Free Covid-19 Marketing Resources 

Marketing Post-Covid: Robert Powell, Chief Marketing Officer and Partner at Cardinal Capital

Transcript

Brian Erickson:
Thanks for joining the Cardwell Beach Marketing Podcast. My name is Brian Erickson, Chief Strategy Officer and partner at Cardwell Beach. In this series, we’re interviewing senior marketers across industries to develop perspective on what marketing will look like in a post-COVID-19 world. Today’s guest is Robert Powell, the founding partner and Chief Marketing Officer of Cardinal Capital Commercial Finance, a commercial finance brokerage and consulting firm with a special focus on hospitality investments. Rob is also an adjunct lecture and instructor at the University of Arkansas, where he lectures on hospitality, marketing, and management, and is a Rainforest Cafe alum. Some interesting background experience. Thanks so much for joining us today.

Robert Powell:
Hey, my pleasure, Brian, thank you. And Cardwell Beach for having me. I like your work.

Brian Erickson:
Awesome. You’re doing some great work too. And you’re working in a very interesting space right now.

Robert Powell:
Pretty dynamic right now, yup.

Brian Erickson:
I want to talk a little bit about weathering the storm, obviously shelter in place orders and other restrictions have fundamentally changed the hospitality industry during COVID-19. Curious on how you’ve advised clients on adapting to this moment, especially from a marketing communications standpoint.

Robert Powell:
What we do is we always go back to the basics and over the course of my career, I’ve developed what I would call a statement here and we call it the painless extraction of cash. And this works in the hospitality business. If you think about it, you want, and it does not necessarily solely work within the hospitality business, it works in all businesses, whereas you want your clients or your customers to run to you, open their wallets and throw money at you in exchange for some level of service or widget or whatever have you. So we go back to that. If you break that statement down, painless extraction of cash, you break it down into four buckets, if you will. Safety and security of the guests and employees, manners, we all want to be nice, performance. Of course, and now I say performance in terms of stage performance.

So if you look at what you’re delivering in the hospitality space as a performance, that’s a good way to, to frame what you’re delivering, the experience that you’re delivering. And then the fourth one is efficiency. Now when these four are working, everybody’s in good shape and we were in good shape up until the pandemic came along. And this also works in marketing and we’ll continue, we believe to do so. What we’re seeing is a breakdown in that first element, the safety and security. So how do we fix this breakdown is the real question while keeping the other elements afloat. Now, once hospitality organizations have determined the scope of these restrictions within each market and renegotiated their expense obligations. And let me tell you, you know, as well as I do, some of them are still wrestling with this. They are having a rough time meeting just those core expenses.

We’re telling our clients to go back to these four elements and direct their marketing efforts on customers and employees to use this opportunity to innovate. Now, if they do not have some form of loyalty program or frequent customer and employee contact mechanism, we’re seeing oddly in this space, not many of them are fully utilizing this. Now’s the time to build or refine those tools. Now, keeping in touch with those two primary audiences, both the customers and your employees was key prior to the pandemic, but it’s being highlighted now more than ever. And us as marketers, this is our area. This is our lever, if you will, to move and change behavior. Now from a purely mar-comm perspective, the message content, as well as delivery, is important and more focused on providing information because the market, as we’re seeing, is starved for information. Not only are we battling for share of mind and wallet, we’re adding on a complex layer of communicating these new business models that we’re seeing evolve, and we want to do so in a compelling manner.

And when I talk about market, I’m talking about both customers and our employees to walk away from these messages with a sense of trust and confidence that this brand is in charge and they’re taking the right steps to make sure we’re safe. Now, I’m going to give you an example here that I just read about: Virgin Money, a Richard Branson organization has started at outdoor concerts again in the UK. We normally think of this, I don’t know about you, Brian, but when I go to these outdoor concerts, it’s usually a fight to mark your spot on the lawn or to watch it, to watch the concert. And you’ve got lines at the concession or lines at the bathroom, et cetera. Virgin, true to its brand, thought of a different approach. They’ve created pop-up venues. They’re calling it the Virgin Unity Arena. Twenty-five hundred fans gathered at the outdoor venue.

