71. Thesis-Driven Marketing: you heard it here first

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
Dom Hawes
You're listening to Unicorny and I'm your host, Dom Hawes. Welcome,Unicorners, to part two of our chat with Andrew Davies. Andrew is a CMO and he is also a serial entrepreneur. His view of marketing is guided by his desire to grow, to scale and to innovate, and we are getting a ringside seat to his approach. In part one, we looked at both speed and scale. In part two, we're going to discuss the great debate itself, brand versus performance, and we're going to find out which side an entrepreneur takes. But first, we are going to look into some of the most underused weapon in our arsenal as marketers. Pricing and packaging. For some investment driven companies, they are hot ticket items. Yet many businesses, I think, seem to be missing a growth opportunity here.

00:51
Dom Hawes
So let's ask Andrew right now what we can all do about that. The premise we're going to start today with is pricing and packaging is one of the most underutilized levers for growth in B2B. We do a lot of work with private equity backed businesses and one of the core elements of the hundred day plan, the very first thing that they look at is pricing and packaging. But it doesn't seem to be something that many businesses, or maybe marketers and businesses are focusing on. Part of that might be. I think that a lot of the pricing decision or pricing discussion has been taken away from marketing. Potentially, there's good reason for that not to be the case with regards to this area. In B2B SaaS, do you think they're overlooked?

01:27
Dom Hawes
Is this something you end up providing a lot of help to your customers on? Or do you think that pricing and packaging is like at the top of the agenda?

01:35
Andrew Davies
We are seeing a shift. We've been preaching this gospel for ten years, or the business that we acquired has. And there's been a big shift from needing just to educate, that this is a lever that you should invest in to now thinking about how you should invest in it. So we are seeing a shift. People are experimenting more, but I wholeheartedly agree that it is one of the least optimized paths to growth. And I remember when I was a software founder, why it's really hard to know what good looks like. You really don't want to mess anyone around or piss anyone off, and so you get stuck in starsys and you just leave it.

02:04
Andrew Davies
But our data is really clear that if you go over a three or four year period, people who are SaaS businesses, who are changing their prices, doing running price experiments, packaging experiments, every quarter they will have 105% greater average revenue per user or average revenue per account than those who are only doing it once a year. The first thing to land here is that just doing it, building the muscle, even if they're bad pricing changes that failed. You're learning and you're starting on that journey, and so the first thing is just to do something.

02:33
Dom Hawes
And when you're running experiments, then you're not going to run experiments on the whole of your customer base. Presumably you're finding a cohort within there to experiment with. How are you managing that complexity?

02:43
Andrew Davies
It depends whether you're sales led and you can be less transparent around your pricing because it's hidden in a room or whether it's public on a checkout. So it depends whether you want to do it just for renewals or just for new customers. So yeah, it does depend. The fundamental principle here is to make sure you understand your value levers and to make sure you understand what your value based pricing should be. So we really encourage people to think about what would be the ideal value metric. So if you could move one thing in that business that's paying you money, what would it be? So your health and wellness app, maybe it would be, I've got a healthier body, I'm going to live longer.

03:17
Andrew Davies
And if you could price based on how long someone lived, then that would be the perfect value metric as the unit of exchange for your product. Now, often we can't charge that perfect one, and so you have to walk back and find a proxy for it. Really important, because a value metric should have three things. Number one, it should be aligned with growth. So as that customer grows in any way, there should be more of those value metrics. Your price should go up. Secondly, it should be aligned with value. As they get more value from what you're delivering, then it should increment up and you should be able to charge more. Those two are both very important. And the third one should be simple, should be easy to understand.

03:47
Andrew Davies
And so we help hundreds of companies a year through price intelligently, our consulting business, but also just through conversations like this with our thousands of customers as they think about what those value metrics are. And it's amazing to see the data behind the scenes here on how much it can lift lifetime value. It can lift your actual overall growth rate and also decrease your customer acquisition cost.

