Experience Strategy Podcast: The Power of Situational Markets in Experience Strategy

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In the latest episode of The Experience Strategy Podcast, we’re dismantling traditional market segmentation and rebuilding it with the revolutionary concept of situational markets. Dave Norton, our experience futurist, gives us a sneak peak into his upcoming book that’s set to redefine how we create value. Joined by industry veteran John Gusiff, we discuss the power of jobs-to-be-done research, the limitations of demographic-based personas, and the critical importance of understanding evolving customer needs. From leveraging qualitative data to scale situational strategies, to anticipating your customers’ future selves, this episode is packed with game-changing ideas for forward-thinking experience strategists.

Voiceover: [00:00:00] Welcome to the experience strategy podcast, where we talk to customers and experts about how to create products and services that feel like time well spent. And now here are your hosts experience nerds, Dave [00:00:15] Norton and Aransas Savas. 

Aransas: Welcome to the experience strategy podcast. I'm Aransas Savas

Dave Norton: And I'm Dave Norton,

Aransas: And we have a really fun and different episode for you today. So Dave's been [00:00:30] writing a book about experience strategy. Maybe no surprise there, maybe long overdue. I'm super excited about it and it's been a real joy to watch his writing process. And so today we want to introduce you to one of the key [00:00:45] themes of the book that we explore in chapter two.

And to do that, I thought maybe we could start by having Dave Give you just a little bit of an introduction to what this book is, what he hopes to achieve with it, and how he's [00:01:00] using Substack to start building an audience and a dialogue around the topics that he's exploring in the book. Then we're going to welcome in a special guest to join us in this conversation and really bounce [00:01:15] ideas back and forth around some of these topics so that we can all learn together alongside you.

Dave, why don't you tell us just a little bit about this book, uh, and what you're hoping to achieve? 

Dave: Yeah, sure. This has been an [00:01:30] ongoing work for a number of years. It's something that I have been working on for probably 10 years, I would say. You know, we, we run these collaboratives each year and we've learned so much in our collaborative [00:01:45] programs.

And we needed to find a way to take. The learnings and bring them together in one coherent form. So I started working on that and I put together a book proposal and, uh, [00:02:00] send it off to Harvard and. They seemed interested at least in one part of it. And at the very end they said no, but it got me excited.

And so I sent it off to Stanford and they were very interested in it. And then one of the reviewers [00:02:15] didn't completely understand what we were talking about. And the short of it is, is that the publishers wanted to see that there was. An audience for the types of topics that we're covering. So I said, forget this.

I'm just going to start [00:02:30] writing on Substack and I'm going to let the audience that's interested come to me. And we've been thrilled. We've been writing now for a little over a month. Or so, maybe two months, right? [00:02:45] Every day I try to post something and, uh, we've got about 2, 200 people who are reading on a regular basis.

We have, 

Aransas: we have a couple thousand subscribers, but we actually have about 10, 000 people who are reading on a [00:03:00] regular basis, which is just so mind boggling in such a short time. 

Dave: Yeah. I know. I'm thrilled, honestly, and cannot wait to go find the next publisher and see who. Uh, is really interested, but [00:03:15] for now I am very much committed to writing everything as much as possible on Substack and kind of going from there.

And, uh, the book is about experience strategy. There's a lot of companies out there that when you ask them, do they have [00:03:30] an experience strategy, they think what you're saying is, do you have a strategy and are you able to deliver on an experience associated with that strategy? That might be an [00:03:45] okay definition, but what we're talking about is how do you create more economic value?

How do you create more? Real value for the customer and the company [00:04:00] through strategy. And, and that's what the book's about. I'm still in the process of writing some of the pieces, but the research is all done and has been done for a couple of years. 

Aransas: It's, it's really exciting to see it all come together.

And even as somebody who's [00:04:15] super close to the work I'm having on a haws over and over, I love the opening to chapter two. So I thought maybe I'd start by just reading a couple of sentences from that. And the way you open this and the sub stack certainly is you [00:04:30] start by. Acknowledging the core challenge that businesses face and you say your company has a business model.

