Design for Lifetime Value like a Visa PMM
Friends. Welcome to product marketing adventures. The only show that takes you beyond theory and into the real execution of product marketing. My name is Elle Grossenbacher, your trusted guide and host of this show. In each episode, I bring in expert product marketers to co host two segments of this show.
Elle:First, a case study example of their work, followed by a messaging critique for companies we admire. So if you're a PMM looking for practical guidance and inspiration, you're in the right place. Are you ready? Let's go. Let's talk about one of the most underrated metrics in product marketing, customer lifetime value.
Elle:So most PMMs I know don't even track it, but we should. Okay. Hear me out on this one, guys. When you understand customer lifetime value, every trade off a PMM needs to make becomes crystal clear. That's because you know and you actually know the payoff.
Elle:So imagine what you could do as a PMM when you know exactly how much your biggest customers are going to bring in when they fall in love with the value that your product offers. You could reposition the product around what truly retains customers. You could focus your go to market efforts on the segments that deliver long term value, and you could help shape the product road map around features high lifetime value customers actually use. You guys, we are going to unpack all of this stuff today. I am so excited to bring you a case study on how Visa built a life cycle marketing practice completely from scratch, moving beyond one time use to drive repeat engagement and increase customer value over time.
Elle:Joining me today to walk through this is one of the sharpest, most creative minds in the game, Terry Seitz. Terry is the kind of leader that product marketers love working with. He's strategic and customer obsessed. He spent over twenty years building and fixing go to market engines for brands like Coca Cola, HBO, Hasbro, and for the last twelve years at Visa. At Visa, he's done everything from launching campaigns with NFL stars and Olympians to founding in house an in house agency AdHoc.
Elle:At HBO, he built strategies for TV hits like Game of Thrones and True Blood. And you guys, his personal resume is super impressive with roles like my true dream job, PTA president. And he was a pro soccer team mascot. Yes. Wearing the funny costume and all.
Elle:And get this. He, quote, unquote, survived time in a Bolivian prison. Not actually, though. More so just visited. Terry, welcome to the show.
Terry:Thank you so much. Well, a retrospective of my career and life. It's a very colorful and and arguably checkered cast. So this is gonna be an amazing discussion. And thank you for the journey thus far because it's been it's been a lot of fun.
Elle:Yes. I am so tempted to ditch the topic that we had today and just talk about your mascotting days or maybe your experience in the Bolivian prison. Maybe I need to do a spin off series just to get to know all the interesting, to your words, colorful.
Terry:It's amazing how we come into the mar how we come into the marketing discipline, like where we came from.
Elle:Oh, yeah. And how it shaped what we have to offer. I love it. Okay. Let's dive right in.
Elle:I can't imagine anyone would not know this, but just to keep it crystal clear, let's bring our listeners up to speed. Tell us about Visa and maybe which products or services your team was responsible for.
Terry:Yeah. So so first and foremost, and I didn't realize this until I interviewed with them thirteen years ago, we're not a credit card company. I know that sounds incredible and bizarre, but we're not. We are a payment technology company, which is a lot of words basically to say, we're the the rails, the digital rails by which transactions and payments happen. Despite us being on the front of every card, we are not a credit card.
Terry:We don't set interest rates. We don't actually issue cards. We're the technology that facilitates those transactions. We do that in a four party model. There's buyers and sellers, and subsequently, there's issuer banks and acquiring banks.
Terry:And we sort of sit in the middle, and we make sure that the payments and the transactions go through. That started in 1958 in Fresno, where back then, was very pen, check, right, you had to go down to the branch, etcetera. So we, in some respects, were were the original fintech, and we'll get into, the case study later, that gives rise to sort of the the new version of that. But, yeah, we were arguably the original fintech, you know, sixty sixty five years ago. Today, we have over 5,000,000,000 cards or credentials in the marketplace.
Terry:We process about 316,000,000,000 transactions on an annual basis, which is worth an estimated $16,000,000,000,000. We do so in over a 160 different currencies, 200 countries, a 150,000,000 merchants, and about 15,000 banks. So just to talk about sort of the scale. But, again, we're not a we're not a credit card company. That's the scale of the the payments ecosystem that we we have power.
Elle:Yeah. I never even imagined that. Yeah.
Terry:Yeah. Like, we were amazing. Incidentally, we started out being owned by a consortium of banks. We IPO ed in 02/2008, so we sort of broke off, which is why we are the Visa today not attached from an ownership structural standpoint to a particular bank. What my team did and does is a couple of things.
Terry:One is we we own the digital products, the marketing of digital products. At the time of the case that we're gonna be talking about, it was largely around sort of security benefits and features attached to things like zero liability, which is you don't pay for fraudulent transactions should they occur, etcetera. The other remit of my team was brand. And so it was about driving brand equity. We called it brand health among sec different segments of the the the cardholder population.
Elle:Right. Yeah. It's so I feel silly because I never even imagined I never even thought about, I should say, how Visa is not a credit card. But after you mention it, on my credit card, it has, like my bank is issuing me the credit card, and they're the ones setting the credit rates and as you mentioned. So very interesting and helpful to understand Visa's role in that ecosystem.
Elle:So for the first segment of our show, we are going to talk about Visa's case study around life cycle marketing and increasing customer value over time. So tell us more about what was going on at Visa when you realized that leaning into life cycle marketing or the practice of life cycle marketing needed to be maybe more strongly established?
