How to Put Customer Needs at the Centre of Business Strategy

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One of the foundations of successful business is understanding customer needs. Really understanding their needs. Developing a deep, almost visceral understanding of what customers’ need lies at the heart of innovation to create winning new products and their marketing to target customers. As Peter Drucker said, ‘because the purpose of business is to create a customer, the business enterprise has two–and only two–basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs’.

But understanding customer needs is not as easy as it sounds. You can’t just go out and ask customers what they need. As Lance Bettencourt showed in a recent article on the Debunking Myths about Customer Needs [1], it isn’t because customers don’t know what their needs are, but because they come mixed-up with wants, expectations, benefits, and above all solutions. If we struggle to define what a need is in a universally accepted way, what chance do we have of marketing, sales and service agreeing on a common customer management strategy? Precisely nil, if like me, you often sit in meetings with marketing and sales people (service is not usually invited) talking mutually incomprehensible languages.

I have been scanning the academic and practitioner literature for over 15 years, looking for insights and tools to help me better understand and define clearly what customers really need. I was about ready to give up when I came across Tony Ulwick and Clayton Christensen's work on customer 'jobs-to-be-done' a couple of years ago.

Customer live their lives in a constant struggle to get things done efficiently and effectively. Sometimes these are simple functional things like getting the kids to school on time, or keeping the old family car running. Sometimes they are personal things, like the satisfaction of cooking a tasty meal for the family, or the feeling after you finish a hard training session at the pool. And sometimes they are social things like enjoying a drink with friends after work, or proudly showing them your new car (the old family car really was on its last legs!). What all these things have in common are that they are different jobs-to-be-done by the customer. In fact, if you look at pretty much everything about your life, or about customers’ lives, they are nothing more than a combination of functional, personal and social jobs-to-be-done, each with a range of different outcomes that customers are trying to achieve.

Once you reorientate your thinking away from the nebulous concept of customer needs, and towards the concrete jobs customers are trying to do and the outcomes they are trying to achieve, you can use the insights to create innovative new products, services and experiences that exactly meet customers’ needs. What Tony Ulwick of Strategyn calls Outcome-Driven Innovation [2]. For example, Microsoft innovated around its software assurance [3] product after carefully looking at the corporate customer jobs associated with licensing and upgrading Microsoft software. Customers hire products to help them get jobs done more effectively. Think of Ted Levitt’s famous example of the job of drilling a hole in a wall [4]. As Clayton Christensen writes, the customer doesn’t actually want a drill at all, he wants a hole in a wall. You can also use the insights to go to market in ways that speak directly to customers about how products help them with important jobs. For example, after looking at the job of sawing during home building and improvement to improve its own range of circular saws [5], Bosch identified a number of different customer segments that had different sawing needs. It used the insights about customer jobs to target each segment with different messages about how the improved circular saws helped them to get the jobs important to them done better.

Understanding the jobs customers are trying to get done and the outcomes they desire from doing so, really does provide a robust way to cut through the psychobabble of needs, wants, expectations, benefits and solutions. And it provides a simple language [6] to describe the world from the customer's perspective, something that has been missing for years. This language can be used to drive both customer-centric innovation, and the marketing, sales and service that supports innovative new products.

Tip of the hat to Fergus Bisset’s blog post on What Are User Needs? [7] for giving me the inspiration to write this one.

Graham Hill
Customer-centric Innovator
@grahamhill