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Over the past few weeks I have had occasion to work with a few established organizations and some startups. I know by now it should not surprise me, but the engagements almost always have to start with a discussion about customers and segmenting. It is usually something with which the clients are struggling.
There are two behaviours that I believe cause people a lot of difficulty in thinking about customers. There is a tendency to look at customers by thinking of anyone with whom you are, or you want to have interaction; even if that relationship is not a customer one but rather a partner. The second common approach is creating segments based on characteristics (age, technology expertise, location etc.).
I subscribe to the job-to-be-done approach to thinking about customers. This is the Harvard Business School approach championed by Clayton Christensen and Mark Johnson, and used widely by Alexander Osterwalder and members of this community. It is built on the concept that the job your customer has to get done, not the customer, is fundamental unit of analysis. This concept can be extended to include the problem-to-be-solved. I won’t go into lengthy, detail explaining the approach here, my objective is to share how I implement that point of view. It is worth doing more research if you are not familiar with "job-to-be-done".
When we start the discussion I ask the people to create a three-column table. In the first column I have them brainstorm anyone who might be interested or be helped by the vision, product or service the business owners have in mind. This first exercise should be as creative as possible, don’t let them self-edit. It will work out as we go along.
After the first column is populated, I ask the participants to then, in the second column, identify the job, or the problem, that each of the potential customers in column one have, with which the participants could help them. This last point “with which the participants could help” is very important. It is not just any problem or job.
Once the second column is populated I ask the participants to then list, in column three, what the customer needs from you in order to get that job done, or solve that problem.
We then look down each of columns two and three, and try to find commonalities that allow us to group these ideas together. For column two, the groupings of common jobs-to-be-done, or problems-to-solve, become the “customer segments” of the business model. The groupings of column three, commonalities about needs, become the “value propositions” of the business model.
On the first issue (customer versus partner), I have found a very simple question helps clarify thinking in this area – who is helping whom here. If you are helping someone else to get a job done, or solve a problem, then they are customers. If the other party is helping you to do something, they are partners not customers. That is not to say the two are mutually exclusive. It is quite conceivable the party may be both customer and partner. In that case you may be involved with a multi-sided platform.
It is a simple exercise that doesn’t take overly long to do. It requires no special tools or knowledge. It can be done on flip charts, or whiteboards, with markers or with pens and sticky notes. Then the findings are transferred to the VP and Customer components of the BM canvas.
Quite interesting and I like the concept. I am currently using the Customer Value Canvas .08 in English & (translated into Japanese) as well to explain the Jobs-to-be done concept with VP mapping along with emphasis on Johnson and Christensen approach(blended). One thing to stress is the continuous focus on VP and understanding if it will actually solve a customer problem present and into the future with nurturing the customer relationship.
Nice post and excellent approach, Mike!
It's a very practical tool that complements our latest approach and thinking on customers and value propositions:
I also really like your simple question to distinguish customers/partners:
If you are helping someone else to get a job done, or solve a problem, then they are customers.
Keep up the great and practical thinking!
Just to be clear - are you asking for an example of the use of the customer-value fit tool?
I think Abdulrhman has asked exactly this example. It's very interesting to get acquainted with it. So, please, be kind to do it, if it's possible.
The job to get done is one part of market segmentation - but is is insufficient in and of itself. Two sets of customers may require the same set of 'jobs to get done' - BUT they may put different degrees of importance on the individual jobs within the set. It is this difference in importance that may define the segment. For example, both amateur and professional photographers require accurate focusing and accurate aperture opening - one may place more importance than the other on one of the functions. It is this pattern of tradeoffs on the jobs to be done that determine the segments. You may read more about this by Goggling 'conjoint analysis' - this is a classical problem in marketing.
That said - the 'jobs to get done' approach is both extremely practical and useful in working with executives and budding entrepreurs.
Valerie, you hit on a very important aspect of all of this. The creation of segments, however it is done, is not the end of the task. There is still the need to understand these segments. Osterwalder, Jobs and Christensen will point the way to having to develop an in-depth understanding of your customers. It is not enough to simply list them.
The next progression from having created the segments, is to look at and understand their jobs and the needs they have. Alexander's customer-value tool helps with this process by further refining your understanding of the individual segments you have identified.
One must go an additional step - quantifying the differential value of the 'job' to each of the segments - i.e., differential pricing.
I may be being rather thick but I don't really follow this. I think an example would be an excellent idea. I tried for a theoretical IOS game company (the game was a fantasy role playing game). I stumbled at the first hurdle. "Anyone interested by the product" is very broad for this product. Would one write "young males" or "young professional men"? This seems rather vague to me. What would you do in this scenario and then how might the rest of the table look?
One of the outcomes of this exercise is the discovery that individual characteristics of your customers - young males vs young professional men - are not significant as they may have the same job-to-be-done and needs.
To start the exercise do just as you describe, make up a list of anyone you can think of who may be interested in this type of game. Getting a few down could be sufficient to start. Then go through the other columns. You will likely find common jobs or problems, but you might be able to differentiate the jobs. Then go back to column one and think of who else might have that job or that problem.
Young males maybe using the game to connect with and challenge their friends, so they need the ability to connect socially or play the game as a group.
Young professional males may be using the game to relieve stress or boredom and they need to be able to play the game in short spurts as their time is limited, so they need the ability to start and stop the game easily.
Don't forget to think widely as well. What about game companies. Could you sell your idea and game structure to them as a product - taking a designer's role.
Game advertisers, could you make the game free and include advertising. I think Angry Birds makes something like $1 million+ a month from advertising revenues in their 'free' game. By the way, Rovio did their initial segmentation by touch screen phone operating systems. Beginning with iOS and them moving on to Android and others. Then they expanded to non-phone based gaming - consoles and computers.
These are only a cursory take on the possibilities. You should know the environment a lot better than I do. If not you probably need to do more research about the environment and business potential of these games.
After this exercise is done, you can move on to a more in-depth understanding of the segments using the Value Proposition designer.
You might also supply different versions of the game for the different segments by charging different prices, or by offering 'add-ons' for special segments at an additional fee.
Thank you for such a good introduction on the client table. I am going to organize a brainstorming session with university students in order to understand what kind of jobs they should do and how our company´s product can help them. I would like to use the client table in the session. Besides, I am thinking to use the empathy map at the same time. For example, one of the jobs needed to be done by students is to join in some activities of student organizations, by using the empathy map we can know what they think, hear, talk etc. during this job and how we can help them to finish. Our company is offering telecom analytics services. Do you think it is appropriate to conduct brainstorming session in this way?