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// 3 SEPTEMBER 2022 DMN.CA ❰ Vol. 35 | No. 9 | September 2022
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Leading Canadian marketing communications agency PRAXIS is delighted to announce that the agency will be participating in a global pilot to test the viability of a four-day work week for its employees. The six-month pilot program is coordinated by non-profit 4 Day Week Global, in partnership with researchers at Cambridge University, Boston College, Oxford University and regional researchers.
2021 and had been working in stealth with early customers such as Lily.ai, MoEngage, andPeteObserve.ai.Lee,SVP of Sales at Lily.ai had this to say about Nektar, “It’s hard to know where to spend your time when you’re not sure if what you’re looking at is accurate. Nektar keeps the data up-to-date and surfaces insights into actual selling time, and inbound vs. outbound activity.”Nektar is a fully remote company with 32
“To our knowledge, PRAXIS is one of the first agencies of its kind in Canada to run a 4 Day Week Global pilot,” says Matt Juniper, Associate Partner and General Manager at PRAXIS PR. “Work-life balance has always been a big part of our PRAXIS culture and we’ve chosen to participate in the pilot as an investment in the well-being and happiness of our employees. We’re excited about how this investment in our team will also translate into additional benefits for our clients.”
talkingpoints
The pilot will follow the 100-80-100TM model, which advocates for 100 percent of the pay, working 80 percent of the time, with a commitment to maintaining 100 percent productivity.“Ourteam will be working closely with our clients and partners to ensure that our four-day week model offers the highest level of accessibility and service,” says Juniper. “We also consider a four-day work week a business improvement strategy focused on working smarter rather than longer, recruiting the top talent in the industry and maintaining the highest standard of client service. It will allow us to shift our business away from measuring based on hours worked toward measuring based on results.”
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Nektar exits stealth mode to help companies navigate the downturn by fixing CRM data leak.
There is a growing body of research that demonstrates that a four-day work week results in happier employees with improved physical and mental health, and higher levels of job satisfaction. This provides
The decision to participate comes amid a growing movement to examine the future of work and how to build a more productive, healthy, and sustainable work environment. PRAXIS is one of 60 North American companies across a diverse range of industries participating in the large-scale pilot.
Toronto-based communicationsmarketingagencyjoins global movement to reimagine the future of work-life balance.
at tools to tackle growth while efficiency and productivity were put on the back burner. With the ongoing tech meltdown, these companies are now responding to the market condition with layoffs, cost cuts, and budget freezes. The tech industry’s prevalent mindset to follow a ‘growth at all costs’ approach is now shifting towards ‘productivity at all costs’. Sales teams depend on their CRM data to gain insights into team productivity, pipeline insights, and revenue forecasting. Despite a CRM being an important system of record for modern go-to-market teams, it still grapples with the problem of poor user adoption and missing data. As per estimates, 40-50 percent of sales activity data remains missing from a CRM, while 27 percent of the data that’s available in a CRM decays every month. This leads to major data and productivity leakage. Revenue operations solution provider, Nektar.ai is addressing the ‘CRM data leakage’ problem and has launched the general availability of its AI-enabled activity capture and intelligence solution. Nektar’s no-code platform automatically captures revenue activity data from email, calendar, chat, and social across all touchpoints in the customer lifecycle. This results in enhanced rep productivity, unprecedented pipeline visibility, and revenue predictability - all with zero rep adoption. Backed by B Capital Group, 3One4 Capital, and Nexus Venture Partners, Nektar raised a $6 M seed round in August
the opportunity for a more energized and productive team, with heightened creativity and sharpened problem-solving skills, ready to and bring their best selves to their client work.
The pilot will begin in October, and will run through March, at which time PRAXIS will assess the results and determine if the program will become permanent. PRAXIS is an award-winning Canadian marketing communications agency with a talent for turning heads, curating exceptional experiences, and making authentic connections between brands and the people who matter to them.
The nature of how marketing organizations structure, promote and market themselves is changing. Around the world, new organizations are shaking foundations with different ways to doing things. Take Nektar for example. Unprecedented amount of free flow capital resulted in startups throwing money
MAREKULIASZISTOCK/
// 5 DMN.CA ❰SEPTEMBER 2022
They are out there, the Vitamix machines older than their owners, passed down through generations; the decades-old blenders that are still in use every day. Starting today, Vitamix is officially on the hunt for these legendary machines with the launch of the “Real Vitamix Legends” contest, a search for the oldest working Vitamix in North America.
This September, Home Hardware Stores Limited is celebrating three decades of partnership with Tree Canada by continuing a tradition started in 1992. For the 30th year, participating Home Hardware Dealer-Owners will host Home Hardware Community Tree Plants in partnership with the national charity, beautifying their communities and giving back.
By eliminating the uncertainty on marketing spend, Consumer Genius has allowed some of North America’s largest companies to increase their likelihood of controlled growth and decrease the dire risk of overspending on marketing that may not yield any results for them. Consumer Genius usually charges on a CPL (cost per lead) basis, however in some cases Consumer Genius would charge a CPA, CPS or CPF which stand for cost per acquisition, cost per sale or cost per funded respectively.
Vintage household products are symbols of marketing campaigns gone by and using them to market new products is a bit of genius. If you have one of the longest-running Vitamix machines you could be one of six winners who receive the brand’s nextgeneration products.
Consumer Genius Inc. Alberta’s fastest growing company has grown quicker than any other company in the province, making it the 15th fastest growing company in Canada for 2021 according to the Globe and Mail and Report on Business TV. There are many companies that still may not know what Consumer Genius does, as its rise to fame has been quick in the short term but has taken a lot longer in the background, mastering one skill, how to source a customer online and help them apply for a specific product or service, and then send that customer to the company who can provide that customer with what they need.
Home Hardware celebrates 30 years of community beautification with Tree Canada.
