Jim Lecinski | The Insomnia Cookies Case - The GOST Model Taught at Northwestern - CMO Confidential

Loading summary

Transcript61 lines

[00:00]
Mike Linton
The CMO Confidential Podcast is a proud member of the I Hear Everything podcast network. Looking to launch or scale your podcast, I Hear Everything delivers podcast production, growth and monetization solutions that transform your words into profit. Ready to give your brand a voice then visit iheareverything.com welcome to CMO Confidential.
[00:25]
Dr. Jim Lecinski
The podcast that takes you inside the drama, decisions and choices that go with being the head of marketing. Hosted by five time CMO Mike Linton.
[00:36]
Mike Linton
Welcome marketers, advertisers and those who love them. The Chief Marketing Officer, Confidential. CMO Confidential is a program that takes you inside the drama, the decisions and the politics that go with being the head of marketing at any company in what is one of the most scrutinized jobs in the executive suite. I'm Mike Linton, the former Chief Marketing officer of Best Buy, ebay, Farmers Insurance and Ancestry.com here today with my guest, Dr. Jim Lecinski. Today's topic, the insomnia cookies case. The G ost or ghost model taught at Northwestern. Now Jim is a professor at the Kellogg School of Business at Northwestern where he has been named professor of the year, which I guess, I guess that's a pretty big deal. Prior to teaching, he worked at Google as Vice president of Customer solutions for the Americas. He's also written two books, Winning the Zero Moment of Truth and the AI Marketing Canvas. Jim actually took issue with CMO Confidential's call out that many MBA programs are not keeping up with the times. He actually invited us to look at why Northwestern is ranked for marketing as the number one school. Welcome, Jim.
[01:54]
Dr. Jim Lecinski
Hi, Mike. Nice to have you with us. Nice to be with you.
[01:57]
Mike Linton
It's great to be with you, Jim.
[01:59]
Dr. Jim Lecinski
Thank you.
[02:00]
Mike Linton
We hardly ever edit these shows and those of you listening now will see that we hardly ever do. Hey, Jim, before we dig into this case and the ghost, the G O S T model, let's ground our listeners in what you teach and why. And you are a clinical professor. What does that even mean?
[02:20]
Dr. Jim Lecinski
Yeah. So again, thanks for having me on the show. Longtime listener, first time caller, as they say. And right. So I'm a clinical professor of marketing. Most schools have kind of two tracks for professors. One are for academics whose focus is on research PhDs, and then the other track is for those who focus more on the classroom experience, on the teaching. So some schools call that teaching professors or professor of the practice. We here call that clinical marketing professors. And so we bring deep industry firsthand experience from the front lines into the classroom.
[03:00]
Mike Linton
So, okay, I got this. So clinical. It sounds so powerful. So I'm going to give you and also teacher of the year. So that's a pretty big deal. You left Google to teach, right?
[03:12]
Dr. Jim Lecinski
Yeah.
[03:13]
Mike Linton
Tell us why you did that.
[03:14]
Dr. Jim Lecinski
Well, look, I had a terrific career, 12 plus years at Google, really enjoyed it. I started late 2005. We doubled the business collectively. The royal we every year for 12 straight years. It was a terrific run and a terrific learning experience as the marketing industry overall went. From when I started maybe 1 or 2% of budgets in digital to now well over 50%. And digital has moved from sort of a sideshow to be critically at the center of the plate for all marketers. Before that, I was in the advertising agency business for a long time. Kind of what led me to this third stage of my career was actually a conversation I had with Eric Schmidt, who was a chairman and CEO at the time, right when I started. And I asked him, Dr. Schmidt, like, what would be your advice for me as a Noogler, as we called it, new to Google, to be successful for myself and for the company and for our, you know, CMO clients and customers. And he stopped. And I'll never forget, Mike, what he said. He looked at me and he said, jim, teach, don't pitch, market or sell, and the results will follow for you, for us and for our clients. And so I never really had thought of myself in any way as sort of a teacher. I was as a marketer, yes. Salesperson, technologist, advertiser, yes. But really that sort of reframed how I approach the conversations that, you know, we would have CMO to Google to help people understand. Right. What's happening in the space, how it's evolving, why it matters and how to take advantage of it. And so that then opened my aperture to invitations to come and do guest lectures at business schools. Did a bunch of that at University of Virginia, at the Darden School of Business, then at the executive MBA program at at Notre Dame, my alma mater, and of course live not too far from campus here in Evanston, north of Chicago, and knew a lot of the faculty who invited me to come and do some guest lectures. And one thing led to another and a few deans ago extended the offer for me to come over full time. I knew that I loved it and it was sort of the right time professionally, academically, for my family, professionally. And so I'm now in my eighth year here at Kellogg and really loving it.
[05:25]
Mike Linton
Well, congratulations. I think that's a great background for this next kind of question. We at CMO Confidential, many of our guests have have asserted that business schools, not all of them, but many of them, are really failing to keep up with the marketplace, especially in marketing. Give us your take on that and we'll leave Northwestern out of this for the time being. But give us your take on that because we've had some guests say a lot of business schools are just not even close to keeping up.
[05:59]
Dr. Jim Lecinski
Yeah, well, I think we should first say, like, keeping up with what? What are we trying to keep up with? And I think, you know, Mike, you and I could probably find some common ground and agree that marketing is a. This interesting combination of durable knowledge and perishable knowledge. Right. I mean, there's some things that if you and I were to get in the wayback machine and transport ourselves back to be, you know, I don't know, a marketer at Nabisco in 1952. Right. There's some things then mattered that mattered in 1992 and 2002 and 2032. Like what? Like a deep understanding of who your target audience is. Although now we might call that icp, ideal customer Persona. Right. So maybe the names have changed, but like those are durable fundamentals, you know, where to play, how to win. That have always mattered. And you know, I, I might take issue with some people who think like, you know, the modern none of that matters anymore and it's now growth, hacking and all of that sort. No, all those fundamentals and disciplines much matter. Right.
[06:58]
Mike Linton
The marking fundamentals, the customer understanding, the understanding of the marketplace, all that that is is you. You've got to be able to do that to play totally.
[07:06]
Dr. Jim Lecinski
And at the same time, some of the, I'll call it perishable tool sets and skills evolve and change over time. So if, you know, you and I were working on Nabisco in 1952, we would have really needed to understand the new media called radio or the early days of television and understand sponsorships in that context, etc. Okay, well, we flash forward all the. And now we're talking about whatever, you know, TikTok or livestream, mobile, social shopping or all of those new things. And so, you know, what we endeavor, you know, I'll just call it as marketing education, marketing educators writ large, is to find that right balance between the durable and the perishable. And I think, you know, that's hard. And sometimes we over rotate to one or over rotate to the other. But finding that right balance, I think is our goal as an educator community in marketing today.
[07:59]
Mike Linton
I love the analogy of durable and perishable skills. Some of the perishable skills we would say are big data that are now here and maybe aren't being taught that well would be big data, cltv, AI, all the soft skills about collaboration, leading an idea through the company, being able to actually adjust on your feet as. As the data comes in. And we would say many schools aren't keeping up on the perishable front and almost everybody is doing the durable, but the perishable is where it's harder to keep up. And what do you say to that?
[08:41]
Dr. Jim Lecinski
Yeah, well, I would say first of all, phoning in the durable and just saying we got that, I would take issue with that. Right. You need to. We keep learning more about the fundamentals. There's new research that comes out from academics and industry. So that's not a gimme or a layup. At the same time, kind of marketing is evolving at the speed of the customer, as we like to say. And so kind of staying on top of those things really takes some effort and takes some work. And we can talk more about how we're approaching this, how I'm approaching this. But yeah, I mean we are teaching customer data platforms and by the way, not just CDP 1.0 or composable 2.0, we're now talking about Agentix, customer platforms and all of these things in class as we try to keep up and lead in some cases the perishable, not just the durable.
[09:33]
Mike Linton
Yeah, well, that perishable thing is really important. And also I would say yes, as the perishable has evolved, it is actually not changing the durable concept, but the durable understanding is impacted by this data and what you can do, particularly with data. But, but other channels. Tell me why or tell our listeners why Northwestern is different and how you are staying on the front end of the marketplace. And I will also say one of the things about marketing is it's where the customer, the company and the technology meet almost first for every company. And that ability to stay on the front is super important. How are you staying on the front?
[10:19]
Dr. Jim Lecinski
Yeah, so look, I mean, first and foremost, the faculty composition that we have is a combination of clinical faculty as well as academic faculty. And so we tried to bring and respect both the durable and the perishable and bring that both into the classroom. So it's not just either or, you know, often sort of there's, you know, all these fights in marketing, upper funnel versus lower funnel or academics versus practitioners. Right. We say yes and right. Or as Ritson calls it, both ism. Right. Like we very strong believers in the the yes and or the both ism. In it. And then we apply that into a curriculum where, you know, there's a core marketing course that everyone who graduates and goes through our degree programs, whether that's the part time or full time or executive programs, needs to complete. And by the way, those courses now are infused with AI and big data, et cetera. So even if that's all you get, we want to make sure that that's as up to date as possible. Think of that as the foundation of the house. And then, you know, Mike, we have sort of three rooms and a roof in our house of marketing at Kellogg. The first room is what I'll call the inputs to being a great marketer or putting together a great marketing program. So that's customer insights, ethnographic research, market research, quantitative and qualitative at the cutting edge of that. Then the second of course is our marketing tactics. So we have great pricing courses, great advertising courses, those kinds of things. The third room, if you will, is around industry specific. So sports marketing versus tech marketing. You know, while they all share some things in common, health care marketing. Right. They all have industry nuances. But then, you know, what we're really most proud of is sort of the icing on the cake or the roof on the house, which is our marketing strategy course, which is been around for many years here at Kellogg. It's sort of the capstone or keystone course that pulls all this together. Professor Tim Cawkins and I are privileged to teach that in the full time program is the course where we teach about how to drive profitable incremental growth using that whole tool set that we've just been talking about, the perishable and the durable in order to add value to the firm.
[12:30]
Mike Linton
All right, let's, let's jump into the case. Insomnia Cookies, which is a real company. Let's start with the business issues facing Insomnia Cookies. And then, then we're going to unwrap this case using ghost.
[12:46]
Dr. Jim Lecinski