04:06
Dom Hawes
Talk to me about packaging a bit. So pricing, I think, is a sort of simple concept to get your head around. I'm going to qualify that, maybe underutilized, but people, whether they're involved with it or not, they get it. Packaging maybe not so much. So that's kind of falls more into a product marketers remit, presumably.

04:19
Andrew Davies
Yeah. So there are a few different angles you could think about your packaging with. So, firstly, how are people buying your product? Is there a freemium offer? If there is some kind of free offer, is it your premium plan or some other plan that you're putting on them to free? And it's time limited. People experiment with things like reverse trials, giving everything and then removing features as you stop paying. So there's a whole bunch of methodology around which ones of those might better for your business, depending on whether you're driving for acquisition right now, building a pool to fish out of in the future, which is where freemium is really good and some form of free plans are good versus optimizing for monetization out of the gate. So that's one angle. Another angle is thinking through.

04:53
Andrew Davies
This is why pricing and packaging are thoroughly interlinked, thinking through the different boundaries around your packages. So we all know the concept of shrinkflation. We walk into Sainsbury's and our box of Kellogg's is smaller now, but the same price.

05:04
Dom Hawes
Right.

05:05
Andrew Davies
And we're seeing this happen across SaaS, and it's actually a really smart thing because blunt price increases in 2024, we are not seeing as a good growth strategy because everyone is so inflation conscious, and willingness to pay is down because of competition in most market segments. And so actually, loads of software companies are using shrinkflation right now. So their price is staying the same, but their package is shrinking. So actually, the thresholds of number of users or amount of kilobytes or whatever your metric is are starting to reduce. So that's another thing to think about. And then most businesses now have some form of dual or triple value metric, so they might have a per seat pricing and a usage based pricing at the same time, which means you've got multiple levers for growth. So those are just a few thoughts on packaging.

05:44
Andrew Davies
And then the other thing that I'll mention because it's so important is the benefit of add ons. So if you've got your core plans, your good, better, best, whatever they might be, you'll be hanging all of those around a hook, which is the thing that everybody likes and everyone is willing to pay for. So lots of your audience like it. It's important to them, and they've got a high willingness to pay. But the really important things to monetize are the things that not everyone likes, only a small proportion of your base likes, but they are very willing to pay for.

06:08
Andrew Davies
So find features, find things within your product stack that maybe only 20 30% of people are willing to pay for, but they'll pay over the odds because those can be split out as add ons, which can really help you monetize effectively without dinging everybody on their price.

06:20
Dom Hawes
I suppose in service you can do that too, quite happily. And in product, I guess you can do that too.

06:25
Andrew Davies
If we think about some other add ons where you blend software and service with ideo, one of the things we found I can remember well, I can't remember which asset management firm it was selling to, but a big one in New York. And were stuck in procurement. We'd gone through the cycle, they decided on using us, but procurement just wasn't signing the paperwork. And then we suddenly realized that they wanted to know that they could trust us on implementation. Now this was a SaaS product. There was very little implementation. But as soon as we charged a $20,000 implementation fee, it went through like nobody in days because they needed to know that. They ticked that box to say there was something that they could implement.

06:56
Andrew Davies
So that's an example of something that had a very high willingness to pay from a small proportion of our customer base that were able to split out as an add on. And it was a service, it wasn't a product. So we do have to think about the whole product here. Often this is integrations is one of the key things you can split out that has a high willingness to pay from a small part.

07:12
Dom Hawes
What's the optimal experimentation cadence? How often a year?

07:15
Andrew Davies
Quarterly. The first thing to do is set up a pricing committee. So who in your business actually thinks about pricing? If we talk with all the people listening to this podcast, they'll be able to say how many reps they have, people who are focused on acquisition, how many customer success teams they have focusing on retention and expansion. But if we asked how many people are waking up every day thinking about pricing, it's probably one of the co founders between 03:00 a.m. Or 04:00 a.m. In the morning, or someone in product marketing for a couple of minutes. So the first thing is set a monthly or a quarterly cadence where you meet and you decide what you're going to do.

