Podcast Transcript - Building Better CMOs
Mercedes-Benz USA CMO Melody Lee
Melody and Greg discuss how marketing has evolved from tactics to growth strategy, why CMOs must better communicate their strategic value internally, and how luxury brands should approach AI innovation.
MELODY LEE: Measurement is really becoming a non-negotiable. And I'm not talking about the measurement where you put a campaign out and then you look at some of the KPIs afterwards and you go, okay, nice, and it lives in a deck and never goes anywhere. I'm talking about the kind of measurement that then informs how you go forward with the next campaign or with the next digital initiative, whatever it may be. So now it is becoming incumbent upon marketers to take the numbers and drive a better way forward. And that's a big difference, I think, that's happened over the last 20 or so years.
GREG STUART: Welcome to Building Better CMOs, a podcast about how marketers can get stronger and smarter. I'm Greg Stuart, the CEO of the nonprofit Marketing & Media Alliance. Now, the voice you heard at the top is Melody Lee, the CMO of Mercedes-Benz USA. She's been there about two and a half years, and previously worked at Hill & Knowlton, Cadillac, Herman Miller, and many others. Melody is also an advisor to Le Car, a technology-driven tool designed to empower women shopping for a car. Today on the podcast, Melody and I are going to talk about the burden and privilege of stewarding a 140-year old brand, why marketers need to do a better job marketing themselves within their own organizations, and how to balance the art of creativity with the discipline of measurement in luxury marketing. This podcast is all about the challenges marketers face and unlocking the true power that marketing can have. Melody is going to tell us how she did that, right after this.
GREG: Melody Lee, welcome to Building Better CMOs.
MELODY: Thank you, Greg. Great to be with you.
GREG: Yeah, no, this is really exciting. So listen, I'm a big fan of Mercedes-Benz, which is where you are, CMO of Mercedes-Benz USA. And I even have questions about cars. We'll get into that a little bit later. But you've now been there a little while in managing marketing for Mercedes-Benz, correct?
MELODY: That's right. About two and a half years.
GREG: What's interesting about this is that what most people don't know — and I'm doing my research — is that Benz was the first gas-powered motor wagon, I think is the words they used. Is that right?
MELODY: That's correct. That's right. Mercedes-Benz filed the first patent for the motor wagon in 1886 and invented the automobile.
GREG: Yeah, yeah. And it was a crazy look in there. I saw a three-wheeled vehicle, I think, if I saw that right?
MELODY: Yes, absolutely.
GREG: I don't mean to get into the engineering dynamics with you. Yeah, that's crazy. I don't know that I realized that that patent was filed that much sooner. I thought automobiles didn't really come around till the 1900s, but yeah, that's early.
MELODY: That's correct. Next year that makes us 140 years old.
GREG: That's crazy, isn't it? Wow. That's some real history.
GREG: Melody Lee, welcome to Building Better CMOs.
MELODY: Thank you, Greg. Great to be with you.
GREG: Yeah, no, this is really exciting. So listen, I'm a big fan of Mercedes-Benz, which is where you are, CMO of Mercedes-Benz USA. And I even have questions about cars. We'll get into that a little bit later. But you've now been there a little while in managing marketing for Mercedes-Benz, correct?
MELODY: That's right. About two and a half years.
GREG: What's interesting about this is that what most people don't know — and I'm doing my research — is that Benz was the first gas-powered motor wagon, I think is the words they used. Is that right?
MELODY: That's correct. That's right. Mercedes-Benz filed the first patent for the motor wagon in 1886 and invented the automobile.
GREG: Yeah, yeah. And it was a crazy look in there. I saw a three-wheeled vehicle, I think, if I saw that right?
MELODY: Yes, absolutely.
GREG: I don't mean to get into the engineering dynamics with you. Yeah, that's crazy. I don't know that I realized that that patent was filed that much sooner. I thought automobiles didn't really come around till the 1900s, but yeah, that's early.
MELODY: That's correct. Next year that makes us 140 years old.
GREG: That's crazy, isn't it? Wow. That's some real history.
Stewarding a Legacy Brand
GREG: Listen, you have to feel that too, as a marketer, as the CMO, to really respect that heritage and that history.
MELODY: Absolutely. I call it a burden of responsibility, but it's a privilege to have that burden, right? It means that, whether you're talking about the product and in its innovation and pushing the envelope there, or you're talking about the marketing of it, or the way that you go to market, sell it, distribute it, whatever it is, the burden of responsibility falls to us as Mercedes-Benz to ensure that we live up to that standard of being the inventor.
GREG: I don't know if the listener here went and looked, but you also have a background in other luxury vehicles. You were at Cadillac for a while.
MELODY: Yes, that's right.
GREG: Yeah. Long period of time, actually. Yeah, another great, great brand, if I can say so. Hey, Mel, you know what caught my attention, though, about your background when I looked a little bit here before we get into all our questions, is that you actually, if I'm doing this right, you have a master's from a technology-oriented university but in international relations, and then you went into comms first. I think your path into this would be interesting to understand. And I see you laughing, so obviously you're as amused by your history as anybody, I guess. But go ahead.
MELODY: I am. I would call it anything but linear, for sure. I laugh because one of the most common questions I get, especially from younger folks starting to break out into the business, is how did you decide to do what you did? And the truth is, not all of those decisions were my own. I went to a tech school because my father was an engineer and I idolized him, and I thought I wanted to be an engineer. I got there, I took Physics 1, and I thought, nevermind, I'm not an engineer. [laugh]
GREG: Well, listen now, there's a lot of people who don't like physics, though. I mean, you could have tried chemistry, you could have tried coding, I guess, but I don't know.
MELODY: I had to do all of the above, Greg. I did all the sciences and calculus and physics, and then finally decided.
GREG: Oh, you did 'em all did. Okay, okay. You made best effort and then said ... What was the conversation with your father, if I can ask, what was the conversation with your father? You said, Dad, really, it's not me. It's not me, Dad. Sorry.
MELODY: I said, my brain just doesn't quite work the way like yours does. But I am really interested in politics and political science, so I think I'm going to switch over and start to study that. And that's how I ended up with two degrees in international affairs, which is essentially political science at Georgia Tech. So I'm very proud of the fact that I got through a technical university with both my bachelor's and master's in science. I'll take it as a consolation prize.
MELODY: Absolutely. I call it a burden of responsibility, but it's a privilege to have that burden, right? It means that, whether you're talking about the product and in its innovation and pushing the envelope there, or you're talking about the marketing of it, or the way that you go to market, sell it, distribute it, whatever it is, the burden of responsibility falls to us as Mercedes-Benz to ensure that we live up to that standard of being the inventor.
GREG: I don't know if the listener here went and looked, but you also have a background in other luxury vehicles. You were at Cadillac for a while.
MELODY: Yes, that's right.
GREG: Yeah. Long period of time, actually. Yeah, another great, great brand, if I can say so. Hey, Mel, you know what caught my attention, though, about your background when I looked a little bit here before we get into all our questions, is that you actually, if I'm doing this right, you have a master's from a technology-oriented university but in international relations, and then you went into comms first. I think your path into this would be interesting to understand. And I see you laughing, so obviously you're as amused by your history as anybody, I guess. But go ahead.
MELODY: I am. I would call it anything but linear, for sure. I laugh because one of the most common questions I get, especially from younger folks starting to break out into the business, is how did you decide to do what you did? And the truth is, not all of those decisions were my own. I went to a tech school because my father was an engineer and I idolized him, and I thought I wanted to be an engineer. I got there, I took Physics 1, and I thought, nevermind, I'm not an engineer. [laugh]
GREG: Well, listen now, there's a lot of people who don't like physics, though. I mean, you could have tried chemistry, you could have tried coding, I guess, but I don't know.
MELODY: I had to do all of the above, Greg. I did all the sciences and calculus and physics, and then finally decided.
GREG: Oh, you did 'em all did. Okay, okay. You made best effort and then said ... What was the conversation with your father, if I can ask, what was the conversation with your father? You said, Dad, really, it's not me. It's not me, Dad. Sorry.
MELODY: I said, my brain just doesn't quite work the way like yours does. But I am really interested in politics and political science, so I think I'm going to switch over and start to study that. And that's how I ended up with two degrees in international affairs, which is essentially political science at Georgia Tech. So I'm very proud of the fact that I got through a technical university with both my bachelor's and master's in science. I'll take it as a consolation prize.
Navigating Crisis and High-Stakes Situations
GREG: Absolutely. And then how did you actually end up at — was it, I'm sorry, was it Hill and Knowlton? I'm sorry.
MELODY: Yes. So I started on the agency side working for Hill and Knowlton, which is part of the WPP Group, of course, and really cut my teeth in the world of crisis and financial communications. Did a lot of transactional support, M&A, proxy fights, IPOs, you name it. It was one of the best ways to learn. I call it kind of the dog years of PR because every year I felt like I was learning seven years worth of things in the world of communications. It really teaches you also what a real crisis is and what high stakes really is and gives you that perspective later on. And it's a perspective that —
GREG: What does that mean? What do you mean by high stakes? I mean, obviously don't maybe mention a client from back then, but give an example. That's interesting.
MELODY: Well, when you are ... Let's say your stock price has dropped 65% overnight because of something that's happened within your company. When you have a crisis of leadership because you've had a CEO make a questionable ethical choice, when you've had to go on Capitol Hill and testify in front of the House of Representatives and the Senate because of a product flaw. Those are real crises that a company has to navigate to survive. And I think it gives you perspective when you come back into the world later on in other positions and you realize that what you're working on is important and urgent, but not truly a crisis. And I think it's a good distinction to make.
GREG: So listen, you and I don't know each other that well yet. Okay. But I'm going to take a chance. I think you probably love that adrenaline dynamics of crisis.
MELODY: Well, listen, Greg, my mom put me on stage for the first time when I was 18 months old. I played competitive piano and violin from the time I was 4 years old to when I left home at 18. I don't know any different. I know life on a stage. I know life under pressure. I know life in a competition. So yes, to some extent I probably am a little bit of an adrenaline junkie, but I also really enjoy being in the room to navigate an issue that seems unnavigable that we can get through with really strong communications and really good storytelling. And that's, I think, been the cornerstone of my career.
GREG: Yeah. Yeah. I love that quote that Billie Jean King made a number of years ago, which is "Pressure is a privilege." I think the older I've gotten, the more I appreciate that. I think I spent a lot of time trying to avoid trouble, I guess, at some level. But that's not where the fun is. The fun is being in the mosh pit trying to solve a big problem for somebody.
MELODY: Absolutely. It means you're depended upon, it means that you have to come up with the answer, the strategy, the tactic, whatever it is. That is a privilege.
GREG: Well, yeah, very interesting. Very interesting.
