06 January 2012

Don't Listen to your Customers by Lubna Khan, JWT Planning, Delhi

Working with a task based approach to innovation.

We all know about products that were launched with extensive consumer research validating them at each stage of the development process, but still failed in the market. Every year, companies spend millions of dollars every year trying to understand customer needs in a bid to innovate and unlock growth. Yet despite the heavy investment in research, and in the actions taken on the basis of the ‘customer needs’ identified, new products fail, advertising and promotion efforts go unheeded and businesses shut down.
The problem at the heart of these failures is that too much attention is paid to what customers say they need. In a widely cited article published in 1993 titled “The Voice of the Customer”, Griffith & Hauser advocated listening to “a description, in the customer’s own words, of the benefit that he, she or they want fulfilled by the product or service.” This is typically the approach used by traditional market research. But in the years since then, the staggeringly high failure rate in innovation with these methods (as much as 80% by some estimates) has made it imperative that new models be found that help to understand what customers really need, and use this to guide business strategy and execution.
This paper argues for a shift to a more task based approach to customer needs – one where the problems customers are trying to solve in particular contexts forms the focus of the innovation process. This is because for a customer, current products and services are merely solutions that at that time enable them to solve problems, and tomorrow something else may come along to help execute the task in a better way. A transistor radio, a portable cassette player and an MP3 player, for example, all help customers with the task of listening to music while on the go.
Different models exist that use this ‘problem - solution’ or ‘task’ based approach to understand customers - for example ‘the jobs to be done model’ introduced by Clayton Christensen & Michael Raynor in The Innovator’s Solution and ‘outcome based innovation' as outlined in ‘What Customers Want’ by Anthony Ulwick. Yet these models, while good on paper, are difficult to adopt. The reason for these difficulties is the lack of clarity that companies have about how to apply the principles to their business problems and market situation.
This paper addresses this issue by providing frameworks to make the right choices when using a task based approach. Three kinds of choice situations are examined and directions are proposed. The first is the choice of market research techniques to identify tasks and customers. The second is about choosing which parameters to change when the current business approach is not working well. The third situation looks at the choice of marketing strategies to implement when a product is launched. The aim is to provide a blueprint that will encourage companies to focus on the tasks customers want to fulfill rather than just what they say, thereby increasing the success rate of their innovations and creating differentiated products and services that provide a substantial return on investment.
The real task of mobile phones
Consider the case of a mobile phone manufacturer. They wanted to strengthen their position in the Indian mass market by creating an innovative new product at a low price point. On asking customers who fit the buyer profile about their unmet needs, they got suggestions along the lines of a better camera, more battery life, better speakers and so on. The company did bring out a range of mobiles with these features – which did reasonably well, but did not have a significant impact on sales.
A representative of another mobile phone manufacturer observed the same profile of people when they were using mobile phones. He saw that many of these people had two handsets on which they had inserted SIM cards of two different telecom providers. Typically one handset was on a heavily discounted telecom plan and the other was connected with a telecom provider who gave better network coverage. This led to the idea of Dual Sim mobile phones that carved out a profitable niche for the first movers.
The problem in listening to customers
Why did listening to what the customers had said lead the company down a blind alley? The answer lies in the fact that when companies gather customer requirements they do not know what types of inputs they need to get from the customer and neither does the customer herself. Wants, needs, benefits, solutions, ideas, desires, demands, specifications (all very different kinds of inputs) can land up as responses to the same kind of questions.
Of course it is important to understand what the customer needs. But when capturing customer requirements, managers must look for what customers want to get done, not necessarily their ideas about the product or service itself. For example a razor manufacturer should realize that users who ask for a lubrication strip are really trying to have as few cuts as possible while shaving. A lubrication strip is just one way in which cuts can be minimized. Similarly, razor users may talk about “a wider handle”. But the wider handle may have been requested so that the razor would not slip out of the user’s hand while shaving. If the manufacturer takes this input literally and puts efforts behind creating a wider handle, they may miss out on the fact that a better option to prevent slippage might be a regular-size handle with a ribbed, rubberized grip.
Another problem is that the wrong questions or the wrong people get asked, or there may be unrecognized assumptions operating in the design and questions. For instance, Coca-Cola conducted millions of dollars worth of taste tests on New Coke, but didn’t ask whether awareness of the brand changed the drinker’s taste perceptions.
Response biases may also be at work. Respondents may decide for themselves what the research is all about and what kinds of answers are “expected”. They may want to unconsciously please or to create trouble for the researcher.
Finally, customers may never mention their desires because they assume those desires can't be fulfilled. Often people become so accustomed to the conditions under which they live that they don't even think to ask for new solutions - even if they have real problems that could be addressed.

