Marketing report
Escaping the Marketing Morass
Joe Sinfield and Scott D. Anthony printed in Marketing Management, March-April 2007 | Volume 5 | Number 2
It is one of the holy grails of marketing: predictability in new product innovation. Yet again and again, smart companies spend tens of millions of dollars doing the best research they can do only to have products flop in the marketplace.
Our perspective is that the way that companies assess and analyze markets shoulders at least a portion of the blame for this unpredictability. Segmenting markets into demographic segments, or assuming that product categories divide the world, can consistently lead to offerings that don’t connect with consumers and miss opportunities for innovation. Companies continue to push for improvements along dimensions that overshoot consumer needs and then complain that commoditization has set in when looking at the market the right way can highlight attractive avenues for differentiation.
There must be a better way, one that allows companies to identify real opportunities that promise extraordinary returns. We believe that focusing on the “job” a customer is trying to get done can help companies break out of the marketing morass. This article describes how this jobs- to-be-done framework can help companies master the “innovation lifecycle,” improving their ability to spot high-growth opportunities, optimize existing products, and inject life into even the most stagnant categories. Jobs and the innovation life cycle
The concept of jobs to be done is described in Chapter 3 of Clayton Christensen’s 2003 book The Innovator’s Solution. The concept is simple. It holds that customers don’t really buy products, they hire them to get jobs done. To identify opportunities to create new growth, then, look first for important “jobs” that can’t be done satisfactorily with available solutions. You can think about a job as a problem a customer needs to solve. Remember the phrase attributed to Harvard Business School marketing guru Ted Levitt: “People don’t want a quarter-inch drill — they want a quarter-inch hole.”
For example, Intuit’s QuickBooks software makes it easy for small business owners to accomplish an important job: Make sure my business doesn’t run out of cash. Before Intuit’s innovation, existing alternatives, such as pen and paper and Excel spreadsheets, weren’t good enough to get this job done. Professional accounting software packages were actually too good — confusing and filled with unnecessary features. QuickBooks did the job better than any alternative and took over the category.
The jobs-to-be-done model is simple but powerful. It shifts focus from solutions that customers utilize to the problems they can’t adequately solve. Instead of categorizing customers into demographic groups that can be poor predictors of behavior, attitudes that might influence purchasing behavior, or activities that people currently perform (often because they have no better alternative), it zeros in on circumstances and constraints that surround the jobs people are trying to get done. These characteristics are more deeply connected to the “best” possible solution than any other segmentation scheme. In short, the jobs-to-be-done model provides a blueprint for innovation: Find that frustrated customer and zero in on the roots of their frustration.
Generally speaking, any successful innovation follows a life cycle. Before there is an innovation, there is market demand. Then an innovator finds a way to tap into that demand. In the early days, the innovator’s key challenge is optimizing the innovation for maximum success, then finding creative ways to capture value. Markets abhor vacuums, so any successful innovator must ward off encroaching competitors. Finally, when the innovation reaches a seeming stage of maturity, the innovator must find new ways to revitalize growth. Jobs-based thinking can help the marketer in each stage of the innovation lifecycle.
Stage 1: Identifying demand
Jobs’ thinking illuminates opportunities to innovate in the marketplace. These opportunities may stem from identifying jobs for which existing solutions are ineffective or nonexistent, or by pinpointing “employers” who will eagerly hire a new offering. Understanding important, unsatisfied jobs almost always highlights substantial opportunities for growth.
While companies often seek to develop market understanding before innovating, sometimes the process works in the other direction. In other words, a company often starts with a technology and has to figure out what market has the highest potential for growth. In these circumstances, start by assessing the problems the technology could solve, the contexts in which the technology could be used, and its performance benefits and liabilities compared to existing solutions. Then, consider all of the “employers” who might be interested in hiring the technology.
Ask questions such as:
Who needs to solve the problems the technology could solve?
Who would be delighted by this solution despite its limitations?
In which contexts could this solution be used where existing technologies could not?
