Augurs On the Town Ep. 9 with Dan Wallace

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Josh Becerra: Hi everybody, this is Josh Becerra from Augurian. I have the pleasure to be talking with Dan Wallace today. Dan and I have known each other for a very long time, probably over 10 years. I think we met at Coco coworking space in downtown Minneapolis, we were sharing some office space. That was a long time ago, Dan.

Dan Wallace: It was, Josh, but what good memories.

Josh: Yes, that was a great space. Dan has been in marketing for over 20 years. Written a book called The Physics of Brand, and now you have a faculty position at the University of Wisconsin La Crosse. Also doing some advising with executives of smaller companies, is that right?

Dan: Yes, that’s right, Josh.

Josh: That’s awesome. I’ve always just loved talking with you, your great marketing brand mind, but I’m really curious about this newer part of your life, which is teaching at the university. How’s that been like? Have you been enjoying the classroom, and what’s it like to be with all those young folks?

Dan: I’ve enjoyed it more than I could imagine, really. It’s fun. One of the things you forget about, that 20 year olds don’t have much knowledge or experience, so it’s pretty easy to get their minds going. This generation, I’m really impressed with. They’re very good kids. It’s been fun, and it also is helping me learn deeper. They say the best way to learn is to teach, and I really do see that developing new skills. It’s also been fun to be in La Crosse, and to experience a small town. I’ve never lived in a small town before.

Josh: Yes, that’s very cool, and I’m sure they just love having you. I can only imagine, like I remember some of my marketing classes in college, and I think people who were teaching them, were pretty theoretical. They hadn’t actually been out there and doing it for as long as you have and having written a book and everything. I’m sure those kids must love being able to pick your brain and ask you questions about your previous experiences. That’s really cool.

Dan: Yes, you’re right. They love the stories, and it’s fun to put them in context and integrate them with the theory.

Josh: Yes. Right on. I mentioned the book, The Physics of Brand. I’m just interested in what drove you to write a book. I know that you’ve said to me before, it’s a lot of work. Tell us a little bit about why you thought it was important to write this book, and how it was even to write it. I can’t imagine it was easy.

Dan: It was quite a process. The book really started in 2002. I called up Aaron Keller, who is the principal at Capsule. I come originally from the advertising business, design was really becoming more important at that point in time. I wanted to chat with him about that. We’re both fans of Luke Carbone and Joe Pyne. The concept of experience, as being key to marketing, came out of Minneapolis, through Joe Pyne and Luke Carbone, so we had a good conversation about that. Somewhere past the second beer, we came up with this concept, that a brand is the sum of all the experiences with people across time and space.

Josh: Wow.

Dan: We thought that was far out at the time. The next thing we thought, well, is our beer speaking or was it really a good idea? We kept picking at it over a number of years. Then Aaron was at an accountants conference, and ran into Renee Morino who testifies in court on brand value. He told this story to Renee and said, “What do you think of this idea?” She says, “I think it’s a great idea. I’d work with you guys on something with this.”

During the recession of 2008, we worked on a white paper, and then we all got busy with our businesses as the economy picked up. Around 2014, we were like, “Why don’t we send this off to some publishers, see what can happen.” We sent it out to a number of publishers and our number one choice, which is now Simon and Schuster picked it up. It’s in three different languages, second printing. It’s been great. The process of writing with Aaron and Renee was really exciting and fun, but the thing I feel best about is currently when people coauthor books, half the time they’ll never talk to each other again.

Josh: [chuckles] That will be cool.

Dan: It was a great experience.

Josh: You know part of my history, is I’ve got two business partners who are my childhood friends. People always say never to do that either, and it seems to work out for us. It is nice when you can have those experiences and come out on the other side still whole.

Dan: It’s true, and there’s always exceptions to the rule, right?

Josh: Yes. What’s your biggest learning from the book, or what conceptually are people latched on to? It’s got a lots of chapters, so what are you talking most about with people about the book these days?

Dan: I’m really not talking about it too much anymore. The book is too advanced for the students I have, and really the book is primarily focused on serving global CMOS, people who are in the field of experience, customer experience. It’s a pretty narrow group of people who are the prime book. Many other people bought it, but those people seem to like it the best, and primarily because the book creates a framework to look at how customer experience works. Essentially, Renee helped Aaron and I figure out what our beer conversation meant.

Josh: Cool. That’s awesome. I know that you got another book in the works. Do you want to tell us a little bit about the concept at least, what you’re working on?

Dan: Yes, this one had a long fuse as well. The concept’s pretty easy, executing it is a challenge, but it’s coming along. The concept is to go and look at all the different aspects of work, and currently I have 36 different aspects. One of the really hard parts is to figure out the right taxonomy for work. There is not one, so I’m still working on that. Then to reach out in each one of those categories, things like finance, marketing, negotiation, and find three thought leaders who are the best in that area. Then ask them to come up with the most essential questions in those areas.