And I believe this was Tuesday for what they billed as a socially distanced concert. By the way, I’m not a fan of the term socially distant. We are physically distanced, but there are ways that we can be social, but that’s another story. So the groups of up to five come out to watch concerts from one of these 500 raised metal platforms out in the middle of a field. Distancing is enforced upon arrival where cars are parked two meters apart before the ticket holders are guided to their own platform for these private viewing areas. Now, if they wanted food or drink, they’re ordered beforehand on their app where they can either go pick it up or they can have it delivered directly to these viewing platforms. Now the app, of course, is another data collection point. Those of us who are marketing and data geeks love this kind of stuff.

So we can see their behaviors. This type of experience is a very unique one, but it may be a view into the future of hospitality. It requires a fairly detailed communication and setting the expectations and creating the energy for that particular event. Thankfully, Virgin has a robust database of audience members they can reach out to directly with timely information. They have also a well-trained consumer base who, at this point, is almost forced to read the fine print and as marketers we know to make it easy for the consumer and employee consume this information when, where, and how they need it. Now, from a marketing data perspective, we’re looking into a total folio value and theoretical value of each guest and employee, and how that affects our messaging. This is a huge topic and we can spend hours on it, but I know we don’t have that much time. But going back to your original question, we’re advising our clients at a very high level to examine those four elements of safety, security performance, the efficiency and manners, of course, and delivering that message within that framework so they can create more impactful marketing.

Brian Erickson:
That sounds good. So if I’m hearing you and kind of distilling that down, basically what you’re saying is don’t sit back and suffer and wait for things to go back to normal. That’s not really the best option here. There’s money to be made. You know, you can go out and get it and people want to spend money, but you’re going to have to innovate and do things a little bit differently. Is that a fair summary?

Robert Powell:
That’s a perfect statement. And we’re seeing pent-up demand all over the place for that element of socializing and the experience that we received through hospitality. And that element is being delivered by people who are getting innovative and reaching out to the customer and reaching out to the market so they can come back and experience it. Granted it is a little bit of an adjustment, but good marketers and good operators are finding ways around that. And there are examples all over the place.

Brian Erickson:
Now, I think you have a very interesting perspective based on kind of dual views into the consulting side of things and also into the teaching side of things, right? So I am very much a believer that your best learning happens through teaching something. So you’re working with a new generation of marketers and students, and I guess, what are you seeing on that front and how are young people viewing this moment in terms of marketing and outreach and what lessons have they taught you from their experiences during the pandemic?

Robert Powell:
Brian, I got to tell you, I love teaching and I’m never sure who learns more, me or the students. It’s always been a passion of mine. I believe the ethos of education, not just the institution, but from an early point, I always learned, and I always leaned on, organizations that were dedicated to teaching and learning. The ones that are formed on hierarchical structures to me are not very enriching or enticing. With that said, we have a crop of some of the best, most energetic and enthusiastic students I’ve ever seen. They are optimistic. They are embracing this new normal with open arms. The digital age that they have been living in is now coming around to the higher education world. Their attitude is what took you so dang long to figure this stuff out. And we had these ideas weeks or months or years ago. Now the fundamental lesson that I’m learning and I’m learning it daily is the way this new generation of university students consumes knowledge is completely different than their instructors did.

90% of their knowledge consumption comes from other sources than textbooks. YouTube, TikToK, Snapchat, home videos are all communication levers that we need to pull together to deliver content to them. It’s an unbelievable time to be in higher education. The business model is changing and the content is dynamic. My personal mission as a teacher, is what I call the Four E’s: to deliver content that is entertaining, enlightening, enriching, and educational, in a manner that’s easy to consume anywhere on any device. This is how students want to receive this information, too. Looking at the source of information most students have now, according to a study a few years ago, they received their information from Stephen Colbert. Believe it or not, on the Tonight Show or the latest YouTube sensation. These are considered credible sources of information. Thankfully, I have a background in improv comedy and that comes handy in times.

My classes are becoming more like performances than lectures. I take my camera and sound gear on location here in Bourbon Street. This is what it looks like now and what it looked like then. I use location studio shoots to demonstrate or introduce concepts to my students. And they respond pretty well. Now in terms of how they look at the industry, they are much more resilient and adaptable than other generations, in my opinion. They’re accustomed to these no touch forms of communicating. Everything is mobile and served up in microbytes of information. To them, this is an easy, and in some cases, preferred way of communicating. Their concern is the special events. If I had to package it in a theme, they miss the live events like concerts and weddings. They also miss international travel. And those are some of the concerns they really have questioned me about. Where is this going and what does this look like?

