PODCAST EP 9
What is Customer Lifetime Value & Why is Conversion Rate Important?
On Episode 9 of the Paper Planes Podcast Simon chats with Simon Bell about what Customer Lifetime Value is and why Conversion Rate is so important.Listen Now
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Simon Dell: Welcome to the Cemoh Marketing Podcast, Liza Nebel, who is based in San Francisco. Whereabouts in San Fran are you?
Liza Nebel: I am in the Inner Richmond. I made the journey to where those with children must move. I love it here though. I’ve been in San Francisco for just probably coming up on 15 years now.
Simon Dell: Okay, and not thinking of— because there’s a few people sort of leaving the area in the moment. Is that the case or is that sort of just what you read in the newspapers?
Liza Nebel: Yeah, a mass exodus, actually. I’m the only one of my friends with children that’s still in the city. I’ve had a handful of friends that have left the state. It’s a challenging, difficult location to live unless you want to be here, you need to be here. My husband and I have family here. Obviously, building a technology company, I want to be in the epicentre, which we now co-headquartered in Seattle where there’s a ton of amazing technology talent, but San Francisco is the place for us.
Simon Dell: Okay. So, give us this sort of elevator pitch. Your company is Blue Ocean. Tell us what you do.
Liza Nebel: Yeah, so Blue Ocean, our inaugural product is something called Brand Navigator and its really brand strategy as a service, and the way you can think about what we do is we provide what brands historically pay hundreds of thousands of dollars for brand tracking with agencies that you think of inter-brand, you’re going multi-million.
And we’re really providing this initial brand tracking strategy service that’s always on and really priced at a price point starting at $25,000 per year, so affordable for even some of the smallest brands to enter, to use it, to understand what to do. It’s not just about a benchmarking and a number, but we’re really providing actionable recommendations on top of it, of how your brand can outpace your competitive set. It’s exciting, there isn’t really anything else out there like it and we’ve gotten a lot of traction thus far.
Simon Dell: I’ll dive into that very quickly, just kind of understand it a little bit more. You’ve also got some big brands on board, on the website. I think some Microsoft, Volkswagen and the big names. I imagine there’s some smaller names as well that people outside of U.S. might not recognize. What exactly do you track? For the dumb of us out there who don’t understand how a brand is tracked, how does that work?
Liza Nebel: The best way to start thinking about it is: What have people historically done? What they’ve historically done is survey-based reporting. And so, they go out and build a panel, they ask questions. It’s very difficult to move off that and ask different questions, to understand aided and unaided awareness, do people like your brand?
Some people do NPS scores at the end of purchase. We’re very different and we take what we call an outside-in approach. And we really look at the world, and anything that is written about or writes about itself is a brand to us. So, a brand can be a sports team, a product, what we all know as brands, an actor, and we go in and just as a consumer would experience a brand, whether it’s online or offline, or it’s through influencers, or it’s through review content.
We ingest all of that. We ingest all the content that brands write about themselves in a variety of channels. We ingest all the content that is written about brands by other people, so of course there’s social as a part of that, but also the review content, professional reviews, news, and then we layer in also media and website traffic, and business metrics such as actual revenue performance and bring that together in a meaningful sort of single location that gives you an understanding of how your brand performs relative to the competitor.
Simon Dell: I’m guessing based on that, there must be quite a few data points that you’re looking at to be collecting that information.
Liza Nebel: Yeah, we’re looking at anywhere and each category is different. Obviously, when you look at B2B, there’s a ton of different types of review sites out there versus B2C, very different, and even the channels that are used of the brands putting their own content out. So anywhere between 100 and 1,100 data points per brand, and we’re really looking typically at six competitors. Think about that 1,100 times 6 is what each sort of – every time we run Brand Navigator and when it’s an always-on production, we’re consistently ingesting thousands and at points millions of data points.
Simon Dell: So, if you’re collecting all that data, and I guess from experience even with smaller businesses when you give them data often, they look at it and go, “Right, what does this mean?” You’ve not only got to collect all that data, but you’ve got to interpret it and sort of, I don’t know, I guess raise flags where you think there’s things that they could do better or improve on?
