CMO 2.0 Conversation with Kodak’s Jeff Hayzlett

This interview was held on January 30, 2009. To listen to the podcast click here

Excerpts from the Interview:

On Social Media: “I would not even call it social media; I’d just call it scalable media…Social media is those things where people gather.  The Internet’s just given it a huge scale.  Before you had some geeky guys who always wanted to get together and dress up like a Klingon, you know from Star Trek, Where there might be one or two of those in the local high school, now they can find thousands or millions of those guys all around the world with these new tools.”

On Branded Content and Product Placement: “I do not like the old product placement where I pay someone, $100,000 or a million or two or three depending on what it is and they hold up my camera in the movie or a TV show. I do not like that kind of product placement, well I mean I like it, but I do not think I should have to pay for it.  And so what we try and do is to make Kodak part of the story.”

On Second Life: “We saw people rushing over to Second Life and I am saying to myself where is the business application for you?  Is it truly there?”

On Branding and Buzz Marketing: “A lot of people say marketing well it’s to build brand - blah, blah, blah, blah, blah. That’s the outcome, not the purpose, okay?  When I first stepped into the job, people said, “Well we’ve got to do some buzz marketing.”  What the heck’s ‘buzz marketing’? I mean I know what it is, but I said, “Guys, you’re here to sell product, okay?””

On How to Treat Customers: “CRM data today tells me about you; I can treat you like a special customer.  And that’s what you deserve. That is the way we as humans want to be treated.”

On Trying Things Out: “You know, I have a saying inside the company with the marketing team.  When they say, “Jeff we’re going to try this and we’re a little scared,” or whatever it might be, I say – well my question to them is, “Is anyone going to die?” And if no one’s going to die then I say “give it a shot.””

On Measurements: “You know there are some tools that you can use along those lines but I’m not a huge, huge believer. I think you know, Francois. I mean in your gut, you know… all marketing does exist to drive sales.”

On Kodak cameras: “They actually make you look thinner. That is what I tell everybody. You know other cameras, other non-Kodak brands add 10, 15 pounds to you right off the bat.”

CMO 2.0 Conversations – an Interview with BestBuy CMO Barry Judge

The following is an edited transcript of the CMO 2.0 conversation between Francois Gossieaux and Kodak’s CMO Jeff Hayzlett. We periodically run those CMO 2.0 conversations for the Marketing 2.0 group. Check there for updates on upcoming CMO 2.0 Conversations. This interview was held on 01/31/09. To Download a PDF version of the transcript, please

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Francois: Today’s conversation is with Jeff Hayzlett, CMO at Kodak. Jeff has been with Kodak just about three years now and was named marketer of the year in 2008 by BtoB Magazine.

Jeff, the first area of discussion that I thought would be interesting surrounds the transformation that Kodak has gone through over the past few years. Clay Christensen, architect of and the world’s foremost authority on disruptive innovation, often talks about Kodak in his discussions. He has said that for a company to go through a transformation like Kodak has over the last few years that company has to basically have a near death experience. Can you talk about just how close Kodak came to near death and maybe help the audience understand the process?

Jeff: I have talked with Clay on a number of occasions but to better understand where we as a company were in this transformative path, the reality of the situation came to light through a session with Jim Collins, author of Good to Great.  Jim had a new book coming out which talks about the six stages of decline. I was one of many marketers asked to review portions of the book and some of the concepts. I reviewed his list of the six stages of decline and then he asked what do you think is the furthest the companies that you know could go in these stages and still come back. Jim felt that most companies could get to stage five or five and a half.  When I reviewed the examples he provided I put Kodak at five, five and a half.  We really went to that level. So, to answer the initial question we were very close to it in terms of that turnaround, which is amazing.

Kodak has been described by the Financial Times as the biggest turnaround in American business history. Obviously with the recession and the economy today, we just like most companies have issues that we are facing but we are very well positioned. If we had not gone through the transformation of the last five years, it would be much more difficult for us. One of our employees actually recognized this at an employee meeting just yesterday. He said, “we’re so glad that we actually went through the transformation that we did because now we are well suited.” The reality is that Kodak is a new company. We became a total new company.

Francois: Yes, I can definitely see that you are a new company. In my previous positions I had Kodak as both a competitor and a customer. Today there really is no comparison. It is an unbelievable brand. It no longer stands for what we believed it did years ago. Was the brand an asset or a liability?

Jeff: you could look at the brand in both ways, an asset and a liability.  We saw an asset that, quite frankly, could have been sold. That is one of the things you could look at because sometimes the actual brand value of the company is worth more than the company itself. But saying that, we are still Kodak, and at the roots of Kodak is imaging science and materials science.  So that is where we play.

The heart of the brand is trust. In both the consumer and BtoB business today it is all about that trust and using the celebratory aspect of the brand. Celebrations, events and activities encompass our graphics business. When we print the materials or help printers print their materials, we hold people’s visions in our hands.

I would like to give you a couple of facts about some the transformation because I think it might help drive some of the audience questions. We describe it as a new Kodak. I refer to it as Kodak 2.0. We have 11 digital product lines, which now account for two thirds of our revenue. More than half of those did not exist in Kodak four years ago.

Four years ago we were primarily called a film or traditional media company. Today, 19 products account for all our revenue. Each of those products is number one, two or three in the marketplace. And once again, 11 of those products are digital, which did not exist and those digital products account for two thirds of our revenue.