It is now restricted whereas once it was very accessible to them and they looked forward to this. I turned it around and I challenged them on how to think of ways to get those same experiences. What would they do if they were leading the charge? Now, occasionally I’ll get the questions of what will this industry look like in the future, or is there a future in this business for me? What do the career opportunities look like? And I usually turn it around and ask the same question. What do you think it’ll look like?

Now, the truth is the hospitality industry makes up 10 to 12% of the global GDP. And this industry, it’s here to stay. However it’s going to evolve and it will adapt. Smart marketers and students of the industry will succeed regardless. And I’m telling you, Brian, they’re coming up with phenomenal ways of sharing information and sharing experiences. They have their own channels out there, micro channels, if you will, of their friends. They’re getting together for happy hours and they’re getting together for birthday parties. I mean, and they’re making a spectacle of these events and it is really refreshing to see how they are doing it and communicating it.

What we called engineered viral, they’re doing it on their own and it’s very organic. So I’m really encouraged about this new generation and learning from things from them daily.

Brian Erickson:
That’s pretty awesome. So what would you say is coming next? And obviously nobody has a crystal ball in this situation or maybe we’d be in a little bit different of standing than we are currently, but you were CMO, as I referenced, of Rainforest Cafe in the late 90s, early 2000s heyday there of the brand. If you were in that seat right now, what would you be thinking about? What would you be working on? What would you be working towards over the next six, 12, 18 months as we come out of this?

Robert Powell:
Good question, and I’ve always relied on data to help me drive home my strategy or to look for holes that are not being met. And those in the future who have a handle on their data, you know, financial and marketing data are winning now and will win then. I would look at it the same thing back in Rainforest days, we counted revenue per chair. While I’m looking at now, I’m going to be looking at total folio value or theoretical value. And those who are looking at that are going to win. And they are going to see a brighter future. Any business, some customers will cost you money and they are low margin. Brian, I know in your business, in the agency business, you have the same situation. Most hospitality organizations are the same. We focus on the ability to identify and segment based on profitability.

Now, to start off, I try to induce with some of the clients that I deal with. I try to induce this simple formula as a question. If you have 20% or 30% of your current customers come back, at one incremental time of year, what would that do to your revenue or your bottom line numbers? Now the same thing would apply. If I was in the Rainforest Cafe chair, again, I would look at my total customer base, and thankfully, we had a database of known customers and I would try to deliver that virtually, or I would try to deliver those meals to them in some other way, that experience in some other way, so I can get them continued to be engaged with my product.

Now we know by doing this, by bringing these people back, bringing the known customers back at least one time, we know what this would do to reducing customer acquisition costs and we can focus on those areas. What are our acquisition costs? It would also force us to measure frequency, total spent, total value, all of those kinds of things, those consumer casual behaviors that add to profitability.

Another lesson that we’re learning in this area is the extension of the brand. First, we have to complete the understanding of what our brand is, that space that we occupy within our consumer’s brain and how that is extended to interruption points that are out the market. For example, Wolfgang Puck, who I have a high, a lot of respect for, opened a great take on a sports bar in Las Vegas. I don’t know if you’ve heard about this one. He calls it Player’s Locker. Now his brand himself occupies a high-quality, approachable, unique Americana food space. With Player’s Locker, he’s combining that with partnerships with local sports figures and Las Vegas, he has some of the Las Vegas Knights hockey team as his partners.

Now, of course, he opened this just prior to the shutdown. So he retooled and the same thing. We would, we would do this at Rainforest—or what is now Landry’s, Landry’s owns Rainforest—retooled, and he’s one of the first to deliver pickup or meal packets. All right. So you get all the ingredients for a meal complete with instructions from him. So you can get a wagyu beef meal to go and you take it home and you cook it. I think that’s fantastic delivery of his brand. We also see where a few bars are moving into the growler and canned cocktail space as a means to deliver on their core competencies of cocktails and beers.

Now, speaking of interruption points, I’m going to go off on a little tangent here. We have a whole new space to communicate a message. And that’s the face mask. In hospitality, this is taking up a lot of real estate, but yet it’s not being very, it’s not being exploited.

Brian Erickson:
I love this. I haven’t heard anybody talk about this, but it’s so- that’s a fantastic point.

