Dell's top marketer flipped from price wars and performance for massive brand push; sales soared, marketing can do no wrong and the board wants more
While topping US$94 billion in revenues, Dell had been in a perpetual street fight on pricing. Margin and brand health metrics were sinking to dangerous levels. ANZ Marketing Director Arjun Deuskar had to fight tooth and nail, but convinced his bosses to go large on brand and a premium push. Along with MediaCom, Dell issued an open tender to Australia's publishers – and 150 of them piled into GroupM towers to pitch their ideas. Deuskar was blown away by the response. In the end, he said 10ViaCom CBS had the best proposition – and the results have been "phenomenal". Now marketing is getting all the plaudits – and board backing to go harder on brand investment.
What you need to know:
- Dell’s flip from performance marketing and price wars has yielded “phenomenal” double-digit growth every quarter since the start of 2020, according to ANZ marketing chief, Arjun Deuskar
- The firm took a lot of convincing that “uncomfortable growth” was going to move the needle, but now Dell is massively backing brand investment. “Every day they are asking me what’s next”, says Deuskar.
- But he says consistency is key – not chasing “every shiny new object”.
- Meanwhile, issuing a market-wide tender to Australia’s publishers in order to shape the new campaign at the very beginning has paid huge dividend. Deuskar was blown away as 150 publishers responded.
- Working with MediaCom and 10 ViacomCBS, Dell’s resultant Changemakers campaign is now shortlisted for four of the 2021 MFA Awards.
The old adage says you spend 70 per cent of your time convincing your own bosses and 30 per cent convincing the customer. Sometimes that’s true; it wasn't easy. But when you can articulate what success will look like and tie that up with the fact that maybe we don't have a choice and it's going to pay dividends in the long run. Well, that’s the long and short of it.
Rebooting the machine
Dell had been fighting a long-running price war with rivals. Sales were holding up, but box by box, profit was declining. Something had to give, so ANZ Marketing Director Arjun Deuskar took a risk – and hit the jackpot with a brand play that is still delivering "phenomenal" sales growth, with both profitability and soft metrics powering away from the red zone.
Getting big brand investment over the line was “uncomfortable,” says Deuskar. But now the finance chiefs are backing his other ideas. If growth requires a bit of discomfort – they want some more and publishers are hungry to deliver it: Dell had 150 Australian media owners queuing out of the doors when it RFP’d its brand campaign. Deuskar was blown away.
But it all came from recognising that a cliché usually evolves from a universal truth: Doing the same thing and expecting a different result is the definition of insanity. Dell was failing that test.
“The laptop category is very cluttered. There are many brands making similar claims. Consumers were getting into stores and mainly choosing on price alone,” says Deuskar.
With a new XPS laptop range in market, aiming to compete at the top end of town with the likes of Apple, that had to change.
“We had to take a leap of faith and look at what consumers really value in a brand.”
Given about half of Australian laptop revenues come via premium product sales, traditional premium and luxury brand cues would be the natural place to start, says MediaCom Sydney Head of Strategy Tim Hull.
But in this case, that would have been a mistake. Deeper research conducted on the back of Dell’s initial findings found the “young, tech savvy audience” were more interested in a brand’s social purpose and sustainability credentials.
“That changed the direction of our strategy and ultimately led us to the Changemakers program,” says Hull. But to get there Dell and MediaCom cast as wide a net as possible – and the response from Australia’s publishers was equally phenomenal.
If we are talking about just growing units or shipping boxes, then we were doing okay. We were growing. But the question is growing profitably – and the signals told us that we may not be able to maintain growth profitably over a long period of time... at some point of time, we will start losing money.
We’re going to need a bigger boat: Publishers pile in
To crack the new creative direction, Dell and MediaCom cast a dragnet, launching a market-wide brief to publishers in late 2019. They were stunned at the volume – and quality – of the responses.
“We had to set up a big briefing session in the lobby downstairs [at 65 Berry Street, GroupM HQ] because we couldn’t fit everyone in, even in the meeting rooms. We briefed about 150 publishers,” says Hull.
“Dell marketing leads flew in to come and present Dell’s background and details of the business, and then we took over and presented the audience insights, the strategic direction we wanted to take – and then just left it to the publishers to come back with ideas that they thought could solve that problem,” adds Hull. “It gave the publishers a lot of space for creative thinking.”
