The folks at Host Analytics kindly asked me to speak at their annual conference, Host Perform 2019, today in Las Vegas and I had a wonderful time speaking about one of my favorite topics: the board view of enterprise performance management (EPM) and, to some extent, companies and management teams in general.
Embedded below are the slides from the presentation.
In a age where some 30% of the US adult population is technically obese, if you’re like most people, then you’re probably trying to keep an eye on your weight, and therefore on your daily food intake as measured by things like number of calories, grams of fat, or grams of protein.
The bad news is that many marketers have tried to subvert the intent of that act by using a non-integer number of servings per package, thus making it quite hard for most of humanity to figure out what they’re actually getting.
Let’s take a concrete example: Buitoni Light Four Cheese Ravioli. Let’s look at the Nutrion Facts label, assuming that we’re interested in calories and grams of fat as our key metrics. The label says the product has 250 calories and 6 grams of fat. But, not so fast, those figures are per-serving. So how many servings are there in a package? 2.5. Really? Wait, 2.5? Come on, did they really design the size of the package so it would feed precisely 2.5 adults? Were they targeting that small market segment of two adults and one eight year-old child who wanted to have (light) ravioli together for dinner?
I don’t think so. While a hungry teenager could devour the package alone, for most adults I believe the package size is pretty clearly designed for two, which also makes sense when you think about the target market. In my experience, if anything, it runs on the low side of two portions, not the high side.
So why would they say a package that was almost surely designed to feed 2 people contains 2.5 servings? There’s only one reason I can think of: to obfuscate the Nutrition Facts.
Quick, what’s 250 times 2.5 divided by 2? Not so easy, huh?
Quick, what’s 625 divided by 2? Easy, that’s 312.5, which is also the answer to the previous question and the actual number of calories you’ll get by eating half a package of Buitoni Light Four Cheese Ravioli.
So, by doing this trick, I’m sure they get most people to think “uh, 2.5 is about 2, so it’s about 250 calories per serving” thus understating the actual calories by 25%.
The answer is trust. Specifically, corporate trust.
Corporations spend billions every year on brand building and communication programs. If you asked any of those companies about their brands, you would hear phrases like: brand promise, brand trust, or faith in the brand. Or if you asked about their desired corporate reputation, you would again hear words like: integrity, trust, or faith.
The thing about trust is that’s hard to earn and easy to lose.
Nestle can — and presumably has — spent lots of money trying to convince me to trust the Buitoni Brand. To trust the quality. To trust the consistency. To trust — I was rather surprised to learn — its genuine Italian-ness. So that when faced with that agonizing moment of truth, staring in utter horror at the confusing array of fresh pasta products, so that at that moment, my hand would guide itself to the Buitoni label.
And then you manipulate the servings-per-container and that trust is gone.
Trust doesn’t just come from what you say. It comes from what you do. Too many companies forget this and, in little instants, undermine billions in marketing and communications spend.
I’m Dave Kellogg, advisor, director, consultant, angel investor, and blogger focused on enterprise software startups. I am an executive-in-residence (EIR) at Balderton Capital and principal of my own eponymous consulting business.
I bring an uncommon perspective to startup challenges having 10 years’ experience at each of the CEO, CMO, and independent director levels across 10+ companies ranging in size from zero to over $1B in revenues.
From 2012 to 2018, I was CEO of cloud EPM vendor Host Analytics, where we quintupled ARR while halving customer acquisition costs in a competitive market, ultimately selling the company in a private equity transaction.
Previously, I was SVP/GM of the $500M Service Cloud business at Salesforce; CEO of NoSQL database provider MarkLogic, which we grew from zero to $80M over 6 years; and CMO at Business Objects for nearly a decade as we grew from $30M to over $1B in revenues. I started my career in technical and product marketing positions at Ingres and Versant.
I love disruption, startups, and Silicon Valley and have had the pleasure of working in varied capacities with companies including Bluecore, Cyral, FloQast, GainSight, MongoDB, Recorded Future, and Tableau.
I previously sat on the boards of Granular (agtech, acquired by DuPont), Aster Data (big data, acquired by Teradata), and Nuxeo (content services, acquired by Hyland), and Profisee (MDM, exited to Pamlico).
I periodically speak to strategy and entrepreneurship classes at the Haas School of Business (UC Berkeley) and Hautes Études Commerciales de Paris (HEC).