PepsiCo CMO Greg Lyons on People vs Consumers
Updated: Nov 25, 2019
On today's episode, we are joined by PepsiCo CMO Greg Lyons for a conversation on how the American beverage giant is addressing the ways it interacts with its loyal drinkers.
Today, you'll learn:
How PepsiCo strives be the at the center of pop culture
The importance of authenticity to PepsiCo
The brand's diverse portfolio, and how it strives to get as individualized as possible when it comes to brand experience
Greg's views on engagement of "people" vs "consumers"
Greg's thoughts on the "mobile crisis" when it comes to content and the way brands interact with their audiences
Greg's advice on how to become a more authentic marketer
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Greg: Especially on mobile right now, I think we're almost at a crisis level of that creative that we're putting on that and how we're interacting with people on that.
Adam: That's Greg Lyons. He's the chief marketing officer of PepsiCo and he's our featured guest on today's episode of Authentic Influence. I'm your host Adam Conner and today's conversation talks all about what Pepsi is doing to be at and stay at the center of pop culture. We also talk about their new and diversifying portfolio specifically in sparkling waters. We talk about the changing trends and how people are interacting with and engaging with Pepsi across social and across other tactics. We talk about the engagement of people versus consumers which is where he has a specific point of view. We talk about his views on how we are reaching a mobile crisis in terms of the way people are engaged on mobile. We talk about importance of authenticity to Pepsi of course and your typical question like, “What are your tips to become a more authentic marketer ?”… You know we have that every single episode. And so I can't wait to share all of those insights with you here and give you a little deeper look into what Pepsi is all about. So for now I'll step back and let you hear the interview for yourself. This is our conversation with Pepsi's Chief Marketing Officer Greg Lyons.
Adam: All right folks I'm here with Greg Lyons from Pepsi so glad to have him on the show today. Greg thanks for coming on. How are you.
Greg: I'm excellent. Thanks for having me.
Adam: It's my pleasure. So glad to be talking to you as you've been with Pepsi for a little while now and having ascended to the role of CMO about two years ago have certainly overseen a lot of the transformation a lot of different things going on around the business today and we're going to dive into all that during the show. But would love to just get us kicked off with a little foundational aspect of your background how you got to this moment.
Greg: My goodness I am so happy to share. In September I’ll been at Pepsi for 20 years which I can't believe. It's been quite a ride. I guess I started out after college I went into marketing consulting for a few years and then back to business school at Kellogg and then with PepsiCo ever since. I worked in Dallas at the Frito-Lay office for eight or nine years and worked in the UK for four years. Both of those on the snack side of the business. Then I moved to beverages I was the theme of Canada Pepsi for a couple of years. And then part of the U.S. team for the last five plus years.
Adam: All right so you have been all over the place… you've seen all different aspects of the business and now here you are overseeing the whole shebang with regard to the North American beverage division. And I want to start off by jumping into you having a very wide purview then when it comes to how Pepsi has worked over the years and I know that there has been a specific focus recently over the last probably one or two years but you can be more illustrative than I on this point about fitting into pop culture or being the center of culture. We've heard that on some previous interviews and so I’d just love to hear your take on how you get Pepsi closer to the center of culture… just basically the relationship between the brand and that notion.
Greg: Sure, when we look back at when Pepsi has been at its best over its history it's truly an authentically then part of pop culture. Probably starting with Britney Spears ,Ray Charles, Diet Pepsi all those wonderful pieces of content that we can remember. And I think when we're at our best recently it's been probably the Super Bowl is the culmination of pop culture. And the halftime show specifically, it's where music and sports have their biggest show of the year. And so we've been doing the Pepsi halftime show for years now. This last year we had a lot of fun because the Super Bowl was in Atlanta… Pepsi is also at its best when it's a challenger brand. And so we had a lot of fun in Atlanta this year we rented out pretty much every billboard in the city and had some fun signs.
Greg: And it was refreshing that we were in Atlanta. And it really, it felt good to put coke a little bit on its back foot there. We did something called the Cola truce which for a day we put a statue of our founder next to their founder at the World of Coke and encouraged people to take a picture with both Coke and Pepsi. And we got a lot of buzz around that. And then you know every year the halftime show is awesome. We led into the halftime show with a real interesting insight this year … our 30 second ad was about truth that is a little bit uncomfortable for us but it's true and we wanted to base our our message off something that consumers can relate to and so lots of times when you go into a restaurant what people order by default is a Coke. And so we wanted to reinforce how amazing Pepsi is and how many people love Pepsi. And so sometimes the waitress almost apologizes and says is Pepsi OK… if they serve Pepsi and we all know especially in the tens of billions of people who enjoy Pepsi every day the Pepsi is more than OK. It's awesome. So that was the insight that led to our campaign with Steve Carrel and Cardi B and Lil John that we celebrated and led into the halftime show. So we just wanted to make sure that we're always part of culture. So we like being part of big moments in culture. We do it in a Pepsi way that's linked to real consumer authentic insight.
