Dear clients, business partners and friends of Line of Sight Group
we are living through extraordinary times. Over the past three weeks,
we’ve seen dramatic changes in our basic way of life: rising cases of the deadly coronavirus, financial system meltdown, panic consumer buying, cancelled events, schools closed…and general confusion.
would like to reassure you that Line of Sight Group is monitoring this
situation closely to ensure we can meet the ongoing needs of our
clients. We are following the protocols
and recommendations from health and local and national government
authorities, and each of us is aware of our own responsibility to face
a global market research and competitive strategy consulting
organization, our assets are primarily digital and knowledge-based, and
one of our key strengths is ‘teamwork’. While we have an office in
Minneapolis/St. Paul MN, our staff primarily work from their home
locations across the United States while seamlessly collaborating by using secure technology. This means that we expect minimal disruption to our activities and ability to continue to deliver high quality and objective business insights.
crisis is demonstrating that market and competitive intelligence
capabilities are more critical than ever, and we are thankful to work
with customers who understand the power of data and insights, and use it every day to make high impact strategic decisions.
you for your continued trust and confidence in these uncertain times.
Please reach out to us if you need any further assistance. We are ready
While no one can accurately predict one, the signs of an
impending recession seem to be mounting.
Earlier this month, the Federal Reserve updated its probability of a recession based on the Treasury Spread. The current inverted yield curve, which has been used as one leading indicator, has moved the probability of recession up sharply in the last year towards 30%.
Another indicator: Nearly half, or 48%, of chief financial
officers in the U.S. are predicting a recession by mid-2020, according to the
Duke University/CFO Global Business Outlook survey, which is conducted
quarterly. And more than two-thirds, 69%, are predicting a downturn by the end
of next year.
Other signs are looming such as lower GDP growth in China
relative to what it was before 2010, the dramatic increase in alternative
lenders in the U.S. economy called ‘shadow banking’, 
and an expected interest rate cut by the Fed today. “The last time it [The
Fed] entered a cutting cycle was September 2007. At that juncture, the subprime
mortgage crisis had displayed clear signs of accelerating.“ 
Regardless of whether a downturn occurs within the next two
years, a recession represents CHANGE. And when CHANGE occurs, be it
technological, societal or economic in this case, there will be winners and
losers. Those with the right outlook and a plan to leverage data and analytics
will likely come out on top.
How will your business respond?
The way in which different business organizations responded
during the 2007 – 2009 ‘great recession’ has been studied by several
researchers to identify winners and losers, and the strategic decisions that
In one study published in HBR, McKinsey clustered companies into ‘Resilients’ and ‘Nonresilients’. The Resilients returned between 6% and 8% more in returns to shareholders than industry peers did. Their performance dipped less overall during the downturn, and they were able to significantly widen their leads in their respective industries during economic recovery.
As might be expected, these companies placed a high emphasis on controlling operating costs. In addition, resilient companies also focused on maintaining loyalty among high-value customers that were central to the company’s post-recession recovery. They were also smart at pricing. Using data and analysis about customers and their competition, the Resilients were forgoing revenues they could have earned through pricing changes. By contrast, industry peers were more likely to try and maintain revenue at any cost, applying price reductions haphazardly to products and services and sending mixed marketing messages. (See our recent post on using external data to excel at pricing)
One of our own clients illustrates the ability to grow, rather than retract, during an economic downturn.
The company is in the commercial printing industry – highly capital intensive and under constant pricing pressure from large corporate customers. In 2008 to 2009, the management team decided to explore growth through potential acquisitions of smaller players that may not be able to withstand the downturn. Rather than investing the time and money to approach companies directly, however, they asked for our assistance to identify potential targets and prioritize them based on certain attributes such as customer base, core assets, technology stack and capabilities. Armed with this insight, their legal and finance teams made formal introductions with confidence and very quickly made several acquisitions. The resulting market share gain (and some new digital capabilities gained in the process) moved our client into a leadership position in the industry.