Terry:Yeah. Great question. So going back to our foundations in Fresno in '58, we launch about a product every twenty years. So this is not something that we are cranking on or had been cranking on a continual basis. We launched a credit card, and then we launched a debit card.
Terry:And then internationally, we launched, which now is somewhat ubiquitous in The US, what we called contactless cards. Right? Where you just go to the terminal payment terminal, and you just tap. Right? You just tap everything.
Terry:We didn't, at the time, launch a great deal of products. But what was happening was there was a a revolution taking place in the consumer markets about how and where people were buying stuff. This is gonna sound like no kidding, captain obvious, but back in, you know, 2015, 2016, ecommerce was still somewhat nascent. Estimates are it was about a twenty eight billion dollar business. Fast forward to today, it's a $1,500,000,000,000 business.
Terry:But back then, it was pretty new, and PayPal had jumped on top of, that rise in ecommerce and foreshadowing where the growth was coming, and they were the first ones to develop and deploy a digital wallet, which made made all the sense in the world. We had not. Mastercard had not. American Express had not. So we woke up somewhat nine years late to the game.
Terry:They had actually developed Digital Wallet back in '98, or did you know, the company was founded in '98. And so we decided to go out and try and establish a beachhead on our own to capture ecommerce transactions. Again, we're not a credit card. We believe that anywhere and in any form that someone is trying to make a transaction, a payment, we should be there. We should power that transaction.
Terry:That goes back to how we make money, the economics of how we make money. But it also goes back to, I think, why we exist as a company, which will come we'll come back to when we talk about life cycle marketing, which is back in '58 in Fresno, Diak, the founder, believed that if we could digitize transactions and payments, that would open up opportunities for progress for individuals, for small businesses, and for society writ large. And so Visa Checkout, which is our digital wallet, or at the time was our digital wallet, is a manifestation of why we exist. It's the how to progress. It was within that context that we launched Checkout, Visa Checkout, which by the way, was a precursor to the fintech revolution that we all see, particularly here in the Bay Area, in terms of what's happening with Venmo and Apple Pay and Chime and Buy Now, Pay Later, and the proliferation of the ways in which people pay digitally.
Terry:Really started in '98 with PayPal, and then with us, Mastercard, etcetera, Amex in, you know, 02/1516.
Elle:Got it. Okay. So you are seeing this change in human behavior. And I love what you said about sticking to the mission of why do we exist as a company. And if there's transactions that are happening outside of where the physical card is present, you need to be there.
Elle:So tell me more about maybe, like, what was the task at hand then with the creation of of Visa Checkout?
Terry:Yeah. Excellent. So, again, go back in time, though it still exists a little bit in in what we call guest checkout. Back then, you had to punch out your 16 account number, your address, your CCV, your expiration date. It was annoying.
Terry:It was annoying. Checkout or digital wallet, right, is this notion that, like, you've preloaded your credentials one time, and then anywhere you transact across the Internet to the Visa Checkout platform exists, like, became two steps or one step. As we think about the future, it's gonna be sort of fingerprints and eyeballs. Right? And it's it's gonna know?
Terry:But back then, it was it was fairly cumbersome. So our remit in launching Visa Checkout was threefold. First and foremost, it was signing deals with merchants. Going back to our four party model, we only exist in sort of the middle where there's a buyer and a seller, an issuer bank, and an acquiring bank. We facilitate those transactions.
Terry:But first and foremost, we need to get merchants to accept and integrate the Visa Checkout product.
Elle:Yep. You can't go and transact if the merchant doesn't create the space to do it. Yeah. Right.
Terry:If if there's no what we call acceptance, if it doesn't exist, then we can't drive transact. So then the second remit or a second charge for us was driving awareness and understanding of the product, and then ultimately enrollments among consumers. Right? So if we think about the McKinsey funnel, that's sort of the top part of the funnel, assuming, right, we're talking about the funnel vertically versus horizontally and we that's a whole other conversation. And then once we had driven awareness and understanding and ultimately enrollments, and this is where you rightly point out, we really needed to drive life cycle or bottom funnel, what we call repeat usage and loyalty.
Terry:Right? The sustainability of a product post launch. So those three charges were an incredibly set of new muscles at Visa that we had to flex because at that time, we we sort of existed like many other brands, particularly big brands, in this, like, Henry Ford, like, one team does x, then they hand it off to y, and then it gets handed off to z. Right? And and then the the car gets shipped or the product to get shipped, and you declare victory and and you move on to something else.
Terry:This new approach to getting deals signed with merchants. Right? So that's the b to b part of our our existence. And then the b to c part of driving awareness, understanding enrollments, and then ultimately repeat usage required us to rewire and rethink our total marketing function.
Elle:Yeah. That sounds incredibly complex because you're seeing this change in behavior in your own customers and in the marketplace, but now you have to do that change in behavior in your own organization. And so it sounds like you had a two sided market with merchants and consumers. How did you manage that from an execution standpoint? Like, how did you rewire the org to support that?
Terry:We created a startup within the walls of Visa knowing that we had that three charge remit in front of us. And it was due to solving a bunch of problems, which is often the case. Right? You sort of don't know where you're going until you somewhat get to a series of forks in the road. The first challenge we had was signing merchant deals.
Terry:The way that Visa has historically worked is and been incredibly successful is we underwrite a bunch of deals. Right? There's there's dollars in the pot to get an issuer or a merchant to sign up with us for the products that's specific to provide. But when we were pitching Visa Checkout, we weren't signing deals. We weren't signing deals from a quantity standpoint, from a quality standpoint, from a size standpoint, and from a speed standpoint.
