Point: When innovating, look at the “job” the customer hires a product to do

Story: At the World Innovation Forum, Clayton Christensen cautioned companies against focusing only on customers when they create incremental innovations. Instead, he recommended understanding the job that the product is hired to do by those customers.

To illustrate the “product’s job” concept, Christensen described a fast food chain’s milkshake sales. At the demographic level, many milkshake buyers are working-age people. But the demographic similarity is not what drives people to buy milkshakes. (When the company researched demographically similar people, the results did not improve sales.) In fact, a focus on age and gender missed the job that milkshakes perform — why do people “hire” (buy) the milkshake? What job do they want the milkshake to perform?

Through further research, the fast food chain found that about half of milkshake sales occurred in the morning. These buyers came into the restaurant by themselves, bought a milkshake and nothing else, and drove away with the milkshake rather than consuming it at the restaurant. Looking deeper, researchers learned that the buyers were commuters, and the job of the milkshake was to provide distraction on a long commute and to tide them over until lunch. For this job, the milkshake competed with bananas, donuts, breakfast bars, and coffee. Commuters hired milkshakes over the competition because milkshakes take a long time to eat, don’t slosh or leave crumbs, and can be held in one hand or be put into a cupholder during the drive.

A very different group of milkshake buyers came in the afternoon and evening. These buyers were predominately dads with little kids. The dads were buying milkshakes for an entirely different job: that of assuaging guilt over not having enough time with their kids. Kids liked the milkshakes, and the dads could finally say “yes” to something and feel good about themselves.

Understanding the jobs people hire milkshakes to do is important when it comes to incremental product improvements. The two jobs for milkshakes call for diametrically different innovations. Thicker milkshakes would delight the bored commuter, but they would frustrate time-pressed dads because kids take too long to finish thicker shakes.

Simply put, innovations that would boost sales in one group would displease the other group. Commuters might want improvements like increased thickness, small added fruit chunks, and a grab-and-go purchase system that lets customers buy a milkshake without standing in the regular food line. In contrast, dads might want a smaller, thinner milkshake that provides fun but quick treat for the kids. The strategy for innovation in this case may be to have two different shake formulations: one for the morning and one for the afternoon/evening.

The point is to understand WHY someone buys the product, not WHO buys the product. The demographics of milkshake buyers are less important than the fact that one segment buys the product as a distraction and protracted meal while the other buys it as a sweet attraction and quick desert.

Action

• Delve into the job(s) of the product, not the consumer(s) of the product.
• Segment by purpose, not person.
• Identify and innovate around job performance dimensions rather than product performance dimensions

Point: Products that perform a rational purpose can fail if they don’t address emotional needs

Story: At the World Innovation Forum, Donna Sturgess, Global Head of Innovation at GlaxoSmithKline Consumer Healthcare, described some of the innovations behind Alli, an over-the-counter weight-loss drug which can help people lose 50% more weight. As I see it, the heart of the innovation lies beyond the physical chemistry of the medication (which blocks the absorption of fat) because the medication does no good if it’s not taken at mealtime. Instead, the real innovation is in the emotional chemistry of the small blue pill carrier called the Shuttle, which encourages the person to stay on their diet.

Alli faces two significant challenges. First, the pharmaceutical performance of a medication means nothing if patients don’t take the drug. Compliance could be a issue with Alli because it needs to be taken with meals, including meals eaten outside the home. That means people need to carry their pills with them.

Second, dieting comes with strong emotional issues. Dieters run a gauntlet of body self-image issues, willpower, fear of failure, and cravings as they attempt to achieve their goals. Sturgess cited data that emotional issues affect 85% of all decisions. Products that perform a rational purpose can fail if they don’t address emotional needs and wants.

To provide emotional support, GlaxoSmithKline designed the Shuttle to be both discrete and distinctive. The calming blue pill carrier looks like a contact lens case. The linear-arrangement of three smooth lobes fits comfortably in the hand. GlaxoSmithKline gave the Shuttle a smooth texture, like a worry-stone. The company intentionally left off any brand markings or names to avoid customer embarrassment — only fellow Alli users know what the little blue case means. The point is that the Shuttle is more than just a functional accessory: it’s a emotional talisman to support dieting.

Action

• Consider the emotional experiences, contexts, and meaning of the product and the product’s use.
• Create product artifacts or accessories that support those emotional experiences.
• Use non-functional product attributes (e.g., color, shape, and surface texture) to convey emotion.

Photo courtesy of Dov Friedmann – PhotographybyDov.com

Point: Innovation processes must reflect people’s true behavior

Story:
Dan Ariely, author of Predictably Irrational, finds that people display a host of consistent behavioral quirks in how they respond to products and marketing. These cognitive biases change not only people’s decisions and subjective opinions, but also their objective performance with products.

For example, in his work on behavioral economics, Ariely and his colleagues documented such quirks as:

• how “free” items can bias decisions
• how arbitrary numbers (e.g., the last two digits of your social security number) can affect the price a person is willing to pay
• how adding a choice that almost no one will choose can cause many people pick the more-expensive choice
• how publicly-made choices differ from privately-made choices.

Note: Dan Ariely will be speaking about the hidden forces that shape people’s decisions at the World Innovation Forum in New York City on May 6, 2009 at 4-5:30 pm.

One strong example from Ariely’s research is the effect of product price on performance. Does getting a good deal on a product change how well that product works? To test this, Ariely and his colleagues studied the efficacy of products such as pain killers, cold medicine, and energy drinks as a function of the price people pay from them. In the energy drink study, people bought an energy drink (some test subjects got a price discount), drank the drink, and then performed a word puzzle test. People who paid more for the drink solved more of the puzzles than did people who got a discount for the identical drink. Similar patterns appeared in the pain killer study and cold medicine research.

The implication for innovation: This research helps explain why good products can fail because of the discrepancies between beliefs in how people should act versus how they actually do act. Moreover, this irrational behavior is consistent across people, products, and time. Because the irrational behavior is consistent, companies can adjust their innovation, product development, product testing, and marketing processes to fit people’s real behaviors.

Action:

• Understand the human biases that affect product choice, willingness to pay, and product performance.
• Design products that suit how people are, not how people should be.
• Create product testing processes (e.g., focus groups and lead user studies) that replicate or control for the effects of actual retail and usage scenarios