CMO Insights

An Interview with Stephen Quinn

Stephen Quinn was named Walmart’s Chief Marketing Officer in January 2007. The two prior years had been tough on the company— growth in same stores sales had been declining and the ROI for the enterprise was declining. Business media had characterized this period as involving a series of “marketing missteps and a need to lift anemic sales growth.”^b

Before joining the world’s largest retailer, Quinn spent 13 years at Pepsi-Co where he served in a number of roles including Chief Marketing Officer for the Frito-Lay division of Pepsi-Co. Prior to that, Quinn held consumer marketing positions at Procter & Gamble, Johnson & Johnson, and Quaker Oats.

I had a chance to interview Stephen Quinn during his visit to Duke in December 2009 when he gave a speech to our MBA students for a Distinguished Speaker Series. The interview and a review of the press accounts of Quinn’s activities over the last three years point to several key steps he took and a number of important qualities that have been important to his success.

Rebuild a customer focus. In a big organization with a powerful supply-chain operation, it is easy to get distracted by internal criteria. Quinn worried that in the early part of the decade Walmart had lost its historical concentration on the customer. “We lost a focus on the customer and the brand.”^c Quinn built on Sam Walton’s famous quote, “There is only one boss: The customer. And he can fire everybody in the company, from the chairman on down, simply by spending his money somewhere else.” Quinn notes, “While retailers generally, and Walmart specifically, long have needed to focus on store operations and supply-chain issues, marketers need to take the lead (among those other disciplines and steer) in a consumer-focused direction.^d

To that he adds, “I think marketing is at the forefront of championing the customer internally and doing something about it.” e Beyond advertising and beyond tactics, Quinn understands that marketing’s job is to guide all of the interactions with the customer. He notes, “Marketing is so much more than that (advertising). It’s making sure everything your company does is customer-focused.”^f

Quinn added, “In great companies, the CEO owns the brand” and noted Eduardo Castro-Wright, the president of Walmart’s U.S. unit, is doing just that. This fact made Quinn’s job much easier. If he is asking everyone in the company to think about the customer, it was essential that his boss be a living example.

“You are the brand.” This was Quinn’s mantra to the company. He knew that everyone had to embrace this notion in order for marketing to work. He notes “In retail, you have to manage the entire interaction with customers and vendors. In-store media and media in general are important because I have to go tell the Walmart story, but at the same time, I’ve got a bunch of people who are telling their story through the stores, and how you pull all that together is challenging.”^g Quinn understood that he could only accomplish his job through the rest of the organization and used various forums including Sam Walton’s famous “Saturday morning” meetings to show employees videos about what Walmart stands for and how each and every one of them is important to the customer’s experience.

External forces were also molding the brand in important ways. Quinn concluded that Walmart was losing the battle by letting others define the brand. Based on market insight, Walmart shifted its brand from a focus solely on low prices in the form of “Always Low Prices. Always.” to “Save Money. Live Better.” This was a big change for Walmart as it reached out to deeper benefits—”Live Better”—that customers really wanted.

Drive off market insight. Quinn has stated “At Walmart marketing, we never guess.”^h He invested heavily in market research, polling more than a million customers monthly. This careful and exhaustive research and analytic work drove a number of important changes. First, he spent time figuring out who was a Walmart customer and who was not. It was clear that not all customers, especially customers interested in high quality or in trendy fashion, are going to find value at Walmart.ⁱ A new segmentation scheme based on this research sought to penetrate existing markets more effectively and drove efforts to leverage existing customers to purchase from more categories across the store. Second, research helped clarify what was important to customer value. Labeled, “Project Impact,” this effort focused on the key factors that would improve customer satisfaction—cleaner stores with wider, less-cluttered aisles, better merchandise, and more visible and appealing store branding.

Quinn’s research and acute understanding of the market also revealed that consumers needed to be reminded why lower prices should be viewed positively—because lower prices help consumers lead better lives. The negative connotations of lower prices were starting to get traction among consumers and Walmart needed to take a stand on the benefits of lower prices. Quinn also understood that the former slogan—focused only on lower price—was too easy to imitate. Finally, the new brand message had to get played out in everything that Walmart did and said. This meant solving problems like Walmart’s willingness to pay for employee healthcare because customers felt bad if they saved money at someone’s expense.

Despite investments in building market insights, Quinn never let go of his instincts. He brought these front and center to the CMO suite. His gut told him that the all capped “WAL-MART” logo was probably too masculine given most of Walmart’s shoppers are women. He advocated the “Walmart” name instead, which dropped the hyphen and used upper and lower case lettering. When there was push-back, Quinn challenged others to “Take the logo home and show it to any woman whose opinion they valued.” No complaints came back. In terms of brand leveraging around the world, Quinn advocated removing the “stars” in the Walmart logo. Sensitive to foreign customers’ viewpoints, he noted, “If you really want it (Walmart’s logo) to look like American Imperialism, then this is the logo you would go with.” The stars were dropped.

