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The framework below shows these inputs and the architecture of each. Each input contributes
to the goal of aligning strategy and structure with targeted market segments. Each of the
inputs also faces challenges which, if left unaddressed, can cause that input to be overlooked
or under-utilized. Below we will describe each input, illustrate a challenge associated
with it and describe one client’s successful experience.
Input 1: The Segments
Defining the Segments is something many companies do well. Using a blend of external
market data and awareness of internal capabilities, the typical company is able to make
well-reasoned choices about which segments offer the best opportunity for shareholder returns.
One challenge with Input 1 is that most companies underestimate the cost of re-aligning
around market segments, particularly when such focus calls for new and/or more robust internal
capabilities. Our experience suggests the typical pattern is to under-estimate the investment
required to build these capabilities.
One contrast to that pattern is a mid-sized commercial insurance company that has embarked
on a multi-year effort to transform itself along the lines of the Migrating to Market Segments
framework. Early in their consideration of Input 1, the top executive team realized that
the target markets it wished to serve would call for executive capabilities that were lacking
in the current organization. As a result, it embedded a robust talent identification, development
and succession engine in its overall transformation plan.
Input 2: The Customer Experience
After investing time in Designing the Customer Experience, many of our clients describe those
conversations as among the most important they have had as an executive team. Unfortunately this investment
is more the exception than the rule. Due in part to underinvestment in Input 1, Input 2 is frequently
overlooked or under-actualized. Anecdotes and personal persuasiveness take the place of rigorous and
disciplined analysis.
However, several of our clients have broken that particular mold. One in particular has
invested in:
- Carefully evaluating the markets they are in and those they should be in (because of
their potential for profitable growth),
- Analyzing the markets’ needs, wants and expectations,
- Focusing, in especially disciplined ways, on understanding the customer experience
they need to manifest at all phases of the value chain for each of their targeted markets
and
- Identifying the critical customer touch points that shape the experience.
They have reworked their business processes to better enable this customer experience.
Input 3: The Brand Army
Creating the Brand Army is about leveraging the organization’s most powerful
asset – its employees – to bring the customer experience to life. Employees
across the enterprise are required and enabled to embody the desired customer experience,
both internally and externally to the organization. The obvious challenge to this objective
is that not all employees touch the ultimate end customer. It can be a challenge to articulate
the importance of embodying a specific customer experience to the internal support functions
of an organization. Ultimately the rationale for creating the brand army is a philosophical
one. A company that embeds a specific customer experience in the company’s DNA
is going to be more successful in transmitting that experience to the external client.
For example, one organization offers financial planning advice as its value proposition
to targeted market segments. To succeed in this effort they will need to move from a product
orientation to a service orientation in the way they interact with customers. One approach
they have employed is to offer the same financial planning service they sell to customers,
to all of their employees. They do this because they understand that the best advocate
for a particular customer experience is an employee who has had that experience him or
herself.
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