The Next CMO Podcast: The CMO’s Role in Creating Enterprise Value with Erich Joachimsthaler

Episode Notes

In this episode, we speak to renowned author, academic. and brand strategist, Erich Joachimsthaler,  about the future of brand transformations and the role of the CMO.

About Erich

Erich Joachimsthaler, Ph.D. is a rare combination of consultant, entrepreneur, academic, researcher, author and positive contrarian.

Over the last twenty years, Erich has led Vivaldi in helping companies to build strong brands, identify innovation and growth opportunities, and fully realize them in today’s digital age. Special areas of emphasis include: leveraging new growth and marketing strategies in the context of industries that under deep disruption and transformation due to rapidly changing customer expectations.

Useful Links

Where to buy Erich’s book, The Interaction Field

The Vivaldi website


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Full Transcript


[00:00:04] Kelsey Krapf: Well, thank you so much for joining us today, Eric, on the next DMO podcast, I know we got the pleasure of knowing that you’re originally from Germany and living in New York city. So we’d love to have you tell our audience a little bit more about you and what you do for the
[00:00:20] Erich Joachimsthaler: volt.
Yeah, absolutely. So, yeah, I live in New York city. I started the company here, a consulting company and agency consulting company in marketing innovation and growth consulting firm would, we would say, and I run the company. I started it here because I, somebody, somebody. Had this song in my head or put that song in my head.
If you can make it here, you can make it anywhere. Right. It’s not it’s New York, New York, so Frank Sinatra. And so, so that’s why I tried it. I must, I must do this in my life. So that’s what I’ve done before that I was an academic. I was at Harvard business school at the university. Uh, uh, Virginia in, in Charlottesville at the university of Southern California, Los Angeles and, uh, in Europe
[00:01:09] Peter Mahoney: as well, Eric, I have so many questions.
It’s going to be difficult for me to contain myself, I think. Uh, and, but we learned in, in the, in the prep here, that Eric is from Bodden Bodden, which, uh, originally in Bodden, bottom, as I explained, is, uh, is where my, um, my wife. Maternal grandparents grew up and came to Boston back in the, uh, probably in the turn of the.
Turn of the century, like early 19 hundreds, something like that. So they’ve, uh, it’s been a long time that they’ve been here in the Boston area, but I, I love your story, Eric. And in that you’ve, you’ve really done some, some fascinating things, obviously spanning from the academic side. Uh, and, and then applying that into, uh, into real-world customer engagements, which is an interesting connection.
Um, and, and I want to talk about your, your books. Cause you’ve got the series of three books that I think are going to lead us into a great discussion, but tell me what drove the change from you to leave academic academia. And I know you’re visiting still as a professor, but leaving that in into the world of business, what was that like?
[00:02:23] Erich Joachimsthaler: But I mean, you know, if I, I really had great passion for academics, it’s a wonderful world and I really enjoyed it. I taught by the case method. I taught this when I was a postdoc at Harvard. It’s a challenging way of teaching because it’s a very practical yeah. Way of teaching. And it’s an it’s highly engagement.
With the executives or the students that you have because you learn a lot every time. It’s not like teaching a class, but after some time. Case study after case study. I just realized that, you know, if you, if you, if, if you, if you just teach, you never know whether you also can do. So I said, look, there is, look, I got to do something.
So I came to New York and I’m I’m in the last 20 years, I must say I’ve been quite often times in the ups and downs of the business. I’ve oftentimes said, why did I ever leave. I get that makes sense. It’s been a wonderful place, but anyway, now I’ve worried only about mortgage payments and loan payments and whatever else.
It has love life of running a business. That’s
[00:03:36] Peter Mahoney: that’s right. And in your recent book, the interaction field we’re going to talk about, but I’d love you to sort of set the context and give us the story arc. As we were talking about the three books that you’ve written over your career. Uh, that that go from, from brand strategy to innovation, to digital transformation.
And, um, so give me, give me the, uh, the, the overall arc and how they fit together
[00:04:00] Erich Joachimsthaler: back in the nineties. Um, I’ve I was at Harvard business school and every professor around there I met when I told them what I’m working on, this amazing academic scientific thing. They all go like. Why is this relevant? Why, why, why?
