by Bradley Elliott (@BradElliottSA) From the rise of growth hacking, to digital transformation and the automation of marketing, being a chief marketing officer (CMO) has changed. Given the massive pressures today’s CMOs face, how do brands better understand their customers? How do they use technology for competitive advantage? We talk to Tim Allemann, Fedgroup CMO, in this second Only Connect podcast.
Full podcast transcript
Bradley Elliott: Welcome to month two of Only Connect, a MarkLives.com podcast. I’m Bradley Elliot, your host, the founder of Platinum Seed and Continuon. This month I’m talking to Tim Allemann, CMO of Fedgroup. For those of you don’t know, Fedgroup is the largest independent financial services provider in South Africa and they’re doing some really innovative stuff in the world of both marketing and financial services and beyond — in fact, they refer to themselves more as a technology business now, than a financial services business. And Tim will be talking to me about what marketers want in this day and age, given the big hype word around digital transformation, AI, IoT [internet of things], data. What does it mean for marketers? What does it mean for marketing departments? And, more importantly, what does it mean for agencies and agency bosses?
I’d like to first start off asking you a bit about your background: How did you start your journey and finally land up at Fedgroup?
Tim Allemann: I started off in the agency world, and spent about 20 years in the agency environment — really in the strategic marketing side of things. I found I was getting more and more into branding strategy. Eventually, I got a bit tired of the agency world, and went off on my own, doing marketing and strategy consulting to clients directly, as well as through some agencies. One of my clients that I was consulting to that stage was Fedgroup. I did quite a bit of consulting to them; absolutely loved the culture and organisation. Grant [Field], the CEO, eventually convinced me to join full-time. And that’s where I’ve been for the last two years.
BE: We read a lot of hype around AI, IoT, businesses going through digital transformation journeys, and the Fourth Industrial Revolution, etc. Personally, [I] believe that a lot of it is just nice, hyped buzzwords. But it’s good to get people thinking about these things. Talk to me a little bit about what what Fedgroup’s doing in terms of putting technology at the core of its business.
TA: We’re an interesting business in that we have traditional product lines sold through traditional channels, a lot of group- and B2B-based business — traditional financial services-type stuff. But, increasingly, we are expanding into far more innovative and retail areas of financial services, and really trying to stay ahead of the curve. So, we’re focusing a lot on innovations, new technologies, looking at new target audiences, needing to look at new channels to market, in order to service those customer segments. Increasingly, we’re looking at going to market with products that aren’t necessarily in the market as yet, and really giving customers out there something new to look at.
Better value, better options. So we, for example, recently launched something last year called Impact Farming, which is a completely different financial services model. Essentially, it’s direct ownership in assets, as opposed to traditional financial structures and funds. We tried to strip out the complexity. This gives us a far more tangible, direct contact with customers from a retail-type environment. We’ve actively embraced innovation in that concept but, from a product perspective, as well as in the use of technology. So, we have consciously made it an app-first product, which introduces its own complexity but also a lot of interesting dynamics to the environment. And along with that, I think we’ve put a lot of technology behind the platform as well as well the app.
So, at its core, Fedgroup actually operates off one central technology platform or system, which is different, I guess, to many of the bigger financial services companies out there that are operating on these multiple legacy systems that don’t speak to each other. We have one system that speaks to everything across the business, it plugs into everything externally — Home Affairs, SARS, the banks, etc. It has a single-view customer, where we can see what’s going on across the business. We have immediate access to data; we know exactly what is going on in the business in terms of sale, in terms of customer care, in terms of phone calls dropped, etc. So that’s the core that we operate the entire business on — this platform. We built the app on that same platform. So, essentially, we have this amazing system operating our business but now the app also has this backend off which it’s based. Which means that we have immediate access to customer information: we know exactly what’s going on, every segment of the day. And we can use that information to plan accordingly.
