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Managing Marketing: Sustainable Brand Purpose

Ben_And_Scott

Managing Marketing is a podcast hosted by TrinityP3 Founder and Global CEO, Darren Woolley. Each podcast is a conversation with a thought-leader, professional or practitioner of marketing and communications on the issues, insights and opportunities in the marketing management category. Ideal for marketers, advertisers, media and commercial communications professionals.

Ben Peacock is the Founder and Scott Matyus-Flynn is the Partner and Head of Strategy of The Republic Of Everyone, a world-leading brand, sustainability and innovation company. They talk about the rising importance of doing good as being good for business and why some markets and some companies struggle with achieving this as a core business driver. They share their philosophy on how brands and communities can work together to create better products, bigger profits and a better world.

You can listen to the podcast here:

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Transcription:

Darren:

Welcome to Managing Marketing, a weekly podcast where we sit down and talk with marketing thought leaders and experts on the issues and topics of interest to marketers and business leaders everywhere.

Today I’m sitting down with Ben Peacock, founder of The Republic of Everyone, a world-leading brand sustainability and innovation company. Welcome, Ben.

Ben:

Gidday, Darren.

Darren:

And joining him is Scott Matyus Flynn who is the partner and head of strategy at The Republic of Everyone. Welcome, Scott.

Scott:

Hello.

Darren:

Now, you talk about world-leading brand sustainability and innovation company. Who is going to answer the question of what does that practically mean?

Ben:

We’re living in a really changing world so innovation’s got to be part of everything at the moment, whether it be digital, strategic, just understanding a customer better–all those sorts of things.

In terms of sustainability and brand, what we’re seeing is the problems of the world are not only becoming more acute but they’re becoming more urgent in the mind of the consumer. And of course brand’s job is to be relevant to the consumer. So more and more, as consumers want answers to these problems, brands are either providing answers or they’re becoming yesterday’s brands.

So we innovate in ways that companies, brands can stand for causes and in doing so gain a business benefit.

Darren:

But we see all the time brands making claims and doing good and yet there is a lot of cynicism out there isn’t there, Scott?

Scott:

Yeah, there is because it’s called woke-washing. Woke-washing is where you claim to stand for a higher purpose or a set of values but you’re running your business irresponsibly or for a lower set of values. So, when organisations get it wrong or it’s see-through, it’s inauthentic and that’s when problems start to occur.

Darren:

One of the problems is that this is often driven by marketing—correct me if I’m wrong. And then there’s a separate part of the business, corporate affairs or operations that often have totally different agendas.

Ben:

100% and they’re not the only two different agendas within an organisation. You’ve got marketing, finance, human resources (which is concerned with employee engagement), corporate responsibility/ sustainability/ sometimes corporate affairs that suit different teams who are concerned with media relations, government relations and everybody has a different agenda.

The name of the game is to look at all these parts of an organisation and ask, ‘how can we actually benefit everyone?’ If you think about a company that does this well, it creates employee engagement, which is good for HR. It creates a story for corporate affairs where we are genuinely doing good things, which is a defensive move to some degree but can be good if you need good government relations like banks for example.

You can often drop your costs especially through environmental sustainability where you’re reducing water, energy or waste, which is good for your operating costs so your CFO is going to be happy. Then if you’re doing it right you’re creating a really good story for your customer so your marketing people are going to be happy.

That is where the true benefit is when you cannot let this live in one department but make it benefit the whole of the company.

Darren:

So, Ben, you make it sound like this is a positive across the balance sheet and the PNL—is that right.

Ben:

I think it’s got to be. At the end of the day, business will keep investing in things that benefit the business. We’re hyper-commercial about this. Our core goal is to create good in the world but you have to be realistic about that. If that is red on the balance sheet, eventually there is going to be a strike put through it.

Unless you can make that a driver for this business outperforming other businesses it’s simply not going to survive.

Darren:

We saw that back in 2007. Around that time in Australia there was a lot of corporate talk about climate change and then the global financial crisis hit and suddenly environmental impacts took a back seat to just keeping the doors open and keeping the money flowing through. Is that the type of thing you’re talking about, the good intentions also have to come with good business?

Ben:

Yes, 100% they do. It is a very interesting story that and I think you see it in any new thing that comes through for business. The dotcom (for those of old enough to remember) had exactly the same pathway.

