Hall of Fame Profile: Mike McMahon

Only two years in and ConAgra Foods is already seeing positive results from its unprecedented reorganization, bringing insights, shopper marketing, category management and in-store marketing all under one group -- Integrated Customer Marketing (ICM). Mike McMahon leads ICM, which consists of more than 75 people spread out over nine locations. McMahon formed the department and built in processes to run the virtual office.With ICM, ConAgra is making a significant commitment around the shopper and its retail customers, a philosophy driven by the corner office (Gary Rodkin, CEO, and Joan Chow, CMO). To date, McMahon says those programs tailored to a shopper insight deliver, on average, more than a 30% return on investment. We sat down to discuss how ICM works and other trends in the industry.McMahon was recognized April 23 during a special ceremony at the In-Store Marketing Summit, held at McDonald's Hamburger University, Oak Brook, Ill. McMahon received an award and was honored alongside two other 2010 Hall of Fame inductees: James Damian, Best Buy, and Parisa Zander, Microsoft.How did you find your way to ConAgra?I started my career in promotions. I worked for a little agency out in Southern California called JP&A and then worked for Alcone Marketing Group, part of Omnicom, in Connecticut. After that, I was at Nestl» for five years in Glendale, Calif. Nestlé has a worldwide relationship with Disney, and I was accountable for the North American relationship -- licensed product development, foodservice sales at the park, experiential branding at the parks, all the product placement in movies and TV shows. It was a complex job, but it was great.So you've switched sides a bit.Exactly. I took the Nestle job because I was interested in the manufacturer side. I was there for five years, and then I went back to Alcone Marketing Group. My wife wanted to live back in Connecticut. Then, one of the guys I knew from Nestle had left and gone to Kodak, and then went to the grocery division of ConAgra in Irvine, Calif. He called to say they needed a vice president to handle integrated marketing, so I went back to California. When Gary Rodkin took over ConAgra, he began thinking about the long-term plan and centralizing in the Midwest. We shut down Irvine, and I was convinced to come to Naperville, Ill.Your experience does fit your role as leader of ICM.Gary wanted to turn the organization from a vertically integrated organization (independent operating groups with their own marketing, HR, finance, etc.) into a matrix organization. My role expanded enterprise-wide, and I had a number of things to do: I had to build a media department; I had to build a PR department. We had all of these separate groups doing different things, whether it was promotions, sponsorships and events, or our precursor to shopper marketing, which we called retail consumer marketing (RCM). That department, frankly, was a few people down at Walmart and one person to handle the rest of the U.S.What was the genesis of ICM?Our senior management has a PepsiCo background, so between Frito-Lay and the bottlers, the action is down at the store. We have a lot of center-store brands, so getting the store right is a key driver of growth. Joan Chow, our CMO, and Doug Knudsen, president of sales, came together and originated ICM. The idea was to take our shopper-facing assets and put them together to change the paradigm of how we think about marketing, specifically around how we engage our customers and shoppers. Then, they took me aside and said, 'We'd like you to lead the group and figure out the org design, the strategy and the deployment.'How did you organize?We had a small group of consumer insights people, and we had category leadership (category management), which was part of sales. We had this dabbling in shopper marketing, and we had no in-store marketing function. First, we built the in-store marketing function. I had to hire the leader and help engage the organization to drive new roles and responsibilities in this area. We expanded the shopper marketing function dramatically, like a five-fold increase in head count. We made category leadership and shopper insights direct lines into me. It was a big change. We are part of global marketing so I report to Joan Chow, and a large portion of the head count at global marketing sits in my group.That is a big shift.We will be 2 years old this coming June. The strategy is to deploy the majority of the people in the field with the customer teams (75% of the head count sits with the customer teams). That means our teams have a complete cross-functional group focused directly on the customer. As our customers are developing their own functional capabilities in marketing, we have experts on the ground to interact with, develop a relationship with and who can become key influencers to help drive growth.You are able to work with retailers more easily and in a more detailed fashion.The strategy is about being very local and customized. Shopper insights are our currency for influence and growth -- we have shopper insights directors deployed out in the field. From a tactical point of view, we use similar tools as other companies, like shop-alongs. But, there are a couple of things that we have done to customize our data sources. We have a SymphonyIRI panel that other companies have access to, but we've built a very customized interface within the panels so that we can build in customer segmentation as they segment their customers. We have built that segmentation so we are speaking the language of the customer. We believe that's fundamental.That touches on the challenge of merging segmentations.Exactly. Another tool we have is called Communispace. It is more of a qualitative panel. We can have any number of people in the panel and literally talk to a particular retailer's shoppers about anything we would want to talk to them about. We can show them concepts; we can talk to them about their store experience; we can talk to them about their attitudes and behaviors. It is a very effective tool. We can go to the panel before we get in front of the customer so we make sure our ideas are relevant to that customer.Who is ICM; who are the heads of your departments?The vice president of category leadership is Rachael Norton. The senior director of shopper insights is Danica Konetski. The vice president of shopper marketing is Jesse Spungin, and the director of in-store marketing is Mary Westerhaus.How do you work directly with them?Three things come to mind. One, as a leader, you hope you have a self-motivated and self-directed leadership team. They get together monthly and have what they call the "Meeting Without Mike." They sit down and crank through some broader organization-wide issues, and then get me in a room. The second thing, and it came