Adam: Yeah I thought that was a really fun twist on the commercial to the inversion of is Pepsi OK. No, it's more than okay of course you know you hear that all the time and in some parts of the country it's crazy. But I've heard it where I'm from on the east coast it doesn't happen so much. But when you refer to a soft drink I've always referred to it as like a soda. Some people refer to it as a pop in Midwest. And out there some people refer to it as just a Coke. So I think that's been in engrained some places and that was a nice way to subvert that… just a little bit and obviously having those stars in there is always going to add a flair. Staying on this point because you know there was a lot of that sort of big time media and you know of course people have opinions on all sorts of things including the halftime show and other campaigns like that with the changes in just sort of media today and perhaps the uprising of social people…you know any sort of keyboard commando anywhere can say anything they want. How does that shift or adapt to the strategy that you have when you talk about the value placed on that like big media strategy as a part of the whole. I imagine that you know that's very important to be at the center of culture through the traditional medias but there's also the realization that the center of culture is subject to change especially when you think about online and digital landscapes and social in particular. So how has the rise of that adapted your strategy towards these big campaigns?
Greg: Well if you're part of the center of culture and you don't have a whole holistic plan of how you're going to maximize that on social and oh but you're missing the boat. So that's a little bit different. That's when I started and it was about getting a very simple message and a 30 second spot. Obviously that's not the case anymore where we're going and we're in the right message to the right person at the right time. And you know personalizing it. But again, we're part of some… something that people want to talk about something that's either going on in culture or we see people gravitate to and then want to share and discuss and talk about it so…. There are brands that have moved away from Big Ten moments like the Super Bowl and just gone to digital and social. We don't think that's right for our high penetration big brand like having ability both. It helps us there so there's a multiplier effect for us at PepsiCo. We've got not only the beverages but the snacks you've noticed that Doritos is usually on the Super Bowl as well. So when we tell our customers like Walmart or Kroger we're going to be on the Super Bowl that helps us get up big displays in stores so that helps give our brands some visibility in the store and helps us promote our snacks and our beverages gather. And it also encourages people / consumers to be thinking and talking about our brand and indication where it makes sense for them to be eating and drinking. So we have a whole team that you know is mission control around all these moments to make sure we maximize the conversation. Aand obviously everything that we do in marketing like most companies do these days with all the technology out there we're getting better at that. But all of the data says with all the PR you get all of the love that you get. We also have direct store delivery so we have a huge sales team that drives trucks and delivers the product or it gets them fired up you're in our conversation. That's why the Super Bowl and those big moments pay out so well for us.
Adam: Well it's great to hear about that that strategy and how it diversifies but also how you are firing up these people. I want to ask something a little bit different because yo mentioned before you know you're doing your best when you are acting sort of from behind as a challenger brand. But I know that you know Pepsi has been performing incredibly well especially in the eyes of investors doing really great on Wall Street you know third year in a row of about performing some of your competitors there. You beat estimates you hit new highs after this quarter's report and a lot of that is due to beverage innovation obviously we've seen sparkling water in those sorts of beverages become really hot this year. Do you sense a difference in sort of the type of ways in which consumers of those beverages engage with your media as opposed to those bigger brands with more entrenched traditional tactics?
Greg: Hey that's a real good question. I do think that smaller brands engage with media a little bit differently than bigger high penetration brands because you get so many eyeballs, it drives some top of mind awareness and people are familiar with the brand and it just drives there's some situational salience or it's just cheap. It's the most efficient way to get as many eyeballs for people who understand what the proposition is about already and keeps it top of mind and so the ROI on TV and our big brands is much higher than those on our new smaller brands because we're doing the job of trying to educate at a time there and there are people who are less familiar with what your brand is… you're raising awareness and it's more difficult to translate that into purchase with just a quick message there. So yeah it's a little bit different our bigger brands probably a little bit more TV heavy. Our smaller brands a little bit more digital heavy but we spend so much more on our big brands that we probably spend more in digital on our big brands and we do on some of our new and smaller brands. We are moving as I said before towards more personalized messaging on an all of our brands and more digital on all of our brands… as marketing technology evolved and the premium you pay for targeting as well.
