B2BMX2018

A brand transformation perspective ZOMBIES/PHANTOMS/SHADOWS 3 Threats to Your Experience Innovation Initiatives 2 The problem Products fail, market leaders topple, sales slump and industries stumble when the corporate view of "the Customer" slips out of touch with reality. Why this happens Cognitive science reveals hard-wired aspects of human cognition that lay subtle and often unseen traps for our thinking about customers, markets and our "theory of the business". Three of these traps (prototype effects, reification and inattentional blindness), which we personify as zombie, phantom and shadow segments, represent particularly notable threats. The solution Pay attention to cognitive traps that may distort your view of the customer, use personas to exemplify your customer insights and equip yourself with a strategically actionable segmentation model that is purpose built to serve the goal of strategic differentiation. PERSPECTIVE IN BRIEF: 3 Threats to Your Experience Innovation Initiatives We all know that customer experience matters. We know that in order to do a better job with customer experience, we need to create more customer-focused organizations. And to do that, it's obvious we need to understand our customers better. To help us, there's an arsenal of techniques and readily available consultants and experts who specialize in the area of getting inside customers' heads. We're motivated and committed. We're well resourced. So, what could possibly go wrong? Not to be too apocalyptic, but are you prepared for zombies? And phantoms and shadows too? The fact is that in mental models of customers, these creatures are all too real. And they're serious threats to your experience innovation initiatives. To explain further, we'll start by providing some context. Prototype effects and the "theory of the business" In 1994, Peter Drucker published a landmark essay in Harvard Business Review titled The Theory of the Business. Drucker diagnosed a fundamental reason why successful companies stumble and why market leaders get toppled. As he put it, they fall because: "The assumptions on which the organization has been built and is being run no longer fit reality." He argued that integral to any organization's theory of the business are assumptions about markets, about customers and, specifically, about segmentation—the differences between customers that make a difference. Over time, for various reasons, those assumptions can become invalid. And, he recounted how General Motors' (GM) fall from global industry dominance in the late seventies was connected with, and based on, a customer segmentation model that had outlived its usefulness. 3 THREATS TO YOUR EXPERIENCE INNOVATION INITIATIVES

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