Marketing Matters

Hi, welcome to Marketing Matters. This is the show where we get to interview some of the brightest minds in marketing.

On today's show, I'll be interviewing my friend, Mike MacIntosh.

Mike's a Silicon Valley executive with a passion for customer success and driving revenue.

And he's helped companies like Apple, Griot, Hyperion, and SonicWall, which is where I first met him.

Welcome, Mike. It's great to have you on the show.

Yeah, thanks Rick. It's great to see you again. It's been a little while.

Absolutely. Now, you know, for, for those of you, uh, that are watching that don't know him, I wanted to start out by asking you Mike to give us a little bit of your background.

You know, as you know, every, every great superhero, every great villain, every major character in a comic book has a backstory, has a, you know, an origin story.

What's your, what's your origin story? How'd you get into marketing and how'd you get specifically into customer marketing?

Yeah.

So, you know, I, I was back in, um, in the eighties, actually, I was at Apple, uh, was a sales guy at Apple.

And I, I was under the impression that sales was everything for a successful company.

And thank God that we at Apple had such great sales folks.

And, um, a little while later I got an opportunity to move into marketing and, uh, joined, uh, quite an incredible team.

It was the group that actually created desktop publishing, uh, which, which probably predates you, Rick, and may predate a lot of your viewers.

Uh, but, uh, it was with us. I would really like to say that it doesn't, but that was my first job out of college was desktop.

A small role.

I didn't realize that. So I got a really good taste of what, uh, of what marketing, uh, does and can do for a company.

And, and then, um, and then later still at, still at Apple, uh, I, I worked with directly with Regis McKenna, uh, who was one of the early marketing wizards here in the Valley.

And, um, and, and so after those, you know, after, after my, my time at Apple, I realized that marketing really was everything, not sales, but marketing was everything.

And that, you know, sales is just an adjunct to marketing.

So that was kinda, that was kinda how I came to be, you know, uh, what I think of myself as a, uh, a true marketer, really marketing focused.

And I, I love the, the depth and the intellectual challenge and, uh, and the ability now to use data in the process to inform decisions.

So that's, that's kinda how it came about in a nutshell. It's a much longer story, but I don't think we have time for that today.

Yeah. You know, I, uh, it is interesting how much, you know, over that, that time has changed.

I was, uh, I was talking with actually somebody, you know, Jerry, I was talking with Jerry the other day, and we were reflecting on some of the early days of, uh, uh, companies we'd worked with here in the Valley.

And, you know, the kind of work that we did, even though it was digital, the output ended up being physical a lot of times.

Right. And we're just kind of reflecting on how much that's changed over the years and how little physical product, you know, we end up outputting as a marketer compared to where we were in the past.

Right. It's really amazing. It's been quite a transformation.

In a relatively short period of time. Absolutely.

You know, and I think, I think that's something that most people, you know, don't really put their head around.

If you look at, you know, over history and all the different changes that we've seen, you know, industrial, non-industrial, you know, moving from, you know, powered vehicles from unpowered vehicles, things like that.

I mean, it's amazing how quickly things have changed in the last 20, 25 years compared to any other, any other cycle.

Um, which is, uh, which is kind of a neat thing to be part of.

Yeah, for sure. Yeah, absolutely. It's, um, I've learned a lot.

I learn a lot, you know, I learn a lot every day and, uh, and you know, never really stopped learning.

Although, um, yeah, as we'll, we'll talk a little bit later on.

Um, uh, I've, I've got some, I've got some thoughts on, uh, you know, how to go about, uh, continuing that learning process.

Yeah. You know, one of the, one of the things I, I remember the first time we met, we, we kind of got into a fun conversation.

We're talking about, you know, uh, you know, a lot of people think about customer acquisition, demand generation, and, you know, they, they really kind of gravitate around that.

But, uh, the reality is, is that you focus on an area that you think, you know, in many cases is much more important, particularly for sustained growth.

And that's on the, on the kind of the existing customer side, you know, marketing to existing customers, maybe talk a little bit about that and help people understand why that's so important.

Yeah. I, um, uh, you know, and, and, you know, we, we know that at least in the world of enterprise, um, enterprise businesses, 85 to 95% of that revenue is going to come from an existing customer.

And, uh, however, the majority of the investment and time and energy is, uh, in most cases, in most companies directed squarely at, um, increasing the customer count, uh, finding new customers.

