Customer segmentation is the search for a group of people who are more likely to use your products and services than the general population. With Jobs-to-be-Done, you can find larger groups of people who have a greater urgency for your products than segments found with traditional methods.
Traditional Segmentation Methods
In traditional customer segmentation methods, teams often use "personas" to define their customers. For example, one person, "Paul" might be defined as young, urban, and college educated. Another, "Kate" might be defined as older, rural, and high school educated. In B2B markets, companies often define their customers using verticals, e.g. "consumer packaged goods," "financial services," or "healthcare."
But personas and verticals based only on demographics or firmographics do not tell you why your customers are using your product. Demographics are based on metrics like age, gender or location; firmographics rely on attributes like industry, company size or geographical area. Neither demographics, nor firmographics cause people or companies to buy products. For example, "Paul" and "Kate" could both struggle in the same way to get to a destination on time, yet it would be unlikely that traditional demographic or firmographic segmentation would group them together.
Similarly, CIOs at a consumer packaged goods (CPG) company and a financial services company could both struggle to enable secure data use. Yet, these two verticals are often not segmented together. This results in identifying a smaller segment with less urgency for your product than you would find using Jobs-to-be-Done.
Job Beneficiary and Job Executor
In our JTBD method, we define your customer using a “Job Beneficiary” and a “Job Executor”. In consumer markets, the job beneficiary and the job executor are frequently the same.
For example, a consumer (a driver) who is using a navigation app is the executor hiring the app to get to a destination on time. The driver is also the beneficiary of getting the job done.
In B2B and medical markets, the job executor and the job beneficiary are often different. For example, a doctor executes the JTBD of restoring artery blood flow, but the patient is the beneficiary. Similarly, an IT manager may execute the job of enabling secure data use, but the beneficiaries are company employees.
In many markets, this beneficiary/executor distinction is important because the job executor is currently part of the solution to getting the job done. New solutions will be developed over time to help the beneficiary get the job done on their own without the current executor. For example, cloud-based applications have enabled companies to reduce or eliminate specialized IT managers (job executors) so that non-technical employees (job beneficiaries) can enable secure data use on their own. In medical markets, new medical devices have been developed to allow a patient to obtain a blood sample on their own without a specialized phlebotomist.
Once you have defined your target customer as the Job Beneficiary or Job Executor you can segment your customers based on their common struggle to get the job done -- needs-based segmentation. This is useful when it's unclear whether or not there are unmet needs in the market. Needs-based segmentation can help you map your competitive position by tailoring your upcoming product development and pricing strategies to your customers through targeted messaging and marketing campaigns.
Perhaps none of the customer needs in the job are obviously slow or painful to meet with the existing solutions. Further, when you conduct a survey of job executors or beneficiaries, none of the needs are showing high levels of difficulty for your customers. In this case, you can look for groups of survey respondents that struggle with the same needs and cluster them into a new segment that has difficulty satisfying the needs. The percentage of respondents in this segment who say it is difficult to satisfy the needs is the percentage of the total market you are targeting. In many markets, they will represent a significant opportunity.
Once you have found a segment that struggles with the job or a portion of the job, you can look at their profile data to determine if they have anything in common regarding age, occupation, geography, etc. This can make it easier to target them with marketing messages. Often, however, the people in the segment do not have common demographics. They are unified only by their struggle.
To learn more about needs-based segmentation of your target market, or to find out about the jobs-to-be-done resources we offer, contact us today!