63. Market share masterclass: blending organic growth and M&A

PLEASE NOTE: This transcript has been created using fireflies.ai – a transcription service. It has not been edited by a human and therefore may contain mistakes. 

 
00:03 
Rachel Fairley 
Welcome to Unicorny. This is a podcast about the business of marketing, how to create value and how you can help your business win the future. And I'm your guest host, Rachel Fairley. Welcome to part two of our discussion with Duncan Daines. We're talking about how to create value. It's the question, right? And Duncan is a pro at this, as marketers were endlessly trying to prove we add value to organizations. But it isn't easy. Duncan's approach to marketing is focused on the business outcome. And in this part of the show, he's going to talk about how to grow market share. And then the big one, how he connects marketing to the business and its outcomes. Let's go. It's very hard to grow your market share unless you grow your customer base.  

 
00:54 
Rachel Fairley 
And that involves wooing more people to buy from you and to buy from you repeatedly. Often what marketers do is they go and look for lookalikes for the customer base they already have and go for organic growth. It then becomes about how much of the market can you reach with what frequency and how can you convert those customers? In what other ways are there for growing your market share that you have found work for the business that you're in?  

 
01:21 
Duncan Daines 
It has, in broad terms, at the largest sort of scale of the market, there are about 25 market opportunities. And those 25 market opportunities each have are usually contracted on the basis of seven to ten year minimum contracts. All of those are identifiable and all of those use particular technologies to achieve that organization's aim. In order for me to generate organic growth in market share out of that market, just using that as an example, it could take me 1520 years in order to gain, I don't know, maybe two or three points of market share, if I'm lucky. At the same time, I have competitors who are trying to churn me out of my positions. I've got replacement. So actually I may lose and not gain, or I may gain and keep, you know, so I've got to think about that.  

 
02:31 
Duncan Daines 
So at times like this, and particularly in the use of different technologies that they may employ, and those technologies will be deeply embedded into the organization construct, it becomes more opportune to then look at m and a strategy rather than doing the hard yards of traditional organic growth and traditional sort of marketing disciplines, in order to feed that organic growth.  

 
02:58 
Rachel Fairley 
In which you might end up just standing still anyway.  

 
03:00 
Duncan Daines 
Yes, you may, because the execution risk around that organic approach will be such that there are no certainties and there are no certainties on the spend that you'll put in that you'll extract back out in value, particularly if you are trying to go from one technical environment into another technical environment where you don't have those skills and competencies or the regulatory approvals, and you're trying to churn somebody out of a position that once again is very hard yards. So you've got to think, and again, this is very much within the context of the industry that I'm in, is you've got to think more broadly about how you're going to achieve those aims.  

 
03:42 
Rachel Fairley 
I get that it's within the context of the business you're in, but I think it is actually just a hard lesson for marketers, because the natural tendency is often to look for those lookalikes and mark ons to campaign your way through it. But there are choices. You can have strategic partnerships and joint ventures. You can do m and a right you can acquire in that customer base. What you're describing is that it's a little bit like that catch 22 of when you start in your career and they want people with experience and you don't have any experience, is that in order to get into a new market or to grow market share, you have to have credibility. You can't get that credibility until you've done it.  

 
04:19 
Rachel Fairley 
And the opportunities are coming up so infrequently that the risk of not being able to pull it off is huge. And you won't know till the end.  

 
04:28 
Duncan Daines 
That's entirely it. It is very tough. But again, it does come back to whether it is commercial marketing, corporate strategy, marketing strategy, insert whatever term here, it just comes back to. Right. How is the organization going to succeed to the benefit of its shareholders within that market space? You've either got, I'm going to defend, I'm going to stay the same, I'm going to grow, or I'm planning an exit. They're your big choices. Probably some more in between. But let's say they're the big choices. Most people will say grow. How you're going to do it organically, inorganically, or a blend. If you decided on the blend, then you need to start looking at, okay, who your possible m and a targets. What position are they going to get? What position are you going to get to with them? What's the execution risk surrounding that actually?  

 
05:28 
Duncan Daines 
Does that allow you to bridge into the other related markets as well? So what's the total size of that.  