Yeah. So you know, marketing professors, myself included, are always on the lookout. We have our sensors open for where our interesting case studies or business examples that, you know, we can use to help our students really learn how to build a business, a profitable, incremental, growing business. And so on my way from my house to campus every day I drive through Campus Town. And even if you've never been here in Evanston, I'm sure all of your listeners, viewers have been in some campus town and that's where the pizza place are. You know, pizza places are, that's where the campus gear places are. And I Noticed a few years ago, they opened a little cookie store called Insomnia Cookies. And in the window, in big letters, it says warm cookies delivered until 3am and of course, you know, as a cookie aficionado, that sounded good. But as a marketing professor, I'm in a marketer. Wow. To be able to put your value prop in the front window, I'm like, wow. So I started researching this thing and it turns out that a guy named Seth Berkowitz, who was at Penn University of Pennsylvania around 2003, 2004, started this as sort of a, you know, dorm based business with the concept of baking and delivering warm cookies late night to students on campus. And then after graduating, turned that into an actual business. First actual store was in Syracuse, at Syracuse University, right on campus, kind of extending that value proposition. And so this idea kind of went from campus town to campus town and started to grow and take off. But of course, you know, like any business, big, medium, small, nonprofit, for Profit, B Corp, B2B, B2C. You know, you sort of say, well, like there's, there's a natural ceiling sort of the S curve of growth. Like at a certain point, like, like that concept kind of maybe runs out of steam. And how do we now get up that next level of the S curve? And so I started doing some research into what these folks have been doing and it turns out, just.
[14:47]
Mike Linton
Sorry to interrupt, just to make sure, right, One of the natural barriers or barriers of this is as soon as I'm in all the college towns, have I done my value prop, Is it over?
[14:57]
Dr. Jim Lecinski
Right? And oh, and oh, by the way, even if I'm in a college town, like how many cookies can you eat during the week as a college student, right? Like there's sort of a natural either financial barrier, right, Or a stomach barrier or a variety barrier. So now we.
[15:12]
Mike Linton
Barriers. And then also the pizza guys and everybody else who you may have infringed on their business, they're not going to take this lying down, of course.
[15:21]
Dr. Jim Lecinski
So now you have to deal with sort of defensive strategy. And to your point, you know, your, your listeners are probably saying, wait a minute, I seem to remember that both Domino's and Pizza Hut now have introduced hot cookies into their delivery as well, right? So, so you get all of the usual sort of natural growth barriers here. So I started doing some research and the longtime CMO there actually just announced his retirement. A really great marketer, a guy named Tom Carasona, took on this challenge to say, like, all right, how do we get from here to there. How do we not drive engagement or friends or fans or buzz or social currency? Right? But he takes the view that we do here at Kellogg is that marketing's job is to drive revenue, profit and share, like in that, in that sort of sense. And so, you know, it turns out, Mike, that what they did matches very nicely our growth strategy here. We're sort of big fans of, you know, we call it the enhanced ansoft strategy, which is basically you can grow on two vectors, right? You can grow based on products or you can grow based on customers. And so the first place to grow is to sell more of your same products to more of your same customers. Right? Like a market penetration. And you say, right, but you know, Mike, we've both been in meetings where marketing teams say, oh, you know, there's no more growth in the core. We've tapped it out.
[16:37]
Mike Linton
Oh, exactly. People like they, especially if you've had two years of no growth, they take it as truth versus you just haven't thought it through hard enough. So.
[16:48]
Dr. Jim Lecinski
Yes, Right. And you know, again referencing my earlier professional experience, like we doubled the core at Google every year for 12 straight years. So like this flattening is a natural phenomena. Like I don't buy that. So okay, what do we do to grow the core? Right, well, you know, first thing they do is they say let's introduce some LTOs, you know, the lingo for limited time offers. So now we introduce some reason for our, you know, what they call insomniacs, our current users to come back more often. We're recording this here around Valentine's Day. So if you go to their site now, of course, red velvet flavored cookies for Valentine's Day, heart shaped cookies for Valentine's. I mean this is the famous pumpkin spice latte, et cetera. Right?
[17:29]
Mike Linton
That's which is now sold like seven months of the year. But yeah, good thing. Yes.
[17:33]
Dr. Jim Lecinski
But it's introducing product variation, but still in your same category, still cookies. We're not talking about pizzas or chicken wings or non category things in order to drive frequency among our current users. So, so they've done that highly effectively over the past couple of years. And I'll reveal the results of their growth here in a minute. But that's strategy number one is like grow and build the core. And so what we teach at Kellogg is sort of the 70, 2010 strategy, right? 70% of your ERGs effort budget focus growth has to be from the core. Then the next thing they do is they say, okay, well is there some new target Audience, new usage or new application that will give us adjacent growth, growth. And so in this case they said, wait a minute, there's a whole population of people who have a, either a dietary restriction or a lifestyle choice. Vegans, right. Who said, you know, like I've chosen or maybe, you know, dietary allergies, etc.
[18:33]
Mike Linton
Food I'm allergic to, gluten I'm allergic to.
[18:35]
Dr. Jim Lecinski
Yeah, Milk, eggs, all these kinds of things. And it turns out there's actually a significant portion of the population, especially on campus college towns. So we say, all right, well maybe we can introduce a version, a variety of our core cookie for vegans and open ourselves up to a whole new audience segment. They did that quite successfully, launching vegan insomnia cookies. So there's our second growth vector still in the same category. And now the third growth factor is to say what are near in adjacencies in a new category? Not gold mines or hotels or you know, these kinds of crazy gold mine. Well, you know, we laugh, but the AMC theater.
[19:19]
Mike Linton
I totally get where you're going. I think this is super important, which is the adjacency has to really be adjacent. Yeah, I didn't mean to interrupt you. So keep.
[19:29]
Dr. Jim Lecinski
No, no, no, not at all. So the adjacency here, of course naturally was ice cream, right? Ice cream sandwiches. Ice cream sandwich cookies. Cookies and ice cream matched together. Not to mention from a product standpoint, we can now take yesterday's unsold cookies and crumble them up in the ice cream, right? So, you know, sort of like what Cold Stone used to do on a bespoke basis. They now serve ready to eat basis. So, so now we've sort of grown the core as our 70. We've grown an adjacent target audience with product variation with the 20. And then we've got the adjacent category as the 10. So now we've got sort of our setup of 70, 20, 10 and we can move that into a marketing growth plan, which you alluded to, we learned in our days with png. Goals, objectives, strategies, tactics, right? So the goal, right. Is a qualitative multi year Starbucks says to be the world's favorite third place, right? That's always the goal, right? So here, right, it's to be, you know, college students, late night go to for snacking. That's always the goal. And then, you know, the objective is a revenue, profit or share goal. This, this fiscal or this calendar year. Quantitative, measurable, how do we get there? Right. Our strategies are those three growth factors that we just laid out. So notice it's not to get more buzz, it's not to be hipper, it's not to be part of social currency. It's not growth hacking. It's those 3 70, 2010. And then the tactics that follow, of course are the famous four Ps, the product, the price, promotion, the place, all those tactical kind of levers that, that you know so often are the mark comm that people confuse with big M marketing. But mark comms, of course, as we know, Mike, a subset of that. And then what are the KPIs against each? So, so it's really a nice case that illustrates how we teach marketing and how we think about marketing here at Kellogg. And of course the punchline of this is over. I mean private. So we have to estimate their actual results because they're not publicly disclosed. But by all indications, estimates are that they have tripled revenue with this growth plan over the past three years, from 100 million to 300 million.
[21:47]
Mike Linton
So I think this is really a really good story. But I also want to point out when you did the model, you didn't talk at all about a bunch of brand metrics that get thrown around that aren't really outcomes. They feed outcomes like traffic awareness, other stuff. Those are outcomes of the work. They're not like things you actually do. Is that way to look at this?
[22:13]
Dr. Jim Lecinski
Yes. And that's how we teach it here. Like those are not board level, those are not CFO level metrics. Right. And we talk about activity based metrics versus business outcome metrics. You might think of these as means and ends. Like sure, we'd all like more traffic to our site and sure, we'd all like lower CPCs, but you don't take traffic to the bank. Right. You don't reward your shareholders with lower CPCs. Right.
[22:37]
Mike Linton
Which cost per click for everybody. Yeah, cost.
[22:40]
Dr. Jim Lecinski
Cost per click. Right. Or cost per acquisition or whatever these kind of intermediate targets are. And so the one that we teach is marketing roi. Right, which is the incremental profit, not the total sales and not the total profit, but the incremental profit that results from the activities that you are doing relative to the costs of those activities. And so of course, Insomnia would sell cookies every day if the marketing team went and took a month off. You can't take credit for that. We'll call that organic run rate sales. It's the incremental lift minus the cost of that lift. And that's ultimately kind of what we instill in our students here. So, you know, again, we're talking about a lot of these modern marketing tactics, the perishable stuff, but built on not only marketing durables and fundamentals, but business fundamentals.
[23:30]
Mike Linton
I think that's a great example and very consistent to, you know, what, what I learned at Proctor and some other places. But a lot of times you get CEOs or boards or other people that are, they're in a really big hurry to grow the business. And I'm thinking of the peloton case we did with, with Demcarte of Maryland where they thought they had a right to do rowers and treadmills, when it looks to me like the marketplace didn't really want to give them that right and they didn't have it and they rushed into this space because they were trying to meet a stock price objective. How do you teach folks to actually stay true to the model and have the argument in the company when the company is the one pushing you to go against the model and do a gold mine?
[24:25]
Dr. Jim Lecinski
Yeah, so look, I mean, we're not going to be able to have sort of a qualitative, I think you feel, argument over this in the boardroom. We need to like bring data. You know, my old boss Eric Schmidt used to say, in God we trust, all the rest of us need to bring data. And so the data that we bring into the boardroom says, all right, look, if we stay true to the core, what kind of growth is available in the core? And most businesses, you know this, Mike, the core is so big that even a single digit growth rate on the size of the core actually results in a huge dollar amount versus if you go into an adjacent business now, you need 2, 3, 400% growth to get the same dollars back out. I mean, I faced this at Google, right? Like a few percent growth in search is greater than a double digit, triple digit growth in YouTube. And we have all these cautionary tales. I mean, in the tech space, I mean, just we don't have to look any further than Facebook or meta, right. When we rotate out of the core business of social media to now over rotate to the metaverse or, you know, Bitcoin that they tried or phones or other things that like you saw what happened was the core eroded and arguably a whole bunch of that went over to TikTok, right, while they were distracted with, you know, sort of the 20 and the 10. So this is like the conversation that we have as we build some financial models that say, all right, what would have to be true in the core in order to get us to the board or street level growth Expectations versus what would have to be true in these adjacencies or dalliances or fishing expeditions. And then we come back and say, is 2% in the core actually possible? How could we do that?
[26:11]
Mike Linton
