Know your customers’ “jobs to be done”
For as long as we can remember, innovation has been a top priority—and a top frustration—for leaders. In a recent McKinsey poll, 84% of global executives reported that innovation was extremely important to their growth strategies, but a staggering 94% were dissatisfied with their organisations’ innovation performance. Most people would agree that the vast majority of innovations fall far short of ambitions.
On paper, this makes no sense. Never have businesses known more about their customers. Thanks to the big data revolution, companies now can collect an enormous variety and volume of customer information, at unprecedented speed, and perform sophisticated analyses of it. Many firms have established structured, disciplined innovation processes and brought in highly skilled talent to run them. Most firms carefully calculate and mitigate innovations’ risks. From the outside, it looks as if companies have mastered a precise, scientific process. But for most of them, innovation is still painfully hit-or-miss.
What has gone so wrong?
The fundamental problem is, most of the masses of customer data companies create is structured to show correlations: This customer looks like that one, or 68% of customers say they prefer version A to version B. While it’s exciting to find patterns in the numbers, they don’t mean that one thing actually caused another. And though it’s no surprise that correlation isn’t causality, we suspect that most managers have grown comfortable basing decisions on correlations.
Why is this misguided? Consider the case of one of this article’s coauthors, Clayton Christensen. He’s 64 years old. He’s six feet eight inches tall. His shoe size is 16. He and his wife have sent all their children off to college. He drives a Honda minivan to work. He has a lot of characteristics, but none of them has caused him to go out and buy the New York Times. His reasons for buying the paper are much more specific. He might buy it because he needs something to read on a plane or because he’s a basketball fan and it’s March Madness time. Marketers who collect demographic or psychographic information about him—and look for correlations with other buyer segments—are not going to capture those reasons.
After decades of watching great companies fail, we’ve come to the conclusion that the focus on correlation—and on knowing more and more about customers—is taking firms in the wrong direction. What they really need to home in on is the progress that the customer is trying to make in a given circumstance—what the customer hopes to accomplish. This is what we’ve come to call the job to be done.
We all have many jobs to be done in our lives. Some are little (pass the time while waiting in line); some are big (find a more fulfilling career). Some surface unpredictably (dress for an out-of-town business meeting after the airline lost my suitcase); some regularly (pack a healthful lunch for my daughter to take to school). When we buy a product, we essentially “hire” it to help us do a job. If it does the job well, the next time we’re confronted with the same job, we tend to hire that product again. And if it does a crummy job, we “fire” it and look for an alternative. (We’re using the word “product” here as shorthand for any solution that companies can sell; of course, the full set of “candidates” we consider hiring can often go well beyond just offerings from companies.)
This insight emerged over the past two decades in a course taught by Clay at Harvard Business School. (See “Marketing Malpractice,” HBR, December 2005.) The theory of jobs to be done was developed in part as a complement to the theory of disruptive innovation—which at its core is about competitive responses to innovation: It explains and predicts the behavior of companies in danger of being disrupted and helps them understand which new entrants pose the greatest threats.
But disruption theory doesn’t tell you how to create products and services that customers want to buy. Jobs-to-be-done theory does. It transforms our understanding of customer choice in a way that no amount of data ever could, because it gets at the causal driver behind a purchase.
The business of moving lives
A decade ago, Bob Moesta, an innovation consultant and a friend of ours, was charged with helping bolster sales of new condominiums for a Detroit-area building company. The company had targeted downsizers—retirees looking to move out of the family home and divorced single parents. Its units were priced to appeal to that segment—$120,000 to $200,000—with high-end touches to give a sense of luxury. “Squeakless” floors. Triple-waterproof basements. Granite counters and stainless steel appliances. A well-staffed sales team was available six days a week for any prospective buyer who walked in the door. A generous marketing campaign splashed ads across the relevant Sunday real estate sections.
The units got lots of traffic, but few visits ended up converting to sales. Maybe bay windows would be better? Focus group participants thought that sounded good. So the architect scrambled to add bay windows (and any other details that the focus group suggested) to a few showcase units. Still sales did not improve.
