How to Beat Your Fiercest Competitor

the variable

In this interview, David Mullen, president and partner of The Variable (Winston-Salem, NC), explains how any company can defeat its biggest competitor and drive sustainable, long-term growth. David articulates the holistic mindshift and strategies needed to develop products people want to buy, build “people-friendly” companies, and win long-lasting, loyal customers. He emphasizes the need to focus on changing:

  • Customer experience to people experience (inclusive of product developers the frontline [those interacting with customers], suppliers, influencers, stakeholders and shareholders, and customers]
  • Buying something to buying into something (shaping people’s experience at every touchpoint)
  • Positioning your company in the minds of customers to positioning your company in the lives of customers

 

Key strategies for building people-friendly companies include:

  • Consulting with the business:
    • analyzing business, brand, and communication strategies
    • identifying the right problems to solve
  • Creating solutions for the right problem. Solutions might include:
    • great advertising campaigns
    • rebranding an organization
    • content
    • innovation roadmaps, product concepts, and product development
  • Engaging to take solutions to market. Areas of concentration:
    • Employee engagement throughout the internal culture
    • integrated media planning and buying
    • social/PR
  • Underpinned with a foundation of Analytics to
    • understand what’s happening
    • assess the magnitude of impacts
    • identify weakest link, opportunities, and challenges, and
    • guide timely change implementation to ensure continued progress and drive growth

 

David can be reached on his company’s website at: thevariable.com, by email at: dmullen@thevariable.com, or on LinkedIn.

ROB: Welcome to the Marketing Agency Leadership Podcast. I’m your host, Rob Kischuk, and I am joined today by David Mullen, president and partner of The Variable, based in Winston-Salem, North Carolina. Welcome, David.

 

DAVID: Hey Rob, how are you?

 

ROB: I’m fantastic, how about you?

 

DAVID: I cannot complain, man. I figure if I wake up in the morning, that’s half the battle. It’s a good day.

 

ROB: And if you wake up and complain, you’re the president and partner of the company, so it’s a lot your fault, maybe.

 

DAVID: [laughs] That’s right.

 

ROB: That’s what I tell myself. [laughs]

 

DAVID: Nice. I like that.

 

ROB: David, why don’t you start off by telling us a little bit about The Variable and about what the agency is great at?

 

DAVID: Yeah, I’m happy to do that. I guess I’ll start with why we exist and then dive into how that’s shaped what we focus on trying to be great at.

 

One of the things that we observed happening in the market is we felt like a lot of people spend their days stalking/obsessing over the other businesses in their category as the competition—which makes sense. It’s not a wrong thing to do.

 

But what we really believe is that your biggest competitor, your fiercest competitor is actually indifference. You’re really fighting indifference every day, whether that’s internally—like 63% of the employees don’t believe that the work they do every day adds meaningfully to the bottom line or to the business’s success, which is a really bad way to go to work every day—or whether it’s externally.

 

The sheer fact that, if you think about your own life, there’s too much happening in your life to care about the vast majority of brands in the world. It doesn’t mean you’re an uncaring person. It’s just between spouse and kids and work and soccer practice and stuff around the house and then the 5,000 advertising messages you’re going to see today, there’s just too much going on in your world to care about all the things.

 

So indifference is real. We believe it’s the biggest competitor. That’s really what you’re facing. That’s really what you’re trying to overcome internally—and externally as well.

 

As we focused on how you defeat that—you can point at the business down the street that you’re competing against. It’s hard to point at indifference—so how do you overcome that? We learned two things that shaped our model and what we’ve focused on trying to be great at as we looked at companies who have overcome indifference.

 

The first is that they go beyond customer experience to really being about people experience. It’s about getting people to care. Right now everybody talks about customer experience and CX, and that’s a good thing. We’re ardent believers in that. But it stops short if you stop there.

 

It’s about people experience. It’s about product developers and product development. It’s about the frontline, who’s actually interacting with customers every single day. It’s about suppliers, it’s about influencers, it’s about stakeholders and shareholders, and it’s about customers. It’s about all these people.

 

You can’t just focus on the customer. You have to focus on people. That was the first big learning.

 

The second was that there’s a way that most companies go to market, but then we noticed something different about how people-friendly companies went to market. This won’t sound surprising to you, because we’ve all done it most of our lives, and you can be successful in doing this: most companies go to market focused on trying to create demand to buy their thing. How do I get people to buy my offering? How do I get them to buy my product? How do I get them to buy my service?

