Antonio Lucio, Global Chief Brand Manager, VISA

When Antonio Lucio, Global CMO of Visa, came to SOM on May 7th to deliver the keynote address at the Yale Center for Customer Insights' annual Customer Insights Conference, he sat down for a conversation with Ravi Dhar, the George Rogers Clark Professor of Management and Marketing and the director of the Center for Customer Insights. The two discussed creating an environment that promotes innovation, Visa's sponsorship choices, including its role in the Olympic Games, and the skills MBA students should build to succeed in marketing.



RAVI DHAR: Good afternoon. I’m Ravi Dhar, Professor in the area of Marketing. I’m delighted to have, today, Antonio Lucio here, who is the Chief Marketing Officer at Visa. He’s going to be speaking at a conference and I thought I’d take the opportunity to ask him a few questions on marketing in general and specifically some of the things that Visa is doing.

Hi Antonio. I want to start by asking you, before you took the job as chief marketing officer at Visa, you spent your extensive marketing career in many CPG companies, Pepsi, Proctor & Gamble, and others. So sort of a first question was just how do you see the similarities and differences in marketing for financial services and the CPG world in which you lived before?

ANTONIO LUCIO: It’s easier to start with the differences. First and foremost, in our business at Visa in financial services, we spend as much time doing business-to-business marketing as the amount of time that we do business-to-consumer, which is dramatically different than what you do at a consumer goods company, where most of your efforts go towards understanding the needs of that ultimate consumer. The second one is, because of the industry in which we play in, which traditionally have not been marketing driven, accountability and return on investment becomes essential.

So as I began my transformation from consumer goods into the financial services world, one of the most important things that I had to do was to even change my language. I had to learn the language of the financial services world and I had to speak P&L-driven marketing at all times. To the extent a marketer is able to demonstrate the link between activities and transactions is our business, that marketer is going to be successful. The third was, as I began my journey into the financial service world, I also understood that what the industry understands as marketing sometimes is actually more of marketing communications – that the discipline of consumer understanding P&L management resides in other type of departments. I had to, over the last two years, undergo a major and radical cultural transformation with my people to actually begin that consumer-centric journey, customer-centric journey, all database, all return-on-investment focused, to actually begin to co-lead the agenda within the structure of the company today, which again is very different than the type of approach that I followed in the consumer goods world. Ultimately, where we would be headed as a marketing organization, we would have that consumer-centricity that consumer goods companies have. Add on top of that customer-centricity, but with a deeper level of rigor in terms of return on investment discipline and, because of the business in which we are in, a deeper level of understanding of consumer behavior, because we see those transactions.

RAVI DHAR:  The skepticism is higher in some sense. The justification of marketing returns becomes much more paramount, whereas perhaps in CPG it was taken for granted that, you know, marketing adds value and so you don’t have to justify… ironically, you don’t have to justify, often, marketing expenditures as much, it seems like, yeah?

ANTONIO LUCIO: That is the case in technology companies, and Visa is first and foremost a technology company. We are a network The same holds true for most of the companies that I speak to around the Bay Area, and all of them are there – Google and Facebook and Twitter and all that. They are technology driven, so it’s almost “if it works they will come.” We are changing that to ensure that as we move forward, given the level of innovation that our category will require to maintain its level of growth, that marketing not only has a seat at the table, but importantly begins co-drive the agenda.

RAVI DHAR: What are some of the lessons, a few key lessons in terms of building a brand and sustaining it? And perhaps also what are some of the common maybe misconceptions or mistakes managers often make about branding?

ANTONIO LUCIO: The first and most important aspect of building a brand is to have a deep understanding of what the brand stands for in terms of its long-term vision, in terms of its rational components and its emotional payouts. So having that level of clarity is critical. Number two is about consistency of purpose. Maintaining that level of integrity across all dimensions of the marketing mix on a consistent basis and, importantly also, maintaining that level of support on an ongoing basis. The third piece is constant rejuvenation. Brands that stay for a long time require constant innovation to be meeting or anticipating consumer needs within their space, and in the process, re-inject themselves with renewed energy.

When I looked at the mistakes that I have made and I have seen other marketers make is they always have to do with those three. Either there is not a thorough understanding of what the brand stands for, or there has not been consistency on messaging, or consistency of support, and the third, which is perhaps the most important one, there has not been a level of constant rejuvenation to maintain that brand more vibrant than ever. When I talk about the innovation and rejuvenation side of it, I am not only talking about the product side of the equation. I am also talking about the engagement, consumer engagement part of the innovation, which means that brands today need to anticipate and meet consumer engagement needs within the context of where the audiences are today.

RAVI DHAR: Any examples, maybe outside Visa, of brands that have done well in terms of the principles you laid out that you like, yeah?

