CMO interview: Building the brand customer proposition at eBay
- 03 October, 2018 07:02
It’s been six months since Julie Nestor joined eBay Australia as chief marketing officer, and one of her initial priorities has been launching the online marketplace’s first loyalty program.
Debuting in June, eBay Plus was originally overseen by the product team but in need of marketing’s touch and customer lens, she says. Having sat on customer retention teams at both Optus and American Express, as well as worked on NRMA’s membership program during her 20-year career, loyalty and retention are passion points for this experienced marketer.
“At first though, this didn’t feel like loyalty as you were asking a customer to pay for it. It made me think about it differently and realise loyalty has evolved,” Nestor tells CMO. “People are willing to pay for subscription services that provide value. That can still be a loyalty program and drive the same outcome in the end – with customers spending more, staying with you, and so on.”
Because when eBay asked customers what they needed, certainty around free delivery and returns on anything they buy came up trumps. So the program’s core proposition is free delivery and returns on millions of items for a flat fee.
“That’s where we started and it’s meeting expectations,” Nestor says. “It was the right thing to launch for existing eBay customers, but to attract new people, it needs more. That’s a big focus in the next 6-12 months.”
Getting the customer loyalty program right is just one of the ways eBay is attempting to shift organisational focus from a product-led proposition to customer centricity. According to Nestor, ‘loyalty’ efforts previously focused on cross-sell and upsell, rather than how to achieve customer stickiness.
“Personalisation has been a global capability but wasn’t really there in terms of customer mapping and journey, and starting with what we know about customers and why they come to eBay,” she explains.
“When you’re a market leader with all this volume, the mentality is around how you keep making the machine work a bit harder every year, rather than that cultural shift to customer centricity. The latter requires us to look at fundamental things like opt-out rates, how many people are reading our emails, how do we respond to them, and just because you bought a phone last week, why are we still feeding you phone offers as you’re not going to buy another one.”
What’s also been absent at eBay, Nestor argues, is the art and human insight. “Sometimes we’ve had to come in and interrupt the algorithm and use a human brain to say how can we do this differently and what might be aspiring to a customer. It’s not just relying on the machine,” she says.
Nestor’s plans to invest heavily in brand building is another reflection of the shift in thinking at eBay. A fresh brand-led campaign is due out shortly emphasising some of the core customer-led capabilities of what the marketplace delivers.
While very comfortable in the performance management space, Nestor suggests eBay lost brand focus in recent years. “You have to get away from that constant onslaught of retail promotions, discounts and coupons and start driving a more valuable buyer experience from the product you have,” she continues.
“I’m coming in with a strong buyer lens, which is what eBay needs right now. It’s been such a successful business – 9.5 million Australians on the site every month – but we have to keep growing and still get the group that haven’t made the transition. And it has to be better than just continuing to give them tactical offers. There needs to be a clear reason to think about eBay and to change consideration set.
“That requires us to shift the balance towards spending on brand over performance and across the funnel.”
To help, Nestor is looking at what people actually think about eBay and notes significant perception gaps.
“We still have this legacy of being the second-hand auction marketplace even when over 90 per cent of what we sell now is new,” she says. “But every time I tell that at a BBQ, people are surprised. So telling that story is important, and it’s hard to do via performance marketing.”
Assisting Nestor reset the balance are two new resources: One executive with strong skills in media and creative, and another with strong expertise in customer engagement. At the same time, she recognises the need for data and insight to help her cause.
“I’m pushing hard on getting a full MMM [media mix modelling] and MTA [multi-touch attribution] model in next year to help with that,” she says. “We’ve put in a lot more in-market testing with creative work and we’ve done some synthetic test and control to get a read out on brand so we can put an efficiency target next to it.”
There’s no shortage of data at Nestor’s disposal within eBay already, and she says it’s mind boggling how many ways the business can potentially gain customer insight. But with so many things to talk to customers about, she again notes a tendency to focus on product and internal insight over customer need.
“There are so many messages – such as abandoning a cart, so should we talk to you about that product, or do we remind you we have a money-back guarantee or best price promise? They were all very initiative focused and not very customer centric,” she says.
To combat this, Nestor is looking to overlay eBay’s first-party data with third-party data to better understand customers in terms of overall interests and preferences.
“If you’re a bit of a discount shopper and you’re price conscious based on some of the other places you’re buying from and your spending patterns, we can give you an offer more relevant to price,” she says. “Whereas if you’re someone who really values convenience and has a lot of subscriptions and comfortable with them, we’re probably going to talk more about eBay Plus.
“It’s a segment approach that’s different to what’s traditionally been used by eBay, which would be based on your value and behaviour with us today, as opposed to potential value based on you in the open world.”
Nestor says different data sets should be used by the brand to engage customers depending on channel and context. “When someone is on the site, we need to trust the algorithm to get that second purchase,” she says. “This is about trying to be a lot more relevant and reducing the amount of communication we’re sending.
“One of the biggest challenges I find is the overuse of owned channels to reach your customers. I’m thinking about how to get personalised offsite and take that same rigour with messaging and personalisation we use on owned channels and use them offsite more.”
