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Annie Wilson is a senior lecturer of marketing at the Wharton School of the University of Pennsylvania. Ryan Hamilton is an associate professor of marketing at Emory Universitys Goizueta Business School. They have both served as consultants to top brands across all manner of industries. Whats the big idea? The Growth Dilemma is about how to manage relationships between customer segments. As brands grow and attract new customers, they serve a wider variety of groups who tend to want different things from the brand. Almost inevitably, as brands get bigger and bigger, this leads to conflict or disagreement between groups of customers who dont necessarily agree on who the brand is supposed to serve, what it stands for, or how it should be used. Below, coauthors Annie Wilson and Ryan Hamilton share five key insights from their new book, The Growth Dilemma: Managing Your Brand When Different Customers Want Different Things. Listen to the audio versionread by Annie and Ryanin the Next Big Idea App. 1. Segments of people relate to each other in predictable ways Weve identified four different relationship types when it comes to customer segments. The first type of relationship is separate communities. Some brands serve different segments of customers in such a way that they dont step on each others toes much. Customer segments may want different things from the brand, but it doesnt tend to cause problems. For example, Lego still serves its traditional customer segment of children who are looking for an interactive toy, but it also has a large and growing segment of what it refers to as adult friends of Lego. These are adults who purchase Lego as collectibles or models to display in their homes. Lego serves both customer segments without much problem. The second type of relationship is connected communities. These are offerings that become more valuable when more people use them. This includes offerings like social media platforms or shared platforms like Venmo. Software platforms like Microsoft Office are another example because the more popular Microsoft Office becomes, the easier it is to transfer files between people. The third relationship type is leader follower segments. This occurs when one segment is cooler, aspirational, or expert in some way, and because they use the brand, there is another segment of followers who like the brand because of those leaders. One example of this is Crocs. Crocs became cool a few years ago, in large part, because a group of trendsetters decided they were cool. Once they started using the brand, that gave everyone else social permission to also start wearing them without being embarrassed. The fourth relationship type is incompatible segments. This is when brands try forcing segments together that want dramatically different things. They have different values or different preferences, and trying to serve them simultaneously causes a lot of heat and friction between these groups of customers. This can blow up in the face of the brand. 2. Growth itself can cause problems Growth tends to be seen as just a good thing: Were going to get more customers in, get more revenue, and thats going to mean more profit. The big argument that we make is that some of the relationship types can lead to sustainable, profitable growth. However, other types of growth can be dangerous for a brand and cost the brand money in pursuit of that growth. 3. There are four main sources of conflict between customer segments The first source of conflict is functional. This is when one segment of customers cant use the brands offerings the way they want to because another segment is using it in an incompatible way. Think of Starbucks. Somebody who wants to go to Starbucks to hang out and read the newspaper with a cup of coffee comes into conflict with the mobile order segment who wants to quickly get their coffee and leave. The piling up of mobile orders and the masses of people rushing in to grab their drinks in a hurry ruins the experience of a lot of third-placers. Starbucks has managed this functional conflict in various ways throughout much of its corporate history and continues to grapple with it today. Some types of growth can be dangerous for a brand and cost the brand money in pursuit of that growth. The second source of conflict is brand image. This is the idea that because one group of customers is using the brand, the image of the brand comes into question for another group of customers. In the 1990s, Tiffany & Co. began selling a large number of more affordable silver products to less affluent customers, mostly teenagers trying to profess their love to high school sweethearts. This created a brand image conflict for wealthier customers who thought, Is this really Audrey Hepburns Tiffany if I have teenagers buying cheap silver jewelry from them? Tiffany had to figure out how to manage that brand image conflict before the brand became too diluted or eroded. The next source of conflict is user identity. This is the idea that because one group of customers uses the brand, another group can no longer use it as a signal of their identity. For a lot of its history, wearing Vans signaled that you are a skateboarder. As Vans has become more fashionable and people who dont know how to skateboard wear Vans, it has created user identity conflict for the skaters who feel like wearing Vans no longer strongly or clearly signals their skater identity. Vans has to figure out how to protect that skater identity for the skater audience while still inviting in these more fashionable audiences. Lastly, we have ideological conflict. If a brand aligns itself with a certain group of customers, it can create ideological conflict with another group of customers. Target has gone back and forth on whether it will support LGBTQ+ customers through its products and messaging. It has created and recreated ideological conflict between groups of customers who either want Target to support LGBTQ+ rights or those who dont want Target to take that stance. These different sources of conflict can either be managed or avoided by building fences, ladders, or planks. 