For example, in the early 2000s, California-based Linksys had to decide how to commercialize wireless networking technologies. Existing versions of the technology allowed users to send data wirelessly over short distances. Signals degraded rapidly beyond about 300 feet and provided low levels of security and encryption. Linksys wisely decided to target users looking to network a home or a small office. The technology helped these users address important jobs, and security and distance-related limitations were irrelevant in that context.
Stage 2: Optimizing solutions
Identifying the opportunity is never enough. Companies face significant challenges when they seek to introduce products that adequately get the innovation job done. Companies need to carefully balance price and features to deliver a product that people are willing to buy. A staple in the marketing tool kit is the customer survey or focus group designed to identify “what customers really want.” All too often, these exercises result in wish lists that if accommodated will create an all-capable, and often very expensive, offering that is desirable to no one.
Understanding the ways in which customers determine value can highlight the tradeoffs between features and price customers will consider tolerable. For example, consider the insights a major consumer health company gleaned through applying the jobs-to-be-done methodology in the area of nutritional products. The company’s initial research efforts surfaced important and unsatisfied jobs ranging from treating heart disease and cancer to maintaining basic health.
The company’s initial inclination was to create a “do everything” product to try to — at least tangentially — stave off many of these conditions. However, more in-depth research identified that consumers really wanted solutions that were specific to them as individuals. A do-everything product would actually provide too much performance on some dimensions and too little on others. The company recognized this issue and is now pursuing focused formulations for specific high demand health conditions that tend to coexist in the population.
Stage 3: Capturing value
When products successfully address an important, unsatisfied job, the value created by the offering often goes well beyond the traditional “cost plus” target margin many companies use to create a pricing strategy. Deep understanding of jobs positions a company to more comprehensively capture the value created by an offering. Consider the case of a global upstream chemical manufacturer that produced latex compounds. This company traditionally sold its product to the pulp and paper industry by the ton. It positioned its offering as little more than a binder used to hold together pulp in the manufacture of office paper. Careful study of the end-user market surfaced a key frustration point for customers who used the paper in high-speed photocopiers: frequent paper jams and smudged ink.
The chemical company recognized that its latex technology could alter the paper texture to facilitate both smooth passage of the paper through photocopiers and improved ink retention. The chemical manufacturer’s solution satisfied a much more valuable job than simply “binding paper pulp.” It had a direct impact on the end-user experience, and gave the paper manufacturer the opportunity to command a premium for its paper. The chemical company’s awareness of the job positioned it to grab a piece of the value it created.
Stage 4: Defending share
Once an idea begins to gain momentum, competitive response is inevitable. As described in Seeing What’s Next (written by Clayton M. Christensen, Scott D. Anthony, and Erik A. Roth, Harvard Business School Press), nimble disruptive competitors typically take advantage of an incumbent’s structural weaknesses and blind spots. The jobs-aware incumbent, however, need not forfeit its prized market. One medical device company Innosight advised faced an attack from a competitor that tore a page out of the disruptive playbook to launch a “good-enough” solution at radically lower price points. Of course, our client could have matched the offering. It wondered if there might be a way to optimize its existing offerings so that customers wouldn’t consider the competitor’s offering good enough. To do so, it sought to understand the full range of jobs that practitioners needed to get done. The company learned that practitioners employing its device sought much more than clinical benefits. They also required training on how to effectively use the product, assistance in building market awareness of the device’s advantages over alternative treatments, tools that allowed them to communicate the device’s functionality to patients, and new mechanisms to help patients pay for the treatment. By pulling these and other innovation levers, the company was able to more sharply differentiate itself against its competitors.
Stage 5: Revitalizing growth
Even white-hot categories cool. Jobs-based thinking can restart growth by helping companies shake up commoditized markets and highlighting opportunities to revive even the most moribund of products. Few words cause as visceral reaction from executives as commoditization. Every executive can tell a horror story of how one of their company’s crown jewels found its differentiation dissipating and its margins crumbling. In these circumstances, plowing more money into innovation seems to make the problem worse, not better. General Electric Chief Executive Jeffrey Immelt put it well when he noted, “We’re all just a moment away from commodity hell.” But what exactly does commoditization mean? It means that customers just don’t value further improvements along particular dimensions. Does that mean that there’s no improvement that customers would value? The answer oftentimes is no.