Great. Let's hope. And unlike many business models of yesteryear, your company understands how [00:04:45] important it is to be customer focused. And then you say, my goal for this chapter is to provide you with a principle that will turn your business model into a growth model. Growth comes from creating value for customers.

Yet we live [00:05:00] in a time of abundance. People have access to almost everything they need instantly. So how does a company grow today and what role does experience strategy play in a company's growth? I just think that's such a nice kickoff for this conversation. Uh, and [00:05:15] then in your chapter summary, you make four big points and, and I'm actually going to use those to guide this conversation today with our special guest who I want to introduce you to right now.

His name is John Gosev and he's the managing partner [00:05:30] for Customer Centric Solutions. He founded the company back in 2002 after 15 years of helping brands across B2B, B2C, B2B2C design and implement customer acquisition engagement service and retention strategies. [00:05:45] He has worked directly with executives in marketing sales, product development, customer service and support functions to help them rethink how they better serve their customers and implement the processes, organization, and technology that [00:06:00] are required in order to support that.

He's truly an experienced CX strategy and experienced design leader. He's helped so many big companies that you would recognize. He's trained with some of the best. And I know [00:06:15] Dave, you were really excited to talk to John specifically about this topic. So tell us a little bit about how you got to have this conversation with John today.

Dave: Well, first and foremost, because John reached out and said, Hey, I'm interested in [00:06:30] this topic. And we had this great dialogue that kind of took off. And, you know, John, I really respect your opinion and, and think you do amazing work. And so, of course, I was [00:06:45] like, Hey, let's have him on the podcast because we can learn from, from John quite a bit.

So I love it. 

Aransas: Well, John, thank you so much for reaching out and again, for joining us today. 

John: Oh, I'm excited to be here. I have to say when I [00:07:00] first opened up your thread and just looked at the outline of it, Dave, I was kind of like, this guy's crazy in terms of, you know, he's setting out to take on a breadth and a [00:07:15] scope around experience strategy.

That's going to take a lot of time. Effort, thought effort, really to articulate it clearly and precisely and force people to rethink [00:07:30] models that they've been leveraging potentially for decades and to think anew about what experience strategy is all about. So once I read the outline, you had me hooked, uh, I wanted to jump in.

And follow along [00:07:45] and go through the same thought process almost in parallel, looking back at past client engagements and reflecting on them and thinking about those core principles within that work historically. And then, you know, going forward, how do I rethink how I [00:08:00] do things and, uh, help companies kind of reinvent value propositions.

Aransas: What a great acknowledgement and, uh, what a, what a, a room for having this conversation specifically [00:08:15] around situational markets. And Dave, I know we've talked about situational markets on this show before, but for our listeners who aren't as familiar about what we mean by that term, can you just give a quick primer into your definition of it?

A [00:08:30] situational 

Dave: market is a way of describing a market that doesn't focus on the market. The number of people that are in the market, it focuses instead on the [00:08:45] number of times a certain type of situation arises. Now, the reason why that is important, at least in my mind, is because the number of people that are in a particular [00:09:00] market is oftentimes actually just a statistical Exercise and we can talk about a lot of things that I think are problematic about people based markets, [00:09:15] but when a situation arises, most people have a similar need.

So it really is a needs based. Jobs to be done based approach to understanding market strategy [00:09:30] that emphasizes the context that emphasizes the uniqueness of that particular situation. So we'll go deeper around it. But I like to think of situational markets as being about the what and [00:09:45] traditional persona based.

markets as being about the who. 

Aransas: It's a great distinction right there. And I think that really clarifies it. And it's probably part of what John is reacting to. And he's like, what is this guy talking about? [00:10:00] Because it does upend a lot of the thinking and the ways of working. 

John: Yeah. When I think about that, Dave, it's, it's not only that it occurs, but it's even the frequency with which it occurs.[00:10:15] 

Right. So I did some work for porch. com, which is providing home services, matching a homeowner to, to the trades. Right. And so you think about that situational context and looking at the [00:10:30] ecosystem of home buyers and home owners and home sellers and the jobs they have to be done. Well, those dynamics have changed.

