Dr. Leonard L. Berry, Distinguished Professor of Marketing, Regents Professor, and the M.B. Zale Chair in Retailing and Marketing Leadership in the Mays Business School at Texas A&M University, joins AMA’s Bennie F. Johnson to talk about building trust through marketing, service in innovative ways, and the value of organizational generosity.
Episode: Trust, credibility, and service
Dr. Leonard L. Berry, Distinguished Professor of Marketing, Regents Professor, and the M.B. Zale Chair in Retailing and Marketing Leadership in the Mays Business School at Texas A&M University, joins AMA’s Bennie F. Johnson to talk about building trust through marketing, service in innovative ways, and the value of organizational generosity.
Bennie F Johnson (00:56.541)
Hello, and thank you for joining us for our latest episode of AMA Marketing And. I'm your host, AMA CEO, Benny F. Johnson. In our podcast, we like to explore life through the lens of marketing, delving into conversations with individuals that flourish at the intersection and nexus of the unexpected through marketing. We'll introduce you to visionaries whose stories you might not have heard of, but exactly the ones you need to know.
Through our thought provoking conversations, we're gonna unravel the challenges, triumphs, and pivotal moments that have been shaped by marketing. Today is a special episode. I'm delighted to welcome our guest, Dr. Leonard Berry. Dr. Berry is the University Distinguished Professor of Marketing and the Regents Professor, and holds the MB Zale Chair in Retailing and Marketing Leadership in the Mays Business School at Texas A&M University.
He is also a Presidential Professor of Teaching Excellence. He served as a Visiting Science at the Mayo Clinic in 2001 to 2002, where he conducted in-depth research studying healthcare service, the basis for his book, Management Lessons from the Mayo Clinic from 2008. He has done field research with the healthcare system, with Berlin Health, all in Wisconsin, and at the Henry Ford and at Henry Ford Health in Michigan. Concurrent with his faculty position at the Mays Business School, Dr. Berry is a senior fellow at the Institute of Health Care Improvement studying service improvement in cancer care and is also an adjunct professor of the Faculty of Health Sciences at the University of Southern Denmark. You can see we're in for a treat today with the distinguished experience and background of Dr. Berry. Dr. Berry, welcome to our podcast.
Len Berry (02:56.406)
Thank you. Thank you, Benny. It's my pleasure.
Bennie (03:00.501)
Well, we spoke a bit about the research and space in here. I'd love to share with our audience. You really had a distinguished volunteer career working and being a pivotal part of the AMA. Talk a little bit about how you first encountered the AMA.
Len (03:20.982)
Yes, well, as you mentioned in your introduction, Benny, I am a marketing professor. I have been for nearly 50 years now.
Len (03:34.974)
And for the last 40 of those years, I've been at Texas A&M and the Mays Business School. And so it's natural for a marketing academic to be involved in the AMA. At the very least, it's a member. I've been a member since I was a doctoral student. But then I eventually got involved in AMA leadership. And when...
Bennie (03:50.912)
Right.
Len (04:02.274)
Went through the different ranks. I was vice president of marketing education and then I was elected to become president-elect of AMA. And then in 1986, 1987, I was the actual president, national president of the AMA, and then past president the year after and on the board for a total of nine years during that period. So that was a very big, important part of my...
It's a thrilling part of my career. I loved, I work at AMA, in the leadership of AMA. I was very fortunate, Benny, I'll add this, that when I was president, it was AMA's 50th anniversary.
Bennie (04:49.837)
Mm-hmm.
Len (04:52.779)
And so in planning my presidential year, I wanted to do something really special. And we did a lot of special things in the 50th year to celebrate AMA and to celebrate marketing, including starting what we call Marketing Week, which was a week where we celebrated marketing.
Bennie (05:15.262)
Okay, yes.
Len (05:21.626)
Throughout North America, the collegiate chapters and the professional chapters all had events. It was just a wonderful, you know, just a wonderful, exciting week to bring more marketing awareness of and bring more awareness of marketing's contribution, the good side of marketing.
Bennie (05:47.957)
Right.