Elle:That must have been disappointing to have built this exciting new startup right during a time when there's a big shift in the world and deals aren't flowing the way you want them to.
Terry:Yeah. And and what we found, and this is a a lesson that we'll talk about later, was we found that the reasons why we weren't signing deals was a, as much as we like to think that our children are all beautiful and smart and wonderful, was a little bit of point of parity in what we were launching with. Two is what we were finding was the selling process was not only through the sales team, through the IT folks on the merchant side, which is the traditional case. We actually, because there was the b to c side, had to sell in to the marketing departments at all of these different merchants at Nike, at Williams Sonoma, at, Pizza Hut, Dunkin' Donuts, Starbucks, and a whole slew of others. And so that created an interesting challenge for us, which is like, you had multiple stakeholders that had different objectives on their end.
Terry:How do we go sell and check out Aviso checkout to ensure that these deals are getting are getting done at the speed and the size in which we we needed to? And this was critically important because one of the things that we had struggled with at the outset was something called, you know, mitigating the cart abandonment rate, which is you and I go online. We're gonna go buy a pair of Nike Bear Jordans, but we don't finish the transaction.
Elle:Oh, yeah. I am a repeat offender of cart abandonment to this day.
Terry:Like, globally, like, 65, 70% of purchases are actually abandoned. And so for the IT folks on the merchant side of the sales equation, they were like, how are you mitigating? How is checkout going to mitigate this when, theoretically, you're asking me to integrate this platform into our checkout process? So we had to figure out a way to develop better sales enablement and cases to go do that. And then subsequently, it's like we had to use marketing dollars and the marketing team on the other side to say, we're gonna drive the upper level funnel to get more people into the checkout process, so that when we're able to consolidate the steps, which is the benefit of Visa Checkout, you'll see increased conversion, lower card event and rate, you know, average ticket size, etcetera, go on.
Terry:The second challenge that we had was, again, once we had driven those deals, we had to then drive the consumer part of this, which was awareness and understanding enrollments, and then repeat usage. And did so through the creation of models and segments using our first party data. We're Visa. We sit on a ton of data through something called VisaNet, and then obviously our customer, our merchant data, and built out go to market plans accordingly. I should say, just to take it one step back, the solution to challenge one, e g, how are we signing the deals was we erased the lines between the different marketing teams and went to our potential merchants as one.
Terry:And that one was, here's a better set of sales enablement materials and cases. Number two is we're gonna come to you with more or less fully baked co marketing plans. So here's the creative. Here's the content. Here's the media plan attached to the deal dollars that we were pitching them with.
Terry:So that we were talking to their IT teams and marketing teams all at once. It was a basically, we just need you to sign on the dotted line and make some approvals. We'll take care of the full end to end process. And our marketing teams served sort of both gods and decision makers at the same time.
Elle:Bringing the two sided market together, the b to c and the b to b marketers to help reduce and lower that cart abandonment rate with Visa Checkout. That's so cool. Okay. And then what did you do about the second challenge that you mentioned? Did you have a solution for that?
Terry:Well yeah. So the second challenge was so first, you get the deals done. Right. We gotta get those over the line. We get the acceptance.
Terry:We get what we call the button, the Visa Checkout button on merchant's websites. And then it was like, how are we driving how are we driving awareness and understanding enrollments and ultimately repeat usage? That challenge of the repeat usage was really fundamentally important because we, at the time, were like, well, we're gonna declare victory. We've done all of this stuff, but it was like, but wait. Wait.
Terry:Wait. You now have to prove out the sustainability of a product. And so we developed a series of models and segments using first party data.
Elle:Yes. Okay. This was the VisaNet, the plethora of data that you were sitting on plus the merchant data. Oh, you're so lucky. It's so it's a product marketer's dream to have that kind of data.
Terry:It's interesting. Yes. We were lucky, but we had to be incredibly careful. Right? We're a heavily regulated industry, so the use of PII is carefully sort of monitored and executed against.
Terry:But what we did have, and what was so crucial to that lower funnel repeat usage lifecycle part was, you know, we're able to identify where people purchased, where they are likely to purchase again, be it on that merchant website or cross selling to a different website, ticket size, price sensitivity to what was purchased. And then really, really, really important for us was what we called recency, which was you'd made a purchase. If you didn't make a purchase within ninety days, you became cost prohibitive to retarget, because it was as if you were a new customer or a new consumer again. So we had about ninety days to make sure that we had achieved what we would call escape velocity, which was you transacting five or six times over a defined set of time, and then we didn't have to target you again. It became more of a habitual use.
Terry:You were transacting. Right? And that was important because, again, we go back to launching this product for Visa. You're often sort of paying merchants to put the button into your checkout experience. Then you're goosing trial through offers, and then you're somewhat goosing repeat usage through some offers.
Terry:Right? But that that investment needed to be decreased. Right? We we had to take down our CPAs and what we were calling our CPUs, right, our cost per usage. Right?
Terry:And then ensure that ultimately those levels of investment, and this goes back to the beginning, were all part of establishing a lifetime value or a customer value. Right? If we think about the sort of crude definitions, right, like the lifetime value is the the value of a sale times the number of transactions over the lifespan of your relationship with that with that customer or consumer. Right? And then you drill it down into, okay.