 
05:34 
Rachel Fairley 
Opportunity when those customers come up for contract again? So if you win a customer and you do the five, the seven, the eight years, whatever it is, that they sign up for. What is the mentality of the business when that sign up happens again? Is it that it's a prospect to woo, or is it a kind of existing customer that you're going to try and retain? It's almost re tendering, isn't it? Opportunities.  

 
05:57 
Duncan Daines 
Yeah, it is. And I think that the difficulty with long term contracts is that you can become complacent and you can become reliant on very good KPI scores to carry you over the line. I can think of one contracting opportunity that we have. KPI scores of 100%. Our KPI's are not within doubt at all. However, they will put us through the wringer of contract reviews, et cetera. And the discipline of that so that we don't become complacent. And when we then bid for that, you are effectively looking at, because, you know, when the end dates of these things are, you're looking at sort of year 18 month lead time into that process. Then you're initiating your sort of campaign approach around that bid. You know, you're identifying who you are seeking to influence around that bid, how you're looking to influence that.  

 
06:58 
Duncan Daines 
You're looking at any partners that you're going to bring on board to increase your success. But essentially you're going to strip it right back and build the whole thing up from the ground up because you cannot make the mistake of assuming that you are in a better position than your competitor. Yes, you have a relationship, but if you build it from the ground up again, you're then working at the same level as your competitors. And that is really beneficial because you have to look at the problem again. Otherwise you can have a tendency of just looking at it. Well, it's just a cut and paste of what we had before, isn't it? Because we've got 100% KPI scores.  

 
07:39 
Rachel Fairley 
I remember the wonderful Amanda Jobbins saying to me, well, all the lights are green, but we know it's not working. It's like, yeah, that's a classic, isn't it?  

 
07:50 
Duncan Daines 
Whatever it may be, you've just got to have that discipline because these opportunities are too valuable.  

 
07:59 
Rachel Fairley 
Is business like a game of snakes and ladders? All the shortcuts seem to lead to snakes. What I appreciate about Duncan's approach is about the outcome and not the process. He works back from the goal and not forward. That gives him an advantage over many marketers. Because no matter what the problem, often the answer for marketers is markoms. Actually, lets be honest, its usually demand generation. Markoms not even brand demand. Duncan is reminding us of the importance of remaining agnostic. There are lots of goals and challenges and problems that we can't campaign our way out of. There are customers we just can't reach or woo or retain. It doesn't matter how tempting our promotion is, we could dangle the most tear jerking emotional hook in front of them and they wouldn't bite.  

 
08:52 
Rachel Fairley 
And in those cases, we need to think differently about how to solve the problem. This takes us to the big subject for all in marketing our role. Are we truly connected to the outcomes of the business anymore? Are we just one p in the four P's? How can we connect better to the commercial output of the business? What can we do? Let's see what Duncan has to say about this. So you are a chief marketing officer and you do run marketing, although I know in your heart of hearts that's not how you think about it at all. Do you think the term marketing is actually a useful one?  

 
09:30 
Duncan Daines 
I was at a meeting at a place, I know this sounds very vague, but I can't mention it, meeting somebody who turned around and said to one of his colleagues, and I remember this so distinctly, why is the marketing guy in the room? And my reaction to that was, I didn't say anything to that particular person, but it said to me everything about the term marketing. And I feel really passionately about the fact that it's become hijacked and misappropriated and has just become broadly associated in lots of people's minds with communications, and it's lost its link to commercial output. In my head, I find that really difficult. And actually, as a consequence of that, I find the term marketing now really difficult, a difficult title statement.  

 
10:31 
Duncan Daines 
I have quite a deep reaction to it now because I just think there are so many people that are listening to this that may feel the same, but they all do fantastic work for the companies that they're working for and are really generating value in those organizations. But that value is hidden under this term, and this term is not really seen as being as fundamental to the success of organizations as it really should be. And I don't know what the resolution of that is.  

