Why competitor analysis needs to start with Jobs Theory
Know your Value don't just Feature match. Start with the Job your users are hiring for.
Understanding your competitors in today's market is crucial, but doing so before knowing your customers well is a mistake. Competitors include any business that could fulfil the same customer needs as yours, not just those offering similar products or services. Recognising the broad spectrum of competitors is essential for strategic growth and innovation. Let’s start with how to uncover customer needs.
Jobs Theory
Jobs-to-be-Done (JTBD) is a framework for understanding customer needs and motivations in product development and innovation. It focuses on the "job" a customer is trying to get done when they purchase or use a product or service, rather than on the product or service itself. The JTBD framework helps companies design better products, create more effective marketing strategies, and identify new growth opportunities by understanding the underlying problems customers are trying to solve.
The JTBD concept has been developed and popularised by several thought leaders over the years, including Clayton Christensen, a professor at Harvard Business School, who is often credited with bringing widespread attention to the framework through his work on innovation and disruptive technologies. Other notable contributors include Tony Ulwick, founder and CEO of Strategyn, who has formalised the approach in his Outcome-Driven Innovation process, and Bob Moesta, co-architect of the JTBD theory and President of the Rewired Group.
What is Job Theory
Job Theory, central to the JTBD framework, posits that customers "hire" products or services to perform a job. This job encompasses the task they need to accomplish, along with the social and emotional dimensions associated with it. The theory suggests that understanding this job in detail allows companies to innovate more effectively by focusing on customer needs and the outcomes they desire, rather than on the products themselves or the demographic characteristics of their market.
Types of Jobs
There are several types of jobs that customers need to get done, which can be broadly categorised as follows:
Functional Jobs: These are the primary tasks or objectives the customer is trying to accomplish, such as cutting a piece of wood, commuting to work, or cooking a meal. Functional jobs are often the most apparent and are typically the starting point for identifying customer needs.
Emotional Jobs: These jobs relate to the way a product or service makes the customer feel as they are completing the functional job. Emotional jobs can be personal (how the customer feels using the product) or social (how the customer believes others perceive them when they use the product). For example, buying a luxury car might fulfil the emotional job of feeling successful or esteemed by peers.
Supporting Jobs: In addition to the main job, there are often related tasks or activities that support completing the primary job. These can include jobs related to purchasing, learning how to use a product, or disposing of it. Supporting jobs help ensure the overall experience is positive and can often be opportunities for differentiation and innovation.
By focusing on the JTBD, companies can move beyond traditional market segmentation and product features to delve into the real reasons customers buy and use products, leading to more meaningful innovations and stronger customer relationships. This approach emphasises the importance of understanding not just what customers are doing, but why they are doing it, enabling businesses to better align their offerings with actual customer needs and desires.
Competitor Analysis
Understanding your competitors is strategically important and when you know what Job your customer is hiring you can seek to win where it counts.
Keeping an eye on competitors that are direct, indirect, potential and substitutes.
Types of Competitors
Direct Competitors: Businesses offering the same or similar products or services to your target market. Coca-Cola and Pepsi, for example, directly compete in the beverage industry, targeting similar consumer preferences with comparable products.
Indirect Competitors: These competitors address the same customer needs but through different products or services. A gym subscription and a home workout app, for instance, both cater to fitness needs but in distinct ways.
Potential Competitors: Entities not currently in your market but capable of entering and competing. This category could include startups with disruptive solutions or established businesses exploring new market segments. Keep an eye on partners or others in the ecosystem that may become your next competitor.
Substitutes: Alternatives that could make your offering obsolete. The transition from physical maps to GPS technology showcases how new solutions can serve as substitutes for existing ones. With Jobs theory, we may uncover that the substitute may be nothing as Clayton Christensen discovered in this book “Competing Against Luck” when looking at the opportunity to sell Adult nappies or diapers now repositioned as adult disposable underwear.