MELODY: Yes. So I started on the agency side working for Hill and Knowlton, which is part of the WPP Group, of course, and really cut my teeth in the world of crisis and financial communications. Did a lot of transactional support, M&A, proxy fights, IPOs, you name it. It was one of the best ways to learn. I call it kind of the dog years of PR because every year I felt like I was learning seven years worth of things in the world of communications. It really teaches you also what a real crisis is and what high stakes really is and gives you that perspective later on. And it's a perspective that —
GREG: What does that mean? What do you mean by high stakes? I mean, obviously don't maybe mention a client from back then, but give an example. That's interesting.
MELODY: Well, when you are ... Let's say your stock price has dropped 65% overnight because of something that's happened within your company. When you have a crisis of leadership because you've had a CEO make a questionable ethical choice, when you've had to go on Capitol Hill and testify in front of the House of Representatives and the Senate because of a product flaw. Those are real crises that a company has to navigate to survive. And I think it gives you perspective when you come back into the world later on in other positions and you realize that what you're working on is important and urgent, but not truly a crisis. And I think it's a good distinction to make.
GREG: So listen, you and I don't know each other that well yet. Okay. But I'm going to take a chance. I think you probably love that adrenaline dynamics of crisis.
MELODY: Well, listen, Greg, my mom put me on stage for the first time when I was 18 months old. I played competitive piano and violin from the time I was 4 years old to when I left home at 18. I don't know any different. I know life on a stage. I know life under pressure. I know life in a competition. So yes, to some extent I probably am a little bit of an adrenaline junkie, but I also really enjoy being in the room to navigate an issue that seems unnavigable that we can get through with really strong communications and really good storytelling. And that's, I think, been the cornerstone of my career.
GREG: Yeah. Yeah. I love that quote that Billie Jean King made a number of years ago, which is "Pressure is a privilege." I think the older I've gotten, the more I appreciate that. I think I spent a lot of time trying to avoid trouble, I guess, at some level. But that's not where the fun is. The fun is being in the mosh pit trying to solve a big problem for somebody.
MELODY: Absolutely. It means you're depended upon, it means that you have to come up with the answer, the strategy, the tactic, whatever it is. That is a privilege.
GREG: Well, yeah, very interesting. Very interesting.
Supporting Women in the Automotive Industry
GREG: Hey, listen, I noticed a couple other things too. You're involved in a business, I guess it's called Le Car, and it's oriented towards women and car buying. Can you just talk about that? I've seen a lot of stuff around your support of women, and as a father of daughters, I appreciate that. But talk to me a little bit about what Le Car is oriented to do.
MELODY: Several years back, Tamara Warren, who is a well-known and well-respected lifestyle and automotive journalist, Tamara and I started chatting about her most common request from her friends. Her friends would come to her and say, Tam, what should I buy? And she would say, Well, I'm going to need you to answer a few questions before I can give you a recommendation on a car that you should buy. And she had this survey that she had in Excel, essentially, which is a spreadsheet file, and she would have people fill it out. It asked a series of lifestyle questions, not questions about horsepower or torque or what kind of powertrain you want, because most of the people that came to Tam felt safe enough to say, I don't actually know what I want, but I can tell you that I have three kids, a dog, and I like to go skiing, and I sometimes Airbnb a house up north in the Hudson Valley.
So she would have people fill out this survey and then give a recommendation as to which cars they should go look into. I remember sitting down with her and saying, You should probably turn this into an actual piece of technology. So, funny that we're talking about this now, this was probably, let's say it was seven or eight years ago that we first started having this conversation, Greg, so long before AI became the buzzword that it is, we basically created together a technology based on questions intended to drive the right response and get someone conversationally to the right choices in a car. So that's how Le Car was born.
GREG: My wife and I were in the process of buying a new car. I'll never forget, we're standing in a lot — you just reminded me — we're standing in a lot and the car agent there, he looked at my wife and I don't know what he said, but he put the word "turbo" in there, and I looked at him and I said, Listen buddy, all due respect, if you're going to go there, can you talk to me about that? Focus on what she's going to be interested in, don't focus on what she's not going to care about. It's a little gender predisposed there because maybe she would be, but she wasn't. I knew enough. It was very funny that he did that instead of, like, he checked and said, Would you like to know about that? He really was kind of oblivious to the whole situation, I thought.
MELODY: Yeah, for every woman that knows that she wants enough space for her children's equipment, sports equipment, there's a man who also wants to know that his golf clubs fit in the back. So I don't think that it is gender normative. I think that some people want to shop based on the attributes and technologies and features in a car, and others want to shop so that the car fits their lifestyle. And Le Car was born to address those who wanted to shop by lifestyle. But even if you are a gearhead and it did know what you were looking for in a car, Le Car could still serve your needs. It might surprise you with some of the recommendations that came out of it.
GREG: My daughter's a data scientist. She might be interested in the technical dynamics of it, but I'm clear my wife wasn't. So it's like, come on, let's think about how we target and serve and respond to people. It was very funny to me. But also, Melody, I think what caught my attention and digging into some of your background and just looking at some of the work you did, you really have been a big fan and supporter of women and women in business, especially I think women in the automotive business. You want to just talk a little bit about that? It caught my attention.
MELODY: Well, we're still half of the population and we influence over 80% of the buying decisions that are going on in a household, which makes us highly, highly influential when it comes to money.
GREG: Any marketer or media should know that. Absolutely.
MELODY: Exactly. So it doesn't matter what kind of product or service you sell or market, you need to be speaking to women as part of just running a good business.
GREG: But I think you are supporting them in business, though. You're going to the next level to help your team and support your team in that area. Just speak to that.
MELODY: Yeah, again, I think when you work in a corporate environment, the number one reason you should be thinking this way is to be a better seller/purveyor of your products and services and a better marketer that speaks to populations that may not feel seen or heard. So I think that's number one. It's always, first of all, what's best for the business, what's best for growth? That's our job as CMOs, as marketers, first and foremost. But secondly, in order to do that, you need to make sure that the representation internally is also there. That means being a champion of those internally to ensure that they're sitting at the table when decisions are being made or when discussions are being had about females or women as part of your buying base. But then third, with that is not only do you champion those internally, you also need to make sure that your marketing is inclusive and representative so that those working on it see themselves in it. It's a cycle of reinforcement, I would call it, that goes back and forth. You need to externally represent yourselves so that you can see yourself reflected in it, but you also have to have the representation internally so that it comes out authentic, right? So it works in many different ways, but it comes down, first and foremost, to ensuring that you're doing the best job for the customer that you serve.
GREG: Hey, listen, I didn't plan to ask you this, but I have a very funny one. I actually interviewed the head of marketing for Hyundai in India recently — longer story why — and he said something really funny. He said that if there is a teenage girl in the house, she is the one making the decision on the car. Have you ever heard that? I'd never heard that. It really caught my attention. As a father of a then-teenage girl who ... Somehow we ended up driving a truck home one year from the dealership. I still have no idea how we bought a truck. I'm not a truck person, my wife's not a truck person, but my daughter really wanted it, and that's what we bought. Isn't that funny? I don't know if that applies to Mercedes, but I dunno. Funny, right?
MELODY: Well, I wouldn't underestimate the influence of the young Gen Z/Gen Alpha woman. That is for sure a factor and something that we watch. I have two teenage boys at home, and I can tell you that they have a very strong opinion about the kind of car they want or a car that they think Mom and Dad should spend their money on. Absolutely they have an opinion on that. And also, it's interesting that you bring this up, Greg, because one of the most fascinating statistics of F1 and motor sports ... Let's just talk specifically about Formula One. The fastest-growing group of fans for the F1 sport is young women age 16 to 24.
GREG: Really?
MELODY: So maybe there's something to it. Yeah.
GREG: Do you know what's driving that or why, or just it is? I don't know. Is there any other background to that that you're aware of?
MELODY: I think there's a lot of theories out there. I think the rise of "Drive to Survive" on Netflix had a huge influence on the sport, for sure. I think the ability to show these drivers in F1 as human beings with all their messiness and drama and glamour, I think it did a lot for bringing in new audiences who saw the sport more multidimentionally.
GREG: I think there was a female — listen, I'm not an F1 expert like my buddy Lou Paskalis is — but I think there was a female driver too here in the last few years that I think probably pushed some of that. What ended up on the show, I dunno. Not my thing.
MELODY: Well, our very own team principal, Toto Wolff, is married to Susie Wolff, who was the last woman to drive in the F1 circuit. She has now gone on to start the F1 Academy, which is intended to put more women drivers into the pipeline for Formula One as well. And F1 Academy also has its own Netflix show.
GREG: Yeah. Got it, got it, got it. Okay, good. Okay, well listen here, let's get to a couple of topics. This is all very interesting and I can probably talk auto all day long. I'm a big car fan.
MELODY: You can come back to it if you want.
GREG: Okay, good, good, good. So listen, it's kind of along the lines of what we were just talking about that, Melody, the work that you've done with other women in the business and helping to manage them and those who are otherwise maybe not really given front stage was part of the way you said that, I think.
MELODY: Several years back, Tamara Warren, who is a well-known and well-respected lifestyle and automotive journalist, Tamara and I started chatting about her most common request from her friends. Her friends would come to her and say, Tam, what should I buy? And she would say, Well, I'm going to need you to answer a few questions before I can give you a recommendation on a car that you should buy. And she had this survey that she had in Excel, essentially, which is a spreadsheet file, and she would have people fill it out. It asked a series of lifestyle questions, not questions about horsepower or torque or what kind of powertrain you want, because most of the people that came to Tam felt safe enough to say, I don't actually know what I want, but I can tell you that I have three kids, a dog, and I like to go skiing, and I sometimes Airbnb a house up north in the Hudson Valley.
So she would have people fill out this survey and then give a recommendation as to which cars they should go look into. I remember sitting down with her and saying, You should probably turn this into an actual piece of technology. So, funny that we're talking about this now, this was probably, let's say it was seven or eight years ago that we first started having this conversation, Greg, so long before AI became the buzzword that it is, we basically created together a technology based on questions intended to drive the right response and get someone conversationally to the right choices in a car. So that's how Le Car was born.
GREG: My wife and I were in the process of buying a new car. I'll never forget, we're standing in a lot — you just reminded me — we're standing in a lot and the car agent there, he looked at my wife and I don't know what he said, but he put the word "turbo" in there, and I looked at him and I said, Listen buddy, all due respect, if you're going to go there, can you talk to me about that? Focus on what she's going to be interested in, don't focus on what she's not going to care about. It's a little gender predisposed there because maybe she would be, but she wasn't. I knew enough. It was very funny that he did that instead of, like, he checked and said, Would you like to know about that? He really was kind of oblivious to the whole situation, I thought.