Darren:

You mean the tech bubble?

Ben:

Exactly right. Suddenly, the internet hit and it became this potential business thing and everybody was starting a dotcom and then businesses all had a website and nobody knew why. It was the big thing to do but nobody was making money.

In fact, they were throwing money at it and getting nothing back and of course, the whole thing burst because very few had figured out how to make money out of it. So it becomes a fashion without any business underpinnings. And then what happens is everyone walks away from it all—‘oh, that doesn’t work’ and they’re all suspicious of it.

And then some companies who are truly forward thinking keep going and keep learning. And lo and behold that’s where Amazon came from. Amazon was just books and they bought CD Now and they went down like everyone else but they stayed in business and slowly learnt how to do this and as they learnt they learnt how to make it a business.

Darren:

So actually make it a profitable business. The tech bubble came right on the back of Y2K, and those old enough (from the last century, the last millennium) to remember that, there was all this fear about technology actually crashing when everything went to zeros. And that didn’t happen. What’s your perspective on that, Scott?

Scott:

On Y2K not happening?

Darren:

On the fact that we had the tech bubble and then the global recession—has this disrupted the focus of business?

Scott:

Absolutely it has. Going back to the GFC, typically as organisations mature with their environmental, social responsibility it starts off being a cost to the business. From a very simple business point of view, if you want to make future reductions on energy it costs money to invest in solar or efficiencies to begin with.

And when the GFC happens everyone wants to cut back on everything they’re spending so there are a lot of things that get put on the chopping board. From a very economic point of view that journey stopped for a lot of people. But as Ben said, there are a lot of organisations that understood it was a growth area, not just something that was needing to be done now.

It was actually how people were looking at doing business on an ongoing basis—the future of business really.

Darren:

Why is it that Europe seems to be so much more committed and so far ahead of the US, and Australia. Especially when we saw earlier this year the confrontation in Oceania with all those island nations that are watching the sea level rise, and yet, Australia is still sitting there going ‘well, all the way with coal’? Why is there this difference?

Scott:

I think being European I can take a lead on this.

Ben:

For 3 more weeks.

Darren:

You’re about to become an Australian citizen?

Scott:

No, mate, Brexit. In terms of the countries themselves, European countries have been around for a long time. They’ve gone through their burgeoning growth stages, figuring out who they are and as a society what they want to be. Australia and America are still young countries and it just happens I think this idea of where does Australia want to be as a country where it takes advantage of its position, its natural riches in mining and minerals.

Society in Europe is a little bit further down the line. Also, it’s got a more deeply entrenched social history and social inequality. There are pockets of it here but Australia is largely middle class.

Darren:

Has that had an impact? Starting an agency like the Republic of Everyone in a country like Australia, has that had an impact on your focus? Ben, have you found that you get traction offshore more than onshore or has it been quite a balance?

Ben:

In a way, what we’ve created is the agency equivalent of a triple back foot with a pike because you’re starting in a country with a very small population that is less far ahead (as Scott said) historically and currently in these issues and just has a limited customer base.

We’ve often looked at this and said our customer base—first of all a company has to have a head office in Australia or an autonomous office, which is not all companies. Car companies are really sales outposts for a lot of them. So, it’s really hard to get these decisions made in this country.

You’ve got to have some level of leadership in this country, which already cuts you down significantly. Then you have to have a company that is interested in being pioneering. And in the nicest possible way I just don’t think Australia is built on innovation simply because we’ve had it good for so long by doing what we do so why change that?

Darren:

We rode on the sheep’s’ back as they say. Now, it’s the mining and property boom.

Ben:

In a way I think that has been of benefit to us because when we first started this, from what I could count (Googling), we were the 3rd in the world. The first would have been Futura in the UK who are our friends and then there was one in the US who had started in this space. We were number 3. If you Google this space now there are a lot of companies doing what we’re doing.

But still we are kind of it in Australia—the only one that does the whole scope of what we do. We counted the other day and in 12 years we’ve had 12 competitors come and go in Australia. And that says something. It says, hopefully, we’re doing something right but it also says we have to be really on our game to survive in Australia.

I Google these other ones and there are companies in America that have 60 people (we’ve got about 20) and I look at their work and it’s what we were doing 5, 10 years ago. In a way being in a small, hard market makes you have to be good.