How they do it
Downturns bring a conundrum for business leaders. While the
short-term demands caution, cutbacks and capital preservation, the long-term
presents opportunities for growth. How do the winners excel?
Rather than cutting back, a key aspect of their
success is continued investment in research, data and analysis to make smart
decisions and focus their attention and investments where they have the
greatest impact. Research, hypothesis testing and refinement save them from
investing in marginal areas while directing investment to the most promising.
As a result, these organizations leap-frog their industry peers into new positions of growth with the eventual recovery. Will yours be one of the winners?
A study published last year in HBR, Forbes and Bain and
Company’s own outlets looked at top-performing B2B companies (as defined by
increased market share, self-described excellent pricing decisions and execution
of regular price increases). The findings suggest that top performers are more
Employ tailored pricing at the individual
customer and product level
Align incentives for frontline sales staff with
the pricing strategy
Invest in ongoing development of capabilities through data, training and tools
These top performers develop pricing capabilities by bringing
market intelligence to bear on three variables for setting target prices:
The attributes and benefits that each customer truly values (External Data)
The alternatives and competitive intensity in the industry (External Data)
The true profitability of the transaction after accounting for leakage in areas such as rebates, freight, terms, and inventory holding (Internal Data)
What caught my eye, of course, is the emphasis on the use of
EXTERNAL DATA to develop the pricing
capabilities of these top performers.
Applying external data to pricing decisions requires an underlying capability to collect data, analyze and deliver insight to pricing decisions. While the authors offer no specifics on HOW this is done, here are three techniques we’ve used over the years to help clients develop this capability:
Systematic scanning. Top performers systematically monitor for pricing information and indicators rather than engaging in “episodic pricing projects”. From press releases to published contracts to captured conversations by the sales force, open source data is compiled, organized and analyzed to understand what customers are paying and the pricing strategies of the competition
Market and competitive analysis. The B2B supply chain contains several transaction points – the points at which money is exchanged for something of value, whether a supplier, customer, distribution partner or other. And whenever money is exchanged, data and information are associated with the transaction. Using this ‘follow the money’ approach and asking the right questions, it is possible to extract valuable insight regarding the attributes customers value and the pricing practices of the competition
Win/Loss analysis. When we speak to B2B customers on our client’s behalf following a buying decision, we seek to understand both the key buying factors as well as the customer’s buying alternatives and their perceptions of price. Whether our client won or lost the decision, knowing how their pricing compared aids them in setting future prices
While data and insight are one component of overall pricing
success, 77% of top performing companies have access to the right data and
tools. An example is a top performing company in the specialty chemical
industry that successfully employed these pricing tactics and increased EBIT by
35% within two years.
The authors close the white paper with these words, “companies in almost all industries have
underinvested generally across pricing. The episodic “pricing project” approach
leaves companies well short of full potential. With meaningful margin upside at
stake, managers cannot afford to continue pricing by guesswork or rules of
The links below will open a three pricing-related case
Our joint presentation with Michelle Volesko Brewer from Wolters Kluwer was a resounding success on Wednesday, based on participant surveys. About 30 participants learned about and shared experiences with Managing Complex CI Projects.
This session focused more on the ‘Art’ of the role of strategy professionals rather than the ‘science’. Key Best Practice themes that arose through the discussion were things like ‘good planning’, ‘project definition’, “objective setting’, ‘communication, communication, communication’ and leadership.
Below are links to the presentation deck, handout and session notes. Please contact us with any questions.
Thanks to all who participated – Steve and Michelle
In the HBR article entitled “Your Strategy Should Be a Hypothesis You Constantly Adjust” (link below) authors Edmondson and Verdin examine two cases of recent business failure: Wells Fargo’s and Volkswagen, and discuss the concept of ‘strategy as learning’.
In both cases, the companies’ strategies were viewed by their top executives as analytically sound, but the performance gaps were blamed on execution. As a result, mid-level managers and employees kept trying harder to execute the plan, effectively digging the hole deeper until there was no other choice but to cover it all up. This, of course, led to scandal and eventual loss for the organizations financially and beyond.