MELODY: Yeah, for every woman that knows that she wants enough space for her children's equipment, sports equipment, there's a man who also wants to know that his golf clubs fit in the back. So I don't think that it is gender normative. I think that some people want to shop based on the attributes and technologies and features in a car, and others want to shop so that the car fits their lifestyle. And Le Car was born to address those who wanted to shop by lifestyle. But even if you are a gearhead and it did know what you were looking for in a car, Le Car could still serve your needs. It might surprise you with some of the recommendations that came out of it.
GREG: My daughter's a data scientist. She might be interested in the technical dynamics of it, but I'm clear my wife wasn't. So it's like, come on, let's think about how we target and serve and respond to people. It was very funny to me. But also, Melody, I think what caught my attention and digging into some of your background and just looking at some of the work you did, you really have been a big fan and supporter of women and women in business, especially I think women in the automotive business. You want to just talk a little bit about that? It caught my attention.
MELODY: Well, we're still half of the population and we influence over 80% of the buying decisions that are going on in a household, which makes us highly, highly influential when it comes to money.
GREG: Any marketer or media should know that. Absolutely.
MELODY: Exactly. So it doesn't matter what kind of product or service you sell or market, you need to be speaking to women as part of just running a good business.
GREG: But I think you are supporting them in business, though. You're going to the next level to help your team and support your team in that area. Just speak to that.
MELODY: Yeah, again, I think when you work in a corporate environment, the number one reason you should be thinking this way is to be a better seller/purveyor of your products and services and a better marketer that speaks to populations that may not feel seen or heard. So I think that's number one. It's always, first of all, what's best for the business, what's best for growth? That's our job as CMOs, as marketers, first and foremost. But secondly, in order to do that, you need to make sure that the representation internally is also there. That means being a champion of those internally to ensure that they're sitting at the table when decisions are being made or when discussions are being had about females or women as part of your buying base. But then third, with that is not only do you champion those internally, you also need to make sure that your marketing is inclusive and representative so that those working on it see themselves in it. It's a cycle of reinforcement, I would call it, that goes back and forth. You need to externally represent yourselves so that you can see yourself reflected in it, but you also have to have the representation internally so that it comes out authentic, right? So it works in many different ways, but it comes down, first and foremost, to ensuring that you're doing the best job for the customer that you serve.
GREG: Hey, listen, I didn't plan to ask you this, but I have a very funny one. I actually interviewed the head of marketing for Hyundai in India recently — longer story why — and he said something really funny. He said that if there is a teenage girl in the house, she is the one making the decision on the car. Have you ever heard that? I'd never heard that. It really caught my attention. As a father of a then-teenage girl who ... Somehow we ended up driving a truck home one year from the dealership. I still have no idea how we bought a truck. I'm not a truck person, my wife's not a truck person, but my daughter really wanted it, and that's what we bought. Isn't that funny? I don't know if that applies to Mercedes, but I dunno. Funny, right?
MELODY: Well, I wouldn't underestimate the influence of the young Gen Z/Gen Alpha woman. That is for sure a factor and something that we watch. I have two teenage boys at home, and I can tell you that they have a very strong opinion about the kind of car they want or a car that they think Mom and Dad should spend their money on. Absolutely they have an opinion on that. And also, it's interesting that you bring this up, Greg, because one of the most fascinating statistics of F1 and motor sports ... Let's just talk specifically about Formula One. The fastest-growing group of fans for the F1 sport is young women age 16 to 24.
GREG: Really?
MELODY: So maybe there's something to it. Yeah.
GREG: Do you know what's driving that or why, or just it is? I don't know. Is there any other background to that that you're aware of?
MELODY: I think there's a lot of theories out there. I think the rise of "Drive to Survive" on Netflix had a huge influence on the sport, for sure. I think the ability to show these drivers in F1 as human beings with all their messiness and drama and glamour, I think it did a lot for bringing in new audiences who saw the sport more multidimentionally.
GREG: I think there was a female — listen, I'm not an F1 expert like my buddy Lou Paskalis is — but I think there was a female driver too here in the last few years that I think probably pushed some of that. What ended up on the show, I dunno. Not my thing.
MELODY: Well, our very own team principal, Toto Wolff, is married to Susie Wolff, who was the last woman to drive in the F1 circuit. She has now gone on to start the F1 Academy, which is intended to put more women drivers into the pipeline for Formula One as well. And F1 Academy also has its own Netflix show.
GREG: Yeah. Got it, got it, got it. Okay, good. Okay, well listen here, let's get to a couple of topics. This is all very interesting and I can probably talk auto all day long. I'm a big car fan.
MELODY: You can come back to it if you want.
GREG: Okay, good, good, good. So listen, it's kind of along the lines of what we were just talking about that, Melody, the work that you've done with other women in the business and helping to manage them and those who are otherwise maybe not really given front stage was part of the way you said that, I think.
Advice for Aspiring Marketers and Leaders
GREG: So, what is the best advice that you've been given over the course of your career? I'm going to guess it might even be stuff that you're passing on to others too. That's kind of what happens to those things. But what are some of the best advice that you've been given over the [years] , other than your father saying you should go and get a technical degree.
MELODY: [laugh] I do talk about this a lot, but I think it bears repeating because it has become the way that I approach leadership and it's become a guidestone for me. I gave you a little glimpse into the way that I was raised and how much of an achiever I was raised to be. It was about the competitive musicianship and the straight A's and the great school, always doing my best, always winning. I remember a few times when I would come in second in a piano or violin competition on the weekend, and my mother would say, There's always the next competition. So there was a lot of achiever that was built into me as I was raised. And so, as I went into the professional world, I had a really great mentor who recognized this in me and said, You don't always need to achieve or to win.
All you need to worry about is making those around you successful. Think about how you make your boss look good and successful. Think about how you make your peers successful. Help meet a need, solve a problem for them. And then look at your team that you manage, when you get to that point, and you think about how you remove obstacles for them, how you advocate for them in a room or for their idea and make them successful, make them look good. Just think about all those angles of making folks look successful around you. If you make them successful, success comes naturally. You don't have to worry about being number one. And I'm really thankful for that advice. I got it really early on in my career, and I think it changed the trajectory of how I approached it.
GREG: Wow. Why did your parents push for straight A's so much, if I can ask?
MELODY: I think it was a —
GREG: Or variations of that.
MELODY: It's a pretty typical immigrant experience, to be honest. If you talk to any child of immigrants, there was a lot of pressure to make your parents proud. Their coming over to the United States — my own parents — was in big part so that they can make sure that their kids, the next generation, could be even more successful. And so they asked us to do our part. They did their part. They wanted us to do our part. So I think a lot of that achievement comes from there.
GREG: Yeah, yeah, yeah. Listen, I mean, it's a little bit maybe biased to say, but I think I would ... If I could find ... We actually had a situation hiring here for the MMA, we had somebody who was actually of immigrant parents, and I was like, you know what? I'd hire her. I'd hire her almost on that alone. She's going to walk through walls. I mean, there's a lot to be said for that. I'm a big competitive guy too, to your point. So I like that kind of thing. There's a sense of drive and appreciation for where you are and a gratitude, I think, that comes with that kind of thing. And as you said, a responsibility, right?
MELODY: Absolutely. Almost a sense that you couldn't possibly pay them back for what they've always done and it just fuels you going forward. Now, that's not to say that I don't have a pretty good innate sense of competitiveness as well.
GREG: Sounds like, yeah. Whether it was wired by DNA or learning, I don't know. It doesn't matter. But you got it too. Right, exactly.
MELODY: Nature and nurture, working together.
GREG: Yeah. There we go. There we go. Very interesting. Yeah. What advice do you give to women specifically, those [to whom] you might have a dynamic of a mentor role? What do you advise to them yourself?
MELODY: You represent a population that is the most influential on a purchase decision. Your voice matters, so speak up. That's number one. There's a lot of — especially in male-dominated cultures — a lot of shrinking, a lot of let me make myself small, let me sit in the back of the room, let me take the notes and make sure the AV is working. When in fact, women should be sitting at the table having a voice and influencing that room just as much as they influence a purchase decision. So I remind them that that confidence comes from who they represent.
GREG: Yeah. Are you almost suggesting even that they would have a responsibility as a part of the rest of ... Yeah, I think that's what you're saying.
MELODY: Absolutely. Yeah. It's an obligation.
GREG: Yeah. It's very interesting. I mean, I have daughters and I have a son, I have twin daughters and a son. They were all obviously raised in slightly different times, but by the same household, by the same parents. And it's interesting. It feels like there's differences in how they approach the world.
MELODY: Absolutely.
GREG: And I think it's my job to help nudge them where helpful — if they're open to it; they need to want to have that — in the right direction to, like you say, stand up and take a role. It's funny, my dad said something funny to me as I was being raised. He said, Why would you ever want to be any role than the pitcher in a baseball game? He was like, It's the center of the action. Why wouldn't you want to be there all the time? I think that's a variation of what you're suggesting for women in this case. It's like, yeah, put yourself in there. Yeah, hold yourself there. Do all you can to be a part of that sort of importance as a responsibility and contribution to the business, right?
MELODY: But as a mother of boys and as a champion of women in the workplace and elsewhere, the magic's always in the diversity of the room. You need all kinds of thought, all kinds of socioeconomic backgrounds. You need different ethnic backgrounds. You just need different experiences in life because a good business represents and reflects its customer base. So that's what is actually required in the room as well. As you know, if you've raised both daughters and a son, there's also just personalities in the mix as well that have be worked with as well. But again, the more diversity, the better. And I think the research out there bears it out. The more diverse the team, the more successful the business.
GREG: Yeah. Because it's very easy — I agree with you — it's very easy to get locked into your own thinking without finding an outside input to that or diversity of orientation. Listen, I would imagine that your team would give you incredibly high ratings just having listened to some of the other stuff in here, in terms of helping them. I really love that kind of orientation in the world. It really is, I think, a lot of what business sometimes is about is this ability to help people. I think if I was to accomplish something, it would be to help them do more than they thought they could already on their own.
MELODY: Absolutely. That's a great way to look at it. I like that a lot. I think there's a tendency to look at folks that work on your team and try to identify the ways in which they're not like you or the ways in which they seem deficient because of the way you are. Our human nature is to champion and prioritize those that are the most like us. And that was a really early lesson for me as well. I remember building one particular marketing team that my coworkers joked were a bunch of little Melodys, and that was not a compliment. I learned the hard way after that experience that I couldn't build a team full of people that just fought and acted just like me. I mean, they were insufferably type A. Right?
GREG: [laugh]
MELODY: And that in the end is not productive.
GREG: I love that: insufferably. That's a new one. I'd heard it actually described as "bold underline type A." So that was a pretty good description for it, right?
MELODY: So that's what I mean when I say that diversity has to come from so many different angles and backgrounds and personalities and methods. It has to be because those are the best-performing teams.
GREG: I love it. Well, listen, let's get to the big question here for Building Better CMOs.