People move more frequently. Right there. That [00:10:45] situation occurs at a much more significant frequency than it has traditionally, which creates market opportunity, right? How do you meet them in the jobs that need to serve given the frequency and the pace at which, uh, those, [00:11:00] those experiences are happening, you know, in different contexts.

Dave: Yeah, I think, I think there are huge changes that are happening around the way that people buy and sell homes [00:11:15] because their situational needs have changed dramatically. Everything from remote work. Right. The ability to work from wherever, do whatever you want to inflation, those are just macro things that are [00:11:30] going on.

There's also personal things that are going on as well. Maybe somebody gets sick and they can't go upstairs anymore. So, so there's all kinds of things that are driving people to buy on a regular basis. And yet [00:11:45] we tend to focus on. You know, like, uh, this is your baby boomer buyer and this is your millennial buyer.

And I think we just miss out on a lot of opportunities when, when that's our mindset. 

Aransas: I think that's [00:12:00] right. And so when you start out this chapter by saying market strategy today. And tomorrow should focus on aggregating the situational needs of individuals. Talk about why you're specifically [00:12:15] focusing on the aggregation of the needs of individuals.

One of the blocking points from this way of thinking as we've talked to others about this is a fear that you can't scale the situational needs of [00:12:30] individuals. 

Dave: That is exactly the issue around scalability. Can you actually scale around a particular situation? And because companies have to be able to [00:12:45] scale in order to be able to realize profitability.

, and I think John, you kind of pointed to one of the key things, which is we, we have to understand the frequency of a common situation. Every statistician that I've [00:13:00] talked to about this idea of aggregating common situations says that you can use all of the same principles of market [00:13:15] segmentation. And apply them to situations instead of applying them to people.

So if you need to do max diff or you need to do some other kind of statistical technique in order to identify the opportunity, you can do it. But [00:13:30] instead of focusing on the people, you focus on the data. The situation, if the situation is not common, most companies are not going to be able to scale around it.

Aransas: That's right. So that's a good, uh, [00:13:45] introduction to, to a conversation around the data and analytical tools that are needed in order to both. Not to get the insights necessarily, though it is part of that, but [00:14:00] also to use the insights here. So I'm curious how you think about data collection for the sake of understanding the customer, John.

John: I always think about it [00:14:15] first through a qualitative lens, right? And so while I'm a fan of big data, I feel you always have to approach big data with a hypothesis. And so what jobs to be done research does from a [00:14:30] qualitative context is establish that hypothesis, right? To identify different situational context, different struggling moments, whether they're positive or negative moments.

I like to form what I call [00:14:45] kind of these job clusters. Which are kind of this combination of a core functional job along with its associated aspirational, emotional, and social. And then as you start to have conversations with 8, 10, 12, 15, [00:15:00] 20 people, you start to see patterns of these job clusters that give you kind of a new way of thinking about who your customer is, what's their connection to the brand, [00:15:15] what are the jobs you're serving well or not serving.

And then you can go analyze that quantitatively, right? And to see if that pans out in terms of a different way of thinking through how to segment, uh, your customer [00:15:30] base. Uh, so I, I think you always move. You know, small data insights to big data or analytical, but formulate those core hypotheses and then test and validate them.

Dave: Well, [00:15:45] I love where you start there, John, and totally agree. You know, that you start with the job to be done. Whenever you're trying to understand anything that has to do with situational [00:16:00] markets, anything that has to do with improving the customer experience. We were just on a call this morning where one of the companies that we work with asked the question, what kind of data should you be [00:16:15] collecting in order to be prepared for, in this case, we were talking about generative AI.

And. I said, you should be collecting data about the job to be done, John, to your point, right? [00:16:30] And he's like, There's the 

Aransas: answer. 

Dave: Right. Yeah. And he's like, okay, what? And I'm like, companies collect tremendous amounts of data, but they don't collect data about [00:16:45] what the customer is actually trying to accomplish.