‘Strategy as learning’ contrasts sharply with the view of strategy as a stable, analytically rigorous plan for execution in the market.
Like all hypotheses, strategy as learning’ starts with situation assessment and analysis — strategy’s classic tools. Also like all hypotheses, it must be tested through action. With this lens, encounters with customers provide data that is of ongoing interest to senior executives — vital inputs to dynamic strategy formulation. Strategy as learning is characterized by ongoing observing and adjusting, fueled by data that can only be obtained through execution.
The ‘strategy as learning’ concept aligns with our idea of ‘strategic thinking’ as posted on our blog 10/5/2018: Strategic thinking is about capturing what managers learn from all sources (including both ‘soft’ insights from experiences and observations as well as ‘hard’ data from market research) and then synthesizing it into a vision of the direction that the business should pursue.
The concept of ‘strategic learning’ and ‘strategic thinking’ is what Line of Sight Group is all about – an evidence-based approach using external data to augment our client’s internal perspective to help them 1) make informed strategic decisions and 2) adjust those strategies based on empirical data from customers and the industry. Our Market Intelligence and our Customer Win/Loss analysis offerings are specifically designed to help our clients develop and maintain systematic and unbiased feedback loops that enable confident adjustments to strategy.
Strategy is about placing bets – big and important bets that can make or break the future. Continuing to up the ante with the belief that the problem is in execution instead of using data to gain feedback for necessary adjustments can result in loss of not only the hoped-for jackpot, but also the entire bankroll.
The team at Line of Sight loves it when we have a chance to attend and sponsor great events…and ProductCamp Twin Cities 2018 really fit the bill! The event was held for the second year at The Nerdery, where attendees were able to share insights and network with developers, engineers, project managers, marketers, user experience, customer experience, product managers, and others who are passionate about product.
This user-organized “unconference” featured Sarita Parikh, Senior Director Consumer Experience and Strategy, Pearson, who gave the keynote speech, “Influencing Behavior in an Irrational World.” Attendees also had their choice of several other sessions, including Product Management Excellence: Creating a Best-in-Class Product Management Organization (Jeff Lash), Linguistics for Voice Interaction Designers: A Crash Course (Ellen Lucast) and more. Engaging speakers and plenty of networking opportunities made for a successful day! We look forward to seeing you next year at ProductCamp 2019.
The count-down begins for ProductCamp Twin Cities 2018 at The Nerdery in Bloomington, Minnesota! This is another great opportunity for Line of Sight Group to keep a pulse on the needs of product managers, by attending and sponsoring local events.
ProductCamp is a user-driven “unconference” that brings together people who are passionate about products and interested in collaborating to share insights. It is also a great opportunity to meet others in the Twin Cities product community.
The event brings together developers, engineers, project managers, marketers, user experience, customer experience, product managers, and more.
Sessions are throughout the day. Sarita Parikh, Senior Director Consumer Experience and Strategy, Pearson, will deliver the keynote session – Influencing Behavior in an Irrational World.
It all starts on November 3rd. Please click here to find out more and register. Come on out to see us! It’s FREE!
“As product strategists aiming to launch a new product or gain market share with a new enhancement, it is critical to be first to the finish line. The risk of losing the race can be in the millions of dollars and devastating to careers.” – Steve Schulz, Line of Sight Group President and Founder
Our efforts to stay current on trends and keep a pulse on the needs of product managers is addressed by attending and sponsoring key events in the local marketplace. Line of Sight Group sponsored the monthly PDMA meeting and presented “Using Analytics to Stay Ahead of the Competition” at Starkey Hearing Technologies in Eden Prairie, Minnesota.
