Jobs to be Done is a hot concept. Companies as wide ranging as twitter, Nestlé, Clorox, and Cisco have been using the theory to double down on customer-centricity. Given that I co-authored one of leading books on the topic, this development is good news. However, I’m dismayed to see how people struggle with using the framework for market segmentation. They tend to over-simplistically bifurcate markets, define segments around jobs that are actually universally important, or frame the analysis from the wrong starting places (e.g., what people are buying today). There is a much better way.
To use Jobs to be Done for market segmentation, follow these six steps:
1. Establish what you will use the segmentation for
2. Define your independent and dependent variables (i.e., the causation that you’re seeking to understand)
4. Sort out which variables are useful, due to having data sufficiently available, having a straightforward relationship to your chain of causation, and having as little overlap as possible with other variables being used
6. Determine so-what implications
Let’s use an example to illustrate:
Years ago, I worked with a credit card company that needed a new segmentation. It had spent millions on its current scheme, only to find that it had very little predictive value with regard to the factors that mattered. Here were their considerations:
1. Establish The Purpose Of The Segmentation – To develop new card types and loyalty programs that will attract high spending cardholders
2. Define The Causation That Matters
• Dependent variables – Spending on credit cards, attraction to loyalty programs
• Independent variables – Customer jobs to be done and contexts that would have a strong statistical relationship to the dependent variables
3. Undertake The Jobs-Nased Analysis
• Context – We found that the importance of jobs varied enormously depending on context. Broadly speaking, there were three contexts that mattered. Some high spenders just liked to live well, which you could tell both through research interviews as well as looking at the types of places they shopped. Another large set were business travelers; their high spending was disproportionately in a few travel-related categories. A third set were putting their small business expenses on their personal card (or they just had an unusual fondness for Home Depot and Staples!)
• Jobs to be Done – The people living well cared about many things, of course, but the quest for prestige and the need to feel confident in purchases mattered greatly to them. Business travelers prioritized getting quick resolution when travel plans went awry, and about making the most of their time when at home. Small business owners often spent less time traveling, but they were working constantly and wanted some ways to escape the pressures of all the responsibilities they bore. (You may ask whether these jobs are functional or emotional or even social, and the answer is that it doesn’t matter. If people are honest with you, they seldom think with such clear delineations. However, do make sure that you capture emotional elements even in what seem to be very functional contexts, as emotional factors enable differentiation and premium pricing in ways that functional factors often can’t deliver on their own.)
4. Sort Out The Most Meaningful Variables – Because a short piece like this requires simplicity, I haven’t given you the dozens of other variables we looked at. In practice, you’ll have a lot of variables to work through. Think about what really matters. Do demographics correlate with being a business traveler? Sure, to some degree, but the chain of causation is long and weak. Do psychographics matter about how much small business people want to unwind? Yes, but that information isn’t in a credit card company’s databanks. The additional variables provide color around context and jobs to be done, which can be useful in devising marketing messages or finer features of product design, but it’s not essential for the segmentation itself.
5. Create A Way To Frame The Market – Simple tables can help teams remember and really use segmentations. I can’t tell you how many elegant segmentations I’ve seen collect dust because they’re so complex that they get ignored. Here’s a way the credit card company could represent things (for confidentiality, I’m disguising some details about this project):
6. Determine So-What Implications – In this example, the contexts (which are both attitude and circumstance-based) have a big impact on Jobs, and those Jobs have a clear bearing on product definition as we’ll see in a moment. So, the segments can be defined along contextual dimensions. It isn’t always this way. In other cases, a wide variety of contexts may relate to a small set of very distinct Jobs to be Done, and therefore those Jobs should be paramount instead. The context-based segments in this case have separate product and loyalty program feature needs based on their Jobs to be Done. People Living Well could be addressed by different colors of cards (fortunately, there is a very wide range of metals and colors to name things after!), as well as concierge-type services which are easy to display to friends but which in truth seldom get used. They would also respond well to purchase protection-type services (e.g., if lower prices are found elsewhere, or a product is out of warranty but breaks). Business Travelers, as well as Small Business Owners, would jump on using loyalty points for access to special events that make for a unique date night and memorable experience, and they’d love a travel-focused concierge who can rapidly find a hotel when an airport gets snowed in. Small Business Owners might appreciate lifestyle-oriented goals (redeem a million points for a week on a private island in Fiji) which provide opportunities to aspire and dream even if the goals are not easily in reach.
Creating a market segmentation using Jobs to be Done isn’t usually as simple as finding a small handful of jobs, but it doesn’t have to be numbingly complex either. These simple steps provide a route to success.
More of this approach is featured in my book JOBS TO BE DONE: A Roadmap for Customer-Centered Innovation.
The Blake Project Can Help You Create A Bolder Competitive Future In The Jobs To Be Done Workshop
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