07:44
Andrew Davies
I had a great example of this recently with a company in a VC portfolio that we support, and they set a daily meeting, multiple of their C suite, multiple of their product team, multiple their marketing team every day for an hour they met until they felt they could reduce the cadence and go weekly and then monthly. And it led to a massive transformation in how they think about their go to market and how they thought about their pricing and packaging. That's showing great results. But it was the willingness to commit that amount and that value of time into the room to discuss it.

08:09
Dom Hawes
That's extraordinary. I've seen that with very price sensitive. I mean, insurance is a classic case where you've got comparison engines, and there'll be a full time pricing team meeting multiple times a day, probably the algorithmic these days, I'm sure. Do you think there's a correlation between distinctiveness or how differentiated your product is and how often you need to consider pricing and packaging? Yes.

08:27
Andrew Davies
And also the volume you're operating at. You know, if you're only dealing with one or two customers right now, it probably, the juice probably isn't worth a squeeze. But as soon as you get to hundreds of customers or thousands of customers, then this is wholeheartedly something you should be building, resourcing around.

08:41
Dom Hawes
Okay, let's shift to trial for a moment, because so, in consumer goods in my early career, a lot of effort was put into getting people to trial product, and SaaS kind of brought that back because suddenly there were freemium pricing models. There are free tiles, as you just intimated. How effective do you think those different models are now? So, freemium first appeared, what, 1520 years ago? Has it had its day, or is it still a powerful way of bringing people into market?

09:03
Andrew Davies
I like to always go back to the question of how do people buy? So to start off with, in every circumstance that you're working with your customers, working with, thinking about how that person decides and how they buy is the first start, because there are some product categories where actually it is a big committee decision, it's a big procurement exercise, and trying isn't important. I think of some government procurement as an example. But in most of our lives, in most of our business lives, someone, whether myself or someone on my team, will be trying the thing we use before we go and invest in it. And so I think it's an utterly essential part of a go to market mix because it's how people buy.

09:35
Andrew Davies
I trust my developer friends, my marketing friends, to see how they use it, but I also want to go and test it myself. So, as a result, making sure there's some form of self serve offering I believe is really important. And I think the most powerful models have both. They have an ability to self serve where you can try it out, but they have also a very data driven sales team who are able to spot those data points on when there's adoption in a large account and then go and upsell to a higher decision maker. And then to your point, it comes down to what kind of self serve. Is there a free forever plan that really is just customer acquisition, that's not even kind of product and monetization, that's just building a pool to fish out of?

10:08
Andrew Davies
Or is this where we're offering our entire service for seven days or 14 days, in which case you have to be really careful that the customer can understand your value prop and get benefit from it in the time you've allotted. And then there are multiple other options there as well. And really it comes down to your business strategy and the competition, the competitive set you sit within.

10:26
Dom Hawes
The beauty of doing that in SaaS, of course, is your marginal cost of running a trial is virtually zero. You can't do that with physical services. Well, you can, but you get bust pretty quickly. Are there businesses, you think, where those sort of premium versus a free trial? Do you think there are categories where it works better or is it just endemic now?

10:42
Andrew Davies
Mostly endemic. I think there is one very interesting category to pull out, which is the AI tech that's built on the general application. So Paddle serves a huge proportion of that base. And now you've suddenly got software businesses with quite a high cost base because they're paying for all of that underlying tech. And I've spoken to several founders who are spending vc dollars like you wouldn't believe on their free plans because people are coming in and processing, you know, thousands of hours of video, getting some benefit, but never actually paying. And so that is one of those categories where you've got to be extremely careful. So either you need to have very deep pockets or you have to really know your unit economics as you go from that free plan into that, you know, that paid plan.

11:23
Andrew Davies
Or you've got to have a thesis that this is about learning right now and you're just seeing people use it. But that's dangerous, right?

11:28
Dom Hawes
It's a brave thesis out of that.

