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This is part of the "Moving Forward" series offering advice to small business owners on technology, mentorship, productivity, and growth. "Moving Forward" is sponsored by Ink from Chase®. More posts in the series » |
Forget customer demographic information. What companies really need to know in order to boost sales is why customers are using their product, according to renowned Harvard Business School professor Clayton Christensen.
"What causes us to buy anything?" asked Christensen at the recent World Business Forum in New York City. "We have to get a job done, and we say: 'What can I hire to get that job done?' If marketers understand the job that customers have to do, then they understand the causal mechanism behind [the products] they reach out for."
A customer's age, race, income level, or even their opinion of your product may be correlated to sales, but none of that information reflects why they buy a product - or, in Christensen's terms, why they "hire" a company for a job - according to the professor.
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As a case study, Christensen described one (unnamed) big fast-food chain that wanted to increase milkshake sales. After holding focus groups and getting extensive feedback on the milkshake recipe, the company could tell you everything about its customer demographics and how they felt about the drink; however, it was unable to move the dial on sales.
So the company changed its strategy and began trying to understand the job that their customers needed to get done. Researchers observed a restaurant for 18 hours and determined that nearly half of the milkshakes were sold very early in the morning to customers who were alone and bought only that item.
Later, the researchers confronted many of these early-morning dairy drinkers, and asked: What need is this milkshake meeting for you? It turned out they all had a long and boring drive to work and needed something to do while driving.
One customer said the previous Friday he'd "hired" a banana to do this job but was hungry by 7:30. Another guy said he hired donuts twice a week, but the crumbs got all over the place. Still another said bagels were too cumbersome to eat because he had to drive with his knees while spreading the cream cheese.
The milkshake, on the other hand, fit nicely in the car's cup holder, filled them up, and brightened their boring drives. The restaurant's competitors, then, were not Burger King, Wendy's, or Dairy Queen; they were bananas, donuts, and bagels.
After gaining this critical insight, the company was better able to improve the milkshakes by tackling the functional, emotional, and social dimensions of this particular job, Christensen said. The company put fruit in them, for example, to provide bursts of interest and gave them a thicker consistency that would last longer.
"When you're thinking about your next product or current product and wondering how to make it different so you don't have competition, understand the job the customer needs to get done," Christensen said. "When you improve your product so it does the customer's job better, then you gain