Len (05:49.218)
People often think of the negativity. And that was the purpose of Marketing Week. We also in my presidential year had a World Marketing Congress and we held it in Montreal because when I was president, there was some tension between the Canadian chapters and the US chapters. Canadian chapters felt they were not getting full attention from this US based AMA.
Bennie (06:10.669)
Hmm.
Len (06:19.254)
And I wanted to fix that. That was one of my priorities and so we put our major conference that year, the World Marketing Conference, Congress in Montreal. It was a great event attended by people from all over the world. So yes, AMA has played a big part of my career. I really feel privileged to have had the opportunity to be AMA president.
Bennie (06:49.049)
And it's just, it's a privilege to have you on our podcast to talk about your career and journey and that journey through service. And I know when I talk to current doctoral students and they talk about their hopes and dreams, they see the same kind of contribution points. I'm gonna list a couple things for our listeners just to get a sense of the impact. The American Marketing Association, William Wickey, Marketing for a Better World Award.
Len (06:59.404)
Yes.
Bennie (07:19.465)
What I love in listening to you talk about the hope of marketing and the power of marketing really hinges on this, how do we build marketing for a better world? Talk a bit about your thoughts on really marketing helping to drive social good and impact.
Len (07:42.198)
You know marketing has such a key role to play in virtually every one of the world's problems, Benny. There is an opportunity, a role for marketing expertise, for marketing skills, for marketing persuasion to contribute to improving our society, to improving our world, to making it better.
Bennie (07:51.51)
Right.
Bennie (07:55.454)
Mm-hmm.
Len (08:16.086)
When you look at the crises that we have across the world today, hunger, poverty, climate, access to education, access to healthcare, economic instabilities, marketing has a role to play in every one of those. Let me tell you a couple of stories to address the question.
Bennie (08:41.407)
Okay, yes.
Len (08:46.255)
And I could go on and on with more than two, but I want to tell you two, and they're two very different stories, but they both involve marketing. The first one is a nonprofit that I've studied called the World Central Kitchen, and it's based in Washington, D.C., so you may know of the World Central Kitchen. And what is it? Yes.
Bennie (09:00.844)
Mm-hmm.
Bennie (09:04.465)
Uh, Ho- Jose Andres, yeah.
Len (09:13.262)
And what the World Central Kitchen does is it's a nonprofit that feeds people in crisis situations when they're hungry. Floods, fires, hurricanes, and even war. But it depends entirely on volunteers and they need to be recruited. That's a marketing issue. And it depends entirely on donations to do its work.
Bennie (09:32.157)
Hmm.
Len (09:41.102)
And the donations need to be raised. And that's a marketing issue. For World Central Kitchen to do its marvelous, it's marvelous inspiring work. It's important work. It's work that actually keeps people alive because you need to eat to stay alive and to drink. It depends on marketing. And
Bennie (09:45.547)
Right?
Bennie (10:06.561)
Mm-hmm.
Len (10:08.206)
The World Central Kitchen is in Gaza right now as we speak, helping to feed and to provide a drink to Palestinians in Gaza, trapped in Gaza right now. And it's mostly volunteers taking their own lives, putting their own lives at risk to do this kind of work.
It's absolutely an amazing organization and it depends greatly on marketing. So that's first story. Second story is very different. It's also another organization I cover, I study and that's Costco. Costco is one of the great companies in the world, not just in America and not just in retail. It's a great, great company.
Bennie (10:55.947)
Okay.
Len (11:08.778)
And it's a great company because it's a great merchant. It sells what people wanna buy, but it's also a great employer. And to be great in marketing you need to be a great employer. You need to be an employer of choice. You need to be an employer people want to work for. You need to be an employer that retains talent. Right now, one of the biggest problems we're facing in American commerce is labor shortages across industries. It's having a big impact on quality of service and the value customers receive. And...unless you're a great employer, and Costco is, you're probably gonna be dealing with these labor shortages too. Costco isn't, by the way. The billions of Costco as an employer can be captured in its generosity. It's a generous employer. And to be a great employer, Costco's labor rates are higher.
Bennie (12:16.333)
Okay. Tell me more about this. Yeah.