It’s going to be a reference book that people at work will use, particularly leaders and managers, but really anybody, to understand what are the most essential questions you need to ask in the most important areas of work. That’s the concept. I have an intern working with me, and researching to find all these people, this summer, and it should be out the fall of 2021.

Josh: That’s pretty cool. Nobody can have domain knowledge over all those areas, and it’s great to be able to rely on folks who have that domain knowledge and expertise to at least get you asking the right questions, which sometimes it’s half the battle, so I think you’re really onto something there.

Dan: Thanks. The world is so complex these days, and I think that if you’re talking with somebody in an area that you don’t know about, the best way to look smart is to ask good questions. Then it’s also the best way to learn.

Josh: You got it. The world is crazy, you said. We’re living in pretty unprecedented context, of course, with the pandemic COVID going on. Here in Minneapolis, the murder of George Floyd, the ensuing protests, even riots. Black Lives Matter movement expanding globally. It’s a pretty new world. I’d be curious to just hear your thoughts on what marketers and brand stewards should be paying attention to, or what they need to be thinking about a little bit in these unprecedented times.

Dan: Surely we all need to be on our toes and adaptable. There’s so much change going on that I think it’s unpredictable to know exactly where things are going to go. I’ve been concerned for a long time about the economic divide in America, that’s been a steady problem. Also, one of the finance people that I follow has said that if you go back to 2008, and if you take away the increase in the debt, our economy wouldn’t have grown. There’s some who believe that, essentially, our economy is not operating in an authentic way. There are a lot of deep problems. Obviously, the murder of George Floyd is horrific, and anybody who looks at history will know that African Americans and Native Americans, in particular, have not had a good experience in the United States, and those are continuing issues. We’re coming back to those again.

Josh: We’ve seen brands and companies responding to this in a number of different ways. Is your opinion that people should be– there should be responses from companies, that companies should take start taking positions? Do you have any thoughts from that perspective? How do companies and marketing teams need to be thinking about some of these issues?

Dan: I think it depends on the company and what they do in the markets they serve.

In terms of taking public stands on politics and social issues, it’s always a bit of a challenging situation for companies. If it really is authentic to the company, I think it can make sense for them to do it, but if it’s not, I think it’s better to spend your time learning how to be more aware of these issues in the company, and try doing what you can to solve them rather than, for example, running ads, supporting things you don’t know much about.

Josh: Right. Yes, that’s never a good practice. Let’s shift gears a little bit. You mentioned that the book, The Physics of Brand, is a book that a lot of CMOs could have a lot of use of. I was just reading a Harvard Business Review article about how the role of CMO is just one of the hardest roles. If not the hardest role, it’s, of all the roles within the C-suite, it’s the one that has the highest rate of turnover. People don’t usually last more than three or four years. Why do you think that is, or what is it about that role in the C-suite for the CMO that makes it so difficult?

Dan: One of the things is it does depend on the company. There are some who do last for quite a long time. It depends on the industry too. However, without a doubt, it’s more dynamic of a role than the other roles. I think a lot of it has to do with marketing used to, in the C-suite, have an interest in pricing, product design, distribution, sales, that you need to be more involved in more of these areas, and to a certain extent, what’s happened is, marketing has been balkanized into really lead development and brand communication.

Lead development, if it works, it’s great, but, eventually, it’s not going to work because you’re going to run out whatever it is you’re doing, and then you’ve got to come up with the next big thing. Brand, unfortunately, is something that a lot of companies see as a luxury. In bad times, they’ll cut it, or a new CEO will come in, and that CEO will say, “I don’t like these commercials.” It’s a hard situation. One thing that’s interesting is there are some companies now that are outsourcing more components of the CMO role. It’s an interesting thing. In many respects, what’s happened is, all those formal duties of the traditional CMO, a lot of them have been taken over by either the CEO or the Chief Technology Officer, [inaudible 00:15:40]. It’s definitely a difficult place to be right now, to be a top-level marketer.

Josh: I find that it’s something that we see where the CMOs are really looking for data, they’re really looking for stories so that they can bring stakeholders into the process and understand, like, “This is what we are actively doing, and here are the actual results of this.” I think CMOs who are able to succeed in today’s context are ones that are actually able to connect all the dots. They’re able to get all the way from somebody who saw a ad, all the way through to that person actually bought something and generated this amount of revenue and close that entire loop. I do think that where CMOs get challenged, is that a lot of times, they don’t have control over all the pieces they need to have control over to be able to even close that loop and tell that story. Yes, being successful as a CMO today, I think is not an easy thing, to say the least.

Dan: It’s very difficult. I think luck’s involved. Do they go into an organization that understands marketing’s role? There are mature organizations though that have very successful marketing options out there as well. One of the things I contend, is a lot of people think that marketing is like magic, and that if you hire the right person in there, they can waive the one. A lot of people are shocked that it actually requires budget and money to make these things happen.