Let’s take an auto loan for example. Sounds like a simple product, right? Quite the opposite. Thousands of people spend hours upon hours in car dealerships, browsing websites, looking at cars they would love to buy, however a large majority of those browsers may never be able to qualify for the vehicle they want. This is where Consumer Genius comes in. Through its platform for auto loans in Canada, CarsFast and LendingArch, consumers can apply for the car loan first, before they waste any time browsing for a vehicle. They then obtain a pre-approval within minutes and are connected to a representative in their area that will complete the deal for them and send them options for vehicles they can choose from, without ever having to step out of the comfort of their own home or office. This also allows the consumer to maintain their credit score health, as it prevents them from having to apply at different auto lenders, with their
“We design Vitamix machines to stand the test of time, and we hear constant proof of that longevity from our social community, who share stories of machines running for decades,” said Laura Ostenkamp, Director of Global Brand and Content Marketing at Vitamix. “We wanted to take these stories beyond our DMs by launching the Real Vitamix Legends contest, celebrating and rewarding the generations of meals and nourished families Vitamix has served in our 101-yearRunninghistory.”Sept.6 through Oct. 18 at 11:59 p.m. EDT, participants age 18 and older can enter by posting a photo or video on TikTok, Instagram, Facebook or Twitter using the hashtag #REALVITAMIXLEGENDS and tagging and following @Vitamix. The post should show their Vitamix in use and share its age and a little about its history. Participants can also submit online here.
Start digging in your closets or get out to those local weekend antiques fairs.
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Consumer Genius Inc is one of Canada’s top “hidden consumer acquisition” forces.
Can a blender be legendary?
Vitamix will choose the top six finalists based on the age of the machine, and the brand’s social community will determine the winners through head-to-head matchups on Instagram Stories the week of Oct. 24. Winners will receive next-generation Vitamix products, and the grand prize will include a trip for the winner and a guest to Vitamix headquarters, valued at nearly $2,500.
The Real Vitamix Legends contest thinks so, and we agree.
“To put it simply, our value add eliminates so much uncertainty for companies when it comes to customer acquisition,” says Ryan Matthews, the companies head of business development. “Take a large Life Insurance company for example, they would spend thousands if not hundreds of thousands in online marketing spend, placing their own ads on social media and large web platforms to attract applicants, without ever knowing how many actual customers they will capture. With us, we would charge a CPL or a (cost per lead), in other words, a fixed cost per customer. We eliminate all the uncertainty when it comes to their advertising spend, allowing them to have a set budget on customer acquisition and in turn, efficiently manage and grow their own firm without the marketing risk,” says Ryan.
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credit score taking a hit each time they apply. Consumer Genius has applied the same methodology now into various financial and non-financial industries, connecting consumers with companies, and becoming the hidden acquisition engine behind some of North America’s largest lenders, mortgage brokers, insurance firms, debt counsellors and auto dealerships. Even companies in the non-financial sector are benefiting from Consumer Genius’ and its ability to send customers their way, including roofing, windows, audiology, solar product installers and home security companies.
The Vitamix family of companies, privately held and family-owned since 1921, is currently celebrating its 101st anniversary. Millions of people around the world employ Vitamix machines to prepare nutritious whole foods in their home kitchens and deliver exceptional and consistent results in their commercial kitchens. The company’s commercial customer list reads like a Who’s Who of major restaurant chains, and gourmet chefs say their Vitamix machines are as important to them as their knives.
“We have become experts at delivering ready customers acquired through diversified digital channels to various companies within Canada, the United States, Australia and the United Kingdom,” says Ryan.
people (and growing) distributed across 7 countries and has 1500+ users. The company plans to spend the rest of the year on its go-to-market strategy and hiring. Nektar is a no-code revenue operations platform that plugs CRM data leakage across the revenue funnel to increase sales productivity, pipeline visibility, and revenue predictability.
the country are participating in this year’s Home Grown: 30 years of planting at Home campaign, each with their own close-tohome“Thereason.impact our partnership with Home Hardware has had across so many Canadian communities is immeasurable. Not only has it been a catalyst to getting so many kids and community members involved in beautifying their communities, it also inspired people and organizations within our network to get involved,” said Nicole Hurtubise, CEO, Tree Canada. “Since 1992, Tree Canada and Home Hardware have worked together to plant and maintain trees in local communities across the country, creating a lasting legacy for present and future generations. We’re thrilled to be
// 6 ❱ DMN.CA SEPTEMBER 2022
Home Hardware Community Tree Plants are traditionally held in September around National Tree Day - the Wednesday of National Forest Week. This year, National Tree Day fell on September 21.
Todd Young, Dealer-Owner, Beach Builders Supplies Home Hardware Building Centre, Wasaga Beach, Ontario: “One of my favourite parts of being involved in Home Hardware’s partnership with Tree Canada for over 10 years is getting to pass my passion for planting trees down to the younger generations, including my son. It
Since 1992, when Tree Canada was founded, Home Hardware Dealers have planted thousands of trees at schools, community parks, conservation areas, and in spaces that require restoration following wildfires, tornados, and other weather-related events.
As Dealer-Owners prepared for their 2022 tree plant, they are reflecting on the positive impact their tree plants have had on the communities they serve:
“Working with Tree Canada has been the perfect opportunity for us to take further action on a cause that is already near and dear to our hearts– restoring trees damaged by Dutch Elm disease. In 2015, we formed
talkingpoints
To celebrate 30 years of partnership, 30 Home Hardware Dealer-Owners across
Home Hardware Stores Limited is Canada’s largest Dealer-owned hardware, lumber, building materials, and furniture home improvement retailer with close to 1,100 stores under the Home Hardware, Home Building Centre, Home Hardware Building Centre and Home Furniture banners. Founded in 1964 in rural St. Jacobs, Ontario, Home Hardware remains 100 percent Canadian owned and operated.
has continued to be a passion of mine to work with youth to share this stewardship perspective and leave an indelible mark on our community for generations. In 2015, we planted 50 fruit-bearing trees at a local park – one of our biggest plants to date. We were inspired by the efforts of our local community garden that donates a lot of produce to the food bank and thought fresh fruit would be a great way to add to this donation.”
Jeff Redden, Dealer-Owner, Windsor Home Hardware, Windsor, Nova Scotia:
a tree canopy restoration committee, with the goal of planting 1,000 trees in Windsor. Throughout the past five years, we have successfully planted over 650 trees and have created 10 new “mini parks” in town. Our partnership with Tree Canada has been essential in regreening our parks and public spaces and restoring Windsor’s tree canopy to what it once was.”
celebrating the longevity of what has been an incredible, 30-year relationship.”
“Home Hardware has a long-standing reputation for supporting and championing local communities, and our relationship with Tree Canada has allowed our Dealer-Owners to give back in meaningful ways,” said Kevin Macnab, President and CEO, Home Hardware Stores Limited. “As we mark another year of Home Hardware Community Tree Plants across Canada, I want to thank Tree Canada and our independent Dealer-Owners for working together to plant more than 30,000 trees over the past 30 years.”
the customer journey, deeply understand the importance of a positive CX throughout the journey, including the invoice-tocash cycle.