Sixty percent of our business is now BtoB. Four years ago that was thirty percent. Sixty percent of our sales are outside of the United States. Most companies are trying to get into other emerging markets. We are already there. To give you an example, Kodak has been in China since 1982.

So there have been a lot of different changes. Let me tell you a bit about the number of people.  Sixty five percent of the people that work for us today were not here four years ago.

Francois: Wow, interesting point of reference.

Jeff: So the pendulum completely swung from one side way over to the other side. Most companies do not survive the transformations we have made.  Switching their product line around, from traditional to digital; switching from a primarily BtoC company to a BtoB company; and finally having 65% of their people be new. These are the hurdles that we went through. It was horrendous change and we called it “transformation fatigue”. But we did it.

Francois: And you were not the first. You were relatively late getting into the digital market.

Jeff: We were relatively late but that goes to the strength of the brand. A good example of that is the fact that we are number one in cameras, digital cameras, right now in U.S.  Kodak invented the digital camera back in 1975/1976. We just did not think it was going to catch on.

Francois: I did not know that.

Jeff: We were so rooted in our film background that we did not push those things out. Today, we are a much faster company and that is a theme for us internally. Everybody talks about being FAST, which is Focus, Accountability, Simplicity and Trust. And then that really means, “Hey even if we screw up let’s do it faster or quicker.” Because you have to bring speed to the market and for a long time Kodak was not known for speed to market.

Francois: I know, I see that you are bringing products to market in months where it used to take years.

Jeff: Exactly, a good example is our new Zi6, which is a pretty hot seller. It is our HD pocket video cam, which shoots HD 60 VGA in still. It was five months to market.

Francois: Just five months to market!  Incredible.

Jeff: Yes and in the past, it probably would have taken us five years.  I joke with our team about that but it is a major change.

Francois: Let’s talk a bit about your team and some other changes. How do you handle your staff being leaner, your budgets being leaner and yet your products are now coming to market in five months instead of five years? How do you deal with the changes in terms of being ready for launch and having everything lined up so that you will have a high chance of a successful product introduction?

Jeff: That sounds like the outline of my next staff meeting! It is exactly what we discuss. Francois, it is a mindset. It is about a mood inside the company. You can sit around and think, “Oh my gosh, I wish it was like it used to be”. I mean, I’d like to look like I used to when I was 20, but I’m not 20 anymore.

Francois: You still look good, though!

Jeff: Well I appreciate that but you know with Kodak there is no such thing as a bad picture. Unfortunately, I am not the best looking guy; I make our batteries look sexy. Again, it is really based around a mood or a mindset. That is what has been really great for us in this whole notion of FAST. Really saying to everybody, you know, you are in power to make a difference. You are in power to move things with great speed.

That is what FAST shows. Whether it is our Focus around what we do; our Accountability where we are delivering on our promise. Our “S” stands for simplicity in terms of challenging the status quo, ask questions, make it simpler. If it looks difficult, change it; make it easier.  And then, “T” is trust. You did not know this person because they are brand new but Trust them, that is the position they are supposed to be playing. And then have a healthy debate around it, which has been great for our company because it has led to a much leaner, meaner company.

We have had to make changes. We have reduced. I am one of the first CMO’s in this company that has ever stepped in and started cutting budgets and saying look, we can get by with less. We can do things. We can shift with different kinds of techniques, which I am sure we will talk about later, changing. All of this was happening and as you know, we were also going through a marketing transformation.

Francois: That is a good segue for the next set of questions. I would like to dig deeper into your opinions on how marketing has changed. Because I think it must have changed tremendously for you, not just for everybody else. Not only has Kodak become digital, your customers have gone digital, they take recommendations from one another and they don’ t necessarily listen to the company as much.  How is that affecting the ways you are making decisions around your marketing mix and how has it changed?

Jeff: It has been tough. I mean, without any question, I think, it has been tough for all of us. At the same time we were making the transformation, marketing has also had an upheaval. You talk about Marketing 2.0. A number of people have pegged that in the last three/four years. So you know the shift has occurred from what I would call broadcast to a narrowcast model with the advent of most digital tools that we have out there today. Whether it is social media, direct mail, or email and you know Perls and everything else that is out there.

So it has moved from what has been a traditional broadcast model.  I use to know businesses, at least small businesses, where most of their money was spent with Yellow Page adds. That is where they spent a majority of their budget.  And that is now changed. Even a small business has to look at search engines and Perl campaigns and emails and spam filter and everything else that goes into it.

So a lot of that has also changed for Kodak - the way in which we market. We used to be one of the biggest supporters of NASCAR; one of the biggest supporters of the Olympics. And we’ve made the changes in that and are saying, “Look, no, these are not the tools that really give us the return for where we want to be as a business.” And so we have had to alter a lot of that activity.

Francois: So you still do a lot of product placement, and you probably should as neuroscientists have found that product placement actually works. But how important is that – or how has that changed in terms of importance to your marketing mix? And then maybe could you elaborate on branded content and how you wanted branded content to become part of other people’s story?

Jeff: Kodak has been touted as a real pioneer in this area and in doing it differently. I do not like the old product placement where I pay someone, $100,000 or a million or two or three depending on what it is and they hold up my camera in the movie or a TV show. I do not like that kind of product placement, well I mean I like it, but I do not think I should have to pay for it. And so what we try and do is to make Kodak part of the story.   We have done that successfully and now we have a balance.