Liza Nebel: Yes, that is exactly what Blue Ocean does and the Brand Navigator product. I’m a marketer by background and I started in the brand space, ended in the digital space, and now I’m building a piece of technology because marketers crave data, but they don’t need another dashboard per se.
You need a dashboard to guide you, but you— people really want the answer. And so, we’re really trying to pride ourselves as an answers company. And particularly, the reason we exist is we actually want to serve mainly, ultimately small business.
We just happen to be incredibly valuable for enterprise and they’ve found us, and we’ve been serving them, but our goal is to continue to build out the automation in such that we can serve. In the U.S. there’s 32 million small businesses that need this type of information as well. It’s— big businesses have used data as an unfair competitive advantage and small businesses need that opportunity as well, and our goal is to bring that sort of natural language element on top of it to show you the data, but roll it up in a meaningful digestible elegant way, but then tell you how to act on it. “What do I do next? What do I do today? What do I do tomorrow? What do I do in six months from now?”
Simon Dell: I obviously understand that all industries are different, but what are some of the common things that you see? What’s some of the common recommendations that you might be making on the basis of the data that you’re seeing? I guess there must be a lot of them, but I also guess there must be a few things that you see quite frequently.
Liza Nebel: So, the trends we tend to see, we will see incumbents will have high levels of familiarity and low reverence, so it’s important to understand, I’ll do a quick explanation of the main area you come in to understand your brand relative to competitors.
We give you something called a Blue Score which is an aggregate of all of those data points appropriately weighted and then scored against your competitive set, but then we break that down layer by layer, so you can actually follow, if you will, like the trail all the way to the bottom of, “What drove that score? Why did I do well or why did I not do well?”
And so, the first sort of factor we look at is familiarity, and that’s what traditional marketers call share of voice. And we’re looking at the paid side. We look at the paid media, but we’re also looking at your engagement rates, the way people talk about you, the consistency in which they talk about you because that’s really a true driver of how much people know about you.
The next, uniqueness, how different and how memorable are you, and product marketers love that side of it. We’re able to really give you a sense of, “Do you stand out in the category or are you hitting the end?” And we score 50 is the lowest, 150 is the highest, 100 is the midpoint. Some of the largest brands tend to be 100 in uniqueness because the small brands flock to them. It’s very hard for them to retain uniqueness.
Consistency, marketers love it, that’s how consistent are you— are you in the right channel at the right place at the right time? We can literally look at the content you put out there. Is there a similar look, tone and feel across channel that customers would recognize, and are you doing it in a consistent basis that’s stable, that’s reassuring, that people expect to experience from you? That’s really tracking over time.
Relevant is about market share, we’re tracking your market share and your influence, and then revered is all about: How much do people love you? It’s our version of NPS, but trying to give you a bit more flavour as to what’s driving that and truly even allowing you to dig into exact customer quotes that are driving sentiment of what people love about you or perhaps areas for you to improve. So, that’s the overall framework of how Blue Ocean operates.
Ultimately, what we want to do is we want to say there are things that we see, and that was your question – in many cases, we’ll see high familiarity. AWS or let’s call it Amazon, low reverence. People know them but they hate them. Familiarity breeds contempt.
We consistently see that. We see the incumbents and the uniqueness category come to the hundred, the midpoint and we see those that want to be like them tend to be on the outliers, but they are trying to get that midpoint interestingly enough. We see great companies that have incredible marketing organizations that are sort of robust – I’ll call them sort of just those that really care about marketing and invest in it.
Great consistency scores. They are doing [INAUDIBLE 00:11:32] marketing. And then when it comes to relevant, I love this, because you will see the biggest guy there in the category, but you can also really see those small ankle-biters that are trying to take market share away because we’re looking at momentum as well.
And I love that because the problem with marketing and brands in general is they’re so myopic. They tend to look at themselves, they look at their own data, they pat themselves on the back because they had great conversion rates or they had an increase in top line growth or marketing qualified leads, you name it.
