62. Segmentation secrets: precision marketing in niche markets

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. 

 
00:00 
Rachel Fairley 
This is an episode that comes from the heart of Unicorny's purpose, how to create value if you believe that a marketer's job is to drive business growth, you're going to love listening today's guest. The role of a marketer transcends job titles, departments and job descriptions. Yes, really. And this episode brings it starkly into focus. Please welcome Duncan Daines, head of engagement at Gama Aviation. Duncan is a brilliant commercial marketer. Isn't it weird that he doesn't have the word marketing in his job title? I'll be asking Duncan to explain why shortly. 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. Duncan started his career in product design before moving into marketing.  

 
00:56 
Rachel Fairley 
He's a classically trained marketer who's thrived in house and in agencies. He worked at Landor, where he tackled transformation projects for brands like BP and Ferrari. As the digital age blossomed, he moved to British Airways, revolutionising their digital sales processes. We met many years ago. He's consulted from London to Dubai, around the world, influencing strategies for brands including Emirates, Dubai properties and Tata, and then aviation called, where he's been steering mergers, acquisitions, listings and delistings. So what makes Duncan tick and how does he align super targeted marketing with visible commercial outcomes? That's what we're going to find out. When you are thinking back about your career and thinking about how you run marketing right now, for most marketers, you're either a kind of agency person or you're an in house person.  

 
01:58 
Rachel Fairley 
And you and I both share the experience of doing both, and I hugely value it. How do you know what skills you need to have in house versus skills that you actually need to get from an agency?  

 
02:13 
Duncan Daines 
It's a really interesting question and I think this is a changing landscape. So I think in my experience of agency world and agency life is a lot of the business model around agencies is in the production, long tail production cycle. It is somehow trying to remain relevant in order to continually, dare I say mine, that relationship for value. When I look at it from the other side of the fence, from my side of the fence, actually a lot of the tools and a lot of the capability I can possess very easily. And really all that is being given to me is manpower to fill a gap that I may not have and I may wish to turn it on and off. That's really what it comes down to. What I would want is the piece which is much more about, what am I missing?  

 
03:11 
Duncan Daines 
What can't I see? What am I being myopic on? You know, what are the macro trends that are going to hurt me and how do I need to respond to them, not just in a five year timeframe, but also in a shorter term? What is it that you can open my eyes to? And I appreciate how hard that is, because for an agency to know your business better than you know your business is incredibly difficult. Often the start point to that is the traditional, well, we'll come interview the CEO, we'll come in to view the management team, we'll host some workshops, and then we'll come up with a strategy paper or a strategy presentation. Again, something I struggle with. I've done that. I've been on that side. I've done those things.  

 
04:02 
Duncan Daines 
But actually, I don't know that I ever really had miraculous insight beyond what was sat across. I think all I did and all I achieved was coming up to sort of some subpar level that they had already understood. And in effect, I've just wasted time. And that, for me, is the conundrum. I don't proffer answer. There are people that would listen to this that probably have those answers or are working on those answers. But as a buyer of services, what I would implore is please concentrate on the value piece, which is where you can offer the best assistance to your client. That is where the future of the agency model has to go to.  

 
04:48 
Rachel Fairley 
I think agencies should be bolder. They should expect their clients to show up with the information that helps them understand the strategy really quickly. The brilliance in an agency is that you work on lots of different industries and different sizes of business in different situations. I want that information. I want to know how I can, you know, learn from Magpie ideas that have worked for consumer goods, that have worked for aviation, that have worked industrial products, for something that I'm doing in tech. I get quite frightened, actually, when agencies play back a sort of mediocre version of what we've told them. And I understand that's part of the processing of them learning about you as a client. But I'd rather they just said, we need 30 grand or 20 grand or whatever to learn about you. Teach us what learn.  

 
05:35 
Rachel Fairley 
And then we're going to basically bring everything that we know from working on hundreds of clients to bear on figuring out this problem or bringing an injection of creativity.  

 
05:45 
Duncan Daines 
I think sometimes as clients, we set about the process the wrong way in its own right, because we're sort of following a believed methodology, actually, maybe that, you know, the learning phase is the thing that should be. Let's forget about the idea of pitching. Let's, you learn about my business. You give me some salient thoughts on where you can add value into my business. You tell me what the cost is going to be involved in further understanding those ideas and driving them through the business, or realizing some of those. And that is a better way of assessing who you're going to want to work with rather than some ideas.  