And I got a bit tired when I went around, uh, all the professors say, and they always asked me, why is this relevant? I thought my scientific academic pursuit was so important. And, and, and, and I realized that I needed to find something that really, really matters are these relevant in business. And, and, and back then, you know, when you look at the company, About, uh, like the typical companies at the time, GE ExxonMobil, IBM and so forth.
The big companies, HP, those companies, the biggest part of those companies, the biggest value of those companies was attentional asset value. You know, things that accountants can count it on the books. Essence. Plants, uh, infrastructure, channels of distribution. It’s everything that you own in some ways, and you can quantify and in a smaller part was the intangible asset value.
But if you look between the nineties and the eighties, there is a massive shift at the time of intangible asset value. And I go like being in the marketing area, like consumer research type guy, I said, This intentional asset value. That’s the thing that matters. Everything else is easy to count. It’s said enough.
It’s what you cannot measure, but it’s what counts, what the accountants cannot count counts. And that’s what I, what I’m working on in the brain is this one thing that helps you to capture the intangible asset value. Now, 20 years later, look forward today more than 20. If you, if you look today, If you look at the average company, let’s say S and P 500, the big company, if you don’t get them, the biggest part of that is the intangible assets.
So it has just flipped upside down. Now, now you see that 85, 90% of the, of the value of a company is intangible of which a big part is the brand, but there’s other things there’s data there. Some are relationships, everything that we in marketing sort of try to really manage and learn how to manage. So I think that’s sort of my, my story arc.
If you will, when I say back then I tapped into this, this, how do you capture value, how to drive business value measured for a company, whether you’re a small business or large business. I think that’s been driving sort of the, the journey of writing this.
[00:06:49] Peter Mahoney: I it’s, it’s an amazing transformation. And you look today at so apple is still got the most valuable brand in the world by a long shot.
They also have obviously a tangible physical plant, but there are lots of companies, but Facebook is a perfect example, right? Very valuable company, Google very valuable company. Most of their, their, uh, their asset value is in the internet. Category it’s data, it’s IP, it’s brand. It’s less about their inventory.
Uh, and, uh, and the lichen in there, the other assets that may be easier to count. So it’s, it’s, it’s fascinating that that transition has been made. I guess the question is, how far will it go? So will it, doesn’t get to the point where, where maybe there was a, uh, an 80, 20 split that’s flipped. Does it get to 99 or a hundred?
How do you think about the, the terminal value of intangible versus
[00:07:51] Erich Joachimsthaler: You see, I think that, I think that we have arrived at a very much at a, at a, uh, on the average, we have very much arrived at a very high level of the value being intangible. I think what has changed is that, that in the old days, Um, when you think, think of Nike, how Nike was born, Phil Knight and his coach had a passion and my mother raffled shoe, you know, with the irony, created a better shoe, a rubber shoe, uh, and then he created the name Nike and all of these, and then he sold it through track in those, in the old days.
Syncs that ma managing the intangible asset was almost like an afterthought. You know, after, after a few years of success, you hire a bunch of brain consultants or you hire the ad agency. Nike hired Weiden and Kennedy and says, Hey, we’ve got money now for an advertising campaign. That’s the old days. I think what is changing Peter?
You said today, That those managing those intangible as it is much more a forethought rather than an afterthought. So, so when you, if you build a business and you don’t start with really thinking about what you stand for, what your brand, as a brand, you aspire to create, um, if you, how do you develop those intangibles?
You have no chance of winning, you know, we, you, you be, if you think of a, if you think. The any category, you know, if you think of, uh, if you think of, uh, uh, uh, for example, the blue apron, uh, the, the food delivery service, you know, that you’re getting that the shipments you get every week, you know, they are 150 others out there, like, like blue apron.
For example, if you look at any category, there’s so many out there, unless you at the very beginning, think about them, fundamentals of brand, customer marketing, you know, how do you drive intangible asset? Right. You have no chance of getting it on. And that’s, I think why that’s the big shift that in daddy’s happening right now?