CUSTOMER EXPERIENCE B4LLSISTOCK/
BY NANCY SANSOM
uncertainty, companies recognize now more than ever that the customer is the lifeblood of the business. Innovation and efficiencies on business processes matter very little when the customer experience (CX) is left out of the equation. CMOs like me know this all too well. In fact, we — a long with the entire executive suite — recognize that CX is a key metric the C-suite should be judged against.
n an environment of andeconomicgeopolitical
// 7 DMN.CA ❰SEPTEMBER 2022
CMOs See the Next Frontier for CX: Collaborative Accounts Receivable
be customer-facing. CTOs, CIOs and CFOs come to mind. CMOs, however, spend a great deal of energy making sense of the customers’ journey, so we can set them up for the greatest success. Arguably, that makes the CMOs insight on the customer experience, regardless of where in the journey the focus is, a uniquely important one to the business overall.
The customer journey doesn’t end after a sale is made CMOs, while primarily focused on the beginning stages of
In Versapay’s joint research with Wakefield, when CMOs were asked, “Which of the following can negatively impact the customer experience?” Nearly 3-in-4 (73 percent) answered invoice to cash, above customer support (67 percent) and the sales process (65 percent). Only customer implementation (77 percent) was seen as slightly more impactful in
In a recent study by Wakefield Research and Versapay, 1,000 C-suite executives at businesses with $100M+ in revenue were polled on the state of digitization in their accounts receivable (AR) departments, and the resulting insights may surprise you. Nearly 9 in 10 survey respondents (89 percent) agreed that “the C-suite is only as good as its customer experience.”CXisahigh bar for the C-Suite to be measured by, especially when you consider that not all C-level executives consider themselves to
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The Riverwood Conservancy I 1902, donated funds equiphospital people inFive with donorscontinue patients’ vitalare not governmentThrough support equipment,and donorsprovide inspireimpact legacyheart and ensurescare for seasonal regional patients.Ross Memorial Foundationgenerations people thatsupports honouredcommunity. yourhere questions. the rolein advancing forKawartha Lakes. touch CFRE, Foundation705-328-6113 ecoons@rmh.org www.rmh.org/foundation 2021GTAGIVINGGUIDE Riverwood Mississauga, www.theriverwoodconservancy.org/donate/ timechild’s communities.development.canoffers members theriverwoodconservancy.org/natureforkids BN889418034RR0001 T Conservancy andmember-based charity programsfocused education,gardening, horticulture. theCouncil, Conservancylike-minded abilitiesindividuals connectlearn about protecting experiencingthe Riverwood.community harmonyMission: Riverwood Conservancy charityprograms and Riverwood,nature on the Riverin Our peopleages, and respectfullyand learn importance conservingspaces futurealso experiencing beauty gardens.donors theand and educationour work strengthen betweenPlease to learnhistory, programs offered TORONTO BUSINESS DISTRIBUTION November 2022 GTAGivingGuide 2022
// 9 DMN.CA ❰SEPTEMBER 2022
CMOs understand this dynamic best, it seems: they nearly unanimously agree (99 percent) that transparency and collaboration would decrease invoice disputes. Compare that with their peers in the rest of the C-Suite: 84 percent of CEOs agree, 97 percent of CFOs, CXOs, CCOs, and COOs, 91 percent of CTOs and 95 percent of CIOs agree.
Businesses are embracing AR digitization — but are they forgetting about CX?
CUSTOMER EXPERIENCE
“Questionssees:about your invoice?
When it comes to digitization of the AR department, CMOs (96 percent) are in lockstep with the CEO (94 percent), CFO (95 percent), and the C-suite generally (96 percent) that there is still work to do in digitizing accounts receivable.
According to Versapay’s study, 85 percent of executives say miscommunication between their AR department and their customers resulted in a customer not paying in full. Thirty-five percent attest that it has happened multiple times.
Moreover, 82 percent of executives say their company lost business due to miscommunication in the payment phase. In fact, 42 percent say that miscommunication in the payment phase resulted in lost work multiple times. So, it’s not a one-off: there’s a direct line between CX in AR and revenue
NANCY SANSOM is Chief Marketing Officer at Versapay. She joined Versapay in 2022. She has twenty years of prior executive experience at PlanSource, PeopleMatter and Benefitfocus (BNFT).
Email us at yourcompany.comwe_will_never_reply@ .”
hand, consider the implications of not offering digital options for AR collaboration:
So, what evidence is there that CX and AR are so closely aligned?
If you add efficiencies in AR without the customer in mind, you unwittingly make the customer experience even worse, which could undercut your gains in efficiency.
Today,retention.thecustomer journey is increasingly (and in many cases, exclusively) digital, which means that digitization is a crucial component of improving CX. When it comes to accounts receivable digitization, many organizations are starting with tools that focus on improving their internal processes. While this is a reasonable starting place, most companies are not implementing digital tools that create better customer experiences across the
implementing digital tools is only on solving internal inefficiencies, you may be missing the greatest value of digitization.
Do you really think they’ll be incentivized to work with you to resolve the issue?
❯ Nearly two-thirds (64 percent) of CEOs concur that better communication with customers is a benefit of digitizing AR.
I think this says something interesting about CMOs: we get it. We get that transparency and collaboration matter to our customers, at every phase of the journey.
CX implications of accounts receivable directly impact revenue
Honestly,shows.ifIhad been given this poll, I too would have answered, yes, the C-suite is only as good as its customer experience. That’s because I understand what’s at stake: when you forget the customer in your digitization strategy, you leave money on the table.
having a negative effect on CX.
Through 2023, our research shows those companies that have not yet fully digitized their AR departments do plan to continue their digitization efforts, but fewer than a third (30 percent) said they plan to place a greater focus on introducing self-service customer portals for payments, collaboration, and dispute management.Intoday’sdigital economy, businesses that fail to digitize are at a distinct disadvantage: cash is king, as they say, but only if you have customers willing to work with you. Make it hard for them to pay, and your bottom line suffers through delayed payments, or worse, nonpayment.
“Today the customer journey is increasingly digital, which means that digitization is a crucial component of CX.”
enterprise, trickling down to their ARWhiledepartments.nearlyall executives agree (96 percent) that their AR department has work to do to be more customer-focused, most (65 percent) have not prioritized implementing tools that focus on the customer experience within the billing and payment process (such as a collaborative online portal) in their digital transformation efforts.
