Episode 302 / Mat Thomas / Lexus UK / Senior Manager, Brand Strategy
Kaizen & Continuous Improvement in Data Driven Marketing
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When most marketers think of data driven marketing, they wrongly think that only applies to the digital world, says Mat Thomas, Lexus UK’s Senior Manager of Brand Strategy. But data should inform not just the tactics, but everything within the brand management process, he advises.
At Lexus UK, Mat and his team apply the principle of kaizen: not making big shifts overnight, but continuous improvements, right across the marketing mix. This mindset is his shiny new object, looking at marketing in phases, learning from results, moving and building from them, and continually testing new ideas.
This approach is contingent on having a set of clear objectives, however. They help drive your strategy and pick the right data sets to work from.
Learn more about Mat’s kaizen approach, his favourite marketing book (Rory Sutherland’s “Alchemy”), and his top data driven marketing tips, on the podcast.
Transcript
The following gives you a good idea of what was said, but it’s not 100% accurate.
Mat Thomas 0:00
Sometimes, if you get too obsessive about the short term, it sort of undermines the value of what we're trying to do in the long
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Tom Ollerton 0:39
Hello and welcome to the shiny new object podcast. My name is Tom Ollerton. I'm the founder of Automated Creative, the creative effectiveness at tech platform, and this is a podcast about the future of data driven marketing. Every week or so, I interview one of our industry's leaders about the future of data driven marketing and our industry. And this week is absolutely no different. I'm on a call with Mat Thomas, who is senior manager brand strategy at Lexus UK. So Matt, for anyone who doesn't know who you are and what you do, could you give us a bit of background?
Mat Thomas 1:17
Yeah, sure. Okay, so Hi Tom, and Hi everyone. So my name is Mat, and I lead yeah brand strategy on Lexus in the UK market. So essentially, with our team, we manage advertising, media, research, sponsorship and partnerships. Been in the role for about three years, and we've seen really good successes as well. Over the past three years, business is doing really well. We achieved the highest volume last year, and also marketing metrics are looking really strong. A bit of background on me, I've been in marketing industry for plus 20 years now. I've worked in three different industries, FMCG, consumer healthcare and also automotive, which has been the last 10 years. Yeah, a lot of experience in things like full marketing mix roles, strategy, ad development, new product development, pricing, yeah, quite a lot of experience. I suppose the interesting thing for me with, I suppose, the marketing career is that wasn't the original plan. I actually wanted to work in the music industry, and was going to do a Music Technology degree and did a sort of like last minute change of plan U turn, and went and studied business and quickly sort of established this really interest in marketing but it wasn't the advertising bit which which really excited me. It was more the research side, so interested in, sort of like the psychology human behaviour, and that still stands today. That's the bit I enjoy the most, and particularly on what we're going to talk about today. You know, really understanding the customer, using data is something which, for me, is the most enjoyable part of marketing.
Tom Ollerton 3:11
Well, the problem with that is that I've got a really high expectation of your content.
Mat Thomas 3:13
Now I'm gonna have to try very hard. Out of work I'm very passionate about travel. Travel a lot around the world, 75 countries. Big passion for Latin America. Speak a bit Spanish. Love music, buy a lot of vinyl. So yeah, that that's me.
Tom Ollerton 3:32
Oh, the modern man, fantastic. Mat, well, I'm looking forward to this, but let's get into some specifics. So, broad marketing career, is there a book that has guided you through that, or a particular publication that you really rate as having some truth in?
Mat Thomas 3:53
I think for me, I mean, there's loads of great books I've got, literally a book I've got my bookshelf is full of them, and there's a lot of great opinion leaders, I think, right now, I think a lot of very good storytellers, too. Within the marketing world, I'm a big fan of Galloway, Ritson... He needs to write a book. Les Burnett has also written a great book, but the one which really stands out for me, and I think has been quite inspiring. I think in the last sort of couple of years, is Alchemy by Rory Sutherland. I actually think he is a genius in that kind of like Mad Professor way let's say. You've interviewed him, haven't you? I think?
Tom Ollerton 4:40
Yes, yes. And you know, bit a trumpet too, in here, I'm actually just about to publish a book myself called UsingCreativity and Data in Marketing, and interviewed 40 very clever people, one of whom was Rory Sutherland. So yeah, trying to keep him on topic was tricky, as you might imagine. But yeah. And he made a real valuable contribution. I mean, my input into the book is minimal, really. It was just me reporting back what other people have said. But yes, he's, he's quite the brain.