We’ve also plugged a bunch of other applications into the platform. We’re not necessarily trying to develop everything from scratch ourselves. Obviously, there are platforms and [people] out there who do certain things really well — these global businesses, these global software businesses and platforms, that do certain areas of the business fantastically — and we plug into those through APIs and so on. So, I think for us, we have a combination of developing our own technologies, where appropriate, and also plugging into best of breed where appropriate, and integrating those into our solutions.
We have particular interest in a number of technologies we believe are going to have an increasing play in the financial services sector and beyond. So, for example, technology such as IoT, AI and machine learning, peer-to-peer, and fintech. A lot of those will be plugged into as well. For example, we have formed our own IoT company that operates as an individual business on the side. We have a 50/50 shareholding in that business, that [is] actually plugged directly into the Impact Farming platform for example. We have formed an AI and machine-learning business. So, once again, we have a shareholding in that; it operates as an independent business but also plugs into our existing businesses, and also into the Impact Farming platform. So, we’ll use, for example, that machine-learning resource to do a lot of the analysis, in terms of what’s going on in the app, what’s happening in terms of customer behavioor and usage. It also gives us insight into how to further develop the app — using predictive learning to provide better UX and UI for our customers going forward. So, whereas Fedgroup was a really traditional financial services business, probably five years ago, I think at the moment we more consider ourselves a technology company that happens to have about 10 financial services licences.
BE: You spoke about putting technology at the core of your business, which you seem to have done. Everyone focuses on the technology, but there’s obviously a huge cultural shift that that goes along with that. Last month, I interviewed the head of Uber Eats in South Africa, and our whole conversation was on data and how to use that to become more customer centric. I think you touched on that — having a single view of customer is so important. And it’s something that a lot of the really big corporates still can’t seem to get right, because everything seems very siloed. So, making those initial technology decisions, is really, really important in terms of how you can then gather that data, which goes into IoT and AI and prescriptive and predictive analytics. How has this changed your own role, and that of the CMO, from where it might have been traditionally?
TA: Whereas we formerly had a very traditional financial services business, we can now operate in multiple areas. Generally, in the past, marketers and CMOs operated perhaps a lot more out of intuition, gut feel, shooting in the dark and hoping that you can hit something. What data and access to information [have] given us is, perhaps, a lot more certainty, through access to information. That allows us two primary benefits. The one is it allows us to more accurately define the problem or opportunity that needs solving, or that we can capitalise on. Because obviously looking at the data, looking at information, one can isolate what the actual issue is, or “the what” more easily. Secondly, what tech allows you to do is it gives you more weapons in your arsenal, more possible solutions, in terms of how to address customer needs, or capitalise on those opportunities going forward. In a nutshell, the data and information [give] you just a bit more certainty, and a bit more direction, as opposed to always just shooting from the hip and hoping that you had the right solution.
BE: I think it’s also made marketing departments a lot more accountable. Traditionally, marketing would go to the CFO, ask for a budget, and come up with their strategy. Come the end of the year, the questions are asked — how has production done, how has sales done? Then, when it comes to marketing? “Oh, you [people] put up a couple of billboards; you run a TV campaign.” But it’s very hard to measure impact. The result has also meant that marketing as a business function has become more measurable, and therefore, there’s more accountability around it as well. Would you agree with that?
TA: Ja, I would agree with it. I also think there’s a danger inherent in that: one needs to be careful about not falling into short-termism.
I think far too many companies are focused on the short-term effect. And it is obviously a lot easier to measure short-term effects of marketing than the longer terms. I think one of the challenges of a good CMO, or good marketers, would be to walk that line between lead-generation, short-term sales, short-term growth, short-term measurability of marketing effects, vs always ensuring that one is looking to the end goal, and that one has a long-term view of where one’s going as a company, or what one is trying to achieve with customers, in terms of building the brand. And those long-term growth and sales effects that marketing, no doubt has a massive effect, in terms of achieving, just more difficult to measure. So there has to be that balance in my mind.