A good example in the U.S. is Celebrity Apprentice with Donald Trump.  It has been a good franchise. He had about six years of that franchise with just regular contestants and then in his seventh season he switched over to a celebrity version. Kodak participated with our new consumer inkjet printer, which is a value proposition around “pricey ink stinks.”

The way the market works today is that in the inkjet market they sell you a printer very inexpensively and then they get you with the ink.  That is what the big ink companies do. In our model we say, I think you will pay a fair price for the printer and yet we will sell you the ink at a much more reduced price. A competitor’s ink cartridge might cost you $60; ours will cost you $9.99 for black and $14.99 for color; it saves the customers up to $150 per year.

So we went to Trump and the Celebrity Apprentice and said, “look, we think the value proposition’s so simple even celebrities will understand it.”  You know the type of people who have their assistants to dial the phone for them and take their dogs of a walk. So, we made that part of the Celebrity Apprentice story and it became such a hit that they actually asked us back on for the finale. During that show they mentioned our name, or the name of our product, every 14 seconds.  Now it was a dream come true from a marketing perspective. It was great for Kodak and it doubled our sales. People got it.

What we did was we made the ink story around “pricey ink stinks” or “firing pricey ink.” And so it became part of the lexicon. People are still talking about that particular branded content experience.

And the story had legs. We did an online version; we did print versions; we used it in the stores, showing the show on the televisions as you walked into a Best Buy for instance. So it had more legs than just a day.  It was more than just holding up the product and smiling. We made it part of the story.  So we look for things like that.

We have other shows that we are doing. Trading Spaces is one. We integrated as part of five different shows. And then, we made our products, whether it was our cameras or printers part of the story. We made Kodak the center and it became a very, very, very positive thing for Kodak and something we really like. So it is a different way of doing it.

Francois: Yes, very interesting. Earlier you talked about social media and how that has impacted the changes. And of course, I totally agree. I think that social media is what changed, you know, the nature of marketing in many ways. But you are also a big social media user yourself; you Twitter, you’re on Facebook and you have a chief blogger.

How does that play into your marketing mix? Also, could you talk a little about whether or not you think there are scalability issues with social media marketing?

Jeff: Well, I think that’s the real thing. I would not even call it social media; I’d just call it scalable media. Social media has always been around. Social media is the Kiwanis club; it is the local Chamber of Commerce mixers; it is those things where people gather. The Internet’s just given it a huge scale. Before you had some geeky guys who always wanted to get together and dress up like a Klingon, you know from Star Trek, where there might be one or two of those in the local high school, now they can find thousands or millions of those guys all around the world with these new tools. So this is to me, just no different than a fax machine. Now I am not diminishing its importance. I’m just telling you it’s given it scale and that is what social media is about.

So how do you use those tools? Because you can still go out with a social media tool like Facebook, put something up and only get 200 or 300 people to follow you. I mean, you have to work at it. You have to make it a value. It has to have real teeth to it or it is not going to work.

But you know, we’ve embraced that and we’ve had to teach a lot of our people how to use that.

We have one of the biggest social networks in the world, which is the Kodak Gallery. We have over 92 million users on that gallery that share photos. So we have a little bit of history in this. And then we have over 5 billion photographs – high-resolution photographs – more than all of the other ones combined. We store and save and the people use and share on the Kodak Gallery.

We have a lot of experience but let’s use Facebook as an example because it is a great place. We have roughly 27,000 employees at Kodak and about 10% of those employees are on Facebook. Now you can go and you can search and find them. And I have about 900, I think, or 1,000 employees who now follow me on Facebook, which is great because it gives me an unfettered way to be able to get to those guys on a regular basis, and they get it. And then other people follow us.

Now we’ve also asked all of our marketing employees to get on Facebook; to learn it, know it, use it. Twitter is another example where we do that. We have a chief blogger that I appointed about a year ago, Jenny Cisney, a young, very talented professional. I think she’s the first female chief blogger ever appointed. So we’ve led the way. And you know Kodak’s got some pretty good blogs. We have, A Thousand Words. We used to have A Thousand Nerds, which was for our technology community. And then also our Plugged In, which is a more product oriented blog. We use those tools pretty effectively and our employees are learning all the time. It is something that you just need to engage in. I mean, there are some pitfalls with using some of these tools, but there is also a lot of good benefits.

Francois: I totally agree with you that social media is not something new. It’s just the technology platform that has enabled us to behave the way that we were hardwired to behave for generations and generations.

Jeff: Yes, it’s great.  I get on Facebook. It’s almost addictive. I have my friends list. I have a friends list for my family. So I click on that and I get to see what my son’s doing because he lives in another state. I get to see what my cousins, nephews, things like that are doing. I can check up on them. I can see if everything’s going okay. And then I have other friend’s lists that I monitor, which are important for me to monitor because I want to stay connected. I don’t think I would stay connected in today’s society like I would without that kind of tool. So I’m just hoping that Facebook and other companies like them can monetize themselves so that they can, you know, keep their scale going.