Mat Thomas 5:10
Yeah, I loved, I think it was like halfway through that interview and he went off on a tangent for about 15 minutes. I think your question was around the future of marketing. And then you stopped him, and you said something like, now I have the unenviable task of trying to understand what has this got to do with the future of marketing. And I was chuckling to myself from the train, listening to that. And these don't talk for like, another 15 minutes, but yeah, I think he's amazing.
Tom Ollerton 5:38
Yeah, yeah, I turned on the microphone and Rory did the Rory Sutherland thing. I was, I was a mere bystander, unfortunately, but yes, a treat to have him on the show. Assuming someone's not going to read that book. What are the three things that you remember from it that you could pass on?
Mat Thomas 5:55
Sure, I think the key thing is, is this whole kind of idea that illogical ideas can sort of lead to very successful outcomes in marketing business. And I think that's the kind of sort of the centre point of the book, you know, he really so emphasises this whole thing about understanding psychology and insight and consumer behaviour. Because I think quite often that we very sort of easily, sort of fall into this trap of assuming that humans are really sort of rational beings, and, you know, they make decisions all the time using logic and complete information. But actually it's not the case. You know, we overlook the complexities, the nuances of human behaviour, which are influenced by emotion and so on. And that's essentially the kind of the the idea behind the book he makes, I think, you know, the second point of it he makes. He gives really good examples of where, I suppose things which have been very successful but defied all logic. He talks about Red Bull at the start, which is such a great example. We said, you know, that product really kind of defied logic. You think about that, it's more expensive than regular soft drinks, it's pretty disgusting, and it comes in a smaller can, but yet, yet cost more. And kind of a traditional, you know, economics would say, well, worse taste, high price, small can... it'll be a failure? While behavioural science will say, Well, you know, consumers don't necessarily buy based on logic. You know, the price and the taste enhance the perceived effectiveness. You know, that whole idea of the unpleasant taste sort of reinforces the idea that it must be sort of powerful and medicinal. And I love that. And I think, you know, it's all about that sort of encouraging organisations to value experimentation and don't dismiss sort of ideas which don't sort of align with with logic. You know, it's kind of, it's not exactly verbatim, but he's like, you know, sometimes the solution to a problem isn't necessarily a price promotion. You could be like an ad with six dancing ducks. I just love that. I just think it's brilliant.
Tom Ollerton 8:15
So, yes, it's fantastic, right? And the reason it sticks out like a sore thumb is because it runs counter to the way our industry is set up at the moment, right? So I mean, I run a run a business which uses data and analytics to help brands understand exactly what should go into their ads, right? So removing the guesswork and the subjectivity through through huge data sets and AI and automation, right? So that's what we do. But, yeah, I agree with what he's saying, but I'm, I guess my pet peeve of Rory Sutherland is, if I'm allowed one is like, Well, how would you implement that? Right? So that's a great story, but you know, and you as Lexus, you can't come in and go, right? We're gonna have like, a bright pink unicorn car with one wheel. Do you know what I mean, like, it's so how do you, how do you take that radical like chaos can rule from behavioural, behavioural psychology standpoint, and sell that into a global organisation like Lexus?
Mat Thomas 9:14
God, that's such a hard question to answer, and it's a really good one. I think, you know, I don't think it's saying every decision you make has to kind of like defy logic. I think it's sometimes about when you do have a business problem is that you sort of don't just go to the sort of the convention, the initial, conventional, you know, solution, and try and look at others and maybe find ways to then validate it. You know, I think in things like advertising, there are great examples in the industry where typically things would, you know, you'd expect the conventional thing with, you know, would always feature. Products, but actually sometimes the best ads and so on this don't even necessarily show the product. I think there's a good example in something like Just Eat, they did a sponsorship or something, Was it love Island and it features like a lizard, but there's no reference to the product or the service whatsoever. But very, very successful. So I think there are ways to kind of prove it, but I agree with you, it's certainly challenging, particularly within quite sort of conservative businesses.
Tom Ollerton 10:18
So Mat, we are in very ethereal territory here around what makes great advertising and behavioural science and lizards. But this is a podcast about data driven marketing, so I am going to pull you back from the brink and ask you a very pointed question. What is your best bit of advice for someone who wants to be a better data driven marketer?