Right. And in that discussion is also the implication that you take your core for granted when you make that kind of big move. And my experience has been sometimes, but very rarely can you get away with taking your core for granted because it is such a big profitable thing, competitors will swoop in on your mistake. Is that what you see as well?
[26:38]
Dr. Jim Lecinski
That's right. And that's why, you know, being able to play defensive strategy to not just grow, but protect your core as well. Because look of success begets attacks, success begets copycats. Right? I mean, you know, one reality show, one reality show works on TV and now there's a hundred reality shows.
[26:59]
Mike Linton
Yes.
[26:59]
Dr. Jim Lecinski
One cookie store works and now there's lots of cookie stores. So yeah, absolutely. You need to be able to protect that and not take your, you know, you said proctor, call it like base and incremental. You can't take your base for granted in the out years.
[27:13]
Mike Linton
So I think this is really important. What if you are doing this, all right, and every year you are missing on the 20 and the 10 and you're growing your core, but the 20 and 10 aren't, aren't working for you. What, what do you do is that you're making bad choices or you don't understand the market? How do you think about that?
[27:31]
Dr. Jim Lecinski
Yeah, so. So now you're not future proofing your business because today's 10 at some point, right. Will become material. Yeah. In the three or five year horizon. And this is hard and sort of predicting consumer tastes, predicting the 10. Where can we be successful? Because now your time Horizon in the 20 and the 10 is not just only this year. You might be doing some pilots and some tests this year, but right now we need that to be successful at scale in the three or five year horizon. And companies are historically not good at this. I mean, Mike, we just need to look no further than the new product success rate. Right. Is horribly low. And I think this is where AI can give us all some help and some assistance. Not outsourcing that to AI, but now we can take what are the past hundred things that we've done that are successful? What are the past thousand things we've done that are not successful? We can feed it to an AI tool, we can give it big sets of data and now we can ask it to start to do some scenario planning, some what ifs and some role playing for us. And this is what I start to see, you know, pretty sophisticated marketing departments starting to do. And, and by the way, we teach all that here at Kellogg as well.
[28:40]
Mike Linton
So, yes, as before, we move on. Anything else you want to add about how Kellogg has maintained its number one ranking in marketing other than, you know, obviously the teacher of the year right there. But.
[28:53]
Dr. Jim Lecinski
No, no. Well, look, I mean, I would just give huge credit to both our dean as well as to the terrific students that we have. You know, we've got a great cohort of students who come every year, eager to learn, they engage. And as we say, the best classes at ours in any business school are not lectures or monologues or TED talks. They are, as you and I have talked, Mike, they're talk shows where the professors come with an interesting thought or a theory or framework, and then we engage the students and let them bring their life and their business experience. And we have a dialectic, back and forth, point, counterpoint, and we sort of arrive at a collective learning. And. And I learned stuff in every class as well because of our terrific students. And we couldn't do that without the vision and the sponsorship of our great dean, Francesco Cornelli, along the way.
[29:39]
Mike Linton
Excellent. Now let's talk to some of our listeners out there, our younger listeners who may want to get into Kellogg, but they just, you know, it's a very competitive admission. They can't make it into Kellogg. What should they look for in another B school to ensure they're getting the right return on their time and money, and they're setting themselves up for a good career in business schools in general and then in marketing in particular.
[30:07]
Dr. Jim Lecinski
Yeah, so the, I mean, the first thing I would say is, right, a growth mindset versus sort of a fixed mindset, because as you mentioned, rightly, Mike, this industry, I mean, I guess all industries, but marketing in particular, moves so quickly. It is evolving so fast. How do you stay on top of all of these kinds of. Of things? So come to whatever kind of learning environment fits or suits your needs. Come with that growth mindset, the humility that, you know, all of us need to have in this profession. Like, we don't know everything. In fact, we probably know only a fraction of everything. And so be open to learning and listening. Now, what does that mean? That means watching podcasts, attending conferences, listening to TED talks, YouTube recordings. All of the big platforms have great certifications. So HubSpot, Meta, Google. Right. Have certifications. Adobe have badges that you can get on your LinkedIn and so like, start to think about how can I turn myself into not a one time, but a lifelong learner? And then what? When you're evaluating these, I would just strongly say that you need to think about whatever learning opportunity that you're going to engage with. How does that connect back to fundamentals of business growth and success that the board, the street, the investors, the C suite cares about.
[31:27]
Mike Linton
But I think that's a really good thing. But if I'm looking at business schools, how do I tell if they're going to teach me the right thing or not? Like if I'm, I'm looking at all these business schools, I can't get into Kellogg, they rejected me. I can, I'm looking at all these other business schools, how do I tell if they're good enough on teaching me this growth mindset or not? What should I ask?
[31:50]
Dr. Jim Lecinski
Well, look, most, most all schools, us included, have a visitation day where you can come and show up in person and not just like look at what's on the website or what's in the brochure, but actually sit in a mock class. And I would highly encourage everybody to do that. Go take a visit. A lot of the mock classes and visits are now virtual, you know, over zoom. But also if you, if you can go in person and sit and watch two or three of the professors, how do they engage with the students and try to use that gauge of how much is durable versus how much is perishable? Because again, if all they're doing is teaching today's shiny object, well, I could probably get that badge from Adobe for a thousand dollars, right, While I'm still working. I mean, it's a big investment in your life. Anytime you take time out to go back and get a graduate degree and so sit and observe it in person in addition to just sort of watching what the, the marketing materials from the school say.
[32:46]
Mike Linton
And should I look that hard at what, how the placement office is doing or the companies that are doing that or the alumni or like, how good of a gauge is that? If I'm looking at this.
[32:57]
Dr. Jim Lecinski
Look, I think alumni network is, is an important point of this. I mean, ours in any business school experience typically gives you three buckets of benefits. The first is the domain knowledge. And some folks will come to either, like, I'm already in marketing and I want to go deeper and get better. Some people come to pivot domain knowledge. Well, I wasn't consulting and now I want to go into private equity or venture capital or whatever, right? So number one bucket of learning is the domain knowledge, the second bucket of value is actually the network that you'll create, right? All of your fellow students, your colleagues, your cohort, the faculty, the staff, those should be people that become and form a lifelong network for you. So how strong is that network? And then the third bucket, of course, is, you know, the, the immediate next step for you when you leave the institution with the degree or with the certificate and the placement office, the career center, those outcomes definitely matter. Although we should say, right, there are some students who come from maybe a family business who are planning to go back to the family business. So for them, career center would be less likely. There are sponsor students who come, you know, sponsored by Deloitte and are going back to Deloitte. So that might be less relevant for them, but depending on your situation, you know, those three buckets of how strong is the domain knowledge? You know, what's the network, the cohort, the alumni value, how strong is that? And then the career center would be the third bucket of value. And you just need to understand how important each of those three are to you and then how well the school you're considering delivers on those.
[34:30]
Mike Linton
I think this is super important. And a lot of times you'll look at that and say, I don't have the time to do that kind of look, but you should, because this is so much money, so much time, and also that next step out of grad school can really launch you or stop you. So I think, Jim, that was a great way to get us to our traditional last question, which is it's a two parter practical advice. You have to pick one or both. Practical advice for our listeners we haven't discussed yet. And. Or the funniest story you can share on the air. You can pick one or both, but you must pick at least one.
[35:10]
Dr. Jim Lecinski
All right, I'll give you a semi embarrassing story and then some practical advice. So as you can maybe tell behind me here, I'm a big jazz fan, play not well, clarinet, saxophone, flute, listen to a lot of jazz, classic, vintage jazz. And a number of years ago, I had the privilege of doing a fireside chat interviewing Wynton Marsalis, right, One of the great living legends of jazz. And he was talking about some of the roots and history of jazz and all the different streams that came together to form this stew that is the music we call jazz. And he was trying to explain some of the African complex polyrhythms that go behind this. And he said, so no problem, why don't you illustrate it for us, Jim? Why Don't. On one knee, you tap out nine beats per bar, and on the other you tap out seven. And so just do a seven over nine for everybody. And of course, I mean, you know, he could do it with his eyes closed backwards and forwards, but I was. And so regrettably. And now I probably have sent a lot of your listeners searching on YouTube. That video is still out there of me.
[36:15]
Mike Linton
If it is out there and someone wants to set it in, we will post it in the comments.
[36:19]
Dr. Jim Lecinski
So horribly embarrassed and fumbling at his mastery over the craft. And my fumbling. But that said, practical advice, just from a career standpoint, since we're talking a lot about careers today, the best advice I've ever gotten, and I'm happy to pay it forward, is meet the universe halfway. And so what does we mean by this? There are some people whose career approach is that of a tumbleweed. I have no plan. The phone will ring, stuff will show up in my inbox, wherever the universe takes me and the wind blows, that's, I guess, what I'll do next. And we all know people like that, right?
[36:50]
Mike Linton
There's one tumbleweed that made it to the top of a massive company, and everyone thinks I can do it, but it's not true.
[36:58]
Dr. Jim Lecinski
That's right. Equally on the opposite side of things are the people who want to, like, wrestle the universe to the ground by the horns. In 1.7 years, I will be at a level 3.6, because the person who was in that job will rotate and be out on maternity leave. And I will have the opportunity. And, you know, the universe intervenes. Right? Like, you can't control the universe. So this idea to have meat in the middle, have some intentionality, what is it that you enjoy? What is it that you're maybe better at than the average bear? Right, so in my case, it's maybe advising CMOS on growth strategies. Right? Like, then you, with that intention, are loose enough and open enough to answer phone calls, reply to people, go have lunches, meet people, listen for opportunities and your intention, plus some of those inbound opportunities, can lead you to a very nice career. But if you're a tumbleweed, good luck. If you're trying to wrestle the universe, good luck. Meet the universe halfway.
[37:55]
Mike Linton
I like that. Meet the universe halfway. I think that's a great way to end the show. Thank you, Jim. And thanks to everyone for listening to CMO Confidential. If you're enjoying this show, hit the like button and subscribe. Look for all of our shows on Spotify, Apple and YouTube, which includes the rise and fall of peloton as seen through the lens of cltv. The Budweiser case, how not to manage a sociopolitical issue. The Warby Parker case, I can see clearly now with my CLTV glasses on. And the show which sparked this conversation with Jim, marketing the battle between believers and non believers, parts one and two. Hey, all you marketers, stay safe out there. This is Mike Linton signing off for CMO Confidential.