As advocates for the customer, CMOs have a role to play in AR digitization
❯ On top of that, 78 percent of executives say that they see payment conflicts that could have been avoided with better communication.
❯ Broadly across the C-suite, 95 percent agree that better transparency and collaboration between AR and customers would reduce the invoice disputes their company faces.
In that case, digitization may actually make your CX issues worse. Think about it: you’ve automated invoice presentment, but if there’s a dispute, you offer only an email address for resolution. Here’s what your customer
Your customers are looking to collaborate with you in real time to resolve invoicing issues — and with the right digital tools, you can provide that to them. On the other
Interestingly, of the C-suite, CMOs were the ones who most recognized the potential for invoice-to-cash to have a major impact on negative CX, second only to the CEO (80 percent). This implies that marketing (73 percent) is in closer alignment with the CEO on the importance of CX in accounts receivable than the CIO (65 percent) and CFO (69 percent).
Because CMOs are early adopters and have our fingers on the pulse of CX, it’s up to us to lead the charge on prioritizing CX in all digitization efforts, including back-office intoincreaseDigitizationprocesses.cansignificantlyyourorganization’sabilitycollaborateandcommunicaterealtime,yetifyourfocuson
When AR departments ignore the customer in their digital transformation strategy, there is a huge risk to the bottom line, as our research
As a CMO, I know that any attempt at added efficiency that is not first aware of the customer (or potential customer) — i.e. the human — experience will fall flat. You’re dealing with humans. Efficiency only works when you humanize the experience.
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A lifestyle is how we choose to live. It is the totality of our habits, interests, attitudes. It is how we think — what we believe — how we spend our time — what we cherish most. And those lifestyle characteristics are remarkably correlated with where we live, for the simple reason that we like to live where we feel most at home. Where we live, in short, says something about who we are. Our next door neighbours may look different, may be slightly older or younger, but chances are they probably share many of the same values and beliefs. They probably watch the same shows — buy the same products — vote for the same political party.
s a nation, we often describe ourselves in terms of what makes us different. English versus French. East versus West. Affluent versus poor. Urban versus rural. Elites versus working class. Progressives versus conservatives. But those differences are never quite as stark or binary as they appear. We are more of a cultural mosaic — a community of communities — defined as much by our lifestyles and values as our demographics.
The concept of geodemographic segmentation was initially developed by a social scientist named Jerome Robbins in the early 1970s. He took the first computer tapes of the U.S. Census in 1970, classified the demographic variables into five domains (social class and affluence, family life cycle, mobility, ethnicity, housing style and degree of urbanization), and found the key factors that accounted for most of the variance between neighbourhoods at the ZIP code level. He then grouped the zip codes into distinct, homogeneous clusters. It was a eureka moment. By knowing the ZIP code someone lived in, you could reliably predict their lifestyle (and by extension, their media and product preferences).
That simple calculus is known as geodemographic segmentation. It is based on the premise that “birds of a feather flock together”. Marketers have been using lifestyle systems for more than half a century to benchmark their customers against the population, find look-alike prospects in the market, select media channels, craft tailored brand messages, pick the best retail site location and much more.
In Canada the counterpart to Claritas was a company called Compusearch, also founded in the 1970s, whose geosegmentation model became very popular with marketers. In 1993 the company lured Jan Kestle away from her senior role as head of the Ontario government’s Statistical Centre and soon after appointed her President. After Compusearch was sold, Jan left the industry, only to return in 2003 to form her own geodemographic company, Environics Analytics, in partnership with the Environics group of companies. Today the company is owned by Bell Canada and is the leading supplier of geodemographic products and tools in Canada. Jan has
That revelation led Robbins to start up the company Claritas in 1974 for purposes of commercializing his cluster segmentation model which identified 40 distinct lifestyle segments. Later the company launched its PRIZM system (Potential Rating by Zip Markets) which became an instant hit with marketers who had begun to recognize that America had become a highly fragmented society. As niche marketing grew in importance, the demand for geodemographic tools soared.
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CONTINUED ON page 14
A
BY STEPHEN SHAW
JanSegmentation:LifestyleKestle Founder and CEO, Environics Analytics Interview with
“You can solve business problems and statistics.”problemssociety’swith
Left to right: David O’Neill, SVP, Analytics Consulting; Pris Rajendram, Manager, Support; Rupen Seoni, Chief Revenue Officer and Jan Kestle, Founder and CEO, Environics Analytics.
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Focal Point. I had to understand what kind of data 27 Ontario government ministries needed for a wide variety of programs. And then I had to go to Ottawa and sit at the table in the federalprovincial negotiation for the National Statistical System that was being developed at the time. When Compusearch asked me to join, their business up until then had been primarily focused on helping retailers understand who lived in their trade areas. But they had expanded into automotive, and quite smartly they wanted to go after consumer package goods, financial services, and government. So, they asked
Kestle: There were a number of companies that pioneered geodemography at the time. In the UK, there was CACI and CCN Marketing, which eventually became Experian. The person behind that was Richard Webber1 Around the same time Jonathan Robbins started Claritas in the U.S. and Bill started Compusearch in Canada. But the initial concept of geodemography came out of the University of Chicago2, suggesting that if we know where you live, we can make a reasonable assumption about who you’re likely to be.
TANNYANGARY
become the doyen of marketing analytics in Canada, presiding over a dynamic team of 200 data scientists, software developers and marketing specialists.
Kestle: I was a mathematician by training. When I graduated, the first job I got was with the Ontario Statistical Center where I had to spend a lot of time understanding the concepts of the census, which was a great foundation for what came later. My last job there was leading a team called The
Bill initially went to Statistics Canada and pioneered an arrangement whereby they agreed to make their data commercially available to the business community. He started off by writing code — he was a programmer as well — where he could put a dot on a map and draw a circle around it, adding up the enumeration areas3. So, looking at the demographics, you could see who lived in a trade area. And then he brought in Tony Lea4 and others to develop the cluster algorithms that led to the Lifestyles segmentation.
Shaw: What initially drew you to the field of segmentation?geodemographic
me to help them sell their data back to the government sector.
Shaw: How big was Compusearch at the time?
Shaw: Did Bill Goldstein get his cue from Jonathan Robbins at Claritas? Or did he independently come up with the idea of leveraging census data for marketing purposes?
Kestle: About 50 people when I joined. It had been founded by Bill Goldstein, and Mike Williams had just taken over as VP and was going to become President. Mike had a similar background to me: he’d worked in government statistics. He was responsible for taking what Compusearch had built and promoting it to other industries. So, he recruited me, and I joined in sales, even though I’d never really been involved in sales. But I never thought of selling data as really sales — I always loved the fact that you can solve business problems and society’s problems with statistics. But that’s when I first got exposed to geodemography.