Although the company had done a cost-benefit analysis of all the details in each unit, it actually had very little idea what made the difference between a tire kicker and a serious buyer. It was easy to speculate about reasons for poor sales: bad weather, underperforming salespeople, the looming recession, holiday slowdowns, the condos’ location. But instead of examining those factors, Moesta took an unusual approach: He set out to learn from the people who had bought units what job they were hiring the condominiums to do. “I asked people to draw a timeline of how they got here,” he recalls. The first thing he learned, piecing together patterns in scores of interviews, was what did not explain who was most likely to buy. There wasn’t a clear demographic or psychographic profile of the new-home buyers, even though all were downsizers. Nor was there a definitive set of features that buyers valued so much that it tipped their decisions.
But the conversations revealed an unusual clue: the dining room table. Prospective customers repeatedly told the company they wanted a big living room, a large second bedroom for visitors, and a breakfast bar to make entertaining easy and casual; on the other hand, they didn’t need a formal dining room. And yet, in Moesta’s conversations with actual buyers, the dining room table came up repeatedly. “People kept saying, ‘As soon as I figured out what to do with my dining room table, then I was free to move,’” reports Moesta. He and his colleagues couldn’t understand why the dining room table was such a big deal. In most cases people were referring to well-used, out-of-date furniture that might best be given to charity—or relegated to the local dump.
But as Moesta sat at his own dining room table with his family over Christmas, he suddenly understood. Every birthday was spent around that table. Every holiday. Homework was spread out on it. The table represented family.
What was stopping buyers from making the decision to move, he hypothesised, was not a feature that the construction company had failed to offer but rather the anxiety that came with giving up something that had profound meaning. The decision to buy a six-figure condo, it turned out, often hinged on a family member’s willingness to take custody of a clunky piece of used furniture.
That realisation helped Moesta and his team begin to grasp the struggle potential home buyers faced. “I went in thinking we were in the business of new-home construction,” he recalls. “But I realised we were in the business of moving lives.”
With this understanding of the job to be done, dozens of small but important changes were made to the offering. For example, the architect managed to create space in the units for a dining room table by reducing the size of the second bedroom. The company also focused on easing the anxiety of the move itself: It provided moving services, two years’ worth of storage, and a sorting room within the condo development where new owners could take their time making decisions about what to discard.
The insight into the job the customers needed done allowed the company to differentiate its offering in ways competitors weren’t likely to copy—or even comprehend. The new perspective changed everything. The company actually raised prices by $3,500, which included (profitably) covering the cost of moving and storage. By 2007, when industry sales were off by 49% and the market was plummeting, the developers had actually grown business by 25%.
Getting a handle on the job to be done
Successful innovations help consumers to solve problems—to make the progress they need to, while addressing any anxieties or inertia that might be holding them back. But we need to be clear: “Job to be done” is not an all-purpose catchphrase. Jobs are complex and multifaceted; they require precise definition. Here are some principles to keep in mind:
“Job” is shorthand for what an individual really seeks to accomplish in a given circumstance.
But this goal usually involves more than just a straightforward task; consider the experience a person is trying to create. What the condo buyers sought was to transition into a new life, in the specific circumstance of downsizing—which is completely different from the circumstance of buying a first home.
The circumstances are more important than customer characteristics, product attributes, new technologies, or trends.
Before they understood the underlying job, the developers focused on trying to make the condo units ideal. But when they saw innovation through the lens of the customers’ circumstances, the competitive playing field looked totally different. For example, the new condos were competing not against other new condos but against the idea of no move at all.
Good innovations solve problems that formerly had only inadequate solutions—or no solution.
Prospective condo buyers were looking for simpler lives without the hassles of home ownership. But to get that, they thought, they had to endure the stress of selling their current homes, wading through exhausting choices about what to keep. Or they could stay where they were, even though that solution would become increasingly imperfect as they aged. It was only when given a third option that addressed all the relevant criteria that shoppers became buyers.
Jobs are never simply about function—they have powerful social and emotional dimensions.
Creating space in the condo for a dining room table reduced a very real anxiety that prospective buyers had. They could take the table with them if they couldn’t find a home for it. And having two years’ worth of storage and a sorting room on the premises gave condo buyers permission to work slowly through the emotions involved in deciding what to keep and what to discard. Reducing their stress made a catalytic difference.
These principles are described here in a business-to-consumer context, but jobs are just as important in B2B settings. For an example, see the sidebar “Doing Jobs for B2B Customers.”
Designing offerings around jobs
A deep understanding of a job allows you to innovate without guessing what trade-offs your customers are willing to make. It’s a kind of job spec.