MELODY: [laugh] I do talk about this a lot, but I think it bears repeating because it has become the way that I approach leadership and it's become a guidestone for me. I gave you a little glimpse into the way that I was raised and how much of an achiever I was raised to be. It was about the competitive musicianship and the straight A's and the great school, always doing my best, always winning. I remember a few times when I would come in second in a piano or violin competition on the weekend, and my mother would say, There's always the next competition. So there was a lot of achiever that was built into me as I was raised. And so, as I went into the professional world, I had a really great mentor who recognized this in me and said, You don't always need to achieve or to win.
All you need to worry about is making those around you successful. Think about how you make your boss look good and successful. Think about how you make your peers successful. Help meet a need, solve a problem for them. And then look at your team that you manage, when you get to that point, and you think about how you remove obstacles for them, how you advocate for them in a room or for their idea and make them successful, make them look good. Just think about all those angles of making folks look successful around you. If you make them successful, success comes naturally. You don't have to worry about being number one. And I'm really thankful for that advice. I got it really early on in my career, and I think it changed the trajectory of how I approached it.
GREG: Wow. Why did your parents push for straight A's so much, if I can ask?
MELODY: I think it was a —
GREG: Or variations of that.
MELODY: It's a pretty typical immigrant experience, to be honest. If you talk to any child of immigrants, there was a lot of pressure to make your parents proud. Their coming over to the United States — my own parents — was in big part so that they can make sure that their kids, the next generation, could be even more successful. And so they asked us to do our part. They did their part. They wanted us to do our part. So I think a lot of that achievement comes from there.
GREG: Yeah, yeah, yeah. Listen, I mean, it's a little bit maybe biased to say, but I think I would ... If I could find ... We actually had a situation hiring here for the MMA, we had somebody who was actually of immigrant parents, and I was like, you know what? I'd hire her. I'd hire her almost on that alone. She's going to walk through walls. I mean, there's a lot to be said for that. I'm a big competitive guy too, to your point. So I like that kind of thing. There's a sense of drive and appreciation for where you are and a gratitude, I think, that comes with that kind of thing. And as you said, a responsibility, right?
MELODY: Absolutely. Almost a sense that you couldn't possibly pay them back for what they've always done and it just fuels you going forward. Now, that's not to say that I don't have a pretty good innate sense of competitiveness as well.
GREG: Sounds like, yeah. Whether it was wired by DNA or learning, I don't know. It doesn't matter. But you got it too. Right, exactly.
MELODY: Nature and nurture, working together.
GREG: Yeah. There we go. There we go. Very interesting. Yeah. What advice do you give to women specifically, those [to whom] you might have a dynamic of a mentor role? What do you advise to them yourself?
MELODY: You represent a population that is the most influential on a purchase decision. Your voice matters, so speak up. That's number one. There's a lot of — especially in male-dominated cultures — a lot of shrinking, a lot of let me make myself small, let me sit in the back of the room, let me take the notes and make sure the AV is working. When in fact, women should be sitting at the table having a voice and influencing that room just as much as they influence a purchase decision. So I remind them that that confidence comes from who they represent.
GREG: Yeah. Are you almost suggesting even that they would have a responsibility as a part of the rest of ... Yeah, I think that's what you're saying.
MELODY: Absolutely. Yeah. It's an obligation.
GREG: Yeah. It's very interesting. I mean, I have daughters and I have a son, I have twin daughters and a son. They were all obviously raised in slightly different times, but by the same household, by the same parents. And it's interesting. It feels like there's differences in how they approach the world.
MELODY: Absolutely.
GREG: And I think it's my job to help nudge them where helpful — if they're open to it; they need to want to have that — in the right direction to, like you say, stand up and take a role. It's funny, my dad said something funny to me as I was being raised. He said, Why would you ever want to be any role than the pitcher in a baseball game? He was like, It's the center of the action. Why wouldn't you want to be there all the time? I think that's a variation of what you're suggesting for women in this case. It's like, yeah, put yourself in there. Yeah, hold yourself there. Do all you can to be a part of that sort of importance as a responsibility and contribution to the business, right?
MELODY: But as a mother of boys and as a champion of women in the workplace and elsewhere, the magic's always in the diversity of the room. You need all kinds of thought, all kinds of socioeconomic backgrounds. You need different ethnic backgrounds. You just need different experiences in life because a good business represents and reflects its customer base. So that's what is actually required in the room as well. As you know, if you've raised both daughters and a son, there's also just personalities in the mix as well that have be worked with as well. But again, the more diversity, the better. And I think the research out there bears it out. The more diverse the team, the more successful the business.
GREG: Yeah. Because it's very easy — I agree with you — it's very easy to get locked into your own thinking without finding an outside input to that or diversity of orientation. Listen, I would imagine that your team would give you incredibly high ratings just having listened to some of the other stuff in here, in terms of helping them. I really love that kind of orientation in the world. It really is, I think, a lot of what business sometimes is about is this ability to help people. I think if I was to accomplish something, it would be to help them do more than they thought they could already on their own.
MELODY: Absolutely. That's a great way to look at it. I like that a lot. I think there's a tendency to look at folks that work on your team and try to identify the ways in which they're not like you or the ways in which they seem deficient because of the way you are. Our human nature is to champion and prioritize those that are the most like us. And that was a really early lesson for me as well. I remember building one particular marketing team that my coworkers joked were a bunch of little Melodys, and that was not a compliment. I learned the hard way after that experience that I couldn't build a team full of people that just fought and acted just like me. I mean, they were insufferably type A. Right?
GREG: [laugh]
MELODY: And that in the end is not productive.
GREG: I love that: insufferably. That's a new one. I'd heard it actually described as "bold underline type A." So that was a pretty good description for it, right?
MELODY: So that's what I mean when I say that diversity has to come from so many different angles and backgrounds and personalities and methods. It has to be because those are the best-performing teams.
GREG: I love it. Well, listen, let's get to the big question here for Building Better CMOs.
The Evolving Role of the CMO
GREG: As we talked previously in the advance notes we sent you, you have a pretty good orientation. MMA is a nonprofit trade association. My job is to make an industry better. I think the thing we're definitely going to agree on here is that marketing's had some challenges. It feels like it's not the most respected member of the C-suite sometimes, and there's issues around that. But I guess as you look out in your experience, either from where you sit now or accumulated, what do you think that marketing either maybe doesn't understand fully, doesn't depreciate fully, could work to be better at, there's missing knowledge? Take it in any direction you want, Melody, but what does marketing need to do to be better?
MELODY: Ironically, Greg, we need to do a better job of marketing ourselves, especially given how much this has changed — "this" being marketing — how much our world has changed as marketers. I would argue, and maybe there's real numbers out there to back this up, maybe the MMA could support us on this.
GREG: Yeah, I'll do research here. Go ahead. Yeah.
MELODY: I would argue, in the C-suite, there's not a job that has expanded, shifted, evolved more so than the CMO's role, more so than a marketer's role. We are now responsible not for marketing as tactics, but marketing as a growth strategy for a company, for a brand. And that entails so many different things. So in every company and all the CMOs you've spoken with, I'm sure all of us have a different scope, but now it's become comms and PR as part of marketing, digital experience and platforms and AI innovation as part of marketing, cultural initiatives internally with employees, purpose-driven kind of initiatives are part of marketing, revenue generation, data monetization, you name it, all sorts of things are starting to fall under this umbrella of marketing now. And so with all this change and all this evolution and this positioning of marketing as a growth engine for corporations and for brands, we are not doing a good enough job of showing how elevated it is, how important it is, and how much of an influence we have on the business.
One of the things that I also love to talk about too is often a C-suite does not think about the gravity of their situations until someone, a marketer, a communicator, says, How would this look as a headline in the New York Times? How would this look as a headline in a press release?
MELODY: Is this the right decision? I had an old boss who called it policy by press release, but what he was trying to say was, when you start to frame it in terms of how you're going to communicate this, how you're going to put this into the world, it gets real. That means that our role as marketers and communicators are of extreme strategic importance. And it is our job to ensure that our colleagues, first and foremost understand that and value it.
GREG: Melody, it's funny you say that. I think we've gotten better, but about 10 years — I've told this story here on Building Better CMOs a bunch — but about 10 years ago, I had a private closed-door meeting with a bunch of CMOs. We were kicking off some work that we were doing around marketing org. There was a professor in the room with me and we had a warmup exercise. And by the way, the CMOs — the CMO of General Motors, CMO of T-Mobile, of Allstate, Chobani, Dunkin'. You get it: a bunch of big-time people we know. And I'll never forget, he and I had a throwaway warmup question. The question was, What's the role of marketing? What's the role of the CMO? It was just to get people talking, to get 'em going, because it was an easy one, right. Melody, one hour later we had not moved on to question two because we realized that nobody in the room agreed what was the role of CMO? What was the role of marketer? So it feels like we've kind of done it to ourselves in not being clear. I think that's what part of what you're saying, right?
MELODY: Yes.
MELODY: I think it is partly a nature of how much it's expanded, how different it is at every company.
GREG: So we have a changing dynamic. Exactly.
MELODY: Correct. You have all these new tools and technologies that have come into play. You have all of this shift from what I would call art to now art and discipline or art and science. A lot of things have happened all at once, and I'm not sure that we as CMOs have kept pace in terms of ensuring that people really understand what our role is and why we need to have a seat at the table. You read articles about how CMO roles are being eliminated. You hear about how they're being rewritten with new titles like chief growth officer or chief customer officer. I'm not denigrating or knocking any of those, but I think it's a reaction to what is marketing anymore and what does marketing do.
MELODY: Ironically, Greg, we need to do a better job of marketing ourselves, especially given how much this has changed — "this" being marketing — how much our world has changed as marketers. I would argue, and maybe there's real numbers out there to back this up, maybe the MMA could support us on this.
GREG: Yeah, I'll do research here. Go ahead. Yeah.
MELODY: I would argue, in the C-suite, there's not a job that has expanded, shifted, evolved more so than the CMO's role, more so than a marketer's role. We are now responsible not for marketing as tactics, but marketing as a growth strategy for a company, for a brand. And that entails so many different things. So in every company and all the CMOs you've spoken with, I'm sure all of us have a different scope, but now it's become comms and PR as part of marketing, digital experience and platforms and AI innovation as part of marketing, cultural initiatives internally with employees, purpose-driven kind of initiatives are part of marketing, revenue generation, data monetization, you name it, all sorts of things are starting to fall under this umbrella of marketing now. And so with all this change and all this evolution and this positioning of marketing as a growth engine for corporations and for brands, we are not doing a good enough job of showing how elevated it is, how important it is, and how much of an influence we have on the business.
One of the things that I also love to talk about too is often a C-suite does not think about the gravity of their situations until someone, a marketer, a communicator, says, How would this look as a headline in the New York Times? How would this look as a headline in a press release?