Darren:up

I have a lot of sympathy for you because when I started doing what we do I kept looking overseas, thinking ‘that’s where I’ll see the future’ and in actual fact a lot of the larger markets don’t try harder.

I think there is a bit of you try harder, you push boundaries in a market like Australia, 1. because it’s relatively small but also because it’s hard to get change.

Scott:

It’s hard to get change but it’s also hard to unearth the people that really want to do it so it’s graft all round if I’m honest. I think if you have a bigger market it can breed a bit of mediocrity or complacency because you don’t have to work as hard.

For us here, we’ve really had to work hard; it’s been a hard graft for quite a long time. And what we’ve been lucky with, in a lot of ways, is that a lot of companies or brands that do work with us really want to be leaders and make a stand and go out there and do stuff, which is why we get to work with Ben & Jerrys, Patagonia. They’re the poster children that people talk to a lot but we’re actually the ones doing the work.

Darren:

Those two examples are interesting because they are companies that are built on their philosophy about doing good right from day 1. Do you think it’s easier if the founders set that agenda than it is for more traditional companies to embrace this and bring about change?

Ben:

Of course it is. It’s so much easier to bake it in and you see it in brands like Thank You who really come from nowhere to take a decent slice of the market and they’re in the right place, right time.

I always laugh when people go ‘oh, this new world’–yeah, new like the Body Shop that started against animal testing in 1973. This is not new. People have been building companies off this for ages.

We talk about built-in and bolt-on, and built-in is when you start a brand with that. Of course, it’s very hard to start a new brand. Companies like that are very interesting for us because in a way they challenge us because they’ve been doing it longer than we have often.

And they’re interested in our breadth of experience but we have to make sure we’re super on our game. You present an idea to Patagonia and they know rubbish when they see it and they know on-brand and good when they see it. But that doesn’t mean you can’t do it with companies that are what we call bolt-on.

You can’t just bolt it straight on top. You have to find the bolts that are already there and ask where does this fit? There is always some sort of social purpose in a brand. Look at banks or insurance companies. Originally, they were a group of people trying to get together to spread risk or share the ability to use money. They were actually social businesses originally.

Look at a lot of things; they began with some sort of cause and that gets lost over time. So, if you can go back and look for what we call the genus or beginning story of a brand and why it existed. Inevitably, you will find something to start to attach to and suddenly it becomes more built-in and less bolt-on.

Scott:

I think that’s right. There are some industries that Ben’s just talked about and insurance is a classic, which are geared for the community. That’s where it came from and also what it still does. It might be (if you’re cynical) lost behind ivory towers and there are a lot of competing motivations throughout business which end up in the Royal Commission.

But it’s much easier for certain categories to form legacy brands, to establish more of a social purpose because social purpose was built in at their roots but it just wasn’t necessarily identified or talked through. It’s definitely a lot easier to do that than it is say for chocolate to solve racial diversity or take on issues that aren’t to do with who they are as a business or a brand historically.

It’s much harder to do that but there is opportunity for them and at every stage of a brand or company there will be some level of impact that they have in society through their supply chain or in the way the product is consumed and by who it’s consumed.

There will be some level of societal impact, positive or negative. That’s part of the challenge but then it’s really about understanding that and then taking that and turning it into a positive impact.

Darren:

I just want to pick up on that little comment about chocolate. As you say, Ben, when you go back to the start of a business there is often a very positive reason for that business to exist. And when you look at the company Cadbury, when it first started in Bourneville, the attitude of the founders (I forget which religion) was such that they built a whole village of very high quality housing for the workers because it was all about the collective benefit of this factory and business for everyone involved; not just shareholders but employees.

It was based on a very strong belief in the common good. Before the corporation as we know it today most businesses were built for the common good. Think of all the Guilds. Today, we’ve got the IWOF, which we know as an insurance company but that was the International Order of Odd Fellows. And it was a guild.

It was where people, collectively got together to insure each other, to look after the common good. Somewhere along the line corporations and the idea of only existing for shareholder value is actually what’s distorted this.

The fact that we’re questioning the value of corporation is why people are almost in a kneejerk reaction trying to get back to ‘why do we exist beyond shareholder value?’