Internal marketing. The “Live Better” tagline described earlier had to be socialized internally as well. Physical assets, such as signs, truck logos, etc, were tied to the old tagline and expensive to change. There was also resistance because it seemed to deviate from the company’s legacy. However, Quinn took the focus off himself and the marketing function and instead noted that “Save Money. Live Better.” could be attributed to Sam Walton himself who said: “If we work together, we’ll lower the cost of living for everyone . . . we’ll give the world the opportunity to see what it’s like to save and have a better life.” Quinn used this information to sell the tagline internally and, more importantly, to have it adopted as the mission of the company and not just an advertising concept.

In general, Quinn knew that in a company as large as Walmart it was impossible to dictate anything. Instead, he concluded it was better to develop and share “. . . a really compelling brand story and help the organization adopt that story to reflect what you are trying to convey with the brand. If you try to figure out rules for every single touch point, you’d end up with binders filled with rules and stuff nobody would ever read.”

Quinn knew there was a lot of skepticism about marketing at Walmart. Initially, he focused on the people internally who thought marketing could help them. He got some quick wins and didn’t try to do too much by spreading resources too thinly. One of the quick wins was with the electronics department. Walmart was convenient for shoppers, but it was hard for Walmart to compete with the big box stores. Quinn noted, “Walmart was a jack of all trades but a master of none. The electronics group wanted to make a change and so we partnered with them. We started working with the area in 2005 and by 2007 customers started to see a difference. We realized that our current assortment just wasn’t going to cut it. We had a lot of unbranded TVs, but this was not what our customer wanted. We had to get the product line right and so we had to go and make the pitch to Sony and Vizio that they should be in our stores. We promised we would advertise and build the brand. In two years, our electronic sales outgrew Best Buy’s and Circuit City went out of business.”

Advocate for metrics. Quinn thinks that many marketing leaders have an aversion to measuring their success through metrics and that most just don’t want to be evaluated. He told me, “Getting it right is more important than looking good.” Walmart employs a broad range of metrics, including concept appeal, copy effectiveness, ROI from marketing mix models and equity and image improvement measures. These are a strong complement to the CEO’s list which is topped by sales, returns, and customer loyalty.

Humility. Quinn did not try to reinvent Walmart. He told me, “I did not want to change Walmart. I wanted to make a better Walmart.” In other interviews, Quinn states, “I didn’t want to make Walmart into Target; just a better Walmart.” He notes, “Walmart doesn’t need to attract a different customer to succeed—just do a better job selling to and maintaining the loyalty of its existing customers.”

This humility shows up in other internal strategies Quinn used. He shared that as he built internal relationships, he would “say yes to any meeting” and work hard to convey to people, including his peers, how important it was for them to work together to do what the company needed. “Certainly it’s not a marketing-led company in the way a lot of packaged-goods companies would consider themselves to be. So I have to be careful not to overstep what it really is.” ^j At the same time, Quinn knew that making the turnaround would be a cross-functional effort. He told me that all of the top officers knew that “We will hang together or we will most certainly hang separately.” He noted that his peers shared his strong desire to make Walmart better.

Quinn also realized that in a company as sophisticated as Walmart, almost everyone had an opinion about how marketing should be done. He said that many marketers feel a lot of pressure to incorporate these views in order to be accepted. The problem is that that such an approach to strategy is not necessarily based on the customer and the original strategy can get diluted if constructed piecemeal to please the masses.

Build marketing talent. In an organization dominated by merchandising and operations, Quinn had to build a marketing organization for Walmart. He did so by hiring many colleagues from past experience including several people from his days at Frito Lay. The key aspect of these hires was that Quinn screened heavily on “culture” fit. He knew that it was not a matter of pure talent. He needed smart and talented people that would also fit into the Walmart organization. He also worked to remove the heavy cross-functional rotation that many marketers faced when they came to Walmart. Instead, he built them into specialists and directors in merchandising and operations built their own specialists. Together with the cooperative spirit described earlier, this depth appears to be working at Walmart.

Results
“I’m proud of the story here, because I think it’s showing how marketing is making a really big difference to a company that maybe didn’t take it as seriously as they do today.” [k] “I do think marketing has a seat at the table… This company had a strong merchant and operations culture, and now we’ve added this third leg of the stool.”[l] Aided by a recession that played to Walmart’s strengths, the company has reversed its negative course from several years ago.

a Special thanks to Mike Norland, Fuqua 2010, for his assistance in the interview with Mr. Quinn.
b Gary McWilliams (2007), “Wal-Mart sets Fleming to oversee Merchandising,” Wall Street Journal, (January 25, 2007): B7.
c Jack Neff and Emily Bryson York, “ANA Urges Marketers: We must be the ones to lead the country out of recession,” Advertising Age (November 9, 2009): 3-4.
d Neff and York, op cit.
e Jack Neff, “Why Walmart is getting serious about marketing,” Advertising Age (June 8, 2009): 1.
f Neff and York, op cit.
g Mya Frazier and Nat Ives, “Reinventing their brands,” Advertising Age (October 9, 2006): 10.
h Tim Craig, “Smart network will need brilliant proof of ROI,” Retailing Today (September 22, 2008): 3.
i Distinguished speaker series, Fuqua School of Business, Duke University (12/1/09).
j Neff, op cit.
k Neff, op cit.
l Neff, op cit.