The eventual winner was ViacomCBS.
“They came to the table with a really fantastic idea and they were bringing executions and thoughts that were sort of media first. They definitely went above and beyond, so in recognition of that, we awarded them most of the budget and went with Ten as a partner.”
The “hero piece” was Dell Changemakers, a content series run in partnership with The Project. “So we would feature stories on different Australians and changes they are making in their industry or within their passions. They all culminated into a 60-second TVC that we also ran across [Ten’s] network and was integrated across online and across all their other network assets, where we were driving people to view the story,” says Hull.
“On top of that, we also had a social-led campaign – the XPS creator series – five episodes of a digital content series that we amplified via social platforms and across Ten Play and Ten social platforms. Each episode featured famous content creators affecting change through their work – and doing it through the Dell XPS.”
Then Covid came along. But rather than freeze, Dell, MediaCom and Ten ramped up the content.
“We had a brainstorm around any opportunity to help people, especially businesses, given that a big portion of Dell’s customers are small business,” says Hull. “That’s when we launched the ‘business as usual when nothing is usual’ segment – a co-funded 30-minute TV special that aired across the Ten network. It provided a spotlight on small businesses which were affecting change during the pandemic, at a time when a lot of people were probably trying to work out what they should be doing.”
Bring publishers in early, win
Dell was blown away by the response from publishers. “When we walked into the GroupM building, I was expecting maybe 10-20 publishers at best,” says Deuskar.
The publishers seemed equally surprised to be brought in at the outset to shape the campaign rather than as just the delivery mechanism.
“The one consistent feedback we got was ‘we have never had a brand come to us with a concept like this’,” says Deuskar. “So when we went to these sessions, whether Ten, or Seven or Nine or Facebook or Youtube presenting their ideas, we could see right off the bat that we were creating something different – and that gave me confidence that we were headed down the right path.”
That confidence was paramount in convincing the company to back the brand push.
Our sequential year on year growth was phenomenal – and I mean truly phenomenal ... and that gave us the confidence that something was working. And that continues. So it was not a ‘one and done’. It was consistent growth that we saw every single quarter – and we continue to see that even up to today.
Uncomfortable growth: Converting the doubters
“We always knew that investing in brand communications can be daunting – we were essentially investing in something that won’t pay back right away. Like all businesses with a bottom line, this is always a leap of faith,” says Deuskar.
“But between ourselves – Dell, MediaCom and Ten – we actually termed it ‘uncomfortable growth’, and giving it a name helped us rally around it. Because we all knew we were going on a journey which was not going to be easy and that was going to make us uncomfortable, but was the change we needed to make a difference in the long term,” he adds.
“And our analysis and insights gave us confidence in the strategy and the partners we had selected to bring this to life. And that was the key: We were using signals to tell us whether we were going down the right path – and those signals were green.”
Even so, Dell’s beancounters took some convincing.
“There’s an old adage that says you spend 70 per cent of your time convincing your own bosses and 30 per cent convincing the customer. Maybe sometimes it is true; it wasn't easy. I'll be absolutely honest, it wasn't easy because it is uncomfortable,” says Deuskar.
“But I think when you share the passion, the vision and are able to articulate what success will look like – and also tie that up with the fact that maybe we don't have a choice, we need to change… [Those holding the purse strings realise] yes, it's going to hurt us in the beginning, but it's going to pay dividends in the long run, adds Deuskar, channelling Les Binet and Peter Field. “And that's the long and the short of it.”
The long and short of it
Binet and Field have long argued that companies that over index on performance marketing and under invest in brand will ultimately see sales taper off.
Deuskar says Dell wasn’t at that point.
“If we are talking about just growing units or shipping boxes, then we were doing okay. We were growing. But the question is growing profitably – and the signals told us that we may not be able to maintain growth profitably over a long period of time. We could keep dropping prices and still grow the share of the units. But that's not where we want to go, because at some point of time, we will start losing money.”
More importantly, adds Deuskar, price wars do not build brand loyalty, because people are loyal only to the cheapest price – whoever makes it.
We now believe that this is the right thing to go. It’s what we now call business as usual, our brand is now always on. I don’t think we are the point where we want to dial it down. We want to invest more to drive the brand because we know it certainly works. We know it's actually giving us better ROI than when we were driving purely promotions.
