Jobs to be Done
For five decades, marketing has focused on the principles of segmentation, marketing, and positioning (STP).
Segmentation of consumer products is generally along demographic, psychographic, and behavioral dimensions. B2B segmentation includes firmographics.
Of the more than 20,000 new products evaluated in Nielsen’s 2012 – 2016 Breakthrough Innovation Report, only 92 (0.46%) had sales of more than $50 million in year one and sustained sales in year two (Source: HBR).
What is wrong with STP as we know it?
Practically all the data (including big data) on customers focus on correlations such as 70% of customers prefer product A to product B. Correlations do not necessarily show causality. Managers find it comfortable to use correlations because it is very difficult to understand causal mechanisms.
Understanding causal mechanisms (what causes us to do something?) is possible if we use Professor Clayton Christensen’s “Jobs to be done” construct.
A fast food chain introduces a milkshake. The milkshake has customers only in the morning. No one understands the reason. A team of researchers is called in to investigate the anomaly.
After painstaking observation and interviews with everyone who buys a milkshake, the following become apparent:
1. Commuters driving to work buy the milkshakes typically between 0630 and 0700 hours.
2. The commuters have a 30 – 40-minute drive ahead of them.
3. They want something to eat or drink throughout their commute.
4. They have tried everything possible – fruits, doughnuts, chocolates, protein bars, yogurt, and sandwiches.
5. All the alternatives fail because (a) they don’t last 30 minutes and (b) they are messy to handle while you are driving.
6. The milkshake is preferred because it lasts 30 minutes, gives the person a filled feeling, and is easy to use.
In other words, customers buy the milkshake not based on any demographic or psychographic characteristics. Rather, they have a “job” – having something to drink for 30 minutes and they “hire” the milkshake to do the “job.”
The same milkshake does not sell at other times because the “job” is different. For example, parents collecting their children from school in the afternoon and stopping by for a quick snack don’t want a thick milkshake – instead, they want a drink that a child can finish quickly. Make the milkshake thinner, add an exotic flavor and you have another solution to another “job.”
A similar approach is visible in the spectacular success of American Girl dolls.
Why would anyone pay over a hundred dollars for a doll? And why would anyone pay hundreds more for the doll’s apparel and accessories?
American Girl has sold 29 million dolls and has revenues of over $500 million a year. The firm has remained the undisputed leader in its category for 30 years. Competitors including Walmart and Disney have tried to replicate but without success.
What is the secret of American Girl?
It turns out that American Girl does not sell dolls. The firm provides an unforgettable experience. Each doll has a history and a story to tell. The doll is an instrument for communicating values, customs, and traditions from one generation to another. Every little detail, from the custom made clothing to the packing, is meant to provide an uplifting experience. American Girl stores have “hospitals” that can fix tangled hair or fix broken parts.
Marketers should ask and answer some critical questions:
1. What “jobs” do customers wish to be done and how can we help them address their problems?
2. What obstacles or inconveniences might customers face and how can we remove them?
3. What are the functional, social, and emotional dimensions of the job?
4. How can we integrate the dimensions into an experience that customers will cherish and come back to us?
Organizations have two choices:
1. They can rely on data-rich models and continue with the hit-or-miss innovation and marketing.
2. They can look through the “job” lens and figure out how they can innovate specifically to get the “job” done better than the competition.
One choice relies on luck.
The other starts and ends with the customer, leaving luck to the competition.
Take your pick.
For more on the concept, please read:
Christensen, Clayton M, Taddy Hall, Karon Dillon, and David Duncan: Competing Against Luck: The Story of Innovation and Customer Choice; Harper Business; Harper Collins; 2016.