Market Segmentation Through A Jobs-to-be-Done Lens

A customer’s unmet needs, need priorities, and preference for solutions are dependent on the context in which they are trying to get a job done.

Back in 1997, we worked with Motorola’s Radio Products Group, a business unit that was responsible for manufacturing mobile radios used in vehicles to enable communication with a dispatcher, a central location or other two-way radio users. After experiencing limited growth in what appeared to be a maturing market, Motorola looked for new ways to achieve their growth objectives.

For years, Motorola had been using a vertical industry classification to segment the radio market — e.g., utilities, public services, etc. — and often recognized the inconsistencies in customer behavior within and across these segments. Intuitively, they knew another segmentation structure existed, but were unable to define it.

While users across all verticals were trying to get the same “job” done (communicate with a group of people when mobile), the application of our outcome-based segmentation methodology enabled Motorola to discover three groups of customers with different unmet outcomes. As part of the segmentation methodology, we also discovered that what caused them to have different unmet outcomes was the context in which they were trying to get the job done.

Three Outcome-Based segments pointed Motorola to success.

The first underserved segment, which comprised about 40% of users, were often confronted with having to communicate in situations that required discreet conversation that could not be overheard (a context). In this context, workers (i.e., police and security) were struggling to get the job done because they had trouble preventing others from hearing incoming messages and going undetected in undercover situations.

A second underserved group of customers (28% of the market) were often faced with dangerous, life-threatening situations (a second context). In this context they were struggling to get the job done because they had trouble communicating with clear, unambiguous and uninterrupted communications when sending and receiving critical instructions/information.

The third segment (about 32% of the market) typically used their radio products to communicate with teams and groups in non-emergency situations, coordinating activities and performing administrative tasks (a third context). They struggled in their own unique ways to get the job done.

We discovered that while the customers unmet needs varied by context, that within each context, the customer’s need priorities and solution preferences were consistent — thus making them attractive segments.

Up until this point, all products produced by Motorola, and its competitors, failed to address the outcomes uniquely desired in each segment with well-matched product and service offerings. A one-size-fits-all mentality perpetuated the industry. With the discovery of these segments, Motorola was able to optimize a radio product for each segment. The products included new features that addressed outcomes that were previously underserved and eliminated product features that addressed outcomes of little or no importance to users in each context.

Outcome-based segmentation reveals segments of customers with different unmet needs — and the context that causes customers to struggle to get the job done.

The end result? Better products, at a lower price, with increased customer satisfaction. The resulting products accelerated revenue growth to 18% in a stagnant market, and secured the company’s leadership position in mobile radio products.

Here is the key takeaway:

A customer’s unmet needs, need priorities, and preference for solutions often vary by context — but they are consistent within context when you segment around unmet needs.

In the years since that study, we’ve applied the segmentation methodology in many other markets. (See market segmentation on the Strategyn site). In doing so we made another important discovery. Consider the following:

A commuter may want to “get breakfast on the go” while heading into work in the morning. One morning the commuter may be doing the driving, have a couple of passengers, and have left for work with plenty of time to spare (a context). The next day that same commuter may be pressed for time and traveling alone (another context). In each context the commuter may have different underserved outcomes and a different solution preference. Maybe a milkshake could even be the desired solution preference in a certain context. Who knows?

So here is the takeaway from this story:

The same person can be in different “segments” on different days, depending on the context in which they are getting the job done.

As another example of this possibility, one minute a dentist may be performing a tooth restoration on a patient that has healthy gums and requires a small filling. In this context the dentist may find it simple to get the job done. In the next case the same dentist may be faced with a patient that has unhealty gums and requires a large filling (another context). In this context there is more bleeding, making it harder to see and to keep the area dry, thus causing the dentist to have a number of unmet needs. Same dentist — same job-to-be-done — different context — different unmet needs.

Anyone who claims customer needs cannot be reliably quantified because a person’s preferences can vary/reverse is posing a non-argument. Of course customer preferences can be different by context. Discovering what contexts cause customers to have different unmet needs is the secret to creating a segment classification scheme that pinpoints opportunities for growth.

This can be accomplished with the Outcome-Driven Innovation process.