Robert Powell:
It’s amazing. In a historic hotel in the heart of the French Quarter, in New Orleans, the other day, I’m standing behind or in front of a plexiglass boundary. And the attendant behind the guy who was taking my reservation or taking, you know, taking my card has a mask on and it’s got his logo on it. And I’m like, God, that’s great. You got messages, you can, you can send me, but Brian, I couldn’t hear a word he said because he’s between those two obstacles. So we have, we have got to go down to the basics here and we got to remove some of these obstacles. So the challenge is how do we express ourselves knowing that our voice is literally filtered and we’ve got this real estate of this mask that you’re forced to stare at. So we’ve got to get creative there. I think there’s a beautiful opportunity that we need to, we need to take a look at it. Cause I’ve got a feeling these masks will be around for a while.

Now there’s a restaurateur in Italy that I have a dialogue with. He owns, I believe four restaurants, and is using this downtime to put all of his staff through front of house and—all of his staff, front of house and back of house—through body language training in order to continue his delivery of service at the level his market is accustomed to. Okay. So he’s also sourcing face masks that have a clear area around the mouth for his hearing impaired clients, they can read the lips still of their servers. So I think that is fantastic, what he is going through to still maintain that sensitivity of the communication that needs to be delivered.

Now, I believe a lot of what we’ll learn are the lessons that I believe are going to stick around. Are the dynamics associated with the touch-less delivery of service? Everybody’s been to a restaurant or the menus are beat up and nobody likes that. Now we have menus that are scanning of a QR code and it pops up on your phone. Well that allows your restaurant to change menus relatively easy. They don’t have to worry about wiping them down. They don’t have to worry about them being out of date, those types of things. They can automatically be changed and allows us marketers to capture data. And we can get people to come back. We now know who they are and we can market to them directly on their phone, their smartphone, and you can get them to come back. I believe this is going to open up a whole new area of marketing and a whole new revenue channel for marketers, if you will. That will be, that’ll stay with us for quite a while.

Brian Erickson:
Yeah, that’s very interesting. So you’re talking about a couple, what I would call buckets, of trends that we’re looking at here. I mean, you have new real estate that we’re not thinking about from a marketing standpoint in terms of masks and PPE. And I think that’s a brilliant way to reframe something that is not so pleasant, right? You have these new mediums on social that younger generations are diving into and embracing, and again, as every generation does, just totally fluent in, that aren’t necessarily being capitalized. And you also have what I would view as maybe something that’s a little bit disconnected from both of those aspects on the measurement, right, where you’re looking at revenue per chair and other very specific metrics. How do you tie all of those together or is it possible to tie all of those together, you know, or is it just really, you kind of got to have faith that they’re going to have an impact and ultimately it’s going to have a longterm, upward trend on, on those metrics? How do you rectify those two different viewpoints?

Robert Powell:
Yeah. That’s why, I don’t know if they’re, I think they are, they work together. I don’t think they’re different. Nonetheless, you’ll still have the core metrics, conversion ratios, all those kinds of things. We just have new tools now.

So we’ve got new real estate to deal with, you know, where we’re, you know, it’s a fascinating time to be a marketer because we’ve got brand new challenge. Our widgets are the same and in the hospitality business or, you know, we’re still selling hotel rooms, still selling food, we’re still selling concerts, selling airline transportation. All of these things are still there at its core. We’re just having to be a little bit more creative and it’s forcing us to, as marketers, work with the operations guys and we’re coming up with truly important metrics. I mean, you know as well as I do, you spend a lot of time around metrics and you can almost have too many data points to look at and examine.

Well, now we’re forced to go down to what really matters and what really makes a difference. You know, what levers, tactical levers are we pulling that causes a change in behavior and develops that trust that we need within our current and future market segments.

Brian Erickson:
On a more granular level, how are you seeing marketing mixes shift tactically from maybe an original 2020 sort of plan? Or are you seeing, just kind of, I’m sure many of your clients came into things with a very clear idea of how they were going to allocate budgets and that just kind of got thrown out the window. So what tactics are becoming more important and what tactics are becoming less important?

Robert Powell:
I had a conversation with a client the other day and he says, “I don’t want to spend any money on awareness. I want to spend everything on action, on promotional, tactical messages and media spend” and I said, “That’s fantastic. I’m glad you’re thinking about that. But you still got to fill the top of the funnel.” He said, “okay, well, we’ve got to think differently about this.” So, what they’re doing and what we’re seeing and what I’m seeing with Cardinal Capital and what I’m doing with Cardinal Capital is I’m moving a lot more to earned media. And I’m doing a lot more towards digital content that is more, I don’t know what the word is yet. Maybe you can help me on this? More raw. Because a trend that I’m seeing in this area is getting a deep dive into people’s human, into their personality and to how they, how they act. How many Zoom calls have you been on that somebody is working out of their house and now you see what their house looks like, you know, and you get to see more and more interpersonal characteristics of that individual.