Francois: I agree. We do a big study every year with Deloitte and the Society for New Communication Research on how companies are leveraging communities and social networks as part of their businesses. We are just about to launch the second version of it.  In the first version we interviewed about 140 companies. It didn’t take us long to come up with the conclusion that, ‘Wait, this is nothing new,’ and so we called the report the Tribalization of Business.

Jeff: Oh yes. I understand but at the same time, I watch companies that make big mistakes. We saw people rushing over to Second Life and I am saying to myself where is the business application for you? Is it truly there? Now for some people I can see that it would work. The W hotel, part of the Starwood Hotels uses it fairly effectively. They setup lobbies and then they actually move the fireplace and the couches around based on people’s usage. SO you might go to a hotel and link up in a bar or something along those lines.

But by and large you have to look at these tools and ask, “Are they really worth it for you?” Some of them I say, yes and others I say no. For Kodak I don’t see the value for us, offering fake products in a fake world for fake people. But for many people, if you like Second Life, then knock yourself out.

I just don’t see us rushing to that. Although I did have a group of people saying, “We have to get on there. We have to get on there.” I said, “Well when my mother gets on it, or whoever the customer set might be, then I’ll be interested.”

Jeff: My mother’s on Facebook and I get that. Here is a – well I don’t want to give her age away – but she’s retired and she’s on Facebook. So something is catching on there. My daughter, her granddaughter is on there and so now you’ve got something cross-generational and that makes sense for me.

Francois: What you just described is when people are looking at social media as potential new channels. I feel that is not the best way to look at it. I think you are looking at it the right way, which is, this behavior has been around forever. You know, it’s the social – I talk about the social messiness that is invading all of our business processes and it’s a matter of embracing it when it makes sense.

Jeff: Yes, exactly. And it’s a tool. It’s not the destination. It’s a way in which you reach people. I think a lot of companies make big mistakes on what I like to call the ‘all in’ syndrome. You know, like they’re playing Texas Hold‘em poker and they go all in when they shouldn’t be going all in.  What I mean by that is that they use one tool or another and that’s all they do. You can’t do that today. You’ve got to use blended campaigns.

I was criticized one time on YouTube. I was asked to give a speech on the power of printing. Not the power of the Internet, not the power of the fax machine, not the power of laser technology, but the power of print. This guy went on to criticize me about the speech and he did not have all the facts. I was asked to talk about the power of printing and that is what I talked about.

The point I am making is that I need all of these tools. I need print; I need online; I need social networks; I need broadcasts; I need radio; I need newspaper inserts; and I need direct mail. You have got to use all tools.

As a marketer I’ve got to blend the campaigns and find different ways to reach different people based on them, because I believe in segments of one today, not segments of this group or that group.  CRM data today tells me about you; I can treat you like a special customer. And that’s what you deserve. That is the way we as humans want to be treated. When someone picks up an Apple iPod or an iPhone, they think that product’s been made just for them. They have a personal attachment to that product. That is what a marketer really has to do – make it a personal attachment.

Francois: Yes. I agree. You talked a little bit about the fact that you had to train people and I think a lot of companies are struggling with how best to train in social media.  Companies like Microsoft, Sun, Cisco and IBM, put out guidelines for what the employees should do when they get into the social media space. Some company guidelines are liberal; they say, behave well, don’t embarrass us, and everybody can respond. But in a lot of industries the culture is just not like that. So what do people do?

You talked about the fact that you had to train your people. Did you identify the people that would be your first responders? Did you let people raise their hand and become part of it? How do you decide who responds, or do you even get involved in controlling who engages in a social media space?

Jeff : I don’t think you can control who engages in that – and you don’t want to. I think that’s the cool nature of social media. I mean you basically want those who are zealots and free thinkers because that’s the way that is; the space evolves. It is like people who put their brand out on the Internet and try to control every aspect. Guess what, you can’t. There’s no way you can control that.

But for your own teams, you can at least start to build some rules. And we are certainly having some challenges that we didn’t think about. So when you do have an employee who is, say, in the marketing team and lives in China and all of a sudden they start putting, Kodak as part of their name and their blog you have to be aware of it. I had someone here in the United States who used Kodak as part of their name and all of a sudden they started writing negative comments about the Presidential candidates, well you have to step in and say “do you realize what you’re doing? If you’re going to use the company name or brand, if you’re going to have that as part of it here are some things we want you to know about.” But outside of that, can you really do much?

I’ve also reached out to employees who are on Facebook and some have written me back saying, “Jeff,” you know, “thank you. I like you, but I don’t want to be your friend. I want to use this for my own personal use and not for my business.”  Well that’s cool. So you have that side of it as well. You just have to recognize that.

Francois: Yes, it’s like my 13-year old son kicking me off of his Facebook friends.

Jeff : Well you’re going to have to come up with a fake name, then, and get back on. So you can watch what he’s doing. As a parent it’s tough sometimes to let go.  And that’s a good example. As a marketer I have to do the same thing. I have to treat it like my children. How do I know when to let go, right?

Francois: Yes, exactly.

Jeff:  And I guess that’s kind of the way you can approach social media. People are going to make mistakes. You know, I have a saying inside the company with the marketing team. When they say, “Jeff we’re going to try this and we’re a little scared,” or whatever it might be, I say – well my question to them is, “Is anyone going to die?” And if no one’s going to die then I say give it a shot.