Len (12:24.47)
They pay more than their competition, considerably more. And they also offer full health benefits to their employees, which is not always the case in retail, especially in discount and wholesale retailing in that sector. But Costco pays considerably more than any of their competitors for their employees. So their labor rates are higher. But their labor costs spending are lower.
Bennie (12:53.974)
Hmm.
Len (12:54.666)
Now, think this. Their labor rates are higher because they pay more. But their labor costs are lower because they're hiring better people and retaining them and getting more engagement out of them. And so their employees are more productive. So their labor costs as a percentage of total sales are lower in the competition.
Bennie (13:20.309)
Wow. It's interesting you use that as a story.
Len (13:23.382)
Executives are not going to think that way. Yeah, executives are. I teach this to my students. Executives often don't make a difference between labor rates and labor costs. But we can. We can. Costco is a brilliant merchant, a brilliant employer. And so, you know, it's retention, it's membership, it has members, you pay, you actually, I mean, how many retailers?
Bennie (13:35.138)
Mm-hmm. Right.
Len (13:51.106)
Have customers that actually pay to be a customer. Not just paying for a transaction, paying to be a customer. Costco is one of those few companies. And it has more than a 90% membership retention rate of its customers. Because customers love Costco. They love the value, they love the experience. They love the discovery of finding something really great in the store. They love the food.
They'd love to be able to buy gasoline at a discount. They love the experience. It's a great marketing story. World Central Kitchen, Costco, so different in what they do, but so alike in how they function and in their generosity and the trust they build, the relationships they create.
Bennie (14:31.382)
Right.
Bennie (14:42.721)
So let's talk a bit more about that. The trust built through marketing and relationships have had. What lessons do you see with these two companies and others for our next generation of marketing leaders? That trust does matter. Relationships matter. And marketing is a throughput for each of those.
Len (15:05.834)
Yes, in organizations, you create value for customers with the values that your organization holds dear. So organizational values, what you believe in, what's authentic for you, what's your priority.
Bennie (15:20.766)
Mm-hmm.
Len (15:31.974)
What your core values are, that actually directly creates value for the customer because it informs the decisions you make, the strategy that you lead, the kind of business that you run, your values, your core values. Are you generous or not? Are you innovative or not? Are you?
Bennie (15:42.134)
Right.
Len (16:02.41)
Are you credible with your customers or not? Do you deliver in win-win or are you basically practicing win-lose in the way you do business? This is what matters.
Bennie (16:21.632)
Yeah, you're so true. And we're in a space in which customers can see through the inconsistencies that you have. The most brilliant marketing campaign and advertising fails when customers can see through that those are only creative words and not a reflection of the business or the values of the work. And it's a lot easier to see today than it's ever been before.
Len (16:26.363)
Thank you.
Len (16:50.75)
Yes, yes, you cannot be a bad company in terms of the way you deal with customers and hide it anymore. You know, United Airlines, when they dragged that poor passenger off the airplane a couple years ago, people with their smartphones and everybody has a smartphone were taking videos and that was on
Bennie (17:00.553)
Right.
Bennie (17:11.626)
Right.
Len (17:23.442)
United Airlines dragging a passenger who happened to be a medical doctor who had to get home last flight that night, who had a operation, who was in a seat, dragging him out of that seat on the floor, out of the plane to make room for someone else. That tarnished the trust, that tarnished the brand.
Bennie (17:31.777)
Mm-hmm.
Len (17:53.223)
Of United Airlines. So you cannot do something bad and hide it anymore.
Bennie (18:02.485)
Not anymore. And to, you know, not to pick on our friends at United, but you know, they were one of the opening social media case studies, you know, United Breaks Guitars.
Len (18:03.222)
Let's go.
Len (18:14.754)
That's right, which is, I actually use that case in my MBA class. It's had, I think, 20 million viewers or more by now. The United Breaks Guitar video.
Bennie (18:15.741)
From Creator Economy Space in there.
Len (18:32.582)
And for those listeners that don't know that story, you can go on YouTube and listen to the song, actually it's a wonderful song, I play it for my students. But what happened is a music group was on a United flight, flying I believe to Canada, and they checked their equipment, their...
Bennie (18:43.146)
Yes.
