Pearson PLC is selling Interactive Data Corporation to Silver Lake and Warburg Pincus.  Pearson is continuing to exit assets that don’t seem core to their business which is increasingly focused on educational products.

As a strategist, I applaud companies that:

• Keep a tight strategic focus
• Exit assets that are not part of a company’s core competency.  Pearson selling Madame Tussauds wax museums, for example.  B2C business not akin to their main businesses
• Decide that competitive dynamics are unattractive.  We know that Thomson Reuters and Bloomberg are doubling down in the financial sector and Dow Jones/News Corp has plans as well

However, there is something about selling their 61% of Interactive Data that nags at me.

• These information services businesses are solid businesses where you embed yourself deeply in customer workflows.  And goodness knows, there’s lots of workflow serving the financial services business
• You reuse information and capabilities in new and different ways, resulting in high profitability
• Doubling down in education is the way to go with state budgets likely to be crimped for years to come?

So, is it my personal bias showing that this nags at me?  Is this exactly what senior leadership needs to be very alert to…..how personal bias allows decisions to be made that aren’t strategically sound?  Or can intuition play a role?

I’m delighted with my wine cellar and enjoy a nice bottle of wine.  But how about the occasional glass of wine?  You can’t hold that bottle of wine out beyond a few days, no matter what they say!

Enter the Red Truck cask which keeps wine fresh for up to 5 – 6 weeks.  So, you can have a glass of wine and then come back in a few days for another one.

I think more new product developers should spend time looking at changing their form factor for product delivery vs. the product itself.  Isn’t that the miracle of bottled water?

Triple or quadruple play is becoming the standard for cable and telecom players serving the residential market.

Now the new opportunity center seems to be around small and medium business for the cable players with the telecom folks looking to secure that fortress.

But will this be largely a price game….shaking margin out of these customer segments?

Angles we see worth pursuing

1. More aggressive industry specialization including tools and applications suited to these industries
2. Outsourcing or forms of business process support that free the SMB players from dealing with every issue soup-to-nuts

But you may be thinking, added SG&A for these offerings? Will it pay? Will the offerings be world class?

We think one viable direction is to pursue software as service to fill application needs for SMB customers either given their industry profile or in support of business process needs they have in sales and marketing management, HR functions and the like.

Issues to Investigate

• Which avenues make sense to pursue in sofware as service for SMB? How do you find the balance between meeting unique needs and not having too wide a portfolio of offerings?
• Is a communications player a credible provider of software as service? For what segments? Or needs?
• What value-added does the communications player offer?
• What’s the business model for everyone to make money?
• Is software as service going to continue to grow or have the logical applications been found and delivery issues solved?

We at Bright Beacon Partners help our clients explore growth opportunities from the conceptual, early consideration phase through business case and on into implementation.

Recently, while talking about product design issues, I was reminded once again of the range of segments in senior marketplace:

Aspiring, Might Need A Boost Segment

Example:  A 60-something gal who heard at a cocktail party that I knew something about texting.
Within minutes, I am sending her a text message and showing her how to retrieve it.  We find out
that she has tons of messages stacked up which she reviews.  She sends a nephew a message.  He
is thrilled.

Lessons learned: No one in her circles was texting and none of her younger relatives had tumbled to the realization that she just needed a little boost to get going.  What are service providers doing to give
the little boost?  This isn’t just a wireless issue but pertains to many new technologies

Specialized marketing tactics:  Training store and care center employees about the little boost, CRM work to identify those who might need a little boost, special events that draw seniors for real-time demos, or ????

Simplest is Best Segment

Example: At the same event, another guest spoke quite vehemently about not wanting any extra functionality beyond calling, a refrain we have heard in many settings and by a variety of consumer segments

Lessons learned: Instead of shaking our heads in bewilderment about a segment so different from most of us, it’s time to acknowledge that this segment is out there.  Specialty wireless players like Jitterbug are pursuing this segment.  Can major wireless players strip phones of applications to reduce implied complexity?

Specialized marketing tactics: Collateral materials at point-of-sale that stress only calling features.  Locks that can block the functionality of other keys so the customer can’t wander there.  Or??

****

For us, this speaks to refining customer segmentation further around needs and attitudes and away from simple views by demographics.

We’re  in the process of advising an agri-business start-up about customer segments, product configuration, branding, and other elements of their marketing plan.  Most people know us from our focus in the service sector, primarily in multimedia, broadband, telecommunications, information services and advertising.  So, what’s up with agri-business?

Strategically, we very much adhere to “stick to your knitting”:

• Need to understand market space and expertise
• Avoid adventures too far afield
• Careful about what you really don’t know

Implications for us:

• Don’t assume, ask questions, listen

Much caution around technology issues.  For example, when we did the branding work:

• Make sure we understand what words mean in the target market
• Especially when looking for something that might have double meanings

But there were some “evergreen” truths around our expertise in marketing, new products and strategy:

(Work in progress!  Please come back to see more.)