They love their numbers when they’re going up, but do you ever look at what your competitors are doing? Are they actually going up faster than you? Because you may not be doing as well as you think, and so we love when we see the small guy just totally blowing past the big guy. You might have the market cap, but somebody is eating your lunch.
Simon Dell: I think that what you said there is that brands that have a high level of familiarity and a low level of reverence, that strikes me as a lot of small businesses as well. Often, I think customers use small businesses because they’re just… they’re there. They’re familiar with them. Especially I think local restaurants, if you turn around and set a small business and said to people, “Why do you go to that restaurant?” And you just go, “It’s local, because it’s there, because it’s easy to get to.”
And then if you said, “Do you love that restaurant?” And people will be, I think a lot of people would say no. They use it just simply because it’s easy. So that seems to be— by judging what you’re saying, that seems to be a problem that occurs at every level of business from the NASDAQ-listed companies down to the small restaurants.
Liza Nebel: It’s interesting and we talked a little about small business and big business and smaller businesses learning from big business, but I do love that small business re-invents and can move more quickly than big business. We do have a lot of small business actually that use Blue Ocean, and I love when they are able to really chart a course to just strategically undermine how big businesses just simply can’t compete because they don’t have the ability to move at pace. So, I think it’s an interesting thing. I think they should learn from each other really, and it’s not necessarily just one directional.
Simon Dell: No, totally and it says to me is – I don’t have it here, but I have a little graph that I use that I appropriated from a company I work for about 15-16 years ago. Lion Nathan, one of the big beer production companies here that’s now just called Lion, and it’s called the consumer engagement model and it has basically six segments, A, B, C, D, E and F.
And the final segment is, well, it actually goes in reverse. So, the top segment is the A’s and they’re called the adorers, and it’s about moving your business from the F’s, so they’re the people who don’t even know who you are or don’t even buy your product, to the – I can’t remember what they all stand for now.
A, B, C and whatever that – I can’t remember. I can only remember the A, the adorers. But it’s about lots of businesses have people that are simply just using you because you’re there. But it’s about turning some of those, and not all of those because that’s impossible, but I guess – and this is back to your brand work in your previous work history.
It’s about trying to turn some of those people into adorers, trying to get people to actually love you, not just tolerate you but absolutely love you because they then become the salespeople and the advocates for you.
Liza Nebel: Yeah, I think you’re spot on there that I think people want to love brands. They’re an expression of who they are. And I think even more – what’s interesting, so what I love about Blue Ocean, but what I love about that, with the change of our lives because of COVID, the world has moved online, so we can actually really measure that more. We can understand that love and that sort of adoration, that influence that those that love you can have on your brand.
I think that people are desperate for that. They’re going to be craving that even more because there’s so much choice at their fingertips. It’s not about actually what’s the closest restaurant, it’s actually: How much do I love that brand? Is it a reflection of who I am? In the U.S. in particular it’s coming down to, “Do they align politically with how I stand?”
All of those things are really important, and I totally agree with you. And if I had to predict a trend where brands have to go where they are moving, I mean, we’re seeing the shift, those that are going to build out incredible digital strategies that are going to enable their customers to be their voice are going to be really successful.
That is just going to be the future of business. And we’re seeing, and that’s not a B2C or a B2B thing. We are seeing it across the board, and even in – we have an advanced manufacturing customer who does multifiber, they compete against like Georgia-Pacific and stuff.
That is an incredibly vocal community, oddly enough I learned they had— I’d never served that category before where the digital presence, and the way you engage, and the way you allow your customers to speak about you is just – it’s allowing some of those brands to just skyrocket past the big guys.
Simon Dell: I can think of two straight off the top of my head of brands that have done that, have shot past the encumbrance, the regular players because the regular players were just tolerated, and I think number 1 was the taxi companies that certainly in Australia may or may not be the same in the US.
But the taxi companies here were just completely tolerated. Nobody really enjoyed being in an Australian taxi because they didn’t make an effort, they didn’t make it easy. They overcharged you when you used your credit card, etc.