Terry:Well, the customer lifetime value is you take that lifetime value, and then you times it by your profit margin, and that's how valuable a particular customer is to you at the time. So for us, it was like weaving that measurement story and that investment story, both for us who are making the investments and then the merchants to say, hey. The customer lifetime value is x for you or y from a lifetime value perspective, and that became a critical story point for us through the launch.
Elle:I love that. And just for listeners, FYI, heads up. I'm gonna make sure that that formula, Teri, that you just mentioned shows up in the show notes so that our listeners can go and snag it and use it in their marketing strategies. Okay. So wrap us up with what was the result of all of this goodness that you were doing with Visa Checkout?
Elle:What kind of impacts to Visa did you see?
Terry:Yeah. Great question. So this two chapter story of going into a merchant to get deal signed and showing them sort of the end to end process, the lifetime value, and then how product to consumer marketing integrated into one another. We were able to capture about 50% of the what we call the TAPV, the total addressable payment volume, which is, again, as Visa, we wanna process every transaction where we can. And that's about understanding where the payment volume exists and then going and trying to capture that.
Elle:And that that sounds really high to me. Do you consider that really high? Because it sounds it sounds like a really good metric.
Terry:Yeah. It was the number of merchants, not the addressable payment volume. We didn't capture, you know, 6,000,000,000,000 in volume. Like, we didn't process that. It was like we had signed deals where their potential volume on their websites or across our platforms totaled 50% of our target.
Terry:So that was a big deal. As we then moved into sort of, okay, well, charge number two was enrollments. Over the course of the the product's life, we generated 35,000,000 enrollments. Big investment, big expectations, 35,000,000 enrollments. Like, that was huge.
Terry:And then the last one was repeat usage and loyalty. Right? The notion of a life cycle metric. And we drove a 23% repeat usage rate, which depending on where you're looking, is 23% a lot or a little? We gave ourselves an incredibly high hurdle to overcome, which was you had to be an active user.
Terry:You had to make two transactions over a rolling twelve months. And that became the proof of sustainability. It wasn't like you signed up once and we never saw you again, but we got to count you. You it's like, no, you needed to be active. So reaching almost a a quarter repeat usage rate was important, and and that goes to this notion of, you know, trying to mitigate the leaky buckets, you know, that we and every other product launch are faced with.
Elle:Yeah. I appreciate the boundaries that you put on even how you're going to track KPIs and metrics for this entire endeavor. Right? Like, it's who you are as a marketer and a leader is that chasing truths. Right?
Elle:So you're not even gonna let data sway you. You're gonna make sure to put parameters around that data. Right? Like, to your point about, like, finding truly active users versus just someone who just signs up once. It really speaks to how genuine the success of Visa Checkout was.
Elle:So really helpful. I just I love this story overall because it's such a great example of how product marketers can move beyond messaging and actually influence growth strategy. And it sounds like you connected life cycle marketing to real business outcomes, and your team proved to merchants that Visa Checkout was worth investing in long term. And then you use that repeat usage as a signal for product viability, and then you built programs for consumers to help drive behavior. I don't even know.
Elle:Maybe I'm saying it, like, as and then as if they happened one after the other, but some of this happened concurrently in parallel. Is that more accurate to say probably?
Terry:Yeah. That's that's exactly right. We're all imperfect fallible human beings and marketers, and what we were what was happening was in in sort of like neo real time, uncovering where we needed to go to as a product marketing team and and evolve ourselves accordingly where the challenges were and where the the the business opportunity and KPIs sat.
Elle:Yep. Yep. I love this. It's the kind of work that directly impacts customer lifetime value. There's so much we can learn here.
Elle:So I'm really excited to dig into this next part. Let's just zoom out for for a bit and say I'm an inspired product marketer listening to this story, and I'm trying to build a life cycle program or get serious about driving customer lifetime value. Where do I start? What would step one be?
Terry:Yeah. Step one is understanding the market driving dynamics, like where where growth, revenue, your next dollar is coming from and and will likely come from. And then really being honest and go, is the company, is the product that we are attaching to those dynamics really well positioned to go do that? Right? So for us, very simply, going back to the beginning and in full deference to somebody like PayPal, we all saw the rise of purchases offline, brick and mortar stores to starting and and forever moving online.
Terry:Right? And so Checkout and PayPal, etcetera, now, you know, the Venmos of the world, Apple Pay are now doing. But for us, it was like the market dynamics were were changing. And for us as a product marketer, that was salivating to go, oh my gosh. There's a new space that we that we have to go play in.
Terry:The other thing that was a a sort of a step one a was, okay, you understand the market driving dynamics. How do you then size it? Right? We talked about TAM before. And for us, given our scale, we couldn't go market and do co marketing and deals with the tens of thousands, now hundreds of thousands of merchants online.
Terry:What we had to do was prove that we could get the top try and get most of the top 40 because then you have scale. Right? If you can get most big merchants to take Visa Checkout, everyone else will follow. So we've very much prioritized those big guys versus what we would call sort of the long tail merchants. And then thirdly, and this goes back to your earlier very good point, step one b or one c is this notion of like, we really should be aligning on KPIs cross functionally and up with the the c suite before we launch.
Terry:And I know, again, kept an obvious statement. But at first, it was like, we now you know, we need to go sign deals. Okay. Well, that was the sales team's job. Well, that wasn't really happening.
Terry:Then it was like, okay. Well, now we have go drive enrollment. But now we have to then prove LTV and and usage. And this was a huge learning for us that it was like, if we're gonna think about a five year plan for a product and a product launch, we should be thinking about this from the totality of a life cycle, not just in tranches of deal sign, enrollment, and then and then life cycle, you know, repeat usage. So those three things I call sort of the step one is, like, understanding the numbers, the north star, where you're going.