[00:09:50] Peter Mahoney: So, so what’s important of course is, uh, in, you alluded to this before in your last comment was about used to go out and spend a lot of money on advertising and try to create this thing, but you actually have to deliver on the brand promise because, and that’s the thing that probably is the most tangible, obviously.
Apple doesn’t have a valuable brand blue apron doesn’t have a valuable brand just because they bought it. They have it because they expressed their brand value through their operation of their business.
[00:10:23] Erich Joachimsthaler: Yep.
[00:10:24] Peter Mahoney: Yep. So is that the thing? Cause I look back and, uh, and uh, I always make fun of the fact that, uh, I’m much, much, much older than Kelsey.
Uh, but, uh, Kelsey probably doesn’t remember the internet bubble days back in, uh, in, in 1999. Uh, but back then there was too much of an emphasis. On only the brand. I mean, they, the of the world doing super bowl commercials without backing it up. So it seems like we’ve corrected from that, but. We also read at a point where, uh, where database companies and information-based companies have skyrocketing valuations.
So w or D are we in danger of doing that again in how do do our audience remembering that it’s not just me and you talking here and, uh, is how, how does our audience as marketers? How do they make sure that they’re there actually. Uh, protecting the value in their companies by, uh, by keeping, keeping these things in mind.
[00:11:29] Erich Joachimsthaler: I, I, I’m also, um, much older than Kelsey and I never make reference to it because for me, it’s not a laughing matter because I don’t mind about it. I only about a mind about the side effects of age. So I don’t even want to talk about it, but, uh, but, uh, I agree. And I was, I went through the period of two thousands, 90, 99, and, uh, uh, and, and that hope is in some ways, and, and I think what happens is.
There is we, you, you, you made a lot of comments here that, that struck me, you know, I’ll be in danger, uh, again, of the same, uh, situation. And there is a bit of this happening, a big, uh, to a large degree, let’s say, happening or hit now. Um, um, but you know, Um, you know, like many of these many companies let’s say, let’s think as, as one example, Google, uh, um, yeah, they, um, yeah, they are very highly valued.
Uh, yes they are. Um, they, they, uh, they. Uh, an overvaluation in, in many respects, but they also have created value for consumers in some ways. So there’s also a delivery of something. I mean, at the end of the day, look, Google, Facebook, uh, uh, and so forth. They, they basically finance themselves through advertising and through keyboard advertising, not, not actually the one that you and I sort of like sit at the TV and laugh about, you know, is oftentimes it’s not a laughing matter because.
The annoying, annoying, kina, an annoying ad that follows you wherever you are online. But in the case of Google as example or Facebook, they also create, have created value. And that is sort of like their, their, their existence. So, so I think that today, um, um, we, we, I think to me, the whole world has the whole world, the consumers have become incredibly.
Be in the old days, we had these very gullible, gullible consumers, you know, easy to re to convince some Yuma or, or some, some gimme GRI like a logo, a slogan or something like that. Don’t leave home without it or what it might be. And we all sort of like flock to a particular credit card. I think today, I think today you’re starting with a very much more discerning consumer environment.
And so some of the companies. The success of them has to do with the fact that they actually create some real value, uh, um, uh, for them. And I think that’s the basis. So I, I, there is, there is an, there is a crazy times that reminds me of the two thousands, like , but I also think that, uh, and, and there is an overvaluation because we, again have, um, if I am I, the person that is the super in my building, He’s going go every morning, he comes and he knocks at my door and he says like, Eric, what did you think about Tesla yesterday?
I go like, you are the super you, you managing the garbage here and the apartment building, you should not be even invested in Tesla. You know? So we are again at the same very retail situation, but I think that there is a real nice story, uh, in a nice, uh, uh, point to be made that some of the companies real are fundamental.
Changing, uh, how we live and work and, and really create value for consumers.
[00:14:53] Peter Mahoney: So, Kelsey, sorry, I was going to say,
[00:14:56] Kelsey Krapf: so one of the first things of creating value is, um, you know, coming up with that brand promise, figuring out your brand strategy, your brand positioning, how do companies nowadays, besides, you know, starting with that step, actually set themselves up for success so that they’re providing value, uh, for those concerns.