out of frustration, is we instituted a brief process. The shopper insights and the shopper marketing people have to be on the call, and we don't walk through the entire brief. We basically review to make sure that we are clear on the objective, and we review the strategy and then the insight. We have been doing that every Tuesday going on 18 months now.A lot of companies will publish their most recent insight study. We have "Seasons of Mom" as one of ours. We make sure in those calls that we are leveraging that work. We also recently added the category leader and in-store marketing to the call. We now have category leadership briefs where we align on exactly what it is we are trying to achieve. They also have the same process where they align with their shopper insights partner and they walk us all through the brief on Tuesday. Everybody on the call hears what everybody else is doing and they learn from each other.What's the third element?We have a very disciplined "Measure Learn Change" process. The shopper insights team is in the field, and then we have a separate group, shopper analytics, who is accountable for measuring our programming. They are part of the shopper insights team but are for measuring our programs. Every month, everybody from across the country gets on the phone -- shopper insights, shopper marketing, in-store marketing, and we will be adding category leadership later this year. We also have quarterly webinars. Each of the four functions, as a team, develops the content and rotates presenting. We are trying to drive interaction and integration. This is a huge knowledge-transfer benefit for ConAgra.What are some key issues on the horizon in shopper marketing?One is what everybody's been working on -- defining shopper marketing. Everybody has his or her own definition, and I've got to be honest with you, maybe that's just the way it is. There is this desire to make it very specific, and my view is: The way different organizations are organized and how they go to market; the way that channels are different from each other; the way that manufacturers are different from each other or the categories we are in; maybe it is OK. All of this work around trying to get a definition, I applaud it and I would love it if there was one, I'm just wondering if it's not realistic?Also, I think there is this concept of balancing extreme customization with efficiency. My group is deployed primarily out in the field and they are working locally with their customer teams and with customer segmentation. They all have their own budgets. They all have their own objectives aligned with the customer teams, and they are working directly with those key customers. However, that can lead to some inefficiency, so we address that with our Measure Learn Change process.Can you give an example of an insight that your team gathered and how that influenced a program?The launch of Healthy Choice Fresh Mixers brought our steaming platform into shelf-stable convenient meals. It's really the simple concept of lunch at your desk. When we launched, we brought an entirely new user into the category. If you think about the category prior to Healthy Choice, it was really Hormel trays. And if you look at that flavor profile and whom they were targeting, we would call them mainstream American males. You wouldn't see a lot of women necessarily eating Hormel. We found out when we launched Healthy Choice Fresh Mixers that 70% of the users were brand new to the category and were driven by the quality and health perception of Healthy Choice. That didn't exist in the category before. It's a big game-changer.When you think about my team's role, Hormel had already defined the category and the set, so it was just making sure we got our set right. That was category leadership's role. Shopper insights worked locally to figure out how to best target the user and how to link that into the shopper marketing programs. The shopper marketing team built trial programs with our top customers, including everything from direct mail to demos to the usual suspects. The in-store team was accountable for several things. First, develop compelling displays -- the team won several awards -- like a great cylinder display that we've never done before. The second piece was improving shoppability at the shelf through shelving systems that helped keep the set faced, so shoppers could easily find the items they wanted.How does that launch compare to a product that isn't a new item?The category leadership team is leading a strategy called SPACE (Simplifying Product Assortment and Creating Efficiency).It's made it easier for shoppers to shop a set -- too much variety can turn people off. The context of it is to make sure you have the right number of facings on the fastest-moving items, make sure you have the right amount of variety, and then segment the category through insight-based shopper behavior.The in-store support around that could include shelving systems; the shopper marketing support could include traffic-driving programs to drive people down the aisle to the new assortment; and the insights team builds data and does the research around the right assortment and how we think about segmentation. From a shopper marketing point of view, the primary strategy for that team is around multi-brand activities. With "Seasons of Mom," there are six seasons over the course of the year: back to school, pre-holiday, holiday, post-holiday, spring and summer. We have done a lot of work on moms' behaviors, emotions and motivations around those seasons from a shopping point of view, and programs that leverage this work return on average more than a 30% ROI.What's ConAgra's position on some new things like mobile marketing, retail media and social media?We have done some testing on mobile marketing. For us, there is a place for mobile, but like a lot of companies, we can't quite understand the how and the effect on results. Social media is a different ball of wax. We are engaged in social media with a couple of very large customers and have done some pretty big things. My view on social media and blogging in particular, when you look at what's been going on in the economy, is that there's a "gaming" of value between the blogger sites and coupon sites. Those who are interested in comparison-shopping and saving money gain by using the Internet. You have to be out there with your value story because that's where a lot of the conversation is happening. It is here to stay.We are not quite convinced yet what role mobile is going to play from a shopper point of view -- as opposed to Europe, where there is a big cultural assimilation that has already occurred. It is not clear what that is here. It's got really seductive potential, but it is hard to wrap our minds around at this point.

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