 
06:30 
Rachel Fairley 
How much of your thinking is shaped by working for a decade in mid market? If you could throw money at it, would your answer be different?  

 
06:38 
Duncan Daines 
I don't think my answer would be different, and that comes from the context of the organization. I think the question is really interesting, but there's never a world where money is no object. It's always going to hit you somewhere. My boss could turn around and say, here's x million, go spend it. But I've got to turn that x million into some value. Actually, when I look, particularly with the world that I live in, if I look at the best way to expend x million, it almost certainly isn't going to be through traditional marketing communications, because of the size of markets that I'm involved in. Because in the nature of those markets, it would just create excessive amounts of wastage, which I can't convert. I know I can't convert it into value.  

 
07:34 
Duncan Daines 
My better way of expending that would potentially to be look at an m and a activity, because I have to look, I have to make a judgment call based on the amount of the fictional amount of money and how to best deploy that to benefit the organization and the creation of value. However, if I took the question in the way it was intended, and I was to say, okay, would it change anything, my perspective of hiring an agency? If I had an amount of money, I don't think it would, because I've seen the other side and I can't unsee it anymore. I've seen the way that it works. I've seen the inefficiency. I've seen it for what it is, and I'm clear about it, and I can't self justify that.  

 
08:27 
Duncan Daines 
The only way I could is if I needed to achieve something quickly and effectively. I'm just hiring manpower, but I can hire that very same manpower through other means if I wish to.  

 
08:40 
Rachel Fairley 
What's really clear to me is you're in a position where you can actually have those sort of thoughts and discuss them and debate them and come up with the best way forward to grow your market share. I don't know that every marketing leader is in a position where they can even voice these thoughts because they're deemed to be corporate strategy or they're deemed to be what finance takes care of.  

 
08:59 
Duncan Daines 
That point is really well made. I always come back to the context of things. I'm in the context in which I'm working. So yes, you're right, that does allow me to have a broader base, but I would still have colleagues that would say, come on, we need to go into the market and we need to achieve x in terms of organic growth. And this is the way that we need to do it and work with many of the sort of pressures that other people listening to this podcast would have on a day to day basis. I don't want to create an impression that I'm above all of that, but what I have to do all the time and what is imperative to me is how do we get whatever we're spending to maximize the value return, the direct value return. That's hard.  

 
09:55 
Duncan Daines 
It's really hard, because I know in a mid cap organization and people operating in this sort of scale would appreciate this, that whatever I spend has an effect on EBIT, has an effect on PBT. This is not a profit center. This is money going out the door and it will hit the bottom line. And so you have a responsibility to make good calls. Sometimes those calls can appear to be quite conservative. You just have to make, try and make the best call that you can with the information that you have around you and the understanding of the way the markets are likely to perform for you, how your audience will buy, how your audience will purchase, and their likelihood of doing so.  

 
10:47 
Rachel Fairley 
I take it you would hire people that have done both agency and in house. Would that be your preference?  

 
10:52 
Duncan Daines 
My preference would be to do that. But what I really want out of those relationships is kind of curious minds. It is, you know, behaviourally, it's. I want, I want people that are going to open my eyes to things, challenge me about this. That's where the value add is going to be. I can only see what I can see. And for somebody to come in and to look at for longer term sector trends and help me be able to articulate how we need to respond to those and how we need to build business cases, how we need to build investment cases around, that is the kind of people that I look to. Yes, I do need also people that have some technical skills. I do not deny that, but those technical skills will be used on a sort of cyclic basis.  

 
11:50 
Duncan Daines 
They'll be used when I need them and not used when I don't. But the people that add the higher value are always going to be the curious thinkers.  

 
12:04 
Rachel Fairley 
Show me the things I cannot see. Duncan is spot on. That's why marketers hire agencies. As Duncan said, it's bloody difficult to do. An agency can never get to know a brand better than the brand knows itself, though I'm sure agencies feel like they do, especially after years of working together. What marketers need isn't more information about themselves or better expressed versions of it. They need something different. They need an injection of lateral or spider's web of creative thinking. Inspired by the glitteratian successes and failures from other industries. Agencies and consultants get to peer inside so many industries and countries and markets and businesses of different sizes, structures, ways of working. They bring all of that knowledge as fresh brilliance. So beautiful agency listeners, remember that in your next pitch. And marketers do. Stop putting so much emphasis on category expertise. That's your job.  