So suddenly, when a brand appears that everybody loves, which is the Uber of this world, they shoot straight past them very, very quickly. And now the funny thing I think that’s turning on its head and people are trying to get – trying to find ways of shooting past Uber because they suddenly become the taxi company… Certainly in Australia. And the other one to me is Zoom. Zoom which has obviously seen a massive growth in the last 12 months versus somebody like Skype. I mean, Skype had what? A 7-to-10-year head start on Zoom?
Liza Nebel: Yeah, Microsoft. I love them but they might have killed Skype.
Simon Dell: I don’t know whether Microsoft is still one of your clients, but that is… Yeah.
Liza Nebel: So, we’ve been with them for quite a while and we help them navigate COVID using Brand Navigator, and just the commitment – the actual actions they put behind their brand, the intention, it’s so meaningful. Their leadership at the top has driven that, and it telegraphs, and people love them. They are a highly revered organization that does what they say they’re going to do, and it financially has changed lives for the better, particularly through COVID.
Simon Dell: So obviously now, we got a sort of understanding of what Blue Ocean do. Just to take a bigger picture, your background is obviously in brands and brands strategy. You worked at Ogilvy for a time. Tell us about the experience there, working in a big agency. How did you find that?
Liza Nebel: I love Ogilvy still. I always have a soft spot. So, I started in New York as an assistant account executive, big, a young college grad taking on the city. I spent a number of years in New York. I loved it. We worked really hard. It really was an industry of work hard, play hard. I got to touch some of the most amazing.
brands and sit in rooms with people. I loved it.
There was just the exposure I had to the thinking and the creative, all aspects of it. You really saw that coming through the door at Ogilvy. They really trained us on the business acumen side, which I think is a really important side of the agency world that sometimes gets lost, particularly at smaller agencies.
They need us to understand our clients’ business. We had to understand the fundamentals, the financials… But what wins at the end of the day is great creative, great freaking ideas that make it to market. And I love that side of it.
I love the production; I love the visual splendour. I ended up transferring out west to San Francisco with Ogilvy and heading up digital strategy. So, a shift and at a time really where we were able to say, “Okay, what’s our return on investment for these banner ads?” I’ll be honest and these… I was doing tons of database marketing with direct mail drops and all of that good stuff.
But I loved it because we could prove it was impacting our customer or client’s business. The agency world is really hard, and I got the burn out. A lot of people burn out, and I fell in love with architecture actually in New York. So, I went to go get my master’s in architecture. I was like, agencies, I’m out.
Simon Dell: Right, okay.
Liza Nebel: Yeah, and so, this is that moment where actually Blue Ocean actually comes from a little bit of this. I got to architecture school and data was driving rapid ideation. We were scripting to get to better design ideas faster, which is what Blue Ocean allows marketers to do.
It’s about letting you be more creative, letting you spend more money on the creative and market, the job you should be focused on, not sorting through data, trying to understand what problem to solve. We’ll tell you what problem to solve. Now, go spend time solving it. So, that’s what was happening in architecture at the same time, and I was just like, “This is interesting. The world has changed data and technology and sort of software to find thinking. It’s fundamentally shifting the way we can engage in the creative space.”
So, it’s been an exciting experience. And I ended up… I spent a little bit more time at agency. I worked on the brand side at Chevron using an agency inter-brand for an 18-month project and I just— millions and millions of dollars, and a lot of time, and it just – for what? It was a logo change and that is not a brand.
So, Blue Ocean is a necessity that all brands need, and only some have historically been able to afford.
Simon Dell: I’ve done a lot of podcasts on brand and brand strategy, but I’m interested to hear… And again, this is more applicable to the smaller end of the market. What’s perhaps the one thing of all, in all the brand strategy that you’ve done in your time, Ogilvy and Blue Ocean, and all the other companies that you’ve worked for… If you were sort of sitting down with a small company, be it a restaurant or be it a manufacturing company or whatever it is, what’s the one sort of major brand lesson that you would say to them that they need to pay attention to?