BE: My view is that agencies are often guilty of retrofitting insight to an idea, as opposed to being driven by insights themselves. So, are agencies adapting fast enough to what marketing departments and CMOs are really focusing on?
TA: I always find it remarkable that often agencies are supposed to be these real lateral-thinkers and breaking-the-mould-type people, yet often they’re pretty stuck in tradition, and the old way of doing things. And, unfortunately, I think egos also get in the way, so what you often may find is that a traditional agency would understand the need for technology, understand the need for other types of thinkers beyond your traditional above-the-line thinkers, may buy a digital agency or may buy tech capability, for example. Then what happens is that bought resource is absorbed into the main agency, into the traditional way of thinking, and is essentially almost forced to toe the party line, as opposed to augment and change and strengthen the overall agency proposition over time. So, for me, these new technologies, these new resources, the new ways of thinking, should be welcomed and absorbed into the traditional models, and seen as in additional weapons in the arsenal, as opposed to threats to people’s livelihoods and careers. They should be tools to enhance creativity and allow for greater certainty, better access to information that allows to enhance creativity, as opposed to being a threat to it.
BE: I think that’s the big misconception, that AI and these sorts of things will take out humans one day, but creative thinking is such a critical skill set that we still possess that technology just can’t keep up with at the moment.
TA: Absolutely, I think that is one of the things that agencies shouldn’t lose. I think the flip side of it is that there’s this onslaught of other competitors into the agency realm — the likes of the consultancies and so on. I think agencies need to play to their strengths, and their strengths, generally, lie in the lateral-thinking and creative realm. So, whereas in a consultancy market, giving you a solution based on best practice, or some sort of traditional model, I think where agencies should be coming to the fore is to provide the lateral thinking, the different view of the world, the innovative, never-tried method or solution that the consultancies, for example, aren’t going to give you. I think, too often, agencies are trying to do what these other [people] already do, as opposed to play to their own strengths.
BE: On that note, what do you look for a marketing partner, and what are the most important decision-making factors for you?
TA: I think a lack of ego, an ability to collaborate. I think you’re looking for people who are essentially commercially minded. I’m not talking about everybody within agencies, but the agency leaders that you engaging with need to be commercially minded; they need to be business people; and they need to understand the commercial intent of the organisation, including, obviously, the client — that their solutions need to have a sales result or have a growth result, some kind of commercial results at the end of things. So, they need to understand what the client is looking for, from a commercial perspective, and find creative solutions that achieve that goal, not some secondary goal that happens to have a better creative solution. We need to be solving the commercial problems.
BE: Ja, and I think that’s sort of what I was alluding to, earlier on, when I was saying I think that the role of marketing has changed to become more accountable. Agencies can’t hide behind the fluffy metrics anymore, because marketing does actually have a measurable way that it adds to the bottom line now.
TA: I guess maybe what I didn’t say, because primarily what I’m looking for in an agency is creativity, I’m looking for a high level of creativity, something that is going to cut through the clutter, that is going to be massively impactful, that is going to create an impact on the customer, is going to be spoken about in the marketplace, is going to generate fame for the brand. So I am absolutely looking for a highly creative solution that is going to stand out from the wallpaper. But the creative solution needs to be focused on solving the commercial problem, or challenge, or opportunity, as opposed to just fluffing some egos.
BE: Do you think we do you think we have the talent in this country to pull that off? Or in general?
TA: I do think we have the talent, ja. I think there’s a lot more collaboration needed these days. I’m talking within organisations, as well as within the service providers. So, whereas people, in the past, were happy to go off in their silos and do their little bits and come back to the table, I think the world is moving way too quickly for that, these days. We’re looking for far more agile solutions, far more prototyping, formal design thinking, agile methodology, where we have iterative processes, that can be adapted to change in the short term. For example, even if you just look within organisations that marketers work for, often you need a lot more collaboration within the departments; within the various functions, you need to be aligning the entire organisation to customer-centric thinking, to a marketing disposition, and focus on the world, where the customer is at the centre of everything. But you can’t do it all yourself — you need to rely on other functions; you need to rely on your service partners, at a collaborative level. And I think what marketers are looking for is way more collaboration between the various marketing service providers — there are just too many silos, too many egos at play, that aren’t in the best interest of the brand.
