Ben Bentzin on Marketing and Brands, from Dell to Tito's Vodka

“The best market research you could possibly do is to put an offer in front of consumers and identify what consumers respond to.”

I’ve always admired those who manage to keep one foot in academia while still polishing their business world chops. Practitioners and researchers walking the halls of the college, a healthy balance I say.

With that I introduce you to Ben Bentzin, marketing lecturer at UT Austin, who spoke with me about a variety of topics, from marketing strategy, direct from Dell, to an intoxicating use of social media at Tito’s Vodka.

As president of Boxcar Holdings, Inc., he is an active private investor and strategic marketing consultant, bolstered by ten years as a Dell Inc. executive, including lead marketer for their consumer/small business division, and product marketing for Dell Dimension and Dell Latitude brands. Sincere teachers always have open hearts, and Bentzin demonstrates his by serving on the boards at the Center for Child Protection, KUT radio and The Helping Hand Home for Children. He has an MBA from Wharton.

If you want to learn more from Ben, check out the Texas Start Up Meet Up session notes on Marketing in the Digital Era, including panel experts Lori Kerrigan, Kevin Newsum, Bill Leake, and Brianna McKinney.

David Wenger: You teach marketing strategy and I imagine your students today are somewhat different than the classmates you had as a student. How have students changed and how does that impact your teaching approach? Audio Clip 1

Ben Bentzin: There’s always this natural tendency for us to look at the next generation and think well, they’re somehow different than we were. But the reality is that the core motivations for students to be in McCombs today are identical to what they were when I was in my MBA program. I asked for a show of hands the other day about reasons why students were at the McCombs MBA program and we categorized them into segments, applying a marketing approach, and they were the same segments that I could have imagined my classmates having been in when I was a student in the early 1990′s.

And so things haven’t changed that much. Maybe I’m wrong about this, but I think students are more professional today. I have sometimes wondered whether I could get into a program of this caliber today if I didn’t already have all this experience that I have. It’s an amazingly talented group of students.

DW: How has the field of marketing changed in that time? Audio Clip 2

BB: The pace of change of technology has dramatically changed the marketing field. When I went through my MBA program the kinds of cases that we covered in terms of the channels of communication with consumers and the application of pricing technologies were far more similar than dissimilar to how they had been done 20 years prior to that. Fast forward now, here we are 25 years later and the methods of communication have changed substantially and the amount of quantitative data and quantitative analytical tools today provides a staggering amount of data compared to what was available 25 years ago.

DW: Do you have an example of that?

BB: Think about the panel discussion we had at the entrepreneurship conference about marketing in a digital era. Digital media today is natively archivable and it natively captures quantitative data about what people are looking at, and what they’re not looking at, and what their preferences are in ways we could never do with traditional media in the past. And successful students and companies will come up with ways to use that data, to apply it to understand what’s really going on in the head of the consumer. Gathering these insights simply wasn’t possible under old systems.

DW: I came out of the advertising business in an era in which, when someone asked you how to measure or quantify return on investment you’d grimace a bit, and you might come up with some exposure figures, but it was very difficult.

BB: When I was at Dell, because we sold direct to consumers we had this huge innovation over what our indirect competitors could do.  We versioned every ad with a unique 800 telephone number, and so at least we knew which ads consumers were responding to. That was a far superior tool to our indirect competitors, but it was still very crude from the degree to which you can only guess what they’re calling about.  It doesn’t necessarily mean that’s the offer that they’re actually buying or which ad was generating the more conversion to purchase. Those are things we still kind of guessed at, where as now you can directly trace exposure to consideration to sale.