[00:15:16] Erich Joachimsthaler: Um, you know, the, the, the interesting thing is that, um, um, that in the old, that all of that is still true and all of that you need to do, but what, what can companies do right now? And, and, and Tesla, for example, is a good example in the automotive. I can do it in every other industry is. You’re also learning directly from consumers.
Uh, and you’re, you’re taking advantage of a direct relationship. If you look at Tesla as an example, um, it’s the only company that directly only directly sells to customers. And, you know, I talked to, I don’t want to mention the car company, one of the premium luxury car companies from Deutschland. Uh, and, and I talked to the CMO and, and, and, and, and they, uh, some of them.
They now sell actually directly to consumers. And the CMO told me, he says like, Eric, you have no idea. We have never learned. We have never understood the consumer. So Mel we’ve never had a direct connection to the consumers. We sold to the dealers and then. Done, you know, got our money and whatever the dealer you use, the some subversive sales tactics you have and sells your sons to, to get into the metal or something.
So, so this whole, the way we used to do a brand, the branding, oh, you know, let’s, let’s build a brand around the product is so different now, because now we are, we are in an agile way in some way. You know, learning from the consumers. And I think that helps. So maybe to what Peter earlier said, how we actually prove that we deliver value and that it’s, uh, I think it’s, I think there’s a different dynamic now.
[00:16:57] Peter Mahoney: So watch the watch of this transformation, because what I’m going to do is connect this to your newest book. Um, because I think there’s a path here that’s kind of interesting through the story. You just told us about the German, uh, automotive company, because. I, I had some exp experience working with, uh, automotive companies in my last company where I was a CMO.
We made a voice in AI technology software. Some of it was embedded within some of these big car brands. Uh, and we found a really interesting thing. Uh, about these non Tesla brands. One is that we created a series of products that had cloud-based capability because it was connecting to these kinds of, uh, you know, information services, voice assistance that we built within the car as an example, right?
The, the problem is if you are a car manufacturer, You’re used to selling through this distribution channel. And like you said, you wipe your hands. If the thing, when, when it’s done, obviously there’s warranty support and things like that. But having an ongoing service delivery capability really complicates things all of a sudden, well, wait, Do I need to recognize the revenue of my vehicle over the lifetime of providing cloud-based services.
Am I a SAS company? All of a sudden, uh, or wait a minute. What, what if I sell this vehicle with these cloud connectivity thing? And a car can last for 50 years. Do I need to make sure that I’m buying servers to last for 30, 50 years, et cetera. And what it speaks to is this massive transformation that companies need to make to sort of deal with this, this digital world that’s been accelerated in the, in the, in the last year, of course.
And I think that’s some of what you wrote about in the interaction.
[00:18:49] Erich Joachimsthaler: Yeah, Peter you’re, you’re pressing you’re you’re, you’re pressing every button that every car executive or automotive executive worries about today. I have habit. These who is the CEO of a Volkswagen. He says, he said, I, he has real life and he comes from BMW.
Originally is not a CEO as another five-year contract or for your country. So he’s been going to be around for a while. He says in the world of electric and electric is the technology from combustion to electric and all good things and bad things about it. Yeah, that’s fine. But in this world, there is a possibility that the car is just commodity.
As a connection to a larger network and we are not making money. And if we are commoditized, uh, as the call, the entire industry or the O E M the entire industry is basically marginalizing commoditized, and the value is created to everything. What you said, Peter, namely, you know, how do you make money over time?
Uh, which is cute. Seeking significant problem. And, and Volkswagen is if, if I can paraphrase what habit D says, probably he said something like we need. We are facing be as a car company facing this, this commoditization of the car based basically the car becomes just a box, connected, a dummy box that connected to, to the network.
And we need to own that network. We know we need a loan, but what, what sometimes we call platform what I call it. And in the action field and the value is created in those interactions, not in the product. And that’s sort of the, the massive shift that I think every industry is going through. And I try to document it.