Summary5 min read

CMO Confidential Podcast – Detailed Summary

Episode Title: Jim Lecinski | The Insomnia Cookies Case - The GOST Model Taught at Northwestern
Release Date: April 29, 2025
Host: Mike Linton
Guest: Dr. Jim Lecinski, Professor at Kellogg School of Business, Northwestern University

1. Introduction: Host and Guest Background

In this episode of CMO Confidential, host Mike Linton engages in an insightful conversation with Dr. Jim Lecinski, a distinguished marketing professor at Northwestern’s Kellogg School of Business. Dr. Lecinski brings a wealth of experience from his tenure as Vice President of Customer Solutions at Google and is the author of notable marketing books such as Winning the Zero Moment of Truth and AI Marketing Canvas. His transition from a high-profile industry role to academia underscores his commitment to bridging practical marketing strategies with educational excellence.

Notable Quote:

Mike Linton [02:00]: "We're talking very often about the durable and the perishable, but finding that right balance, I think is our goal as an educator community in marketing today."

2. Marketing Education: Balancing Durable and Perishable Knowledge

Dr. Lecinski elaborates on the concept of durable versus perishable knowledge in marketing education. Durable knowledge encompasses foundational principles such as understanding target audiences and market strategies, which remain relevant over time. In contrast, perishable knowledge includes evolving tools and technologies like big data, AI, and new media platforms that require continuous adaptation.

Notable Quote:

Dr. Jim Lecinski [06:00]: "Marketing is an interesting combination of durable knowledge and perishable knowledge. There's some things that have always mattered, like a deep understanding of who your target audience is, and some tools that evolve over time."

3. Northwestern’s Approach to Staying Ahead in Marketing Education

Northwestern University’s Kellogg School of Business distinguishes itself by integrating both durable and perishable elements into its curriculum. Dr. Lecinski emphasizes the importance of having a balanced faculty composition that includes both clinical (practical) and academic (research-focused) professors. This blend ensures that students are well-versed in enduring marketing principles while staying abreast of the latest industry trends and technologies.

Notable Quote:

Dr. Jim Lecinski [10:19]: "We have a combination of clinical faculty as well as academic faculty. We strive to bring both the durable and the perishable into the classroom."

4. The Insomnia Cookies Case Study and the GOST Model

A significant portion of the discussion centers around the Insomnia Cookies case study, illustrating the application of the GOST (Growth Strategy) Model. Insomnia Cookies, founded by Seth Berkowitz, successfully scaled its business from a dorm-based operation to a nationwide presence by focusing on late-night cookie delivery tailored to college students.

Key Business Issues:

Market Saturation: As Insomnia Cookies expanded to multiple college towns, they faced challenges such as market saturation and competition from established pizza chains entering the cookie delivery space.
Growth Barriers: The natural limits of their initial market included consumer demand cycles and the potential for brand dilution.

5. Implementing the GOST Model: 70-20-10 Strategy

Dr. Lecinski explains the 70-20-10 growth strategy employed by Insomnia Cookies:

70% Core Growth: Focused on selling more of the same products to existing customers through strategies like Limited Time Offers (LTOs) and seasonal flavors.
20% Adjacent Growth: Introduced new product variations, such as vegan cookies, to tap into new customer segments with dietary restrictions or lifestyle choices.
10% Category Expansion: Expanded into adjacent categories like ice cream sandwiches, leveraging synergies between cookies and ice cream.