Adam: Well it's interesting to know about these differentiated tactics for different people and of course you have to do that across a diversified portfolio. It can get quite complex and I'm sure there's plenty of data coming in there. But as this now global brand very established all sorts of different people liking all sorts of different things. What's your strategy for continuing to build that that individual and personal engagement because I'm sure having all of this new information is great but you want to leverage it in the right way. And from what I think people have different views on how to leverage that data and how to treat consumers or obviously people as you like to call them I know that's crazy I'm even saying that but calling them people is what you should do and I know that you do that. So I'd love to know your thoughts on building that personal engagement despite the global diversified portfolio that you hold.
Greg: It's a major capability agenda that we are in the process of building here and it's two things. First if you do not use all of the science and the data that is making marketing so exciting and evolving marketing every day you're either going to miss out. And so we are leaning in heavy to building our first party data we've got over 60 million names right now in our database that we can personalize messages to. We are getting much better at measuring how effective our media and our marketing investments are. We used to measure our media once or twice a year with marketing mix. Now we're building the capability to be able to measure it and adjust it in real time. And we're starting to get better at dynamic creative which again is the different message to different person depending on what's going to be most relevant and effective against each individual person.
Greg: That being said as the technology is evolving and as we have all this data and we're making this data priority we run the real risk of not developing authentic relationships with the people who love our brands and our products. And what can happen is you start to treat people and data as transactions. And what the best brands do and the brands that are going to win in the future need to leverage this data but treat people as you would want to be treated as a person as part of a relationship. And so not only are we leveraging all this data but we're also investing a great deal of time and energy of understanding people at a human level and developing real empathy for the most valuable people who drink and enjoy our beverages and our brands. And we have a program that we call “humanize” where every single marketer in our department. So you know over 500 marketers are spending time every week are just getting to know people who drink with their friends and ideally people that are not like them at all. People who live in different parts of the country have different values. We're just trying to understand what's important in these people's lives how our brands fit into their lives what brands they're most loyal to and why and just develop some gut and you know understand them at a human level. And I think when you combine the data that we have all the smart tech that we have with that real deep empathy for consumers of your product we call people, then you're going to win in the future. And I think our marketing’s been getting better and more effective and our brands have been getting stronger because of that the consumer understanding combined with all of the data that we're mining.
Adam: Well that's great. I'm glad that you are able to see that there are equal benefits or let's say commensurate benefits between having a lot of data and building a lot of those relationships. And I know that you gave a position on this in a speech with the Mobile Marketing Association and I'm just curious as to why do you actually perceive that there is such a dichotomy here. I mean why do people not treat both of these things as equally powerful?
Greg: Well I think it's interesting that everyone's in a different place on this journey and there are some companies that are still way behind in the martech and in the data part of the equation. And so they're holding on to it's all about empathy and it's all about doing great TV advertising. So that's marketing of the past. You're going to have to move past that. And then there are the tech companies… Especially on mobile right now. I think we're almost at a crisis level of the creative that we're putting on that and how we're interacting with people on that. It feels very transactional to me. And I think that's dangerous. If we start leaning more and more into the tech and don't really care about making people feel something when they see our brands and it's all transactional I think in the long run you're going to lose that emotional connection and lose that authentic relationship that our brands have with the people. And I think the tech companies there are in danger of that. And some of the tech companies not all of them clearly. And so we just had a real interesting conversation with people on different sides of the fence and what's more important …building that emotional connection or getting that transaction. And I think the answer is you got to do both.
Adam: I would agree. Of course, this is something that listeners will know well you know we are all about how to build these relationships of course the premise being that everyday people consumers people who are on their mobiles all day are any brands most authentic influencers. So that's a great point about the mobile like almost crisis level with regard to creative. I'm a big fan of moving away from transactional personally. I think people will win in the long run who don't do that.
Greg: You and I are on the same page. Let me give you a lesser example to bring that to light light. We've got this new sparkling water brand called bubly and bubly is a homerun for us. It's doing incredibly well. We know that there's a message that's more effective for people who are drinking a diet cola right now that are transitioned and are thinking about gosh maybe I shouldn't be drinking this Diet Coke maybe I want something a little bit healthier. We know that there's a different message to get them to try bubly vs. a sparkling water drinker who is drinking another brand.