INTERVIEW
CONTINUED FROM page 11
INTERVIEW
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Kestle: When you build a segmentation system based on cluster analysis5, a lot of art goes into it — knowing which variables to select, how to ensure you’re not using co-directional variables like income and age. Tony pioneered the idea of using a relatively small number of weighted variables. But his work was a collaborative exchange with the small handful of geodemographic companies that existed at the time in Canada, the U.S., and the UK.
We were going to base the business around a segmentation system, but what was really exciting about doing it with Environics Research was that they had the psychographics — the social values data. It was an opportunity to combine a segmentation system, which is primarily demographic, with attitudinal data. So Michael invested in us and I recruited a founding team. Then we just rolled up our sleeves to build a segmentation system that was going to take us to the next level.
product to say this segment exists in both countries. It took us a year to build the first PRIZM system. You not only have to do all that math, but you have to create the cluster profiles and names.
Kestle: When you create a segmentation system, a cluster system, there’s hundreds of potentially good solutions to consider. But we had the technology to run a solution overnight against a thousand different variables and see empirically whether the system was giving you greater lift. Because when you build a system like that, you’re looking for the magnitude of small differences. You’re looking for high highs and low lows. You don’t say in advance you want this number of segments and they need to be this big — you actually allow the data to speak.
Kestle: I really felt like there was an opportunity and there was a core group of former clients and employees who agreed with me. We decided to put together a business case. I was looking for $1 million. That doesn’t seem like a
Kestle: It’s the age-old question. Most marketers like to use a tool like PRIZM for acquisition. But it only starts there. You can also use it to understand your share of market, to understand sponsorship opportunities. It connects to location, so you can think about it for merchandising, and because it connects to values, you can use it for creative and message targeting. Even if a brand builds custom segments around lifetime value, you can still link them to the outside world through PRIZM.
lot of money, but I have tell you, trying to raise $1 million in 2002 to restart a business like that, well, it wasn’t easy. So, it was really great when Michael Adams, who owned Environics Research, stepped up. That was after more than a year of having banks and information businesses take us all the way to the altar, but never quite get there.
Shaw: Are values becoming a key driver today of people’s decisions — that is, another way to segment them?
We’d also expanded into the U.S. but by that time Compusearch was owned by Polk. And they were a great partner because the relationship between demographics and what kind of cars people buy is really exciting if you’re a statistician and a modeler. But Polk decided to divest its consumer marketing assets to focus on its automotive work. And that left Compusearch a little bit of an orphan. So one of the last things that happened before I left is I arranged the sale of Compusearch to MapInfo. And the reason why that was an appropriate home for Compusearch at the time was their kind of desktop mapping really needed data.
Shaw: Critics argue that geodemographic segmentation is old school. How do you respond to them?
Kestle: We were able to take survey data and project it to the ground, creating a whole new perspective. For example, if you have the survey results from 10,000 people and you’re making an estimate of what that’s likely to be for 750,000 postal codes, you need some pretty cool statistical methodologies. And so I’m very proud of the fact that through the ‘90s, Compusearch extended way beyond just the segmentation system.
Shaw: In 2003, you decided to start Environics Analytics. What led you to that decision?
“There is values.”ofcontinuationbutpolarization...morealsoatraditional
Kestle: Well, I think that values have always been important. To what extent are values changing? The latest work shows that yes, there is more polarization, but there’s also a continuation of more traditional values in Canada. So, the jury’s out a little bit. I think the next year or so will be interesting.
Shaw: How did you go about it?
Shaw: Did Tony develop on his own unique statistical approach to creating the lifestyle segments?
Shaw: What made Compusearch so successful in the 1990s?
We decided to license the brand name PRIZM from Claritas. It was the first system used in North America and it was well recognized. We would work on which segments are similar in Canada and the United States because people always want a North American or a global system. At Compusearch we always used to say, “Let’s build a North American system!”. But you’re getting rid of your differentiation by doing that. So we built our Canadian system independently, and then we actually looked at the behaviors of all the segments in Canada and the U.S. and we twinned them. And so, we were able in the launch of the first
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Shaw: Is the public concern about data privacy an obstacle to growth?
“We only use data that required.”anonymizedweandpermissioned...isdatathatgetareif
Kestle: The climate around privacy is causing some headwinds. I don’t think there’s any reason why we can’t be data-driven in Canada and honor the trust that consumers have when they give their data to government, to information companies, to brands. But the data and analytics community has to recognize that people are demanding, “Tell me what you’re going to do to keep my data safe, to make sure I can’t be identified.” We need to follow the principles of consent and transparency. There’s way too much of a false narrative out there that says businesses using data are all bad actors. The banks and the insurance companies, the telecoms and the retailers, and most large businesses in Canada have spent millions and millions of dollars in the past 20 years complying with PIPEDA, complying with CASL, and making sure that the work they do is consistent with the laws of the land. Companies like us, we only use data that’s consented and permissioned, and we are already retooling our systems so that we can be sure that we don’t use any PII7 and that the data that we get are anonymized if required.
INTERVIEW
Shaw: What new moves are the government considering to strengthen privacy?
Shaw: How can marketers use Shaw: Geodemography came a strategic data and analytics consulting team to help our clients: three people — someone, very experienced, from our team; a very experienced person from data and analytics at a big agency; and a very experienced person from consumer-packaged goods. Their job will be to understand the main business challenges and objectives; bring the stakeholders together; help identify the roadmaps and the blockages. And then we will do the things that can help accelerate that agenda. Because in many companies there’s just aren’t enough resources to do it all.
Kestle: I’m excited that we’re going to finally have legislation8 that will bring us GDPR equivalency. But we need the government to make all the regulations and issues around de-identification and
3. An enumeration area is the distance canvassed by one census representative. An EA is composed of one or more adjacent blocks.
5. Cluster Analysis is a statistical technique for classifying subjects into groups, or clusters, on the basis of how closely they resemble each other.
8. The Consumer Privacy Protection Act will replace the federal Personal Information Protection and Electronic Documents Act (PIPEDA), which has regulated the collection, use and disclosure of personal information since 2001.
2. The study of geodemographics is often associated with the Chicago School of Sociology which supported the notion of classifying neighbourhoods based on shared characteristics.