Of the more than 20,000 new products evaluated in Nielsen’s 2012–2016 Breakthrough Innovation report, only 92 had sales of more than $50 million in year one and sustained sales in year two, excluding close-in line extensions. (Coauthor Taddy Hall is the lead author of Nielsen’s report.) On the surface the list of hits might seem random—International Delight Iced Coffee, Hershey’s Reese’s Minis, and Tidy Cats LightWeight, to name just a few—but they have one thing in common. According to Nielsen, every one of them nailed a poorly performed and very specific job to be done. International Delight Iced Coffee let people enjoy in their homes the taste of coffeehouse iced drinks they’d come to love. And thanks to Tidy Cats LightWeight litter, millions of cat owners no longer had to struggle with getting heavy, bulky boxes off store shelves, into car trunks, and up the stairs into their homes.
How did Hershey’s achieve a breakout success with what might seem to be just another version of the decades-old peanut butter cup? Its researchers began by exploring the circumstances in which Reese’s enthusiasts were “firing” the current product formats. They discovered an array of situations—driving the car, standing in a crowded subway, playing a video game—in which the original large format was too big and messy, while the smaller, individually wrapped cups were a hassle (opening them required two hands). In addition, the accumulation of the cups’ foil wrappers created a guilt-inducing tally of consumption: I had that many? When the company focused on the job that smaller versions of Reese’s were being hired to do, it created Reese’s Minis. They have no foil wrapping to leave a telltale trail, and they come in a resealable flat-bottom bag that a consumer can easily dip a single hand into. The results were astounding: $235 million in the first two years’ sales and the birth of a breakthrough category extension.
Creating customer experiences
Identifying and understanding the job to be done are only the first steps in creating products that customers want—especially ones they will pay premium prices for. It’s also essential to create the right set of experiences for the purchase and use of the product and then integrate those experiences into a company’s processes.
When a company does that, it’s hard for competitors to catch up. Take American Girl dolls. If you don’t have a preteen girl in your life, you may not understand how anyone could pay more than a hundred dollars for a doll and shell out hundreds more for clothing, books, and accessories. Yet to date the business has sold 29 million dolls, and it racks up more than $500 million in sales annually.
What’s so special about American Girls? Well, it’s not the dolls themselves. They come in a variety of styles and ethnicities and are lovely, sturdy dolls. They’re nice, but they aren’t amazing. Yet for nearly 30 years they have dominated their market. When you see a product or service that no one has successfully copied, the product itself is rarely the source of the long-term competitive advantage.
American Girl has prevailed for so long because it’s not really selling dolls: It’s selling an experience. Individual dolls represent different times and places in U.S. history and come with books that relate each doll’s backstory. For girls, the dolls provide a rich opportunity to engage their imaginations, connect with friends who also own the dolls, and create unforgettable memories with their mothers and grandmothers. For parents—the buyers—the dolls help engage their daughters in a conversation about the generations of women that came before them—about their struggles, their strength, their values and traditions.
American Girl founder Pleasant Rowland came up with the idea when shopping for Christmas presents for her nieces. She didn’t want to give them hypersexualised Barbies or goofy Cabbage Patch Kids aimed at younger children. The dolls—and their worlds—reflect Rowland’s nuanced understanding of the job preteen girls hire the dolls to do: help articulate their feelings and validate who they are—their identity, their sense of self, and their cultural and racial background—and make them feel they can surmount the challenges in their lives.
There are dozens of American Girl dolls representing a broad cross section of profiles. Kaya, for example, is a young girl from a Northwest Native American tribe in the late 18th century. Her backstory tells of her leadership, compassion, courage, and loyalty. There’s Kirsten Larson, a Swedish immigrant who settles in the Minnesota territory and faces hardships and challenges but triumphs in the end. And so on. A significant part of the allure is the well-written, historically accurate books about each character’s life.
Rowland and her team thought through every aspect of the experience required to perform the job. The dolls were never sold in traditional toy stores. They were available only through mail order or at American Girl stores, which were initially located in just a few major metropolitan areas. The stores have doll hospitals that can repair tangled hair or fix broken parts. Some have restaurants in which parents, children, and their dolls can enjoy a kid-friendly menu—or where parents can host birthday parties. A trip to the American Girl store has become a special day out, making the dolls a catalyst for family experiences that will be remembered forever.
Source: Harvard Business Review
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