Greg: The diet soda drinker you want to talk about artificial sweeteners, zero calories etc. Even no caffeine. The competitive sparkling water you want to talk about the flavor variety, the bubbles and all this stuff. If you only talk in those two rational and so one's more effective to one group once more effective the other one we can target the groups. That's great. But if you don't have that overarching saying that makes you smile when you see a bubly piece of content you're going to lose in the long run. You got to do both. They both have to make you smile the way that you tell that rational message has to be linked in that way that people are getting some utility out of seeing it not just some information. And again I think we've done it probably best recently with bubly of doing it in a way that makes people feel great about the brand they just emotionally are attached to this brand snf then they figure out that it's got no artificial sweeteners or the best flavors out there for a sparkling water.
Adam: That do both, thatis critical. And you know obviously we know Bubly is doing very very well. And as we mentioned earlier a big reason why you guys are at all time highs right now and doing incredibly well year over year.
Adam: So with all this in mind I have two questions. One is I think one subjective and one's objective and the second is going to be about advice. But on this start with this first one I actually don't know. I've asked the super often but you guys are doing great things internally when it comes to mixing the data and building relationships and finding all these great ways to bring a smile to the face of your consumers. If you had to it's incredibly broad but if you had to give Pepsi an authenticity score let's say where 0 is you know maybe what you were talking about with some of these all we only like data and we're treating people transactional being 0 and 10 being we are you know completely on the relationship side we're using data well and you know we are truly you know funneling these consumer experiences and using that to better ourselves and better the way we market. Well where would you put Pepsi on that scale right now with the recognition that I'm sure that there's always places to grow. I'm just I'm curious of that. Do you have thoughts there?
Greg: When you're in marketing you can never be at 10. It is constantly evolving. That's why I love it so much. Oh my gosh it's I’ve been in marketing my whole career.And I’d give us you know if I were going to be generous I'd give us an 8 striving for 10 where we're never going to have it completely cracked but I do feel that the people on each of these brand teams genuinely are embracing the data and the technology and using it as well as authentically understanding their consumers at a human level. And then we try some things. We're always trying new things new technologies new ways to reach consumers. And I think where we're getting better at it. One thing that we're working on right now is how do you build loyalty at a local level. And so we've just reorganized a little bit and now we've got four mini marketing departments and four divisions. And so there's a division CMO within each marketing department and four different parts of the country. And so as I get more and more experience and see more and more things the brands that I think really can connect and build that relationship do so at a local level and can figure out what is incredibly specific about living in Detroit right now. And how are people feeling in Detroit and how can Pepsi tap into that is even more powerful it is augmenting the national message. And so we're getting better at that local marketing. And I'm going to be investing more in that as well. So 8 on the way to 10. I would say seven or eight.
Adam: All right. Well good good to know. Last question for you and it's going to relate exactly what you just said there but we always like to have advice for our listeners here many of whom are marketers or students of the craft. And if you are you know anywhere from a sole proprietor up to a Fortune 500 or 100 player and you're just looking to start this path to getting more authentic and maybe getting more local. I mean what should people be thinking about or what should they start to do as an initial piece of advice from you given the fact that you've been on this journey yourself.
Greg: Yeah it's interesting. I'll go back to moving from calling consumers “consumers” to really think them as people. And so one of the things that we've done is we've tried to figure out how we're going to be awesome to people internally as well to each other as opposed to only focusing externally on our consumers. And so we're trying to build a culture here at Pepsi where we make people feel valued and there's just little things that we can do.
Greg: Like on Mountain Dew, we send the people who love our brand the most who are engaged the most, we send them the innovation a little bit ahead of time and it makes them feel special that makes them feel part of a club of like oh my gosh this is coming out and I'm the first one is who's got it. I will send them little just care packages to make them smile with some swag. Same thing here when we have our awards show at the end of the year and we're celebrating people who have other great leadership or have done something amazing on the business, it's not just me standing up there shaking their hand giving them a trophy or a plaque. We don't tell them but we contact their parents and their spouse and their best friend then like they all give them these great messages that we play in front of the whole department.So we're trying to authentically make people feel valued here as well. And so if you can just be a human being and remember what that's like then you're gonna start to build really authentic relationships and the brands that develop the most authentic relationships are the ones that's going to develop the deepest loyalty.
Greg: And then once you get that passionate fan group that is loyal to your brand they do the marketing as much as you do it. And there's no stopping you then. So I guess if I'm going to sum up the advice: put people first and remember what it's like to build authentic relationships… start with your friends and your co-workers and then you become better at it when you're running a brand.
Adam: Start inward then turn outward focusing on relationships all the time. Folks I hope you take that advice to heart and for God's sake go buy yourself a bubly. Greg Lyons thanks so much for joining us on the show today.
Greg: Adam I enjoyed it. Thanks for having me.