4. You can manage segment relationships using fences, ladders, and planks Fences is the idea that you want to create separation between segments that might otherwise come into conflict. Carhartt, famous for its workwear, has a segment of customers who are blue-collar workers who wear Carhartt because it is durable and good for working in. Carhartt also has a segment of customers who like Carhartt because their clothes have become fashionableeven on the red carpet. To prevent conflict between these groups, Carhartt keeps them separate. They market different products to them and use different messaging. Carhartt even has different stores for them, and that keeps both segments happy because they can get what they want without interacting with each other. Another way you can manage these relationships is by creatig ladders. This is when you make one group of customers clearly higher status or more important than another group of customers. Youre making it explicit or implicit that one group of customers are leaders and the others are followers. Tiffany & Co. offers various lines of jewelry, each with a distinct price tag that clearly signals the leaders (who pay millions of dollars for Tiffany jewelry) and the followers (who pay hundreds or thousands). It creates a hierarchy that keeps segments happy because it allows them to give customers what they want without eroding the brand image. The last thing you can do is create planks. Youre essentially showing some group of customers the door. Another way of saying this is firing customer segments. There are times when two customer segments are in conflict, and the smartest thing to do is let one of them go or force one of them away from the brand. There was a time when Six Flags offered various pricing discounts and incentives. Many teenagers would buy tickets to Six Flags because they were cheap or discounted, and then they would visit the parks, enjoy the all-you-can-eat benefits, and act like teenagers. It ruined the experience for many other customers who wanted to enjoy Six Flags or potentially bring their families. Six Flags essentially showed those teenagers the door by changing the pricing incentives so that those customers didnt get as much access to the park. They implicitly fired those customer segments. Ridership overall did drop, but the park made more money from other customer segments that wanted to return because they had restored the parks experience for them. 5. You are never done managing customer segment relationships. Managing customer segments isnt something that can be applied once to permanently solve problems. A different set of conflicts is bound to come up later. This is just the evolving nature of markets: new segments emerge, old segments fade, and brands change their positioning over time. We are proposing a discipline for managing growth and customers over time, which is that you constantly have to manage these relationships to avoid conflict. You need to constantly think of different ways to prevent or mitigate that conflict. Any time you bring different groups of people together, they can come into conflict. You need to constantly think of different ways to prevent or mitigate that conflict. For example, at a country club that I went to growing up, new members wanted different things from the club than what old members wanted. Club managers had to figure out how to build fences, ladders, or planks between those customer segments. But these instances are everywhere, beyond brands, like that one friend who went on a family vacation and discovered that their in-laws had different expectations of the vacation than their own family. We see this in politics when a candidate tries to expand their base and increase their popularity. They try to appeal to a broader audience with diverse values. They have to figure out how to keep people who want different things happy simultaneously. We even see this within organizations. As organizations hire more employees, you sometimes get factions that have different interests. Whether its in marketing and brand management or any other domain, this fundamental idea of managing the different things that different groups of people want from an entity requires constant monitoring and supervision. This article originally appeared in Next Big Idea Club magazine and is reprinted with permission.
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E-Commerce
Today, the workforce is aging rapidly, but only 10% of companies have a strategy to retain mature workers, according to a survey by career support platform HR Brain. Since the 1980s, Pew Research Center reports the number of workers age 65 and older in the U.S. has nearly quadrupled. Creating workspaces built for an aging workforce stands to benefit companies. A 2024 global academic study on age-inclusive workforce practices found that keeping more experienced, older workers on the job led to money saved on recruitment, training, and knowledge acquisition across organizations. Tim Glowa, founder and CEO of HR Brain, noted older employees have the most relationships with suppliers and clients, and the most institutional knowledge. However, the design specialists Fast Company spoke to found most companies aren’t thinking of creating office spaces for their older employees. Instead, they are focusing on attracting younger workers and accommodating neurodivergent employees. [Photo: Lord Abbett/Mike Van Tassell] More than a decade ago, Jeremy Myerson, now professor emeritus in design at the Royal College of Art in London, noticed a brain drain problem in the U.K. workforce. Many workers were retiring in their fifties, leaving companies with knowledge gaps instead of taking the time to pass their experience down to newer employees. To address the problem, Myerson got a government grant to examine older workers needs, collaborating with companies in the U.K., Japan, and Australia. They landed on the idea of inclusive design, he says, not just designing for older people . . . but providing better standards of all round design in the workplace. Ironically, the inclusive design that Myerson thought about years ago is popular right now, because it also happens to accommodate the needs and desires of the neurodivergent and young workers companies prioritize. Older workers end up benefitingbut unintentionally, even though they were the original inspiration for Myersons inclusive design. [Photo: Lord Abbett/Mike Van Tassell] The Elements of Inclusive Design Upon entering large office buildings, its common to find kiosks with screens depicting the buildings layout, complete with interactive maps you can click for directions. Often, officegoers can download these apps to their smartphones, and navigate with phones in hand as they walk. But not all workers have smartphones, particularly older ones, and too much screen time can strain eyes of all ages. With generally reduced visual acuity, older workers relying entirely on screens or apps for [office] navigation can be a big barrier, says Carolina Madrigal, senior associate and creative director at HLWs brand experience studio, Brandx. Her studio implements high contrast analog signage and tactile cues