[00:20:39] Peter Mahoney: that it’s really fascinating. And I love the concept because it really does tie together. I think the massive transformation we’re seeing a lot of companies go through with strategy and yeah, of course, what our audience CMOs care about. Right. They care about. And I think most CMOs, I think are probably thinking of a small.
Uh, you know, small T transformation, when they’re looking at the digital transformation, they’re thinking, how do I put everything on the web? And the reality is that that’s not quite it. So how should it. Marketing leaders and executives in general. Think about how, how, how should they think about expanding their worldview to be ready for a more dramatic transformation of the businesses they operate in?
[00:21:29] Erich Joachimsthaler: Know, you know, you say this a small box, it’s a huge box, you know, 10 years. You know, if you, if you look at today, Google we spoken Amazon together has about 80% of advertising or 50, more than 50% of advertising spending is now digital of which Google apple, Google has about 50. Then Facebook comes up with 25 and then another 10 comes from Amazon.
And then you have a few others that thousands of others said that the tumbler run in the advertising six. But, but if you think about that, COO perspective, what we have gone through, where they have gone through is a massive, massive change. Um, and we followed that. We followed the lure of, uh, a quick, uh, uh, conversion of customers through these amazing meals.
Digital marketing for the last 10 years, because Google has told us, it’s such a great idea. And Facebook has told us and sales people after salespeople have told us. And now in the last five years, we realized that it’s actually not true. You know, most of those, those advertising dollars. Do you know, do you know that of 10,000 ads that you show only five are clicked online?
Of 10,000 ads, only five are clicked. Uh, intentionally everything it has is, is, is, is they call it brand safety. So, so we, we are as a CMO, you’re faced with a massive change that we took place. It’s a total disruption of marketing, how we do marketing and on the top of this CMO today, You know, even though debt has been, my whole business has been disrupted how, you know, placing ads, how we, how we, how we target consumers, how we connect with consumers, what kind of advertising we can play offline, online omni-channel and so forth.
But on the top of it, be a CMOs need to rethink. Totally because our role in this new world is actually not to place ads on to do advertising. Our role is speak to become too. If you think of the kindness. If you could think of if the, if, if, if let’s say Volkswagen, BMW and Mercedes, if they sell until now, cos or Toyota in the future in the next several years, they sell mobility and, and, and, and a CMO needs to now to say from that consumer perspective, what is mobility?
What is mobility to Kelsey? What and how do we make money in this new world? So, so the CMEs R chart is on one side solving for the digital transformation or disruption of the marketing job, but the CMO job needs to think of a much bigger transformation of the entire business from, from selling mobility, from selling costs to mobility or from selling tractors.
If you are a John Deere to selling farm product, That’s totally different game for John Deere, let’s say, uh, which is a chapter in my book in some way. So, so, but, but, so I think that, and where is it coming from? Where is this coming from? You know, where is it coming from for hundreds of years? B been living on, uh, on, on creating value through supply side economies of scale, we create a pipeline where you’re going to get brought to you.
Great production, great product, great engineering, great marketing. And we push out a product to the customer. And that is changing. Now. Value creation is not anymore through the pipeline supplies that it’s called demand side economists, call it demand side economies of scale. So everything that we as marketers.
Or to be live as marketers is on the demand side, that’s where value is created. Do you know what’s the value of, of apple elbow smell you? Is the customer base that we all connect and I download apps all the time. If, if you don’t have the app. On the, the app store is a platform and network. If you don’t have that, this thing is going to be very useless for me because you know, even the next version, 12 or 11 or 13, they have now it’s a little gadget here and get yourself a slight technological change.
But what makes this so useful for me and create real customer value. I can do anything with it. You know, I can do literally anything. You can, you can find the date on that. It’s not necessary for me at my age anymore. I can, I can. I, you know, I opened my door to my apartment. You know, everything was, it’s like a Swiss army knife and that value creation apple creates in some ways.
