The Market Segment Analysis Chart

Sometimes all you need to do is step back and put the right high-level data in one place so you can actually see what’s going on.

That’s the idea behind this post. The chart I’m going to show you is simple. Yet, despite spending many hours in boardrooms with executive teams debating segment strategy, I have almost never seen all the relevant data brought together in a single view. Lord knows I’ve asked for it.

What do I see instead? Seas of numbers. Live reports, spreadsheets, and dashboards. Slides with loads of dashboard clips – my favorite – especially when those clips come from different systems with different definitions and reporting periods. What should be a strategy discussion ends up a data forensics exercise combined with a quilting bee. (Hey, everybody, let's make an attractive quilt from all the dashboard clips people brought!)

So you end up spending the vast majority of your time navigating, explaining, and reconciling numbers before you can even start to discuss what they mean. You leave the meeting with your head spinning. You can’t see the forest for the trees. Heck, with some companies, you can’t see the forest for the leaves.

What’s needed is to put the relevant information together in one place, clearly and consistently, so smart people can sit down and talk about it. Note that “sitting around talking about numbers” is a concept I’ll explore more deeply in a future post – I'm a huge believer in doing that and a lot of companies don't do it enough. This post is about making a chart that enables that style of conversation.

Back to market segments, this chart helps answer two questions:

• Do we have the information we need to make the decision? If you can’t fill in some cells, leave the holes. Then ask what it would take to calculate the missing numbers and who’s going to get them. A half-completed chart tells you both what you know and what you don't know, but maybe should. Maybe the right answer is to send some ops and FP&A people off to fill in those blanks and reconvene next week instead.
• Have we presented that information in a way that helps people decide? Producing numbers is only part of the job. Helping people see the relatively small set they need to make an important decision is the other part.

I'm going to both present the chart and fill it in with some illustrative numbers. For analytical readers, I think this makes it more interesting exercise (i.e., can I unravel the mystery in the data?). But let's not get so wrapped up in the mystery that we forget the purpose of the post: if you're thinking about market segments, you should make a chart like this for your company and use it as the backdrop for a strategic conversation.