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After establishing a …and a shared understanding …GE agrees that tighter segment focus
common set of objectives… of the competitive environment… can differentiate it from competitors
Objective Setting Competitive Assessment Segmentation Strategy Clarification

GE’s Customer Perceived Quality Gap Segment Opportunities


Experience Evolution Harvest Must Win Explore
GE
Competitor
ERA 1II
Customer
ERA 1I Centricity

NPS 2002 2005 2008 IT Sales


ERA 1 Marketing
VOC
Price Premium
Manufacturing

Finance Operations

2002 2005 2008 Segment Strategies


ide Number of Competitors
rise-W Answered Questions:
E nterp tives:
Objec Why?
,
profitable
• Drive g rowth Unanswered Questions:
org anic ium
re prem Who?
• Captu t position What?
m a rk e 2002 2005 2008
How?

Source: General Electric Company; EMM Group; Marketing Leadership Council research.

MLC1AMOPF5  © 2008 Corporate Executive Board.  All Rights Reserved. 1


Start to Finish
GE Develops a Differentiated Go-to-Market Strategy That Focuses the Entire
Organization on Delivering Experiences That Delight Select, High-Priority Segments

Why? Who? What? How?


Why are segment-specific Who are the What critical How will we
strategies needed to achieve target segments segment needs invest to meet
our common objectives? we’ll pursue? can we exceed? those needs?

Source: General Electric Company; EMM Group; Marketing Leadership Council research.

MLC1AMOPF5  © 2008 Corporate Executive Board.  All Rights Reserved. 2


Why? Who? What? How?

A Better Balance
Marketing Distills Complex Markets into a Short List of Actionable Segments That Are Easily Understood by Peer Functions

I. Separate Actionable II. Identify a Short List of III. Target Segments


Information from Irrelevant Data Intuitive Needs-Based Segments Based on Ability to Excel

Focus on information that: Perform quantitative needs-based Focus on segments where we can:
segmentation to ultimately arrive
• Helps predict segment needs at segments that are: • Surpass key segment needs
• Informs decision making • Durable over time • Achieve growth and profitability goals
• Applies outside of Marketing • Homogeneous within and • Identify the select spaces where evidence
• Takes advantage of the actionable heterogeneous across suggests we can be great
information sales already understands • Differences between segments can be
easily articulated by non-marketers

Data Rationalization Needs-Based Segment Clustering Target Segment Evaluation


Illustrative
Segments:
1 2 3 8 Explore Must Win
Tech- Ease-of-Use- Comfort- Price-
Needs: Focused Focused Focused Focused

Attractiveness
3-D Imaging

Segment
Irrelevant Actionable Cycle Time
Patient Comfort

Marketing Ease of Use


Training Support
Price Ignore Harvest

Long-Term
Ability to Compete
MLC Resource
Needs-Based Segmentation
Resource Center
Source: General Electric Company; EMM Group; Marketing Leadership Council research.

MLC1AMOPF5  © 2008 Corporate Executive Board.  All Rights Reserved. 3


Why? Who? What? How?

Painting a Bigger Picture


Understanding the entire hierarchy of segment …and sets the stage for a concise articulation
needs broadens the scope of potential differentiation… of value the entire organization can execute against
Hierarchy of Customer Needs Value Proposition Template
Illustrative Illustrative
Target Segment:
Ease-of-Use-Focused Doctors The value proposition codifies the target segment,
its unique needs, and how the company will
deliver benefits to meet those needs.