And, and so, so, and it’s the network, it’s the network that, that that’s, what’s called what, what I describe in the book sort of creative. So I think that vs market. I mean, we are like caught between a rock and a hard place because, because not only do we have our own disruption, we also need to lead our organizations, whether you’re a smaller business or a larger business, you need to lead them very differently, not from the marketing function, but from the function of understanding customers, more deeply understanding the mud.
And how do you create value from that point of view?
[00:26:35] Peter Mahoney: So I think you’ve scared all of our audience. Now, Eric, now they’re going to be going out and going to get one of those nice Rhine river valley Reese lanes will recommendation.
[00:26:45] Erich Joachimsthaler: Right? There is a book it’s called the next CMO. Hey, there you go. Perfect. I also recommend Riesling.
[00:26:54] Peter Mahoney: Excellent. We’d like one of those, maybe we can put a link in to, in the, in the show notes about some of your recently recommendations. Uh, so let’s let let’s talk about solutions then. So obviously we’ve got massive problems that we have to deal with lots of transformation, lot going on. And, and I think you’ve really elegantly.
Illuminated these use cases with brands that we’re all familiar with, but I’m a COO say of a, you know, a hundred million dollar company. Uh, what does this mean to me? So, and, and, and, and it’s one of these things that I worry about is that sometimes. These big trends that we see in these big companies, they say that doesn’t really relate to me, but I think it does.
So how should that CMO of a a hundred million dollar company think about dealing with this new reality?
[00:27:43] Erich Joachimsthaler: You know, um, there are these two guys, they are 24 years old. Um, uh, they’re both Wharton graduates, um, and they wanted to start, they, they. They had a problem. Um, and I have described it in the book. The company is called flat iron health are and, and, and what they, they, they made some money because early startup, they made some money actually from Google.
Uh, and they had some money and said, you know what? It can be really solved. Something that really matters to consumers. And they’re looking around, what is it, you know, before they sell some online business, they actually felt that selling an online business. Isn’t really a lot of value. Doesn’t mean a lot, a lot of meaning of life.
These guys have said, Ted is, is not one’s name. And that is the other one to him that turned off. And, um, and they, and they, they, they thought around it and, and well, they did is they say that one of the, one of the, uh, the two of them had a little, an 11 year old. Who was diagnosed, who was tired, who, who had some illness actually like AMEA at the end?
It was, but they couldn’t find it. It’s an 11 year old at Brandon is his name, a nephew of one of the two. And they said like, look, what’s the real problem is the real problem we are solving here is, is, is, is that when you could need to get medical attention for some cancer, Nobody knows anything.
Everybody, every doctor tells you something else. And, and to try to find that solution, um, they, they, they said, look, maybe we should, we should create sort of the Google of health care, sort of where you can find solutions to problems almost like you. And I find stuff on the Google internet. And, and, you know, like if you were to think of a traditional business, unless you would say, Hey, I’m going to, I’m going to sell them a software, maybe an app.
And then, uh, and then, um, um, and, and, and, and that Brandon it’s software, they branded itself on on-call cloud, the ongo cancer cloud on booklet, but it’s on a cloud computing and we can sell this to the house. That’s that’s sort of like, you can make a lot of money and Salesforce makes a lot of money.
Microsoft makes a lot of money and you can become very rich very quickly if you have successful. But they said something else, you know, they said the biggest problem is that most of the data that is around. There is actually, uh, when doctors treat patients it’s never recorded because it does mumble with something quickly.
They don’t, they scribbled something that nobody can read the nurses, you know, sort of like misses half of it. And, uh, and it, it’s just not a perfect world. So there’s a little money. They have the hired minimum, minimum wage. People are at $15 an hour. Um, and they’ve, they’ve, they’ve followed doctors around and recorded every mumble they call them obstruct us.
Um, And, and, and, um, uh, and, and recorded diligently every treatment of every doctor of every doctor. Um, uh, every patients today, 2.5 million patients are on the system, 2,500 cancer hospitals. They had a hard time for one year to convince 100. But what hems is, they created this data flow on the basis of their technology and what now, what they sold the company for $2 billion.