 
11:03 
Duncan Daines 
The other thing that I'm increasingly becoming aware of, which is difficult to sort of say or suggest and totally contradictory when you work with a company that is in aviation is, there is a slightly darker side that can be seen to the world of marketing and its use as a label within consumerism and consumerism's effect on the planet, in that it's the marketer's fault. Why we're that is leading consumerism and waste into a planet. I don't like to see kind of what we all do in listening to this podcast as being identified as a cause of an effect. We all have responsibilities for that, but I start to see it being tagged quite often. Now, look, I don't want to overplay or overstate the case, but our job is to enable a sale at the end of the day.  

 
12:01 
Rachel Fairley 
That's true. And so that's the reality. There's a lot of chief commercial officer, chief revenue officer, chief customer officer. There's all sorts of different terms out there, sort of all saying the same thing, which is how to find and woo your customer.  

 
12:15 
Duncan Daines 
Yeah, I think that point about the number of titles. So I also have another title which is group head of engagement, and that's to get over the situation of why is the marketing guy in the room? There is title soup that goes along, which generally just means the same thing, but it's kind of what's generating the title soup is probably the dissatisfaction of how marketing is seen within organizations, or even externally from the organization. And it's really interesting in sort of my context again, is that I don't have what you'd traditionally call a marketing team that does the four P's or the seven P's or any other sort of framework that you'd like.  

 
12:56 
Rachel Fairley 
Now let's talk about that. Do you have people who do marketing working for you?  

 
13:00 
Duncan Daines 
I have people that are specialists in pricing. I've got people that are specialists infrastructure, distribution, supply chain. I've got people that specialists in regulation. I've got people that are specialized in aviation operations, ground operations, security. They're my team. They're the people that I'm bringing in to solve the challenges around product, place, price, promotion. They're the people that I'm using. I'm using them effectively as a squad where I can bring them in and dynamically form a team of capability to be able to get whatever it is the organization needs to do to achieve the outcome. I'm a CMO without a team. So working in these dynamic squads allows you to aggregate the knowledge of the entire organization, not have that knowledge resting within a vertical stovepipe that is called, for want of a better term, marketing.  

 
14:09 
Duncan Daines 
It is for the size of business we are and the structure of business we are. It is a much more efficient way.  

 
14:16 
Rachel Fairley 
Of working, but it makes it much easier to stay focused on product, price, place and promotion, because you can bring that skill set rather than it being about what's in your fiefdom, and therefore you're just going to focus on the bit where you've got the people reporting into you that do that work and ignore everything that you don't have jurisdiction over. You think about what the business has got to achieve with the resources it has, not about what's yours.  

 
14:40 
Duncan Daines 
Yes, that idea of a sort of fiefdom don't have in. When I had a small fiefdom in 2021, 1 January, we introduced new corporate strategy and I disbanded what was effectively the group marketing team into the business areas. Those business areas, or strategic business units had different requirements, different needs, different stages of maturity. And therefore the marketing people, such as they are now totally aligned into those groups and play a part of the squad to enable getting to an outcome that is appropriate for that strategic business unit.  

 
15:27 
Rachel Fairley 
As people progress up an organization and they want to manage. Not everybody does, of course, but some people wish to manage. How do you give them the opportunity to manage if you haven't got a kind of classic department by department hierarchy?  

 
15:41 
Duncan Daines 
In one of the strategic business units, there is a hierarchy. So it's a software as a service is one of their core products, and they need to generate, they're on a growth cycle. At this moment in time, they're moving into a different geographic market. There is quite a bit of communications orientated items to be done and delivered. So going back to our previous topic of in house or agency, they've formed a little in house production team and therefore the head of marketing within that particular environment. He is then managing line, managing the production resource around that, to be able to deliver the business's requirement, but still working in a squad of other people that includes developers, includes commercial side, including legal, et cetera. So there's still that sort of squad mentality.  

 
16:42 
Duncan Daines 
But he in this example, has the opportunity to line management and grow his line management skills.  

 
16:48 
Rachel Fairley 
In a sense, managing other people and managing, getting something done and managing yourself right in those dynamic situations is a skill set which requires IQ and EQ and develop your experience. But it's not this idea of you come in after university at a junior level and you work your way up to manager, and then you get senior manager, and then you become director, and then you become a VP, and then you become that kind of hierarchical growth. It's much more about how your expertise contributes to an outcome and how you can work with others, whether they are working for you or whether they are working alongside you. It's a very different mentality.  

