A New Framework for Customer

Segmentation
Her confession was blurted out in the midst of our first conversation about the new digital marketing
strategy which we would eventually advise them on: You know, I dont think I believe in segmentation
anymore. She said it fast and softly, almost in hope that the sounds around us would make it
inaudible. But we did hear it, and responded, Well, we dont either.
For us, this exchange was the culmination of a reflection that had started in the classroom and in
client engagements, where we were finding an increasing disconnect between telling people about
segmentation, targeting and positioning on the one hand, and about the increasing shift of control
from brands to consumers, on the other. Clients and students questioned it increasingly: here we
were, advocating a rigid methodology that carves out the market because we cant be all things to all
people, while preaching the gospel of co-creation at firms, such as Lego and Starbucks, that enter
into a dialogue with their customers, giving them more access, sharing risk, and advocating
transparency (see Prahalad & Ramaswamys book The Future of Competition).
In one presentation, we were exuberant about Big Data and Little Data, and in the next, speaking
what seemed to be 1960s voodoo psychographic language. To resolve these contradictions, we had
begun pleading with students and clients to look for jobs to be done. The approach echoes Ted
Levitts famous comment about selling inch holes rather than inch electric drills, and advocates a
mindset shift away from selling products to doing jobs that solve customers problems. In Clay
Christensens words, customers hire products or other solutions because they have a specific job to
fulfil, not because they belong to a certain segment.
Once the taboo was lifted in our minds and in our conversation, our client, a senior marketing
executive in the telco sector, with decades of operational experience, explained that in some of the
countries she managed, her marketing teams were simply shelving the results of the segmentations
they felt obligated to perform out of routine, or because they felt it was expected of them as serious
marketers. They just ignored them. In others, marketers were still adamant that segmentation was the
only way to go, but couldnt explain its benefits. Voodoo indeed.
We agreed to work on a new kind of segmentation based the combinations of jobs that customers
need to get done. Heres how the jobs done segmentation works:
Step #1: Identify the contexts in which customers are using the companys products. Examples
of such jobs in the mobile telco realm might include: being in touch with family and friends while
roaming,choosing the best entertainment and dining opportunities on the go over the weekend and
becoming more confident and secure in the use of a smartphone. A mobile service provider using

multiple research techniques might find that there are fifty or more jobs to be done across their
customer base. One person might typically get several jobs done by a given provider or brand.
Step #2: Combine information about transactions and customer behaviour in the contexts to
describe each of the jobs to be done. For our weekend entertainment example, we would look for a
combination of weekend searches for entertainment information, searches for local restaurants, movie
reviews and social behaviour such as tweets about movies, concerts or restaurants. The becoming
confident and secure job might use data from call centre interactions and detect unused features on a
new smartphone. The actual relevant data for each of the jobs to be done is selected during the
initial research as a function of the different contexts to be explored and the data available. This is
very different from traditional behavioral segmentation which focuses on a wide set of individual
variables such as the percentage of voice calls. Here we need a holistic view of the data required to
characterize a context.
Step #3: Map individual customers to jobs, using the data. Each customer would be scored
according to the relevance for him or herself of each of the jobs done. A specific customer may need
20% of the entertainment job, 2% of the confidence job and 40% of the being-in-touch job. The
customer profiles would be spread across all jobs. From there its a simple step to cluster customers
on their mix of jobs to be done rather than on their raw behaviour, demographics or attitudes. For
each segment, there may be only three or four jobs to be done that are crucial. This then allows the
development of specific solutions for each segment.
Setting the job done framework as a basis for customer segmentation allows us to use all the relevant
data for customers in a meaningful and structured fashion. Firms can see how customers are hiring
solutions for the jobs important to their lives and observe customers in the action of getting the job
done (or in some cases, not getting it done). As brands access unprecedented amounts of data about
consumers activities and are able to use them more efficiently and productively, they find broad
patterns and trends and can indeed get better at detecting the person behind the data and the jobs
that person needs done. Another element of relevance for customers is that they now expect that the
data which they are implicitly sharing with brands will result in a positive impact on their own personal
experience rather than in lumping them into new, irrelevant buckets.
Peter Drucker once said, The customer rarely buys what the business thinks it sells him. The
problem is we dont know what kinds of jobs customers are going to need done unless we follow each
customers journey. Big Data now lets us observe that journey. This type of of segmentation is more
important than ever as technologically empowered customers have more choice and the ability to craft
their own solutions. It represents the new job to be done for us all of us in marketing.
More blog posts by Judy Bayer and Marie Taillard
More on: Customers, Marketing

JUDY BAYER AND MARIE TAILLARD