So, so they, they and somebody rich, but they deservedly. So what, what they now have found is. That they share those data with hospitals, across doctors, across pharmaceutical companies and, and, and even the FDA, the food and drug administration that the drug administration that approves sort of the, the cancer drug sector.
And he’d has a significant effect on, on how. Get treated when you get a diagnosis cancer, uh, in cancer, any form of cancer. So it has sometimes they found that, that you don’t need any drug at all. You know, maybe it’s a different diet that you eat. Maybe you need to slim down, you know, you need to eat certain things.
Sometimes you go to weight Watchers. Sometimes it’s another therapy, but there are many therapeutic solutions instead of just, you know, having a drug that makes you look like a vegetable within six months and feel like that even worse. And, and so, so the answer lies to that. It, the long answer, the short answer.
The value is not in the software that I’m selling. That’s sort of like the obvious product that you have that you place in, in the computer of the doctor and the hospital, if you will. The value in this case is it’s actually in the, in the indirections, in this case, the data from daily diagnosing, uh, of, uh, of, of, uh, on, on looking at patients and, and that becomes the value.
Um, and, and, and that’s changing the pharmaceutical industry because, because, because, uh, every pharma company now works with it. So it’s not only, so when we think as a marketers, the way you’re not starting to think about same thing with this John Deere tractor. Is the value in the John Deere tractor. Now I love the tractor, you know, I’ve been dreaming of it when I left in bond and bond.
They’re all over the place. Nobody, it’s not, it’s not the value of the product. It’s the data that attractor collects when it, when it drives over the field, it’s the data. Farmers in this case, the consumer customers share with each other. I think we need to think as a marketer, you need to think outside the box and I have a product and now they asked me to market that product.
You know, it starts out with this figuring out how do we create value by connecting with consumers, either it’s farmers or, or patients in a, in a, in a care center, in a, in a cancer care center, if you will. And that’s where it. And that’s how it works. And through that in directions, we start learning about the consumers in an agile, in an ongoing way.
And, and ultimately it’s that intangible asset value, those relationships, those in the actions, the, some of those interactions that create significantly more value than the original product that we sell.
[00:33:48] Peter Mahoney: Well, that’s amazing. And I think that the. Kind of business models that you see companies employing today are much more aligned with the strategy than in the past.
So SAS companies, as an example, get paid when people use their platforms in gym and when they stopped using them, they stop getting paid. And in the past, you know, I’ve been in the software business for many decades now used to sell it all up front. Uh, and, uh, and you didn’t care if they used it or not.
You hope they did. And maybe they’d tell your friends, but the, the alignment of business models to encourage this kind of behavior and the connectedness. Of these kinds of applications is really critical in, in making this possible. And I think you’re right, that what CMOs need to do is they need to look at their own interaction field, look around and say, what, what is their interaction field with between their customers and, and the, the use of their product versus just their product?
What data does it create? Uh, what value does it create? And, and that’s the thing. It sounds like people should feel
[00:34:53] Erich Joachimsthaler: you and I we’ve been growing up baby said, look, let’s look at the John Deere. Let’s look at the competitors. Uh,
let’s look at ours versus theirs. How different is ours versus theirs? Look, we have the green and yellow colors, you know, we have a brand and then, and then let’s look, let’s see, let’s look at our. Uh, based on that, let’s look at our customers and, and ask customers what they want. And the customer will tell you and B look at either competitors and say, look, they have these features.
And they have that features. We figured out in the trade show, we feed it back to the manufacturing and say like, look, I can’t sell the same thing anymore. The competitor has all of these features. And I asked the customer, the customer one that features today, this is called a world of feature righties, you know, and today they don’t want that anymore.
If you, if you, you know it from software, you know, when you launch something, you now monitor whether this is used and if it’s not. Then it’s gone, you know, you, you, so it’s a dynamic learning about the software rather than selling all the features in a, in a rep, a shrink wrapped box upfront, you know, and say like, look more features, uh, windows 98, you know, going by the phlebotomists, you know, that’s the old world.