Len (19:00.622)
Guitar and their other musical equipment and the lead singer of the group was looking out the window when the baggage handlers were dealing with luggage and putting into the hold and they saw one baggage handler throw the guitar case to another and he dropped it, fumbled. And so when he got to his destination his guitar was broken.
Bennie (19:23.01)
Oh, yes. Yes.
Len (19:31.158)
He spent nearly a year trying to get United Airlines talking to a variety of different staff members to actually reimburse them for buying a new guitar. And he got the runaround. And finally, he and his group made this song, United Breaks Guitars. They posted it on social media. It had hundreds of thousands of hits within three days and now it's in the multi-millions.
Bennie (20:03.681)
You're right. And a case study in the best of business classes of what not to do.
Len (20:11.458)
Yes, yes, yes.
Bennie (20:12.137)
Yes. Well, you know, in keeping with these powerful one word themes, we've talked trust, credibility. I'm going to bring up another one, which has been the topic of a few of your books and works, the topic of service. You know, how can marketing professionals, both as individuals and as your teams and organizations, think about service today in new and innovative ways?
Len (20:25.869)
Yes.
Len (20:37.65)
Oh, I love the question and hopefully I don't go too long in answering because I have a lot of thoughts on that. I'll pick my spots.
Bennie (20:46.62)
And we'd love to hear it. We'd love to hear it, my friend. Yes.
Len (20:50.498)
Thank you, thank you. Well, especially in terms of thinking about service in innovative ways. Number one, we have to think about improving service quality and reducing costs at the same time. They're not opposites. And the mistake we often make in business is we assume that in order to really improve our service, we're gonna have to raise our costs of doing business.
And that may in fact be true in the short term, whether it's adding information or improving digital technology or whatever it might be, or adding staff. But in the long run, if you truly improve your service, you're gonna reduce your costs. You're gonna reduce your costs. You're gonna, you're going to reduce the cost of having to re-perform failed services.
You're going to reduce your cost of replacing lost customers because of poor service. You're going to reduce your cost of negative word of mouth and on and on and on. So that's one point, improve service and decrease costs at the same time. Think about service quality that way. Another important way to think about service, Benny, is to do service today, to practice service today.
That the marketing groups have to work very, very closely in partnership with both HR and IT. You can't have a war between marketing, IT or HR. You're all in it together. You have to be partners and you have to be coordinated. You have to pool your talents and your skills because without HR, you're not gonna be able to be the...company of choice that I talked about. And without IT, you're not going to be able to attract customers that are wanting to do business with you on their smartphone or on their laptop, which is a very, very big segment of the population today. Everybody, virtually everybody has a smartphone. They may not have a lot of what they need in their home, but they do have a phone.
Len (23:16.15)
So that's a key point. Another key point, and I've already touched on this, is internal marketing. We think of marketing externally to the external customer. But to do that well, you need to also practice great internal marketing with your own employees. You need to market to your employees. Think of them as internal customers. You need to create a great work product for them.
Bennie (23:36.532)
It's so true.
Len (23:49.191)
In order to have a full staff, in order to have a great staff, in order to have an engaged staff. So internal marketing is as important as external marketing. So that's a key point. Yes, please, go ahead.
Bennie (24:02.996)
It's so true. And as you mentioned.
Bennie (24:07.481)
As I say, it's a key point, as you mentioned. I've often seen in the data supports that your employees are your first best customer. They're your first, if done right, they're your first advocates for the business. If you haven't sold your employees, no matter how good your product is, you're never going to sell anyone else.
Len (24:27.122)
Absolutely. Well said, Benny. And yes, I teach this to my services marketing MBA students. I teach them also that you cannot be great in marketing unless you're great digitally. If you're going to be in marketing, you have to be so well versed.
Bennie (24:37.598)
Mm-hmm.
Len (24:56.766)
So caught up to date, so smart about digital, you simply cannot be superb in marketing unless you are superb in digital marketing today. You know, when I, years ago, was a doctoral student, digital marketing didn't exist. You know, it was, you know, we thought of marketing basically as advertising and personal selling.