ANTONIO LUCIO: I think the brand that exemplifies both the positive and the negative of what it is to… what it is to manage a brand consistently over time and what happens when those brands get out of that journey is brand Coke. When they maintain a level of consistency of brand identity, a level of consistency and support around the world and breakthrough innovation, both on the product side as well as the consumer engagement side, they’ve done remarkably well. When they’ve diverted from that path, they haven’t. I think… I happen to think they are in a very good path today. The obvious ones, I love the Mini Cooper brand. I mean, talk about a brand that understands deeply its DNA, what it stands for. It has maintained a very rigorous level of consistency in messaging and support, and it is constantly innovating not only in the design of the cars but in the way that they engage with the consumers. I am a Mini Cooper driver. I have been now for two years And I have to say from a consumer experience standpoint, it is one of the most satisfying consumer experiences, not only when I’m driving the car, but also the level of engagement that I have with that brand, even at the service… even at the service center. So those, again, the other obvious ones everybody knows and I shouldn’t comment on, like Apple, et cetera.

RAVI DHAR: Looking at sort of the communications mix that Visa has, sports sponsorship seems to be a key element of your communications mix, including obviously the Olympics, both the Winter and Summer. I enjoyed watching the basketball game in China with you, and now the world of soccer. So tell me a little bit about why sports sponsorship is seen as an important, relevant element of your communications mix. And secondly, given the large amount of dollars spent, give us a sense of what are the benefits that you get from these things.

ANTONIO LUCIO: Well I wish I could claim credit for the acquisition of any of these properties. I was lucky enough to inherit them. In the case of the Olympics, when the Olympics were obtained, they were an extension of the brand promise, of ubiquitous acceptance, everywhere you want to be. As time evolved, the Olympics became to play two important aspects in our brand engagement dimension, both business-to-business as well as business-to-consumers. First and foremost, what the Olympics do is give us the opportunity, through our banks, to leverage the asset against those priorities that the bank may have in a given country. So through the utilization of the Olympics Rings and messaging, they can go for acquisition, they can go for retention, they can go for increased usage. Part of our deal is that we extend those rights to our bank customers. That’s how we get revenues. That’s how we get transactions.

The second part of it is equity. Because with the Olympics, we have been doing that now for 22 years, we have enough data that actually correlates the level of impact that the asset has on equity even at the same level of messaging. And what we’ve been able to prove over the years is that the same messaging, one carrying the property and the other one not carrying the property, has a higher level of recall, has a higher level of branded recall, whether it is digital or traditional, and importantly it has a higher lift on brand equity. I did have the opportunity to work on the renewal of the Olympics, and I have to tell you that, since Visa became a public company, the level of rigor on returns on investment exponentially grew. So I actually had to take the property not only to our management, but given the multi-year commitment, to our board of directors. And in order to do that, we actually had to build a very thorough business case on return on investment. And, again, on the top-line basis, we’ve been able, because we’ve been doing it for a long time, through accentured modeling, to actually identify the revenues associated with the property. We also have all the costs associated there. And I have to say that overall, and by key country, we’ve been able to deliver positive returns, on the return side. On the equity side, we’ve been able to, in every single country that we leveraged the Olympics, we were able to see significant lift in brand equity gaps versus our key competitors. I don’t have the history yet, Ravi, on the FIFA World Cup. All I can tell you is that the same level of rigor that we apply to the Olympics, we’re going to have to apply for FIFA. And if it doesn’t pay out, we will give it up.

RAVI DHAR: That’s interesting. And so let me talk about consumer side of communication, the b-to-c part. And so clearly one of the big things you notice is that the media is getting fragmented based on the media consumption habit of consumers. So what challenges or what are the different ways in which Visa is now trying to connect to consumers, given fragmented, you know, landscape out there for media?

ANTONIO LUCIO: Well, we’re doing two things. First and foremost, we transform the creative development process. Because the media equation – or I should say the audience equation is so critical, given the level of fragmentation, we’ve decided to go media-first. What that means is a thorough understanding of the consumer as consumer, in terms of his behavioral patterns and his road or her road to transaction, but then the utilization, understanding the utilization of media by that particular consumer in its path to transaction. By doing that, we create a media strategy and plan first, and then we give this to the creative department to actually create against that. I have to say, Ravi, being very honest about it, that the creation of the model and the creation of the engagement model in a multitasking world, we’re sort of feeling our way into it, because the biggest challenge that as marketers we are facing is the fragmentation of the data. So we have different KPIs and we have different tools and different methodologies to measure all the different impacts across the multiple media options that we have. That data and those tools don’t speak to each other to the point that I could say, you know, the relative impact of social media is this versus search, versus the You Tube experience, versus TV. We don’t have that. And that’s an issue that we’re going to have to crack as an industry, and hopefully with the help of the academic world. But as far as consumer engagement, we’re doing media first, as I mentioned.

The second one is the understanding of awareness, conversation/communication, and transaction. In other words, we assume and we take for given that the consumer will be multitasking. So we’ve assigned the role of high-impact awareness and invitation to action to the TV. We’ve assigned the role of conversation and consideration to social media, and we’ve assigned the transaction role to links to e-commerce sites that consumers can get either through social media or through other means. Again, we’re experimenting with the model. We don’t know if we have the right answers yet. But I think we’re into something, in terms of understanding the consumer as audience as important as understanding the consumer as consumer and, on the other front, taking for granted multitasking as a model and assigning a different role to each one of the media alternatives in a way that they could work with each other. Again, we don’t have the tools to measure whether we are successful or not, but it’s something we’re definitely experimenting with.