11:29
Andrew Davies
It's a brave thesis, particularly when new tech and new competitors are coming into the market every other day. I don't know how many tools I've tried, but, you know, the portion I paid for versus the portion I've tried, it's probably 100 to one. And so that is one segment where you do have to be very careful.

11:41
Dom Hawes
I'm a tryr, so I have tried a lot and I sign up to them to a paid, but I then often will back out unless I can see an immediate and obvious benefit. Presumably, in a market as fast moving as the LLMs, retention must be a massive issue.

11:54
Andrew Davies
Absolutely. And one of the things you've got to do is keep developing your product, stay ahead of the competition. We think about retention in a much more broad sense, though. So we think about involuntary churn, credit card expirees and those the dunning issues. We have a product to solve that. But then when it comes to voluntary churn, one thing that we do is help people walk through cancellation flows. So our data suggests that when someone wants to cancel a self serve product, you've got about 18 seconds of friction before they start to get annoyed. And so in that moment of time, what can you do? Well, you can ask them why you signed up in the first place, reframe them into a positive mindset. You can ask them why they're considering cancelling, which is great for product insight.

12:30
Andrew Davies
And then the third thing you can do is walk them through a series of options of pausing the plan or downgrading or some other form of option that doesn't mean you lose them. And that depends on whether you're trying to optimize for logo retention or revenue retention, which is core to your business strategy. So we love diving into those kind of geeky conversations on how you can get a little bit of insight from a user that's trying to churn, even if it's just for your own insight, to build better product in the future.

12:53
Dom Hawes
And given that, as you said, 2024 started with a few cancellations, coming back and re signing that data is gold dust, 100%.

13:00
Andrew Davies
And I really believe right now many companies should be thinking carefully about reactivation campaigns. All the people who've churned previously, how can we go back and welcome them again with some form offer?

13:15
Dom Hawes
There's loads of ideas there from Andrew about things that you and I can try with pricing and different ways that we can package products and services. And rather than just list them here again, instead, I want to draw out the big point. I'm taking away from his thinking and it's this, don't be afraid to try something. I think if were able to capture the DNA of an entrepreneur and bottle it, that's what we'd find. Lack of fear I spent 25 years now ducking and diving in entrepreneurial environments. I've built, lost and sold businesses along the way, so I'm naturally drawn to Andrew's way I try new things all the time because the enemy of progress is stasis. You have to keep moving forwards. Markets change around us all the time. And while the mission seldom changes, the method does.

14:06
Dom Hawes
And those not used to fast paced entrepreneurial environments think that people like me flip flop, that we don't stick to our guns. We change our minds all the time. But when I hear Andrew talk about marketing, I hear things like decisive speed is better than accuracy. Tick failure is a valuable research. Learning, oh, double tick action beats inaction every time. Treble tick. The entrepreneurial mindset is constantly on the move. It tries new things to see if it can find an improvement. So when Andrew describes his approach to pricing and packaging, he's essentially advocating a system of constant review and adjustment, almost like a permanent a b test in which you make a small tweak to an original and then see which performs better. And as he's describing it makes perfect sense.

14:53
Dom Hawes
I can see the incremental leaps, even if there is the odd step backwards. But the general direction of travel, well, that's great. It's always forwards. I can see why many businesses aren't playing with those levers, though. The cost of getting it wrong sometimes seems to outweigh the benefits of getting it right. Because apart from anything else, there's personal risk at play here, too. But surely it just requires a shift of mindset or maybe a reframe. So instead of thinking about risk of, oh my God, I might get something wrong, shift your view. Reframe it so that you see that you're learning and taking measured risk to make things better. And on that note,Unicorners, here is your homework. You can start small, but you have to take risk. Encourage your team to do the same. Start training your entrepreneurial muscle.