Working with a task based approach
A task based approach overcomes the dependence on the voice of the customer and shifts the focus to more observable and objective ways of identifying customer needs. It creates a shared language that all the internal stakeholders in a company can understand and agree on, helping to create synergy. It also provides a single thread that links and guides effort at different stages of the innovation process.

Deciding on the research techniques
The first decision crossroad arises when companies have a product or product concept in hand, but don’t really know either the tasks the product can fulfill or the customers for whom these tasks are a priority.
a. When the customer is known but the task is not
This situation typically arises when the product has existed for some time in the marketplace, but is not doing as well as it should. Marketers don’t really understand what task this product is being used for and which other tasks could be connected with the product. In this situation some key customers should be tracked down (for example those who have recently increased purchase significantly, bought the product at some inconvenience or have stopped buying) and investigated through ethnography based market research tools.
Point of purchase and point of use observations and interviews will need to be combined with these inquiries. The emphasis is on watching the customers and learning from their actions, rather than just asking them.
b. When both the customer and the task are known
In such a situation, companies are interested in getting a deeper understanding of all the nuances of the task that’s important for the customer, in order to find new ways of positioning and advertising. ‘Generative’ techniques are helpful here.
Participating users are asked to make artifacts or fill in scrapbooks with expressive material, which convey meanings about concrete aspects surrounding product use as well as abstract aspects of their life, hopes and fears, and explain them to a panel of peers. Consumers can take photographs or make videos, put together collages, draw and paint or create models of the ideal product.
c. When the task is known but the customer is not
In some unique instances, the company understands the tasks that the product can fulfill for some niche customers, but don’t know what kind of customers would buy it in the mainstream market. Tracking down ‘lead users’ who have modified other products to fulfill a similar task can provide a clue to the larger set of customers who would be interested in the product.
d. When both the task and the customer are unknown
In this situation, a promising new technology appears on the horizon, but the manufacturer neither understands which customers to target nor the task it could do for them. In such a case, the company creates a prototype, virtual or physical, and through observation based research (like empathic design techniques) discovers the task it could fulfill for the most lucrative set of customers.
Deciding on changes in business strategy
In the dynamic and competitive business environment, the strategy with which a company initially approaches or exists in the market often needs to change. In such a situation, a task based approach can be used to inform the choice of parameter to change in the strategy.
When to change the product
Often customers use products for tasks that are different from what was originally intended. When it is seen that customers are putting up with inefficiencies because they don’t have a choice, and force fitting the product to their situation, this is an indication to modify the product and tap into a new opportunity.
Chinese appliance maker Haier Group discovered that customers in one rural province used its clothes washing machines to do the task of cleaning vegetables. Hearing this, a product manager got company engineers to install wider drain pipes and coarser filters that wouldn’t clog with vegetable peels, and then added pictures of local produce and instructions on how to wash vegetables safely along with the product – a move that helped them win market share in China’s rural provinces.
When to reposition an existing product
When the real competitors to a product are identified, it often points the way to a change in the marketing approach so that the product can compete more effectively.
When the launch of refrigerated entrees, positioned as upscale gourmet dinners, failed, research identified that some customers saw them as a better choice compared to alternatives to lunch at work. Restaurants, fast food, frozen dinners and home - made preparations all had some downside which made even the expensive refrigerated entrees seem like a bargain. This pointed the way to reposition them as office lunches.
When to change the target customers
When a new product launch does not achieve the success that was hoped for, often the root cause is that the targeting is not right.
A new venture in jewellery retailing initially targeted women between 18 and 49, but found that most of their buyers were men who saw the chain as useful for selecting a gift but had a highly unsatisfied task of ‘presenting the gift in an interesting way’. The jewellery chain zeroed in on an opportunity to sell men great gifts, by helping them find the perfect way to make a surprise gift presentation.