And part of that of course, is, is a function of, uh, is a function of what wall street expects from companies.

Um, you know, with a lot of attention being paid to new customer acquisition by, uh, the investment community, but, but really at the end of the day, you know, if you're not taking great care of your existing customers, and if you're not doing everything within your power to increase their ability to get, uh, even more and more value from the products they already own products, they've already purchased from you, you know, you're just, you're just missing a huge opportunity.

Um, I think that, that, um, you know, finding, finding new customers is incredibly difficult, heavy lifting expensive.

And, and in my experience, um, the biggest, the biggest challenge really are the, are the expectations for what marketing can and should achieve within unrealistically short periods of time and with unrealistically small budgets and head counts.

So, so I think I, you know, I look at the traditional marketing job as, as the, the toughest job in the world and, and, and something that, um, you know, I have a lot of empathy for those people who find themselves in that role.

And back in, um, I guess it was probably while I was still at Apple, um, I started working and, and when I was working with Regis McKenna, I started really thinking about and starting to develop techniques that were, um, focused on, uh, you know, improving the relationship with the existing customer or tightening that relationship in improving the knowledge within the company of our existing customers.

And, and, and so that's, you know, that to me, um, is, is, is what's most interesting, uh, in, in marketing.

And I, and I don't even actually like to use the term marketing when I think about existing customers, because you know who they are.

And the term marketing implies so many, uh, uh, misunderstood concepts and, you know, and, and, and everybody in the world, regardless of their function believes that they're a marketing expert.

Um, I don't like to use the term marketing when I talk about, you know, uh, customer retention is really what I, what I prefer to call it.

But, um, but you know, in, in terms of, uh, to use, to use the term that you're, that you've set out customer marketing, um, you know, what's really wonderful about it is that you know who you're talking to, or at least you should know who you're talking to and you should know what they think and, uh, what they care about and, uh, and, and where they need your help and, and you should know what motivates them.

And, and so that type of a relationship, a communication or interaction relationship with existing customers to me is much more rewarding and fulfilling, um, because I, it's, it's more of a long, a longer term relationship with that customer.

I'm not just acquiring them and handing them off to the sales organization.

I am, you know, nurturing that relationship to produce more and more value first and foremost for them.

And then as a result, uh, the, the, the company derives incredible value.

Yeah, I, I completely agree with that.

We've, we've, we've had many a conversation of the years on this one.

I think, um, the most powerful, uh, impact that you can have is where you connect both the, the acquisition and the retention so that it's a seamless customer experience, right.

Where you're truly focused on the lifetime of that customer.

Um, you know, in some companies like us, we, we call it land and expand, right.

You know, how do you land a customer, but then continue the experience through to expand.

But you know, it's a mentality that, um, it's interesting and it takes a, you know, a lot of, uh, thinking in different areas.

You have to, you know, be creative and coming up with the messaging and the content and all that.

And then you have to be very analytical to figure out what's working, what's not for the customer.

And then to actually, you know, build programs that can help them.

And to your point, create a better experience for them. So they want to stay, they want you to, you know, buy that next widget from them, whether it's a car or, you know, a SAS service or what have you.

Right. Yeah. You're doing the right things by doing the right things for your customers.

You are, uh, enhancing the lifetime value of that customer, uh, to your company.

Yeah. And that's, and again, that's, that's what motivates me in, in the world of, of customer marketing.

It's, it's knowing that simply by doing what's good and best for my customer, I'm doing what's great for my company.

And when I look at, when I look at, uh, you know, companies like SonicWall, Rick, um, the eventually, I was there for eight years and, and eventually the programs that we put into place, you know, we grew our, our, our upgrade revenue from, you know, 2 million a quarter up to 35 million a quarter.

And we grew, we grew our, our, uh, our renewal revenue, um, from, you know, 60 million a year to 120, 140 million a year.

I don't know where the company is now in terms of those numbers, but, but again, because you're talking about existing customers, you know, uh, and you can measure very precisely the effect of the actions that you take in terms of the results that are specific dollars associated with each individual customer's account.

So, you know, it's, it's a really gratifying branch, I would say of, um, you know, of marketing.

Uh, it, it's, it's, it's, it's very different, uh, and, and, and you need to think very differently about it.

And I think, I think the biggest problem is that, that at most companies, um, well at, at some, I guess, more and more companies, it is someone's job, but going back just three, four years at most companies, it was no one's job.