Scott:

And the genus story, going back to your roots is often where organisations find it. There is definitely a move for organisations to have a more distinct role for society. The sustainability argument is essentially that businesses and society need to coexist or that businesses need to operate for society rather than at the expense of it.

A lot of organisations over time have moved away into this idea of efficient production, management, sales for the purpose of maximising profit. That ideology of shareholder first is being challenged.

Darren:

The roundtable of CEOs this week who said ‘no, it’s no longer shareholder value.’ I’m a bit cynical about that. I think they came out and made that statement and then went straight back to their office and phoned all their institutional shareholders and said, ‘don’t worry, we still love you, we’ll look after you’.

Scott:

Possibly but it’s a symbol of times changing. The idea of businesses operating for just shareholders is changing. And the top end of town do realise that. Whether that’s just an operational thing in a business at the moment and doesn’t quite get through to brand entirely but it’s definitely happening.

Darren:

I’m sure you’ve seen the research that says the baby boomers who are now entering retirement are still the most selfish, self-centred, don’t care about anything but their own financial considerations. They keep pointing to the millennials as driving this but it’s actually beyond generational or is it?

Ben:

I don’t ever like pinning things on age related demographics; I think it’s wrong. It’s very easy to look at the boomers and go ‘they own 7 houses and essentially spent the entire world’s carbon budget getting rich and having fun.’

But then you can say they’re the ones who started the whole age of Aquarius and the e movement and people like Bill McKibben, who, apart from Greta Thunberg, is probably the world’s greatest number one spokesperson on climate change and he’s a baby boomer.

It’s just not fair to do that. Some of the greatest rebels of our time are baby boomers. Obviously, it’s so much more poignant for millennials because it’s so much closer. But at the same time there is a lot of disposability in the way that things are consumed by that generation and all of us. And nobody even talks about generation X at all anymore.

Darren:

Except that they’re a really important generation. They’re inclined to err on the side of wanting to leave the world in a better place than they are necessarily this generalisation about the boomers.

Yes, the boomers have given us a lot of things. The one I always remember is ‘greed, for want of a better word, is good’—Gordon Gekko in Wall Street.

Ben:

He was, to be fair, the antihero. And they gave us the environmental movement. It sort of lost in the 60s didn’t it? The times they were a changin’ but they didn’t really change but they changed the wrong way.

But the whole roots of the environment movement are in the baby boomers. I just don’t think you can look at it like that. I think people have inherently conflicting needs and interests in their world and really the whole conversation is about short-termism versus long-termism.

And as humans we are all prone to short-term benefit over the promise of long-term gain. But this is really what we are talking about. If somebody goes ‘you can knock down that forest, do something bad quietly, you probably won’t get busted and you’ll get rich but long-term it won’t be good for the planet’. A lot of people will be tempted by that.

That’s an angel and devil on your shoulder moment. And that’s really what we’ve been living with for a long time. By making the short-term decisions essentially it’s like the world’s been living on a credit card and now we keep spending and building up a debt and just ignoring it.

And the debt is starting to get called in; we’re starting to get interest payments with big storms and social issues and migration issues—the whole lot. It all comes together around the mix of overpopulation and overconsumption. In that sense, when you go back to your shareholder / stakeholder conversation with a company, it’s exactly that.

If you’re thinking shareholders only you’re probably thinking about the next 3 to 6 months. If you’re thinking about your stakeholders, meaning your entire supply chain, your employees, your brand value long-term, you’re thinking long-term. And if everybody in your organisation is rewarded in the next 6 months then it’s hard to think long-term.

Darren:

You mentioned before, Amazon. Yet, one of the great things that Jeff Bezos has done is get his shareholders onside with getting no returns along the way while I build a fantastic capital value within this organisation. And they’ve stuck by him so it is possible.

It is possible for a CEO not to be held ransom to delivering quarterly returns if they have a big vision. Is part of this doing good potentially the platform for that big vision?

Scott:

Yeah, absolutely. Paul Polman does the same at Unilever. He’s fighting against that.

Darren:

Did. He’s left now. Unilever’s a great example because you guys work with Ben and Jerry and they were acquired by Unilever and yet still were able to maintain that purpose-driven vision even within a big corporate like that.