Now the attorneys have asked me to add, “Are any laws being broken?” so I know to ask that one now, too. So as long as no one’s going to die and no laws are being broken, then give it a shot. When they say, “Well what happens when we mess up?” I say, “Well then you mess up but you know no one died.   And we’ve made some mistakes; I’ve made them a lot but that’s what makes you better, making more mistakes.

I did something one time publicly. I did something I shouldn’t have done; said something in a way I shouldn’t have said because I get excited.  And my boss pulls me in and says, “You shouldn’t have done that.” And I said, “Well you told me to push the edge,” you know, “push the edge, push the edge.” He goes, “Yes, but I didn’t say go over it.” And I said, “Well now we know where it’s at.”

Francois: That’s interesting. And you’re so right that you cannot control it.  I mean that’s a fact. And you know, one of the reasons why you can’t control it is because people will do whatever they want.  The other reason is people are going to increasingly bring their own tools to work.  We have a client, and they have thousands of people in their IT department who cannot access Twitter or any of the social networking sites.  And what are they doing? They’re looking to help one another on Twitter on their iPhone.

Jeff: Well but at the same time, employees have got to be careful too, because they can be stupid. I had, an employee who was out for a while and they said they couldn’t work at home, couldn’t do this and so forth, but yet I was reading that person’s Twitters about going to this function or that function. So, you catch people doing that or they badmouth it like, “So-and-so’s an idiot” and they are talking about the management team and so forth like that.

So you ask, what are they, stupid? Are they just not thinking? They think they have anonymity here? They don’t. So we monitor those things. Here’s another example I found on how you can use Twitter. We monitor Twitter all the time for complaints. And you know, we don’t pick up a lot because – I mean we do get complaints like every company. It’s just the nature of the game, you can’t please everybody. But we find people who are having problems, can’t get through to customer service, or they just get caught up because in a big company you can get caught up. And we’ll see those and we’ll get them personal attention and they love it. So you engage. And that’s what using social media tools is really about for marketers; engaging.

Francois: Yes. I have a question from the audience around social media. How do you measure success and impact?

Jeff : You know there’s some tools that you can use along those lines but I’m not a huge, huge believer. I think you know, Francois. I mean in your gut, you know.  I spoke at DLB in Germany and went and my team searched and there were like 26 tweets about my speech as I was delivering it; they were tweeting from the audience and things like that. So is that getting across? Did it get picked up? You know, do things like that work?

A great example was our use of Malia, who is Obama’s daughter. She used a Kodak camera during the Inauguration. We caught it and within ten minutes, started Twittering about it. The Tweets and the story then got picked up by the New York Times and it also got picked up by numerous blogs. So you’ve got the First Lady, the First Daughter and now we’ve got the First Camera. So you know when it works. We know when it works.

Jeff : Now the key is – I always talk with my team about, “Alright, how many zeros has it got?” and at first they said, “What do you mean?” I said, “I like things that have lots of zeros behind the number.” So if it’s a one or it’s a nine, I just like to see lots of zeros behind it because that means I’ve got a greater impact on the impressions.

We did something with the Inauguration. We’ve got a brand new website, so if people haven’t seen it I encourage you to go to kodak.com. We’ve done this new language called black fade, and you’ll see it; it is very iconic because Kodak should be iconic. When you think about imaging, I mean, you should think about Kodak. When you think about picture, most people talk about Kodak moments and so forth.

And so I wanted to get back to that because our website over the last few years has really migrated to something – it was very loud and looked more like a yard sale or a bazaar, because we were just hawking products and using it as more of a retail tool. And I said, “No, no, no. We have to go stand for something.” And so when I stepped into this job I said I want the pages redesigned and I want this up within x many months. And we did it in a very short time.

There’s a gentleman by the name of Paul Porter who led that for us and set up our company. He passed away about a week and a half ago. And this week (January 2009) we actually have a tribute on the site of him and of some of his very special images. So I encourage people to go to the site. But during the Inauguration week, when we really were at the height of the launch of this product, we went to Bob McNeely who’s a White House photographer. He was the White House photographer for Clinton and he’s now doing the Obama photo book; the official Obama photo book, which Kodak is participating in.

Bob McNeely gave us some exclusive images of the Inauguration and the event and we posted those on the site. On the Monday before the Inauguration we also posted some old photos of Martin Luther King also from a well-known photographer.  And these images are exclusive to kodak.com.  Each week we’re changing those images, and hopefully every day as we go. You can click on it; find out more information about the photo, what’s special about it and everything there is to know about the photo. And that’s what I think Kodak’s about. It was really cool.

But during the Inauguration week, we had 174 million impressions; 174 million impressions. Now I don’t need any tool to tell me that worked. I mean that just tells me the number of impressions but I know it worked. And we know how many tweets were done on it, how many posts were done on it, how many blogs were done on it. And then how many hard newspaper stories were done on it. It’s pretty cool.

Francois: Yes, I like your pragmatic way of looking at measurement. I listened to some of your other speeches and podcasts before our conversation and I liked the way that you try to bring as much down to ‘how is it impacting sales?’ And again, it’s something that we found in the Tribalization of Business Study, too. That is, the companies that were most happy with how their community initiatives and all of the social media were working, were those that were measuring the impact of those things the exact same way as you would measure the impact of other programs on that same business process.

