What are Twitter’s jobs-to-be-done?

This is a guest post by Hutch Carpenter. I met Hutch when he was running products for Spigit. He is one of rare product management leaders who starts with customers and their job to be done over myriad product features. Hutch now does Innovation Management Consulting for startups and enterprises. You can read his thoughts on innovation in his blog and follow his tweets at @bhc3. Hutch’s motto is, ” You can’t wait for customer insight. You have to go after with a club.”

Will your thoughts be featured next in this guest post series? Write yours now.

 

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Jobs-to-be-done asks this: why did customers hire your product? “Hire” means they picked the product to satisfy some need or want. To think this way is to empathize with customers, better understanding growth opportunities. Two things to know:

1. Jobs are relatively unchanging over time
2. Products to fulfill jobs are not the same as the jobs themselves

Take Twitter: how’d anyone ever think *that* would be successful? Because it fulfills these jobs:

• Learn new information
• Share interesting stuff
• Talk with others
• Participate in major events
• Connect with like minds
• Establish professional reputation

We used to MySpace, email, write letters-to-the-editor, etc. Now we tweet.

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Will Galaxy 4 fail because they based it on customer research?

I don’t know what is going to happen with Samsung Galaxy 4 sales and I am not going to make a prediction. One thing that is clear from the media reports is that initial excitement quickly gave way to a feeling of let down. Unlike Apple that says they don’t do customer research and shares no details about their understanding of what the customer needs, Samsung gladly shared their design process for S4

the phone’s software development was driven by four key requirements that Samsung research found consumers most desired:

1. The phone had to be fun,
2. encourage closer relationships,
3. offer convenience and
4. help improve health and wellness.

This is some very specific details based on whatever customer research they conducted. And they fed that input into their design process to deliver what they believe to be the right phone for these jobs customers are hiring a phone for.

Compare this against the famous Steve Jobs statement about not asking customers what they want and designing the product in secrecy.

The question is what will the bloggers and social media say if S4 turns out to be a bust? Will they once again extol Jobs school of product innovation and blame S4’s failure on taking the path of methodical customer research and developing products based on customer needs?

Again it is hard for me to say the outcome of S4 but if they were to fail then it is not because they designed it based on what customers desired but because of their interpretation of how to fulfill their desire.

For fun needs Samsung added a whole bunch of camera features like Sound and Shot for amateur news reporting, Beauty Face etc.

For relationships needs they added text translation to chats,emails and texts.

For convenience they delivered a set of gesture features to control phone without touching.

Finally for health they added features mirroring those of FitBit and other devices popular among quantified self movement.

If you are going to question Samsung’s approach to product development it is the way they chose to fulfill customer needs with these features that you should question. We hope they did not ask customers directly what will be more fun or convenient because that would be the equivalent of asking customers if faster horses will be more fun.

It is quite possible they did no follow-on research to determine if Samsung’s interpretation of desires matches that of customers’. It is also possible they first decided on these features and later fitted them on to customer needs.

Any of these reasons for sure will result in product failure that is not due to asking customers what is important but how it was asked and how it was interpreted.

So if S4 indeed fails in the market place do not rush to accept what you believe to be Apple’s method of product development and give up on customer research. Instead recognize that customer research is lot more complicated than finding what they desire or asking what will fulfill those desires. It is a multi-step approach that starts with customer desires and testing repeatedly with to deliver the right offering that serves customer needs better than any other alternative available to them.

How do you do product development.

Bye Bye Mr.Memory! Hello Mr. Insight

In the Alfred Hitchcock film 39 Steps, the opening scene features a stand-up act by a man introduced to us as Mr.Memory. People paid money to come to this show. He was someone who had committed at least 50 facts per day into his memory and could answer any audience question. The questions range from the distance between Winnipeg to Manitoba to baseball statistics. Today we do not need Mr.Memory nor do we  appreciate committing facts into memory. We have Google, or bing or the next big search engine.

If you look closely at Mr.Memory’s act it was still an entertainment act. If it was a rote regurgitation of facts the audience would not have paid good money to get there. He was witty and the audience was laughing.  Mr.Memory would have bombed if the audience were bored or laughing at him instead of at his jokes.

Google or not,  data, information and facts have  always been available to those sought them. Data might not have been free or there were transaction costs but was available. People protected data as if the value is intrinsic to the data. Value  is not intrinsic to data. Value is created from the insights one derives from these to serve a market and gain upper hand over the competition.

There is a quote that was attributed to Sam Walton (I cannot verify the authenticity): “I am not so much afraid of someone stealing my data as someone can make better decisions with it than I can”.  Whether or not Sam Walton said this the statement holds true.

Mr. Memory  may not have  job today but he knew then that his advantage came from doing something different with the information – delivering entertainment that competed for customer wallet share against other forms of entertainment.

Do you, as a decision maker, just seek data for its own sake or create actionable insights that deliver profits?