 

We spend a lot of time understanding the customer decision journey and focusing all of our money and resources on shaping what people think along the customer decision journey. Ultimately, we’re trying to position ourselves in the minds of people. So that’s how most companies go to market, and a lot of companies have been successful doing that.

 

But what we noticed about these people-friendly companies who’ve overcome indifference is that they focus on trying to get people to buy into their service or offering. It’s not transactional. It’s not just about buying something. It’s about buying into something.

 

Because of that, they’re really obsessed with shaping what people experience and how people experience the business at every touchpoint. Not just what they think along the CDJ (customer decision journey), but what they experience at every touchpoint.

 

Ultimately what that has resulted in for those companies is that it’s not just about positioning themselves in the minds of customers. They actually position themselves in the lives of people. It’s just a fundamentally different place to be as a company, as a business.

 

That’s why we exist. We exist to build people-friendly businesses that fight indifference because we’ve seen that that drives disproportionate growth. Those companies vastly outperform the market. When you compare 5 year periods, 10 year periods, 18 year periods, they really drive sustainable, long-term growth.

 

We believe that’s the path to success for the business. So that’s shaped who we are and what we believe. What we’re great at is we’ve focused on three areas to help build people-friendly businesses.

 

The first is the consulting approach. We look at business strategy, brand strategy, and communication strategy, working to identify the right problems to solve. What are the actual problems, the right problems—or the right opportunities to go capture? It doesn’t matter how great the advertising is or the strategy is; if it’s rooted in the wrong problem, then it’s not going to work. So really a focus on consulting to find the right problem across business, brand strategy, and communications.

 

The second area is around creating. You’ve got to be able to invent the right solutions to solve the problems. For us, those solutions might be great advertising campaigns, it might be rebranding an organization, it might be content. It could be innovation roadmaps and product concepts and product development. But we want to focus the solutions on the right problem. That’s where we look at creating these solutions.

 

The third area is once you’ve created solutions, you’ve got to be able to take them to market, whether that’s internally or externally. We look at that as the “engage” side of what we do. As we talk about engage, the places where we really push hard to deliver well are around employee engagement (how do you pull that solution all the way through the internal culture?), integrated media planning and buying, social/PR.

 

And then obviously analytics is really, really important to all this, kind of an analytics foundation under all of it so that we can make sure we’re understanding what’s happening, the impact, what we should change tomorrow, next week, next month, next year to continue to progress and drive growth.

 

We view that as not a linear thing. Once you go through all that—I just saw a study that says today’s incumbent in most categories won’t be the incumbent in 5 years. So you have to constantly be finding the weakest link in the chain, finding the opportunities, finding the challenges, and then pushing through to solve those things.

 

Netflix didn’t stop at solving the Blockbuster issue with mail-order DVDs, although that’s where they started. They continue to innovate. They continue to change, continue to find new people-friendly solutions. Even the Skip Intro button. Rob, every time I press “Skip Intro” on Netflix, I thank them profusely for being people-friendly.

 

So it’s constant reinvention and evolution to continue to push yourself. That’s what we focus on. That’s what we try to be great at.

 

ROB: By contrast, on Netflix, just to go down a rabbit trail, I wish that to be people-friendly they would let me turn off those auto-playing previews at the top. But we’ll skip that for a moment.

 

To paraphrase what you said a little bit, it sounds like perhaps a mistake that many people make when they’re thinking about going to market with a product or with marketing. They focus on what they want people to care about without first getting the people to care at all, or worrying if they care at all. It sounds like you’re thinking first about how to get people to care, and then to link that to the thing that they should care about.

 

Some brands do this constantly. Coca-Cola, Red Bull, these are folks who understand that they want to connect someone to a lifestyle, and then they’re going to tag Coca-Cola or Red Bull onto the end of skydiving from space, in orbit (no pun intended) with the content itself.

 

Most of us are not Coke, are not Red Bull, and I imagine most of your clients are not at that scope and scale either. How do you suggest people think about getting people to care and then connecting that to what they care about at a smaller, and sometimes even very small, scale?

 

DAVID: That’s a great question. Two straight examples or applications of that would be—lots of times companies go off and create something for the sake of creating something. Now, they wouldn’t say it that way. Usually there’s a business reason behind what they’ve done, but there isn’t often a consumer reason behind what they’ve done.

 

One of the things we’re really adamant about is how do we infuse, for example, real consumer needs, consumer desires, fears, wants, hopes, all of those things, how do we infuse that into product development and product innovation? Not just “can we create something,” but “should we be creating something?”