Results: This strategic approach reportedly tripled Insomnia Cookies' revenue from $100 million to $300 million over three years.

Notable Quote:

Dr. Jim Lecinski [21:46]: "By all indications, estimates are that they have tripled revenue with this growth plan over the past three years, from 100 million to 300 million."

6. Metrics in Marketing: Focusing on Business Outcomes

The conversation shifts to the importance of differentiating between activity-based metrics and business outcome metrics. Dr. Lecinski advocates for focusing on metrics that drive revenue and profit, such as Marketing ROI, rather than vanity metrics like website traffic or cost per click, which do not directly contribute to financial performance.

Notable Quote:

Dr. Jim Lecinski [22:12]: "We teach marketing ROI, which is the incremental profit that results from the activities relative to their costs. That's ultimately what matters to the board and the C-suite."

7. Ensuring Strategic Alignment and Protecting the Core

Dr. Lecinski warns against overextending into adjacencies without solidifying core business strengths. He highlights the necessity of maintaining and protecting the core to prevent competitors from capitalizing on any weaknesses. The discussion underscores the value of data-driven decision-making to justify strategic moves to stakeholders.

Notable Quote:

Dr. Jim Lecinski [24:25]: "We need to bring data into the boardroom. If we stay true to the core, what kind of growth is available versus what we need from adjacencies."

8. Advice for Prospective Business School Students

Addressing listeners interested in pursuing an MBA, Dr. Lecinski offers guidance on selecting the right business school. He emphasizes the importance of a growth mindset, lifelong learning, and evaluating schools based on domain knowledge, network strength, and career support services. Engaging in mock classes and interacting with current students are recommended strategies to assess the suitability of a program.

Notable Quote:

Dr. Jim Lecinski [30:07]: "Come with a growth mindset and be open to learning. Evaluate how a school connects to business fundamentals that the board and C-suite care about."

9. Practical Advice and Personal Anecdote: “Meet the Universe Halfway”

Concluding the episode, Dr. Lecinski shares his practical career advice: “Meet the universe halfway.” This concept advocates for intentionality in career planning while remaining open to opportunities. He cautions against both passivity (being a tumbleweed) and excessive control (wrestling the universe), suggesting a balanced approach to career development.

Additionally, Dr. Lecinski recounts a humorous experience interviewing jazz legend Wynton Marsalis, highlighting the importance of embracing imperfections and continuous learning.

Notable Quote:

Dr. Jim Lecinski [35:10]: "Meet the universe halfway. Have intentionality about what you enjoy and are good at, while staying open to opportunities."

10. Conclusion

Mike Linton wraps up the episode by reiterating the value of the discussed strategies and inviting listeners to explore more episodes covering diverse marketing cases. The conversation with Dr. Lecinski provides a comprehensive look into effective growth strategies and the critical role of education in shaping adept marketing leaders.

Key Takeaways:

Balanced Education: Integrating both durable and perishable knowledge is crucial in marketing education.
Strategic Growth: The 70-20-10 model effectively drives business growth by focusing on core strengths, adjacent opportunities, and category expansions.
Data-Driven Decisions: Emphasizing business outcome metrics over activity-based metrics aligns marketing efforts with organizational goals.
Career Development: Adopting a balanced approach to career planning enhances professional growth and adaptability.

For More Insights: Explore additional episodes on Spotify, Apple Podcasts, and YouTube, including topics like the rise and fall of Peloton, managing sociopolitical issues in branding, and effective strategies for business model adaptability.

Stay Connected: Follow CMO Confidential for more in-depth discussions and expert interviews that delve into the nuances of marketing leadership and strategy.