Liza Nebel: I think the one lesson that they should – that it’s not about a single print ad or a social campaign, but it’s about the total experience you’re looking to create. And to that point, remembering that your employees are a part of your brand. I think that that is something brands neglect, and we are starting to talk to a lot of the customers we work with about the connection point between their employees and the impact on bottom line.
Because they are an expression of your brand. They’re part of your brand where people hear about you. So, I would say making sure that there’s that through line through an organization of everybody understanding the meaning of the brand, the intention of the brand, how we speak, how we act, how we talk. This is why we do it this way.
I think internal branding is one of the things, it’s not – definitely at Ogilvy, I spend actually a number of years working on massive internal branding programs. I think that that gets neglected when you start running up against budgets and you need to get media and market and companies are moving fast. Just remember your employees are the front line of your brand too.
Simon Dell: I think that’s really applicable again in the small business space, is that they don’t spend enough time and effort training the staff, educating the staff and understanding that what could be, I don’t know, an 18-year-old girl who’s at university coming one day a week to do a part-time job for six hours.
It’s just as important that they are a brand ambassador for you is somebody there that’s full-time or somebody that’s the owner and all those kind of things. They seem to rush that part of it. And I guess you probably see that just in everyday when you, whether you’re going to go and get you a coffee, or buy some clothes, or whatever it might be, I guess you see that as well.
Liza Nebel: Absolutely. And I think that’s a lesson that – it’s one that strikes me, and it’s become – using Blue Ocean, that’s one that – and if you ask my co-founder as well, we would go… That’s an interesting perspective of the world that we’ve both touched from an agency standpoint, sort of the employee brand but didn’t ever, could never see or quantify the impact of it.
And it’s really meaningful. It’s a meaningful impact. It drives your customer’s experience and your customer, that you know, we go back to sort of the advocacy, that ambassadorship, the loyalty and the love, they need to have that good connection with your employees as well.
Simon Dell: I’ll never forget – I did one of the earlier podcasts I did with a franchise owner, one of the big franchises here in Australia, quite a controversial franchise. They were mechanics. They’re fixing cars and all that kind of stuff. And I’ll always remember, he said to me that he had a young guy who was under 30 who owned three of his franchises, and this guy had drummed into everybody who worked for him the importance of customer service, knowing the customer’s name when the car came up the driveway, treating everybody the same with an equal level of importance, and so on and so forth.
And he even said, “This guy is one of my most successful franchisees.” He’s got the brand, he’s got the customer service, he’s got well-drilled polite staff. And most people would understand in the mechanics, that can go either way.
And the point he made is that each of his franchises was making something like $200,000 profit a year, and this was one young guy who was under 30 who owned three of them. I never forget that that was the difference – and that was, he said, “I’ve got franchises that don’t make that much money.” But that singular difference – they weren’t in any better location. They didn’t have better brands. They didn’t have more staff, but it was just over indexing in the training and the education of his staff.
Liza Nebel: I believe it. I worked on Time Warner for a number of years, and specifically Time Warner Cable, which if anybody’s ever been a customer of Time Warner Cable, you probably hate it because cable companies in the US are a monopoly. Whether they want to say it or not, they are. You’ve got to get your triple play, your phone, your internet, and your TV from the same person.
And they recognized they needed to have their people on the front lines just create that experience that maybe the product itself couldn’t live up to. At least smooth out some of that because there’s always a higher expectation. Nobody likes their bill. Everybody hates their cable bill, but people could make that better and they did a great job.
Simon Dell: Aside from Time Warner, and this could be one of your clients or not one of your clients, one of the last questions for you today: Who have you seen turn it around really well in the past maybe year, two years, five years, whatever. But who have you seen go from a struggling brand to somebody that seems to be sort of kicking more goals today?
Liza Nebel: People may go, “That’s crazy.” I think a brand that almost went off the deep end was Airbnb, and I think they turned it around. I think Microsoft has done an incredible – going from like the Steve Ballmer years into the Satya years. Leadership at the top has changed that organization and its value.