And we thought of advertising as the networks and the magazines and the newspapers and the billboards. And we that all still plays a role, but it plays a smaller and smaller role every single day. We are in a digital world today and tomorrow, and we better be great at it. And then the final point I'll make, because you asked about innovative ideas of ideas we don't typically think of when we think of marketing. The final point I'm going to make, Benny, so we can move on, is the greatest marketing success driver of all, is organizational generosity. Generosity is your most powerful marketing tool, because with generosity, as we were talking about before, you create trust with your stakeholders, your customers, your employees, your community, your vendors.
Bennie (26:09.38)
Mm.
Len (26:24.002)
With generosity, you create trust, you create loyalty, you create engagement. You can even create love. We don't usually use the word love when we use the word market. But in fact, many customers truly love World Central Kitchen. They truly love Costco. And so...
Bennie (26:35.37)
Right.
Len (26:49.382)
If you're going to create love, customer love or stakeholder love, you need to be generous. You need to earn that.
Bennie (26:58.114)
When you mentioned love in that way, it reminded me of my dear friend, Mauro Puccini, who's chief design officer of Pepsi. And he's a big fan of the notion of he's in the business of love. And he talks about his work on his teams, his design and marketing teams as people in love with people.
And that drives the work that he has. And he speaks with such passion about it. But it fits that same strategic point that that's what you're creating through the generosity of your programs and teams. To pivot a bit, but we talked a bit about teams and people working together. One of the things that we've seen and we still push for, but I'd love to get your thoughts. So what are some of the emerging best practices that organizations can use?
To increase the diversity of marketing teams. You know, we have a really dynamic world in which we're a part of, but there's long been a challenge of diversity within the marketing teams and leaderships. What are some of the things that you're seeing as you talk to students and work with organizations today?
Len (27:53.038)
Mmm.
Len (28:08.318)
Oh, I love that question. Thank you, Benny. My answer is if you want to create a more inclusive and diverse marketing team, then your actions are going to speak louder than your words. And so what you need to do is you need to actually do inclusive and diverse marketing. If you do inclusive and diverse marketing, then people are going to notice.
Bennie (28:21.643)
Right.
Len (28:38.846)
And more diverse potential workforce is going to be attracted to your organization. So when we think about marketing, we think about product lines, we think about media selection, we think about brand messaging, we think about market segmentation, and we think about all of these aspects of marketing, all of them lend themselves to more diversity, more diverse and inclusive thinking in the services and products we offer, in how we message our offerings, in the media that we use, in the way we segment markets. We can create a more diverse, more inclusive, more authentic, more welcoming product line or service line. We can look at our messaging and ask ourselves, Does this messaging, does it speak, does it provide clues of inclusiveness? Does it carry that message of inclusiveness? We can look at our media. Are we using media that will reach the audiences, the diverse audiences we want to reach? Are we investing? in suppliers that represent diversity and inclusion. Our actions speak louder than our words.
Bennie (30:21.641)
I love that reminder of the actions speaking louder than our words. I'm going to leave us with this question for you. When we think about this goal of a better world, what advice do you have to marketers today of intentionally creating this better world? What advice do you have for us?
Len (30:35.234)
Yes.
Len (30:47.818)
My advice is that each and every one of us, you as CEO of AMA, me as a professor who has the opportunity to work with industry, but work also with the next generation of marketers in terms of my students, and hopefully influence readers through my publications. Each of us today, we have a responsibility to be responsible, to be an activist in our own way that's true to our values and that fills an unfilled need. So my advice is each of us needs to be on the field, not on the sidelines. We need to be willing to tackle some issue some social issue that's really important to us personally that we're passionate about. And we need to make.
Len (32:01.922)
We need to make the investment to become knowledgeable so we can become a leader, we can become a spokesperson, we can become a role model. We need to build a network of people to work with because we can't do anything important alone. We need to work with people. We need to include. And then we can make a difference. And if we make a difference, it not only helps others.
It helps ourselves. It makes us more proud of the work we're doing, more...passionate about the work we're doing, more eager to get up in the morning and get started again the next day.
It makes us better and hopefully the world a little bit better too. For me, it was finding healthcare. You know, mid-career. I reinvented myself. I didn't know I was going to spend the last 23 years studying healthcare, learning how to write for a medical journal.