So yeah,
[00:36:07] Peter Mahoney: it is. And, and I’m, I’m disappointed because we’re, I mean, yeah. Up against our time here, Eric, and this has been just an amazing conversation. Uh, and, uh, but before I hand it over to Kelsey to ask the last question, uh, just help people, uh, understand where they can find out more about you, uh, Vivaldi and where they might go find it.
[00:36:31] Erich Joachimsthaler: Thank you so much. Um, yeah, I, um, obviously my, my last name is so complicated and long that, uh, uh, it’s hard to even, even for me, it was like, it took me a long time to properly spell it in Germany. So, but I . Today’s a website. Actually, my assistant produced it for me. W w dot dot com. Anybody who competes anybody who is competing, completing the challenge gets a free book from me.
I’m fine. Said website. Uh, They, um, w w E uh, Vivaldi liked the musician. I couldn’t have called it your installer. Nobody knows. Knows that. So I go with Vivaldi, the musician Vivaldi group com. Um, and so I think that on LinkedIn you’ll find me easily. Somehow, and I really like to connect and people and people give me comments on anything good and bad, the bad ones I prefer, uh, in person, the good ones, you know, please, uh, widely distributed them.
[00:37:37] Peter Mahoney: Well, we’ll also share all of that in our show notes. So people who are listening to the podcast to take a peak in the show notes and you’ll see all the links to all that stuff. But Kelsey, I think with that, we’ve got one more quick. Eric, this has
[00:37:48] Kelsey Krapf: been great. There’s so many golden nuggets from this conversation, everything from, you know, demand side economy to scale, to connecting network and consumers I’ve loved all of it.
But what advice would you give for aspiring CMOs or CMOs today in the marketing world?
[00:38:06] Erich Joachimsthaler: So to me, I call this, I call this framing, you know, if I were to be a CMO, I, the first thing I would do is I would say I would challenge my leadership team and the people around me and say like, how do we frame our business?
How do we think of this? The what I call the outside in the demand perspective, from a value creation on the demand side, you know, it’s like, um, and, and, uh, you know, like it’s the, uh, those doctors who provide all those information, you don’t, they contribute significantly to value creation. Those patients that are diagnosed with cancer and, and provide the treatment data.
I think that’s where value is created. So how do we get, and so I think that that’s the way that in my book, That’s the first step. And the second thing is a way, a way to, to understand consumers through this direct interaction. I, in my book, I, I, I talk about how do you write this? How do you get that, uh, consumers to participate in, in that value creation?
How do you make it a, what I call it a fair value exchange. Um, and that’s the trick, you know, if you look at the big companies, you talk about MSF. Um, you talked about, uh, flat Ayron you talk about John Deere, you talk about apple, you talked about Google. We all share in a way in that, you know, every time I download an app, Google, Amazon, I’m sorry.
Apple knows a little bit more about me. What my liking is and disliking is, and they use that in order to produce more, you know, if you, every, every net for every, every show you watch on net, In a way, uh, you know, communicate back to Netflix, what your preferences are and on and on and on. So I think that figuring that out is the second part.
And then the third part is, is, is, is, is building that model and scaling it. I think Peter spoke on, on, on the next CMR. That’s where the CMO blocking and tackling comes in. So, so my, my suggestion Kelsey, is don’t start with a blocking and tackling that we typically do and have to do as marketers, performance, marketing, advertising, communications, and all that’s all, but that’s, that’s, that’s now almost like the base.
The baseline. What we need to think about is, is, is how do we frame our business? We are not selling tractors. We are helping farmers. Boost the productivity of their land. That’s, that’s another metric. Um, we are not solving for selling more costs. We pick a blend of cars on the road we are solving for people’s mobility.
I think so. So starting to think about that, that’s where I think that’s a, that’s a really great dialogue two half with, with other executives and whether you’re in a startup or in a bigger.
[00:40:47] Kelsey Krapf: Love that. Well, this has been great. Thank you so much for your time today, Eric. Uh, make sure to follow the next CMO and plan out on Twitter and LinkedIn.
And if you have any ideas for topics or guests, you can email us at the next TMO at Plannuh dot com. Have a great day, everyone. Thanks, Eric.
[00:41:05] Erich Joachimsthaler: Thank you.