 
13:08 
Rachel Fairley 
Instead, ask your agencies to bring you something you can't do or get. Ask them how to think about your opportunity in a new way. Okay, let's move things on. Now I want to talk to Duncan about segmentation. Like me, he's a market oriented marketer who values segmentation, targeting and positioning. Today there's much debate in the marketing echo chamber about whether segmentation is even relevant. Let's get his take.  

 
13:36 
Duncan Daines 
Segmentation has always been quite close to my heart, particularly sort of going back to old days and kind of looking at brand portfolio analysis and doing work around that, and then looking at how that dovetails into specific segments and how brands correlate to specific segments, etcetera. So I've always had an interest in it. There will be a lot of people listening to this that are working in B two C markets where they're dealing with very large universes of people, where their segmentation has to be led through a variety of things and data will form a large proportion of that to make sure the segment is viable in its own right and to understand much more of the dynamics of this. I'm lucky in that I don't work in those kind of mass segments. My universe of people is probably around about 100,000 total.  

 
14:40 
Duncan Daines 
Of those 100,000 people, you can break them down into different buying behaviors, different personality types, relatively efficiently and at a qualitative level. Now, I appreciate there are some people on the back here that probably holding their hands up, screaming and thinking, well, it's got to be qual and quant. I understand that. However, context of where I am, I don't have the money to do all of those kind of things, and it's in an inefficient spending. I can hone my segmentation down, and the way that I hone those segments down is again, looking at the more qualitative, behavioral Persona led. So where am I picking that information up? You know, my budgets are limited. I've got to play them smart. So where am I going to go? Well, I'm going to go to my internal resources, number one.  

 
15:34 
Duncan Daines 
So I'm going to go to my sales team, I'm going to go to my customer service team, I'm going to go to delivery teams, and I'm just going to sit and listen to begin with. And I'm just going to listen about what are the behaviors that they're starting to see and how are they being manifest through decision making cycles right from the start, right from first point of contact right through into delivery. And then I'm going to begin to amalgamate those because they're not so very different. I'm not talking about a large universe of people here, and they can be quite quickly aggregated. So currently I have around about 32 different Personas. And those Personas I find incredibly useful for briefing people in terms of the organization. I find it incredibly useful in terms of working with the sales team and certainly working within.  

 
16:30 
Duncan Daines 
We do a lot of large scale government bids. You know, again, I go back to the Personas all the time to revise, to update, but also to be a touch point because I need to know what the characteristics of that segment are and how they work. And it's a good way of being a sort of mental reminder that you need to think about certain personality traits.  

 
16:55 
Rachel Fairley 
So is that influences buyers? Is that what you mean by all the different Personas?  

 
17:00 
Duncan Daines 
So I'll have generic sort of category statements, so the influencers purchase decision, ultimate decision makers. And of course, that's the sort of 101 of adding that information into your CRM. But then I want to get underneath that a little bit more because there'll be particular, let's say influencers that have particular organizations that they'll be working with, particular worldviews, particular playbooks around how those organizations are run, for example, banks. They have to exist within a regulatory world themselves. And therefore that regulatory world is known and therefore that you can work against that.  

 
17:47 
Rachel Fairley 
So you're working on a heavily regulated business, selling to heavily regulated markets.  

 
17:53 
Duncan Daines 
Yes. Yeah. I appreciate for a lot of listeners, this is a, a very different world than they may occupy, but it is niches within niches. And I therefore come back to sort of previous comments about, you know, things like communication spend. You have to make quite careful adjudications whether your comms plan is actually going to hit the people that you want it to and to what degree, what level of wastage that you're going to have with that activity. And you've got to be quite hard on yourself because it's very easy to turn around and say, here's my wonderful campaign plan. We're going to be in this, that and the other.  

 
18:40 
Duncan Daines 
And I've integrated this all in, okay, I've done a job of communicating, but if I fail to hit and achieve an outcome from those audience, from that audience, because simply they've been missed in terms of the targeting, then that hasn't really achieved anything.  

 
19:00 
Rachel Fairley 
It's fascinating that your audience is so small and working with such constraints themselves that you have to be so precise.  