RAVI DHAR: So it’s almost like looking at the consumer’s decision journey, if you like, from the time that need is triggered to transaction, and whatever the media consumption might be along that journey. And the complication is obviously the interaction between these different media instances.

ANTONIO LUCIO: Absolutely, absolutely. So hopefully you will help us figure this one out.

RAVI DHAR: We’ll be happy to learn more about it first, before we can figure it out. I want to ask you a little bit – obviously, in your industry, there is a lot of innovation happening in terms of payment mechanisms, particularly by technology companies, which wasn’t there as much 10 years ago. And so I wanted to ask a little bit about what’s the role of innovation and your role as CMO. How do you… who does… how do the different groups work together to think about new ideas, whether it’s acquisition, whether it’s home-grown? What exactly is the role of marketing in that?

ANTONIO LUCIO: Again, it’s a role that is evolving. Being a technology-centric organization, as we have traditionally been, the innovation approach, by the way, as most technology companies today, has been technology-out. What we are trying to bring into the picture, and we have very specific examples, now, to show, is marketing should bring consumer-in points of view. The product development group should bring technology-out. And out of that tension and discussion, breakthrough ideas will happen. The way that we’ve done that is by enlisting partners like IDEO that, through their design-principle approach, which combines anthropology with product design, has helped us transform the product-development approach by bringing the consumer into the center of the equation first. Again, it is a process. It is a journey. We have not done that consistently across all the dimensions of our innovation journey, but that is the vision – consumer-in marketing, technology-out product development-out.

The second aspect of innovation that you get – and believe me I have never been as paranoiac about innovation as I have become since I moved to San Francisco. The technology world, whether it is in payment industry, or data management, or consumer engagement, is in every single corner of that small place. What we are coming to terms with as a company is the fact that, like many other companies have done, the realization that we will not be able to come up with every single idea in the payment world that we would be able to leverage through our scale. So what you are seeing us doing is significantly more external orientation for development that will take us through either co-creation with consumers, co-creation with developers, or a significantly higher role for acquisitions, which we could not do before, because we were not a publicly traded company, to help us narrow the technological gaps that we will need in the areas that we need to take the business forward. An example of that is the announcement of our cyber-source acquisition that will help us step-change our ability to compete in the e-commerce world.

RAVI DHAR: Do you think the skill set that a successful marketer needs has changed compared to when you started out your career in marketing or do you think the fundamentals are pretty much the same, or do you feel that certain capabilities have become more important over the years?

ANTONIO LUCIO: I think some have remained the same, but amplified, like analytical rigor. The amount of access to information that we have today is nowhere close to the access to information that we had when I started 29 years ago. So having people that are analytical by nature, that feel totally comfortable with numbers but at the same time are able to transcend the numbers to paint the traditional brand picture is mandatory. Second is global orientation. Right now, in the world, two things are happening at the same time. There are pressures towards globalization – internet, affluent marketing, cross-border transactions – and there are forces that move towards localization, decoupling of the economic, rise of nationalism, so on and so forth. Having people that are able to look at the world with that frame of mind, understanding that you’re going to need both and are capable of tackling the complex question that is how do I deliver local relevance while maintaining the integrity of a global brand, is also critical, which we didn’t have when I started.

The third one is teamwork and leading by influencing. The world has changed from the command-and-control days. You either lead by influence, regardless of organizational and hierarchical structures, or you are going to be left behind and the organization will end up rejecting you. So the ability to work in teams – not only as leader of a team but as an active participant in a team – is more important than ever. And then the last two is digital savvy and curiosity, which we didn’t have at the time, because of the way that the world is changing. And finally, finally, which I think the last two years have demonstrated, resilience is it. People that are able to manage adversity, that are able to make mistakes and pick themselves up frequently, are the types of people that we need in the marketing world and that we need in the business world today.

RAVI DHAR: Great, and on the last note, I want to ask you – I spent some time over the years in the Yale University system, in the School of Management, giving talks, coming back – any sense do you have developed over the years, like, about Yale as a business school, what seems to be sort of its DNA or associations of brand in terms of the type of students that we might have?

ANTONIO LUCIO: I’ve seen the school evolved over the last couple of years. The things that have remained consistent have been… it’s almost an exclusive, boutique school. It’s small, it’s incredibly selective, and it’s incredibly rigorous in its approach to hard-core analysis and business. That, I think, is the cornerstone of the DNA, as I see it. The evolution has been towards true, true interdisciplinary approach – interdisciplinary not only within the business world, but beyond. The whole notion of allowing students to interact and cooperate with other schools within the system in the solution of big, complex problems is something that a lot of people talk about. I’ve seen it at Yale, alive, well. And I think it could become a very significant point of difference, particularly as the University begins to tackle more global problems of business.

RAVI DHAR: Thank you so much for your time.