We’re seeing athletes publish, just because they got time, their own workout routines that kids are getting up at 8:00 AM or 6:00 AM, whatever, whenever they can to watch their favorite athlete on TV, do a workout routine. Well, this is endearing. This is a brand extension. This is how I’m seeing. If there is a mixed change, it will be more on the creative delivery of that. It is raw and I’m not sure we’ve got a name to couch that style in. This has got some legs to it. You’re seeing that with YouTube personalities blow up. You’re seeing that TikTok, of course, that’s in essence, an extension of this or a realization of this.

I’m making a confusing argument here for a very good question, but I’m seeing people going towards the more genuine, more one-to-one communications and allowing the consumer of those messages to see the personality and the multi-dimensions of that brand. Not just a message, if you will.

Brian Erickson:
Just staying in touch authentically flaws in all right. Just not trying to hide what’s actually there.

Robert Powell:
Yeah. I read an article or I was talking to somebody just the other day. I was in Minneapolis and I was talking to him, actually, one of your competitors. And they said they had a very large nationwide brand come to them and say, look, we need to create videos that don’t look like they were created. You know? And the guy who, he’s a principal of that agency, he’s scratching his head and he goes, “Rob, I’ve never had somebody tell me that.” And I said, “Well, what’s your production value?” He goes, “I’m getting an old handheld camera. And I’m going to walk around and see what we can do.” That’s the stuff that they’re getting challenged with, which I think that’s a pretty compelling way of looking at how we’re going to deliver these messages.

Brian Erickson:
The hospitality industry, no question, has been hit incredibly hard. And I guess if you could give one piece of advice to mid-market and SMB marketers in your industry right now, what would you say they should stay focused on?

Robert Powell:
If I had to boil it down to its lowest common denominator, focus on your known customers and get them back. We’re talking, share of wallet here and share of visits. Focus on the ones that have already made an investment in you. Be diligent, laser focus on that, be consistent and accurate of your information to that group. You’re going to survive, you will survive this and you’ll come out on top if you’re consistent about it, but you need to approach it, like, look, we’re in this together. We all have these challenges. We value you. Come on back. Those that have that mindset will win. So that’s what I’m telling our current customers, our clients, and the people that we’re advising. And that’s pretty much the message that I’m giving to my students as well.

Brian Erickson:
So now how would that translate? Obviously, we’re going through a time where we’re potentially going to experience record-breaking unemployment. And I think it’s going to be of disproportionate impact in industries that suffered like hospitality. So many marketers are going to find themselves in transition right now in this industry. So what skills would you say are most important? You know, you look at the one piece of advice you gave to people that are in the role. How do people who are searching for a new role emphasize their skillset in that area?

Robert Powell:
It’s strange because what appeals to me when I’m hiring someone may not appeal to the next person. I look for a creative pitch to me, how well can they find me? You know, I’m looking for the box of donuts that I opened the box and you know, the top of the donuts and there’s their resume or their CV is stuck to the top of the box of donuts. That, to me, you’re hired right there just for the creative execution of your resume, but enhancing the skill sets… A firm grasp on both the macro and the micro data points and understanding those is one element. You have to have a firm grasp on that. If you think you are weak in one of those areas, you know, you better shore that up with some level of some skill set and some knowledge base there.

The other piece, and I mentioned this to a kid, a young man that I’m mentoring the other day. And I said, if you’re going out there, there’s a fusion between marketing and technology and physical space design. If you can get those three and you learn how those three come together, you’re going to be able to deliver a hospitality experience that touches all five senses in a way that has not been done before. And if it has been done, it’s by the apex predators in this business. So if you can do those three while telling your story, you’re going to win.

Brian Erickson:
Awesome. Well, Rob, thank you so much for taking the time to talk with us today. Greatly appreciate it.

Robert Powell:
My pleasure.

Brian Erickson:
So make sure to check out Rob, on social media, look them up on LinkedIn. Cardinal Capital is definitely putting out some great content, as is Rob personally. This is Brian Erickson with Cardwell Beach. Thanks again for listening. And please make sure to check back for more senior marketers, sharing their perspectives on what marketing will look like in a post COVID-19 world.

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