.
CMO.com: What are your three strategic marketing priorities for this year?
Pinkerton: We’ve transformed the team with new skills and new roles, and we’ve built a modern marketing organization. We have a team that is future-proof. But we really have to go prove ourselves. So a big part of it is to drive revenue, drive brand, and drive offers that ladder up to the overall business goals.
Additionally, digital is still a big priority. It’s not a channel; digital is the foundation engine for everything that we do. The priority is to drive a bigger concentration to the pipeline and to revenue with sales. It is the handshake with sales and driving the client experience, so we help our clients and our prospects get the information they need, when they need it, so they can make a better purchasing decision.
The third priority is to really reinvigorate the brand. Morningstar’s business relies upon the brand and the brand is strong and has a wonderful reputation, but it's ready for a full, vigorous introduction into the digital world. We’ve been busy migrating 20 years of digital experiences to AEM. I’m excited for prospects and customer to be reintroduced to the authenticity and empowerment of Morningstar over the next few years in the digital world.
CMO.com: Adobe is encouraging companies to make experience their business. Would you say that is top-of-mind for you as a CMO?
Pinkerton: So we’ve built a marketing organization that’s focused on the customer experience 100%. That is we do want to continue to be an experience business. As a brand-oriented company, we have always put the investor first, so it has always been top-of-mind.
CMO.com: If you could go back in time and give your younger self one piece of career advice, what would it be?
Pinkerton: Max out that boring 401(k) that we were talking about or whatever tax advantaged, company sponsored investment plan you have access to. The power of compound interest is the most powerful thing that any young person should know. And while it doesn’t sound like it has anything to do with your career, if you invest young in your 401(k), you will be more financially secure. And financial security certainly gives you more career options as you get older because you will have the ability to take risks or be patient when times are tough.
CMO.com: Words you live by?
Pinkerton: Well, if you treat everything in life like an adventure, you’re probably going to be successful at it. And we try to do that with our work and with our play. If you treat your work like an entitlement or something you are owed in some way, you’re probably not going to be successful by it. But if you try to have some fun and treat everything like an adventure, generally I think things will work out well.