Elle:Yeah. Yeah. I really appreciate how you put a timeline to it too. So you're not just looking at the here and now. So, like, the to your point, understanding the context of of your market, but also looking into the future and how that market will continue to evolve.
Elle:It's so common, certainly in tech, right, for companies to wanna jump in and be a me too, and it's tempting to do that. And to your point earlier around product marketers kind of, like, salivating at the opportunity to create and build something, you know, sexy and new and exciting. But if you really wanna drive value looking internally, look at looking at who I am internally, but being true to who you are as an organization sounds like a good reminder even though it is a captain obvious. I appreciate that. Okay.
Elle:So step one, you kind of have this understanding today's kind of here and now market context, market dynamics, and aligning on the KPIs. What about step two? What happens after that?
Terry:Yeah. It's it's interesting as you and I have been talking about this. We're essentially talking steps as if we're writing a brief. Right? So if the first part of what we just talked about is the, call it the business challenge and opportunity, the second one is your customer or consumer segment part.
Terry:Right? It's the the audience, for lack of a better word. So step two is understand the barriers to why deals aren't getting done. Right? For us, it was multiple stakeholders who we hadn't accounted for.
Terry:It was somewhat of a point of parity set of benefits, and how do you how do you break through those things? How did we as an organization break what was the traditional sell in deal making process, which again was just largely underwriting deals? And that became sort of first and foremost. Because again, we're a b to b to c model. You understand the barriers to getting deals done and then transitioning to the consumer side.
Terry:What are the barriers for adoption? You rightly pointed out, if there's no acceptance, if you can't get deals done, then it doesn't matter about enrollments. Right? But, you know, for us, it was and I think a lesson for product marketers is you gotta really focus and be maniacal about prioritizing benefits. They're all not the same.
Terry:They are all not gonna drive perception or behavior usage in the same ways and at the same rate. For us, it was the ease and convenience of what checkout provided people versus something like security. And that was important because ease and convenience delivered against the merchant need of, hey. I have I wanted to make sure that folks can pay on their phone, on their laptop, you know, in the browser, across all different sort of platforms. How does Checkout mitigate the friction that is inherent with those things?
Terry:And then lastly, again, once you got them in the door, how do we ensure that there's repeat usage and loyalty, the sustainability of the product? And how do we do so in a way that weans us off of constantly just paying for people to transact for us? So again, that goes back to hyper segmentation. It goes back to sort of the flywheel of communications that balanced education with specific product features and specific merchants in our case, like co marketing. And doing so with a timestamp of and across a bunch of different channels to go, when is it gonna be cross prohibitive to continue to do these things, etcetera.
Terry:So as we think about the brief, we go, okay. The business challenge was x. Here's sort of the the insights. And then
Elle:Understanding, yeah, those barriers. And you mentioned a very important aspect of it that's specifically related to life cycle marketing and unlocking customer lifetime value with looking at what are the barriers to repeat usage. And some product marketers I know are really good about tracking that and identifying it, but it's so hard as product marketers because we have we are one of the type of marketers who we have so we have so much on our plate. We wear so many different hats, and not only could it be difficult to get that kind of data, but sometimes you don't even have time to track that kind of metric. But it's a good reminder to add that into if if there is a product marketing dashboard out there to add that KPI to that so that you can start looking at, you know, what could be those barriers to repeat usage or or loyalty.
Elle:Okay. So we talked about step one and step two. How about step three?
Terry:Step three is the go to market strategy and then the the crafting and deployment of that of that strategy. So, again, I talked about that recharge remit of you gotta get deal signed. Right? We had we had to get Visa checkout accepted at merchants. So we collapsed the process and the team's remit, and we went into 50 or 60 different merchants and said, here's the sales enablement case for the IT folks, and then here's the marketing case for the marketing team, and went in with sort of one unified two chapter story.
Terry:So that was the first thing we did. This all coalesced, and it goes back to the product features and benefits, around what we were calling the one hand campaign. Right? And it it was the notion that Visa Checkout is so easy. It's so convenient.
Terry:It's so intuitive to use. You don't have to do the 16 numbers and the CCV in your hands. Right? It literally is like, you can check out on any merchant website with one hand. And so we dimensionalize that through some really interesting vignettes and stories.
Terry:So we had a surfer in Tahiti, make a Pizza Hut order surfing.
Elle:How cool. Like, super creative. Super creative.
Terry:Yeah. Just to dramatize how this is done. We had a bunch of NFL players throwing, you know, Hail Marys, you know, 60 yards catching and checking out at the same time.
Elle:I think maybe was that, like, in a commercial or something? It sounds so familiar. I think I might have seen it.
Terry:Yeah. See, it worked, everyone who worked. We did, we did a Super Bowl stunt where we set the Guinness Book of World Records for most one handed catches in sixty seconds. It was 33, and it was it was done by Odell Beckham and Drew Brees at the time, which then it got it went a little viral. Antonio Brown, who was a star wide receiver for the the Steelers, did it, like, the the the next year because he wanted to break it.
Terry:Right? Because why you know, NFL players have egos, and they wanted to best each other, right, better each. So we dimensionalized this notion of one hand and the the ease, the convenience, the the intuitive use through that campaign. And then we also developed 50 or 60 different co marketing campaigns with the individual merchants that we had signed deals with. And so it was like, how do you talk about the concept on one hand within the context of what they were selling and and their websites?