BE: Ja, I could not agree more. As an agency — not to blow our own trumpet — but we’ve always prided ourselves on collaboration. I mean, literally on our wall is written “No egos, no bullshit.” I think a lot more collaboration is needed, and to understand that the pie is big enough to share, and that it also grows, the more you collaborate. And we should be worrying about the end results for clients, not what lands up in our bank account. Because ultimately, now that it’s measurable, the more growth we can prove, from a commercial viewpoint, obviously, if we grow people’s businesses, as marketers, then the pie increases in size, right?
TA: Ja — for example, when we did the Impact Farming launch last year, my big message to all the partner agencies was: this is an opportunity for all of us. There’s an opportunity for the Fedgroup brand, in terms of an innovative platform, putting our product as well as our brand on the map. But it’s equally an opportunity for all the partner agencies.
But, from a revenue perspective, going forward, as well as the creative opportunity where, if we make this work and it works for the brand, and it’s a commercial success, you know, there’s more of it going forward. If we’re all sitting in our silos and just worried about our own bottom line, it doesn’t help anybody going forward.
BE: Just one final note on that point, when you’re talking about collaboration between service providers, I think one thing I’ve noticed is that clients don’t want to, or marketers don’t want to, be the ringleaders, right? They don’t want to have to sit and coordinate everyone. They want everyone to go off and be mature enough to sit down and sort it out among themselves and collaborate naturally, as opposed to them having to be a ringleader, and always bring people around the table.
TA: I completely agree with you; I think it’s absolutely fair to say [that]. I think often you sit on the agency side, and you wonder what the hell are clients doing all day. You know, we’re busy, we’ve got a lot going on. A lot going on, that is not necessarily sitting in the comms side of things. And I think you’re wanting, absolutely, to rely on your agencies to act like adults and act in your best interests.
BE: Finally: any recommended reads or podcasts that you listen to?
TA: There’s a great book that I’m reading at the moment called Modern Monopolies.
BE: Apparently, I have some inside info that that’s like a must-read for everyone inside Fedgroup!
TA: [laughs] Absolutely — we do have some exco reading material, just in terms of aligning us all in terms of where we’re going as a company and I think, if you’re wanting to understand the structure and the business models of future companies, I think it’s a great book to read, Modern Monopolies, just in terms of understanding platform businesses vs old-school, linear-type businesses.
BE: And How Brands Grow?
TA: I am an absolute evangelical about Ehrenberg-Bass [Institute for Marketing Science] and [Prof] Byron Sharp. And all the thinking that goes beyond, behind that. I think that any marketer who hasn’t read How Brands Grow, and the subsequent books and papers and research articles, is losing a lot. I think that Ehrenberg-Bass [is] at the forefront of understanding the reality, and the empirical evidence of what is going on in markets, and how to nudge consumers forward.
BE: Be sure to subscribe by hitting the subscribe button below the video. Until next month, keep connecting!
- Marketing Science: How Brands Don’t Grow — marketing scientist, Kevin Gray, asks Prof Byron Sharp of the Ehrenberg-Bass Institute for Marketing Science about key mistakes many marketers are making.
Transcribed using otter.ai and then edited lightly.
The founder of Continuon and Platinum Seed, Bradley Elliott (@BradElliottSA) has created a number of businesses in the digital and technology sectors. He believes that marketing needs to be reinvented so that it becomes more useful to humans and brands. He’s also a collector of fine whisky. Bradley contributes “Only Connect”, exclusively to MarkLives.com. In this podcast, he chats to custodians of the world’s top brands about what matters most to them.