Jeff: Yes and it works. I mean make it simple. I know in the States and in the U.K. for instance, we ran infomercials. And when we put those infomercials into play, I saw the sales jump immediately. And then I started moving the infomercials or the spots. We did a long form and short form of those spots, and I moved them into various markets. And I actually could track the sales going up.  So you know – all marketing does exist to drive sales.

Francois: Exactly.

Jeff : A lot of people say marketing well it’s to build brand - blah, blah, blah, blah, blah. That’s the outcome, not the purpose, okay?  When I first stepped into the job, people said, “Well we’ve got to do some buzz marketing.”  What the heck’s ‘buzz marketing’? I mean I know what it is, but I said, “Guys, you’re here to sell product, okay?”

Selling product creates the buzz about our brand. People will start talking.”  I said, “You mention buzz marketing to me one more time, buzz yourself out the door.”  We’re here to sell stuff and then you build the brand.  The brand is nothing but a promise to the customer that’s delivered but you can’t deliver it until they buy it.

Francois: Yes.

Jeff : Okay? So that’s what you have to start to do. And we just keep things simple, or at least try to keep things simple. I guess that’s part of our FAST that we talked about earlier.

Francois: That makes so much sense. I had another client, another retailer, and they were launching communities and they had a big get-together to look at how things were going. They were measuring the impact of their community by looking at page views and time spent on the site. Even though, by the way, if the community was working; people were communicating with one another via SMS and email, but that’s a side point. And I’m like, “Why do you measure it that way?” and the CMO said, “Well how else should you measure it?” and I said, “How about measuring it by increased traffic to your stores? Or increased sales or something?” And the VP of marketing got up and said, “That’s really interesting. We measure every single other marketing program that way and we never thought about doing it on this one.”

Jeff: Yes. That’s the only way we measure it because in the end, if I don’t sell something, make money, I can’t spend anything.

Francois: You have to.  I had another question from the audience and then I want to move on from social media.  The question is what application do you use to monitor Twitter and to ID Kodak complaints?

Jeff: I don’t, I think Twitter synergy. I know we do Twitter search. Sorry people are whispering in my ear as I’m sitting here, which will tell you the CMO doesn’t know everything, right? And I’m the first one to admit that I don’t know everything but I’ve got lots of great, great, talented people.

You can go on Twitter search, type in your name, and look in there. There’s another place where you can actually look at Twitter ratings. I saw that because I’m in, like, the top X number. I can’t remember the number. My staff told me. I don’t look for those things. It’s kind of cool to see them, but I do Twitter search and I’ll search ‘Kodak’ and, you know, somebody will mention a Kodak and you just look at it.

Francois: Well you’re pretty competitive in terms of your ranking aren’t you?

Jeff: Yes, I’m up there. I know in Rochester I’m in the top, and I think I’m in the top 50 or top 100. And we just got named as one of the top 40 Twitter brands by Advertising Age.

Francois: Oh that’s cool.

Jeff: Yes we’re pretty excited about that. I mean because most people were going, “Holy crap! Kodak’s up there.”  So it gives you the indication of our newer company the way in which we operate. So to the listener out there who wrote in the question, just go to our blog and click on Jenny Cisney, our chief blogger. She’s the one that does it and she’s the expert. So she’s the one I’m going to call anyway to answer the question.

Francois: Thank you. So I want to shift gears a little bit. With product life cycles increasing and everything becoming faster and people hanging out in different places – how do you get your product insight? How do you get product ideas and stuff like that; how do you gain your market insights? And has that changed over the years?

Jeff: First of all, you get it from customers, right? We all know that but how do you actually do that? We do it a couple of different ways. We have what we call the Big Picture Panel. The Big Picture Panel has thousands and thousands of people who write in, tell us and talk to us, and we bring those people together. We’re constantly checking with them. That’s on the consumer side.

But the web and these kinds of tools has actually allowed us new ways in which we can reach out to people and get more information. So the ideas come from those customers themselves. They log onto our blog, and they send us suggestions. And we’re looking for better and better ways because if I can use the web or go to the web for that, it cuts my costs. We’ve also got research panels and I have product marketing managers and product managers who go out and make sure that they get that information. So if I can give them some better tools to collect and research that would be awesome. But most of it’s just by talking to the customer.

Francois: Yes, I agree. How tightly is this whole process integrated with your customer support or customer service area?

Jeff: It could always be better, but it’s actually pretty good. When you’re monitoring it say through Twitter or with our customer service team they are handing those things over and saying, “Hey, here’s a suggestion or, “Here’s the top 20,30 complaints.” Let me give you a good example of where we had some product innovation from customers.

It’s our Smart Capture tool that we now use on our cameras. You know, Francois, if you have one of our quick cameras, and I hope you have one of ours.

Francois: I do.

Jeff: Okay, good, because they actually make you look thinner. That is what I tell everybody. You know other cameras, other non-Kodak brands add 10, 15 pounds to you right off the bat. Just let your listeners know that and people will hopefully know I’m in jest. Well – sort of. Now the listeners will see that I like to have a lot of fun.

Francois: I actually still have one of the Kodak cameras with the instant film.

Jeff: Oh, wow! Hang on to that. It might be worth…

Francois: I know, I will.

Jeff: Now the other – Smart Capture. So today you have a digital camera and eight out of ten people take all of their pictures in default mode.  You’ve got probably 20, 30 settings on your camera today, and most people take pictures in default mode.

