How does a business-to-business company find out exactly what end users do with its products? That was the question we wrestled with at the Thomson Corporation, because the people who buy from us are not the same people who actually use our products in their daily work. For Thomson, the answer has been to combine multiple methods of deep customer inquiry, from market surveys to observing users directly in their workplace. Those efforts have been part of a front-end customer strategy that has become the cornerstone of the company’s transformation. This strategy has included asking lawyers, accountants, financial analysts, investment managers, scientific researchers, and other professionals who use our products and services what they do on a minute-by-minute basis. Then we’ve systematically sought to deliver solutions that meet their needs during each of those hours. By doing so, we’ve learned how to help end users with their work in ways that might otherwise never have occurred to us.
Transforming Strategy One Customer at a Time
Reprint: R0803D
A decade ago, the Thomson Corporation, like most B2B companies, had a much better understanding of the people who purchased its newspapers, journals, and textbooks
for their organizations than of the people who actually used them in their daily jobs. Facing an internet shakeup of its market, Thomson realized it needed to bridge that
critical knowledge gap. The company began systematically scrutinizing its end users—in much the same way that Procter & Gamble tackles consumer research—as part of a new
front-end customer strategy that would become the cornerstone of the firm’s transformation.
In this article, Harrington, Thomson’s CEO, and Tjan, a consultant who advised him, describe how the company adopted a user-centric mind-set—initially in the
Thomson Financial division and then throughout the organization. First came a redefinition of the division’s market, which was mapped not by type of purchaser but by eight
end-user segments. That gave Thomson a clear view of the division’s real, addressable market and of corresponding opportunities. After conducting surveys and “day in the
life” observations of users, Thomson charted their entire work flow, beginning with what they were doing three minutes before and after using a product, and saw where the
organization could add value. Then, through cluster and conjoint analysis, the company determined how pain points and product preferences varied among the users. With that
information, Thomson was able to identify three clusters of customers in one segment and develop three categories of offerings.
Since beginning to implement this approach, Thomson has changed radically. Its revenue now comes mostly from digital, not print, products, and it generates twice
the operating profit and four times the free cash flow it did 10 years ago. In a market that changes by the day, Thomson’s revenue is unusually predictable and profitable.