Mat Thomas 10:52
Okay, right. So I think there's a kind of common misconception in the industry that data driven marketing is just about digital marketing. And obviously like digital channels, paid media, CRM, social search, they obviously naturally generate a lot of, you know, measurable data. But I think sometimes this misconception, sort of dangerously overlooks the sort of broader strategic power and application of data within marketing, right? One of my pet hates, I think, sort of in the last sort of few years, and I've sat through countless presentations from agencies where, you know, when we talk about data driven marketing, it's always accompanied with this kind of imagery which kind of resembles the film, The Matrix, or something really futuristic. And again, it sort of, for me, sort of reinforces this notion that it's only digital but I think this is really misleading, because actually data should inform literally, not just the tactics, but literally everything within, I suppose, the kind of like the brand management process, right? Let me give you the example. So if you think about, I suppose, understanding customers and sort of diagnosing the market and stuff like that, you know, you use quant data. You use brand tracking data to maybe ask for market, whether it's a attitudinal, behavioural segmentation, identify clusters of customers which have certain needs. Strategy wise, you have, you know, brand tracking data to define your objectives. And you know, at Lexus, like, we have a primary objective, a secondary one. And I think even on that brand positioning, you know, you need the data to actually define which two attributes, for example, you want to create relative differentiation within into a market and their strategic things. This is way before you even get to sort of tactics. And I think in sort of tactic wise, we do a lot of marketing mix modelling at Lexus, we use data to define, for example, you know, what's the right media mix when we when we launch a new product. So I guess for me, it's this, sometimes I think there's this sort of danger that we think it's just very sort of digital, and I think that limits its strategic value. And I'm not saying that digital is not important, course it is, but I sometimes think that we look at it quite narrowly, and I think we need to think much broader.
Tom Ollerton 13:42
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Tom Ollerton 14:19
Yeah, I think I definitely picked that up in doing the research for the book. I was just mentioning that, I mean, even myself, I went in thinking I'm writing a book about data driven marketing, and I was, I thought it was all gonna be ones and zeros, but as I started speaking to people, I was like, No, that's not it at all. There's, there's a lot of ones and zeros, but they do not capture so much stuff. And they if you do, if you chat to one Lexus customer or potential customer, that is data that that audio recording, or the sketches in your notebook, or whatever that is data, it's not it's not in a dashboard, it's not in a spreadsheet. It's not available at the click of a button. But it has a whole lot of meaning in it that digital data could never have.
Mat Thomas 15:01
Yes, exactly, exactly that point. So, yeah, so that's kind of how I see. I think that another point I think is worth making as well, is that I think sometimes that, you know, there's a risk that data should inform and not dictate. Because I think sometimes we have to be really careful that we don't sort of overreact to short term data signals, right? Because I think you can, from that, actually drive very sort of core strategic decisions, I think, you know, and I get it, there's always the urgency on, you know, is something working, and everything like that. But I think we can over emphasise kind of shorter metrics like conversions too much and not appreciate, you know, the brand effects actually do take time, and sometimes, if you get too obsessive about the short term, it sort of undermines the value of what we're trying to do in the long and in brand investment. I can really sort of relate to that at Lexus, where, you know, we've really shifted so much of our investment into the long and it takes time. And so, yes, I think that's a watch out.
Tom Ollerton 16:10
Well, it's the it's the Burnett and Field long and short position isn't it, and once again, Peter was in the book and had a fascinating discussion. He was very apologetic. He was like, Look, Tom I'm going to say some really negative things about performance marketing. So no, that's the world in which you operate. Let's have it. And he was saying, like, there just isn't well, he didn't say this specifically. But what I took from it is that there isn't really anything, like, there isn't a performance ad, there isn't a brand ad, some brand ads drive performance, some performance ads drive or or push brand metrics down, right? And a performance ad will work a lot better if that, if there is a brand in the background to support it, right, you're not gonna go buy a car that you've never heard of. I mean, you might, but that's a that's a tiny market, right? So, so it's it, but yeah, our industry, like you'd have a performance team, and you have a brand team, and you have a performance metric, and you have a brand metric, and they can be in different offices or different countries with different objectives. So I agree with you, but we are short on time now. We haven't gotten to your shiny new object yet. You've you've got me chatting on I've lost control of this interview in a good way. So your shiny new object is a mindset of continuous improvement. So what do you mean? And why is that a shiny new object?
Mat Thomas 17:34
Okay, so let me explain what I mean, right? So, Lexus, right? We're a Japanese company, and we kind of follow, we follow this principle of kaizen. You may have heard about this, right? So it's, it's not necessarily about making big strategic shifts overnight, but it's about the sort of continuous improvements you make, literally right across the the marketing mix, if I think about it, right. We rarely make decisions without data. It literally drives everything. And I suppose, why is this by shiny new object? I think it's a shiny new object because I think, as a business, you know, this is a big topic for us, the whole thing of data driven marketing. I think it's very important to kind of emphasise to, you know, the business that actually, that this isn't the case of, like, just collect lots of data and we're not sure what we're going to do with it. It's about being very clear in terms of how you go into what you can achieve with it. And I think this principle of kind of stating, right, this is about constant learning and constant improvement, whether that is what you're doing in product, or what you're doing in comms. I think for me, that's why it's the shiny new object is to kind of emphasise the business that, you know, it's not just that, yeah, we just get all the data through into a box, and we kind of do something with it. It's about, there's a reason, and there's a principle behind it, and that's why, as I call it, my sort of shiny new object. Does that make sense?