Hill-Rom Industries, a company that sells beds to hospitals, is an illustrative example. Hospital beds would seem to have all the characteristics of a commoditized product. Yet, between 1975 and 1990 Hill-Rom grew its share of the hospital bed market from 30 percent to 90 percent and doubled the frequency with which hospitals replaced beds. By working to understand how the company could improve its customers’ business, it learned that nurses, who account for a significant share of hospitals’ operating costs and whose interactions with patients strongly influenced perceptions of care, were spending inordinate time on non-nursing tasks — picking up things that patients had dropped and solving television problems, for example. By adding features and functions to their beds that obviated many non-nursing tasks, Hill-Rom differentiated its beds in ways that helped hospitals make money. Hospitals readily paid premium prices for these improvements.
These insights did not come from segmenting markets by small, medium, and large hospitals. They came from understanding the job — the levers that drive hospitals’ profitability. It turned out that there was tremendous room for differentiation and premium pricing in the hospital-bed market, but it required taking a fresh perspective to identify dimensions along which existing products were not good enough to get important jobs done.
Many companies find that the power of particular brands wanes over time. A brand that was a powerhouse decreases in importance as core customers age and a new generation arises without the close connection to the brand. Additionally, a jobs-to-be-done perspective can illuminate ways to reinvigorate a brand. Procter & Gamble did just this several years when it attempted to revive its Mr. Clean brand. P&G asked a simple, powerful question: What was the real reason people hired Mr. Clean products when the brand was its strongest in the 1960s and 1970s? Its conclusion: to magically clean the seemingly uncleanable.
With that understanding, P&G began actively seeking circumstances where consumers were frustrated by their inability to magically clean surfaces. It identified three clear circumstances and three new offerings:
My rogue child has decided that our walls made an ideal blank canvas for his crayons. Mr. Clean Magic Eraser cleans these hard-to-clean surfaces…like magic.
I spend hours a day in my car and it gets dirty. I don’t have the time to go to a professional car cleaner and the soap and bucket doesn’t get the job done. Mr. Clean Auto Dry does.
I’d love to clean behind my toilet, the corner of the shower, and under the sink. I’d also love to not kill my back. Mr. Clean Magic Reach Bathroom Explorer solves this problem.
By asking what job customers historically hired Mr. Clean to get done, P&G was able to focus its innovation energy on circumstances where that job couldn’t adequately get done, helping it to return the brand to its former prominence.
Doing the job of finding the job
The jobs concept is highly intuitive and extremely understandable. Case studies like those above ring true to most marketers. When it comes time to act on the concept, however, many companies get stuck. Concepts that look so appealing in print become surprisingly difficult to implement. The good news is that utilizing the concept does not require radically new market research techniques. The tried and true techniques that companies use to conduct research can — if used properly — provide tremendous insight into important, unsatisfied innovation jobs.
Our experience suggests that there are two critical success factors for job-to-be-done thinking. First, act like an investigative reporter, using a variety of techniques to unearth and synthesize jobs clues. Focus groups, observational research, internal brainstorming, and expert interviews can all be helpful ways to generate long lists of jobs. Quantitative research can help with prioritization and tradeoff decisions.
Second, ensure that the questions change in ways that are consistent with the jobs-to-be-done model. The jobs-to-be-done model places the customer’s problem squarely in the center of the information equation. Questions must focus on understanding problems instead of gaining reactions to proposed solutions.
The biggest impediment to change can be existing mindsets. Start changing mindsets with simple starting points. Gather critical managers together. Introduce the concepts. Get people to start talking about the jobs for which customers hire the company’s products. Or have people open their briefcase, pull out a product, and describe the jobs for which is gets hired. Simple steps begin the process of transformational changes.
Joe Sinfield is a partner at Innosight and also a professor of civil engineering at Purdue University. Scott D. Anthony is president of Innosight. Innosight was founded by Clayton Christensen.
