Unmet needs represent market opportunities
Looking through a jobs-to-be-done lens, we see that a market opportunity exists when customers struggle to get a job done. Indeed, addressing those unmet needs is the key to success. But in most companies, managers don’t agree on what a customer need even is. This means it’s impossible for them to know what all the needs are, let alone for there to be consensus on which are unmet. Our methods of prioritizing market opportunities work because they are built around our solid understanding of what a customer need is. Our opportunity algorithm (explained below) makes it easy for us to determine which customer needs are unmet and to what degree. Knowing which customer needs to address in priority order enables us to systematically accelerate company growth. This is a key output of our innovation process, Outcome-Driven Innovation (ODI).
Myths that mislead
Companies often define a market opportunity as a new product or technology they have created. They believe that finding a need that their technology or product offerings can address is the actual market opportunity, but that is a myth that misleads. A market opportunity does not exist because a company has a certain competency or has created something; it exists because customers are struggling to get a job done. Their struggles are the market opportunity: success comes from discovering what they are and helping them get the job done without the struggle.
The opportunity algorithm prioritizes market opportunities
We have discovered that customers consider between 50 and 150 metrics (their desired outcomes) when assessing how well a product or service enables them to successfully execute any job. These metrics are the customer’s needs. A customer need is unmet when it is important to the customer, but not well satisfied with the solutions currently available.
To discover which of these needs are important and unmet, we have devised a mathematical formula we call the opportunity algorithm, which says that market opportunity = (importance + max,0 (importance – satisfaction)). This formula reveals which customer needs are most important and least satisfied; the ones that represent the best opportunities for growth.
For instance, if circular saw users agree that minimizing the likelihood of the cut going off track is an important and unsatisfied need, then that need represents a market opportunity. The more important the need and the less satisfied the customer is, the greater the opportunity for value creation. We use sophisticated quantitative market research techniques to ensure the accuracy of our data, reducing the risk of failure and making sure we focus on the right opportunities for growth. (Learn more about discovering unmet customer needs.)
Our Opportunity Landscape has proven to be invaluable in helping us visualize the degree to which markets are over- and underserved. The landscape is a snapshot of all the customers’ needs: each dot in the landscape represents the degree to which a specific need is important to the customer and the customer’s level of satisfaction. Each market opportunity is highlighted in the landscape. Knowing a market’s underlying structure is critical for formulating the right innovation strategy. We discover hidden opportunities for growth by revealing where customers need help most. These market opportunities are also used as inputs into our market segmentation process, revealing unique segments of opportunity. Learn more about our growth strategy consulting services.
This landscape reveals a market that is underserved and in need of a solution that will help customers get the job done better. Each market opportunity is revealed. The underserved outcomes represent opportunities for growth.