MELODY: Is this the right decision? I had an old boss who called it policy by press release, but what he was trying to say was, when you start to frame it in terms of how you're going to communicate this, how you're going to put this into the world, it gets real. That means that our role as marketers and communicators are of extreme strategic importance. And it is our job to ensure that our colleagues, first and foremost understand that and value it.
GREG: Melody, it's funny you say that. I think we've gotten better, but about 10 years — I've told this story here on Building Better CMOs a bunch — but about 10 years ago, I had a private closed-door meeting with a bunch of CMOs. We were kicking off some work that we were doing around marketing org. There was a professor in the room with me and we had a warmup exercise. And by the way, the CMOs — the CMO of General Motors, CMO of T-Mobile, of Allstate, Chobani, Dunkin'. You get it: a bunch of big-time people we know. And I'll never forget, he and I had a throwaway warmup question. The question was, What's the role of marketing? What's the role of the CMO? It was just to get people talking, to get 'em going, because it was an easy one, right. Melody, one hour later we had not moved on to question two because we realized that nobody in the room agreed what was the role of CMO? What was the role of marketer? So it feels like we've kind of done it to ourselves in not being clear. I think that's what part of what you're saying, right?
MELODY: Yes.
MELODY: I think it is partly a nature of how much it's expanded, how different it is at every company.
GREG: So we have a changing dynamic. Exactly.
MELODY: Correct. You have all these new tools and technologies that have come into play. You have all of this shift from what I would call art to now art and discipline or art and science. A lot of things have happened all at once, and I'm not sure that we as CMOs have kept pace in terms of ensuring that people really understand what our role is and why we need to have a seat at the table. You read articles about how CMO roles are being eliminated. You hear about how they're being rewritten with new titles like chief growth officer or chief customer officer. I'm not denigrating or knocking any of those, but I think it's a reaction to what is marketing anymore and what does marketing do.
Elevating Marketing at Mercedes-Benz
MELODY: When I first got to Mercedes-Benz, I recognized that as something that I could change first, and it's not the world's most exciting thing to say, my first priority is ensuring that marketing is elevated at Mercedes-Benz USA, and that people understand why we deserve a seat at the table and how we drive growth for this company. But if you don't do that, then there's no amount of cute campaigns or initiatives you can put out there that are going to make a difference. So it starts here in ensuring that my colleagues understand how we can influence and drive the business forward. I think you're right, it's just so many different factors and there's been a lot of progress in a lot of different ways, but we should and can be doing more.
GREG: Hey, Melody, it's a little funny — and maybe you don't want to answer this question but I'll try it anyway. How could one of the world's greatest brands — I mean, I don't know, Mercedes has got to be in the top 10 of all brands of all time, almost — how can one of the greatest brands not respect marketing? I don't know. Maybe is there a better way I should ask that question?
MELODY: I wouldn't call it not respecting marketing, but I would say that it became important for me to just remind people that we're not here just to pull off an event without sweating. We're not here to just create a TVC.
GREG: So was the pressure in part you were putting on your team to say, listen, we need to step up here, right?
MELODY: Absolutely. And also, you need to view your work as strategic and critically important to the success of this organization. That was the main message. We don't get to 140 years and the No. 8 brand on the Best Global Brands index without a deep, deep respect for the brand and a deep respect for marketing and branding. That is true of Mercedes-Benz, and it has been for over a century. But we have to keep reminding ourselves that that's true and we have to continue to invest in it as we go forward.
GREG: I won't name names on this one, but we had one of the CMOs of the board tell us she had gone through some marketing ... actually a follow-on to that marketing org work that we started with the professors 10 years ago, funny enough. This is a consumer packaged goods, so that's sold through retail. It's only brand, that's all that is. There's no transactional marketing to that. There's no customer experience to that kind of thing. I won't mention the brands. In doing some work, they had discovered that nobody in the company, nobody in the marketing department, understood foundationally, fundamentally how to develop a brand. They had outsourced it to the agency. I mean, that's a reflection of what you're saying like that. And this is eye-opening for them to go, oh my God, how did we ever get down this path? But obviously they did. The company did — companies have funny patterns sometimes — they did. That's crazy though, isn't it?
MELODY: But that is a balance that all marketers need to strike all the time. It's not a one and done. You never quite get it right. You've got to find a way to not outsource your thinking and your strategy but still bring in agencies as real partners, right? It's a symbiotic relationship that goes back and forth.
GREG: But if you're leading the brand, you really better know how brand gets formulated and have a really good process for doing that.
MELODY: I would think so, yes.
GREG: I mean, listen, I'm an agency guy, so I think agencies are generally oriented to try to do the right thing, but not without some orientation. You need to own responsibility for that, I think. And I wonder if marketing has done it.
MELODY: Absolutely, absolutely. And that's the expectation here for sure.
GREG: As near as I can understand and tell, having some understanding of how public companies operate, that compensation for the C-suite executives and probably many others in the company is predicated on growth. That's what all companies [do] : growth and margin improvement. I go, So if that's the truth, why isn't marketing the most important role in the company? That's a moment of self-reflection, I think, that we as marketers — and by the way, I'm a longstanding marketer, that's all I ever wanted to do, it's all I have any interest in doing, I have no outside interest other than marketing at many basic levels — but it's like, why aren't we the most respected? And I agree with your point, if I'm hearing you right, which is that we've kind of done it to ourselves in some regards or not, or maybe not taken the next step in our evolution as an industry. I dunno.
MELODY: I think that's what it is. I think it's just the internal marketing of ourselves to ensure that colleagues across the organization understand our capabilities and what we can do to help drive demand and growth. Any situation that I find myself in, there's a lot of looking at me and saying, okay, so how are we going to put this into the world? How are we going to get this message out there? And then what are we going to do to ensure our employees are on the same page? And then also, how do we talk to our dealers? We have to ensure that 386 dealers also hear the same message and are also marching to the same orders as well. So I can't tell you how many times we're sitting in a room and all of a sudden the last five action items fall to me as the marketer. But that does speak to the importance of the role.
GREG: What's your advice then to your team or to those maybe individually — a mentor, female or otherwise, males, any way you want to go at that — what is your advice to them then in line with this to help them support that mission? Because I liked how you said that. I think you're right. This is what we as leaders need to pass on to others. How do you do that? How do you communicate that to them now?
MELODY: The only thing that I've ever been able to see work as a leader in keeping folks motivated is to give them a sense of purpose that everything that they do, small or large, even if it's filling out a terrible form that they have to submit because Germany requires it, is so key to a much greater purpose, a higher charge to us as marketers in this organization. Everything that we do matters. And I talk about this often as well, what other group sits here and has to see their work go out into the world, right? Again, I'm not knocking my colleagues, but there's so much that —
GREG: To be viewed and criticized. If it's an ad, viewed and criticized, absolutely.
MELODY: You're putting your work out there. You're putting your project, your event, your campaign, your digital experience, whatever it is, you've got to launch that baby into the world and let everybody judge. That's not something that everyone in a corporation has to do. So trying to remind folks of a greater purpose and the privilege of being able to put their work out for the world to see all while receiving a lot of unsolicited opinions about marketing, because everybody is an expert in marketing.
GREG: Everybody's doing it as a side hustle. Exactly.
MELODY: Exactly. Everybody's doing it as a side hustle. And this new and I would say required aspect of measuring what we do and proving ROI and proving effectiveness, all of that coming together means that there's a lot of scrutiny and pressure on the marketer today, but that means it's really fun. And what we do matters.
GREG: Hey, Melody, it's a little funny — and maybe you don't want to answer this question but I'll try it anyway. How could one of the world's greatest brands — I mean, I don't know, Mercedes has got to be in the top 10 of all brands of all time, almost — how can one of the greatest brands not respect marketing? I don't know. Maybe is there a better way I should ask that question?
MELODY: I wouldn't call it not respecting marketing, but I would say that it became important for me to just remind people that we're not here just to pull off an event without sweating. We're not here to just create a TVC.
GREG: So was the pressure in part you were putting on your team to say, listen, we need to step up here, right?
MELODY: Absolutely. And also, you need to view your work as strategic and critically important to the success of this organization. That was the main message. We don't get to 140 years and the No. 8 brand on the Best Global Brands index without a deep, deep respect for the brand and a deep respect for marketing and branding. That is true of Mercedes-Benz, and it has been for over a century. But we have to keep reminding ourselves that that's true and we have to continue to invest in it as we go forward.
GREG: I won't name names on this one, but we had one of the CMOs of the board tell us she had gone through some marketing ... actually a follow-on to that marketing org work that we started with the professors 10 years ago, funny enough. This is a consumer packaged goods, so that's sold through retail. It's only brand, that's all that is. There's no transactional marketing to that. There's no customer experience to that kind of thing. I won't mention the brands. In doing some work, they had discovered that nobody in the company, nobody in the marketing department, understood foundationally, fundamentally how to develop a brand. They had outsourced it to the agency. I mean, that's a reflection of what you're saying like that. And this is eye-opening for them to go, oh my God, how did we ever get down this path? But obviously they did. The company did — companies have funny patterns sometimes — they did. That's crazy though, isn't it?
MELODY: But that is a balance that all marketers need to strike all the time. It's not a one and done. You never quite get it right. You've got to find a way to not outsource your thinking and your strategy but still bring in agencies as real partners, right? It's a symbiotic relationship that goes back and forth.
GREG: But if you're leading the brand, you really better know how brand gets formulated and have a really good process for doing that.
MELODY: I would think so, yes.
GREG: I mean, listen, I'm an agency guy, so I think agencies are generally oriented to try to do the right thing, but not without some orientation. You need to own responsibility for that, I think. And I wonder if marketing has done it.
MELODY: Absolutely, absolutely. And that's the expectation here for sure.
GREG: As near as I can understand and tell, having some understanding of how public companies operate, that compensation for the C-suite executives and probably many others in the company is predicated on growth. That's what all companies [do] : growth and margin improvement. I go, So if that's the truth, why isn't marketing the most important role in the company? That's a moment of self-reflection, I think, that we as marketers — and by the way, I'm a longstanding marketer, that's all I ever wanted to do, it's all I have any interest in doing, I have no outside interest other than marketing at many basic levels — but it's like, why aren't we the most respected? And I agree with your point, if I'm hearing you right, which is that we've kind of done it to ourselves in some regards or not, or maybe not taken the next step in our evolution as an industry. I dunno.
MELODY: I think that's what it is. I think it's just the internal marketing of ourselves to ensure that colleagues across the organization understand our capabilities and what we can do to help drive demand and growth. Any situation that I find myself in, there's a lot of looking at me and saying, okay, so how are we going to put this into the world? How are we going to get this message out there? And then what are we going to do to ensure our employees are on the same page? And then also, how do we talk to our dealers? We have to ensure that 386 dealers also hear the same message and are also marching to the same orders as well. So I can't tell you how many times we're sitting in a room and all of a sudden the last five action items fall to me as the marketer. But that does speak to the importance of the role.
