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Are you distracted by algorithms?

Matt Madden
Managing Partner
Hall & Partners The Modellers

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How brands can grow through a proper focus on customer experiences

Though it’s been years since I read The Innovator’s Dilemma, I still think about the lessons from Clayton Christensen’s business masterpiece almost weekly. I suppose it’s a healthy stress to try sorting out which upstart’s disruption is going to mess with my clients’ business (and my own!).

Christensen’s recent follow-up, Competing Against Luck: The Story of Innovation and Customer Choice, has more genius lessons, and focuses more on solutions than problems. It led me to a fresh perspective on gauging people’s need states… a big deal personally since I believe discovering and assessing unmet needs is one of our biggest roles in marketing research.

The job to be done

In a nutshell, Competing Against Luck says brands can grow by understanding customer experience in a different way: by understanding what customers struggle to achieve. Access to huge databases of psychographic and demographic data can be a distraction. Rather than using algorithms to sell more based on customers’ characteristics, we should learn more about what the customer wants to experience.

After decades of watching great companies fail, we’ve come to the conclusion that the focus on correlation – and on knowing more and more about customers – is taking firms in the wrong direction… [Instead they should focus on] the progress that the customer is trying to make in a given circumstance – what the customer hopes to accomplish. This is what we’ve come to call the job to be done.

When customers buy something, we should ask ourselves, “What job are they hiring us to get done for them?” To better understand this idea, take an example describing Christensen himself:

[Clay] has a lot of characteristics, but none of them has caused him to go out and buy The New York Times. His reasons for buying the paper are much more specific. He might buy it because he needs something to read on a plane, or because he’s a basketball fan and it’s March Madness time. Marketers who collect demographic or psychographic information about him – and look for correlations with other buyer segments – aren’t going to capture those reasons.

What it means for research

The reasons behind a purchase are really about why and when. Why is a shopper motivated, and when does an occasion arise to turn that motivation into action?

At Hall & Partners The Modellers we do a lot of product and brand innovation research, and we’ve always believed that our clients need to deliver on deeper motivations. It isn’t enough to measure attitudes, psychographics, or even behaviors. We need to ask questions in a way that links purchase decisions to underlying emotions. So, while our embedded research philosophy means we’re already getting a lot right in answering the ‘why’, we’ve been taking things a step further by focusing more on the ‘when’.

We researchers already focus on the ‘when’ in doing occasion-based segmentation or analyzing need states. In industries like travel, the same person can have totally different preferences when traveling for business versus leisure, and we analyze both situations differently. Food and restaurant clients also have a laser focus on the ‘when’, as most of their business is driven by time-based customer preferences.

We need to ask questions in a way that links purchase decisions to underlying emotions

We can take it a step further by injecting more ‘when’ into other areas though. Product research isn’t an area commonly known to focus on occasions. However, we’ve found ways to blend the ‘when’ and ‘why’ in product research, one example being for movie release windows and pricing. The time and circumstances of movie consumption lead to very different priorities for a single individual. Forecasting how much a person will buy, rent or stream is greatly improved when factoring in occasions and moments with a job to be done philosophy.

Some customer service groups are obsessed with delight, but they can miss the mark badly. Timing and situation matter. When resolving a problem, a customer usually doesn’t want overdone gestures of goodwill in the pursuit of delight; the customer simply wants the resolution experience to be quick and uncomplicated. That same customer may well appreciate service that goes above and beyond at another time. The ‘when’ matters more than the ‘who’.

We’ve found that a similar focus on the ‘when’ can improve research insights in other areas like customer journey, pricing, and messaging.


Netflix gets the job done

When people overlook the ‘why’ and the ‘when’, they can miss on major predictions. Netflix is one example that comes to mind.

It wasn’t long ago that many wondered if Netflix had a viable future. Netflix seemed to have one job: give tech-savvy people easy access to major Hollywood movies. When studios started making content unavailable (or unaffordable) to Netflix, a potential death spiral arose. Articles mounted about the lack of blockbusters available through streaming. But Netflix found people hiring it for a unique job to be done. People wanted less time-based channel surfing and fewer trips to the video store, instead seeking on-demand entertainment at their fingertips. People had pockets of time to fill, and no combination of scheduled TV, DVR or DVD usage could fulfill their diverse needs with an easy experience the way Netflix streaming could.

Watching Netflix

Netflix growth wasn’t driven by the ‘who’ (tech-savvy movie watchers) or the ‘what’ (Hollywood blockbusters). Its business was driven by getting a job done for people: providing instant entertainment in many circumstances. Yes, other factors contributed hugely to Netflix’s success… Netflix Originals, improved TV series content, a ubiquitous app, the ease of binge-watching, cord-cutting trends, international expansion, and excellent customer experience. Still, those predicting the demise of Netflix were wrong largely because they misunderstood the job that Netflix got done. Today, Netflix stock prices are at an all-time high.


What this means for the future

Researchers and data analysts have to help brands avoid getting distracted. We’re all driven to get more insight from the ever-increasing amounts of psychographic and demographic customer data. The current crop of BI tools and customer analytics will certainly drive some revenue. However, the most successful growth and innovation will come from understanding the ‘why’ and ‘when’ of people’s choices. We need to be the champions of digging deeper (and better) to help drive our clients’ long-term growth.