Adrian C. Ott, CEO and founder of Exponential Edge Inc., included me on her distribution list for an advanced reading copy of her new book, The 24-Hour Customer. I cannot say enough good things about this book. In my mind, the book is excellent for executives, strategists, marketing, and innovators. From a strategy perspective, the approaches are well-structured and remind me of timeless, Michael Porter-esque classics. Yet the book goes beyond the classics and uses examples in the book that are cutting-edge, modern, timely, and technology-rich. Above all, Adrian Ott provides an innovative treatment of customer segmentation based on their propensity to pay attention and spend time. She additionally sheds light on various tools that can be exploited specifically with respect to dimensions of time and customer values. In this post, rather than addressing an overview of Adrian Ott’s total approach, I’ll simply point out one of the key frameworks and cover why it renews and gives marketing segmentation the respect it deserves.
One of the biggest laments I hear from marketing professors at various universities is with respect to how students and undergraduates look at marketing segmentation. Marketing segmentation is about subdividing markets into subsets of customers that behave similarly or have similar needs. But the craft of identifying segments is often under-appreciated or rushed. My wife, a professor of marketing at the UCLA Anderson School of Management, has often characterized a segmentation “pecking order” to students:
Segment based on “why” customers purchase first. Then look at what they purchase, how they purchase, and who purchases. (The Why/What/How/Who marketing segmentation pecking order)
The biggest segmentation error that people tend to make is that they start with the “who” because it is the most salient. Suppose one wanted to have a business that sold roses. If you started with the “who” dimension, you might start with a marketing segmentation strategy that is focused on middle-class families in a metro area. But a better strategy is to start by thinking about “why” people purchase. By engaging in this research, you might unearth important consumer behavior and situational aspects. For example, many males buy roses last-minute because they need to improve prospects with a key relationship. “Last-minute” is a key reason why people purchase – hence the presence of roses in places like grocery stores, 7-Elevens, and entrepreneurial, street-side vendors.
With that perspective on common customer segmentation errors as backdrop, Adrian Ott’s book offers up a series of methods and tools for understanding and applying how time (and the scarcity of time) affects a company’s potential approaches to engaging customers. One key tool (the "Time-ographics Framework") that Adrian uses in her book is depicted below (image reproduced with permission of author and publisher):
The Time-ographics Framework relates a customer’s propensity to spend time with the propensity to pay attention. (Yes! It is focused on teasing out the details of “why” people really purchase!) The significance of the stratification Adrian uses is that in order to play in one quadrant, one often needs to develop separate and specialized strategies. For example, to play in the “Habit” quadrant, one often has to tie into regular routines that cue the customer. Adrian Ott cites the example of P&G’s Febreeze, which was a great product that initially failed in the market because people forgot to use it. Once P&G helped to tie the image of Febreeze with the notion of the daily task of tidying up a room, Febreeze turned the situation around into one of the fastest growing brands. As another example in the “Motivation” quadrant, Adrian Ott introduced me to the concept of geocaching (which I have since purchased software and taken up with my kids). At risk of selling geocaching short, geocaching is basically a worldwide treasure hunt and trinket exchange system where users use global positioning systems (GPS) on their mobile phones to locate hidden boxes all around us (yes, sometimes hidden everyday in parking lots, by restaurants, etc.). Services by http://www.geocaching.com enable people to use slices of time to embark on quick, mysterious adventures. My kids are “motivated” by the mystery to check on the position of geocaches near us. Sometimes we’ll take a 1000-foot detour to find a hidden magnetic Altoids box that someone has tacked on the back of a fire hose box (where we drop off some items and pick up things like foreign coins, coupons, etc.). To bring Adrian Ott’s framework back full circle, she addresses the challenges of products in each Time-ographics quadrant and key tools that can be used for each.
The 24-Hour Customer is a book with rich thinking. It is sure to become a definitive source for professionals with respect to time-strategies, very current company examples and case studies, and timeless treatment of a marketing segmentation area that has not been comprehensively addressed before.
Adrian, excellent work on the book!
Update (6/30/2010): Catchy teaser video on Time-onomics just released. Link here.
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Charlene Li, founder of the Altimeter Group and co-author of the bestselling book Groundswell, was generous to include me on her distribution list for an advanced reading copy of her new book Open Leadership: How Social Technology Can Transform the Way You Lead. Open Leadership both motivates and provides an excellent framework & toolkit for changing and opening up an organization through support of social technologies. In this post I overview key elements of the book and my favorite contributions to the business & leadership book landscape.