4. Tony Lea is a Senior Vice President and the Chief Methodologist at Environics Analytics.
Kestle: I could name four significant retailers. Certainly a bank or two, and telecom. But we also see credit unions who are trying to compete with the big banks. We’ve done great work in the energy sector. We’ve actually had some federal government departments and municipal departments think about citizens and residents the same way brands think about consumers. So, the shining lights are organizations that really want to be data-driven. We have 1,000 customers — of those, I’d say 50 are on the right path. Maybe there are 20 who are amazing. They believe in data, and they’re really open to solving business problems differently.
6. A demand-side platform (DSP) is an adtech solution that allows an advertiser to buy digital ads; a data management platform (DMP) is used to control cookie IDs and segment audiences in order to target them with specific ads.
Shaw: Who would you put in the pantheon of advanced data users in Canada?
10. A clean room is an encrypted, secure location where first-party data is anonymized and matched with aggregated 3rd party data.
INTERVIEW
Shaw: What’s your vision for Environics Analytics going forward?
Shaw: How are you planning to help digital advertisers adapt to a “cookieless” future?
STEPHEN SHAW is the Chief Strategy Officer of Kenna, a marketing solutions provider specializing in delivering a more unified customer experience. Stephen can be reached via e-mail at sshaw@kenna.ca
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with Bell Media11, but we also work with Corus and Rogers. And TELUS is a customer. And as far as our partnership with Bell goes, they’re not restraining us at all.
Number two, to have platforms that connect to the ecosystems so it’s easy for marketers to do things quickly. And then to invest in new technologies like a clean room, starting with the business problems people are trying to solve. We can give people the tools and they can do it themselves; or we can do complex projects for them, and everything in between.
We’re investing in more data production; we’re investing in better platforms. We have a great system called ENVISION, which is used by over 2,500 analysts and users and it’s great, but we’re rewriting it — moving it to the cloud, so that it’s modular, so that it connects to everything else. And we’re also investing in people who can help organizations implement the data strategy. And I think the
7. Personal Identifiable Information.
next frontier is for us is to help people actually measure and know what works and what doesn’t. So, we are on a bit of a mission.
11. Bell Media acquired Environics Analytics in 2020.
In fact, they’re encouraging us to build a solution that works for the whole marketplace. And so, I’m very excited about that.
anonymization really clear. We have to make sure that statisticians and methodologists are in charge of how we manipulate data. For example, we’re working on increasing our capacity to use mobile movement data — everybody’s antsy about that — taking the signals that are passively collected from phones and using those data in 100% privacycompliant ways to help with things like transportation planning, healthcare delivery, social service delivery — but also help with getting the right products on the shelves, with getting stores in the right location, with understanding the mix between online and offline. We have to help Canadians understand why data makes their lives better. And we haven’t done a good job of that, you know. We have to really explain that most people in our business are using data responsibly. And why data are so important to our future. When the census was canceled9 and then reinstated, it was amazing, I had people talking to me about it. And it made me realize that if we explained the issues properly and really helped people understand, we can counter the negative narrative which is out there. We have to be the advocates for data making life better and being used responsibly.
TANNYANGARY
9. The Harper Conservative government cancelled the mandatory long-form census in 2010 and replaced it with the voluntary National Household Survey. Five years later the Liberal government reinstated the longform census questionnaire.
1. Professor Richard James Webber was the creator of the geodemographic systems Acorn and Mosaic.
Kestle: Well, we see our role as an accelerator and an enabler. Our plan is to continue to build more data faster, that is, weekly and monthly, instead of annually and quarterly, that’s number one.
Kestle: We need a Canadian ecosystem where brands can share data — where the data from an advertiser and a publisher can be shared in a privacy-compliant way to understand what the best activation paths are. So we’re working on that. We’re building a clean room10 where first-party data can be blended in a secure environment for a limited period of time, consistent with the consents that exist, so that organizations can understand their co-marketing opportunities, their sponsorship opportunities. It allows us to develop audiences with partners and then measure the result. So we’re investing with a ton of partners in an ecosystem that will allow data to be blended so that we can assure our advertiser customers that there’s a Canadian solution that works for them in ad tech. We work closely
pathways, we conducted an indepth study of the growth patterns and performance of the world’s 5,000 largest public companies over the past 15 years.
EXECUTIVE LEADERSHIP
6. Grow where you know. Focus on growing where you have an ownership advantage.
The 10 Rules of Growth
To understand how organizations can try to overcome these obstacles, we studied the growth patterns of the sample companies through various lenses. Our findings suggest ten imperatives that should guide organizations
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A typical company grew at a measly 2.8 percent per year during the ten years preceding COVID-19, and only one in eight recorded growth rates of more than 10 percent per year.
Growth is hard for companies to achieve Healthy growth has also been hard to sustain. When we compared our sample’s performance in the first half of the last decade with the second half only one in three companies that were in the top quartile of growth between 2009 and 2014 managed to maintain that rate in the subsequent fiveyear period. Among companies that grew predominantly organically, the rate was even lower, at one in four. This suggests a strong tendency for growth to revert to the mean.
ne of the surest signs of a thriving enterprise is robust and consistent revenue growth. That has not been easy to accomplish over the past 15 years. Corporate growth slowed dramatically after the global financial crisis, with the world’s largest companies growing at half the rate they did before 2008. Furthermore, increases in capital investments outstripped revenue expansion, compressing returns. Now, with a slowing global economy, rising inflation, and geopolitical uncertainty, growth that delivers profits and shareholder value may become more elusive still.
1. Put competitive advantage first. Start with a winning, scalable formula.
5. Look beyond the core. Nurture growth in adjacent business areas.
seeking to outgrow and out-earn their peers.
BY CHRIS BRADLEY, REBECCA DOHERTY, NICHOLAS NORTHCOTE, AND TIDO RÖDER
Ten rules of value-creating growth
O
The research reaffirmed that revenue growth is a critical driver of corporate performance. An extra five percentage points of revenue per year correlates with an additional three to four percentage points of total shareholder returns (TSR) — the equivalent of increasing market capitalization by 33 to 45 percent over a decade.
