The CMO will make the difference
How does one go about reinventing a traditional brand? How important is sustainability and what skills do brand managers need? Florian Haller, CEO Serviceplan Group, in an interview with Susan Schramm, CMO McDonald's Germany.
Florian Haller: Two years ago, you ushered in a new era of brand management at McDonald’s. How does one go about reinventing a traditional brand?
Susan Schramm: I think the secret – and not just for McDonald’s – is not to allow a brand to become a “traditional brand” in the first place. You have to permanently breathe new life into it. At McDonald’s we’re constantly asking ourselves how we can do things better, how we can look at things in a different way. McDonald’s is a brand that manages to move with the times and keep an eye on its customers’ needs. In brand management, you have to really take a close look at the everyday lives of your target group. There can also be a certain element of tradition in the consistency of change and development.
Florian Haller: It’s a well-known fact that digitalisation is the biggest driver of change. What role does it play in the rethinking of a fast-food brand?
Susan Schramm: At first sight, digitalisation doesn’t seem to really apply to a company like McDonald’s, because the act of eating is always analogue. But losing sight of the digitality in our lives would be a huge mistake for us as a brand. Our extensive digitalisation – with our ordering kiosks, app, CRM system and lots more besides – has fundamentally changed our service concept, our production options and our overall business model. Especially now, in the crisis, focusing on our digital further development is really paying off for us as a brand. We are seeing that the path we have chosen was the right one. This means that we now have completely different ways to communicate with our target groups and also offer them virtually contactless services.
Florian Haller: What form does digitalisation take at McDonald’s?
Susan Schramm: Launching our app, which I can use here as an example, has benefited us greatly. Sure, there’s nothing revolutionary about an app in itself. But in next to no time we gained over 15 million registered users and therefore also the opportunity to learn something about our customers and target them effectively. And it means we now also have a tool that we can use to make perfectly tailored offers for specific target groups. As a company, keeping up with the times is very important, particularly for our target groups in their teens and 20s. The app gives us a form of communication that we can use to reach them in the digital environment that is such an integral part of their daily lives. And the “Mobile Order & Pay” feature that is integrated in the app is proving extremely useful during the current crisis.
Florian Haller: Would you say that McDonald’s has developed from a mass brand into a personalised one?
Susan Schramm: We are definitely getting there. Now that we can appeal to our customers in an increasingly personalised way, our communication with them is completely different and we can build up a sense of familiarity and trust. The only way to find out who our customers were in the past was through research. In future we won’t only know who visits us, but will also be able to enter into a 1:1 dialogue with them and provide them with individualised offers.
Florian Haller: Will the coronavirus crisis leave a permanent mark, or will things eventually get back to normal?
Susan Schramm: I don’t believe that there will be a “back to normal”. We have all learnt a lot from the crisis, I think, and it is precisely these findings that we will take with us into the future. What I could envisage is a shift towards more sustainable consumption, to a greater sense of responsibility and appreciation of things.
Florian Haller: So will sustainability and purpose remain megatrends?
Susan Schramm: I have the feeling that these topics will become even more relevant. The pandemic has shown us that we humans are lot more vulnerable than we thought. Our entire generation didn’t ever imagine or expect such a crisis to happen to them. We are suddenly realising that a lot of things we took for granted are being questioned and can fall asunder quickly. So in that respect, I believe that sustainability and values will gain in significance – even though we are seeing a certain discrepancy between morals and consumption. And if a brand wants to be relevant in the long term, it has to face up to that. So as a company of course we have to look at what our customers want and what is actually being purchased and consumed.
Florian Haller: McDonald’s isn’t a brand that most people would associate with sustainability. How do you want to change that?
Susan Schramm: By moving with the times and constantly developing, we can always ensure that the measures are visible and transparent. It all comes down to authenticity, i.e. the things that you can credibly represent. The McDonald’s of 2020 is a far cry from the McDonald’s of 30 years ago. A lot has been achieved: more sustainable packaging, a vegan burger, free-range eggs and lots more. We know that certain things cannot be changed from one day to the next, but that it takes time – for example in the case of supply chains that have to be built up. There are a lot of small steps that we are taking with a view to becoming better in the long term.
Florian Haller: In an interview you once said that loudness wasn’t your thing. But in this day and age, how can you be heard without being loud?
Susan Schramm: A lot of brands can be loud – sometimes all they need for that is the right budget. But many loud brands are still not very convincing and aren’t necessarily successful either. And volume alone doesn’t enable you to get your message to stick in people’s minds, not by a long chalk. Relevance and authenticity are more important here. There are many great ideas that start out small and then often spread a lot more successfully than if you were to just shout them from the rooftops.