Ben:

It’s actually written into the constitution of the sale. It’s a really interesting corporate deal if you look into it. More broadly, the vision that Paul Polman had was that he said, ‘if you’re interested in 3 to 6 month returns we’re not your company’. And that was a decade ago.

And now 60% plus of their growth is in products with either core sustainability in them that they brought into their portfolio or with brands that have a purpose based message. Your right, he’s had a vision that’s been very, very strong for them.

Scott:

He’s proved it which is what’s been needed. It’s all very well standing up there and saying ‘we don’t want to be beholden to your 3 month cries’ , moving to annual but also proving that investing in the right places in sustainability has really worked for them.

And it’s been a real success for them. I’m very happy that a company as big as Unilever has done it.

Darren:

To prove that it can actually be done. As almost a parallel to that we see 3G Capital invest in places like Kraft Heinz and bring the traditional cutting costs, focussing on bottom line profit development and see very quickly that short-termism actually erodes any chance of long-term results. So, it’s been an interesting juxtaposition between the two.

Scott:

And I think we’re in an interesting time when businesses are seeing that choice and different pathways and are able to make decisions based on that.

Darren:

Now, you guys have used the term sustainability throughout this conversation and I find it really interesting because when I talk to people about sustainability there is a large group of people who think it’s economic sustainability, i.e. profitability.

What’s your broadest and (paradoxically) most focussed way of describing sustainability?

Scott:

Wow. For us the broader sense is environmental, social, and economic outcomes but broadly it’s about societal outcomes. The environment will recover when we’re not around to mess it up. The imperative about the environment is to do it obviously for environmental ecological reasons but ultimately people are why we care about doing that because we’re the ones who are going to be impacted.

So, there is a bigger societal issue. The way we talk about it in simple terms is just eco-ethical impact. That seems to sum environmental and social reasoning. That’s the kind of language we use. We try not to use the word sustainability because it’s tarred with a lot of history.

It’s politicised and also for a lot of people it just means the environment. So you tend to have different conversations with different organisations who have different understandings and culture internally that requires you to use different words when you’re dealing with them.

We use sustainability sometimes, CSR sometimes, community sometimes or bigger societal impact. We’re doing social impact for someone at the moment.

Darren:

The other one I like is the rise of the discussion around ethical decision-making and sustainability. It also weaves its way through all of those. What’s the ethical approach for society, for the environment? There is something about the term ethics especially when you consider it in the frame of minimising damage.

If ethical behaviour is about minimising the negative impact that you have on everything around you, it’s actually a good term to bring into business isn’t it?

Ben:

I have mixed feelings on it. I like it because it speaks straight to values. It says to me ‘do what’s right, not what’s convenient or easy’. And that in its essence goes to who you are as a human which embeds right down to the core of you have to live with this decision.

That I like about it. The side I don’t like about it is we live in a Donald Trump world—I can’t find an ethic on him yet he’s winning. So there’s this kind of juxtaposition where there are too many proof points out there that values aren’t enough; you have to add in this carrot for some gain as well.

Darren:

I’ll just pull you up there because from my perspective that’s a very moral judgement and I don’t think that ethics and morals are necessarily the same thing.

Ben:

Ethics and values perhaps.

Darren:

The definition of ethics I like is minimising damage to all stakeholders. It’s not about doing the right thing or the wrong thing. In any decision you make, there will be a consequence for someone or something that is not best for them. So, at least consider, in making those decisions, minimising the impact for as many people as possible.

Scott:

I think the consideration of many stakeholders, that is important. I’m not too keen on the idea of just minimising negative impact. Once you’ve minimised that you get to zero impact but there is positive impact you can create as well.

Having that mix of risk and opportunity or negative impact; where’s the value you can create rather than just how do we do things slightly less bad. Where a lot of organisations have come from is we want to continue to do what we’re doing but just do it less bad.

And for me that’s just being more efficient at doing something which is not necessarily benefiting society.

Darren:

Scott, you brought it up before when you were talking about the environment. All human activity negatively impacts on the environment. Even the things we think are positive often have a negative impact. People talk about recycling but then we hear about the energy consumption in recycling.

When humans all die off, then the environment will recover because it has its own balance or equilibrium. And it’s only us that are constantly screwing that up.

Ben:

Chernobyl is a good example of that.

Darren:

The series on Netflix.