 
17:28 
Duncan Daines 
It is, and probably again a context for a sort of mid sized organization. Organizationally, there are probably only five or six layers from the most junior individual to the CEO. So in terms of the typical hierarchical growth within the organization as it stands at the moment, there's not that. Well, if you come here, then you'll do that, then you'll do this, then you'll do that, then you'll do the other. What you will do is grow in your skills, capability, the way that you understand the world that we live in. For sure.  

 
18:06 
Duncan Daines 
To be honest, for a lot of younger people, that enables the idea of squiggly career, because they'll come, they'll absorb, they'll learn, they'll do three, four years, maybe in certain circumstances, more, and then they'll take that and move on and apply that to maybe an organization that's slightly bigger, slightly more hierarchical, maybe more traditional structure, and then move on. And then, I don't know, we may see them again.  

 
18:35 
Rachel Fairley 
So, Duncan, what's next for you?  

 
18:37 
Duncan Daines 
When I started working where I am, did I ever think I was going to be there for a decade? That sounds even longer than ten years, weirdly, yeah. We talked about looking up. When I look up and I look at what I've done, what I've been part of, the squads and teams that I've been involved in, I've just learned so much and so many people have been so patient with me, as I've learned, and I hope I've replayed that to them. I'm now at a point where I think I understand.  

 
19:08 
Rachel Fairley 
Congratulations.  

 
19:11 
Duncan Daines 
And therefore, I think, for me, kind of what's next is a really exciting time. Companies on my watch, gone from being listed to now delisting. Delisting is going to give it greater sort of boardroom agility. Got a very strong balance sheet. We've got some really exciting possibilities. We know what we want to achieve. There's some really interesting programs that's involved in the organization. So I'm looking forward, in a bizarre sense, to more of the same because the same isn't the same every day. Every interaction is genuinely different. And it's a really interesting and exciting organization to be part of. And it has frustrations, as everything does. But I think what next for me is probably more of the same.  

 
20:08 
Rachel Fairley 
I love it. You sound like you've warmed up for your job now.  

 
20:11 
Duncan Daines 
Yeah, it sort of feels like that, actually. It feels like you got to a point of sort of when neo in the Matrix suddenly sees the Matrix, you sort of feel a bit like that. So you feel how. Get to understand now how all the bits are starting to be connected. And that's really quite exciting.  

 
20:36 
Rachel Fairley 
My first boss, Maurice Wolf, an amazing general counsel, gave me this advice. Rachel, you need to go and find people that are better than you at what they do and work with them. Isn't that just what Duncan's been describing? He's bringing together people who have the expertise and developing their expertise in areas where the strategy needs something to be done. And then he's encouraging them to have that focus and make progress towards a goal. This is about the importance of staying agnostic in our problem, solving the right people and the right tasks, working together. There's a solution for every problem. It's just a question of staying open minded as to what it might be. It could be markhams, it could be a campaign, or it could be m and a.  

 
21:26 
Rachel Fairley 
Thinking about all the levers in business we have available to us to pull can only help us as marketers got to connect skills to achieving the outcomes of the business we're in. Marketers are effectively the customer's representative, just as account management are the marketers representative inside an agency. We need to deeply understand what brings buyers to market to shop, what they need, who they ask for advice, how often they buy, what they want to achieve and what we can offer that they want and how we can help them make the most of it. That's how we help our businesses grow. And in both parts of this show, Duncan has told us how he creates value. And, you know, not once, as he said the words campaign or account based marketing, he blends the tactics required to achieve the outcome.  

 
22:18 
Rachel Fairley 
He thinks about his successes and failures based on the revenue that it produces and that's why he's so credible and successful. He's a commercial marketer in a challenging market, in a mid sized company. He doesn't start with marketing, he starts with the goal. And everyone's got a stake in the outcome. You've been listening to Unicorny, the antidote to post rationalised business books. I'm your guest host, Rachel Fairley. Your regular host is Dom Hawes. Nicola Fairley is the series producer, Laura Taylor McAllister is the production assistant, Pete Allen is the editor and Peter Powell is the scriptwriter. Unicorny is the Selby Anderson production.