I mean, look at its value now versus then. That’s an incredible turnaround story. I think looking at the food industry, because there’s a lot – like KFC I think has been a turnaround story. They’ve brought their brand back, and you know, people love them. They have massive loyalty. And at points, I’m trying to think who else. I don’t want to be too stuck on consumer or B2B, but I think…
Simon Dell: I’ve just put you on the spot there, so apologies for that.
Liza Nebel: Yeah, no. I should know that. I think: What are great turnaround stories? I think industries that have not done a great job at that, and I’m looking for them to make a difference, is the airline industry. You just want them to be better, but they’re just not. I think there could be a good turnaround story there.
Simon Dell: It’s funny because nobody ever… I mean, some people certainly in Australia where we had the duopoly of Qantas and Virgin, and nobody really else, is that you either kind of loved one or the other, but you never really loved one or the other if that makes sense.
You had a favourite but only because you kind of had to have a favourite, do you know what I mean? And I don’t think either of them did themselves any favours because I think to, my personal opinion of one, was that they always struggled to find out where they were supposed to be in what is a strange marketplace.
Australia is… There’s only three real cities people fly in and out of. And anyone listening to this from Adelaide will never speak to me again, but it’s Brisbane, Sydney, or Melbourne. That’s it.
Liza Nebel: Another one I can think of, eBay. eBay was huge, and then went totally dark, and then they completely revitalize themselves. And it’s a massive marketplace again. I thought I’d never go to eBay again and I go to eBay all the time. I love it.
Simon Dell: We’ve been working on some Amazon U.S. stuff, and I saw a video on TikTok the other day. I have a guy that was sitting there saying, all these kind of classic 60-second TikToks about how to make money from nothing and doing nothing.
But it was the first one I’ve ever seen about eBay, and he was saying this is how you can make money on eBay. So, I’ve got to the point I’d— this was two days ago, I was thinking if now there’s videos coming out about how to make easy money on eBay, eBay must be doing something right if all those people are creating those videos.
Liza Nebel: They’ve had a massive shift and they’re doing very well now, but they were— I thought they almost went out of business. I really did.
Simon Dell: Alright, so last question for you. What’s next for Blue Ocean? 2021 is obviously a big year. We’ve just all got through 2020, and hopefully fingers crossed this one’s better. What’s on the horizon for you guys?
Liza Nebel: What’s on the horizon? We are all about building great long-term relationships with our current customers but also growing rapidly. We’re a technology company. So, I think it’s building out the product and just trying to drive the level of automation to a point where we are ubiquitous, and anybody can use us.
Our goal really is to democratize strategy. It has only been reserved for those that can have a $10 million retainer with Ogilvy and can afford to actually wait 16 months to actually act on the recommendations that came in the report, like that’s not the way the world works anymore.
So, our goal is to just drive the automation and some of the AI components to build out a product that really is affordable and accessible for everybody. That is our driving goal. Right now, the way we operated, 7 days to value, and then you have this always-on platform, we want that instantaneously.
And we want people to be able to come, any size business, maybe a business that hasn’t even launched, and just understand what they should do. So, that’s our goal, is just to be in every person’s hands and keep growing. And you know what? As a business owner, I want to build a company where people love coming to work. That’s also what 2021 is all about.
And you know, we’re going to have to strike that balance between remote working and in-office working, and I want to create flexibility and just bring joy to people’s lives right now.
Simon Dell: That’s something I think everybody needs now as well, so that’s a fantastic sentiment. So, last question, if somebody wants to get a hold of you, if they want to get in contact with you, what’s the best way of doing that? But don’t give your phone number out.
Liza Nebel: I was totally going to.
Simon Dell: Unless you want to, yeah.
Liza Nebel: [email protected] I’m happy for a chat anytime. And yeah, we’ll get together.
Simon Dell: Awesome. Liza, thank you very much for your time. It has been very informative. I really appreciate you joining us today.
Liza Nebel: Awesome. Thanks so much, Simon.
PODCAST EP 9
On Episode 9 of the Paper Planes Podcast Simon chats with Simon Bell about what Customer Lifetime Value is and why Conversion Rate is so important.Listen Now