Terry White, Chief Innovation Officer, Amway Japan

Recently, Michael Moon spent some time with Terry White of Chief Innovation Officer of Amway Japan. They discussed service innovations for consumer engagement and marketing operations. The Journal of Digital Asset Management first published this interview in Volume Four, Issue 2 - click MORE for additional interviews and articles about the engagement, social media, and marketing operations.

MM: Today we’re with Terry White, the Chief Communication Officer of Amway, Japan. Truly, a renaissance gentleman farmer of the 21st Century, in terms of being a generalist — a master generalist — across many disciplines in the brand marketing and marketing operations.

Terry, if you would, let’s start off with just a quick little summary in terms of Amway, Amway Japan and your current focus, and what you’ve been doing there.

TW: Sure. Amway Japan is a billion-dollar company. We serve roughly around a million distributors and customers. We touch the lives of maybe 20 million people in the course of what we do.

My role there for the last five years has been as the Chief Communications Officer. That means picking up responsibility for all of our customer-facing communications — from print through video, websites, mobile, social media. All of it.

And being part of the executive team, trying to lead us back into a growth approach to the market. We’ve been around that billion dollar mark now for a few years. It’s time to move on and grow past that. The fact is, if we do our job right, we’ll blow through double that amount provided we stay committed to our value-prop and passionate about our brand.

MM: One of the things that struck me, Terry, as rather unusual is that in North America, Amway has a certain brand as a function of its multilevel marketers. Usually somebody’s had a friend or a family member try to sell them Amway products or sell them as a distributor.

But in Japan, at least my experience of the Amway brand in Japan and Korean and other parts of APAC is that the Amway brand has really emerged as a youthful, upscale, aspirational brand. It might even compete head-to-head with a Shisheido or a Clinique or an Estée Launder, say for example, in the personal care products. Or basically top-flight consumer brands. Can you speak to that a little bit, and perhaps correct me if I’m misrepresented that?

TW: Yes. I think all in all, that’s a fair statement. At the same time, up front, we’ve had some reputation problems in Japan, as well. For a start, we don’t allow distributors to sell videos, tapes and DVDs - an issue that our business faces elsewhere in the world. So we can focus on getting great products to consumers.

Our reputation for quality products is outstanding. Customer satisfaction in the order of way above 90%. Do we compete with Shisheido and some of those other brands? We like to think we do. We dominate some market spaces. In others, we regard those guys as fair competition.

I think our brand is not where we want it to be. But rest assured that we are well on track to take it to the place that you describe. I think your statement is reasonably fair about where we’re positioned.

MM: So as you’re looking at how to grow — it’s not just to grow Japan — but also to grow other areas of the Amway family… Is that right?

TW: Absolutely. The reality, Michael, is that the days where we could grow our business by expanding geographically are over. We’re in well over 80 countries and jurisdictions. We’re not going to get significant growth just by looking for other places to go.

Given that reality, we have to move to a place where we grow through innovation. We’ll grow by bringing great products that consumers want to buy into the marketplace and helping our distributors sell those products to consumers.

That has to happen all around the world, now. In some markets, the challenge is in different areas. In Latin America, we just don’t get the sort of market share numbers that we can be comfortable with. We’ve got to go out and reconfigure the business. In Japan, we actually have to find more people who want to run an Amway business. In other parts of the world, it’s about keeping people in our business, and making sure that more people get to make more money earlier on, and are able to generate a retailing business.

So it’s a global focus on three core strategies. Three strategic directions.

The first is we have to develop a culture based on innovation. The second thing we have to do is to become consumer-focused. For the last 20 years, we’ve been focused on our sales force. That’s fine, but it’s only one side of the coin. The third thing we must do is become performance-driven. It is too easy as a marketer and a communicator to make decisions based on intuition. It’s the old, “This is all about magic,” and, “I know what copy works and I know what images work.” But that’s not true. It’s 90% science. So we need the hard data. 90% science, 10% magic. I’m there for magic - I support people who make magic every day. But at the end of the day, we have to become performance-driven.

MM: From a perspective of a CMO, and as you’re looking forward — you’ve nicely summarized three broad-ranging dimensions of the company, in terms of focusing on innovation, and becoming more consumer-centric and performance-driven. From a CMO’s perspective, as they are now beginning to think through how to execute that strategy, what are some of the issues or constraining or hindering factors that you see against those three drivers?

TW: The problem that we face is just the increasing speed of the innovation cycle. Japan is a really good example of this. Did you know that major beverage suppliers in Japan are contracted to supply the five big convenience store chains with three new products every quarter?

What’s happening? Let’s use Coke as an example. Say Coca-Cola is providing 15 new products per quarter. Reformulations. Repackaging. Recampaigning. Per quarter. Into the convenience store format in Japan. You’ve been there. You know what the consumer interaction is with the convenience store format in Japan. What’s happening is that the consumer is saying, “I’m loyal to you, but what have you done for me lately?”
I think innovation cycles are the greatest barrier to being successful — particularly for large global organizations. Just like the market entry barrier for start-ups.

Think about just the mobile phone market - you’ve got a new phone coming out every week. How do you get across a message about a device like that, that’s different? Can you keep saying “You can talk, and look cute on our phone? Love — Nokia”? I think cycles are the first major problem in innovation.

I think the second major problem with innovation, to tell you the truth — is expectation. As brand managers and brand ambassadors — we haven’t done enough to manage the expectations of our customers.

In a 21st-Century environment where we’re all connected to one another ubiquitously all the time, we’re not getting across to our consumers our aspirations for our brands and our products and services. I think those are the two major problems. I think those are the two key issues that Chief Marketing Officers really have to deal with.

I think from the perspective of consumer focus-the problem is, Michael, we’re no longer in charge of our brands. My nutrition brand, Nutrilite, is not what I say it is, any more. It’s what Google says it is. It’s what Facebook says it is. It’s what’s happening on YouTube. The challenge for marketing is to come to terms with that reality, and not deny it. Not get involved in more noise in the marketplace. It’s to deal with that reality.

MM: You were saying that as we’d come back and look at consumer focus, we have to first of all acknowledge that the consumer now co-owns the brand or is now controlling many aspects of the brand.

TW: The consumer defines your brand. A brand is nothing more than an emotional interaction between product / service and a consumer. And there’s a lot invested in that, and it’s a very complex subject that you and I have spoken about many, many times in the past.But the consumer is actually now in charge of the brand.

MM: Terry, I just ran across a great example that perhaps frames and clarifies and maybe takes what you’re saying just one step further. As we think about brands — and I was thinking about going in and out of the six different coffee shops here on the street where our offices are in Oakland… It seems that there’s a certain commitment to the brand experience. So when you go into a Starbucks or a Peet’s, there’s a certain level of commitment to the experience.

Not everyone shares the same level of commitment, but you could say one aspect of a brand — or one dimension of a brand — is a commitment to the experience of it.

TW: Absolutely.