But you know that if you were to move it to a different setting for different situations or concerns, like a birthday with lots of candles in front of you; or you’re in a room taking a picture and someone’s standing next to a window and it’s got more light coming from outside than in, you know, those are the kinds of things.

So what we did was we built the ten most common and ten most used features, and sometimes most difficult that would help you adjust, like there’s three people that align up differently, one’s forward, one’s back, one’s in the middle, and what it does is it evens all those out and picks them up individually so that one face isn’t fuzzy. They keep them all in focus.

We built all that into one button. And that came from our customers saying, “Hey, I have this situation,” or, “How do I do this?” And rather than have to move that manually, it’s like capture on steroids. One button and we, Kodak, do the rest.

That gets back to the simplicity of our company; back to the days of George Eastman when he founded the company in 1880. He said, “You press one button and we do the rest.” And that’s been a Kodak mantra.

Now we got away from that, and then as the digital age started coming we moved forward with what was called the Easy Share Brand because people didn’t know how to get into digital. So we made it easy and that’s how the Easy Share came about. So we built everything around ease of use.  We have the Easy Share printers and the Easy Share Gallery. Push one button and we do the rest. And that is a great example of listening to our customers and bringing forth a functionality feature. The customer does not have to worry about it; it is one button.

Francois: Now lets talk about introducing products much faster into the marketplace. Obviously you still have products that are going to fail, especially in a time where the industry average is that eight out of ten products fail. I don’t know if that applies to you guys, but you will have failures. Are you failing faster, too? And how do you measure that?

Jeff: Yes, I can say that in the two years I’ve been here we haven’t had any products that have failed. They’ve actually been pretty good winners.  And you know, we’re doing extremely well with our inkjet printer launch. I mean, that’s been a big success.

We reported on that yesterday in our quarterly call about how well that’s been doing. Growth in that area is in the hundreds of percent – growth because people get it. I mean we do a very good job of listening to our customers. I think more than a lot of companies. Our customers are very vocal. We hold their images, their pictures; their most cherished moments. We help you produce those things. So you as a customer are very vocal about that.

Our commercial print customers, they’re very vocal also because we help them build their companies. We are an integral part of their business and we help them print documents. Forty percent of all commercially printed documents in the world are done on Kodak technology. Over 75% of newspapers are printed with Kodak technology. Most of the magazines in the world are printed with Kodak technology. So, all we have to do is listen to the customer and put all that stuff in perspective and they really help us succeed.

So to go back to your question, we haven’t had a lot of failures.  Of course there have been a couple that just didn’t do as well as we thought they would do. Or, you know, we spread ourselves a little too thin because we launched too many. Now we’re trying really hard to say, “No, no, let’s keep this a little bit more simpler.” And, “Let’s scale down the portfolio. Lets scale down the SKUs that we offer.” But that’s just good business sense.

Francois: Are you maybe killing more ideas up front?

Jeff: I think – well that’s a good way of saying it. We’re doing a better job of due diligence in what we’re going to put the money behind. Because you can’t do everything, right? And that’s difficult for a company who’s come through all this transition. The question is “Who are We?” What do we want to do?” and for Kodak we really said, “Look the crux of it is digital imaging and material science.” That’s where our strength lies. So, you know, we’re the soul and science of imaging is the way we describe that.

And for Kodak it’s around what I call M3I2 for the company: Make, Manage and Move Images and Information in your life and in your business. That’s what we do, okay? Whether it’s taking care of your personal images of photographs, those Kodak memories, or its helping you print documents in your business life and store, manage and make those documents. That’s what it’s about; Make, Manage and Move Images and Information. So, yes, I think that’s a great way of describing it, in that we just decide through our processes, these are the ones that we’re going to – you know, rationalize and say, “This is the best shot, the best chance, and lets put our money in.”

We’ve changed a lot of our marketing around. Let’s say you have 12 divisions of groupings or groups of products, or you know, we talk about 19, if you put those into 12 and each one’s got ten products under each of that, that’s almost like a product a day coming out and there are going to be updates. There are going to be two updates to a product per year and with software it could be more. It becomes horrendous. You just can’t manage that. Your sales force would basically have to be trained almost every day. And you can’t do those kinds of things and be effective. There’s just no way.

Francois: I agree. You know a lot of people think that you can increase your product introduction success ratios by increasing the number of ideas that go into your funnel. In reality, I think that a lot of products fail because they’re not being killed early enough in the process, and you end up having too many products that are all underfunded at the end of the day.

Jeff: I was at a conference earlier this week and somebody was saying, “Well can you put this in the camera?” I said, “Sure, give me the money.” And he said, “Well I want all this.” I go, “Well you know what? You’re the only one that wants it.” And I appreciated him, but I was having a good debate with this guy because he wanted the world. Well okay, unfortunately he’s the only guy that might pay for it. We’ve got to look at it with a lot of zeros and how do we make back our investment and that has tradeoffs.

Francois: It’s like Peter Drucker said, you have to market to the people who are not customers yet. You have to make your numbers from, the 80% of people who are not buying your product yet.

Jeff: Exactly.

Francois: Yes. I have a detailed question from the audience. Somebody is asking whether you can give us an idea of what happened once you saw the Kodak camera at the Inauguration. He’s looking for basic steps that he could use to get the word out on something like that.