 

Even if you sell through at retail, how do you get category buyers involved in the process of your specific development as well, and help them understand why you’re creating it and what the consumer demand and need is? That might sound like table stakes, but I can tell you a lot of folks don’t do that, don’t take that step. It takes a little more time and a little more intention and a little more resources.

 

But we’ve seen that it drives better product development, better innovation, and better sell-in and sell-through once you take it to market. So that’s one example.

 

Another example—and it doesn’t matter how big you are. We’ve got clients that are global and the largest in their category, and we’ve got clients that are $80 million, $100 million. They run the gamut, and we love all of them.

 

But I’ve seen clients at both ends of that scale and everywhere in between get so excited about either a new way that they’re going to position the brand or a new business strategy or a new advertising campaign or whatever it is. They get so excited about it that they forget to pull it through the people who matter most in delivering it, the organization, before they go to market.

 

Even the step of getting internal people to care by actually engaging them—90% of CEOs say that employee engagement programs are really important; only 25% of them actually implement something. It isn’t always doing the thing you don’t know. Sometimes it’s doing the thing you know you should do, but actually taking the time to do it.

 

So getting people to care, how do we actually engage employees in a way that unites them, empowers them, and motivates them to deliver what we’ve created, to deliver that every day to customers in ways that stand out, and with experiences that change how customers view us and the brand?

 

There’s lots of different ways to engage employees, but even just doing the step of not forgetting them—every day in this country, businesses go to market with programs, ideas, products, new things, and they have not adequately engaged internal employees enough to deliver it.

 

That’s just two examples off the bat, but there’s lots of ways to do that.

 

ROB: What you’re doing in employee engagement, that’s a pretty interesting corner of the world that you don’t always hear about when you think about marketing. Buy-in from the company itself.

 

Switching gears a little bit, if your LinkedIn profile is to be believed, you have a bit of a unique path when it comes to being a partner at an independent agency. Tell me about the history of the company, and then about the history of your own role there.

 

DAVID: I’ll start with The Variable. It was started 7 years ago, I joined 5 years ago. So founded in 2011, I joined in 2013.

 

The Variable was started by two guys I love, Keith Vest and Joe Parrish, partners in the business, because they felt like there was fundamentally a different way to help clients solve problems. They had done the big agency thing, learned lots of great things there, worked on lots of great brands, but also became a bit disenfranchised with some of the non-great parts of being part of a big agency and part of a big holding company. They felt like there was a way to bring clients better ideas, faster, and that they all didn’t have to look like an advertisement.

 

When I first came and met with them, one of the things that Joe said was, “We don’t believe advertising is dead, but we believe the process that only leads to advertising is dead.” That was 5-½ years ago when I first started talking to them.

 

They started The Variable to help clients solve problems by really understanding the problem and really bringing solutions to the table—which could include great advertising, but might not just include great advertising.

 

It’s been a great 4 or 5 years since I came on board. The business has grown tenfold in the last 4 years. We’ve quadrupled in size. I think we’ve hit a real opportunity in how we have thought about our model and how we help clients. The types of people we’ve brought into the team to help do that is a pretty disparate group. It’s an interesting group of people.

 

That’s driven great success for us from a business perspective and from a recognition perspective. Two out of the last three years, we’ve been an Ad Age Small Agency of the Year. Our moms are super proud, which is great.

 

But also, I’m really proud because of the team. It’s a great team. We approach problems differently, and how we think about bringing value to the world and bringing value to our clients. They work hard. So I’m proud of them for that recognition on that, too.

 

That’s a little bit about The Variable. We work with all types of clients in all types of categories. We’re really proud of who we partner with, and they’re fantastic. We’re really intentional about who we partner with. So that’s a little bit about The Variable.

 

My own story, it’s been a little divergent. My initial major in college was Chemical Engineering. I was going to be a chemical engineer. You can see that worked out really well. By mid-second semester of my first year in college, I was like “I do not want to do this.” I was trying to figure out what I was going to do. This is 21 years ago.

 

I was trying to figure out what I was going to do, and I don’t even know how I stumbled upon it, but I somehow stumbled upon public relations as a career path. I had never heard about it before, no one ever talked about it when I was in high school or growing up. I started looking into that, and it seemed really interesting to me, so that’s what I changed my major to.

 

I spent my first 9 years in PR agencies. I was up in Chicago for a little while and then came down to Charlotte, North Carolina, and then over here to Winston-Salem to work at an integrated big agency called Mullen. Now it’s called MullenLowe. At the time it was just Mullen.