Mindful versus mindless
Another initiative Nestor kicked off to help her customer cause is on ‘mindless versus mindful’ shopping. As a democratic online marketplace, it’s hard to control every product and listing, she explains. A challenge is making sure customers trust eBay to provide the best outcome.
This led to significant insight work and research around customer segments and identification of ‘mindful’ versus ‘mindless’ shopping.
“Mindful shopping is, for example, needing to buy a birthday gift for your mum that has to be special and is you’re prepared to put time into it,” Nestor says. In contrast, mindless is shopping for toilet paper or nappies and is usually driven by search.
“If you’re doing the latter and we don’t give you a fast experience, you’re not coming back. EBay has been way too geared for mindful shopping even for mindless purchases,” she says.
Based on these insights, eBay Australia has started change the user experience onsite based on products it knows fall in either category. It’s starting with its top-selling technology products, along with fashion.
“We need to attract more young females to eBay and fashion is the way in,” Nestor says. “We’re starting at a vertical level on inventory that matters to a customer’s ongoing likelihood to continue to purchase and stay with eBay.”
Up next: How Nestor views the Amazon effect, plus what to do about CMO tenure and managing CEO expectations
The Amazon effect
With Amazon’s entrance into the Australian market last December, eBay is arguably on a burning platform to address a major new competitor challenging the status quo. Nestor says one benefit of Amazon’s arrival is more online purchasing broadly, and recent research from agency player, Mindshare, into the Amazon effect certainly indicates this is the case.
She says eBay is also confident of holding its market position in certain areas, one of which is its longevity in the local market. “We’ve been here 19 years and brought small businesses into ecommerce, and there’s a lot of love and heart for our brand locally,” she says. “There are some fundamentals of our brand we need to dial up more to reflect that.
“EBay is still a beautiful place for the quirky and long-tail item you’re searching for, but it should be a place you think about for everything. Leading into Christmas, I really want to try and get that message across in a new brand campaign. It should be a one-stop shop. “
Retaining long-term success has been be about being aware of what the consumer barriers are to thinking about eBay, Nestor adds. “If people don’t know we sell new product or that we have 80 of the top 100 retailers and a money-back guarantee and best-price promise, why wouldn’t they go to Amazon?
“We’re not changing everything, because a lot of what we do is working very effectively and we have continued to stay in that number one position. And we feel very confident with increased delivery propositions and moving towards a more customer-centric proposition, that we will stay there. But we need to be clear as a brand on what we are and what we have.”
This won’t stop eBay being at the forefront of innovation, and Nestor points to the recent launch of its voice-based interaction partnership with Google. The next step is full end-to-end commerce experiences via voice.
“But also the years of 2018 and 2019 are getting that core shopping experience as good as we can make it, and fixing the problems customers are asking us to fix,” she says.
Having built up 20 years’ experience in marketing, Nestor has certainly seen the role, remit and reputation change over her career.
It was while at retail-based agency, Ideaworks, that she worked on Westfield’s direct marketing efforts and gained her first taste of data-driven marketing. From there, Nestor went to Saatchi to work on NRMA’s loyalty program, followed by George Patterson, working for Douglas Nicol on Optus. This led her to a role within Optus as customer retention manager, where Nestor spent five years in various marketing roles as well as an operations role working on large-scale capital projects.
Most recently, Nestor completed a 13-year stint at AMEX, initially in customer management, followed by a series of positions across Australia and Asia covering marketing, partnerships and general management running the financial services provider’s Asian insurance business. A highlight was working on the David Jones/AMEX joint venture, the first retail co-brand AMEX had done globally. Returning to Australia, Nestor spent the last four years as the consumer marketing CMO, sitting on Amex’s Australian leadership team.
Nestor suggests marketing’s strategic input is somewhat dependent on the organisation’s focus, with customer-centred organisations more highly valuing marketing and all it brings. At eBay, she sees a business in transition.
“In terms of marketing changing more broadly, it’s relentless the pace and knowledge marketers need to have now across so many different elements – you’re expected to be fluent in financials, need to know everything about the customer and prospect, you need to know about media, digital – it’s really intense,” she comments.
A further pressure point is short-term expectations CEOs often have of CMOs. Nestor agrees the buck often stops with the CMO to deliver results. The interviewing process is therefore critical in discovering any such unaligned expectations, she claims.
“I had the right experience to make it happen at eBay but I also needed to manage expectations as well,” Nestor says of eBay’s CEO, Tim MacKinnon. “Tim is centred in data; I believe as much in the art as science. If we both hadn’t gone deep during the interview process to ensure our views aligned, it could have been quite disheartening.”
Nevertheless, Nestor recognises the pressure CMOs feel they to make a big mark really early in their tenure.
“My first six months have been focused on building the relationships necessary for me to influence people over time and to understand a really complicated business and build a good team. This is basic but important stuff for any leadership position,” Nestor says.
In the face of such change, resilience has to be the top attribute CMOs must possess to stick it out, Nestor says. Inspiration an important trait, too.
“People think CMOs are fortune tellers half the time. You have to be competent and be able to inspire a team and lead them in the right direction,” she says.
Finally, Nestor’ third CMO attribute is “scrappiness”. “Not being too wedded to everything and being able to react and be scrappy is really important.”