In 2006 at the International Advertising Association World Congress in Dubai, I interviewed Jim Stengel, at the time P&G’s global chief marketing officer. Nice guy, sizeable entourage, determinedly on-message in that Corporate American-style. He left P&G in October 2008 to set up his own marketing agency (“We must apply life’s lessons — generosity, love, humor, empathy and service — so that marketing inspires life, and life inspires marketing”) and blogs occasionally. Here, he talks about the importance of design, customer engagement (and follow through) and being prepared to fail.
For someone who claims to give only one or two industry speeches each year, Jim Stengel’s message of “the consumer is at the centre of all we do” is a well-worked schtick. Since refocusing the sprawling P&G business in 2000, the firm’s global marketing officer has made it a central theme of every marketing discussion. “The consumer is our boss,” he tells the IAA World Congress in Dubai.
Really? Not quite, but it’s a good line.
“What it means is the consumer has all the power,” he explains, off stage. “We want to be close to the consumer and we want to be inspired, but they can’t always tell you what they want next. That’s not how innovation happens.”
P&G’s task, he says, is to observe consumers (“see their frustrations, their needs”) and design products, services and communications plans to meet them: “It would be dangerous if we said to the consumer ‘tell us everything you need’. We’d never do that.”
In practise this means more retail visits, more time spent seeing how consumers use products, and more emphasis on design. Overall, more time out of the office. Less time with charts, more time spent with, say, mothers to learn about Pampers. His says the easy-clean Swiffler product (indeed, category) was wholly inspired by such insights.
“It’s a change of mentality. I don’t like to think of our brands as simple products. Now, not many people would immediately say we’re in the service business, but we’re trying to have that mentality,” he says. “There is a relationship between our products and the consumer, and we want to learn everything about that – how it’s presented in store, how easy it is to find, to understand?
“It’s not just how it cleans, but how it feels, smells.”
Getting to this requires the brand team to take responsibility for everything about the product, he explains, including packaging and design. The consequence is creative, effective communication.
“If you take these learnings into communications, you’ll never make a bad ad and you’ll never do media plan that doesn’t engage her in a way she doesn’t want to be engaged with. It’s not about making communications and forcing it out, it’s thinking about how you’re relevant to her life.”
Stengel points to a doubling of profits and a 40% lift in sales since 2000 as proof the approach is working (the company has also upped the number of $billion brands, even excluding the Gillette deal). Such success is now a great incentive to press on, but how did he start to shift the culture of such a diverse, tangled business?
“It starts form the top. This thing is valued by all our business heads, and it’s expected when you do market visit – I’m out seeing consumers on this trip,” he states. “You take the compound impact of 140,000 people (P&G’s employee count) and it’s powerful.”
With such a positive energy across the collective brands, does this suggest a higher profile for the P&G parent brand? Is there value in ‘Tide by P&G’?
Stengel thinks not. “It’s mixed around the world. In Japan, for instance, it’s important for consumers to understand where the brand comes from. I’d never see us pulling out of that. But in, say, the UK it’s less important.
“Our basic philosophy is that our brands offer something special. The P&G name is important as an employer; for our stake holders to see we have good corporate governance, that we’re responsible. But does the P&G mean much if we’re launching a new product? For retailers, yes, but we’ve not found it to be a driver among consumers.”
Bossing the agencies
Changing the way P&G views the market has also required its marketing communications agencies to shift the way they do business. P&G is an increasingly demanding customer in this relationship.
Stengel diplomatically allows that “we’ve worked with great partners who’ve helped us grow our brands over many years”, but is clear that changes in approach need to be made.
“It will be different brand by brand but we’re looking at a merging of disciplines – design is becoming very important, PR is very important, communications planning is very important. The brand needs flexibility and agility.
“We’re moving towards one team with one set of goals and one compensation scheme.”
He admits this will require huge changes to way agencies are structured and that the concept is so new there has to develop a standard model. Of the P&G brands, he says Pampers is probably the best example, with a strong central team, shared learnings and a range of interaction programmes, but reviews are ongoing.
“It’s up to us to lead this. We need to outline what business model is needed, and enable our partners to put that team together. Sometimes that will mean we need new agencies.
“Sorrel believes in it, Levy believes in it. It’s not simple. We need to tackle it together.”
Stengel rolls out US agency Wieden & Kennedy during his IAA address to trumpet P&G’s “loyalty and respect”. Off-stage, he says agencies can expect loyalty if linked to performance.
“We believe in loyalty in continuity of expertise, but we believe in that with performance. We won’t fire anyone right away. We’ll be honest in our feed back and if an agency doesn’t evolve and change, we’ll take action.”
He makes great play of not being afraid to fail. He cites the Apple brand as being a great inspiration (Nissan, Motorola and Tesco also get favourable mentions) because “they continue to reinvent themselves and don’t always win”.
“Failure’s not an easy thing. We’re a competitive company, we like to win, and we like to be number one. This has to start at the top,” he says.
“What we say is ‘fail early and fail cheap’. Get your learning in early and try something before you investing the company on it. The time to fail is not when you’re launching a new brand into a major market. It’s trying a lot of different things early in the innovation cycle.”
Febreeze, which came a consumer testing in Japan, was not an instant hit, but given time and patience it has grown to become a “several hundred $million brand” and rolled to North American and Europe.
“We’re not always successful, but if we think we have something, we’ll have the patience to stick with it.”
Stengel has said as he’s grown older he now has more courage to back hunches, to go with an idea rather than wait for 10 pieces of supporting data to come through. How does this sit with P&G’s continuous push for greater means of measurement?
“We’re putting a lot of effort into measurement, and we’ve done some interesting work on word-of-mouth, influencer marketing. But there are two messages: let’s push on innovative measurement, but understand that we’re never going to be able to measure everything. As long as we’re strong consumer-based organisation, that has to guide us. I’ve seen tremendous examples of effective marketing that has understood where the consumer is coming from and based marketing plan on it. But you couldn’t measure it.”
And the Middle East? Lacking in hard data and seen as conservative, can this part of the world contribute to P&G’s broader innovation? Absolutely, says Stengel.
“We have very high shares and a strong local organisation. The percentage of business we do here that comes from local innovation is far higher than in other markets – and a lot of it is being exported. Work we’ve done on Head & Shoulders and baby care has gone international.”
“There are lots of opportunities today,” he continues. “There weren’t cell phones 10 years ago, no iPods three years ago. Any time I see a private label doing well or a small label coming through I know we missed something. I hope our company stays entrepreneurial enough to take advantage.”
Ultimately, he says, this is P&G’s competitive advantage – “learn, share quickly” – but doesn’t predict a homogenised world.
“There are core values and categories that transcend cultures, but how you express them in different countries changes. Communications that have worked here we would not have dreamed of doing in Cincinnati or Geneva. We need to continue to share with each other, our knowledge is our power.”