 

ROB: Any relation?

 

DAVID: No, no relation. Although it was interesting—when I first started, people returned my voicemails and my emails super fast. It was great. But no, no relation at all.

 

While I was at Mullen, I switched to an integrated account management role. I really appreciated the PR years inside of that. What I learned in PR is the power of storytelling and how to capture an editor’s attention in 3 seconds or less. This is back in the day when you picked up the phone and you called the executive producer at The Today Show to pitch them on a story.

 

You actually called people, so you had to be compelling in 3 seconds or less. That was invaluable, and has been invaluable, as I moved into more of an integrated account role.

 

Then I started running integrated client accounts at Mullen across strategy, creative, media, analytics and reporting, which was great. I learned a lot there and had some really great experiences working on the global brand. Did some fantastic work.

 

Then I met Joe and Keith. That’s where our paths converged. I had been at Mullen for about 7 years and was doing great. I wasn’t looking for a new opportunity. Joe reached out, and I couldn’t use my usual—when a recruiter reached out, it was usually not for a job in Winston-Salem, North Carolina. My wife and I had really grown to love this place a lot. We planned on being here 3 years; that was 13 years ago.

 

So I couldn’t say, “Thanks for the compliment, but I’m not looking to move right now.” These guys were down the street, so I couldn’t use that. I decided to go meet with them, told them I wasn’t looking for something new but was happy to meet if they wanted to. They said, yeah.

 

I walked away from that meeting feeling like, “Holy crap, I might quit my job and come work with these guys.” There was something about this place and what they were doing and how they viewed the world and how they helped clients, and even the team and wanting to be a place where people can flourish, that was interesting and I wanted to be a part of.

 

I came in as Director of Account Management at The Variable 5-½ years ago, and it’s been a great 5 years. Like I said earlier, the business has grown tremendously the last 4 to 4-½ years. We’ve gone from 12 people to just over 50 people. I became president and partner in August of last year.

 

ROB: How does that transition happen, going from a guy that is hired into an 11- or 12-person agency to that move to partner? I’m sure it’s different in each case, which is why I’m interested to hear a little bit more about your own path.

 

DAVID: I’m sure it’s different in every case. I can just speak to my own. About 2-½ to 3 years in, Joe and Keith asked me if I would be interested in that. I’m glad they waited 2 or 3 years. When I came in I was super gung-ho, but it’s like the honeymoon phase. I hadn’t been in a small agency in a while. We had time to really get to know each other versus just what we thought each other were after a couple meetings.

 

So that wasn’t part of the initial discussions at all, and I’m glad it wasn’t because we got a chance to really get to know each other really, really well. Becoming a partner in a business is like marriage. It’s like work marriage. You’re casting your lot in an even deeper way with another person or two or three. Who you do that with matters a lot.

 

We had been together about 2 or 3 years, loved working together—not just because the business was growing really rapidly and we were doing work that we were really, really proud of, but how we did the work together I think is what mattered a lot to us. It’s not that we didn’t disagree, but how we disagreed mattered.

 

We had a shared vision of being a place where people could really flourish and our own people could really flourish. There were a lot of shared values there, a lot of shared integrity, how we think about the business, how we think about the industry, and how to help clients.

 

We started having those conversations about 2-3 years in, started working to make that official—it takes a little bit of time to do that. In mid to late 2016, I would say, we really started having those conversations, beyond conversations to practicality and what that looks like. We mapped out a roadmap and then finalized it in July-August of 2017.

 

ROB: That’s an interesting story. I think the bottom line there that is probably a broadly applicable lesson is that you all knew each other and how you worked together before you jumped into that harder-to-separate partnership, if you will.

 

DAVID: Yeah.

 

ROB: Moving on a little bit, what are a couple of things that you’ve learned while leading The Variable that you would do differently if you were coming into the role again or if you were starting a new agency tomorrow?

 

DAVID: It’s funny, doing things differently—I’ll think of one, but I always get nervous about that question.

 

This is a slight tangent, I apologize. Not that everything has been perfect by any means in my life, but I love where I have landed. I love where I’m at in my life. I love where I’m at in my career. So I’m always afraid that if I would do something differently along the way, I’d end up at a different place.

 

But if I had to pick something, I would say having the courage to trust your gut earlier when your gut’s wary of maybe a new potential client opportunity that doesn’t feel right.