2. Make the trend your friend. Prioritize profitable, fastgrowing markets.
3. Don’t be a laggard. It’s not enough to go with the flow — you need to outgrow your peers.
7. Be a local hero. Commit to winning on the home front.
9. Acquire growthCombineprogrammatically.healthyorganicwithserialacquisitions.
To buck these trends, business leaders need to follow a holistic growth blueprint consisting of three core elements: a bold aspiration and accompanying mindset, the right enablers embedded in the organization, and clear pathways in the form of a coherent set of growth initiatives. To help our clients identify these
10. It’s OK to shrink to grow.
4. Turbocharge your core. Focus on growth in your core industry — you can’t win without it.
However, relatively few companies could boast such results. A typical company grew at a measly 2.8 percent per year
RAMCREATIVISTOCK/
Empirical research reveals what it takes to generate value-creating growth today
Firms that managed to grow faster and more profitably than their peers during our study period did even better, generating shareholder returns six percentage points above their industry averages.
during the ten years preceding COVID-19, and only one in eight recorded growth rates of more than 10 percent per year.
8. Go global if you can beat local. Expand internationally if you have a transferable advantage.
Make the trend your friend
Ruthlessly prune your portfolio if you need to.
The more rules you master to create growth for your organization, the better.
We have quantified what it takes to master each rule, as well as the extent to which excelling at each improves corporate performance. The resulting “growth code” allows you to benchmark your growth performance and set the bar for your next strategy. The more rules you master, the higher your reward. But the bar is high — fewer than half of the companies in our sample excelled at more than three of the ten rules, and only 8 percent mastered more than five.
A high return on invested capital (ROIC) indicates a business model powered by a competitive advantage. Companies that generate stronger returns attract and deploy more capital, a virtuous cycle that enables them to grow faster and generate still higher returns. While some firms forgo profits for a time in pursuit of
Turbocharge your core When developing a growth strategy, often the first question on a CEO’s mind is, “Where should that growth come from?” To help find the answer, we categorized revenue increases among our sample companies into growth within the core industry (their largest industry segments at the start of the study period), in secondary industries (smaller
EXECUTIVE LEADERSHIP
annual TSR of 17 percent. A sports apparel company, in contrast, was outpaced in growth by its segment peers by one percentage point annually, and its shareholder returns were more lackluster at 1 percent per annum. While many factors could have affected these two companies’ stock price aside from their growth rates, our analysis suggests that outgrowing your industry is worth, on average, an additional five percentage points of shareholder returns per year. Among companies that managed to achieve this while being more profitable than their peers, this figure was one percentage point higher still.
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segments with different rates of growth. The cloud services category is growing faster than voice services, for example, and the growth rates of each category vary widely by country.
Don’t be a laggard Outgrowing your industry implies a strong business model — an advantage rewarded by capital markets whether you’re in a fast- or slow-growing industry.
For example, a department store chain had a business model — brand-name bargains in stores with low inventories and costs — that in 2007 delivered 5 percent higher ROIC than its cost of capital. The management team used this advantage to expand the store network from approximately 900 locations that year to more than 1,500 in 2019. As a result, revenue grew by 9 percent per year and the company generated an impressive 29 percent in annual shareholder returns.
This age-old axiom holds especially true today as the acceleration of pre-COVID-19 trends widens the gap between corporate winners and laggards. Over the past 15 years, companies that expanded in ways that maintained or increased their
exposure to fast-growing, profitable segments generated one to two percentage points of additional TSR annually. This suggests that organizations already in attractive markets should keep investing to stay ahead of the pack. Firms facing market headwinds, on the other hand, may need to aggressively reallocate their resources toward tailwinds, potentially staging largescaleThepivots.selection of markets needs to be precise, however. In their best-selling book, The Granularity of Growth, our colleagues observed that many “growth” sectors have sluggish sub-industries, while relatively “mature” sectors include rapidly growing segments. Take the telecommunications services industry, which grew at 1.6 percent per year over the period of our analysis. The fastest-growing company in the sector increased its revenues by 21 percent annually, while the slowest contracted by 9 percent per year. This dichotomy reflects the influence of acquisitions and divestitures, as well as portfolio choices—that is, varying degrees of exposure to
Markets reward strong business models.
Put competitive advantage first
the3aachievedhomedifferent2007percentbothtwoeventheirexpectationslikelyfromtocompaniesFurthermore,thatmanagewinmarketshareawaycompetitorsaretobeatthegrowthreflectedinshareprice,unlockingstrongerreturns.Considerthistaleofretailcompanies,ofwhichgrewat4ayearbetweenand2017butinsegments.Aimprovementretaileritsgrowthincategorythatgrewatpercentannually,andcompanygenerated
growth (with Amazon being perhaps the best known), the far more typical, and practical, approach is to establish a distinctive business model and then scale it.
but still significant revenue contributors in the first year of our time frame), and in new industries (segments where the companies did not initially have a presence).
For companies with fast-growing core businesses, expanding into new areas can help position their portfolios ahead of future trends. Those with slow-growing cores, on the other hand, can use adjacent
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This decomposition reinforced the importance of a healthy core business. Put simply, it is improbable that you can achieve strong growth if the core isn’t flourishing. Only one in six of the companies in our data set with core-segment growth rates below their industry median managed to achieve overall corporate growth rates above those of their peers. Therefore, finding a way to unlock growth in the core needs to be a top priority. For some organizations, this may require a wholesale revamp of the operating model. Others may need to identify granular pockets with growth potential in their existing markets or new ones and reallocate resources to them from more stagnant segments.
Be a local hero Industry (along with moves up and down the value chain) is only one aspect of the “where to grow” issue. The other is geography. Just as it is hard to achieve overall growth if your core business isn’t thriving, it is unlikely that you can raise your growth trajectory without winning in your local market.2 In fact, fewer than one in five of the companies in our sample that had below-median growth rates in their local region managed to outgrow their peers. Many members of this minority are companies in slowgrowing regions, such as Japan, that offset lethargic local growth with aggressive international expansion. An air-conditioning and refrigeration manufacturer, for example, managed to offset slow growth in Japan by successfully expanding to North America and China.
Our analysis shows that companies growing in a way that increases the similarity of their portfolios earn, on average, an additional one percentage point of TSR per annum. Those that expand into new industries can expect an additional two percentage points if the new industry is similar to their core. Companies that grew into similar adjacencies outperformed theirWhypeers.does similarity matter so much? We believe it is a proximate measure of whether a company is a natural (or best) owner of an asset and thus able to generate optimal value from owning or operating the business. This value could derive from synergies with other businesses the company owns, distinctive technical or managerial capabilities, proprietary insights,
or privileged access to capital or talent. Take the example of General Mills’ purchase of Pillsbury from Diageo. There was little overlap between Diageo’s core business and Pillsbury’s, while Pillsbury’s and General Mills’ businesses share many of the same competencies and assets. This enabled General Mills to reduce costs in roughlytodistribution,manufacturing,purchasing,andandtherebyraiseoperatingprofitby70percent.
utilities consolidated toward their core business areas more than otherOnlysectors.20percent of most organizations’ total growth comes from beyond the core.
businesses to offset slow growth elsewhere.
