Customer needs don’t have to be elusive
The key to company growth is to create more value for customers. This means better satisfying the customers’ unmet needs. Why is this so hard? In over 95 percent of all companies, managers don’t agree on what a customer need even is. This means it’s impossible for them to know what all the customer needs are, let alone for there to be consensus on which ones are unmet.
Can a company consistently satisfy customer needs when it doesn’t know what they all are, or even what constitutes a need? Chances are it can’t. Less than 1 percent of all companies were able to grow 5 percent or more every year for ten years (1999-2009), according to a recent study published in the Harvard Business Review. Clearly, value creation is a challenge.
But it doesn’t have to be this way. Examining customer needs through a jobs-to-be-done lens, we see that a customer need must relate to helping customers get a job done better. This insight has led us to create a whole new way to think about, capture, and use customer needs to create breakthrough products and services. It is part of our innovation process, Outcome-Driven Innovation (ODI).
Myths that mislead
Managers and employees in nearly every company hold some of the following mistaken beliefs. These beliefs are a key reason why companies struggle to innovate:
1. Customers have latent needs; needs they don’t even know they have.
2. Customers struggle to articulate their needs.
3. Customers’ needs change quickly over time.
4. Customers won’t know what they want until they see it.
5. It is impossible to ever know all the customers’ needs.
These myths have survived for decades because companies traditionally define customer needs around the product (a product-centric view) rather than around the job the product is hired to execute (a customer-centric view). As a result, the traditional methods of capturing customer needs don’t work; and these myths seemingly offer an explanation as to why. We have proven that these are all untrue statements.
So what is a customer need?
Let’s start with what customer needs are not. A customer need is not a solution, product feature, or idea. Nor is it a statement that describes how to make products easier to purchase, set up, install, or interface with. Customers don’t buy products and services to set them up or to interface with them. They buy products and services to get a job done.
It is true that customers don’t know what solutions they want, but a solution is not a need. Customer needs are the metrics customers use to measure how well they’re executing the job-to-be-done. We’ve discovered that customers typically use between 50 and 150 metrics, which we call outcomes, to describe the successful execution of any job. These outcomes are the customers’ needs. Outcomes power our innovation process, Outcome-Driven Innovation. When we define needs this way, we can readily identify all of them because customers know perfectly well what success means to them when getting a job done. Take the job of listening to music, for example. People can articulate that success results from being able to find desired songs quickly, avoid choosing unwanted versions of a song, and quickly change the order in which songs are heard.
This perspective changes everything. When needs are thought of in this way, there is no such thing as a latent need or a need a customer can’t articulate. Furthermore, these needs are stable over time: they often don’t change for decades because the job-to-be-done remains the same. Consequently, once we have captured all the customers’ needs in a market, a company’s ability to create customer value in that market is enhanced for years to come.
The ramifications of knowing the customer’s needs
Having a full set of customer needs, defined around the job-to-be-done, impacts all aspects of innovation, including the way opportunities are defined, the way markets are segmented and sized, the way product and pricing strategies are formulated, and the way ideas are constructed, tested and positioned. These customer metrics guide and drive the entire innovation process. This holistic and comprehensive quality of ODI is what makes it so powerful and what enables us to launch big ideas that win.