 

It can be really hard to say “no” to pursuing a new partnership or new opportunity. First of all, it’s flattering when someone reaches out to you. Secondly, we’ve got a little bit of a chip on our shoulder. We think we do things differently and that we really help clients drive their business. It’s not just about creating a funny ad or winning an award. We’re trying to drive the business.

 

So it can be hard to say “no” to a new opportunity, but there are times where you’re meeting with a potential client, and we knew we could solve the problem that they believed they were facing, but something felt off. I can’t even necessarily describe what that is. Maybe the chemistry is off, or the way they treated us inside the discovery process felt like we were seen as more like disposable vendors than real partners.

 

Early on we still pursued those, even when they felt off. What we learned is that it’s just not worth it in the end. You spent a lot of time and energy on something that you suspected wouldn’t come to fruition or that you worried would be a one-way relationship even if you did win, and, in the end, your gut’s usually right. I would say that that bore out.

 

So we became way more intentional about listening to our guts over the last 3 years. We love pursuing ways to help new clients, solve challenges, or take advantage of opportunities, but we approach the pitch or the discovery part of that differently.

 

The questions we ask in the early stages now aren’t just focused on understanding their business and their challenge; they’re focused on really understanding what the relationship will be like if we work together. Will we be treated like partners or will we be treated like vendors? How do you treat people? How will you treat our team?

 

That’s really allowed us to focus our time and energy on the right opportunities instead of all of the “opportunities.” I feel like we’ve gotten much more diligent about that. I wish we had done it earlier. It would’ve saved some heartache.

 

ROB: Very interesting, and I think helpful for others to learn from. Looking ahead a little bit to the future of marketing and marketing technology and The Variable itself, what are you excited about?

 

DAVID: You know this; the agency world is in a really dynamic time right now. There’s a lot of change happening.

 

I think the next 2 years will be a time where we see agencies that don’t evolve will struggle significantly to stay in business, and where we see agencies that do evolve or find new ways to bring value to the world, find new ways to bring value to clients, have flexibility in shifting their model, trying new things, testing new things, I think they’ll succeed significantly.

 

We started changing our business model—I talked a little bit about that and how we partnered with our clients 4 years ago. So I feel like we’re pretty far out ahead of the curve of some of the things that are happening right now and some of the trends that are happening, some of the things clients are looking for, and ways that they want their partners to drive the business.

 

I think we’re well-positioned to continue bringing disproportionate value to clients. We love evolution, so we’ll continue creating new ways to deliver value. It’s an incredibly disruptive time right now, and will be for the next couple of years, but to us that’s incredibly exciting. I’m really excited about that.

 

From a technology standpoint, what I get excited about is technology that actually helps us deliver real insights and real action. People get wrapped up in data for data’s sake, and that can be a lot of 1s and 0s. It can be a lot of digital exhaust. Nate Silver, everybody knows it—finding the signal in the noise is the real value, not the noise.

 

So what I’m excited about on the technology front is finding new ways to continue to take real data, what’s really happening in the world, but be able to draw the real insight out of that versus being overwhelmed by all of the noise.

 

Things that will continue to help us get better and faster at finding the insight, the real opportunity, the real challenge so that we can take advantage of that or solve that, I think will only get better as we keep moving forward.

 

ROB: Got it. That is a good way to think about the future. We all have to keep evolving, but I think that’s especially poignant in the agency world where it can be easy—you talked earlier, going way back, about the competitor is indifference.

 

Especially as you grow, I imagine there’s a gravitational pull towards indifference, towards just checking the box and doing the work for the client or doing the work that’s your description and doing the things that have won you deals before. I think that puts a nice bow on things.

 

David, when someone wants to get in touch with you and The Variable, how should they find you?

 

DAVID: We are on the World Wide Web at thevariable.com. My email address is dmullen@thevariable.com. We’re pretty approachable and open kinds of folks, so we’re pretty easy to find and get in touch with. I’m on LinkedIn as well.

 

ROB: That’s excellent. Thank you for sharing today, David. I encourage everyone to check out The Variable.

 

A special thank you to one of our former guests, Simms Jenkins from BrightWave Marketing, for this introduction. Great introductions make for great guests, and we’ve seen that here today. Great to talk to you, David. Thank you for your time.

 

DAVID: Thanks, Rob.

 

ROB: Take care.

Thank you for listening. The Marketing Agency Leadership Podcast is presented by Converge. Converge helps digital marketing agencies and brands automate their reporting so they can be more profitable, accurate, and responsive. To learn more about how Converge can automate your marketing reporting, email info@convergehq.com, or visit us on the web at convergehq.com.

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