Loading summary

Transcript61 lines

[00:00]
Mike Linton
The CMO Confidential Podcast is a proud member of the I Hear Everything podcast network. Looking to launch or scale your podcast, I Hear Everything delivers podcast production, growth and monetization solutions that transform your words into profit. Ready to give your brand a voice then visit iheareverything.com welcome to CMO Confidential.
[00:25]
Dr. Jim Lecinski
The podcast that takes you inside the drama, decisions and choices that go with being the head of marketing. Hosted by five time CMO Mike Linton.
[00:36]
Mike Linton
Welcome marketers, advertisers and those who love them. The Chief Marketing Officer, Confidential. CMO Confidential is a program that takes you inside the drama, the decisions and the politics that go with being the head of marketing at any company in what is one of the most scrutinized jobs in the executive suite. I'm Mike Linton, the former Chief Marketing officer of Best Buy, ebay, Farmers Insurance and Ancestry.com here today with my guest, Dr. Jim Lecinski. Today's topic, the insomnia cookies case. The G ost or ghost model taught at Northwestern. Now Jim is a professor at the Kellogg School of Business at Northwestern where he has been named professor of the year, which I guess, I guess that's a pretty big deal. Prior to teaching, he worked at Google as Vice president of Customer solutions for the Americas. He's also written two books, Winning the Zero Moment of Truth and the AI Marketing Canvas. Jim actually took issue with CMO Confidential's call out that many MBA programs are not keeping up with the times. He actually invited us to look at why Northwestern is ranked for marketing as the number one school. Welcome, Jim.
[01:54]
Dr. Jim Lecinski
Hi, Mike. Nice to have you with us. Nice to be with you.
[01:57]
Mike Linton
It's great to be with you, Jim.
[01:59]
Dr. Jim Lecinski
Thank you.
[02:00]
Mike Linton
We hardly ever edit these shows and those of you listening now will see that we hardly ever do. Hey, Jim, before we dig into this case and the ghost, the G O S T model, let's ground our listeners in what you teach and why. And you are a clinical professor. What does that even mean?
[02:20]
Dr. Jim Lecinski
Yeah. So again, thanks for having me on the show. Longtime listener, first time caller, as they say. And right. So I'm a clinical professor of marketing. Most schools have kind of two tracks for professors. One are for academics whose focus is on research PhDs, and then the other track is for those who focus more on the classroom experience, on the teaching. So some schools call that teaching professors or professor of the practice. We here call that clinical marketing professors. And so we bring deep industry firsthand experience from the front lines into the classroom.
[03:00]
Mike Linton
So, okay, I got this. So clinical. It sounds so powerful. So I'm going to give you and also teacher of the year. So that's a pretty big deal. You left Google to teach, right?
[03:12]
Dr. Jim Lecinski
Yeah.
[03:13]
Mike Linton
Tell us why you did that.
[03:14]
Dr. Jim Lecinski
Well, look, I had a terrific career, 12 plus years at Google, really enjoyed it. I started late 2005. We doubled the business collectively. The royal we every year for 12 straight years. It was a terrific run and a terrific learning experience as the marketing industry overall went. From when I started maybe 1 or 2% of budgets in digital to now well over 50%. And digital has moved from sort of a sideshow to be critically at the center of the plate for all marketers. Before that, I was in the advertising agency business for a long time. Kind of what led me to this third stage of my career was actually a conversation I had with Eric Schmidt, who was a chairman and CEO at the time, right when I started. And I asked him, Dr. Schmidt, like, what would be your advice for me as a Noogler, as we called it, new to Google, to be successful for myself and for the company and for our, you know, CMO clients and customers. And he stopped. And I'll never forget, Mike, what he said. He looked at me and he said, jim, teach, don't pitch, market or sell, and the results will follow for you, for us and for our clients. And so I never really had thought of myself in any way as sort of a teacher. I was as a marketer, yes. Salesperson, technologist, advertiser, yes. But really that sort of reframed how I approach the conversations that, you know, we would have CMO to Google to help people understand. Right. What's happening in the space, how it's evolving, why it matters and how to take advantage of it. And so that then opened my aperture to invitations to come and do guest lectures at business schools. Did a bunch of that at University of Virginia, at the Darden School of Business, then at the executive MBA program at at Notre Dame, my alma mater, and of course live not too far from campus here in Evanston, north of Chicago, and knew a lot of the faculty who invited me to come and do some guest lectures. And one thing led to another and a few deans ago extended the offer for me to come over full time. I knew that I loved it and it was sort of the right time professionally, academically, for my family, professionally. And so I'm now in my eighth year here at Kellogg and really loving it.
[05:25]
Mike Linton
Well, congratulations. I think that's a great background for this next kind of question. We at CMO Confidential, many of our guests have have asserted that business schools, not all of them, but many of them, are really failing to keep up with the marketplace, especially in marketing. Give us your take on that and we'll leave Northwestern out of this for the time being. But give us your take on that because we've had some guests say a lot of business schools are just not even close to keeping up.
[05:59]
Dr. Jim Lecinski
Yeah, well, I think we should first say, like, keeping up with what? What are we trying to keep up with? And I think, you know, Mike, you and I could probably find some common ground and agree that marketing is a. This interesting combination of durable knowledge and perishable knowledge. Right. I mean, there's some things that if you and I were to get in the wayback machine and transport ourselves back to be, you know, I don't know, a marketer at Nabisco in 1952. Right. There's some things then mattered that mattered in 1992 and 2002 and 2032. Like what? Like a deep understanding of who your target audience is. Although now we might call that icp, ideal customer Persona. Right. So maybe the names have changed, but like those are durable fundamentals, you know, where to play, how to win. That have always mattered. And you know, I, I might take issue with some people who think like, you know, the modern none of that matters anymore and it's now growth, hacking and all of that sort. No, all those fundamentals and disciplines much matter. Right.
[06:58]
Mike Linton
The marking fundamentals, the customer understanding, the understanding of the marketplace, all that that is is you. You've got to be able to do that to play totally.
[07:06]
Dr. Jim Lecinski
And at the same time, some of the, I'll call it perishable tool sets and skills evolve and change over time. So if, you know, you and I were working on Nabisco in 1952, we would have really needed to understand the new media called radio or the early days of television and understand sponsorships in that context, etc. Okay, well, we flash forward all the. And now we're talking about whatever, you know, TikTok or livestream, mobile, social shopping or all of those new things. And so, you know, what we endeavor, you know, I'll just call it as marketing education, marketing educators writ large, is to find that right balance between the durable and the perishable. And I think, you know, that's hard. And sometimes we over rotate to one or over rotate to the other. But finding that right balance, I think is our goal as an educator community in marketing today.
[07:59]
Mike Linton
I love the analogy of durable and perishable skills. Some of the perishable skills we would say are big data that are now here and maybe aren't being taught that well would be big data, cltv, AI, all the soft skills about collaboration, leading an idea through the company, being able to actually adjust on your feet as. As the data comes in. And we would say many schools aren't keeping up on the perishable front and almost everybody is doing the durable, but the perishable is where it's harder to keep up. And what do you say to that?
[08:41]
Dr. Jim Lecinski
Yeah, well, I would say first of all, phoning in the durable and just saying we got that, I would take issue with that. Right. You need to. We keep learning more about the fundamentals. There's new research that comes out from academics and industry. So that's not a gimme or a layup. At the same time, kind of marketing is evolving at the speed of the customer, as we like to say. And so kind of staying on top of those things really takes some effort and takes some work. And we can talk more about how we're approaching this, how I'm approaching this. But yeah, I mean we are teaching customer data platforms and by the way, not just CDP 1.0 or composable 2.0, we're now talking about Agentix, customer platforms and all of these things in class as we try to keep up and lead in some cases the perishable, not just the durable.
[09:33]
Mike Linton
Yeah, well, that perishable thing is really important. And also I would say yes, as the perishable has evolved, it is actually not changing the durable concept, but the durable understanding is impacted by this data and what you can do, particularly with data. But, but other channels. Tell me why or tell our listeners why Northwestern is different and how you are staying on the front end of the marketplace. And I will also say one of the things about marketing is it's where the customer, the company and the technology meet almost first for every company. And that ability to stay on the front is super important. How are you staying on the front?
[10:19]
Dr. Jim Lecinski
Yeah, so look, I mean, first and foremost, the faculty composition that we have is a combination of clinical faculty as well as academic faculty. And so we tried to bring and respect both the durable and the perishable and bring that both into the classroom. So it's not just either or, you know, often sort of there's, you know, all these fights in marketing, upper funnel versus lower funnel or academics versus practitioners. Right. We say yes and right. Or as Ritson calls it, both ism. Right. Like we very strong believers in the the yes and or the both ism. In it. And then we apply that into a curriculum where, you know, there's a core marketing course that everyone who graduates and goes through our degree programs, whether that's the part time or full time or executive programs, needs to complete. And by the way, those courses now are infused with AI and big data, et cetera. So even if that's all you get, we want to make sure that that's as up to date as possible. Think of that as the foundation of the house. And then, you know, Mike, we have sort of three rooms and a roof in our house of marketing at Kellogg. The first room is what I'll call the inputs to being a great marketer or putting together a great marketing program. So that's customer insights, ethnographic research, market research, quantitative and qualitative at the cutting edge of that. Then the second of course is our marketing tactics. So we have great pricing courses, great advertising courses, those kinds of things. The third room, if you will, is around industry specific. So sports marketing versus tech marketing. You know, while they all share some things in common, health care marketing. Right. They all have industry nuances. But then, you know, what we're really most proud of is sort of the icing on the cake or the roof on the house, which is our marketing strategy course, which is been around for many years here at Kellogg. It's sort of the capstone or keystone course that pulls all this together. Professor Tim Cawkins and I are privileged to teach that in the full time program is the course where we teach about how to drive profitable incremental growth using that whole tool set that we've just been talking about, the perishable and the durable in order to add value to the firm.
[12:30]
Mike Linton
All right, let's, let's jump into the case. Insomnia Cookies, which is a real company. Let's start with the business issues facing Insomnia Cookies. And then, then we're going to unwrap this case using ghost.
[12:46]
Dr. Jim Lecinski
