The average CMO lasts 23.5 months. 75% of all new products or services introduced by established companies fail. Think these two figures might be related?
Clayton Christensen of Innovators Dilemma fame, recently put out a new article in the MIT Sloan Management Review, entitled, “Finding the Right Job for Your Product” where he takes on the commonly held practices of many marketers, including but not limited to segmentation and demographics.
While I’m not going to try and recap a 10 page article from someone who is much smarter than myself (besides you can download the article for free right now), I would like to add my own take on two key points that he makes.
Customers are looking to “hire” the right product. An employees job, no matter what the job description might say, is to ad value to the company. Your products “job”, therefore, is to ad value to your customer. In a business setting your products job is even more specific: to ad economic value to your customer. I’m not just talking about a clinical ROI measurement. After all, what’s the ROI of hiring a new employee? So if an organization, or individual, were going to “hire” your product what would the job description look like? What would (or should) your products “resume” look like? This goes beyond identifying what your customers “needs” are. Needs change, jobs are are more stable. Now you may be saying to yourself, how are jobs more stable? Jobs get eliminated all the time right? This is where I’d like to address my second point and the title of this blog post.
The vicious cycle of focusing on demographics and segmentation has lead marketers to become increasingly lazy. If your product is not addressing the job your customer needs to have done you are faced with the only other option: “brand building”. This is so cost prohibitive that many companies will scrap great product ideas before they get started, or bury potentially good products in advertising that don’t speak to the job position their product could fill. This leads to the 75% failure of new products by established companies. How long would a company last if they only had a 25% employee retention rate?
What’s the solution? marketers need to get out from behind the demographic figures that their advertisers keep giving them to support more advertising expenditures in the wrong direction. Since your customer is not going to hand you a job description for what they are looking for, you need to get out there and observe your customer in action and sometimes even talk to them. How many CMO’s talk to their customers? Christensen give some great guide lines for what type of research needs to be done and how many cases you should gather.
It is not easy gathering data to figure out the right job for your product. One quote I will use from Christensen’s article, to leave you with, exemplifies the type of research he proposes and how companies can apply it.
“Sony Corp.’s legendary co-founder, Akio Morita, had a policy of never relying on quantitative data to guide new-product development as he lead the company between 1950 and 1980, because data doesn’t exist for new applications of technology. Instead he and his associates just watched what people were trying to do and tried to imagine how applying the company’s electronics miniaturization technology could make it easier and more affordable for more customers to do those jobs. Morita’s success rate for new products was much higher than the 25% success rate for products whose launch is guided by more quantitatively sophisticated market-research methods.”
p.s. new media provides some really great ways to do this 
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