for people finding their way around workspaces, a tactic thats also helpful for some workers with disabilities. This often means implementing what Madrigal calls landmark elements. Colors that change depending on a spaces function and even art installations can serve as memorable references, she says. For example, at investment company Lord Abbetts New Jersey headquarters, Madrigals team commissioned custom art pieces that reflect the companys history, one incorporating its old ledgers, another a woven piece resembling financial graphs. The historical nod can also make older workers wanting to share company history with incoming employees feel seen. [Photo: Lord Abbett/Mike Van Tassell] Light and sound The warmer lighting and aesthetics that make an office feel more like home have generally been tailored to younger workers. Ricardo Nabholz, studio creative director at TPG Architecture, has found these elements resonate just as much, if not more, with older officegoers, especially as many had spent decades in sterile cubicles with fluorescent lightingthey welcomed the comfortable change. However, circadian rhythm lighting, in which artificial indoor lights change color throughout the day to match the shifting sun outdoors, thought to jibe with the natural sleep/wake cycles of the human body and therefore provide health benefits other artificial lights dont, doesnt work. It ended up overtaxing older employees, says Erin McDannald, CEO of tech-focused design firm Elevated. She and her colleagues came by this discovery after wearing Oura Rings to their circadian-lit workspace. The same was true, they found, for people with autoimmune disease and autism. [Photo: Lord Abbett/Mike Van Tassell] The sweet spot? When people are sitting under 2700 Kelvin lights, says McDannald, they’re calm, cool and collected. The warm lighting promotes relaxation, while changing lights, like those used in circadian rhythm lighting, or those that are too bright increase stress, making it more difficult for officegoers to access the logical, decision-making parts of their brains. Certain office environments prove more stressful for aging workers. Older ears tend to have more trouble distinguishing single voices from background noise, making designated quiet spaces for meetings crucial. Quiet spaces arent just for older people. On a recent project for a financial technology firm, Nabholz said the mostly Gen X executive team wanted something between a playground and a cube farm. Nabholzs team came up with what he calls a layered environment, which included quiet zones, social lounges, and flexible meeting rooms, he says. Younger employees ended up flocking to quiet zones, thought to appeal most to older workers. It was a reminder that design thats responsive to one group often ends up resonating more broadly, Nabholz says. [Photo: Lord Abbett/Mike Van Tassell] Diversity in workers, diversity in workspaces Ultimately, accommodating an aging workforce means creating a variety of workspaces that cater to different workstyles. We use behavioral personaslike the heads-down worker, the hybrid floater, or the collaborative leadto understand needs more accurately, Nabholz says, not a hierarchy of ages. Over and over again the designers pointed out that the inclusive elements meant to help one persona often benefit another. For example, the ergonomic equipment that benefits someone managing arthritis can also benefit a 28-year-old with sensory sensitivities or a 40-year-old parent balancing work and caregiving, Nabholz says. Clients dont explicitly ask us to design for older workersbut they are prioritizing things like retention, culture-building, and productivity, he notes. Those goals absolutely intersect with the needs of an aging workforce. [Photo: Lord Abbett/Mike Van Tassell] Still, says Glowa, most companies arent even aware of the demographic time bomb theyre facing as a significant number of workers across industries near retirementin nursing, for example, the average age is already 50, per HR Brains report. He suggests how companies can avoid missing the boat on retaining older workers through both policy and design: Talk to your older workers, he says. Do they want more opportunities to mentor younger employees? More comfortable seating? Quieter workspaces? Then build policies that reflect that, he continues. Otherwise, you risk losing some of your most experienced people without a backup plan.
Category:
E-Commerce
Working from home allows for the flexibility and work-life balance that many modern employees require in order to feel content in their jobs. Therefore, being asked to return to the office can be a very tough sell. But a new report found one factor to be majorly motivating when it comes to in-office work. And, surprisingly, it doesn’t have to do with benefits, pay, or even flexibility. It’s having a work bestie. A newly released report from ezCater surveyed 1,000 U.S. employees who work in an office setting and remotely. It found that 80% of employees feel more engaged at work when they have friends at the office. According to experts, gabbing it up at the office isn’t only good for mental health and longevity, but it’s also good for cognitive function, meaning it’s tougher for workers to mentally check out. “Social activities cause us to use our brains more than almost any other activity,” Dr. Andrew Budson, a neurologist and chief of cognitive and behavioral neurology at VA Boston Healthcare System, says per Harvard Health. In recent years, the ability to work remotely has become the most desirable perk of a job, with some reports finding it to be even more important than income, despite the fact that it can be isolating. However, according to the report, remote work hampers employees ability to build relationships. Only 43% of remote employees reported having close work friends, while 69% of office and hybrid workers did. With a loneliness epidemic in full bloom, more workers may now crave socialization. That’s especially true for the youngest workers: 85% of Gen Z respondents said having a work bestie would make them more engaged. Gen Z also expects socialization to be ingrained in their workplace culture. More than half (56%) expect their company to help foster that socialization by creating a sense of community at work. Robert Kaskel, VP of people at ezCater, said in a press release that companies should pay attention to the need for socializationespecially when it comes to Gen Z. “Employees with friends at work are considerably more engaged, so its in companies best interest to create an environment that fosters socialization.
Category:
E-Commerce
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