It was just sort of an adjunct responsibility that a marketer who was primarily responsible for customer acquisition would also carve out like 3% of their time to do, to manage, uh, customer retention.

And that's just, that's just silly. And that doesn't work.

Yeah. Yeah. And again, it just kind of goes to the point, there's so much that's changed over the years.

And, and this is one of those areas where it used to be almost like your point, and an afterthought is like, yeah, we're going to get the customers, but our product is so great that, you know, it's just going to be, you know, they're going to just renew and say, well, why didn't they renew?

Like, well, let's go, let's go figure that out because there's ways we can improve.

And, uh, and it has, it has a huge impact.

It really does. And, you know, when you think of the best companies out there and you worked with Apple, I mean, that's, that's one of the companies that's there where, you know, people jokingly refer to them as the cult of Apple, because when somebody has an Apple product, you buy the whole ecosystem and you never go away.

So that's a, it's a great success story. Apple's brilliant in that regard.

But, um, you know, again, when, uh, when you are helping, when you're focused, when your mindset is to focus on, uh, helping your customer to continually derive more and more value, if that's the focus, um, then that relationship is going to naturally expand because you've developed, you've developed trust, you've developed, um, the expectation in the customer's mind that, yeah, I've been, I've been using this solution from them for the past, you know, three, four years, and they have proven that they're totally focused on my success with that particular solution.

I'm open, I'm open to hearing about anything that they may want to offer up to me.

And the, and the, one of the other awesome things about customer marketing is it is not rocket science.

It does require good data. You have to be smart about who you're talking to and you need to know their history and you need to pay attention, you know, to what's happening with regard to, let's say, um, active support tickets or whatever.

Um, but, but communicating with that customer, or the thousands and thousands of existing customers is not expensive.

Right. You know, the budget, like my budget, my budget at SonicWall was maybe, and what I needed to spend was maybe maybe 30 to 50,000 a year.

But I was affecting over 200 million a year in revenue.

Yeah. Having a positive measurable effect on that revenue.

And, um, I mean, that's like, like I said, it's just, it's, it's a gratifying, uh, space to concentrate on.

Yeah, absolutely. Now you've worked with a bunch of companies and you've worked on a bunch of great projects over the years.

Uh, any of them stand out to you? It's like, this is, this is kind of something that was done, right.

That is repeatable that people, people should look at.

Yeah. Uh, there are, there are definitely a couple of, a couple of examples in the, you know, specifically with regard to marketing.

Um, I was at, uh, Brio, which was a business intelligence company back in the early two thousands.

And, um, and the company was really on its knees, having a hard time and, uh, you know, had, had started as kind of one of the pioneers in the space of business intelligence, but then, um, for, for a number of reasons, kind of lost, uh, lost their grip on that, on that market.

I joined the company and, um, and, uh, I was working for a wonderful guy named Brian Gentile, who I knew at Apple.

And, and, uh, it's kind of been a mentor for me over the years.

Um, he had complete faith in me and, uh, and wanted me to, you know, take the marketing organization and, and, uh, resources and do what I felt was going to be most effective and most helpful and most beneficial to the company.

And, uh, with, you know, after, after a fair amount of study, uh, I came to the conclusion that, um, the best thing we could do is go after our biggest competitor and basically pick a fight.

And we did.

And, um, and, and that competitor back then is, was a company called business objects.

Can't remember if IBM or, or SAP acquired them, but it was IBM. Yeah.

Yeah. Um, so we went after them with a campaign, you know, as much of a campaign as we could muster, we didn't have massive budgets.

Um, but I, you know, I had all, all forms of marketing, uh, at my disposal in my, on my team, plus I had an outbound sales organization or a pre -sales organization.

And, um, after about six months of this campaign, nothing, no results whatsoever after about nine months.

And, and everybody was on me to back away from this competitive attack campaign.

But after about nine months, we started to see things tick up. And, you know, this is when I talk about expectations, this is one of the fundamental, you know, fundamental problems that most marketers face.

Um, you know, the expectation is always that you can, you can turn things around within a two, three month period.

But what I, what I learned improved was that, you know, after nine months, it started to turn around and then it sort of hockey stick.

And before we were acquired, um, by Hyperion, we, we actually, uh, posted a profitable quarter, the first profitable, profitable quarter in over, I don't know if it was three or four years.