GREG: What's your advice then to your team or to those maybe individually — a mentor, female or otherwise, males, any way you want to go at that — what is your advice to them then in line with this to help them support that mission? Because I liked how you said that. I think you're right. This is what we as leaders need to pass on to others. How do you do that? How do you communicate that to them now?
MELODY: The only thing that I've ever been able to see work as a leader in keeping folks motivated is to give them a sense of purpose that everything that they do, small or large, even if it's filling out a terrible form that they have to submit because Germany requires it, is so key to a much greater purpose, a higher charge to us as marketers in this organization. Everything that we do matters. And I talk about this often as well, what other group sits here and has to see their work go out into the world, right? Again, I'm not knocking my colleagues, but there's so much that —
GREG: To be viewed and criticized. If it's an ad, viewed and criticized, absolutely.
MELODY: You're putting your work out there. You're putting your project, your event, your campaign, your digital experience, whatever it is, you've got to launch that baby into the world and let everybody judge. That's not something that everyone in a corporation has to do. So trying to remind folks of a greater purpose and the privilege of being able to put their work out for the world to see all while receiving a lot of unsolicited opinions about marketing, because everybody is an expert in marketing.
GREG: Everybody's doing it as a side hustle. Exactly.
MELODY: Exactly. Everybody's doing it as a side hustle. And this new and I would say required aspect of measuring what we do and proving ROI and proving effectiveness, all of that coming together means that there's a lot of scrutiny and pressure on the marketer today, but that means it's really fun. And what we do matters.
The Importance of Measurement in Marketing
GREG: What is the responsibility of measurement? You had referenced earlier, you're not sure that marketers felt a sense of responsibility to be measured in the past. And I don't know. I mean, I can see your background — I don't know all that you've done — but what's your orientation towards marketing measurement? That's still fraught with difficulty and challenges, I think. What have you either tried to do there within Mercedes or how do you look at that generally?
MELODY: What I've observed, Greg, over the last 20 or so years in this world of communications and marketing is KPIs and measurement as optional to KPIs and measurement being absolutely mandatory and necessary for better decision-making going forward.
GREG: So there's a spectrum, you're saying. You see a spectrum across brands. Is that kind of what your different experiences? Okay, go ahead, yeah.
MELODY: Absolutely. But I see it over time as well. And now I think its ... Measurement is really becoming a non-negotiable. And I'm not talking about the measurement where you put a campaign out and then you look at some of the KPIs afterwards and you go, okay, nice, and it lives in a deck and never goes anywhere. I'm talking about the kind of measurement that then informs how you go forward with the next campaign or with the next digital initiative, whatever it may be. So now it is becoming incumbent upon marketers to take the numbers and drive a better way forward. And that's a big difference, I think, that's happened over the last 20 or so years.
GREG: Are we getting better tools? Is there just broader awareness? Is the data becoming more available? What do you think is happening now? Why is the trend to that? I mean, listen, I'm a huge believer in measurement. I actually co-founded multi-touch attribution about 20 years ago when I was trying to figure out ... We couldn't measure internet in a marketing mix. Here's the greatest transformation in consumer behavior and there was no measurement system to measure internet in a marketing mix. Now granted, the business is only $8 billion at that point so it was a pretty small segment of media now versus the $250 billion now. But I mean, that was kind of crazy we couldn't do that.
MELODY: I think that what's happening now, though, is that there is no shortage of ways to measure. And now the challenge has become how do you simplify to only the metrics that really matter to help you make better decisions. And I have repeated myself a few times, but metrics for metrics sake is never going to make sense to any marketer, but metrics to help you make a better decision next time is something that I think we can all embrace. So I think it's about simplifying to the metrics that actually matter for what you're doing. And then secondly, sometimes accepting — and this is when you go back to the art side of your brain as a marketer — that performance is not everything or that a certain initiative or tactic needs to be measured in a different way. So what I'm referring to is, for example, the ever-elusive upper-funnel brand-building initiatives where you can only measure a few things, but you can't measure it all the way through to conversion of sale. But sometimes as marketers, we need to be okay with that. You don't get to 140 years at Mercedes-Benz if all you relentlessly focus on is performance marketing designed to drive the sale of a car. If everything we did was only to drive the sale of a car, we wouldn't be here in another 140 years.
GREG: I agree with that. And by the way, Melody, I have done that research and so it's funny, I actually had the question come up. We started to hear the question about five–six years ago, which is what was the relationship between ... As performance marketing, now largely driven through digital, came more on everybody's lips, so to speak, or on their plans, the board had a discussion like, well, what is the relationship between brand and performance marketing? You know what's crazy about that, Melody? There was no methodology to measure that. And by the way, I talked to 250 CMOs in that process. I am very clear there was no approach to do that, and I have enough research background, I could... So MMA went and built a methodology to do that, and we can now tell you what the value of brand is long term and its relationship then to performance marketing.
And obviously, because it was unmeasured, it was significantly undervalued. I mean, that's the answer I give more. I will say, though, Melody, just to be fair to all of us though, we did ... Listen, I tell the brands who've done studies, Ally did a study on that to use that methodology. Kroger's did. Kroger's and Ally were the first two, AT&T and Campbell's are the only brand we've offered that, now I'm not sure we've sold it. Well, it's complicated. It is difficult. Maybe it doesn't work for everybody, but I'm not saying that their brands pick up a methodology, picked up the methodology to go execute against that. Again, I'm not so sure we've told everybody, so I'm going to be a little bit fair to the industry, but there's enough marketers that do know that no others have really tried to measure that.
MELODY: I would love to see a methodology that actually measured that. And the factor of time is also something that has to be put into it, right? Because you measure those on different horizons.
GREG: Well, that's what we measured. We basically were able to ... We created a methodology that had never existed, which basically measured sales over time as a result of brand campaign. And because we were collecting so much data on individuals' media habits, exposure, their attitudinal shift, and then ultimately long-term sales, we basically created a longitudinal track, the same people for 12 to 18 months. That's what made it unique. Nobody had ever tried to do that. And in fact, when I actually created — when I created, when my team, let me be clear — created the methodology. I've got smarter people than me on that. But when we created the methodology, Google came in and says, listen, listen, we love what you're doing. We love this work. We think this is great. By the way, we think what you're trying to do won't work. That was Google. So it was kind of funny that they even ... But we pursued it.
We said, well, I think I got enough momentum and I think I got enough traction. We're going to go try it and we'll see if it doesn't work. The question is so big that we need to do it. I'll tell you what it did show, interesting enough, one of the summaries of the points of that is that ... I have exact data for 12 months. We then modeled two years out, which we felt some confidence to do just to understand this model, and we said that a brand campaign will outperform performance marketing by 40% over a two-year period.
MELODY: Oh, interesting.
GREG: But see, this is information we'd never had. This is where I'm kind of a little concerned and where the role of the MMA exists or a group like us that can exist to do this because it'd be very hard for you as Mercedes just do that research on your own. Very hard. It'd be unlikely to make it into a project plan. But that's information we need to go talk to the CFO to say, okay, now knowing this, what do you think we should do? If this is information ... And I have no reason for bias on that. I don't, at some level, care if brand lives or dies, as a trade group, and I'm not selling anything against that, so I don't have any self-interest in it. Yeah, but that's what the data says. So 40% increase in sales.
Then the conversation is like, well, can we wait or do we have a bit of a ... it's kind of to your earlier part, we have a bit of a — you didn't say it exactly this way — but a bit of a shitstorm with the public markets, which can kind of happen. We're managing that near term. There's a lot of complexities to a business. Where do you think we are in terms of measurement's ability to answer the core questions that we need to as marketers? If you put it on a scale of one to 10, 10 being we're perfect, where do you think we are as an industry still?
MELODY: I'm not sure if I can speak for the whole industry. I think that over time, I would say we've gone from a one to at least a four or five, but I think there's still so much room to grow as media changes and as tools like AI come into play. I'm surprised you haven't asked me about AI yet, actually, because I guess it's the question that I get asked the most, but I think that's really going to shift the way that we measure as well.
MELODY: What I've observed, Greg, over the last 20 or so years in this world of communications and marketing is KPIs and measurement as optional to KPIs and measurement being absolutely mandatory and necessary for better decision-making going forward.
GREG: So there's a spectrum, you're saying. You see a spectrum across brands. Is that kind of what your different experiences? Okay, go ahead, yeah.
MELODY: Absolutely. But I see it over time as well. And now I think its ... Measurement is really becoming a non-negotiable. And I'm not talking about the measurement where you put a campaign out and then you look at some of the KPIs afterwards and you go, okay, nice, and it lives in a deck and never goes anywhere. I'm talking about the kind of measurement that then informs how you go forward with the next campaign or with the next digital initiative, whatever it may be. So now it is becoming incumbent upon marketers to take the numbers and drive a better way forward. And that's a big difference, I think, that's happened over the last 20 or so years.
GREG: Are we getting better tools? Is there just broader awareness? Is the data becoming more available? What do you think is happening now? Why is the trend to that? I mean, listen, I'm a huge believer in measurement. I actually co-founded multi-touch attribution about 20 years ago when I was trying to figure out ... We couldn't measure internet in a marketing mix. Here's the greatest transformation in consumer behavior and there was no measurement system to measure internet in a marketing mix. Now granted, the business is only $8 billion at that point so it was a pretty small segment of media now versus the $250 billion now. But I mean, that was kind of crazy we couldn't do that.
MELODY: I think that what's happening now, though, is that there is no shortage of ways to measure. And now the challenge has become how do you simplify to only the metrics that really matter to help you make better decisions. And I have repeated myself a few times, but metrics for metrics sake is never going to make sense to any marketer, but metrics to help you make a better decision next time is something that I think we can all embrace. So I think it's about simplifying to the metrics that actually matter for what you're doing. And then secondly, sometimes accepting — and this is when you go back to the art side of your brain as a marketer — that performance is not everything or that a certain initiative or tactic needs to be measured in a different way. So what I'm referring to is, for example, the ever-elusive upper-funnel brand-building initiatives where you can only measure a few things, but you can't measure it all the way through to conversion of sale. But sometimes as marketers, we need to be okay with that. You don't get to 140 years at Mercedes-Benz if all you relentlessly focus on is performance marketing designed to drive the sale of a car. If everything we did was only to drive the sale of a car, we wouldn't be here in another 140 years.
GREG: I agree with that. And by the way, Melody, I have done that research and so it's funny, I actually had the question come up. We started to hear the question about five–six years ago, which is what was the relationship between ... As performance marketing, now largely driven through digital, came more on everybody's lips, so to speak, or on their plans, the board had a discussion like, well, what is the relationship between brand and performance marketing? You know what's crazy about that, Melody? There was no methodology to measure that. And by the way, I talked to 250 CMOs in that process. I am very clear there was no approach to do that, and I have enough research background, I could... So MMA went and built a methodology to do that, and we can now tell you what the value of brand is long term and its relationship then to performance marketing.