Jeff: Oh, yes, when we saw it on Inaugural – I mean I can’t remember where I was at the time. Oh, I remember now. I was heading to the Inaugural Ball when I saw it because I had been giving a speech in a kids’ marketing summit and then I was flying up to Washington D.C. My plane got canceled and I remember seeing the Tweet come across. Immediately I said, “Where are we at with it?” and they said, “Well we’ve got you covered.” We do a, what we call step and repeat program in the company, which is something we just instigated.

Let’s just take that one event. Something would happen and say, “Well are we going to put that up on the Internet site? Are we going to put this on the external site? Are we going to send this to the sales people?” So it would generate, then, 50, 60 emails. So I went to the team and said, “Stop this.” You know, first of all, create this program that says when we get something we’re going to do “A” “B” and “C”. And “A” is these 20 things. And then “B” becomes “A” plus these five things. And “C” is “A” plus “B” plus these three things. So that’s what we decided to do.

We got ready for it. I said, “Guys, get ready because it’s going to come. And when it comes, you hit the button and it goes out.” You know, it is kind of like George Eastman, push one button and we do the rest. I said, “Lets make it simple.” Which makes it fast, right? So what we did was then immediately we activated our PR team and our public relations firms and we started getting the picture referenced of her that was posted immediately with that camera. The caption just said – she was taking a picture of the Jonas Brothers, I think, at the time and she was holding a Kodak M8-93. So first thing, everybody was verifying that it was our camera. For sure it is our camera because now we’ve got a picture of her, the First Daughter, using the First Camera.

Next we started getting that out to a list of bloggers. And from the list of bloggers then we got it on gadget.com. We got it in the New York Times, and the L.A. Times. I then saw her in my issue of People Magazine; so – yes, I just want to tell people right now that I read People. But we advertise there, so I like to look at all publications. People might not be my normal publication and I’m usually not the demographic target mix for that.

But for your listener, that’s what we did. And so we got that out to a number of sites and that led it to getting into the papers. We made it in a lot of newspapers the next day, and its part of our overall impression list – it was just very, very successful.

Then you go through this huge debate because you’ve got to decide a number of things. Do we use it? And by that I mean, do you actually run an ad? Do you tout it? And so we then had that debate. And all this took place in hours. I said “no, we’re not going to use it. We can report on it.” We can get other people to report on it, but we’re not going to use it as an ad because, I think the First Family deserves some privacy but we’ll report on it. We’ll link to it and do those things, but we’re not going to run an ad. Plus the bigger issue is she’s a minor.

Employees immediately wanted to send her our newest camera. They say – Oh can we get them to use our wireless digital picture frames? Should we send them a Kodak Zi6? Jeff, should we send them a Kodak inkjet printer? You know, I said, “Whoa, whoa, settle down everybody. No, first of all it violates all the gift laws, and second, hey, she bought it. Okay? That’s even better. We didn’t have to give it away; she bought it. And she was using it.”

And just the other day, in fact I think it was Tuesday, or maybe even Wednesday, our CEO Antonio Perez was at the White House and met with Obama. He was there to give him some advice on the business community and what we at Kodak are facing along with a lot of other companies. He actually went up to Obama and thanked him for using, and having a Kodak camera. And I think Obama commented that his daughter loves it.And so Antonio says, “Yes, but can you buy two?” and he goes, you know, the president responded, “Hey Antonio, one at a time; one at a time.”  Which is great. We’re glad he sees the value in a good buy.

Francois: I have so many more questions that I wanted to ask you but we are getting to the end of our conversation. I do want to ask you one more though.   “Are you seeing generational differences in your marketplace? And what’s the impact of the mobile youth force?”

Jeff: Well you do see a lot of generational, but you know, just as you see generational you see it individual. So, don’t just look at segments as a marketer, think as segments of one because you will truly get them down to segments of one. So you want to know about that personal experience. You want that personal experience and you want that connection. The question is so how can I make an emotional connection to the customer? And then use all these tools at my disposal to get to that.

Everyone has their own differing in terms of differences in understanding. If I go back to my mother, she doesn’t understand technology. So I have to show her how to drag the photos onto a media card so she can put it in her picture frame. I don’t even want to buy her a wireless frame because that’s still going to freak her out but my daughter wouldn’t think of anything else but having it digital. And my daughter couldn’t understand why we’d do it any other way. And so, she’s teaching her grandmother how to do these kinds of things.

So there’s a huge generational gap and lots of challenges with the new generation on how to reach them and make it meaningful and make it last.  Because they’re a little bit more inundated and a little bit more jaded than, say, my generation or my mother’s generation. So yes, it’s a big difference.

Francois: Very good. Well, Jeff, I want to thank you for this conversation. I think this was great. I truly think you are a CMO 2.0 working for Kodak 2.0.

Jeff: Well thanks a lot. You know I’m just a guy from Sioux Falls, South Dakota and I’ve made it to New York and I’m having a blast.

Francois: I can tell that. So thank you so much, I really enjoyed it. Maybe we can do this again. I had a lot of other questions regarding organizational changes and the roll of corporate marketing versus operational company marketing and stuff like that. But maybe – hopefully we can do that some other time.

Jeff: Any time. We love to visit with you and your audience.

Francois: Thank you, Jeff. I want to thank everybody for participating in the call. I want to remind you that there is a new site for those conversations. It is www.cmotwo.com.