 
19:08 
Duncan Daines 
In many of the markets that we work in, if you look at the business development functions, we are privileged often by being on, for example, the list of bidders. It's all about conversion. So acquiring new people into the mix isn't the thing that's going to turn the needle at all. I don't need mqls. I really don't. I need conversion because they know you.  

 
19:36 
Rachel Fairley 
And you know them. You just have to show up in a way that's relevant and differentiated for their particular need.  

 
19:41 
Duncan Daines 
Absolutely.  

 
19:42 
Rachel Fairley 
That's mad. So the segmentation and then knowing that audience, how well does your organization actually stick to that?  

 
19:52 
Duncan Daines 
I think the organization is implicitly conscious of the different segments and what they are. But I don't think it is conscious of segmentation as a discipline. And actually, to be honest, I'm fine with that because it'll take a lot of energy to be able to sort of convince people that there is this world called segmentation and you need to have it. And that's how kind of good marketing practices work, etcetera. They sort of already know that. So rather than do that, I have to say, okay, well let's look at being focused around our customer base. What does that actually mean? Implicitly in my head, I'm then looking scanning my 32 Personas and then understanding where they fit and kind of what is driving purchase decision.  

 
20:40 
Duncan Daines 
How we going to be able to write a structured campaign over the next, I don't know, x number of months to be able to get them over the line. You know, that's my job. I'm not going to pass that to anybody else, but I am going to steer them towards clients. Understanding the client base, understanding the behaviors behind the client base. This is a slightly confessional, but I'll get it all out there. But I think it's important people listen to this. I'm not projecting that this is some sort of perfect scenario. I got it wrong and I spent two years on a 25 million pound bid building it all up with the team and we lost that bid. And one of the reasons we lost that bid in the feedback was something that was on me.  

 
21:30 
Duncan Daines 
I didn't pick up one of the key buying behaviors. We came second, but there's no prices for second. That's 25 million pound contract that won't come up again for another five years. That market opportunity, that opportunity is dead. And that was all because I didn't go back and really think about why is this customer, what's driving this customer's purchase decision? And that's a tough one to wear. But what I would suggest is don't lose the faith in your segmentation. Don't lose the faith in the reason why you are in the markets that you're in and targeting the segments you're in. That's going to be based on a plan. And that plan is going to have alignment into the commercial ambitions of the organization. It's really easy to go. It's really hard. So there's a bright, shiny thing over there.  

 
22:29 
Duncan Daines 
I'm going to leap onto the bright, shiny thing and try and make that work. But then you've lost focus and you're now investing time and effort into something that is potentially new. You've not built the knowledge, the execution time around. It's just new and a bit shiny and hopefully looks a little bit better on a report than the hard yards that you're having to put in. Maybe without any luck in another area, I would advise just keep the faith. Let it play out. Try not to go for the what looks like a quick win.  

 
23:13 
Rachel Fairley 
Oh, don't you just love a good candid hindsight story? You see, Duncan has high standards, and this failure stands out because it's really unusual. Unusual, no doubt, because he reflects and learns from every experience where things don't go as planned that openness is so useful. He doesn't think of it as a damage limitation exercise, an opportunity calling for crisis management to protect his reputation. It's all about learning to perfect, getting it right, because all the lights can be green on your short term KPI's but if it doesn't work out, it didn't work. There's an honesty to stopping, as Duncan did and saying we did that wrong, and we did wrong for this reason. It can make your work better and better. And with that, we come to the end of part one.  

 
24:08 
Rachel Fairley 
I loved how Duncan described how agencies can add value not by trying to be category experts, but by being out of category experts, bringing ideas fed from what they've seen and heard and learned and done. From the big wide world that we live in, from the different cultures and businesses and industries and stages of growth. There's an honesty to realizing that you can get the work you deserve from the agencies if you ask them to focus on the wrong things, don't duplicate your own work. Ask them to focus on what you can't do. Appreciate the depth of their past experiences, and ask them for what we don't know and can't see and can't imagine.  

 
24:48 
Rachel Fairley 
Ask your agency how they solve business problems like yours, not merely what they've already done for businesses like yours, and what can they bring that your category isn't doing where others zig zag? In part two, we talk about growing market share and just how commercial can marketing get. I can't wait. You've been listening to unicorny, the antidote to post rationalized business books. I'm your guest host, Rachel Fairlie. 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 a Selby Anderson production.