And obviously, because it was unmeasured, it was significantly undervalued. I mean, that's the answer I give more. I will say, though, Melody, just to be fair to all of us though, we did ... Listen, I tell the brands who've done studies, Ally did a study on that to use that methodology. Kroger's did. Kroger's and Ally were the first two, AT&T and Campbell's are the only brand we've offered that, now I'm not sure we've sold it. Well, it's complicated. It is difficult. Maybe it doesn't work for everybody, but I'm not saying that their brands pick up a methodology, picked up the methodology to go execute against that. Again, I'm not so sure we've told everybody, so I'm going to be a little bit fair to the industry, but there's enough marketers that do know that no others have really tried to measure that.
MELODY: I would love to see a methodology that actually measured that. And the factor of time is also something that has to be put into it, right? Because you measure those on different horizons.
GREG: Well, that's what we measured. We basically were able to ... We created a methodology that had never existed, which basically measured sales over time as a result of brand campaign. And because we were collecting so much data on individuals' media habits, exposure, their attitudinal shift, and then ultimately long-term sales, we basically created a longitudinal track, the same people for 12 to 18 months. That's what made it unique. Nobody had ever tried to do that. And in fact, when I actually created — when I created, when my team, let me be clear — created the methodology. I've got smarter people than me on that. But when we created the methodology, Google came in and says, listen, listen, we love what you're doing. We love this work. We think this is great. By the way, we think what you're trying to do won't work. That was Google. So it was kind of funny that they even ... But we pursued it.
We said, well, I think I got enough momentum and I think I got enough traction. We're going to go try it and we'll see if it doesn't work. The question is so big that we need to do it. I'll tell you what it did show, interesting enough, one of the summaries of the points of that is that ... I have exact data for 12 months. We then modeled two years out, which we felt some confidence to do just to understand this model, and we said that a brand campaign will outperform performance marketing by 40% over a two-year period.
MELODY: Oh, interesting.
GREG: But see, this is information we'd never had. This is where I'm kind of a little concerned and where the role of the MMA exists or a group like us that can exist to do this because it'd be very hard for you as Mercedes just do that research on your own. Very hard. It'd be unlikely to make it into a project plan. But that's information we need to go talk to the CFO to say, okay, now knowing this, what do you think we should do? If this is information ... And I have no reason for bias on that. I don't, at some level, care if brand lives or dies, as a trade group, and I'm not selling anything against that, so I don't have any self-interest in it. Yeah, but that's what the data says. So 40% increase in sales.
Then the conversation is like, well, can we wait or do we have a bit of a ... it's kind of to your earlier part, we have a bit of a — you didn't say it exactly this way — but a bit of a shitstorm with the public markets, which can kind of happen. We're managing that near term. There's a lot of complexities to a business. Where do you think we are in terms of measurement's ability to answer the core questions that we need to as marketers? If you put it on a scale of one to 10, 10 being we're perfect, where do you think we are as an industry still?
MELODY: I'm not sure if I can speak for the whole industry. I think that over time, I would say we've gone from a one to at least a four or five, but I think there's still so much room to grow as media changes and as tools like AI come into play. I'm surprised you haven't asked me about AI yet, actually, because I guess it's the question that I get asked the most, but I think that's really going to shift the way that we measure as well.
How is Mercedes-Benz Using AI?
GREG: So yeah, Melody, let's go there for a little bit here. Listen, marketing has become an incredibly operationally intensive business with more complexity than we ever could have imagined, I think, for those of us who grew up in it. In fact, I had the head of brand for Adobe tell me the other day, she was launching a campaign — and I've heard others tell me more — but she was launching a campaign that had 5,000 creative assets in it. That's crazy, right?
MELODY: No, not really. That sounds like something that we would do. [laugh]
GREG: It sounds like something ... Okay. I didn't put the pressure on you for that. Okay. Yeah. I guess the point in part is that AI has so much opportunity to help us as a function within the business. Where do you see ... Maybe the question is, where are the best places that you think to place bets, either based on your experience or what you're seeing in the world? Where would you double down and focus on AI as an application to marketing?
MELODY: So you may have heard me say this on Jim Stengel's podcast, but I really like this quote that I learned while I was in Cannes, that creative can be automated, but that creativity never will be. I like that statement because, for me, that helps prioritize where AI is best deployed, and that is in the automation of creative. So the 5,000 pieces or of assets that are required for a campaign or whatever it is, this idea of dynamic content or dynamic content supply chain, that's enabled by AI. And I think there's a ton of opportunity there. So anything that requires that automation, that replication, that numerous assets that maybe used to be done manually, I think there's a lot of opportunity there. I think that gen AI is creating a lot of opportunities when it comes to creativity as well. But I do see some of the dangers of outsourcing, just like we just talked about earlier, Greg, you don't want to outsource all your thinking and creativity to agencies. Why would you do that with AI either, right? So they're very similar in that regard for me. I think that, for those elements of marketing that are operational, like you said, there's a ton of opportunity. There's a good bit, I think, of opportunity also in getting smarter about the way we buy media.
GREG: Yup.
MELODY: So the ability to bring predictive models to bear so that we can make better decisions going forward, that should also be automated instead of us looking at every channel in isolation trying to make it all fit together.
GREG: Correct.
MELODY: So I think there's opportunities in those spaces. As we watch the rapid transformation on the generative side, I think we have to exercise a little bit more caution there. And here's the other thing I'll say about AI as well, which is I think it applies, when you talk about creativity and gen AI, it applies differently with a luxury brand.
GREG: Yeah. I mean, you're really protecting a brand there in a big way. Yeah, go ahead.
MELODY: We're absolutely protecting our brand so we do have to be a little bit more cautious. So I talk about that 140 years a lot because what that is to me is a challenge to be a steward of the brand in this moment of time. That means I'm only here for, I don't know how long, but let's just call it a few years. I'm a little blip on that Mercedes-Benz radar, and then it's passed off to somebody else. That means we need to honor its heritage by protecting it as much as we possibly can. And maybe that means we don't take the same amount of risks when it comes to gen AI as other brands. The other piece is that a luxury brand is selling something with an intangible amount of value in it that someone's going to pay more for, even though they rationally know that it did not cost that much. They know they're paying a premium because they're paying for more than the cost of goods.
GREG: Yup.
MELODY: That's a human psychological challenge for a marketer that I'm not sure AI can replicate today. Can it in the future? Maybe. I won't rule it out. But today, I think that human psychological factor is something that we as marketers and as human marketers need to manage. I think those are two big differences for luxury brands that I would say. Now, where we see a ton of opportunities on the product side of things, and I don't know if you know this, Greg, but Mercedes-Benz introduced artificial intelligence in 1996.
GREG: No, I didn't know.
MELODY: So it's been didn't going for almost 30 years in the halls of Mercedes-Benz.
GREG: What did they do? What did they ... Yeah, talk more about that. That'd be interesting to people.
MELODY: So we've had voice control in our car since that time. So being able to say, Hey, Mercedes, change my ambient lighting. Hey, Mercedes, change my temperature while you're driving. That sort of ability has been built into our car since the late '90s. Now we have ChatGPT integration in our cars as well, so we're able to use natural language processing in a conversational tone to tell Mercedes what to do in the cars. We use AI for customer experience. You probably know this, but speaking of 5,000 assets, a car is made up, on average, of 30,000 parts. 30,000 parts. And today we're moving towards software-defined vehicles. What that means is that our customer agents, when somebody calls in, have a much higher degree of complexity in trying to diagnose and fix a problem, sometimes while people are driving in a panic, right? In that scenario.
And so AI enables our customer service teams to answer that question much more quickly, get that answer faster, instead of looking through a bunch of different manuals trying to find the answer for the car you're in. AI that drives a better customer experience, whether it's in the car or in a customer call center, is really important and prioritized at Mercedes-Benz. AI that drives revenue growth, let's say that makes our website mbusa.com perform better so that somebody converts to a lead, revenue-driving AI initiatives are the second big priority. And third, it's the operational pieces. So getting the optimal operational excellence for whatever process you're looking at is where the third area of opportunity is that I see it. Other than that, because we're Mercedes-Benz, because we're 140, because we're a luxury brand, we have to, I think, approach this with caution.
GREG: So Melody, listen, I would be remiss not to give you opportunity, given the high-end nature I expect of my audience here, at least that's who I hear from.
MELODY: No, not really. That sounds like something that we would do. [laugh]
GREG: It sounds like something ... Okay. I didn't put the pressure on you for that. Okay. Yeah. I guess the point in part is that AI has so much opportunity to help us as a function within the business. Where do you see ... Maybe the question is, where are the best places that you think to place bets, either based on your experience or what you're seeing in the world? Where would you double down and focus on AI as an application to marketing?
MELODY: So you may have heard me say this on Jim Stengel's podcast, but I really like this quote that I learned while I was in Cannes, that creative can be automated, but that creativity never will be. I like that statement because, for me, that helps prioritize where AI is best deployed, and that is in the automation of creative. So the 5,000 pieces or of assets that are required for a campaign or whatever it is, this idea of dynamic content or dynamic content supply chain, that's enabled by AI. And I think there's a ton of opportunity there. So anything that requires that automation, that replication, that numerous assets that maybe used to be done manually, I think there's a lot of opportunity there. I think that gen AI is creating a lot of opportunities when it comes to creativity as well. But I do see some of the dangers of outsourcing, just like we just talked about earlier, Greg, you don't want to outsource all your thinking and creativity to agencies. Why would you do that with AI either, right? So they're very similar in that regard for me. I think that, for those elements of marketing that are operational, like you said, there's a ton of opportunity. There's a good bit, I think, of opportunity also in getting smarter about the way we buy media.
GREG: Yup.
MELODY: So the ability to bring predictive models to bear so that we can make better decisions going forward, that should also be automated instead of us looking at every channel in isolation trying to make it all fit together.
GREG: Correct.
MELODY: So I think there's opportunities in those spaces. As we watch the rapid transformation on the generative side, I think we have to exercise a little bit more caution there. And here's the other thing I'll say about AI as well, which is I think it applies, when you talk about creativity and gen AI, it applies differently with a luxury brand.
GREG: Yeah. I mean, you're really protecting a brand there in a big way. Yeah, go ahead.
MELODY: We're absolutely protecting our brand so we do have to be a little bit more cautious. So I talk about that 140 years a lot because what that is to me is a challenge to be a steward of the brand in this moment of time. That means I'm only here for, I don't know how long, but let's just call it a few years. I'm a little blip on that Mercedes-Benz radar, and then it's passed off to somebody else. That means we need to honor its heritage by protecting it as much as we possibly can. And maybe that means we don't take the same amount of risks when it comes to gen AI as other brands. The other piece is that a luxury brand is selling something with an intangible amount of value in it that someone's going to pay more for, even though they rationally know that it did not cost that much. They know they're paying a premium because they're paying for more than the cost of goods.