Companies that grew into adjacent industries generated, on average, an extra 1.5 percentage points per year of shareholder returns above their industry peers.
Our study found that, on average, 80 percent of growth comes from a company’s core industry and the remaining 20 percent from secondary industries or expansion into new ones. However, these figures varied among sectors during our study period. For example, industrial companies generated a full third of their growth from new industries, while
EXECUTIVE LEADERSHIP
One such company was a global automotive tire supplier that diversified into brake and safety system technology, power-trains, and vehicle connectivity and information systems. Together, these segments now account for approximately 75 percent of the company’s total revenue, and its growth exceeded that of its peers by 2.4 percentage points per year.
Grow where you know
Look beyond the core
But examples of this strategy abound. The current transition to net-zero carbon emissions, for instance, presents many promising opportunities for companies in chemicals, construction, and other industries to expand into fast-growing adjacencies such as recycled plastics, sustainable construction materials, or meat substitutes, as demand for their legacy products declines.
As we saw, diversifying into adjacent segments can be a valuable growth strategy, but how similar should these segments be, both to the core and to each other? We used a simple measure: industries are similar if they often appear together in corporate portfolios (for example, cable and satellite together with broadcasting, or aerospace and defense with industrial machinery).
Go global if you can beat local Approximately half of the total growth by companies in our sample came from geographies outside their home regions — an aggregate number fueled by Japanese and European companies that relied on international markets to compensate for slow growth at home. In faster-growing areas, such as China and North America, international regions accounted for closer to 30 percent of total growth. Companies that expanded internationally generated 1.9 percentage points more annual TSR than their industry peers, but those with healthy growth
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It’s OK to ‘shrink to grow’
Organizations with fast growth in the home region can benefit most from international
Many management teams feel pressure to deliver consistent growth, which is understandable: the 10 percent of companies in
For companies that don’t have a consistent growth engine, periodic pruning of slow-growing parts of a portfolio is the best alternative.
EXECUTIVE LEADERSHIP
We wondered whether programmatic acquirers outperform organic growers simply because they grow faster, so we extended the analysis to control for growth rates — in other words, comparing the performance of companies with different M&A strategies but similar growth rates. We found that programmatic acquirers still outperformed their organic peers. This suggests that even when companies that grow purely organically match the growth rates of their acquisitive peers, they are
All business leaders have cost benchmarks. Now you have a growth benchmark, too. However, mastering the ten rules of value-creating growth is only one part of a holistic growth recipe. Start by developing a clear growth ambition: a quantum of growth that is more than just the momentum of your current businesses. Then develop a coherent set of growth pathways that encompass as many of the rules as possible. Finally, instil the capabilities and operating model to execute with excellence.
expansion.Tosucceed
Its shareholders have been handsomely rewarded, with a TSR of more than 10 percent per year from 2009 to 2019.
less likely to generate peer-beating shareholder returns.
in their home markets benefited more than those merely treading water at home. The former category generated an additional 2.6 percentage points of annual shareholder returns through geographic expansion, while those that struggled locally gained only 1.3 percentage points — not enough to offset the performance drag from the weak home market.
other hand, when a European grocer that struggled in its home market expanded aggressively into Latin America, its TSR trailed that of its peers by seven percentage points per annum over the subsequent decade.
CHRIS BRADLEY is a senior partner in McKinsey’s Sydney office; REBECCA DOHERTY is a partner in the San Francisco office; NICHOLAS NORTHCOTE is a senior adviser in the Brussels office; and TIDO RÖDER is an associate partner in the Munich office.
Companies in our sample that used such shrink-to-grow strategies divested assets in one or two years but grew consistently during the other years. They managed to generate five percentage points more annual excess TSR than inconsistent growers and large-deal acquirers. The key is not to confuse increasing scale with valuecreating growth. For example, one Australian conglomerate has consistently divested less attractive parts of its portfolio, such as insurance, and put the proceeds into growth opportunities.
Copyright 2022
that it is not the total value of transactions but the deal pattern that drives shareholder returns. After segmenting companies into four categories, our colleagues found that programmatic acquirers — those that did at least two small or medium-sized deals a year along the same theme — outperformed peers using other M&A approaches.
The case of a high-performing European manufacturer of agricultural and municipal vehicles illustrates the benefit of venturing abroad from a strong home base. The company leveraged its equipment’s stellar reputation to expand into the United States, where it continued to generate market-beating returns. On the
our sample that grew for seven of the ten years between 2010 and the end of 2019 strongly outperformed their peers. But suppose you don’t have this consistent growth engine? Statistically, the worst thing you can do is try to buy growth with a “big bang” acquisition. Your best option is to periodically prune back by divesting slow-growing parts of your portfolio and reinvesting the proceeds into new areas.
The authors wish to thank Abhranil Das, Marjan Firouzgar, Anna Koivuniemi, Monika Kumari, Karin Löffler, Nikolaus Müller-Mezin, Florian Popp, Monica Rodriguez, and Jacco Vos for their contributions to this article. McKinsey
Today, many companies with legacy business models are using programmatic M&A to both digitize and enlarge their businesses. Take the example of a European publishing group that made more than 60 acquisitions over the past decade to expand its portfolio into digital media offerings: digital assets now account for more than 70 percent of its Whyrevenue.isprogrammatic M&A so
at international expansion, it’s critical to have a clear source of competitive advantage that is transferable across regions. Without it, foreign companies will probably struggle to compete with incumbents that better understand the local context. This reality may explain why companies that grow strongly at home benefit so much more from global expansion — they are more likely to have winning business models, aspects of which can be transferred to new regions.
& Company.
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powerful? First, practice makes perfect: programmatic acquirers build organizational capabilities and establish best practices across all stages of the M&A process, from strategy and sourcing to due diligence and integration planning. Second, those that pursue large deals often need to overpay to secure the asset and then must successfully integrate two businesses of similar size — something that’s notoriously difficult to get right. Finally, doing many small deals enables companies to gain access to new markets or consolidate fragmented ones without the risk of “betting the house.”
Acquire programmatically Mergers and acquisitions account for approximately one-third of the revenue growth among companies in our data set. McKinsey’s longstanding research into M&A strategies has repeatedly reaffirmed
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