Florian Haller: Speaking of which, how do you use social media as a brand?
Susan Schramm: We use a lot of social media channels to communicate with our customers, but it’s about keeping the dialogue going here too. Marketing messages don’t work in the same way on all platforms and in terms of channel-adequate messaging, we have experienced an enormous learning curve in the past few years. Just because something works on Instagram, that doesn’t mean it necessarily also has to work on TikTok. A lot of work and orchestration are required: what is the target group, on which channel, how should we target them and what messages are relevant?
Florian Haller: But when it comes to social media, there is still the question of how you scale all of that. You need a widespread impact, after all…
Susan Schramm: That’s why I always say that social media and digitalisation are absolutely indispensable. But simply writing off TV, outdoor and print advertising is the wrong approach in my opinion. Conventional media still have a very strong impact and are moving more towards interaction with online and social media. You need to find the right media mix: which medium is the best for which purpose? I’m a firm believer that success all comes down to having the right mix.
Florian Haller: Does a brand need one big idea, or does it make more sense to appeal to the different target groups on different platforms with lots of different ideas?
Susan Schramm: If I have an amazing idea that works on all platforms then that one idea is enough. But that’s rarely the case, which is why you usually need lots of ideas. You have to keep surprising people, while always keeping your eye on the current zeitgeist, trends, medium and target group. And also make sure that all of that is in harmony with the brand’s core. The trick is to ensure that the brand is recognisable at all touchpoints in the long term, without always being the same.
Florian Haller: What do you see as the core of your role as CMO?
Susan Schramm: I have a very young team made up of lots of great people – and it is my job as CMO to motivate and inspire them and to create an environment in which employees are confident enough to develop things and also themselves. Ideally, I am the person who has the vision for the brand and says where we need to be heading. And then we develop the path to that goal together.
Florian Haller: Is working with the younger generation different these days?
Susan Schramm: It used to be about accumulating knowledge and then passing it on to the next generation. But it has become more of a give and take. As an experienced CMO, you bring a certain calmness to a situation – you are able to analyse things and recognise opportunities and set out guidelines in certain areas. But there are also areas in which I learn an incredible amount from the young people I work with, for example when new channels gain in relevance among the young target group. That’s a lot of fun and always exciting.
Florian Haller: Do you expect the CMO to have a more or a less important role in companies in the future?
Susan Schramm: I’m an optimist as far as that’s concerned. Basically, I think the CMO will gain in significance, although it does of course depend a little on the company structure. McDonald’s, for example, is very much a marketing-oriented company, and we as the marketing team are not only responsible for the brand but are also measured by sales and have a responsibility for them. We get the figures every morning at 8:00 am, and that’s when I can see how our products and offers are being received by the customers. That success is much more quantifiable than if I am “just” responsible for shaping the brand. And it means I have more of an influence on the company’s profits and direction.
Florian Haller: One point is certainly also that digitalisation is breaking down barriers to market entry. That is levelling the playing field, which in turn is leading to marketing generally becoming more important.
Susan Schramm: It’s true that digitalisation is making it more important to develop your brand and clearly differentiate yourself from the competition. If you want to stand out, you have to engage with new channels and ways of interacting with the target groups. The greatest challenge here is creating instant recognition value and communicating it as individually as possible at the same time. A lot of people underestimate how difficult it is to develop a brand and keep it relevant and modern. So I believe that intelligent marketing will continue to make the difference here in the long run.
Florian Haller: Does a CMO need to be a forward-thinker when it comes to innovation?
Susan Schramm: Ideally, the marketing team should bring creativity and a new way of thinking to the company. I think all companies would benefit from giving their CMOs the freedom to innovate – perhaps even the formal responsibility for innovations.
Florian Haller: What will be the major brand management issues in the post-coronavirus world?
Susan Schramm: The main issue in our post-pandemic future will be what kind of an effect the crisis is having on consumers and consumer behaviour, and how brands can communicate accordingly. That’s not really something that anyone can predict yet. Security and trust are important factors here. It will be important to understand what your own brand stands for in this new context. Reconciling both those factors in the future will be quite a challenge.
Florian Haller: What skills do brand managers need to bring to the table to achieve this?
Susan Schramm: That can only be achieved with a certain amount of empathy, a quality that is becoming more and more important. If I want to understand how people tick and how my communication is being received, then I can research everything and prove it with data. But I am still convinced that it won’t work without empathy. A CMO should also have the guts to be able to make certain decisions and think differently. It’s important to keep an open mind. And that includes not being too self-important. I think that this openness and the ability to listen to others are extremely important qualities for someone who works in marketing.
This article was first published in our Serviceplan Group TWELVE magazine.
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