Should you listen to your most loyal customers?

Should you listen to your customers who take the time to write to you asking for specific products or features? The common sense answer seems yes, but should you always listen?

The WSJ has a story of loyal fans of British version of Cadbury’s refusing to accept the version sold in the US markets. The latter is manufactured by Hershey’s under its licensing agreement with Cadbury’s with a recipe tailored to the US market. Should Cadbury’s or Hershey’s listen to these most loyal fans and change their recipe? The article in WSJ describes these fans as someone who,

wants nothing to do with the stuff made in the U.S. “Oh, it’s so yuck,” she says. “You might as well eat a Hershey bar.”

With such loyal fans does it not make sense to a marketer to listen to them? The answer is not straightforward and need to be analyzed from at least three angles

1. What is the customer saying and what do they really want?
2. Is the customer insight actionable and profitable?
3. What is the share of profit from these customers?

The first point is the most repeated story that if Ford had listened to its customers it would have developed faster buggies. In the book Game Changer, P&G’a retired CEO, Mr. A.G.Lafley calls this “customer driven and not customer led”. It is important you listen to your most loyal customers but everything you hear are not the customer insights – not to mention the biases in what we choose to hear and how we interpret it.

The second point is about relevance of customer insights to your business. In the Cadbury’s story the insight you may find is that the customers are really holding on to their memories of living abroad and are trying to relive by reminding themselves of the chocolate they ate there. This would be a valid information but it is insight only if you can act on it, the action required fits your business strategy, and you can generate profits from it through product innovations.

The third point is about  the share of profits you generate from these customers. What is this segment’s willingness to pay for such product variation? What are your costs to produce, distribute and get it to the target segment? It is not just how big this segment is or how much revenue you generate – the segment has to generate enough profit to justify new action.

Next time you see a flood of tweets, blog posts, and other social media expressions of customer likes and dislikes, ask the three questions before you rush to implement change.

It’s Not What It Costs You It’s What Your Customers Value

Whether you are a small business or a large corporation marketing means Segmentation and Targeting. Marketing is about finding what is relevant to each segment and delivering at a price they are willing to pay. There is nothing more to it. It is however easier said than done. It does come  easy to companies like P&G that have done it for so long, institutionalized the process, has the resources to conduct customer research, gather insights and invest on new product lines to monetize those insights.

Not all can afford such unfettered access to intellectual or capital resources.

I saw a post by an artist, Ms. Michelle Moyer, of White Dog Studios, who makes and sells jewelery. Michelle is thinking about pricing her wares correctly. She says,

I think that artists undervalue their work far too often. When I go to shows or browse online and see handcrafted pieces selling for a price that I know will barely cover material costs, if at all, I cringe because this sets the market lower for my work. I believe that my work has value and that incorporates not just the material costs, but the time it takes for me to develop the design and make the piece.

I want to highlight a great point that Ms.Moyer intuitively figured out, it is the effect of reference price. Customers do not know the absolute value of the crafts. There is not a universal system that tells us how much we value Ms. Moyer’s craft’s vs. others. We look at prices relative to available options. While there is no common value for crafts, presence of lower priced competitive items sets a lower reference price for her customers.

Ms. Moyer  talks about rest of her pricing in terms of material costs and labor costs, and about how much artists value their work. Pricing is about capturing a share of the value you create for your customers. Your costs are irrelevant to your customers. Pricing needs to be based on value added to customers. It is not about what you value or what you think the value is, it is what your different customers think.

The value is not the same across all customers. In the book Game Changer, retired CEO of P&G Mr.A.G.Lafley talks about “who is your WHO?. The “WHO” refers to the customer. Mr.Lafley, goes on to say

“As you work to better understand the WHO, you’ll discover that people use your product for different reasons. They may have different occasions for when and how to use it; differences about what they think is a good value, and what they are willing to pay. One size does not fit all”

Ms. Moyer  is practicing a type of multi-version pricing,

I try to offer a range of pieces at various prices. For example, this bracelet, for sale on my Etsy shop, is only $20, which I believe is a fair and affordable price. This bracelet, on the other hand, took much longer to design and create, so it is priced at $70.

This is good but her  multi-version pricing is once again based on her costs rather than on segmentation or customer value. Taking a lesson from Game Changer, there are opportunities to find  the reasons people buy the bracelets, different occasions and how the customers use the bracelets.

It is not easy when you are a small business  who cannot afford to hire someone to do strategic marketing or invest in doing customer research or segmentation studies. Even a simple pricing of just one version of your product gets harder  when you make products that have no “common value”.  So the easiest route seem to be producing what is easy to you or pricing it based on your costs.

But it does not have to be as rigorous and formal as it is for a multi-billion dollar giant like P&G.  You can solve 50% of the problem by simply  starting a conversation with your customers.

This blog  and I can help you get started on the right type of customer conversation and finding what they value.  Write to me.

Related article: Small Business pricing.