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™ Case Study

Arm & Hammer Animal Nutrition

Achieves Double Digit Revenue
Growth Using ODI
by Anthony W. Ulwick

Arm & Hammer’s Animal Nutrition business (Church & Dwight) was determined to grow. Scott Druker, director
of the business, chose to employ Strategyn and its Outcome-Driven Innovation methodology to formulate and
drive its growth strategy. A mere year after adopting Strategyn’s “jobs-to-be-done” thinking, the business had
experienced double digit growth, far outpacing its competitors. Scott sat down with Strategyn’s founder, Tony
Ulwick, to talk about the remarkable journey.

Strategyn is the only innovation consulting firm licensed to practice the patented Outcome-Driven Innovation® (ODI) process. © Strategyn, LLC
A conversation with Scott Druker

The following conversation took place on May 20, 2015.

Ulwick: Scott, how would you describe the problem that Church & Dwight
was trying to solve?

Druker: We had gone through several product development efforts and launches in
recent years that were disappointing despite the technical success of the products.
The commercial response was lackluster. So, not wanting to repeat history and
recognizing that innovation was an important aspect of our growth strategy, we
asked ourselves, “Okay, how can we do things differently?” I was familiar with Scott Druker
Director of Animal Nutrition
your work, and I thought it would be an interesting approach to take given the Arm & Hammer Animal Nutrition
challenges we were facing with our animal nutrition products in the dairy market.

Ulwick: How would you describe Arm & Hammer Animal Nutrition’s traditional approach to innovation?

Druker: We relied largely on discussions that we’d had with customers, with people in the industry that we worked
in, the dairy industry in particular. We’d talk to nutritionists and to dairy producers, asking, “What are some of your
biggest issues?” We mainly focused on the nutritionists, who are the people the dairy producer hires to help put
together the ration to feed the cows. Our products go into those rations, so even though the dairy producers are
buying the products, most of our efforts were focused on the nutritionists.

Ulwick: Would it be fair to say that before using ODI, part of the issue was not knowing which customer to
target to obtain the needed insights?

Druker: We’ve always known the end customer is the dairy producer, and ultimately the dairy cow, but yeah, we
were basically getting our innovation information from a consultant that was being hired by the dairy producer. So
yeah, I think absolutely part of our issue was we weren’t identifying the right people to speak to.

Case Study: Arm & Hammer Animal Nutrition Achieves Double Digit Revenue Growth Using ODI 2
Ulwick: Why did you choose to go with Strategyn and ODI over other options?

Druker: Prior to joining Church & Dwight and taking lead of the Arm & Hammer nutrition business, I led a business
that sold anti-microbial actives and formulated products, and I was responsible for developing markets and new
products. I first came across the ODI concept while reading The Innovator’s Solution, by Clayton Christensen. That
book makes reference to your work and the concept of jobs-to-be done, and that led me to read your book, What
Customers Want. It was natural for me to decide that if I was going to do something to improve innovation, I might
as well go to the people who wrote the book on it.

Ulwick: We’re happy that you did. Let’s talk about the results. What surprising insights came out of the
Strategyn/ODI research?

Druker: The research helped on many fronts. First, it

helped clarify in our minds that the customer is the dairy The research helped on many fronts. First,
producer, not the nutritionist. Next, understanding that it helped clarify in our minds that the
the “job” they were trying to get done had little to do customer is the dairy producer, not the
with nutrition and was focused squarely on optimizing
nutritionist.
herd productivity. Then it was certainly eye opening to
see how many desired outcomes the dairy producer
is trying to satisfy in a given day, in a given month,
in a given year. I think we identified over 165 different desired outcomes (well-constructed need statements). We
homed in on optimizing dairy herd productivity, and when we started prioritizing the outcomes through quantitative
research, the most surprising thing was how many opportunities there were, and how few of those opportunities
were directly related to nutritional ingredients for the dairy producer. Our whole business is focused on supplying
nutritional ingredients and supplements, so that was probably the most surprising thing.

Ulwick: Scott, how would you describe the market strategy that Strategyn recommended based on the
customer insights?

Druker: Clearly the market strategy started with our collective recognition of whom we needed to target for value
creation. Even though we don’t sell directly to the dairy producer, we need to make sure that we keep our eye on the
dairy producer and the job they are trying to get done. We have relationships with various other components in the
supply chain, but at the end of the day, we need to create value for the dairy producer.

Case Study: Arm & Hammer Animal Nutrition Achieves Double Digit Revenue Growth Using ODI 3
The second major focus was changing our messaging and how we speak about things—moving away from talking
about product benefits and features and toward talking about outcomes, and linking our products to the outcomes
they satisfied. The third focus was taking a look at the job map, which had 15 steps in it, and saying, “Let’s take a
step back and look at where we can position ourselves in the marketplace that impacts the majority of these steps.”

The other part of the market strategy is segmentation: recognizing that the normal demographic methods for
segmenting customers, while helpful for sales resource prioritization, are not helpful for opportunity identification,
and hence solution identification. One of the things I go back to, one of the surprising things that came out of
the research, was that a large dairy or mega dairy can share many of the same unmet needs and outcomes as a
small dairy. And geography wasn’t necessarily the determinant either: ultimately there were some key outcomes
that decided what kind of segmentation there was. Thinking about that—the segments and how we position the
business—has become an important part of our marketing strategy.