Value Proposition Functional Benefits:


Segment understanding begins Tie the offer to the
Personal
with analysis of customers’ …but laddering to Value Proposition for: doctors who are focused relevant outcome the
Needs
articulated needs… higher-order needs on ease of use customer is trying to
“I want to leave a
uncovers the functional achieve.
legacy of modernizing
and personal needs Who want to: reduce errors and minimize
our practice.”
that often supersede patient anxiety
articulated needs. Product Attribute Benefits:
Functional Needs GE provides: intuitive imaging systems Provide a credible point
“I want to reduce the for direct comparison
chance of radiology team That offer: simple, quick, and accurate images with competitors
errors and patient anxiety.”
Allowing you to: win the support of your staff and
leave a legacy of modernization
Product Attribute Needs Personal Benefits:
“I need a system that offers Account for emotional
minimal wait time, a short training connections to the
cycle, and that is easy to use.” purchase decision

Source: General Electric Company; EMM Group; Marketing Leadership Council research.

MLC1AMOPF5  © 2008 Corporate Executive Board.  All Rights Reserved. 4


Why? Who? What? How?

Tipping the Scales


GE Creates Separate Occasions for Execution and Ideation to Ensure Ongoing Investment in Segment “Delighters”
I. Assess Target Customer Interactions for II. Concentrate Company-Wide Efforts on Bringing
Pain Points and Opportunities to Delight Highest-Value “Delighters” to the Forefront of the Experience

Touchpoint Analysis Experience Harmonization


Illustrative Illustrative

Marketing maps target customer Value


tion :
Proposi se
Opportunities to Delight:
interactions to identify opportunities to: U
Ease of t
Segmen
Training Service Certification
• Dispose of customer pain points
through improved execution Onboarding Support Billing
• Delight customers with
unexpected value

“…we could cut


Target Customer Interaction Map: cycle time…” “…and even reduce the
Awareness Repeat time patients spend
“If we simplify the waiting for results.”
Purchase user interface…” Sales Marketing
Value
tion :
Proposi se
U
Ease of t
Segmen
IT Manufacturing

Operations
1 2 3
Educate Selectively: Focus Leverage Organizational Define Success: Direct cross-
cross-functional partners Capabilities: Empower cross- functional partners to select
on understanding a small functional partners to develop segment-specific metrics that
number of critical customer the strategy for differentiation, they will be accountable for and
Product Benefit: Functional Benefit: Emotional Benefit: touchpoints where segment based on the collective reflect their ability to deliver
Confusing Simplifying user Simple user interfaces needs emerge prominently. capabilities of organization. segment benefits.
invoicing needs training reduces provide a more
to be simple to technician entry “modern” feel than
navigate. errors. technical upgrades.

Source: General Electric Company; EMM Group; Marketing Leadership Council research.

MLC1AMOPF5  © 2008 Corporate Executive Board.  All Rights Reserved. 5


Image of Success
Distribution of Sales Proposals Share of Wallet
At the Front Line
Representative Market High-Priority Segments
Other
Sales and Marketing collaboration throughout Segments
the process improves Sales’ ability to articulate:
High-Priority 30%
• Customer Perspective—working Segments 60%
knowledge of the segment’s needs 80%
70% 60%
• Internal Perspective—thorough 40%
understanding of how the company
delivers on critical needs 2005 2008 2005 2008
• Unanticipated Value—new sources
of value that distinguish the company
from competitors Close Rates Customer Profitability
High-Priority Other High-Priority Segments
Segments Segments
Sales Interaction
4x 1.2x
Illustrative 1x

“We’ve made the


user interface much 1x 1x 1x
simpler…”
“I’d like to
see that.” 2005 2008 2005 2008 2005 2008
“The real benefit is that
cycle time drops and your
patients will spend less time “I hadn’t thought Pick Your Battles
waiting for results.” about that.”
“Differentiation isn’t about being average or even above average at all things, it is
about being truly great at a few things, and delighting a select number of segments.
The Harmonization initiative provided a simple, structured method of focusing the
entire organization on our biggest opportunities for differentiation.”
Jacqueline Woods
Rep Doctor Head of Center of Excellence
General Electric Company

Source: General Electric Company; EMM Group; Marketing Leadership Council research.

MLC1AMOPF5  © 2008 Corporate Executive Board.  All Rights Reserved. 6