Terry:And it was often done with offers. Right? You're paying for folks to sort of first, make a transaction, and then subsequently if they're to do some of the usage stuff. But what we also were very cognizant of was filling the pipeline with people who were not going to a specific merchant to redeem an offer. And that tracks back to this marketing notion of the ninety five five rule, which is that at any given point in time, 95% of your potential market is not in the market for your product or service.
Terry:They just simply are. 5% are. We as a as a function do an amazing job converting them, tracking them, attributing them to different platforms. Right? But the reality is out of your total addressable market, 95% aren't actively seeking you out.
Terry:How do you cultivate prime the pump, get them ready for when they are? And that we believe and know has a correlation to ultimately lower cost per acquisition and cost per use when they are more actively primed versus the proxy of like cold calling. Right? You don't want a cold call, you want you want the warm leads. We just did it at scale.
Terry:And so we would go to market with brand, what we were calling brand education campaigns, and then co marketing campaigns with very specific merchants. We then took that after you got it after you became an enrollee and developed these segments and these models in terms of the where, when, why, how to get somebody to repeat transact, and did so with more education and brand messaging, flywheeled with more specific co merchant. And we were able to disseminate where you would likely transact next, and then served you advertising and marketing and built us a whole CRM program to go do that.
Elle:What I think was so special and unique about how you built your go to market strategy is that you intentionally included elements that influence lifetime value. And I haven't seen and maybe it's just be maybe this is a b to b thing. I haven't spent a ton of time in b to c, but I haven't seen a ton of go to market strategies that include so much of the creative campaign rollout. Of course, I've seen and been part of creative campaign rollouts before as a b to b product marketer, But just typically, it's it's an initiative and activity that happens after the go to market strategy. But in the case for Visa Checkout, it's so important to include some of that as the elements of all those vignettes that you mentioned were so critical to the success of the product.
Elle:Great. Okay. I wanna do a quick recap now. So you had, step one of understanding the market dynamics and, aligning on the KPIs, and then you add step two of understanding those, the barriers and the challenges. And then step three, the go to market strategy.
Elle:Is there anything else to this story?
Terry:Yeah. I wanna tie it back to the beginning. Fresno, 58, DHEAC, why Visa exists as an organization. And you and I talked about this sort of offline, but this comes from the Simon Sinek school of why you exist as a company, why you use this as a as an individual. And Visa Checkout served as a great example of why we come to work and why the company exists.
Terry:Right? So we go back to the beginning, which is Visa exists to digitize payments or the digitization of payments enables individuals, small businesses, governments, right, all our different stakeholders, society writ large to progress. Right? We are about a rising tide lifts all boats. We don't pick winners or losers.
Terry:Wherever you transact across whatever form factor, like, we wanna power that. Yes, because we make money, but because there's progress inherent in that, society benefits. And I know that's like a very sort of high order thing to try and chase, but truth be told, that's why Visa was created all of those years ago. Visa Checkout was one element of that, which was we were moving from brick and mortar checks knocking out information to ecommerce, right, way back when. And so were the Visa Checkout was was one of the first manifestations of that.
Terry:So don't lose that because it gives you purpose as you come in every day as a product marker to go, why am I doing this? Why am I slogging fifty, sixty, seventy hour weeks? It's because your your why, quote unquote, to go back to Simon, is tracked to the company's why. So it it underpinned all of this. So it's a really lovely story of sort of why we exist.
Elle:Yeah. Right. Just being true to the mission of the organization. I like that reminder. That's very helpful.
Elle:Last question for you on the first segment, this case study segment of our show. What advice do you have for a PMM who is embarking on the journey of building customer lifetime value?
Terry:So the first is product launches don't end after the product is launched. Kept an obvious statement, but you need to prove out the sustainability and the viability to use your good words, or that product will not survive. So first and foremost, realize that as we're thinking about a launch, the launch really isn't just about the launch, it's about a five year program, the defined time period by which we are proving out the viability of a product. So end to end through life cycle is critically important as we think about planning investment asks and then go to market plans accordingly. The second, which is tangential to that, is this notion of the ninety five five rule, which is we all spend most of our time thinking about the disposed or the predisposed, that 5% of people who are in our market, but realize 95% are not actively looking for us.
Terry:So how do you cultivate them, get them primed at the pump and ready, such that when they are, their conversion becomes faster and cheaper, certainly from a CPA and a and a CPU perspective? And then third, which you teed up at the beginning, is part and parcel with all of this, noting time constraints, resource constraints, is trying to think of ourselves as scientists or mad scientists. Right? If we think about that search for truth, or we think about the scientific process, it's developing hypotheses. Right?
Terry:In our case, it was like, why aren't deals being signed? Why aren't why isn't there consumer adoption? Oh my god. Now we need to prove out this is know, the viability of this product over the long term. What are the hypotheses that give rise to those barriers and then potential opportunities?
Terry:Test them.
Elle:Yes. Test them. Wanna repeat that again.
Terry:Test them. Test them. Test them. You know, try and validate them, then communicate them out to the organization, to the sales team, to the IT department, to C suite, and go, this is what we found. Here's how we think we can optimize.
Terry:And then test again and refine again. Like, are forever, as scientists, searching for the truth. And the truth isn't often a destination. It's about optimization. So think like a mad scientist the next time you're doing a product launch.