Charlene Li describes “open leadership” as “about how leaders must let go to gain more.” Stepping aside from Open Leadership’stable of contents, I created a one-slide summary figure (sort of like a "cheatsheet") to help describe the key concepts. While the figure doesn't capture every element of the book, I think the figure focuses on the key areas a company must address when designing and implementing social technology-based strategy.
I see her book as tying together five key areas:
Open Leadershipserves as an excellent, end-to-end process toolkit and is well-suited for corporate executives, marketers, business information technology professionals, and management consultants looking for leadership frameworks supported by social technologies. Treatment of the subject is just above the technology-evaluation level (which would include determining whether technologies such as BuzzMetrics, Yammer, Radian6, Communispace, Umbria, Twitter, Wordpress, and Facebook are appropriate).
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It is atypical for me to write a book review for this blog, but Nilofer Merchant’s “The New How: Creating Business Solutions Through Collaborative Strategy” is very respectable contribution to both audiences of this blog and the process of strategy development in general. In particular, the book does two important things beyond other strategy books:
The book divides strategy into two domains – 1) where a company competes, and 2) how a company competes. The premise of the book is that the former topic (where a company competes) is well-addressed by existing strategy books, such as those by Porter, Chan, Kim, and Mauborgne. Nilofer’s book addresses the gap in business texts regarding the latter topic, which includes day-to-day and quarter-to-quarter strategies, such as “how do we grow sales of product XYZ” or “how do we grow sales of division Y by Q%?” As she writes, “One person’ strategy is another’s tactics. The unnecessary and fruitless war of what is tactics or strategy or execution must end.”
Part 1 of the book provides a call to action for individual employees and leaders. But the book goes further by providing specific responsibilities that each person must fulfill. Where I admire the book is in its approach to addressing each employee’s role. Whereas “older” methods of strategy may have been focused on executive management teams, this book provides context, terminology, and frameworks for educating a broader audience. As an aside, I am also struck by the fact that Nilofer does a good job of incorporating concepts of improvisation into the strategy development process, culture, and mindset of employees. Improvisation is especially a soft spot for me given my involvement with Business Improvisations, a collaboration between business academics and improvisation instructors which helps companies in areas such as innovation, leadership, teamwork, etc. through customized, experiential learning sessions.
Part 2 of the book goes into greater detail on process of strategy development. It breaks down the process into four major areas:
Although the book goes into much greater detail on all of these areas (with specific examples, charts, tables, etc.), one of my favorite charts is the MurderBoarding overview chart (copyright image reproduced below from “The New How” via permission from Nilofer Merchant). I often find this part of the strategy development process to be at risk of falling apart – this part of the strategy process is inherently messy, and unless the team focuses on a disciplined reference framework (like the one here), it becomes too tempting and easy to try to cut corners. Look carefully at the chart and see if you have been tempted to cut corners in the process. For example, did you forget to test the idea in part before finalizing the strategy? Or did you forget to vet and refine the criteria used to evaluate a strategic option?
Even as an experienced management consultant and manager, I would highly recommend this book (I’ve also added it to my popular Crash Course Consulting Reading List). The book is practical and covers a body of knowledge that has been largely undocumented to date. Whether one explicitly uses the processes Nilofer describes, the book still provides a good framework for assessing how one is doing. This book is well-suited for corporate executives, strategic planners, general managers, and management consultants. It would also be good as a textbook to supplement strategy and/or consulting courses.
Feel free to let me know your thoughts!
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For many strategy engagements, a lot of attention is paid to the detailed analysis framework. For example, should a benchmarking framework be used? Or will that framework lead us down a path of mediocrity? Or perhaps value-chain or Blue Ocean-like analysis should be used here? What method should we use for prioritizing brand associations and rectifying brand image versus identity? Regardless of strategy technique, one key output of these efforts is often a scorecard summary. A scorecard is tangible. It can be like a report card that you got from school in elementary school. While the scorecard is important, it's important to not lose sight of how a scorecard is developed and what the scorecard could mean for your organization.
The figure below shows an illustrative scorecard for a company. The scorecard helps to identify strengths and weaknesses. In the scorecard below, I've also depicted areas where the company needs to make improvements (operational and tactical focus) and where the company needs to differentiate longer-term (strategic focus).
Traps with scorecards can happen with the processes before, during, and after the scorecard.
Common traps that can occur before the scorecard are:
Traps during the scorecard readout process include:
(Very) common traps after the scorecard readout process include:
The picture below shows the logical context for an example scorecard process, and it is an important aspect often lost in the mix. Note that the process context for the scorecard is as important (if not more important) than the scorecard itself.
What are your experiences with scorecards? How can you use them more effectively?
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