15:40
Dom Hawes
Look for gain by risking small pain. Be clear to your team that failure, by the way, it's expected to start with. And if you do your homework, I'd love to hear how you get on. Speaking of getting on, I'm now wondering how Andrew's approach works for that age old battle. Brand versus performance. Which side does he stand on? How does he choose which to deploy? How does the modern entrepreneurial mindset guide him through this phony war? Let's find out. Right, let's dive into the rabbit hole. Brand versus performance. Like, we could probably spend all day talking about this, but let's try and contain our conversation a bit. So, when you and I met before the podcast started, you mentioned that kind of thesis driven marketing and its importance.

16:22
Dom Hawes
I think there's a tendency that I'm seeing, particularly in B2B to think about marketing in very polar terms. It's either this or it's that. The 95 five rule, the distinctiveness versus differentiation. People were promoting rules, I guess they're trying to promote training courses. The wider marketing population is taking these rules as read, but the world isn't as simple as that. And when you mentioned thesis driven marketing as a concept to me, it immediately jumped out at me. What does it mean to you? What is it everyone wants to be?

16:49
Andrew Davies
A data driven marketer. Yeah, it sounds obvious. It's a truism. Yet when I have the privilege of diving behind the scenes of a Paddle customer or a prospect, or just someone who's asked for advice, the first question I ask is, what's your thesis on? Why you exist and why your product matters and how people buy it. And often people have got a much better grasp of how many people are clicking on certain search terms or responding to certain email campaigns than they do on the actual why that sits behind those things. So at every stage of a business, but particularly in the early days where data is scant, I think it's incredibly important to spend time thinking about the why. And if you really deeply understand the why, then the data should prove or disprove. That should strengthen your thesis over time.

17:29
Andrew Davies
But if you don't have a thesis, then you end up in scattergun marketing. You end up doing a huge bunch of things that might not be meaningful to your customer. So that's what I mean when I think about thesis driven marketing, asking the why questions before we look at all.

17:39
Dom Hawes
The what, which is incredibly important, because again, I've seen lots of businesses where they, as you said, everyone wants to be data driven marketers. So they get the data, they look at it and try and take meaning out of the data without any context. They're trying to find correlations, but correlations also are almost impossible to find. They're hoping to find causation, of course, but unless you're testing something, the data is virtually meaningless.

18:02
Andrew Davies
Absolutely. And we all have this attribution problem that's another rabbit hole we might not get into, but maybe we will. And some things easier to measure. And so even the data you're seeing is biased by the actual channel you're using or the type of tactic you're using. And we see this all the time in our marketing. We see someone celebrate that someone clicked on an adwords that has resulted in an opportunity or a close one deal. And then we find out that someone in our field team was having a conversation with their friend down the pub and noted it to them and then they went and had a look and that's why they clicked. Or we see the opposite happen where, you know, perhaps the marketing have not realized where something's come from in our self serve engine.

18:37
Andrew Davies
And we realize that actually there's been conversations happening behind the scenes that have been stimulated by a podcast we've been running. And so I think it's really hard to measure everything. And I think the first stance we should take is we're not going to measure everything. And if we understand that, then we can start to understand how our marketing engine works from first principles rather than just looking at the things that are most easy to measure.

18:57
Dom Hawes
Yeah, I think you need a very supportive executive team, though, to support that kind of approach. Certainly in this studio, I've spoken to marketers whose CEO's, it doesn't matter who they are. Other executive members have a low opinion of marketing and therefore feel that marketing needs to prove itself. Of course, what they're saying is they have a low opinion of the output of a marketing department. They still believe in marketing because they price, they package, they communicate, they do all of these other things. To me, some of the conversation around the importance of measuring input from things like branding is bogus in the first place. It's like saying we need to prove the value of oxygen. If you stop breathing for 30 seconds and then see how you feel and then tell me how valuable oxygen is, it's a binary thing.

19:37
Dom Hawes
It's on or off. Marketing's the same.

