What sets customer-centric companies apart from their competitors? To start with, they don’t simply announce their love for customers in a mission statement and continue business as usual. They create a culture that’s passionate about and aligned around the customer mission. They systematically bring the voice of the customer into their innovation process, by understanding customer motivations. They design and deliver exceptional customer experiences.
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Companies that commit to customer-centricity can outperform competitors and build a foundation for long-term success. The journey is not easy, though, and it requires a deep understanding of what drives the choices their customers make. More data doesn’t necessarily provide the answer. Companies today collect, crunch and categorize massive amounts of information about their customers, but still their innovation success rates remain stubbornly low. That’s because the data is a helpful way to reveal many fascinating characteristics – but not customer motivations why customers buy.
To truly get at what drives customer intent and buying decisions, executives need to focus on understanding the “jobs” that customers are trying to get done in their lives. This approach, called jobs to be done, is based on the observation that people don’t buy simply buy products or services; they “hire” them to get important, unsatisfied jobs done in their lives. In the famous words of Harvard marketing professor Ted Levitt, “people don’t want a quarter inch drill, they want a quarter inch hole.” Jobs represent the progress people are trying to make in specific circumstances, and typically have functional, social, and emotional dimensions.
A “LIGHTNING BOLT”
“It was really was like a lightning bolt for me because we had been thinking hard about how we would grow new customers, how we would want to serve them, how we would organize the university,” says Paul LeBlanc, president of Southern New Hampshire University. He joined about 35 other senior executives at a recent Innosight CEO summit to discuss how taking a more fundamental jobs view to frame customers’ needs could drive innovation and renew culture. SNHU has in the past five years become the leading non-profit in digital learning and has transformed from a regional college with 4,000 students on campus into a national university with 75,000 customers of 250 online degree programs.
A new body of research and study into jobs to be done is showing its broad potential. LeBlanc’s and SNHU’s story is among many in the new book Competing Against Luck, which draws on more than 15 years of research and practice by Clay Christensen, Innosight, and other thinkers like Bob Moesta. The book shows how leaders are using a jobs approach to give clarity not just to innovation solutions but also to help align strategy, marketing techniques, organization, and culture around a customer-centric mission.
Understanding Jobs to Design New Offerings
According to Nielsen, of the 20,000 new products launched between 2012 and 2016, only 92 had sales of $50 million in the first year and sustained sales in the second. Their analysis shows that each one nailed a poorly performed and clear job.
The practice of digging through data for correlations and building elaborate customer profiles is partly responsible for such a poor showing. But by centering market research efforts on what customers are trying to achieve in a particular circumstance, marketers and product developers can find rich opportunities for innovation and design solutions and experiences where there is less guesswork about trade-offs customers are willing to make.
Hershey’s Reese’s Minis, for example, achieved breakout success with this line extension in part by researchers identifying circumstances where customers weren’t satisfied by existing candy formats – driving the car, standing in a crowded subway, playing a video game. In these situations, the smaller format was more convenient to eat and the resealable flat-bottom bag were easier to dip into.
The Jobs-Focused Organization
Focusing on customer jobs to be done functions as an enduring innovation North Star and can align individuals across the organization behind a common purpose. Jobs-focused organizations ensure everyone is pulling together by putting into place a series of enablers across strategy, culture and processes — from the mission statement to customer value proposition to key performance indicators.
The benefits of a jobs-focused organization can be profound. Leaders can articulate their company’s purpose in a way that unifies its culture around a customer-centric mission. With clarity of purpose, employees can make autonomous decisions. Measuring the right things is reinforcing and provides more meaningful insight into how the company is doing.
At Intuit, for example, focusing on the customer job “to get taxes done” has enabled the company to move beyond the chaotic “feature chases” that produced lots of new improvements that customers didn’t really value. The company is so focused on customers’ jobs that it allows itself to market products that customers actually need, operating like a network of startups in which small teams launch new product pilots with minimal senior-level approval because they are so clearly aligned on with jobs.
Putting Customers at the Center of Strategy
A prevailing approach to setting strategy is to take a “present-forward” view of future possibilities: carefully gather and analyze data, look for quantitative proof that an investment opportunity will bear fruit, and act. This approach is based on an implicit view that tomorrow’s world will look similar to today’s.
But such an approach can obscure potential growth opportunities because it constrains the aperture of possibilities to existing products and customers. For example, when a leading consumer appliance company began to develop a long-term growth strategy, it discovered a looming growth gap. It had long relied on growth through incremental improvements to its appliances, which kept the big retailers that sold its products satisfied. But because relationships with end customers, who could hold on to products for years at a time, were highly transactional, continuing this course would lead to few added revenues over time as it does not make buying new versions of products essential.
When leadership took a “future back” approach to setting a strategic direction, they saw new possibilities. They started with the assumption that tomorrow will be different than today, vigorously examining how end consumers themselves are changing and how to change the nature of their company’s relationship with them. The exploration of key consumer jobs of the future led to identifying promising new strategic opportunity areas that yielded actionable new product concepts almost immediately. “Being consumer-centric is a major cultural change for us,” the CEO says.
CULTURE CHANGE THAT STICKS
Scott Cook, Intuit Founder and Chairman of the Executive Committee
2018 CEO Summit