Ulwick: How did the outcome-based segmentation solution impact your market strategy?

Druker: It gave us a more realistic way to look at the

market. Over time we had confused sales prioritization It gave us a more realistic way to look at
with real customer market segmentation. At the end of the market. Over time we had confused
the day, we only have a certain number of salespeople, sales prioritization with real customer
so we tend to want to call on the larger dairies, because
market segmentation.
if you get one of them, they have a measurable impact
on your business. We just assumed that all those large
dairies share certain needs, and that small dairies have
completely different needs. The data showed that was
not the case, so that absolutely was surprising.

Ulwick: What other market strategy recommendations provided your team with immediate value?

Druker: One of the key recommendations that we initially focused on was to go after the low-hanging fruit, to find
out if and where our existing products addressed some of the most underserved outcomes that were identified. We
basically got into a room, listed 165 of the outcomes on the wall, color coded the segmentation, and identified the
10 or 11 outcomes that all segments shared and identified as high priorities. We literally went through each one of
our products and tried to see which outcomes those products could potentially help address.

Case Study: Arm & Hammer Animal Nutrition Achieves Double Digit Revenue Growth Using ODI 4
We then focused a lot on the redesign of our whole messaging. We took all our product literature and our website
and redesigned and focused them on outcomes. Our whole marketing talk and speak turned to outcome based, and
that is very prevalent now in our whole business. People talk about outcomes. Now you hear salespeople saying,
“We need to position this in terms of an outcome a person is trying to satisfy.” So that is rewarding, to hear people
starting to think that way. I think some of the basic elements of the recommendations we followed pretty quickly.

There were several recommendations made around becoming a total solution provider to the dairy. We probably
have been a little slower to respond on that, but it’s not ignored; it’s probably something I am spending more time
on now, thinking about.

Case Study: Arm & Hammer Animal Nutrition Achieves Double Digit Revenue Growth Using ODI 5
Ulwick: Scott, what internal challenges did you face in gaining agreement from everyone to head down this
new path.

Druker: I’m kind of fortunate that I was able to unilaterally make the decision to go down this path. But having said
that, it was important to me to get consensus. I needed to make sure everybody bought into this. I think the biggest
resistance we had early on came from the fact that I came at this with a greater degree of knowledge of what
outcome-based marketing was about. So early on, it was just getting people to appreciate what this was about.
Also, the senior people are used to seeing and thinking about markets and market research studies in very traditional
ways. They want to see a pie chart with size and your market share, but I was talking about job maps, outcomes and
multivariate dimensional scores—not something that necessarily resonates quickly. But again, I have to say there was
very minimal resistance, to be honest with you.

Ulwick: Was there a reason the organization was

ready for change? So we didn’t necessarily have to go change
our pricing or products or redesign or
Druker: Yes. We had a product—a protective license reformulate the products. The biggest
product—that we had developed and launched. We
impact was changing the messaging so
spent seven years developing it based on hearing in the
people understood, “Oh that’s what that
market that there was a need for it. I would argue and
defend it as the best in the market, and we launched it
product can help me get done.”
to much fanfare. Then it kind of just did a ho-hum. So
that example was fresh in our teams’ minds, and we
could say, “What went wrong here?” It’s not the product development, and certainly not our marketing. It’s certainly
not our company’s reputation, and it’s not our overall knowledge of who to call on, or our ability to access any of the
particular decision makers. It’s just that we didn’t ask the right people the right questions. That was probably one of
the easiest ways to start convincing people: we had just had a fresh example of a product innovation that was just
lackluster.

Ulwick: Scott, of all the actions taken to date, which had the most impact on revenue?

Druker: Clearly, changing our messaging helped us differentiate our products versus competitors’. Whenever you
pick up a trade journal in our industry, you see a cow in an ad and virtually the same story: “We can help improve
milk production, protein production, fat production, dry matter intake.” It doesn’t matter which ad you are looking
at; it is virtually the same thing. So what we have been able to do is say, that’s not really what the people are focused

Case Study: Arm & Hammer Animal Nutrition Achieves Double Digit Revenue Growth Using ODI 6
on. It’s actually surprising when you think about it. Of the 165 outcomes that the dairy producer mentioned, not one
of them identified any of those key points that you see in almost every one of the ads. So we didn’t necessarily have
to go change our pricing or products or redesign or reformulate the products. The biggest impact was changing the
messaging so people understood, “Oh that’s what that product can help me get done.”

Ulwick: Scott, we completed the project work in late 2013. Can you describe how the market strategy
implementation rolled out?

Druker: By the end of 2013 we got all the results, and we spent the end of 2013 really going through the first
stage of looking at our products, digesting the information, and asking ourselves, “Okay, how do we act on this
data?” Second, we tried to understand how our products could address some of the underserved outcomes, and we
started thinking about the segments and how we should change some of our sales conversations, based on what
segments a customer might fall into. By the time 2014 rolled around, we had really started the wholesale change to
be forward facing to the market—changing our positioning and our Web design and promotional literature. By the
first quarter of 2014 and certainly by the second quarter of 2014, we were full on into repositioning how we go into
the marketplace.