19:39
Andrew Davies
Yeah, I agree. And we've also done a bad job over the last ten years of training boards and CEO's of how to think about marketing. I was having a conversation with John Miller, who was the co founder of Marketo last week, and he's almost apologetic about the attribution in Marketo because that's trained people to see these easy to measure metrics that don't tell the whole story. It'll be interesting to see the business he starts next that I think will be tackling some of those challenges. And so I think we've also done a bad job of portraying what's valuable in the grabbing hold, in the desperation for some numbers. We've given the numbers that are easiest to measure and therefore what we end up doing is invest in the things that are easy to measure.

20:14
Andrew Davies
You know, the stories, it doesn't matter which product you're selling into which market. The data is very clear. If there is higher brand awareness and affinity in those markets, in that segment, then all of your direct response measurements will be higher. All of your conversion points will be higher. It makes obvious truth, and yet you have to be willing to operate on these two timeframes of marketing. The now that this quarter, the how do I fill pipeline, and the sometime in the future, do I have a position in front of an audience that we can build a real business on?

20:39
Dom Hawes
So now, this quarter, that's really sales? That's sales, not marketing.

20:43
Andrew Davies
Well, we have a self serve business where marketing can conduct activity and see revenue drop into the bank account.

20:49
Dom Hawes
One of the things when I'm asking myself, is this a sales thing or is this a marketing thing? Customer contact is one of them, and self service completely breaks that concept. The other one I have is, do you fish by any chance?

20:59
Andrew Davies
I don't.

20:59
Dom Hawes
Okay, so I'm sure you understand the concept of fishing. I use a phishing thing around this. Is it sales or is it marketing? Right. So marketing is going to say, we want to catch a trout, and marketing is going to say, where do trout hang out? They hang out on that river. And marketing is then going to go, right. If you want to catch trout on that river, this is the kit you need. This is the rod you need. This is the reel you need, the lures you need. And they're going to equip sales to go to the river and catch a fish. When they get there, local conditions can change. So the salesperson has the kit that they've been given by marketing, but they're actually responsible for landing it.

21:30
Dom Hawes
It's not possible to measure the effectiveness of marketing at all if you run with my rather blunt metaphor, but it's not possible to measure the effectiveness of an individual instance. But you probably can measure it over time. If after a year, the salespeople still haven't caught anything out of the river, marketing is probably not doing a great job. But the shorter times frame you go to, the less able you are to measure marketing, because ultimately it's down to sales to deliver self service. Wow, that's like fish catching themselves. How does that work?

21:58
Andrew Davies
I was trying to work out how I could extend your method. No, I think it's broken.

22:01
Dom Hawes
You just broken it. I haven't even announced it on this podcast until now. You've already broken.

22:05
Andrew Davies
But one thing I think is really important, that is a not so popular truth, I feel, with marketers is in the world where you're giving salespeople the right rod, the right equipment, the right anorak, the right place to fish is that the response of that salesperson is part of the value you deliver right now is part of you measuring value. So if you are absolutely relied upon by your field teams in the measurement timeframe of a week or a month or even a quarter, that's enough. If your sales leaders are seeing value from how you're arming them, the content you're giving them, the campaigns you're running. But if you can't even tick that box, then absolutely there's a problem.

22:40
Andrew Davies
But I think it's really important in the first instance just to see that often in B2B go to market in the early days, marketing's biggest client is sales. Accept it and go work it.

22:49
Dom Hawes
Yeah, I think it's a good point. Paddle. Are you able to say, I mean, how do you have to justify all of the marketing budget? Or is there an acceptance that brand matters and that it's harder to measure?

22:57
Andrew Davies
There is absolutely an acceptance that brand matters. We believe that. Firstly, and I believe it's part of the reason I joined the business, that if you don't invest in brand, you pay the price in customer acquisition cost every quarter from now into the future. And so it helps us now, it helps us in the future. And I fully believe that our eventual exit, wherever that ends up going, will have a component of that value, will be the brand we've built, the community we've built. So yeah, we do believe that, the board believes that, our team believes that. But that doesn't mean it's easy. And we can just do whatever, because one of the big problems with brand campaigns is you can spend a huge amount of money on things that don't move the needle.