They might collect data about, uh, whether or not the customer is satisfied with the experience, which is great. But even that question, if it's a CSAT or. And that promoter score is not going to tell you, did they accomplish the [00:17:00] job that they're trying to get done? Right? So the first thing you have to do is be really clear about the job.

And I love what you're saying. It's about qualitative as much as anything. Then you got to get them to share more data with you. Then you got to get [00:17:15] that data to be used for their purposes. At their point of use, not for your purposes so that you can sell them more stuff, but for their purposes. And then once you figure out [00:17:30] those 3 things, then you can begin to anticipate what they're going to need the next time around.

So the next time this situation occurs, you're going to be better prepared to support them. And honestly, most companies don't think that way. [00:17:45] 

Aransas: You're so right. And it is that it's that very problem, isn't it? That they're thinking about what it is for the customer and they're just looking through the wrong lens.

That's why I love John's company name so much. Uh, for as a [00:18:00] reminder, it's customer centric solutions. So it's saying, what is the answer, the solve that puts the customer right at the center? 

John: I did some work for, uh, a smart thermostat company called Ecobee. [00:18:15] Founder and engineer and when you started to evaluate, uh, what job to be done people had, or what was their motivation for buying a smart thermostat?

There were definitely people like the founder who wanted to [00:18:30] configure. monitor, optimize, do all these things. But there were a number of people who wanted to simply set it and forget it. And so they had comfort [00:18:45] objectives. They wanted to sleep better. They wanted to modernize their home. There were all these different motivations for why people bought a smart thermostat.

Right. And so how do you kind of step back from a very product centric view [00:19:00] of what people are trying to do and look at it from a context of the outcomes they're trying to achieve and how, as Clayton Christensen always says, is how does the product or service fit into people's lives, right? What are [00:19:15] they hiring it to accomplish?

And so always asking that question of how does it fit into their lives? Because those are unique opportunities to provide value. 

Aransas: That's exactly right. And I think that's a perfect jumping off point to the third bullet in this [00:19:30] summary, which is situations change. So the strategist needs to adapt their models over time.

How are you talking about that in the book, Dave? 

Dave: So they're constantly changing. People's needs are constantly [00:19:45] evolving and constantly changing. And that's part of the reason why I am concerned about traditional segmentation. It tends to be used to say there is a certain population that will always [00:20:00] have this, this need, and that's not necessarily true, right?

Needs come and go. You may be in the market to buy a home, to your point, John, but once you bought the home, are you still in the market? In that category, no, [00:20:15] you, you have new needs. Maybe you need to turn that home into a smart home. Maybe that's the next thing that you're focused on. Taking kind of a traditional home and turn it into something, uh, smarter.

[00:20:30] And companies that are paying attention to how needs evolve, how needs progress are able to innovate faster. They're able to think faster and they don't miss [00:20:45] opportunities. In the book, I tell the story and a lot of design thinkers will remember this story that have been around for, for any time about how, why it was that Sony wasn't able to create the iPhone or [00:21:00] the iPod at the time.

And they had all of the technology, they had all of the different services, uh, that would be needed to put together the capability, but they didn't have the mindset around it. And, [00:21:15] uh, according to the writers of the case studies associated with it, it was because they were focused on this fixed idea of who their target audience was, instead of seeing it as, hey, people [00:21:30] have Walkman.

That means that they like portable music. That means if we could go to the next step and make the music even more portable by providing it in a digital format, it would be even more successful. And Oh, [00:21:45] by the way, while we're doing it, let's make other things portable as well. So they took their eye off of the job to be done and instead focused on whether or not, uh, the women would want pink Walkman and the men would want blue [00:22:00] Walkman.

You know, like, Uh, that's crazy. Um, but that's what happens when you use traditional segmentation. 

Aransas: Now you have me thinking back to my first MP3 player where I had space for three songs that [00:22:15] I just listened to over and over and over. I now hate those songs, but it was still pretty cool. I mean, cool enough that I listened to those three songs 3000 times.