Elle:I love that. I'm gonna say it again. Think like a mad scientist. I think that is such a powerful mindset shift for PMMs. And I've heard other marketing leaders say that product marketing is part art and part science.
Elle:But we really to your point, like, we're not just launching products. We are we should be constantly experimenting. And I think that makes for some of the strongest PMMs that I've ever met. They're the ones who aren't afraid to experiment. They're constantly running feedback loops with customers and with the product team.
Elle:They're searching for patterns in the data, and they're pushing beyond that initial hypothesis to see what actually moves the needle. So that's really helpful. It's not it's not really just about crafting a story. It's about uncovering the truth that earns the right to be told in a story. And that means forming smart hypotheses, stress testing them, and being humble enough to refine when the data surprises you.
Elle:It's the craft.
Terry:What an awesome summary. You you we should flip seats. You should you want interviews.
Elle:I'm just paraphrasing what you've already told us.
Terry:Much better. Much better.
Elle:I love this. So fun. Okay. So that's gonna wrap up with our first segment of our show. And now it's time for the second segment, which is also very fun.
Elle:This is the messaging critique. This is the part where we as marketing experts get to analyze real world messaging. And the fun part is, Terry, you get to pick the company. But before you announce the company you chose, just wanna remind our listeners in case this is the first episode that they are tuning into, we're gonna talk through one thing that Terry is loving about the messaging or the product, something that's working really well, one thing that we wish that the PMM would have done differently with the messaging, and then finally, something that the marketing team or the PMM team can iterate on to take the messaging to the next level. Maybe it's a creative campaign or content that they can think about.
Elle:Really, this is all about learning and brainstorming and refining our craft, not looking for negativity, just a thoughtful, constructive critique. Alright. So let's get into it. Terry, what company did you pick?
Terry:So we're gonna move totally away from payments, and we're gonna move to beer. So my my case to discuss today is Modelo. So for listeners, hopefully, you've seen the news recently if you follow it. Modelo is the is now the number one best selling beer brand, in The United States. It it just outpaced
Elle:I actually did not know that. I mean, I'm not a huge beer drinker. I do like beer, but I didn't know that. Go Modelo.
Terry:Go Modelo. Yeah. Who would have thought? So I love the case, and I love the case because they understand, first and foremost, who their target audience is. And we all like to say that we do.
Terry:These guys know it better than anybody else. They are maniacally focused and their positioning is maniacally focused on what I would call the working guy. They are not the IPA target audience. They are not the you were ubiquitous American bud bud like, like, we're for everyone. They are not the the best crowd.
Terry:They are for the every working common person. They're not chasing attention. They're not trying to and we'll get into this in a second. They're not trying to capture everybody.
Elle:I love that. So when I go to their website and I enter their website, their homepage tagline reads, brewed for those with a fighting spirit. I love it too. It to me, it immediately invokes the emotion of pride. Right?
Elle:Like, to your point, they're speaking to those who are the working class, and they're proud of it. I don't wanna get into too much of of the topic. So I'll stop there, and I'll ask you, like, what else like, tell me more about what you're loving about that messaging for their product.
Terry:Well, I think you nailed it with this notion of pride. Going back to the Simon Sinek thing for just a second in terms of why a company exists. Modelo as a brand exists to celebrate those making it on their own terms. And so for for this target, it's working with your hands. It's like laboring.
Terry:These guys are not sitting in ivory towers and offices. They are outside infrastructure making making the world go round. Right? They are they are those folks. The other thing they do, to talk about your point about pride, which I think is so wonderful, is that they're not shy about leaning into the Mexican and immigrant heritage of the brand.
Terry:Right? That's the fighting spirit. Right? So much of boxing, right, and the boxing lore and legends and champions come up through through Mexico and and South America. So they lean into the positioning on that.
Terry:They understand sort of the why they exist. And then in their go to market, they profile all of these like minded people. Right? So if you think about day laborers or small business owners, folks that are bootstrapping their way through life that weren't born with a silver spoon. Right?
Terry:Tattoo artists, they lead into car culture. Right? It's this this notion of defiance, and I'm gonna do this on my own.
Elle:And on my own terms. Yes.
Terry:It's reflected in the music, the protagonist, and the characters. The tone is that. They're doing some sponsorship with UFC and and MMA, which is, like, super in line with with who their target audience, you know, celebrates. Ultimately, and again, think this is a huge a huge lesson for all of us, particularly private marketing, it's they put out content that the audience customers see themselves in. They are not aspirational to the point of, like, I don't understand who that person is.
Terry:Right? It's the, like, I'm targeting a 70 year old even though I'm profiling, like, a 45 year old. No. No. No.
Terry:This is, like, relatable. Like, you see yourself in the work, and I think that that's just, like, magic.
Elle:Yeah. It's so human and so genuine and authentic. I love that. Okay. So what's something that you wish the PMM would have considered as they were putting together some of that storytelling?
Terry:Well, I think they've done a fantastic job affirming the positioning, why they exist, and then understanding their their target audience, flowing it through all the good market. There's some cautionary tales here. And the first thing is they are in danger of eroding some of that authenticity with what I would call sort of proximity based sponsorship alignment. They're in the NFL, but they don't sponsor teams. They just talk about fans generically.
Terry:I was just watching the US men's national team play last night. Like, they're in soccer, but they're not formally part of it. And so you see these generic, like, fan messaging scarves and jerseys that aren't actual teams. Right? And so you're like, no.