Enhancing Strategy with Jobs-to-be-Done Theory
The Jobs-to-be-Done (JTBD) framework shifts focus from competing on features to understanding the job customers hire your product or service to do. This approach is based on several core principles:
Customers buy products and services to accomplish a specific "job."
A "job" includes functional tasks along with emotional and social aspects.
Understanding the "job" offers a stable basis for innovation and more effective marketing.
Success is measured by how well your product or service completes this "job" for the customer.
Competitor Analysis through a JTBD Lens
Traditional competitor analysis, focused on feature comparison, often overlooks how customers define value in relation to their jobs-to-be-done. A more insightful approach involves:
Identifying unmet needs within the job customers are trying to complete.
Analysing how well both your and your competitors' offerings meet these needs.
Continuously innovating to better address these needs than your competitors.
Using Jobs Theory in competitor analysis shifts the focus from traditional feature-by-feature comparisons to understanding how well each competitor enables customers to get their jobs done. This approach offers deeper insights into customer choices and preferences, revealing opportunities for differentiation and innovation. Here’s how to apply Jobs Theory in competitor analysis:
1. Identify the Core Job(s)
Start by clearly defining the core job(s) customers are hiring your product or service to do. This includes understanding the functional, emotional, and social dimensions of the job. For example, in the case of a smartphone, the core job might not just be communication; it could also include managing one's social media presence (a social job) and feeling technologically savvy (an emotional job).
2. Break Down the Job into Specific Tasks
Once the core job is identified, break it down into specific tasks or steps the customer needs to complete to achieve the job. This helps in understanding the job in greater detail and identifying where customers might experience frustration or inefficiency with current solutions.
3. Analyse Competitors Through the Lens of the Job
Evaluate how well each competitor's product or service accomplishes the identified job and its specific tasks. This involves looking beyond the surface features to understand the actual outcomes competitors are enabling for customers. It's crucial to assess both direct and indirect competitors, as well as potential substitutes that might fulfil the job in different ways.
4. Identify Gaps and Opportunities
By understanding the job from the customer's perspective, you can identify gaps in the market where no existing product or service adequately fulfils the job or where customers experience significant pain points. These gaps represent opportunities for innovation or areas where your product can be differentiated.
5. Monitor Changes in How Jobs are Done
Jobs and the way they are done can evolve over time due to technological advancements, changes in consumer preferences, or broader societal shifts. Regularly revisiting and reassessing the jobs your customers are trying to get done and how well competitors are serving those jobs can uncover new opportunities or threats.
6. Use Insights to Guide Strategy
The insights gained from applying Jobs Theory to competitor analysis should inform strategic decisions, including product development, marketing, and sales strategies. By focusing on the job, companies can more effectively position their products as the best option for getting that job done, tailor their messaging to highlight how they address customer pain points, and innovate in ways that truly matter to customers.
Meal Kit Delivery
Consider a company in the meal kit delivery service industry. The core job customers are hiring meal kits to do might be "to easily prepare a healthy and tasty meal at home." By analysing competitors through this lens, the company might find that while many services offer meal kits, there's a gap in the market for those catering to specific dietary needs or offering faster preparation times. This insight could lead to the development of a new line of meal kits specifically designed to fill this gap, along with marketing strategies that highlight this unique selling proposition.
Incorporating the Jobs or JTBD theory into competitor analysis enriches understanding of customer needs and shifts the focus from Feature competition to Value creation by better fulfilling these needs. By recognizing various types of competitors and concentrating on the jobs customers need done, businesses can strategize more effectively and innovate in ways that genuinely resonate with their audience.
Understanding the Value your product creates for customers - or the Job it’s hired to do - means you’re better positioned to capture this Value with relevant Pricing and Packaging.
Start with Value - Problem to Solve for Customers - and go deep on how you can Innovate to create a product, package a service and price for profitability.
Need help uncovering what you customer’s jobs are and how to analyse competitors through this lens? Drop me an email at irene@phronesisadvisory.com