And so, you know, that was a, that was an incredible experience, you know, committing to something, doing it and sticking with it, you know, knowing enough about, about human psychology and the fact that you gotta, you know, you just, you gotta be in front of people with something compelling many, many times.

And, uh, you know, if you've got a budget is small, you better expect a very long period of time before you start seeing results.

But, you know, it's, it's, it's worth it to, you know, to stay the course and, uh, and, and, and continue to invest in what you believe is going to work.

Yeah. I imagine the other factor into that as well is the fact that people probably had contracts with the other company.

And so you had to catch them at the right time where the contract is up for renewal.

So reading the story ahead of time, you, you know, put, put them, put you in their mind when they actually got to a renewal, which is going to be at some point later to your point, you know, it's, you know, maybe six months, maybe it's nine months, particularly on an annual renew.

Yeah. Yeah, exactly.

And I think, I think, you know, I think precise, I think that is precisely why we really didn't start to see significant effect until, uh, you know, nine months out.

Um, but, but if we, if we had panicked and been under pressure from management that believed we were on the right, believed that we were on the wrong track because we didn't produce results in three months, we would have abandoned, uh, we would have abandoned a significant investment that we had made in gaining attention, uh, of the right, of the right audience and for the right reasons.

We did some interesting, interesting, competitive in it, I guess, in, in my experience as a, as a marketer, as a general marketer, it's, um, it's always the competitive, uh, displacement stuff that I really love.

I, uh, you know, I play a lot of different sports and, and I love competing and, um, and in the world of business, displacing a competitor.

Uh, you know, we went after, um, Cisco at, at Sonic wall.

Yeah. And, uh, and, and we also went after checkpoint at Sonic wall and, uh, and we went and, and, and we, we actually developed a, a campaign that was intended to, um, intended to go after, uh, Palo Alto's pipeline.

And, uh, and, and so we, you know, we did a lot of, a lot of great fun, interesting things on the competitors on the competitive front.

And, and one of the things that I, that I saw at Sonic wall specifically was, um, the, uh, the Cisco replacement, uh, campaign, um, that was built out, uh, it was actually, you know, myself, I had a very small team, but it was myself and a guy named Zach Yarns, guy that ran sales ops.

And he and I sat next to each other and we built this gorilla campaign and it was just, it was just awesome.

And, and, and, and so, you know, when people talk a lot about sales and marketing working together or not, and, um, you know, I think people just simply spend too much time debating, uh, debating that weakness as opposed to planning and executing campaigns or programs together, you know, hand in hand, sales and marketing, uh, building stuff together and getting it out the door.

There's nothing more fun than having, than having sales folks involved directly in, in the process of developing the program and in the process of executing, you know, and at the end of the day, you generate results and you can, you can, you both, you sales and marketing own those results together.

And it creates, uh, I think a really healthy dynamic.

Yeah. You know, that's one of the things that I just love about where we are in the world of marketing these days where, um, things are measurable, right.

And it's, it's much, you know, if I, if I flash back to the late nineties, early two thousands, you know, you did a big campaign.

Um, you just, you just had to show awareness or something.

And it was very esoteric as to how you showed the success for that particular campaign.

But nowadays everything is, is trackable click to the website, uh, you know, form submission, uh, purchase, right.

Every, you know, renewal, um, and the systems are connected together in a way that's more intelligent than it has been in the past.

And it makes it, in my opinion, much more fun to, to do what we do.

Uh, because at the end of the day, we can't hold up that report card and show the results that we're having.

And they're not always good by the way.

And that's, is trying to be better than anyone else or at least your last time doing it.

Yeah. Yeah. You know, and you, you just, you know, you need, you need people, you need management to commit budget and headcount, uh, to building, you know, a, a, a great marketing ops team.

You know, that is a super important function and, and with it, like you said, um, yeah, you can, uh, consistently and reliably, um, not only measure the effectiveness of a program that you put out there, but before you put the program out there, set realistic expectations for that group, you know, because people, people tend to ask whether or not something was successful, whether or not a campaign or a program was successful generically.

And, and when you ask that question generically, without first understanding, well, what was intended or, uh, what, what was, what was the intended result or the, the, the, the likely result?