Terry:No. You're gonna erode these authentic moments of unity and identity. So stop there. The second is and I don't understand admittedly the unit the unit economics behind this. It goes back to, in some respects, the LTV conversation that we're having.
Terry:But they've started the well tread, well, we're gonna do a bunch of line extensions outside of the traditional beer. And now they're into, like, spiked agua frescas into fruit flavored beers. And you worry that, yes, in the short term, the the economics are gonna be favorable because they're expanding the number of people buying Modelo. But you wonder if those ardent loyalists who are buying it at high levels of frequency at scale, sort of the 2080 rule, are gonna start to ebb away because it's no longer gonna be a beer brand about them because they're trying to be about and for everyone. So two cautionary tales that I wish product marketers would think differently about, again, as we think about lifetime value.
Elle:Mhmm. Mhmm. That's a really great point. Okay. And last point, what would you do to take it to the next level if you were the PMM?
Terry:So two provocations. The first is there is somewhat coming out of the election, though this isn't coming out of election, it's just sort of an insight coming out of the election, is what's happening to young men across the country. There seems to be sort of a quote unquote crisis. Right? Employment numbers, mental health issues, identity, etcetera.
Terry:And so is there a way for Modelo to authentically support young men as they are going through this really turbulent set of life stages
Elle:that Seize the cultural moment with their target audience, that their target audience is experiencing.
Terry:Far easier said than done for you and I to talk about and for a beer brand to talk about, but I think that there's a provocation in in potentially threading that needle. And then the subsequent provocation is we all see what's happening and reading about what's happening in DC, in state capitals, what's happening all over the place. Is there a way to sort of lean into, the immigration issue and supporting definitely sort of supporting that without getting burned? Again, they're just provocations, but you could conceivably, and going back to the roots of the brand, go, it's not out of bounds to talk about these things. Know know that you may be singed on the back end.
Elle:It would be a fine line. But is it doing doing justice to your target audience? I like it. I'm just being bold with it. Oh.
Elle:I don't know if we have any Modelo PMMs who are listening or if Modelo even has PMMs for that matter. Right? It's just maybe it's just a super creative agency that they use. But shout out to any of those marketers who may be who may be listening and committing to the authenticity. And, hey, there's a good idea for you to explore here with this creative cultural moment here.
Elle:So, Terri, before we go, I just have to have a gratitude moment and say thank you so much for your willingness to come on and dive so deep into such a great case study with Visa and share your knowledge and expertise with the product marketing community today.
Terry:Oh, gosh. Thank you. The the thanks is mine. Thanks to you for the effort the platform to tell my story.
Elle:Yeah. Of course. For me, personally, it's amazing to see some marketing product marketing, leaders like yourself who have personally inspired me. So I wanna make a space in my episode for you to talk through maybe some of those marketing leaders who have inspired you and shaped who who you are. This is an opportunity to give some shout outs.
Elle:So let's hear them.
Terry:I'm gonna talk about four. And what's interesting so the four are Yin Renny, Lisa Rubinich, Wendy Gruenberg, Maureen Maldari. These four brilliant minds, I had the good fortune to work with at Gray Worldwide, which is a, you know, huge advertising agency in New York many, many years ago. They ran the Hasbro business and a couple of other businesses. But it struck me that these four folks happen to work on the same account at the same agency at the same time, and I was sitting at their feet learning from them for a number of years.
Terry:Why them? Brilliant business minds, brilliant advertising minds, and equally brilliant relationship minds, all at work at the same time. Their sort of number one leadership principle in proper corporate speak is this notion of sort of independence with accountability. Informally, Lisa Rubinich said this to me a number of times is, I will always give you enough rope to hang yourself, which sounds overly dramatic. But if you if you think about it, it's this notion of, I'm gonna give you independence.
Terry:There's rope there for support if you need it, but there's accountability at the end of the day. And that's how she ran this business. And that's how the four brilliant, female leaders ran that business. That business stayed at gray for thirty years, which is an anomaly these days. Thirty years, a lot of it under these four individuals who who ran the business.
Terry:So they were so wonderful. So we're so fifteen years on, I still take that leadership principle into how I manage my teams in terms of, you know, independence with accountability. You know, I'll give you enough rope to hang yourself. They gave me the the opportunity and space to develop as a marketer and and as a leader, and so I'm eternally grateful for them.
Elle:That's amazing. It's and you got them all at the same time. All the same time. Oh, wow. I'm sure they give you a huge advantage as just as you developed your leadership skills, and and you got so many great mentors.
Elle:I love it. Okay. So I promise this is the last question that I have for you. Where else can we access your expertise? Is it best to connect you on on LinkedIn?
Elle:And please tell us what's next for you.
Terry:Yeah. LinkedIn, definitely. I've been doing a ton of writing and covering some of the topics we talked about today in terms of, you becoming a mad scientist, going back to basics, the notion of why, the attention economy. So LinkedIn is where you can find my musings. What's next is I'm doing a lot of advisory work and looking for opportunities that deliver against my why.
Elle:I love it. And you could honestly write a book on some of this life cycle marketing, delivering long term customer value. So just gonna throw it out there. I think that Mad Scientist could be a really good book title.
Terry:Thank you. You will get credit for that in the yeah.
Elle:In the acknowledgments? Yeah. Awesome. Well, again, thank you so much, Terry. This was a lot of fun.
Elle:And thank you PMM listeners for coming on this adventure with us today. I hope this episode leaves you with inspiration to take the next step in your own journey.
