We’ve all been brought up to believe that our customers are kings and queens to be served honestly according to their needs and wants. This is one of the logics that we must follow in the business environment and businesses increasingly seem to preach customer centricity also in more traditional environments where typically the product has been king.
Sometimes, though, I seriously doubt whether some companies actually practice what they preach.
How are you trying to understand your customer?
Most often, companies seem to focus much on existing customers; how to improve the product, how to improve the service, maybe how to create more transparency and deeper relations, which you can argue there is nothing wrong with. But they rarely try to understand the diversity of underlying jobs to be done (the understanding of why a customer would hire a particular product for serving a particular need under certain circumstances) and consider how to change accordingly to those particular jobs.
They rather seem to focus on existing products, and the relation between that particular product and the customer and not vice versa which leads to a narrowing of their perception of possibilities and strategic opportunity areas.
Also, in many cases the noncustomer is of no interest at all. Why should you even consider understanding the ones who reject you, or merely pay you an occasional visit, and apparently don’t generate any or enough income?
Well, there is a reason or perhaps several reasons, behind why someone, doesn’t pay attention to your product or service. Maybe it’s not because they are idiots who don’t understand the product. They might have very important jobs to be done that are not served, overshot or undershot. What might seem uninteresting from an economic perspective today might be of a complete different nature tomorrow.
Several factors negatively influence how companies respond to jobs to be done
Let’s use cable-TV providers as an example. Cable-TV providers who for a long time, some may say still, believed in the conventional TV package and the concept of linear TV – a product and a concept that seem to be obsolete these days or eventually will be.
What kept (or keeps) cable-TV providers believing in the merits of a cable-TV product that research for many years have documented was a pain among customers?
Maybe, they were more interested in generating short term profits for investors?
Maybe, they ignored the signals of change because they knew better than the customer?
Maybe, they were blinded by the so called technological wonders of their current product?
Maybe, their company thrived from conventional thinking?
Maybe, they ignored to look on society, consumer behavior and technological developments in a broad perspective, in other words neglected big picture thinking?
Traps to avoid
There are at least two traps to avoid for especially incumbents.
The first trap to avoid is to only narrowly focus on existing customers based on a product-customer relation because this typically only leads to sustaining innovations thus paving the way for disruptive innovations from competitors.
The second trap to avoid is not looking for alternatives among noncustomers which could potentially lead to the creations of completely new market offers, which currently your unknown competitor is working on doing, and perhaps eventually will make your core customer leave you.
How should we understand the perception of quality and the jobs to be done behind it?
The first trap is a classic. Cable-TV incumbents have felt the pains inflicted by streaming giant Netflix. Streaming, in the beginning, was a technology with poor qualities in their eyes. It didn’t perform to the same level as the signal led through the cable. Their product focus kept them from understanding what jobs to be done the customer actually had. Focusing on an engineer’s perception of quality and on blind reliance on cash cows, instead of what customers actually perceived as quality meant that streaming services didn’t hold any interesting profits because it was not for the masses due to poor quality.
First problem was that they didn’t respond to customer demands from core customers who wanted more selective freedom in combining their own channels. What they actually missed here was the word empowerment, which I addressed as an important customer job to be done to respond to and anticipate as far back as 2010 at Copenhagen Future TV.
Second problem was that they didn’t even pay attention to noncustomers who were discarded as “nerds” whose behavior moreover was illegal in their ever going search for finding movies or TV-series online. Interestingly enough, our research showed that this wild bunch were willing to pay a fair amount for content that was actually packaged the right way and which addressed their need to watch content (both new and perhaps surprisingly also older content) on multiple devices.
By the time Netflix opened both noncustomers and from an immediate economic view more importantly, existing overshot customers were more than ready to jump to Netflix and increasingly shave or either completely leave their cable-TV provider.
Initially, incumbents tried to disregard the movement to streaming by openly dismissing the content of Netflix as old, of poor quality, completely missing the point of perhaps the most important jobs to be done to fulfill in the entertainment business – freedom and empowerment to choose your own content, whenever you need it, on whatever device, and on a subscription basis so you would not have to deal with different price points when you are really in the mood for entertainment. This combination of jobs to be done was actually what different customer types saw as true quality.
To explain the second trap I will draw on an example by Kim & Mauborgne in their recent update of the classic Blue Ocean Strategy. Sony demonstrated an interest in e-readers and conducted research among existing users of e-readers. The research showed that they were interested in better quality screens, larger screens etc. (forgive me if don’t go into detail here).
Even though Sony adapted to those needs they eventually discarded from the e-reader business because they didn’t see increasing sales. What went wrong here was the fact that they didn’t turn to noncustomers who actually wanted an e-reader if enough titles were available. Something Amazon saw and reacted to, and I believe with great success at least from a customer point.
Sometimes, I admit, it is of course difficult to understand which customer type you should focus on, especially when you consider how difficult it is for incumbents to forget about existing business and the one and only strategy to follow. I would argue that today’s companies must try to understand jobs to be done among many different types of costumers, be ready to work with multiple strategies, and willing to open new arenas to avoid being disrupted. So putting the customer types at the center of your attention is important for developing strategies and innovations accordingly.
To understand customer types we must understand the environment and the world they live in
In my view one of the biggest challenges for today’s companies and especially incumbents, is to learn how to understand the exponential environment in which technologies develop and integrate in customers lives.
Not that products and services necessarily only have to be of a technological nature, but because with those changes come very impactful changes in consumer behavior and in their choice architecture, in jobs to be done that are necessary to respond to as a company interested not only in its survival, but maybe more importantly, who is interested in driving a purposeful business with a strong value proposition that resonate among customers.
It is often said that no customer can explain to you what they want. It might be true, it might also be wrong. You should listen to the customer jobs to be done, and you should be able to break away from conventional thinking and use a creative mindset to interpret those jobs to be done into offerings that match what the customer might not be able to imagine but will sincerely react positively to because this was just what he or she needed.