Ben:

Not the series. Even with the radiation, nature has thrived. The radiation has had less of an impact on it than having humans around, which says something. I really want to challenge this. I did part of a permaculture course on holiday. Everyone thinks it’s how to garden but it is actually a set of principles that lead to how to garden.

And the most beautiful one; they say if you’re going to buy a place to do permaculture don’t buy the good land, buy the really bad land. Because then you learn to compost and improve the soil and you take bad and you make it good and then you make these interventions into nature (it’s quite interventionalist) in ways that actually improve nature.

There’s this beautiful story that comes out of one of the movies about it that says, ‘we’re always told we must have a smaller footprint but the problem is there are so many of us now that we are not going to small footprint our way out of this’.

But the point is if you’re aiming to reduce your footprint you’re missing the point because you can’t reduce your footprint out of the problems we have. Everyone has to actually maximise their footprint on this planet. But we have to maximise it in a way that we create positive change.

And if you think of it like that, that you can go in and make positive interventions in nature and actually improve land, speed things up and help regenerate habitats then suddenly you go ‘there are 8 billion of us who could actually make this environment, this world, work extremely well, extremely quickly’.

To Scott’s point, you can’t ever think about doing less bad, you have to look at it and ask, ‘how can I as a human, a brand, an organisation actually do some real good?’

Scott:

You are right in a way though, which is if we weren’t here the world would be hunky dory but we are here and we’re at a point where we’ve messed quite a few things up so, to Ben’s point, it is about how can you fix that up? How can you regenerate? How can you make a more positive contribution?

Darren:

By minimising the damage.

Scott:

That’s definitely part of it.

Darren:

What Ben was saying there reminded me of my dear departed mother whose whole philosophy in life, which she passed on to me, is that the one obligation of every human being is to leave every situation and every environment better than when they found it.

It’s something I embrace because it was driven into us time and time again that when you walk into any environment, when you walk out of it, it should be better than the way you found it. For her that could be just neatening things up, preparing it for the next person or just leaving people feeling better than when you first walked into the room. No matter what it is.

If we had 7 to 8 billion people (the world’s population) living everyday of their life on that philosophy it’s amazing how quickly the transformation would come about.

Ben:

Now apply that to the company and brand level because we were talking environmentally in this conversation but apply that and ask ‘did we as a company/ brand make everybody’s life who works for us better? Every supplier whether they grow food for us? Every shareholder, every person who watches one of our ads or buys from us—did we make their life better?’

Suddenly, that’s brand purpose. If you can build a company around that style of philosophy how can you fail? That is how you win because everybody is with you, wants to work with you, wants to buy from you, supply you. That is half your company problems solved right there.

Scott:

One challenge on that, which is why we have frameworks to work within, is that people have different values. Though what I value is good, leaving someone walking away could be a great clanger that I think is really funny but it might do some damage.

Darren:

It is interesting how we’ve got this negative aspect of cults. When you hear of a cult you think of people taking the Kool-Aid and all committing suicide and things like that. But in actual fact cults can be positive things because all they are is group of people who are absolutely passionately aligned to a particular set of values and vision and wanting to achieve a particular outcome.

Imagine if you could, companies focussed on a cult to deliver a better world, outcome and experience. The thing I love about cults is the passion that comes with it and the ability of that passion to actually transfer into action.

I’ve just noticed the time. This has been a great conversation but thanks for stopping by. So, it’s the Republic of Everyone not for everyone.

Ben:

Kind of both, I guess but officially ‘of’.

Darren:

Ben and Scott, thanks for having a chat. Just one last question. I notice on your website that you believe the perfect company is one where brand, sustainability and community all work together to create better products, bigger profits, and a better world. So, on that basis, which companies actually achieve that?

Ideal for marketers, advertisers, media and commercial communications professionals, Managing Marketing is a podcast hosted by Darren Woolley and special guests. Find all the episodes here

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Darren is considered a thought leader on all aspects of marketing management. A Problem Solver, Negotiator, Founder & Global CEO of TrinityP3 - Marketing Management Consultants, founding member of the Marketing FIRST Forum and Author. He is also a Past-Chair of the Australian Marketing Institute, Ex-Medical Scientist and Ex-Creative Director. And in his spare time he sleeps. Darren's Bio Here Email: darren@trinityp3.com

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