This segment explains why traditional market segmentation methodologies often improve products in ways that are irrelevant to customers’ needs. It also explains why jobs-based market segmentation enables us to more reliably predict the product and service changes that will result in increased customer demand.
Market Segmentation is Broken
No matter how you look at it, it’s hard to argue that our market segmentation methods are working. New products are failing at the stunning rate of between 40-90% depending on the category. A primary reason is that product and customer based market segmentation models are improving products in ways that are irrelevant to their customers’ needs. A better way to think about market segmentation is to make jobs the fundamental unit of analysis. The purpose brands that emerge from this process create greater opportunities for differentiation, premium pricing and future growth
Fixing Market Segmentation
Jobs-based market segmentation is less of a method for collecting data than it is a method for viewing data through a new lens. Companies that successfully implement this approach answer six basic questions. The first is what progress are your customers trying to make? Specifically, what are the functional, social and emotional dimensions of the desired progress? Second, what are the circumstances of the struggle? Who, where, when and while doing what? Third, are there significant pockets of non-consumption? Fourth, can you spot workarounds and other compensating behaviors? Fifth, can you identify jobs that customers don’t want to do? And sixth, are you observing unusual uses of existing products and services.