Yeah. So you know, marketing professors, myself included, are always on the lookout. We have our sensors open for where our interesting case studies or business examples that, you know, we can use to help our students really learn how to build a business, a profitable, incremental, growing business. And so on my way from my house to campus every day I drive through Campus Town. And even if you've never been here in Evanston, I'm sure all of your listeners, viewers have been in some campus town and that's where the pizza place are. You know, pizza places are, that's where the campus gear places are. And I Noticed a few years ago, they opened a little cookie store called Insomnia Cookies. And in the window, in big letters, it says warm cookies delivered until 3am and of course, you know, as a cookie aficionado, that sounded good. But as a marketing professor, I'm in a marketer. Wow. To be able to put your value prop in the front window, I'm like, wow. So I started researching this thing and it turns out that a guy named Seth Berkowitz, who was at Penn University of Pennsylvania around 2003, 2004, started this as sort of a, you know, dorm based business with the concept of baking and delivering warm cookies late night to students on campus. And then after graduating, turned that into an actual business. First actual store was in Syracuse, at Syracuse University, right on campus, kind of extending that value proposition. And so this idea kind of went from campus town to campus town and started to grow and take off. But of course, you know, like any business, big, medium, small, nonprofit, for Profit, B Corp, B2B, B2C. You know, you sort of say, well, like there's, there's a natural ceiling sort of the S curve of growth. Like at a certain point, like, like that concept kind of maybe runs out of steam. And how do we now get up that next level of the S curve? And so I started doing some research into what these folks have been doing and it turns out, just.
[14:47]
Mike Linton
Sorry to interrupt, just to make sure, right, One of the natural barriers or barriers of this is as soon as I'm in all the college towns, have I done my value prop, Is it over?
[14:57]
Dr. Jim Lecinski
Right? And oh, and oh, by the way, even if I'm in a college town, like how many cookies can you eat during the week as a college student, right? Like there's sort of a natural either financial barrier, right, Or a stomach barrier or a variety barrier. So now we.
[15:12]
Mike Linton
Barriers. And then also the pizza guys and everybody else who you may have infringed on their business, they're not going to take this lying down, of course.
[15:21]
Dr. Jim Lecinski
So now you have to deal with sort of defensive strategy. And to your point, you know, your, your listeners are probably saying, wait a minute, I seem to remember that both Domino's and Pizza Hut now have introduced hot cookies into their delivery as well, right? So, so you get all of the usual sort of natural growth barriers here. So I started doing some research and the longtime CMO there actually just announced his retirement. A really great marketer, a guy named Tom Carasona, took on this challenge to say, like, all right, how do we get from here to there. How do we not drive engagement or friends or fans or buzz or social currency? Right? But he takes the view that we do here at Kellogg is that marketing's job is to drive revenue, profit and share, like in that, in that sort of sense. And so, you know, it turns out, Mike, that what they did matches very nicely our growth strategy here. We're sort of big fans of, you know, we call it the enhanced ansoft strategy, which is basically you can grow on two vectors, right? You can grow based on products or you can grow based on customers. And so the first place to grow is to sell more of your same products to more of your same customers. Right? Like a market penetration. And you say, right, but you know, Mike, we've both been in meetings where marketing teams say, oh, you know, there's no more growth in the core. We've tapped it out.
[16:37]
Mike Linton
Oh, exactly. People like they, especially if you've had two years of no growth, they take it as truth versus you just haven't thought it through hard enough. So.
[16:48]
Dr. Jim Lecinski
Yes, Right. And you know, again referencing my earlier professional experience, like we doubled the core at Google every year for 12 straight years. So like this flattening is a natural phenomena. Like I don't buy that. So okay, what do we do to grow the core? Right, well, you know, first thing they do is they say let's introduce some LTOs, you know, the lingo for limited time offers. So now we introduce some reason for our, you know, what they call insomniacs, our current users to come back more often. We're recording this here around Valentine's Day. So if you go to their site now, of course, red velvet flavored cookies for Valentine's Day, heart shaped cookies for Valentine's. I mean this is the famous pumpkin spice latte, et cetera. Right?
[17:29]
Mike Linton
That's which is now sold like seven months of the year. But yeah, good thing. Yes.
[17:33]
Dr. Jim Lecinski
But it's introducing product variation, but still in your same category, still cookies. We're not talking about pizzas or chicken wings or non category things in order to drive frequency among our current users. So, so they've done that highly effectively over the past couple of years. And I'll reveal the results of their growth here in a minute. But that's strategy number one is like grow and build the core. And so what we teach at Kellogg is sort of the 70, 2010 strategy, right? 70% of your ERGs effort budget focus growth has to be from the core. Then the next thing they do is they say, okay, well is there some new target Audience, new usage or new application that will give us adjacent growth, growth. And so in this case they said, wait a minute, there's a whole population of people who have a, either a dietary restriction or a lifestyle choice. Vegans, right. Who said, you know, like I've chosen or maybe, you know, dietary allergies, etc.
[18:33]
Mike Linton
Food I'm allergic to, gluten I'm allergic to.
[18:35]
Dr. Jim Lecinski
Yeah, Milk, eggs, all these kinds of things. And it turns out there's actually a significant portion of the population, especially on campus college towns. So we say, all right, well maybe we can introduce a version, a variety of our core cookie for vegans and open ourselves up to a whole new audience segment. They did that quite successfully, launching vegan insomnia cookies. So there's our second growth vector still in the same category. And now the third growth factor is to say what are near in adjacencies in a new category? Not gold mines or hotels or you know, these kinds of crazy gold mine. Well, you know, we laugh, but the AMC theater.
[19:19]
Mike Linton
I totally get where you're going. I think this is super important, which is the adjacency has to really be adjacent. Yeah, I didn't mean to interrupt you. So keep.
[19:29]
Dr. Jim Lecinski
No, no, no, not at all. So the adjacency here, of course naturally was ice cream, right? Ice cream sandwiches. Ice cream sandwich cookies. Cookies and ice cream matched together. Not to mention from a product standpoint, we can now take yesterday's unsold cookies and crumble them up in the ice cream, right? So, you know, sort of like what Cold Stone used to do on a bespoke basis. They now serve ready to eat basis. So, so now we've sort of grown the core as our 70. We've grown an adjacent target audience with product variation with the 20. And then we've got the adjacent category as the 10. So now we've got sort of our setup of 70, 20, 10 and we can move that into a marketing growth plan, which you alluded to, we learned in our days with png. Goals, objectives, strategies, tactics, right? So the goal, right. Is a qualitative multi year Starbucks says to be the world's favorite third place, right? That's always the goal, right? So here, right, it's to be, you know, college students, late night go to for snacking. That's always the goal. And then, you know, the objective is a revenue, profit or share goal. This, this fiscal or this calendar year. Quantitative, measurable, how do we get there? Right. Our strategies are those three growth factors that we just laid out. So notice it's not to get more buzz, it's not to be hipper, it's not to be part of social currency. It's not growth hacking. It's those 3 70, 2010. And then the tactics that follow, of course are the famous four Ps, the product, the price, promotion, the place, all those tactical kind of levers that, that you know so often are the mark comm that people confuse with big M marketing. But mark comms, of course, as we know, Mike, a subset of that. And then what are the KPIs against each? So, so it's really a nice case that illustrates how we teach marketing and how we think about marketing here at Kellogg. And of course the punchline of this is over. I mean private. So we have to estimate their actual results because they're not publicly disclosed. But by all indications, estimates are that they have tripled revenue with this growth plan over the past three years, from 100 million to 300 million.
[21:47]
Mike Linton
So I think this is really a really good story. But I also want to point out when you did the model, you didn't talk at all about a bunch of brand metrics that get thrown around that aren't really outcomes. They feed outcomes like traffic awareness, other stuff. Those are outcomes of the work. They're not like things you actually do. Is that way to look at this?
[22:13]
Dr. Jim Lecinski
Yes. And that's how we teach it here. Like those are not board level, those are not CFO level metrics. Right. And we talk about activity based metrics versus business outcome metrics. You might think of these as means and ends. Like sure, we'd all like more traffic to our site and sure, we'd all like lower CPCs, but you don't take traffic to the bank. Right. You don't reward your shareholders with lower CPCs. Right.
[22:37]
Mike Linton
Which cost per click for everybody. Yeah, cost.
[22:40]
Dr. Jim Lecinski
Cost per click. Right. Or cost per acquisition or whatever these kind of intermediate targets are. And so the one that we teach is marketing roi. Right, which is the incremental profit, not the total sales and not the total profit, but the incremental profit that results from the activities that you are doing relative to the costs of those activities. And so of course, Insomnia would sell cookies every day if the marketing team went and took a month off. You can't take credit for that. We'll call that organic run rate sales. It's the incremental lift minus the cost of that lift. And that's ultimately kind of what we instill in our students here. So, you know, again, we're talking about a lot of these modern marketing tactics, the perishable stuff, but built on not only marketing durables and fundamentals, but business fundamentals.
[23:30]
Mike Linton
I think that's a great example and very consistent to, you know, what, what I learned at Proctor and some other places. But a lot of times you get CEOs or boards or other people that are, they're in a really big hurry to grow the business. And I'm thinking of the peloton case we did with, with Demcarte of Maryland where they thought they had a right to do rowers and treadmills, when it looks to me like the marketplace didn't really want to give them that right and they didn't have it and they rushed into this space because they were trying to meet a stock price objective. How do you teach folks to actually stay true to the model and have the argument in the company when the company is the one pushing you to go against the model and do a gold mine?
[24:25]
Dr. Jim Lecinski
Yeah, so look, I mean, we're not going to be able to have sort of a qualitative, I think you feel, argument over this in the boardroom. We need to like bring data. You know, my old boss Eric Schmidt used to say, in God we trust, all the rest of us need to bring data. And so the data that we bring into the boardroom says, all right, look, if we stay true to the core, what kind of growth is available in the core? And most businesses, you know this, Mike, the core is so big that even a single digit growth rate on the size of the core actually results in a huge dollar amount versus if you go into an adjacent business now, you need 2, 3, 400% growth to get the same dollars back out. I mean, I faced this at Google, right? Like a few percent growth in search is greater than a double digit, triple digit growth in YouTube. And we have all these cautionary tales. I mean, in the tech space, I mean, just we don't have to look any further than Facebook or meta, right. When we rotate out of the core business of social media to now over rotate to the metaverse or, you know, Bitcoin that they tried or phones or other things that like you saw what happened was the core eroded and arguably a whole bunch of that went over to TikTok, right, while they were distracted with, you know, sort of the 20 and the 10. So this is like the conversation that we have as we build some financial models that say, all right, what would have to be true in the core in order to get us to the board or street level growth Expectations versus what would have to be true in these adjacencies or dalliances or fishing expeditions. And then we come back and say, is 2% in the core actually possible? How could we do that?
[26:11]
Mike Linton