Josh: I also think it’s like a mindset shift, the other people within the C-suite need to shift gears in a more of almost taking it as science, we have to run tests, we have to see the results of those tests. Based on the results of those tests, we’ll tweak our formula and we’ll run some more tests, versus make some magic happen here, and if it doesn’t work, you’re fired. It’s like, “No, we’re going to test some things. We’re going to understand if it worked or not, we’re going to gain some insights from that, and we’re going to test more.” It’s more of this iterative mindset versus like, “Here’s the new campaign. It’s going to go bonkers.” Being a CMO is tough these days.

Dan: I’m glad I’m teaching. I’ve been in that seat, it’s a hot seat.

Josh: Yes, for sure. One of the things I saw in your LinkedIn profile that I thought was fun, is you had a list of your Gallup strengths, and one of those is futuristic. I want you to take out your crystal ball a little bit and tell us what kinds of trends or technologies you’re seeing today that you think people should be paying close attention to that in the coming years, this stuff is going to be important for all of us? Do you have any ideas or tips on trends or tech that you’re seeing that is going to be relevant in the future?

Dan: To be clear, in terms of Gallup, I’m interested in the future. I’m not a futurist, and I’m bad at predictions most of the time.

[laughter]

With that, I’ll tell you some things I’m looking at. One is Chief Martech, you’re familiar with them?

Josh: No.

Dan: Chief Martech, they monitor all the cloud-based marketing platforms, and there are over 7,000 of them now. What that tells me is, nobody knows what’s going on, really. It’s so complex that there’s so many choices.

Dan: that there’s so many choices.

Josh: Right.

Dan: Software is always a bit of a mystery, so you don’t really know how all that stuff works. That means that, companies that can be guides, like Augurian, have a real good place because there’s no way anybody inside of a company can figure all that out on their own.

Josh: Sure, yes.

Dan: You need people who are good in certain areas. That’s in terms of marketing.

In terms of the broad macro environment, the thing that I see is, we’re having obviously COVID, which is not going to leave us, it’s [inaudible 00:20:48] again, it’s in June of 2020. They’ve never come up with a vaccine for an R&A virus before, so this would be a first if they can do that. That’s a pretty harsh reality. There’s a lot of economic realities with that. 20 million people are unemployed right now. It’s just mind boggling.

Josh: Right.

Dan: I feel so sorry for those people. It’s so good to have some work to do, for one thing. That’s a big issue. We have a lot of social discord in this country, and on top of that, some futurist I’ve been looking at that I respect, do believe that essentially, on a geopolitical stage, Donald Trump is more of a symptom than a cause, are withdrawing from the geopolitical landscape. A lot of that has to do with free trade, has brought a billion people out of poverty in the world, but it’s hurt a lot of people in the United States. These are all crazy complex issues.

Josh: Right.

Dan: It’s geopolitics. All of these things are in play at the same time. I think it’d be very risky to hazard a guess as to where all of this is heading. I do have an interesting thing. Yesterday I talked with a tech marketer in New York City who is involved with the investment community. They’re looking at putting equity stakes in the companies through their investment partners, and also revenue sharing with mid sized companies, so companies with $20 to $500 million in sales. Part of what they see is that there’s going to be a lot of defaults and opportunities to buy companies that haven’t integrated digitally yet, and then do that with them. I think that’s pretty fascinating. This guy has a marketing background.

I think there’s going to be a lot of room for innovation in this. Whenever things are really bad, there’s bad things going on in certain areas, and there’s great opportunities in other areas. I do believe that the tech space is going to be the big winner, Wall Street says that. If you took away Google, Apple, Microsoft, and Amazon, the stock market would be down significantly. They’re pulling everything up. Back in the ’80’s, they talked about the information age, it’s definitely here.

Josh: Yes, it sure is. You mentioned that you read a couple of different futurists. Do you have anybody in mind? Who would you just off the cuff recommend, “Here’s somebody that I’ve been paying attention to.”?

Dan: Well, on the geopolitical front, there’s this guy named Peter Zeihan.

Josh: Okay.

Josh: Okay. I’ll see if I can get her on. Cool.

Dan: Then there’s Simon Anderson is a futurist in Minneapolis. I’ve gotten to know him pretty well. He just flat out says, “I can’t predict the future. All I can do is show you trends.” Although there are situations where you can line up all the trends, and he says that you’d be very foolish to ignore them.

Josh: Right.

Dan: Like for example, that COVID would grow.

Josh: That’s a given, at this point. Well, cool. Well, this has been great. I love just picking your brain and hearing your thoughts on everything from what CMOS need to be thinking about, all the way to the geopolitics and back, and I really do appreciate your time. We’ll just make sure that people need to go and buy a copy of The Physics of Brand, and when this new book comes out, we’ll have to make sure we pay attention to when you get it published and have you back.

Dan: Sounds good, Josh. Thanks for having me on. I appreciate it.

Josh: All right. Awesome. Thanks, Dan. Bye.