DW: Is a marketing director or a product manager of a start-up doomed to reinvent the strategy every 6 months? Audio Clip 3

BB: Well, in the strategic marketing course I teach one of the first things I emphasize is the classical definition of a strategy, which is a long-term sustainable source of competitive advantage. A strategy is something a company can do better than their competitors sustainably over a long period of time. And so if the strategy changes every 6 months it isn’t really a strategy it’s a tactic. And in some businesses these tactics are a process of exploration, finding out what works and what doesn’t work, which can be a very effective way of strategy development. To a certain extent the best market research you could possibly do is to put an offer in front of consumers and identify what consumers respond to, what they appreciate, what they vote for with their dollars. What they like and what they don’t like can be a very powerful way to develop a strategy. But to be very clear the process of strategy exploration is very different from defining a strategy. Once you’ve defined your strategy, if it’s a successful strategy, it will carry you for a very long period of time. Dell has been practicing essentially the same strategy for the last 20 plus years, a strategy that hasn’t changed.

DW: Talk about that strategy. They’ve had to adapt to changing market conditions in recent years. Audio Clip 4

BB: Dell’s strategy has historically consisted of a value chain of delivering products that must be configured to customers who need those products, and they tend to be high value products that require some degree of configuration. What’s happening is that as the cost of computing components declines the need for configurability has declined because if you can have everything then you don’t need to pick and chose. Configuration is about choices but if you have everything you don’t need to chose.

Dell, with the Latitude Z and with other products, is starting that process of exploration, to identify how to compete in the world where competition is defined less on the basis of configurability and supply chain, and more on the basis of integrated whole products delivered with relatively little configuration. The Latitude Z is a great example of that next step of moving, and responding as the market is changing. Dell’s development model historically had been the very fast follower, not necessarily innovating in all the new product categories, but being the first to market to deliver the new technology in the configuration that consumers found attractive.

Now we’re finding that Dell is exploring this possibility of more native product innovation, competing directly on the basis of product innovation as opposed to following the trends of where consumers were headed. Latitude Z would be an example of that. Dell is at a point now where to succeed the company must innovate to continue to succeed, and we’re seeing examples of those efforts at innovation.

DW: One of the most interesting questions from the conference was whether companies or professional marketers can truly speak with an authentic voice. Audio Clip 5

BB: I have quoted Samuel Goldwyn, who once said, the most important thing in acting is honesty, once you’ve learn to fake that, you’re in. And to a certain extent, consumers have a very tuned ear for false efforts to be cool, false efforts to be empathetic. Those efforts don’t really resonate with the consumers’ impressions and assumptions and understandings of the brand. I find that social media and that kind of communication is very difficult for to sound authentic coming from a contractor or somebody who’s outside of the company.

Sitting outside the company and trying to be the personality of the brand is very, very difficult. It’s typically going to be most successful from someone who is in the heat of the battle in direct contact with the information flow of what consumers are saying, and what is the product offering, and the company’s strategy in terms of the product they’re offering. That will ring true as authentic because it is authentic.

If you understand and believe passionately in the company strategy, and you’re in the information flow of what consumers are saying about the company’s product or service, then it’s easy to be authentic. You become authentic because you are.

Consumers want to establish an emotional relationship with that brand, they are much more likely to have a strong loyalty and affiliation with that brand. And what good branding is about is essentially simulating a one-on-one interaction, which is actually one to many, creating a sense in the minds of the customer that I can relate to that brand. That brand understands me, and therefore I feel more loyalty to that brand. And that’s where social media can be so powerful. Well executed by someone that represents the personality of the brand and understands the personality of the brand and understands what the brand can do for customers. That can really be extremely powerful in representing the brand, through social media and through various channels in creating an emotional bond, even though it is a one-to-many kind of communication.

DW: Does anybody come to mind, any company or organization, that you think is doing this particularly well?

BB: On a small scale, there is a small Austin start-up, Tito’s Vodka. It’s a local distillery of vodka, the first licensed distillery in the State of Texas, operating in Austin since 1997. Tito’s has a very strong brand profile, and all of Tito’s social media comes from one brand of manager who’s been with the company for a very long period of time and feels passionately about the product, feels passionately about Tito’s, and does an outstanding job of representing the brand because she really represents the personification of the brand.