Bennie (33:20.318)
Right.
Len (33:22.626)
Going and studying all these different health systems. From Mayo Clinic in 2001, which was my first one, I studied it, wrote a book about it, as you mentioned. Last fall, I spent three and a half months living in downtown Detroit, because I studied at Henry Ford Health, and I wanted to learn about the problems of the safety net hospital systems. The ones in every downtown, in big cities that take care of all the people that many of the affluent hospitals don't want to take care of. And I wanted to learn about their problems and see if I could help. And I learned a great deal. It was a fantastic learning experience for me. So I spent three and a half months living in downtown Detroit in order to truly because for me, the best way to really learn.
Bennie (34:13.302)
Okay.
Len (34:20.538)
Is to actually go to the GEMBA, go to the place where the people are doing the work and walk by their side and listen to them and observe them.
Len (34:34.871)
And working at Henry Ford, I feel I was really able to help them, but they helped me. They taught me, they inspired me with the work they're doing there, the great work. It's such a gift to have that organization in Detroit.
Bennie (34:42.913)
Mm-hmm.
Len (34:56.686)
Just like having similar organizations in every big city in this country that step up and take care of people who need help and may not have very many options to get that help elsewhere. But they're there. They're running the trauma centers. They're running the burn units. No one else in the city is probably doing that except the Henry Fords of the country. So...health from me. Yeah, for me, it was.
Bennie (35:25.948)
I love your journey. I was gonna say I love it.
Excellent. I was going to say I love in your journey, that kind of unexpected moment, we were talking about passion and investment, and it immediately took you back to that point in your career in which you made a pivot and marketing and healthcare individually were meaningful, but became so much more when you put them together and kind of thinking about how you navigate and how you can take the training, the thoughts and the skill sets of your marketing training and apply it to these spaces with organizations that are doing the most good in these spaces. Just as we talk about it, hearing your voice light up and seeing your face light up when you thought back, and it was right there for me when you said investment and passion, it took you back to that moment of when you found that aha. And I think that's important for our listeners to know that we may find in our journeys these unexpected moments where we invest in the community, our future, the skills we're passionate about in finding these ahas for us.
Bennie (36:37.269)
So as we, I can't believe Dr. Barry, we've come to the end of this conversation. I'm sure this will be the first of many. I'm gonna make my way down there to see you in Texas again so we can continue our conversation. It really brought to life the power of community and service from your roles with the AMA to showing leadership and support in the classroom for the next generations of marketers, but then giving us really important kind of notions of thinking about how we as marketers can take our skill, our insight, and find ways to invest in a more dynamic and better future. I really appreciate your wisdom and sharing with us today. And I wanna thank you and give you the last word if there's anything you'd like to share with our audience.
Len (37:29.526)
Well, thank you, Benny. Thank you for having me on the podcast. It's such a pleasure to visit with you today and to our listeners.
And I welcome your visit to Texas A&M. I'd love to show you around my university and have you meet my colleagues and have you meet some of my students. And maybe we can arrange it so you can sit in one of my classes and participate in one of my classes. I would love that. As the CEO of AMA, it would be such a pleasure.
Bennie (38:03.854)
Count me in, count me in. I don't wanna have to take any other quizzes again, but I'd be honored to be there and be a part of the community.
Len (38:15.826)
In terms of my last word, everyone listening from an organization, listening to this podcast, here's a question periodically you need to ask about your company or your organization. If our company or our organization were to disappear tomorrow,
Bennie (38:18.474)
Yes.
Mm.
Len (38:44.002)
Would customers miss us?
Len (38:49.794)
Would customers really miss us?
Bennie (38:53.577)
And I think that's a great way to leave today, to do the work that matters, to build the relationships with both customers and employees and your work that matters, and to do it in such a way that your impact would be missed. So thank you for joining me, my friend. My special guest today has been Dr. Leonard Berry. And this has been a truly inspiring conversation on this episode of AMAs.
Marketing and podcasts you can find more information about AMA and the work of our podcasts and these conversations at AMA org or listen wherever you find your podcasts Until the next time I am Benny Johnson and thank you for being a part of marketing and