Line of Sight Group’s Steve Schulz shared some analytical models for using knowledge of the external environment to understand where you are in the race with your competition, and how to think about bets and moves you can make to differentiate and stay ahead. Use cases demonstrated how organizations can apply data and analytics to continuously monitor competitive developments and engage in interactive dialog on how to use that information to respond to threats and opportunities.
How to create and populate a development map and scorecard
Development strategies and response adjustments
How to present the data and strategic response
Starkey’s Aaron Schroeder, Au.D, kicked off the event with a welcome and shared their efforts to help people hear throughout the U.S. and around the world. He showed a music video featuring singer-songwriter Matt Nathanson, who joined Starkey in Peru to help raise awareness and funds for people struggling with hearing loss. I encourage you to watch it here. It is sure to warm your heart.
Thanks to Minnesota PDMA and Starkey Hearing Technologies for the opportunity!
Minnesota PDMA is the place for innovators and product people to come together. The organization holds monthly events all around the Twin Cities. All people, perspectives, and ideas are welcome.
Starkey Hearing Technologies is a hearing-aid manufacturer that prides itself on connecting people and changing lives. The company has provided more than 1 million hearing aids to people around the world.
One of the ways Line of Sight Group keeps current on trends is to attend and sponsor key events in the local market. Last month, we had a chance to learn what was on the minds of professional researchers by attending and sponsoring the SLA-MN (Minnesota Chapter of the Special Libraries Association) and MALL (Minnesota Association of Law Libraries) Holiday Party.
The popular event, held annually, is open to all information professionals, librarians, researchers, knowledge managers, archivists, students, and guests. The social atmosphere brings like-minded professionals together to discuss various topics, including different research tools and information services, projects and opportunities, job openings and career paths, and others.
Guests also learned about new products and services at the Exhibitor Fair, featuring Line of Sight Group and other sponsors, and had the opportunity to place bids at the silent auction, benefiting the St. Catherine University SLA Student Group.
Additionally, this year’s Holiday Party was held at the Minneapolis Institute of Art. Guests were invited to visit Mia’s galleries and tour Mia’s Art Research & Reference Library, one of the Midwest’s premiere research centers dedicated to the study of art.
Finally, organizers provided a vast array of catered hors d’oeuvres, desserts, and drinks.
It was great meeting so many wonderful attendees and sponsors at the SLA-MN and MALL Holiday Party. The gathering was fun for all and we would highly recommend it to anyone interested in attending next year!
Customer Experience is the area many retailers have chosen to compete on over the past few years. When it comes to shopping, it is breaking increasingly into “chore” vs. “cherish” activities. On the “chore” side, firms like Amazon offer commodity pricing, streamlined delivery, and voice recognition to make online ordering an easy experience for obtaining essentials. That leaves “cherish,” the type of shopping based on the discovery of interesting products and socializing them with others. This type of shopping is characterized by a great physical presence, unique items, and creating meaningful experiences. You’ll find artisan crafted products, hand-picked selections, custom built offers, or even built-by-the customer creations. How might a retailer best compete in the Customer Experience realm?
One of the first areas to consider is to understand the external environment. What are the trends and who are the competitors? Are there competitors offering something similar? How are they unique? What kinds of experiences do they offer? Are they competing on digital or physical experience or both or is it something else?
Next, savvy retailers track and map internal environment elements like customer journeys and voice of the customer as well as metrics like Net Promoter Score and Customer Satisfaction. Asking for feedback after every interaction or transaction is wearing customers down so building insight via analytics into the flow (that is not invasive) will be a key.
With external and internal environment insight in hand, retailers have a number of levers available to pull. Retailers can swiftly test and prototype various experience design elements using service blueprinting, bio-mimicry and design thinking. Some are using Virtual Reality to conduct their prototyping digitally as a first step. Capturing insight via primary and secondary research about the external and internal environment goes a long way towards creating a strategy to compete on customer experience as a differentiator in retail. Knowing the type of shopping that your current and future customers engage in can align your strategy and go-to-market initiatives on a path toward delivering meaningful and differentiated customer experiences in the digital and physical worlds.