Clay Christensen, renowned Harvard Business School Professor and author of the bestselling book The Innovator’s Dilemma, believes that for businesses, including startups, to be successful, they need to stop selling products and services to customers based on market segmentation. Instead, they should focus on trying to help people address their jobs-to-be-done.
Traditionally, companies plan and launch new products or services based on segmenting their market and then positioning the merchandise or service accordingly.
Segmentation in marketing involves dividing the market based on product categories (either function- or price-based) or dividing the customer based according to specific demographics (age, gender, education etc.).
While this can work, it’s not always reliable. With 95% of new product launches failing each year, Christensen believes there’s a different way to approach this challenge: jobs-to-be-done.
Jobs-to-be-done focuses on what items, products or services consumers “hire” to get a specific task done. Adopting a jobs-to-be-done perspective requires businesses to crawl into the skin of their customer and focus on how they go about their day, constantly asking: “why did they do it that way?”
Think about “job” here as being shorthand for what a specific individual is really looking for so that they can accomplish something in a given circumstance. As an entrepreneur, your responsibility is to understand what job your customer is trying to fulfil, and then design a product with associated experiences and uses to do that job. You need to deliver that product or service and sell it in a way that reinforces its intended role so that customers find themselves choosing your product or service over anything and everyone else.
Let jobs-to-be-done inform your product design
To give further insight into how the jobs-to-be-done theory works, Christensen gives the following example.
A well-known fast-food chain was having trouble increasing their sales for milkshakes. Did they need to make them more chocolatey, fruitier, thinner or thicker?
The company had followed the traditional route of segmenting their market according to their product (the milkshakes) and by demographics (the profile of a typical milkshake drinker). The company then asked people who suited their predefined demographic to name all the characteristics of their ideal milkshake. The answers came back: chocolatey, fruity, thin, thick, smooth, etc. The chain’s marketing division responded to the feedback, but their milkshake sales still didn’t improve.
Enlisting the help of one of Christensen’s researchers, the fast-food company attempted to understand what “job” the customers were “hiring” the milkshake to get done. Christensen’s researcher spent a full day at one of the fast food chains’ outlets reviewing and documenting everyone who bought a milkshake:
The researcher discovered that a whopping 40% of milkshakes were bought first thing in the morning by commuters who ordered them to go. But why? The next morning, the researcher went back to the fast food outlet and started to interview the customers who left with a milkshake in hand, asking them what job they had hired that milkshake to do.
After a little explanation and probing, most customers had the same answer. They wanted the milkshake because they had a long commute to work and needed something to take up that time and make the journey less monotonous. Furthermore, they knew that they needed something of sustenance to keep them full until lunch at 12:00, and it had to be something they could have while driving.
They could have just as easily hired a bagel or a piece of toast to do the job, but the customers pointed out that both would be too messy. A piece of fruit could be hired, but it would be eaten in a few bites. The customers explained that the milkshake gave them something delicious that lasted a long time thanks to the thick consistency and the thin straw, and they only needed one hand to drink it.
Now that it understood the job that needed to be done, the fast-food company could develop a series of thicker morning milkshakes to last the long commute, with a range of flavours and textures.
They were also able to identify a separate job that customers required milkshakes for! Parents often wanted to give their children a treat after school or a sports match, but didn’t want to wait forever for them to drink it; the restaurant responded by creating a milkshake with a thinner consistency that was equally delicious but could be sucked up through a straw in a much shorter amount of time.
When following this method, keep in mind that a “job” is not a description of what the customer is doing or the steps they are taking to get a job done. Instead, the “job” expresses what the customer is ultimately trying to accomplish.
A deep understanding of the specific job that needs to be done will enable businesses to apply innovative product development and marketing efforts without guessing what tradeoffs their customers might be willing to make.
Four key principles support the jobs-to-be-done approach:
Okay, so you understand your customer’s problems and you’ve created a product that can help solve them. But how does your customer know that your product exist? That’s where marketing comes in.