John: So, where that [00:22:30] resonated with me, Dave, was you do jobs to be done research. You understand different types of jobs people are trying to get done. You understand the breadth of the jobs. You understand the hierarchy because [00:22:45] you can, you can serve jobs that are horizontally. You can also serve them better vertically.

But the next question is. And this is a question that I always ask my clients, uh, and I was influenced by a guy who wrote a book called, who do you want your customer [00:23:00] to become? So you analyze your customer base, uh, you know, who you serve now, who do you want them to become? Because who you want to become sets that context for where the [00:23:15] brand needs to go next, right?

Which fundamentally, when you look at Starbucks in its origination. Right, Charles Schwartz comes back from Europe, experiences a cafe experience, comes back to [00:23:30] America, and people drink coffee black or with milk and cream. Right? And so he decided not to serve that market. But to create a new market, so he was obviously asking that question of [00:23:45] who do I want my customers to become, and that became the market he began to serve, uh, and not enough companies ask that question, right, which I think you speak to in your book in terms of that, that near future target.[00:24:00] 

Right. Of where your customers are going and what are the new needs or opportunities to serve? 

Dave: Absolutely. that's, we spent a lot of time on that in chapter three, which I'm still writing at this point And what I love about this idea of who do you want them to become is not just That it's about their near future need, but this is the type of thing or answers that you would bite into and and really chew at [00:24:30] because so much of what consumers want today is something that will transform them in some way, shape or form.

And they're looking to brands that they know are going on a journey [00:24:45] towards something. And if they hook up with that journey, it's going to make their personal performance better over time. And, uh, you know, so, uh, Rancis, that's. That's right up your alley with everything that you're doing. 

Aransas: [00:25:00] Yeah. And I think I might even play with rewording John's question to say, who does your customer want to become?

And that lets us then think about the transformational aspect of that instead of just serving who they are [00:25:15] now, uh, considering really what they, they want to become. And how we can act as guide and support to enable that through data, through insight, through, uh, some sort of coaching or other guidance, [00:25:30] uh, because playing the role of enabler and, and supporter is tremendously powerful.

Right now, uh, one of my, my favorite stories in chapter two, and it's one of the early ones is the [00:25:45] Canon versus Apple story. Uh, and I just think, you know, since we've, we've gotten some, some good case studies in there, uh, it might be worth, uh, touching on that one. I think it really lands this idea of the Delta between designing, uh, based on [00:26:00] who the customer is and how the customer uses technology.

Dave: So in the chapter, I asked the question, which market would you rather be in? Would you rather be in the market [00:26:15] of the photo taking market that Apple has established or the photo taking market that Canon has established, right? And we, we have to remember that most, [00:26:30] uh, personal cameras, That are bought today, most cameras in general that are bought today are Canon brands, right?

So they've been very, very successful [00:26:45] in a category that at one time was a mass category and now has become a niche category. the reason why they're successful there is [00:27:00] because they go after people who want professional cameras. Okay, it's the who want part of that, that they have stuck with and [00:27:15] they will continue to stick with.

All right, apple basically is saying, what are all the situations where people want to take a photo and how do we make that happen? And their platform allows [00:27:30] you to do that. And of course, there are far more photos, I don't even know what the percentage is. I mean, it's gotta be like a hundred million times more photos that are taken [00:27:45] using Apple products or Samsung products, right?

Because they have completely changed the paradigm. And instead of focusing on the who, they're focusing on the what. Anybody who [00:28:00] wants to take a photo in this particular situation can, you don't have to be a lover of cameras in order to do it, or bring that camera with you in order to do it, that that paradigm is true for almost every single [00:28:15] solution out there because of digital technologies.

Uh, so. Same thing is true for shopping. We used to talk about shopping in terms of different shopper profiles, but if I'm traveling, I can [00:28:30] still buy regardless of my shopper profile. And if you're going to capture the traveling buyer. Then you need to understand that situation. You need to understand that job to be done and you need to tap into the tools [00:28:45] and technologies that already exist that allow you to be able to serve that situation.

Aransas: So good. Uh, and so relatable, John, as we start to round out the episode, were there other questions [00:29:00] or ideas that you were excited to discuss with Dave that you think maybe other listeners might want to explore a little deeper? 