23:31
Andrew Davies
And so I'm a big believer that we've created this forced dichotomy between brand and demand, between performance and brand. And one of the things I love doing is wrapping up executions, campaigns, ideas that have some demand impact and some brand benefits rather than money that's doing one or the other.

23:50
Dom Hawes
Let's sift through the wreckage of that broken metaphor and see what gems shine brightest, shall we? But before we do that, I'd love you to do one very small thing for me and hit subscribe. It's so easy, but it's so important because the bigger we become, the more guests we can book for you. And of course your podcast then just appears like magic in your feed. Anyway, somewhat surprisingly, I really liked what Andrew said about starting with why? Very Simon Sinek, of course. And it was surprising because as you know, I am not Simon Sinek's greatest fan, but I think Andrew was saying more than just start with why he was using it as the basis for measuring. Because without deciding on why you're in business, how can you decide what to measure?

24:36
Dom Hawes
And I like Andrew's reasoning here because it makes a mockery of all the unnecessary other stuff that we choose to measure. As we said in previous pods, what actually counts is a happy customer is your why making them happy. Measure that and then don't worry about all the other stuff. Now, we've already looked at that a lot on this show, so today there are two other things really I wanted to focus on, and I'm going to read you the first one verbatim. He said it doesn't matter which product you're selling into which market, the data is very clear. If there's higher brand awareness and affinity in those markets, then all of your direct response measurements will be higher. All of your conversion points will be higher. Now, regular Unicorners will know that. This is music to my ears.

25:19
Dom Hawes
I love making the case for brand, but what I really like about Andrew's point is the symbiotic relationship between the two, between brand and performer, because they go hand in hand. It's pointless trying to have one without the other. The hard part is convincing the numbers people, because as we discussed, it's hard to put a number on brand. Instead, we marketers have made it easier to put numbers on the other stuff. So naturally that's where the number people want to put their investment. But we have to invest in brand, otherwise the more numbers oriented stuff doesn't work. And as Andrew points out, if you don't invest in your brand, you pay the price in customer acquisition costs every quarter from now on. But where I'm netting out on this is surprising me because I'm getting less and less polar.

26:06
Dom Hawes
It's becoming less black and white for me. Maybe there is a middle way that's better. Maybe there's an adjustment to our approach, an incremental shift that we all need to try. And this brings me to the second quotation that I want to focus on, and it's the very last thing Andrew said to us. Here it is again. We've created this false dichotomy between brand and demand. And one of the things I love doing is wrapping up executions, campaigns and ideas that have some demand impact and some brand benefit rather than money. That's doing one or the other. Now let's accept that everything we do is brand, whether we like it or not. So if our work is all promotion based, then the kind of brand we're going to build is a promotions led, always on sale kind of brand.

26:51
Dom Hawes
But what if we could find a way of building awareness, building consideration the stuff that brand work does while also doing something that could impact demand? The campaign that stands out most for me here is Volkswagen's work in the early noughties, the surprisingly ordinary prices campaign, where people were shocked or distracted to see how ordinary the prices were for VW cars. This was a really clever campaign because it shored up the quality and reputational brand stuff while simultaneously juxtaposing that with a price that begged you to go to the website or to the show. The two played off each other beautifully. Yeah, yeah. Okay, okay. I know it came off the back of years and years of really excellent brand work. Fine, I get that.

27:34
Dom Hawes
But still, if a company like Volkswagen, who back then really knew the value of brand, if they could play with demand at the same time, it does rather beg the question, why can't I? Why can't you? And it takes us right back to where we started. Because if venture capital markets for power, which is a proxy for brand, and private equity markets for profit, which is a proxy for performance, you see by blending those two models, you get both. Now, I don't yet know how to do that perfectly, but I am willing to try. And that, I guess, in itself, it's a big step. You have been listening to Unicorny. I'm your host, Dom Hawes. Nichola Fairley is the series producer. Laura Taylor McAllister is the production assistant, Pete Allen is the editor and Peter Powell is our scriptwriter.