Many CEOs don't seem to care about organic growth. They either give up on it, in the belief that their companies will inevitably become low growth, or they cede responsibility for it to the operating units. Those are big mistakes. In an uncertain business environment, all corporate leaders need to be actively engaged in organic growth. Four rules can help them support the operating units in the quest for the best opportunities: 1) Keep an eye on the big picture by setting standards and assembling data that steer the company toward promising areas, nurturing an enterprisewide organic growth capability, and looking across markets and businesses for small opportunities that can be bundled. 2) Fight the short-term pressures of the business cycle by earmarking local cost savings for local investment and demonstrating, through a special corporate fund, that good ideas can always attract resources. 3) Resist typecasting some units as "growth engines" and others as "cash cows." Those labels shape beliefs about growth and affect the operating units' behavior. 4) Create a language for organic growth that helps the company clarify its priorities and develop a coherent, high-performing pipeline of opportunities.

In tough times, many retailers focus on their most loyal customers. That seems sensible enough. But, paradoxically, your most loyal customers are not your best source of revenue growth in a recession. You're already collecting most of the money they're spending. If they suddenly spend 25% less, most of that will come out of what they spend in your stores. It's not likely that you'll pry away customers who are fiercely loyal to other retailers either. Your best opportunity lies with "switchers" - the people who spend money both in your shops and elsewhere. If you collect, say, only 20% of what they're spending today but can increase that to 30%, you'll still realize a net gain even if their total spending drops by 25%. Drawing on a study of more than 50 major U.S.-based retailers and over 20 years of global consulting experience, consultants Favaro, Romberger, and Meer set out five operating rules to help retail executives determine where to direct recession-squeezed resources for the biggest return. These rules basically boil down to: (1) Identify the people who are shopping both in your stores and in others'. (2) Figure out what they're buying elsewhere (or want and can't find at all) and adjust your offer so you can give it to them. (3) Analyze which of your costs contribute to producing the benefits the switchers want, then spend more on those activities and less on the ones that don't matter to them. (4) Organize your efforts efficiently by grouping your stores into clusters based on different populations of switchers. And, finally, (5) focus your customer research, merchandise-planning, performance management, and strategic-planning processes on the switchers. By following those rules, struggling retailers will discover that they have a larger universe of growth opportunities than they might think.

In 1964, Daniel Yankelovich introduced in the pages of Harvard Business Review the concept of nondemographic segmentation, by which he meant the classification of consumers according to criteria other than age, residence, income, and such. The predictive power of marketing studies based on demographics was no longer strong enough to serve as a basis for marketing strategy, he argued. Buying patterns had become far better guides to consumers' future purchases. In addition, properly constructed nondemographic segmentations could help companies determine which products to develop, which distribution channels to sell them in, how much to charge for them, and how to advertise them. But more than 40 years later, nondemographic segmentation has become just as unenlightening as demographic segmentation had been. Today, the technique is used almost exclusively to fulfill the needs of advertising, which it serves mainly by populating commercials with characters with whom viewers can identify. It is true that psychographic types like High-Tech Harry and Joe Six-Pack may capture some truth about real people's lifestyles, attitudes, self-image, and aspirations. But they are no better than demographics at predicting purchase behavior. Thus, they give corporate decision makers very little idea of how to keep customers or capture new ones. Now, Yankelovich returns to these pages, with consultant David Meer, to argue the case for a broad view of nondemographic segmentation. They describe the elements of a smart segmentation strategy, explaining how segmentations meant to strengthen brand identity differ from those capable of telling a company which markets it should enter and what goods to make. And they introduce their "gravity of decision spectrum," a tool that focuses on the form of consumer behavior that should be of the greatest interest to marketers--the importance that consumers place on a product or product category.