Ulwick: How long did it take for you to start seeing

results? Our business, from 2013 to 2014, grew
greater than 30% and the ODI process
Druker: I would say we started to see results almost
played a significant role in that growth.
immediately. You start seeing the results in terms of the
Every one of our products had double
conversations you are having, and then you start seeing
digit growth.
incorporation of products. We had a phenomenal 2014.
Off the charts. The dairy economy helped—it was a
factor in it. I think our execution, our messaging, and our
positioning all contributed to an outstanding year.

Ulwick: Can you share how the ODI-based market strategy impacted your revenue growth?

Druker: I’ll say we grew greater than 30% and the ODI process played a significant role in that growth. Every one
of our products had double-digit growth. A lot of people in the dairy business did great last year because factors
aligned, but we far outpaced many competitors.

Case Study: Arm & Hammer Animal Nutrition Achieves Double Digit Revenue Growth Using ODI 7
In addition, in January 2015, we made an acquisition of
a business, Vi-COR, that got us into more species than When we made this acquisition, the
just dairy. It brought a very nice complimentary product template I used to explain to our executive
for us to use in dairy, but it also got us into the poultry team why it made sense was generated
and swine markets, which is exciting for the growth from the ODI work.
of our business. When we made this acquisition, the
template I used to explain to our executive team why it
made sense was generated from the ODI work. I was
able to show them that here is a job map, and here are
outcomes the dairy producer is trying to satisfy, and
here is why Vi-COR’s products are going to help us with
some of these key outcomes. Vi-COR also brings in a
service component that helps address some areas that
we identified as some of the top opportunities in dairies.
I found that this small business was operating in a very
important niche, providing a very important solution to
dairy producers. I used the work from ODI to screen for
acquisitions, and that work assisted in the acquisition.

Ulwick: How did these successes impact the

organization and you personally?

Druker: Probably the biggest personal gratification I

have is looking at my team and seeing that they are
embracing the methodology. I think it helped them think
more broadly about who we are as a business and what
we do, and what opportunities are out there.

Case Study: Arm & Hammer Animal Nutrition Achieves Double Digit Revenue Growth Using ODI 8
Ulwick: How would you describe your experience working with Strategyn?

Druker: It was terrific. I believe the agriculture nutrition industry was a little bit outside of where Strategyn normally
works. All the same, you guys are great, professional, intelligent, right on time. Great communications—it was
definitely really enjoyable to work with the group. And I speak for my whole team.

Ulwick: That is always good to hear. Thank you. And just as a final question, is there anything else you
would like us to share with the readers of this case study?

Druker: That no one else in agriculture should try this! But more seriously, the thing that I would share is, once you
get involved and you start to think about a market through this lens, the notion of defining your customer as a job
executor, and then asking customers what job they are trying to get done instead of asking them what solutions they
want is such a basic, simple, and obvious way to approach product development. It’s remarkable that companies just
don’t do it more often. But I do understand why. It’s not trivial to do. I’ve come to appreciate that it’s not an easy
exercise, but once you have gone through it, it’s so obvious – and powerful. It is obviously the right way to approach
marketing and innovation.
`
Ulwick: Scott, thank you so much for sharing your thoughts. It’s been a pleasure working with you.

Case Study: Arm & Hammer Animal Nutrition Achieves Double Digit Revenue Growth Using ODI 9
Contacts

About the Author

Anthony W. Ulwick is the founder and CEO of Strategyn, an innovation consulting firm
based in San Francisco, California. He is the author of What Customers Want (McGraw-
Hill, 2005),“ Turn Customer Input into Innovation” (Harvard Business Review, January
2002), “The Customer-Centered Innovation Map (Harvard Business Review, May 2008),
and “Giving Customers a Fair Hearing” (MITSloan Management Review, Spring 2008).
He can be contacted at ulwick@strategyn.com.

Contacts
United States Asia Pacific Germany, Austria &
Tony Ulwick Thomas Davenport Switzerland
CEO & Founder Managing Partner Martin Pattera
Strategyn thomas.davenport@ Managing Partner
ulwick@strategyn.com strategyn.com martin.pattera@strategyn.com
+1 415 787 2706 +61 412 105 385 +43 7472 65510 121

EMEA France & Italy

Petr Salz Maurizio Beltrami
Director of Business Managing Partner
Development maurizio.beltrami@strategyn.
psalz@strategyn.com com
+31 40 2261800 +41 79 596 34 27

Accelerated growth. Delivered.™

©2014 Strategyn, Inc. Outcome-Driven Innovation® and Strategyn® are trademarks or registered trademarks of Strategyn. Strategyn’s innovation methodology is
protected by patents 5963910, 6085165, 6115691, 7340409, 8214244, 8494894, 8543442, 8583469, 8655704, 8666977 and other pending patents.

Case Study: Arm & Hammer Animal Nutrition Achieves Double Digit Revenue Growth Using ODI 10