3.1: Getting to Know Your Customer - Video Tutorials & Practice Problems

<v ->Welcome to lesson three.</v> So let's talk about how do we get to know your customer. In order to understand customer needs from a product perspective, we need to define the job to be done, JTBD. It reflects the underlying user needs. This theory was popularized by Clayton Christensen who was a Harvard University professor when he was researching innovation to meet user needs. Jobs in this context are foundational for understanding what is the customer motivation and why customers behave the way that they do. The JTBD framework focuses on the why behind customer behavior. In his famous lecture on the topic of jobs to be done, professor Christensen described research that he and his team have done to improve milkshake consumption at McDonald's. When the visitors were asked to taste new milkshake flavors and share their preferences, the improvements didn't really influence the product consumption in any way, no matter how they changed the flavor. Then they decided to do research in a different way. The researchers were observing the reasons why the customers were hiring the milkshake and what was the job that milkshake was doing for them. So they found out that most milkshakes were consumed in the morning, when people were going to work, frequently driving, and the drive to work was really boring for them. So the respondents revealed that they tried to hire, and first they hired bananas and donuts as competitors to milkshakes, but neither one was a good competitor because banana was gone in three minutes and donut was too messy to eat in the car. The milkshake though, was taking over 20 minutes on average to consume, it fit well in a car cup holders, and it was feeling enough so that they didn't have to eat any meal until lunch. So in some, they found out that competitors to the milkshake were not milkshakes of different flavors, but rather bananas, donuts, and some snacks. So as a result, they improved the checkout system to make it faster, established drive-thru, and also helped people in many ways not to lose any time on their way to work and also make the milkshakes last longer. For that, they put any pieces of fruit and berries in the milkshake, but also not too thick to get stuck in this straw. And also, they make the drink thicker so that it lasted longer. And all of this significantly improved the consumption. So as a simple way of explaining JTBD theory, if a consumer goes to a store to buy an electric bulb, their goal is not to buy a bulb, the ultimate goal is to make the house well lit at night. So that's the job to be done. So the value of a computer is not to provide a keyboard to type commands, it is to process and retrieve information. Similarly, the invention of the single button smartphone address this in a brilliant way. The job to be done is not to have more buttons, it is to make any command very simple to execute. So the concept of job to be done is the next step in product adoption, because it extends the concept of a product to the value that it provides to the customer. So now let's review a case study. In his article Jobs-to-be-Done Case Study: Beware of Lead Users, Tony Ulwick, who was the pioneer of jobs to be done theory discussed a global medical diagnostic software company. Let's call it GMDS. So this company was a leader in medical diagnostic software, but it experienced a steady decline in demand of their software. They were continuously collecting feedback from their power customers, the best specialists in the field, most advanced ones and the company worked really hard to understand the needs of those lead users and made them part of their customer advisory board. So that worked really, really well. Those lead users became an integral part of the company's innovation and development practices. They provided feedback, and this feedback were used to deliver new features, but despite all of that, the company position in the marketplace was continuously declining. So in order to address the challenge, the company decided to use JTBD analysis, and customer segmentation that was appropriate for this group of users. And they looked at highly experienced as well as less experienced physicians in their analysis. So to do so, they captured desired outcome statements from approximately 170 users. It was very interesting what they found out. They saw that lead physicians did not really represent the customer market. They represented only 21% of the physician population. And on top of that, the company found out that physicians in this specific observed segment were not at all dependent on the diagnostic software to make an accurate patient diagnosis. They were lead users, so they had the experience, knowledge and all the skills that they needed to make this accurate diagnosis on their own. So they only used the software to verify that they were correct. But in contrast, the 79%, all the remaining physicians were highly dependent on the diagnostic software because they needed it to gather the needed information and make the proper diagnosis. So these needs were basically different from those of all the lead users. They needed to see the details, understand the reasoning. They wanted the system to generate a very detailed script and they wanted to share the script with the patient. So because the company in this case was focused on its lead users without understanding the outcomes desired by the remaining 79%, which were the target market, they failed to understand the needs of the underserved customers. This way, this company put themselves in a position of declining market share. So the lesson learned here for us is that the importance of tying the product strategy to understanding unmet customer needs is most important. By using the JTBD approach, the company management was eventually able to deliver products that met the needs of their target audience, and they got their business back on track. So it creates use case about how powerful it is to understand who your users are and be able to meet their needs.