People buy products and services to get a job done. We have discovered that in any market customers use between 50 to 150 metrics to describe the successful execution of the job-to-be-done. These metrics are the customers needs. The goal of innovation is to create products and services that address unmet customer needs, making it possible for customers to get the job done better.
Knowing which of the customer’s 50 to 150 needs are unmet in a given market is a difficult challenge for most companies for three reasons: (1) managers don’t agree on what a customer need is, (2) they fail to capture all the customers’ needs, and (3) the methods they use to determine which are unmet are flawed.
Despite all the talk about satisfying unmet customer needs, the voice-of-the-customer (VOC) community cannot say what the focus, structure, and content of a customer need statement should be. Without agreement on what input is being sought, VOC becomes an anything-goes proposition. Anything a customer wants to talk about becomes an acceptable customer input. This has been a problem.
As we have suggested above, the input companies must capture to be successful at innovation is not a transcription of customers’ heartfelt remarks regarding a product or service: rather, it is a desired-outcome statement resulting from understanding how customers measure the successful execution of a job. (Learn more about customer needs.)
For each step in the job-to-be-done, the goal is to understand what makes that step time-consuming, unstable, or unpredictable, and what makes it inefficient. Strategyn’s qualitative research methodology is optimized for capturing these desired-outcome statements. For those with business process improvement or a Six Sigma background, this is akin to deconstructing a business process and determining what metrics must be measured and controlled to produce a predictable output.
Traditional methods fail because proponents of those methods insist that the number of customer needs must be limited to between 15 and 25 because developers cannot deal with more than that. This is utter nonsense. The reality is, customers have more than 15 to 25 needs in nearly every market. Denying this is self defeating. Using arbitrary methods to whittle down the number of need statements simplifies market research activities, but the simplification comes at the expense of uncovering all the unmet customer needs. It is time to put this old thinking to rest. It is possible for companies to capture, prioritize and process over 100 customer needs. We have 20 years of experience that proves this it so.
Opportunities for growth vary in their attractiveness. Some unmet customer needs are more important and less satisfied than others, making them better growth targets. Determining which unmet needs represent the best opportunities for growth has long been a challenge. Many of the methods used for this purpose are leading companies to pursue phantom opportunities while missing others altogether.
To address this challenge, our innovation process, Outcome-Driven Innovation (ODI) makes use of the opportunity algorithm, which reveals the needs that are the most important and least satisfied. (See What Customers Want, chapter 3.) The more important and less satisfied a desired outcome is, the greater the opportunity for value creation. We capture importance and satisfaction data points using advanced quantitative research methods. These data points are then used in the algorithm, eliminating a potential source of error and variability. The outcome-driven methodology transforms the process of identifying unmet customer needs into a science.