Tom Ollerton 19:14
It does. Yeah, I've caught myself doing some real marketing bullshit recently, not for the first time, but there's that. There's the three Ds, right? There's, there's data decks and dashboards, right? Where actually what you need the fourth D is a decision, right? If those three Ds aren't driving a decision, then it's just a waste of time. And I was interviewing Perla Bloom, who is Expedia, I think, which she was at and she was saying, unless your data inspires a creative person or inspires a decision, then it's redundant. Like I'm sure it's someone's job to pull together data like an analyst, but if the analysis doesn't inspire you to go right, probably. Let's go do that. Then it's redundant. So, so tell me, like, I get the principle of kaizen a bit, but and I understand it how it works from a manufacturing perspective. But could you give me an example of how it works in marketing, specifically, whether, like, a previous role, I don't want you give anything away, but, like, how could you as someone who goes, right, what I'm going to copy Mat, what's, what's the kind of the matt, three steps of making this work?
Mat Thomas 20:28
Okay, three steps. But let me, I'll talk about Lexus. Okay, right? Our goal for Lexus in the UK is about building salience in the UK market that's being more top of mind in a buying situation, yeah, and, I mean, just give the context on that. You know, the data which we see right kind of tells us that people know we make cars, property brand awareness is really strong. It's like 99% but when people come into the market, we're not as top of mind as we'd like to be, particularly when you compare with, like, you know, the German competitors and so on. So where does this mindset come in, in terms of continuous improvement? It's, it's a case of, like looking at, sort of, your marketing in phases. It's kind of, you do something, you see a result, you learn from it, and then you move on to the next one. So for example, we use, you know, we spend a lot of money on TV still, and we constantly test creative. We use this company system, one you may be aware of. We do a lot of pre testing, and one of the metrics within that pre test is called fluency. It's about the accuracy, the speed of brand recognition, and we know that's really important for salience. So each time we do pre testing, we're trying to learn in terms of, how can we improve it next time, for example, in other projects we do within the brand, you know, they work in phases. We've launched a huge tenant sponsorship over the last couple of years. We see that it's making a contribution to salience. And now we've got another phase of things we're going to be doing, which I'm not going to share, in terms of what we think, again, could be a driver for salience. So that makes sense in terms of, you know, it works in phases, and that sort of constant, going back and checking the data and trying to learn and improve.
Tom Ollerton 22:34
So how do you know you've got the right data? What... so there's, there's a lot of it available. It's cheap as chips, isn't it getting all the different sorts of data points. But how would you like make Kaizen work? I assume we need an objective, and we're going to do a test, and therefore we need the right data to make us know that we have moved in the right direction. So how would you make sure you got the right, the right data?
Mat Thomas 22:56
This is a great point, because if you think about it, we are literally snowed under with data, right? And which one you know, which data do you actually use? My advice would be that if you're really clear on your objectives, then there would be KPIs, which would sit onto that so that should inform what data you look at. If you don't have a kind of clear objective and strategy, then I think you will be in trouble, and you just don't know which data sets to look at. I think it does have when you're really clear on what you want, and the strategy is very clear, you quickly get to, you know, to see what things you don't need to look at and what you do.
Tom Ollerton 23:38
So what are the problems with implementing this Kaizen approach. Does it like not work for the kind of wily, creative person that just wants to do something because it feels right or like, is it something that you talk about in the interview process, or how does it... where does it get stuck?
Mat Thomas 23:55
I don't think it should inhibit creativity. I think it's about making in some ways, I think it should actually help creativity. Because if you're constantly in tune in terms of how things are performing, then that should actually really help you. If you're not clear on where you're looking or on which data sets are right, then I think, yeah, you're all over the place, but I, as I say, I don't think it should inhibit creativity or stifle it at all.
Tom Ollerton 24:26
Mat, this is really frustrating, but we've very quickly come to the end of this podcast, so I would love to carry on this conversation. I bet there's other people listening to this thinking I've got a word or two. So, Mat, so where can they where can they get in touch with you, and what makes a message that you will actually reply to?
Mat Thomas 24:43
Okay, well, I'm on LinkedIn. Just search by Mat Thomas Lexus, I suppose for me, keep it short, keep it relevant, and I'm always interested to have a chat.
Tom Ollerton 24:54
Brilliant Mat. Thank you so much for your time.
Mat Thomas 24:56
No worries, thanks Tom.
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