The results: No longer uncomfortable
Given the brand push started as Covid hit, it was hard to separate whether the huge rise in sales was purely down to the pandemic. But as Australian caseloads fell and last year’s lockdowns ended, the growth kept coming, says Deuskar.
“Our sequential year on year growth was phenomenal – and I mean truly phenomenal,” adds Deuskar. “They were 100 per cent double digit and that gave us the confidence that something was working. We used econometric models like media mix modelling, our internal financial metrics and also indicators from this brand research. And when we put all of that into the mix, it told us [the campaign] was definitely working – and in some cases working better than we had planned,” says Deuskar.
“And that continues. So it was not a ‘one and done’. It was consistent growth that we saw every single quarter – and we continue to see that even up to today.”
For me, the result is when your general manager or the country leader or the APAC lead says, ‘marketing team, well done.’ That's victory for me. When the business acknowledges what marketing is doing, which is a big risk and we are seeing the results, and when the team gets the credit for it, we know we have won.
Making the business believe in brand
The continued growth – at better margin – has converted any brand investment sceptics at Dell.
“We now believe that this is the right thing to go. It’s what we now call business as usual, our brand is now always on,” says Deuskar. Whereas previously Dell might dial down brand investment once results started to follow, that is no longer the case.
“I don’t think we are the point where we want to dial it down. We are raring to go. We want to invest more to drive the brand because we know it certainly works. We know it's actually giving us better ROI than when we were driving purely promotions," says Deuskar. "So we are spending more than what we did the year before, but we're doing really well now, despite spending a lot more. And our brand metrics are also a lot better than what they were.”
Those improvements stand “anywhere between five to seven points across consideration or familiarity,” he adds. While those gains may seem modest, he points out that it can take category brands “a year to even get a single point of improvement, whereas we have been able to get five points in just over a year and a half”.
Deuskar says ruder brand health indicates growth will continue over the year ahead – because it is seeding Dell into the minds of people who are not yet ready to buy a laptop, but ultimately will be, which is represents about 90 per cent of the market at any one time.
“In the past we were very good at capturing the 10 per cent who were giving the signals that they are looking for a laptop. But what we are [now] doing is looking at customers who are not in the journey at all, catching them early and telling them what a good brand we are. So when they are in the market to buy something, now they are adding Dell to the consideration mix.”
Now marketing is the hero
Regardless of the brand or sales gains, Deuskar says there is only one metric that really counts.
“For me, the result is when your general manager or the country leader or the APAC lead says, ‘marketing team, well done.’ That's victory for me. And I know that when the leadership and when the business acknowledges what marketing is doing, which is a big risk and we are seeing the results, and when the team gets the credit for it, we know we have won, that we are doing something right.”
But he’s quick to acknowledge that success has many fathers – and many mothers.
“Marketing might lead, but it’s a contribution from everybody. It’s sales doing its bit, because we can’t say we’re premium and not deliver a premium experience when people call or chat. Our website needs to tell the story. Our supply and inventory must all make sense, because people want premium and they want it now. All of these things are part of the premium journey,” says Deuskar.
“So everybody from content to production to creative to finance, sales, supply chain and operations, everybody is involved in the success. But when the numbers are healthy, you get people joining hands much faster and saying, ‘well, this is working – let's support marketing a little bit more’."
Which is exactly what is now happening at Dell.
“Now I’m being asked every single day what is next,” says Deuskar. He’s used that credit line to invest in sponsorship of the Fortress e-gaming centre in Melbourne’s CBD. “That sponsorship may take years to give us a return. But I think it’s important,” says Dueskar, because gamers want quality machines, and they frequently upgrade. “So we were able to make those investments for the long-term based on the [XPS campaign] success, and say that every time we do something new, it's working.”
But Deuskar ends with a note of caution: consistency is key and chasing every opportunity may end in tears.
“We have to be careful we don’t overcook this. Pick a few things that we know work and do them consistently over a period of time and add flavour as we go along. Not over do it because I feel I have to show I am doing something new every quarter or every year.”
He says that has been the downfall of too many marketers.
“I think the one mistake that marketers make is moving on to the next thing too early and going after the next shiny object. I think we need to calm ourselves down, and hold back and keep ourselves honest.”
Dell is one of the finalists in the 2021 MFA Awards. Mi3 is interviewing the marketers behind some of the strongest case studies ahead of the awards in February 2022.
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