There are zillions of words written about how customer centricity leads companies to success.
However, the “customer-centric” term is sometimes misused as a catchall for customer feedback or customer satisfaction results, but making people happy is not enough. To have sustained success, companies must genuinely understand what the customer wants and needs, and implement the right internal and customer-facing processes, strategies and marketing actions to satisfy them.
Hands down, the best example of customer centricity is Amazon, whose mission says it all: “to be Earth’s most customer-centric company”.
“We see our customers as invited guests to a party, and we are the hosts. It’s our job every day to make every important aspect of the customer experience a little bit better.” Jeff Bezos, Founder & CEO of Amazon
Last month, when struggling to define our customer personas at Virtual Lab better, Fede Boero recommended me to read Competing Against Luck by Clayton Christensen. This read introduced me to “Jobs-To-Be-Done” Theory, a way of looking at customers with a completely different lens which shed a lot of light on my discovery process.
“Job-to-be-done” involves a mindset change since it forces you to look at our product the way customers do. Clayton Christensen described this concept back in 2006, in this paper he wrote together with Intuit founder Scott Cook.
The theory just asks, “What job your product is hired to do?”.
People buy services and products to get specific jobs done; and while products come and go, the underlying JTBD doesn’t go away. A commonly used example is that people do not want a quarter-inch drill; they want a quarter inch hole.
JTBD theory is a change in the lens we use to understand customer needs. The Job, not the consumer, is the fundamental unit of analysis.
To understand what’s the Job our product is hired to do, we need to find which progress the customer is trying to make in a given circumstance — what the customer hopes to accomplish. This growth or accomplishment is the job-to-be-done.
All of us have endless jobs to be done in our lives. Some are small (pass the time while waiting in the supermarket line); others are big (seek a more fulfilling job). Some are regular (pack some lunch early in the morning before leaving to work); some show up unpredictably (find a nearby auto repair shop after our car broke up during a trip). When buying a product, we’re mainly “hiring” it to help us do a certain job. If the product does the job well, we tend to hire that product over again when we confront the same job. On the other hand, if it does a crappy job, we “fire” it and look for a replacement.
The Milkshake Example
The canonical example used by Christensen to explain Jobs Theory is a milkshake.
Some years ago, McDonald’s was trying to increase the sales of their milkshakes. So, they would interview milkshake customers and explain to them that they were trying to improve the milkshakes to increase the sales. They would ask them if they would like bigger milkshakes, or new flavors (like root beer or orange), chocolatier or thicker milkshakes . However, after improving the milkshakes with the interviews results, they found that customers didn’t buy more milkshakes.
Christensen was hired as a consultant to help McDonald’s to nail this problem, and he applied his brand new Jobs Theory to solve it. To understand which job arose in the lives of some customers that caused them sometimes to hire a milkshake, Christensen studied a McDonald’s restaurant for 18 hours one day. It turned out that about half of the milkshakes were sold before 8:30 in the morning. It was the only thing the customer bought, they were alone, and they always got in the car and drove off with it.
To figure out what was that job, Christensen went back the next morning and positioned himself outside the restaurant so to confront these milkshake customers as they came out. He asked them: “What job are you trying to get done that cause you to come to McDonald’s to hire a milkshake at 6:30 in the morning?”
It turned out that they all had the same job to do. That is, they had a long and tedious drive to work. And they just needed something to have while driving to stay engaged with life and not fall asleep. The customer wasn’t hungry yet, but they knew they’d be hungry an hour later. So they needed something they could hold with their right hand while driving, and keep it for the whole commute.
This analysis showed that McDonald’s milkshakes were not competing against Burger King’s milkshakes. They were competing against bananas, snickers, donuts or even bagels to do the same job. However, milkshakes were much more convenient than their competitors since they were easier to consume, only one hand was needed, and they were so viscous that it would take them the whole commute to finish them up with that thin straw.
Customers didn’t care about the ingredients. All they cared about was to be still full at 10 am and have something to entertain them throughout their trip.
Unveiling what the job was, put McDonald’s on a very different trajectory. It explained the reason why there were no results after improving the milkshake on dimensions of performance that was irrelevant to the job-to-be-done
To improve the milkshake for the morning JTBD, McDonald’s moved the milkshake from behind the counter to the front. To help them not to be late for work, they also gave people a prepaid swipe card so they could just dash in, gas up, and go without being caught behind a line. They also made milkshakes thicker to take longer to suck them up, and so on.
When McDonald’s understood that they were competing against bananas, the sales of the milkshakes increased by 7x.
JTBD theory tells us how managers should think about customers, strategy, products, growth, and innovation. Here’re some pieces of advice:
1. Design a business around a JTBD.
Products become obsolete, and this is why companies should instead create a business around the JTBD, which will lead them to sustainable success. This is why Ford moved from an auto company to a mobility & transportation company, opening the doors to markets such us ride-sharing.
2. Let customers get their entire job done.
People do not want to have to put together diverse services or products to achieve their needs. They want only one service/product that helps them get the entire job done.
3. Target those customers who will pay the most to get the job done best.
When a market is highly underserved, the fastest way to profits is first to target the people who will pay out the most to get that job done the best.
4. Let Jobs Theory guide the future of your company.
The only products that will win the future are those that help customers get the job done better. Understanding where customers struggle today to execute the JTBD indicates what a particular product needs to do in the future to win in that market.