John: I'm interested in your thoughts, Dave, as it relates to studying jobs, and then this [00:29:15] notion of studying the job performer, right?

So I know that's a tricky balance, right? In terms of having it be, uh, person focused versus situational context focused, but at some level, uh, the job [00:29:30] performer matters, right? Because the job performer from a behavioral standpoint, right, has certain beliefs, is in different environments, has a different emotional context.

And it [00:29:45] seems like while we kind of try to steer away from psychographic demographic type personas. There perhaps still is a need to define the job performer. I, I've been leaning into this concept of understanding [00:30:00] mindsets, right? Like, What's a luxury mindset? Because luxury means different things to different people.

What are money mindsets? Because money means different things to different people. What's been your experience in terms of kind [00:30:15] of, uh, the transition away from traditional personas? To new ways of thinking about consumers and buyers and how that ties to studying situational context. 

Dave: Well, I'm, I'm still a big believer in design [00:30:30] thinking principles and understanding the jobs we've done in qualitative research.

And you, our company also does a lot of qualitative research to try to understand those users and their, their unique [00:30:45] needs when it comes to identity. And remember, chapter two is principally about how do you identify a market for your product? That's principally what it's about. And, uh, doesn't mean that you shouldn't [00:31:00] be working with users and trying to understand their differences.

In my mind, there's kind of like two axes that we need to think about. Are there specific users, like, for example, new doctors who need to [00:31:15] specialize in a particular area? Does it pertain to most people, like anybody that wants to buy a home? Okay, and then on the other axis is you have unique situations.

Maybe those [00:31:30] doctors are only interested in very specialized insights. Whereas you have common, um, situations that occur all of the time. So with those two [00:31:45] axes, you know, we can imagine different scenarios and how much time we need to spend with the end user. So if it's most people in common situations.

When employees want to [00:32:00] use AI to kind of speed up finding important documents, then the uniqueness of the people Doesn't matter quite so much. In fact, you want a wide range of different people that you're, you're talking to. But if it's specific [00:32:15] people in unique situations, like when new doctors need to specialize in a particular area of their profession, then you really do need to understand the who associated with those people.

And I think, I think that's [00:32:30] where my head is right now. You could argue against that. That, I don't know what your thoughts are. 

John: You've confirmed the value of the two by two. I used to work for an executive that basically you say everything could be just [00:32:45] explained in a two by two. 

Aransas: Welcome to our world.

You're in good company. We in fact teach a frameworks course as a part of our collaborative program each year, because we believe in the power of the [00:33:00] framework. Well, this has been such a great conversation, and I feel like we could probably continue on for another half hour. Um, but what I want to do is invite people to join us on this journey.

If you have thoughts to [00:33:15] contribute to this conversation, Reach out to us on Substack or LinkedIn. We would love to hear from you. Uh, as hopefully this episode evidences, uh, we're eager to have these conversations with other smart people. And we know [00:33:30] that the experience strategy podcast audience is jam packed.

With smart people who have big thoughts and ideas and opinions about this stuff. So hearing from you helps make us smarter. It [00:33:45] also helps us ensure that we're writing something that is going to be really useful and meaningful to you. So please do reach out directly to Dave or to me. We'd love to hear from you.

If there's a conversation you want to bring on the air. And, uh, talk about one of the [00:34:00] chapters of this book. Let us know. I think this is a lot of fun to sort of break down the ideas, especially with you, John, given your depth of experience and analysis on these topics. So really appreciate you [00:34:15] joining us and being open to this conversation.

John: Wonderful to be a guest and, uh, Dave, keep challenging people. Uh, keep forcing people to think differently. 

Aransas: Hey, that could be a tagline. Think different. Oh, [00:34:30] wait. 

Voiceover: Thank you for listening to the experience strategy podcast. If you're having fun nerding out with us, please follow and share wherever you listen to your favorite podcasts, find more episodes and continue the conversation with us at [00:34:45] experience strategy podcast.com.