Learn What (Alan) Brown can do for you

March 1, 2006

BY MICHAEL KRAUSS

Sitting down to lunch with Alan Brown you sense pent-up, positive energy. This is a CMO who gets it done. Yet, Brown also is a listener. He opens his presentations by asking his audience for questions.

“Is there anything you want me to talk about?” Brown asks. Right away I understand how it is he can sell books and music as well as he sells stocks and bonds: Brown’s a natural-born CMO.

Brown has served as CMO of Seattle-based Amazon.com Inc. and Chicago-based Nuveen Investments Inc. Now he’s taking his Internet and financial services pedigree and moving to new heights. After four years as CMO of Nuveen, he’s just been named executive vice president of the investment company, running Nuveen’s $14 billion global mutual fund business.

“I’ve lasted more than 23 months,” quips Brown, in reference to the limited average tenure of today’s corporate CMO.

How does he do it? The common thread is customer-centricity. Brown lives, breathes and thinks the concept--and the concept works.

He offers a diagram with concentric circles to illustrate that the customer is at the core of his thinking. He worries about the customer experience. He tries to personalize his offerings. He strives to build community around that customer. He’s on a neverending quest to invent new ways to delight the customer.

But Brown’s not shy in the boardroom. He knows the talk is about cutting marketing budgets, and hey, he’s a quantitative guy. He understands the numbers--but knows you can’t be a slave to cost-cutting.

“Why are we always on the defensive to justify our budgets?” he asks. He relates how a chief information officer happily reports a 20% reduction in the company’s total cost of ownership for expensive enterprise resource planning software. “That’s great,” he adds, “but I don’t know anyone that went out and bought a latte because the SAP solution’s total cost of ownership dropped 20%.”

His point is crystal clear: Marketers must remember that they’re in the customer advocacy business, not the cost containment business. Forget that fact, and you’ve lost.

“Where do customers come from?” Brown asks. “(From an) an article they saw? An ad they read? Word-of-mouth?”

“Think about your watch,” he goes on. “No one ever talks to you about the total cost of ownership (of personal accessories). They bought the watch because someone recommended it. They liked that brand.”

You do have to measure, he adds, “Just like the CFO, the CIO or the VP of operations. You are a businessperson with a marketing emphasis. The question is, ‘Where do customers come from?’ ”

Because he measures it, Brown knows customers arrive as a result of marketing actions. He measures ROI, but in his case, it’s return on imagination. He knows human emotions drive customer purchase more than total cost of ownership. He tracks return on experience: “You go to Starbucks and look at the great detail you see.” He measures return on adoption, getting customers to use a product or a service and the financial benefits that brings.

In fact, Brown calls himself a “measurement maniac,” but adds, “there are parts of the business where you have to take a chance.”

He points to Amazon Founder Jeff Bezos to make his point. Bezos and Brown were in a war room near Christmas time about five years ago. It was the height of the selling season--make or break time. Bezos turned to Brown and said, “Alan, we should offer used books.”

Brown cringes today like he did five years ago. He had top-line responsibility. He wanted to make his numbers, but there was Amazon’s founder saying, “It would be good for the customer.” Brown knew Bezos was right.

“We put it out there,” Brown says. Right next to the newest Steven King novel selling for $24.95, Amazon offered the used version. The publishers screamed. The authors screamed. Everyone screamed, but the customers loved it. And Brown notes that customers bought a used book and then three new books over the course of the year. That’s a pretty positive return on adoption.

“It was completely counterintuitive to a retailer, but it was customer-centric,” he says.

Brown loves to talk about the personalization of the Amazon Web site. He doesn’t harp on the complicated collaborative processing technology that enables Amazon to offer like-minded customers purchase suggestions. Instead, he points to pithy e-mails he has received from real customers. One delighted customer wrote Brown the following:

“As for the music you recommend, well, I am baffled. How do you know that Celine Dion is one of my favorite singers? Maybe there is a high correlation between middle-aged fat male Italian oceanographers and sweet and mellow young female Canadian singers? Or was it that she once teamed with Pavarotti?”

Fat or thin, the oceanographer was plainly delighted, and that’s Brown’s point.

At Nuveen, Brown’s been applying his customer-centric philosophy to selling stocks, bonds and retirement security. Nuveen is a 108-year-old financial services firm known for trust, integrity and conservatism. Brown’s job is to help the company grow without losing its roots. His mantra is “conservative ingenuity.” He’s helping Nuveen change while staying true to its heritage. So far it’s working.

“People who invest don’t invest for returns,” Brown says. “They invest because they have children who they want to put through college. There are always strong and powerful human emotions that drive why people put money with us or any other firm. Our promise to them is, we are never going to be No. 1, but over the long haul with conservative ingenuity, we’ll have investment quality.”

Once again, Brown is customer-centric. He’s personalizing offerings to Nuveen’s customers. He’s building community, and he’s working to surprise and delight the customer. Those are the lessons Brown learned at Amazon. “It’s about marketing expertise. You can take the marketing side of what you’ve done and apply it in very different businesses,” he says. “There’s no ceiling to what you can do.”

Brown’s living proof of that.

Michael Krauss is a partner with Marion Consulting Partners based in Highland Park, Ill., and can be reached at Michael.Krauss@Marionpartners.com or news@ama.org.