Right. And in that discussion is also the implication that you take your core for granted when you make that kind of big move. And my experience has been sometimes, but very rarely can you get away with taking your core for granted because it is such a big profitable thing, competitors will swoop in on your mistake. Is that what you see as well?
[26:38]
Dr. Jim Lecinski
That's right. And that's why, you know, being able to play defensive strategy to not just grow, but protect your core as well. Because look of success begets attacks, success begets copycats. Right? I mean, you know, one reality show, one reality show works on TV and now there's a hundred reality shows.
[26:59]
Mike Linton
Yes.
[26:59]
Dr. Jim Lecinski
One cookie store works and now there's lots of cookie stores. So yeah, absolutely. You need to be able to protect that and not take your, you know, you said proctor, call it like base and incremental. You can't take your base for granted in the out years.
[27:13]
Mike Linton
So I think this is really important. What if you are doing this, all right, and every year you are missing on the 20 and the 10 and you're growing your core, but the 20 and 10 aren't, aren't working for you. What, what do you do is that you're making bad choices or you don't understand the market? How do you think about that?
[27:31]
Dr. Jim Lecinski
Yeah, so. So now you're not future proofing your business because today's 10 at some point, right. Will become material. Yeah. In the three or five year horizon. And this is hard and sort of predicting consumer tastes, predicting the 10. Where can we be successful? Because now your time Horizon in the 20 and the 10 is not just only this year. You might be doing some pilots and some tests this year, but right now we need that to be successful at scale in the three or five year horizon. And companies are historically not good at this. I mean, Mike, we just need to look no further than the new product success rate. Right. Is horribly low. And I think this is where AI can give us all some help and some assistance. Not outsourcing that to AI, but now we can take what are the past hundred things that we've done that are successful? What are the past thousand things we've done that are not successful? We can feed it to an AI tool, we can give it big sets of data and now we can ask it to start to do some scenario planning, some what ifs and some role playing for us. And this is what I start to see, you know, pretty sophisticated marketing departments starting to do. And, and by the way, we teach all that here at Kellogg as well.
[28:40]
Mike Linton
So, yes, as before, we move on. Anything else you want to add about how Kellogg has maintained its number one ranking in marketing other than, you know, obviously the teacher of the year right there. But.
[28:53]
Dr. Jim Lecinski
No, no. Well, look, I mean, I would just give huge credit to both our dean as well as to the terrific students that we have. You know, we've got a great cohort of students who come every year, eager to learn, they engage. And as we say, the best classes at ours in any business school are not lectures or monologues or TED talks. They are, as you and I have talked, Mike, they're talk shows where the professors come with an interesting thought or a theory or framework, and then we engage the students and let them bring their life and their business experience. And we have a dialectic, back and forth, point, counterpoint, and we sort of arrive at a collective learning. And. And I learned stuff in every class as well because of our terrific students. And we couldn't do that without the vision and the sponsorship of our great dean, Francesco Cornelli, along the way.
[29:39]
Mike Linton
Excellent. Now let's talk to some of our listeners out there, our younger listeners who may want to get into Kellogg, but they just, you know, it's a very competitive admission. They can't make it into Kellogg. What should they look for in another B school to ensure they're getting the right return on their time and money, and they're setting themselves up for a good career in business schools in general and then in marketing in particular.
[30:07]
Dr. Jim Lecinski
Yeah, so the, I mean, the first thing I would say is, right, a growth mindset versus sort of a fixed mindset, because as you mentioned, rightly, Mike, this industry, I mean, I guess all industries, but marketing in particular, moves so quickly. It is evolving so fast. How do you stay on top of all of these kinds of. Of things? So come to whatever kind of learning environment fits or suits your needs. Come with that growth mindset, the humility that, you know, all of us need to have in this profession. Like, we don't know everything. In fact, we probably know only a fraction of everything. And so be open to learning and listening. Now, what does that mean? That means watching podcasts, attending conferences, listening to TED talks, YouTube recordings. All of the big platforms have great certifications. So HubSpot, Meta, Google. Right. Have certifications. Adobe have badges that you can get on your LinkedIn and so like, start to think about how can I turn myself into not a one time, but a lifelong learner? And then what? When you're evaluating these, I would just strongly say that you need to think about whatever learning opportunity that you're going to engage with. How does that connect back to fundamentals of business growth and success that the board, the street, the investors, the C suite cares about.
[31:27]
Mike Linton
But I think that's a really good thing. But if I'm looking at business schools, how do I tell if they're going to teach me the right thing or not? Like if I'm, I'm looking at all these business schools, I can't get into Kellogg, they rejected me. I can, I'm looking at all these other business schools, how do I tell if they're good enough on teaching me this growth mindset or not? What should I ask?
[31:50]
Dr. Jim Lecinski
Well, look, most, most all schools, us included, have a visitation day where you can come and show up in person and not just like look at what's on the website or what's in the brochure, but actually sit in a mock class. And I would highly encourage everybody to do that. Go take a visit. A lot of the mock classes and visits are now virtual, you know, over zoom. But also if you, if you can go in person and sit and watch two or three of the professors, how do they engage with the students and try to use that gauge of how much is durable versus how much is perishable? Because again, if all they're doing is teaching today's shiny object, well, I could probably get that badge from Adobe for a thousand dollars, right, While I'm still working. I mean, it's a big investment in your life. Anytime you take time out to go back and get a graduate degree and so sit and observe it in person in addition to just sort of watching what the, the marketing materials from the school say.
[32:46]
Mike Linton
And should I look that hard at what, how the placement office is doing or the companies that are doing that or the alumni or like, how good of a gauge is that? If I'm looking at this.
[32:57]
Dr. Jim Lecinski
Look, I think alumni network is, is an important point of this. I mean, ours in any business school experience typically gives you three buckets of benefits. The first is the domain knowledge. And some folks will come to either, like, I'm already in marketing and I want to go deeper and get better. Some people come to pivot domain knowledge. Well, I wasn't consulting and now I want to go into private equity or venture capital or whatever, right? So number one bucket of learning is the domain knowledge, the second bucket of value is actually the network that you'll create, right? All of your fellow students, your colleagues, your cohort, the faculty, the staff, those should be people that become and form a lifelong network for you. So how strong is that network? And then the third bucket, of course, is, you know, the, the immediate next step for you when you leave the institution with the degree or with the certificate and the placement office, the career center, those outcomes definitely matter. Although we should say, right, there are some students who come from maybe a family business who are planning to go back to the family business. So for them, career center would be less likely. There are sponsor students who come, you know, sponsored by Deloitte and are going back to Deloitte. So that might be less relevant for them, but depending on your situation, you know, those three buckets of how strong is the domain knowledge? You know, what's the network, the cohort, the alumni value, how strong is that? And then the career center would be the third bucket of value. And you just need to understand how important each of those three are to you and then how well the school you're considering delivers on those.
[34:30]
Mike Linton
I think this is super important. And a lot of times you'll look at that and say, I don't have the time to do that kind of look, but you should, because this is so much money, so much time, and also that next step out of grad school can really launch you or stop you. So I think, Jim, that was a great way to get us to our traditional last question, which is it's a two parter practical advice. You have to pick one or both. Practical advice for our listeners we haven't discussed yet. And. Or the funniest story you can share on the air. You can pick one or both, but you must pick at least one.
[35:10]
Dr. Jim Lecinski
All right, I'll give you a semi embarrassing story and then some practical advice. So as you can maybe tell behind me here, I'm a big jazz fan, play not well, clarinet, saxophone, flute, listen to a lot of jazz, classic, vintage jazz. And a number of years ago, I had the privilege of doing a fireside chat interviewing Wynton Marsalis, right, One of the great living legends of jazz. And he was talking about some of the roots and history of jazz and all the different streams that came together to form this stew that is the music we call jazz. And he was trying to explain some of the African complex polyrhythms that go behind this. And he said, so no problem, why don't you illustrate it for us, Jim? Why Don't. On one knee, you tap out nine beats per bar, and on the other you tap out seven. And so just do a seven over nine for everybody. And of course, I mean, you know, he could do it with his eyes closed backwards and forwards, but I was. And so regrettably. And now I probably have sent a lot of your listeners searching on YouTube. That video is still out there of me.
[36:15]
Mike Linton
If it is out there and someone wants to set it in, we will post it in the comments.
[36:19]
Dr. Jim Lecinski
So horribly embarrassed and fumbling at his mastery over the craft. And my fumbling. But that said, practical advice, just from a career standpoint, since we're talking a lot about careers today, the best advice I've ever gotten, and I'm happy to pay it forward, is meet the universe halfway. And so what does we mean by this? There are some people whose career approach is that of a tumbleweed. I have no plan. The phone will ring, stuff will show up in my inbox, wherever the universe takes me and the wind blows, that's, I guess, what I'll do next. And we all know people like that, right?
[36:50]
Mike Linton
There's one tumbleweed that made it to the top of a massive company, and everyone thinks I can do it, but it's not true.
[36:58]
Dr. Jim Lecinski
That's right. Equally on the opposite side of things are the people who want to, like, wrestle the universe to the ground by the horns. In 1.7 years, I will be at a level 3.6, because the person who was in that job will rotate and be out on maternity leave. And I will have the opportunity. And, you know, the universe intervenes. Right? Like, you can't control the universe. So this idea to have meat in the middle, have some intentionality, what is it that you enjoy? What is it that you're maybe better at than the average bear? Right, so in my case, it's maybe advising CMOS on growth strategies. Right? Like, then you, with that intention, are loose enough and open enough to answer phone calls, reply to people, go have lunches, meet people, listen for opportunities and your intention, plus some of those inbound opportunities, can lead you to a very nice career. But if you're a tumbleweed, good luck. If you're trying to wrestle the universe, good luck. Meet the universe halfway.
[37:55]
Mike Linton
I like that. Meet the universe halfway. I think that's a great way to end the show. Thank you, Jim. And thanks to everyone for listening to CMO Confidential. If you're enjoying this show, hit the like button and subscribe. Look for all of our shows on Spotify, Apple and YouTube, which includes the rise and fall of peloton as seen through the lens of cltv. The Budweiser case, how not to manage a sociopolitical issue. The Warby Parker case, I can see clearly now with my CLTV glasses on. And the show which sparked this conversation with Jim, marketing the battle between believers and non believers, parts one and two. Hey, all you marketers, stay safe out there. This is Mike Linton signing off for CMO Confidential.