Things that Won’t Make it Into Chapter 2 of the Experience Strategy Book
A missive about missed opportunities
I’m plugging away on Chapter 2: Principle 1—Growth comes by Capturing Situational Markets. I am finding as I write that my mind jumps around to so many different topics and memories. Situational markets was the last concept that I built out for this book. It took me two decades to get my head around the idea. That’s in large part because I accepted, as we all do, the marketing definition of a market. It was Joe Pine who pushed me to see the term differently and I owe him a large debt for that push.
An academic reviewer for one of my book proposals said that I have a tendency toward business neologisms. He didn’t mean it as a compliment, and he clearly didn’t get the concept of a situational market. I suspect that he teaches a class on CX and can’t imagine why I didn’t focus on personas.
Here’s why.
I’m 55 years old. I’ve spent my entire academic and adult career focused on design thinking and then experience strategy. I used to be a huge proponent of personas and, even to this day, many of Stone Mantel’s clients still ask us to help them create them. (We do them but we try to sneak in new ideas as well to make their deliverables more appropriate for their near future needs.)
This is an example of persona template that I borrowed from the Internet. Not a Stone Mantel product. (Someone please tell me how identifying that Tobi is an extravert helps the company—a music distributor?—to create value?)
I remember why personas were so important. In the 90s and early 2000s, many companies were still heavily influenced by Michael Porter and Jack Welch, neither of whom, was at all concerned about the end consumer / customer. Porter’s 5 forces work (Competitive Rivalry, Supplier Power, Buyer Power, Threat of Substitution, and Threat of New Entry) is mostly concerned with competitors and scale. Jack Welch built GE into a conglomerate of businesses that were either first or second in their categories. Again, the focus was on competitors and scale.
No one was actually talking about people’s needs. Except for the people in design thinking and user research. I think Clayton Christensen’s work on disruptive innovation and jobs to be done—especially jobs to be done—was influenced by user centered disciplines like usability studies, ethnographic research, co-creation, and so forth. Back then we needed a way of telling the customer’s story and requirements. Personas did that.
Journey mapping didn’t take off until business channels began to proliferate. Even though design thinkers were creating journey maps, they didn’t become ‘strategic’ within organizations until companies became overwhelmed by the complexities of managing online, direct, retail, call center, social, and app interactions.
At first, personas were simple—and rarely encumbered by demographics. Taking a cue from usability studies, persona work, didn’t try to impress by showing the number of people who statistically fell into the persona. That work was done by marketing and was called market segmentation. But as personas became more sophisticated and companies had to figure out how to think about the details of a persona and the aggregation of segmentation, they merged them. Today, for many companies, persona work and segmentation work are the same thing.
Doing so simplified things, but erroneously.
As my mind wanders, I can’t help but wonder what would have happened to customer centricity efforts if the two had remained separate. Or better, if the principles of design thinking had won the day. As I will show in chapter 2, segmentation work is almost always a mistake for your experience and for innovation. It can help messaging. But it warps the way the company sees the customer, making it difficult for the company to see new opportunities.
To make decisions companies need data. Demographic and psychographic data is cheap and fixed. That makes them ‘trustworthy.’ Companies need to size opportunities and scale their offerings. And while web, app, and other tool data is very useful, it’s really ‘responsive data’ about what people are doing now with the current solution.
When I started my own firm in 2005 one of the first people I brought in to work with my clients was Bruce Temkin, who was in the process I think, of leaving Forester and starting his own practice. A synthesizer of ideas, his work would give a lot of credibility to the current CX movement. Temkin helped to popularize NPS (Net Promoter Score) within the design thinking movement. Fred Reichheld, working with a group of companies, created NPS in the early 2000s.
In the first and only session where I invited Bruce to speak to my clients, he shared his excitement about NPS and its ability to help companies become more customer experience focused. Honestly, I didn’t see it. I saw NPS as a loyalty score that was marginally better than CSAT.
Bruce’s vision for CX didn’t match at all with my point of view. I have always grounded my work in Pine and Gilmore’s The Experience Economy. And I felt that Temkin was mostly focused on services. Today, Temkin is a part of the amazing company, Qualtrics. Qualtrics turned NPS scores into a SAAS model and built one of the most important tools for giving companies data and insights about their customers ever created. They do so much more now.
I still don’t like NPS. I think it was designed for a different time and purpose. But I’m glad to see that companies have reliable access to much more data about their customers.
But, none of this will likely be in chapter 2. I don’t think readers want to waste time on the past.
Chapter 2 is personal to me because it represents an alternative view of the value of experiences, one that tries to fix the mistaken assumptions of segmentation persona work, NPS, CX, and growth. It also challenges the reader to imagine how companies will have to change to meet the future challenges of intelligent (AI) solutioning.
So, to the snide academic who reviewed chapter 2, I say, “I’m proud of the neologism. ‘Situational markets’ is exactly the concept companies need to focus on.”