When to change the task for a brand
Over time, some brands lose their strong connection to their customers. In such a case, refocusing on the original task the brand promised to fulfill and making it relevant to a new set of customers through a change in the product portfolio can help in making the brand a powerhouse once more.
P &G revived Mr Clean by understanding that in the brand’s heyday customers were hiring it to ‘magically’ clean what was thought to be uncleanable. With this insight, they developed a new range of customer value propositions under the brand, like Mr Clean Magic Eraser which worked on surfaces like walls that children had scrawled on or coloured.
Deciding on the marketing strategy
Another choice framework can be used to make decisions on which marketing strategy to adopt based on how aware people are about the task and the solution to fulfill it.
a. Direct connection:
When an entirely new technology hits the market, consumers are not clear what tasks the product will fulfill for them. An effective way to market is to determine what critical tasks the solution could address that consumers are already highly aware of, and then to focus marketing around connecting those tasks in her life to the solution for hire. Direct marketing techniques work well here.
Ambient Devices created a set of consumer electronics that gave off lights of different intensity and color based on external conditions and marketed them through products like the Ambient Umbrella. The product indicated when rain was imminent and so fulfilled the task of having an umbrella when it rains.
b. Wake up jolt:
In this scenario, a job exists but is not at the forefront of consumer consciousness. But a great product that addresses that task is out there. The advertising needs to act almost as a ‘wake up jolt’ about the task for people to take notice.
Previous to the Listerine advertising, bad breath had been understood as a disagreeable social habit, but because people can’t really smell their own breath, ‘getting rid of my bad breath’ had not been a task they actively sought to fulfill. Before Listerine sold mouthwash, they sold halitosis.
c. Social currency:
In some situations, a product is released into a market where people are visibly frustrated and impatient that an important task they have is not getting satisfied. When the product clearly addresses this high-awareness task, it’s a success from the beginning. In such a situation, word of mouth strategies are very effective.
By offering a sophisticated atmosphere and high quality products to customers who had been looking for a ‘third place’ to relax in between work and home, Starbucks were able to create visibly satisfied advocates who spread the word to others.
d. Solution story:
In this scenario, the consumers are highly aware of the task they have and are actively looking out for solutions to fulfill it. But the ability of the product to accomplish the task may not be evident right away. Marketing is therefore vital to bridge that gap of understanding. A story needs to be told about how the product acts and delivers impact on people’s life.
Kodak realized that an important task was being able to share images with distant friends and family easily and conveniently and developed Kodak EasyShare. Success was in part due to communication on how simple the process was and how much pleasure it created.
Changing the world through the right choices
The task based approach to innovation has the power to change the world of business as we know it. Companies no longer have to rely on doubtful customer input to make critical investments, or wonder why their innovation failed despite extensive research with customers. The choice frameworks provided in this paper are a clear guiding light to help companies navigate the landscape of customer tasks much more effectively. Making the right choice of research techniques, parameters to change and marketing strategies while utilizing a task based approach will help companies unlock value from their customers and create innovations that change both their own fate and the lives of customers everywhere.
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Christensen, C. M. and Raynor, M.E. (2003). The innovator’s solution. Harvard Business School Press.
Griffin, A. and Hauser, J.R. (1993). The voice of the customer. Marketing Science, 12(1), p.1-27.
Leonard, D. and Rayport, J.F. (1997). Spark innovation through empathic design. Harvard Business Review, November-December, p.102-113.
Sull, D. (2011). 10 Clues to Opportunity. strategy + business, 64. http://www.strategy-business.com/article/11304?gko=ce28d (accessed 21st September 2011)
Ulwick, A.W. (2005). What customers want: using outcome-driven innovation to create breakthrough products and services. McGraw Hill, New York.
von Hippel, E. (2006). Democratizing innovation. The MIT Press.

1 comment:

  1. Thank you for the info. It sounds pretty user friendly. I guess I’ll pick one up for fun. thank u

    Know Your Customer