GREG: Yup.
MELODY: That's a human psychological challenge for a marketer that I'm not sure AI can replicate today. Can it in the future? Maybe. I won't rule it out. But today, I think that human psychological factor is something that we as marketers and as human marketers need to manage. I think those are two big differences for luxury brands that I would say. Now, where we see a ton of opportunities on the product side of things, and I don't know if you know this, Greg, but Mercedes-Benz introduced artificial intelligence in 1996.
GREG: No, I didn't know.
MELODY: So it's been didn't going for almost 30 years in the halls of Mercedes-Benz.
GREG: What did they do? What did they ... Yeah, talk more about that. That'd be interesting to people.
MELODY: So we've had voice control in our car since that time. So being able to say, Hey, Mercedes, change my ambient lighting. Hey, Mercedes, change my temperature while you're driving. That sort of ability has been built into our car since the late '90s. Now we have ChatGPT integration in our cars as well, so we're able to use natural language processing in a conversational tone to tell Mercedes what to do in the cars. We use AI for customer experience. You probably know this, but speaking of 5,000 assets, a car is made up, on average, of 30,000 parts. 30,000 parts. And today we're moving towards software-defined vehicles. What that means is that our customer agents, when somebody calls in, have a much higher degree of complexity in trying to diagnose and fix a problem, sometimes while people are driving in a panic, right? In that scenario.
And so AI enables our customer service teams to answer that question much more quickly, get that answer faster, instead of looking through a bunch of different manuals trying to find the answer for the car you're in. AI that drives a better customer experience, whether it's in the car or in a customer call center, is really important and prioritized at Mercedes-Benz. AI that drives revenue growth, let's say that makes our website mbusa.com perform better so that somebody converts to a lead, revenue-driving AI initiatives are the second big priority. And third, it's the operational pieces. So getting the optimal operational excellence for whatever process you're looking at is where the third area of opportunity is that I see it. Other than that, because we're Mercedes-Benz, because we're 140, because we're a luxury brand, we have to, I think, approach this with caution.
GREG: So Melody, listen, I would be remiss not to give you opportunity, given the high-end nature I expect of my audience here, at least that's who I hear from.
New Mercedes-Benz Models
GREG: So what Mercedes-Benz car should they all be focused on now? You want to give any sort of, I don't know. I'll let you be the car dealer here for a moment. What do you suggest everybody take a look at? What do they want to pay attention to?
MELODY: I think probably the most exciting introduction — we've just gone public with it — is the CLA. And the reason I talk about the CLA is because it represents the next generation of Mercedes-Benz vehicles. It's moving to what we call the MBOS, the Mercedes-Benz Operating System. It's a completely new technological platform for our future vehicles. Everything starting to roll out after that is going to move on to this MBOS platform. I really hope that people take the time to not only read about this, but also experience the CLA when it hits stores in the United States later this year — it's coming towards the end of the year — because the experience will be so unlike maybe what they've experienced before and is a harbinger of what's to come. So CLA is really, really exciting. The other really exciting introduction that we just made in Munich at the International Auto Show, the IAA, is the GLC.
So GLC is our next-generation most popular vehicle sold around the world. It's that mid-size SUV that everybody wants, but it is going to be one body style, whether you want electric, plugin hybrid, or internal combustion. So it is a return to the one body style but powertrain of your choice from Mercedes-Benz. It is incredibly beautiful on the interior. The experience is unparalleled when it comes to the GLC as well. So definitely check out the CLA and the GLC. But my own little favorite thing that's coming this year is the E 53 wagon. If you're a real gearhead and you love cars, you may like wagons and Mercedes-Benz arguably makes the best. I think the E 63 wagon is one of the best wagons ever made, but we're bringing the E 53 AMG wagon to the US later this year as well.
GREG: Boy, that's great. I love somebody who knows their product so well, that's really well done. I love it. [laugh] I love it. Okay, so I guess if the listeners could put up their hands, we would take a bunch of hand raising right now to send them to a dealer near them that they could go do. Listen, I'm excited about that. So when's the CLA coming out? What's the date of that?
MELODY: It'll be later this year. So we should have them in stores November–December.
GREG: And this is the first year for that particular model line, just to excuse my ignorance about that.
MELODY: Yes, that's the model year 26 CLA. That's correct.
GREG: Wow. How exciting.
MELODY: New generation.
GREG: Yeah, no, it really does feel like Mercedes has just been on fire the last few years. They've sort of revolutionized the brand. I think that there's a diversity of automobile opportunities within that from performance to broader, I don't know what to call it, larger sedans that just are more luxury vehicles. But yeah, it's really interesting.
MELODY: Yeah, we're proud of what we call the luxury of choice. We provide the luxury of choice to our customers. So whether you are a Mercedes Maybach customer, a Mercedes AMG performance gearhead type, or someone that just really likes fast cars, or you are interested in any variant in the Mercedes-Benz portfolio, we have the widest and deepest portfolio available to folks, and that's part of our great success.
GREG: Wow. That's great. Well, there we go. I think that's probably a pretty good place to close it up then, right, Melody? I mean, listen, if we've sold a few cars and we've made all this worthwhile and help people with their car buying decisions in addition to fixing their marketing, I think we've done a good job, don't you think?
MELODY: Absolutely.
GREG: Listen, I can't thank you enough for doing this. I really appreciate it. I was very interested to talk to you. We are in the market for a car, so we'll take all of your advice and act against that.
MELODY: Well, let us know.
GREG: There we go.
MELODY: Happy to help. Thanks for having me, Greg.
GREG: Yeah, thank you, Mel. Appreciate it.
Thanks again to Melody Lee from Mercedes-Benz USA for coming on Building Better CMOs. Check the description of this episode for links to connect with Melody. If you like this episode, you might also enjoy my conversation with Lauren Beckstedt, the CMO of Brunswick. We talked about why being a hand-raiser opens doors in your career, educating your company's leadership about modern marketing practices, and most importantly, what boat should I buy? You can find the episode and every episode of Building Better CMOs on YouTube, Spotify, Apple Podcasts, or wherever you're hearing me now. At MMA, we are working to make marketing matter more through conferences, research and education. If you want to know more, visit us at mmaglobal.com or write me directly, greg@mmaglobal.com. Don't forget, Building Better CMOs is now on YouTube. Just go to bettercmos.com/youtube to start watching. Our producer and podcast consultant is Eric Johnson from LightningPod.fm. Artwork is by Jason Chase. And a special thanks to Angela Gray and Dan Whiting. This is Greg Stuart. I'll see you in two weeks.
MELODY: I think probably the most exciting introduction — we've just gone public with it — is the CLA. And the reason I talk about the CLA is because it represents the next generation of Mercedes-Benz vehicles. It's moving to what we call the MBOS, the Mercedes-Benz Operating System. It's a completely new technological platform for our future vehicles. Everything starting to roll out after that is going to move on to this MBOS platform. I really hope that people take the time to not only read about this, but also experience the CLA when it hits stores in the United States later this year — it's coming towards the end of the year — because the experience will be so unlike maybe what they've experienced before and is a harbinger of what's to come. So CLA is really, really exciting. The other really exciting introduction that we just made in Munich at the International Auto Show, the IAA, is the GLC.
So GLC is our next-generation most popular vehicle sold around the world. It's that mid-size SUV that everybody wants, but it is going to be one body style, whether you want electric, plugin hybrid, or internal combustion. So it is a return to the one body style but powertrain of your choice from Mercedes-Benz. It is incredibly beautiful on the interior. The experience is unparalleled when it comes to the GLC as well. So definitely check out the CLA and the GLC. But my own little favorite thing that's coming this year is the E 53 wagon. If you're a real gearhead and you love cars, you may like wagons and Mercedes-Benz arguably makes the best. I think the E 63 wagon is one of the best wagons ever made, but we're bringing the E 53 AMG wagon to the US later this year as well.
GREG: Boy, that's great. I love somebody who knows their product so well, that's really well done. I love it. [laugh] I love it. Okay, so I guess if the listeners could put up their hands, we would take a bunch of hand raising right now to send them to a dealer near them that they could go do. Listen, I'm excited about that. So when's the CLA coming out? What's the date of that?
MELODY: It'll be later this year. So we should have them in stores November–December.
GREG: And this is the first year for that particular model line, just to excuse my ignorance about that.
MELODY: Yes, that's the model year 26 CLA. That's correct.
GREG: Wow. How exciting.
MELODY: New generation.
GREG: Yeah, no, it really does feel like Mercedes has just been on fire the last few years. They've sort of revolutionized the brand. I think that there's a diversity of automobile opportunities within that from performance to broader, I don't know what to call it, larger sedans that just are more luxury vehicles. But yeah, it's really interesting.
MELODY: Yeah, we're proud of what we call the luxury of choice. We provide the luxury of choice to our customers. So whether you are a Mercedes Maybach customer, a Mercedes AMG performance gearhead type, or someone that just really likes fast cars, or you are interested in any variant in the Mercedes-Benz portfolio, we have the widest and deepest portfolio available to folks, and that's part of our great success.
GREG: Wow. That's great. Well, there we go. I think that's probably a pretty good place to close it up then, right, Melody? I mean, listen, if we've sold a few cars and we've made all this worthwhile and help people with their car buying decisions in addition to fixing their marketing, I think we've done a good job, don't you think?
MELODY: Absolutely.
GREG: Listen, I can't thank you enough for doing this. I really appreciate it. I was very interested to talk to you. We are in the market for a car, so we'll take all of your advice and act against that.
MELODY: Well, let us know.
GREG: There we go.
MELODY: Happy to help. Thanks for having me, Greg.
GREG: Yeah, thank you, Mel. Appreciate it.
Thanks again to Melody Lee from Mercedes-Benz USA for coming on Building Better CMOs. Check the description of this episode for links to connect with Melody. If you like this episode, you might also enjoy my conversation with Lauren Beckstedt, the CMO of Brunswick. We talked about why being a hand-raiser opens doors in your career, educating your company's leadership about modern marketing practices, and most importantly, what boat should I buy? You can find the episode and every episode of Building Better CMOs on YouTube, Spotify, Apple Podcasts, or wherever you're hearing me now. At MMA, we are working to make marketing matter more through conferences, research and education. If you want to know more, visit us at mmaglobal.com or write me directly, greg@mmaglobal.com. Don't forget, Building Better CMOs is now on YouTube. Just go to bettercmos.com/youtube to start watching. Our producer and podcast consultant is Eric Johnson from LightningPod.fm. Artwork is by Jason Chase. And a special thanks to Angela Gray and Dan Whiting. This is Greg Stuart. I'll see you in two weeks.