With the rise of the digital evolution, today’s customers are far more in charge of how they find, assess, select, purchase and have their product or service delivered. To stay ahead of the competition, savvy businesses must understand customer choices and adapt their strategies to suit the market.
It’s a challenging time for executives who need to make decisions every day about their business in order to grow—decisions about their sales strategy, customer experience, products, competitors, resource allocation, marketing and more.
For most executives, the strategic frameworks and tools they rely on are based on a single dominant idea: to achieve a sustainable competitive advantage. The problem with this is that such ideas and frameworks—think Porter’s 5 Forces, McKinsey’s 7-S framework, or other nifty number and letter combinations—were designed in and for another era (not to mention the creaking SWOT analysis). They were not designed for the fast-paced world of business today—for quickly exploiting and moving in and out of advantages.
The old concept of sustainable competitive advantage assumes that customers’ needs remain relatively static. Under this premise, business executives made strategic decisions based on what they thought they knew—and they had a reasonable chance of being right. But not anymore!
Most companies’ growth strategies are simply not fit-for-purpose in today’s disruptive world, where the pace, vectors and integration of change are radically different from just 15 years ago.
Fortunately, some of the world’s leading thinkers have been tackling the issue of ‘What next?’ for some time, and UniSA’s Institute for Choice has been contributing knowledge, right up alongside them.
“Growth strategy has changed,” says Professor Joe Urbany, “It’s no longer about sustaining competitive advantage over time—it’s about developing a strategy to sustain growth over time.”
Professor Urbany, is a Professor of Marketing with the Mendoza College of Business at the University of Notre Dame, Indiana, USA. A world leader in building growth strategies, Urbany has been working with his colleagues to develop a set of new frameworks and tools to show executives where to focus and how to win. The result? A 3-Circles strategic framework, from which the critically acclaimed Vennli platform was born.
Vennli is a cloud-based software platform for creating and executing growth strategies. Its shining point of difference is its focus on customer choice and what you, and your competitors, are doing to fulfil their needs. At the core of the platform is the 3-Circles model, a dynamic Venn diagram that visualises your customers’ needs.
The 3-Circles model was developed over 10 years at the University of Notre Dame, and refined by Executive MBAs and other graduates with over 800 growth strategy projects. UniSA’s Institute for Choice has had a long-term relationship with Professor Urbany, and the 3-Circles model.
So what is the 3-Circles model?
At the heart of the model is the customer and Professor Urbany’s relentless focus on how to help companies be different from their competitors in ways that are important to customers.
The model aims to understand the value customers seek and the value companies can create for them. Sounds simple, doesn’t it? But the reality is that most executive decisions involving customers are made without any customer research.
Before you say, “that doesn’t apply to my company”, have a serious look at your most recent executive strategy meetings and find out just what customer research was actually presented.
In fact, most companies don’t undertake deep customer research for any number of reasons: lack of time, resources, internal politics, the personal preferences of the executive team members and informal research.
How does it work?
- The overlapping circles show where customers' perceptions of market offerings align with their needs and wants
- Pins represent choice factors from your survey, the distance between them is their relative importance and performance
- Filters let you flip between internal and market views, as well as between different segments or competitors, and visualise the results.
- You use the diagram to develop growth ideas with your team. Create idea reports that compare ideas, costs, timings and ROI, to ultimately identify your optimal growth strategy.
This approach simply will not work in 2015. All companies need to understand their customers, deeply and continuously if they want to continue to grow or, in some cases, exist. Just look at what Uber is doing to the taxi marketplace, or how Airbnb is changing the hotel space.
The 3-Circles model provides a platform to conduct customer research (with hundreds or thousands of current or potential customers), then presents the information through the 'vLens’, a simple Venn diagram using a savvy mapping algorithm. It’s also a process that helps company executives to simultaneously think about customers, competitors and the company, putting the company’s existing beliefs to the test through facts.
Through clear visualisation of customer information, the 3-Circles model and process provides a powerful basis for the analysis of a company’s current competitive position as well as substantial insight for prospective growth strategies, in real-time.
Businesses can segment data to uncover new insights, compare internal thinking to actual customer perceptions, and continuously collect data to drive daily decisions. This facilitates the speed of understanding of what customers truly value and what action is required by executives. It focuses attention on the most critical strategic concepts, and where limited resources should be allocated for the best outcome via the lens of your customer.
Academically robust, and commercially accessible, the 3-Circles model is at the forefront of information design and data visualisation. The ability to assess and weigh customer choice in real-time is unprecedented. Strategies are immediately actionable and manoeuvrable, based on your business priorities. And this is what makes the 3-Circles model so powerful.
UniSA’s Institute for Choice has been part of the development of the 3-Circles model and worked closely with Professor Urbany and the Vennli development team. With the design and integration of the research into the Vennli platform now complete, UniSA’s Institute for Choice is now able to share this new model for strategic business growth with companies, organisations and government agencies across the world.