Um, if you, if you know that in advance, what the expectation, if you have set a reasonable expectation or an informed expectation before you launched that program, and then you measure it based on the, you know, against the initial expectations, then that's a, that's a rational, uh, discussion to have about, uh, effectiveness.

Um, but, but you know, so often marketing is just, you know, um, or at least in the old days, marketing was unable to set and manage those expectations and unable to report in a meaningful way, uh, against the actual results.

But yeah. So, so, you know, a lot of, a lot of really positive change has happened and it's, it's gratifying to me to see, um, science and discipline applied and math applied in marketing.

Um, because one of the things I did right after Apple, actually, I, I, I went off and, um, founded a, uh, um, an ad agency, uh, advertising slash, um, channel consulting agency.

And I referred to that, uh, I referred to the company, it was called fuel.

And I referred to it as, um, uh, a marketing systems company. And, and the whole idea was, um, to take a more systematic approach to marketing, to apply systems technology to marketing and to market systemically.

So recognizing that every functional area in the company contributes to marketing, whether or not they're doing it deliberately, they are, every functional area has some, some impact, some effect on the image of the company.

And, and so fuel, um, was, you know, was, was really trying to bring science to the world of marketing, perhaps, you know, 20 years too soon or 15 years sooner than the technology really supported our ability to do that.

But, um, but like I said, it is, it's great. It's great to see how things have evolved.

Yeah. It's fascinating. But the one thing I want to point out is that human beings have not evolved that much in the past 25 years.

Yeah. You know, expectations or, or, um, skills or areas of focus have evolved, but we, as humans, we, we, we take action on something, um, that we're interested in or that we believe in, or that there's a connection, uh, to, so, so, you know, the fundamental, the fundamental human elements of marketing and, and the, the critical role of human psychology in the marketing process, you know, that hasn't changed much.

The delivery vehicles have changed. The methods of interaction have changed a bit, but, but the essence of, of the human to human, uh, engagement is the same.

And, and so, you know, even though we've got all of these new, these new methods for getting the word out there and building interest in something, um, it still takes, it still takes time to gain the interest and you still have to know your audience in advance.

And, you know, there are all these other fundamentals, uh, that, that don't change and, and they will probably won't change anytime soon.

That's true.

That's very, very true. Now, no, I know you're, uh, you read a lot and I can see all your books in the background there.

Uh, you have any, yeah, yeah. Mostly cookbooks.

I see a little chef up there. Um, do you have any books you recommend to people in marketing that, uh, you felt like had a positive impact for you?

You know, um, uh, I, I actually, what I read Rick is a 95% historical fiction and fiction and biographies.

And history and, uh, science. And, uh, I really, I really don't read any books on business.

Um, it's funny, you know, and in fact, um, you know, I'm a marketer, uh, but I've never really taken a formal marketing class when I was in college.

I didn't study marketing. I didn't study, I studied economics and political science.

Um, so I, you know, I have, I have a million different interests and, um, and very little free time.

So when I've got time to read something, uh, it's, it's usually on a topic that is very far from the world of, of technology marketing.

Uh, I'm reading a book right now about, um, about, um, Alexander Hamilton.

Fantastic, amazing, interesting story. But I do, I do the only marketing book, the only customer marketing book that comes to mind is the one that's in my head and I haven't committed it to paper yet.

Sorry about that.

I've, I've toyed with it many times and I've had, I've had people approach me who, uh, who would like to coauthor that book.

Um, just, you know, I just haven't been able to make it happen yet.

Yeah. Yeah. But you know, I always find it interesting how many people, uh, are in marketing, particularly marketing leadership roles who didn't come from marketing.

You know, our friend Steve was a scientist.

Uh, my, uh, my last CMO was, um, an engineer. Uh, I've had a, you know, financial person.

I've, you know, it's, it's amazing, you know, the different, different paths people take to get into marketing, which is, which is why I asked the question on the show.

Right. It's, I, it's interesting to find out where people, where people came from.

Yeah. Yeah. Yeah. I've always been interested in human psychology.

And, um, and I, I didn't, I guess I didn't realize as I was out there, you know, in my early job seeking efforts, I didn't realize that marketing really at the end of the day was all about human psychology.

And that's what, that's what keeps me, that's what keeps me going on this topic.

Yeah. All right. Well, thank you.

Thank you for coming to the show. It's been great having you on. My pleasure.

Thanks for having me. My guest again, Mike McIntosh. All right. Take care, Rick.

Thank you.