Summary: When conducting market research, it’s essential to identify segments according to the jobs and outcomes that are important to a particular group of consumers.
When there are groups of consumers with different sets of jobs to do, or placing of importance on jobs and outcomes, we have what we call a consumer segment. In this case these consumer segments will likely require different offerings because they will respond differently to them. In plain English, what they value is different. Therefore what is suitable for one segment will not be for another.
Segmentation should always revolve around the jobs and outcomes people prioritise first. Not who your consumers actually are but what jobs and outcomes are important to them. The idea is to find groups of people that hold the same jobs and outcomes as being the most important to them – then they form a segment. Great, if you then find that one group are all Men from Bristol between 30 and 35, drinking in pubs in the city centre, you’re going to know where to find the segment – but these distinctions are only looked at, after you have grouped people that hold the same jobs and outcomes as the most important.
All the data you have needs feeding into a cluster analysis program or some type of segmentation software, so we can see if there are patterns – distinct groupings of consumers with the same priorities for jobs and underserved jobs or outcomes. These are segments of opportunity.
There are distinct groups of consumers who want to see improvements along the same dimensions as the others in their group. So you may find the segment of essay buyers that has price 70/30 weighted against quality, a segment that is 50/50 and a segment that is 20/80 towards quality. Within each segment you may find that the exact Value Factors that make up quality differ amongst even smaller segments – so in the 20/80 group maybe a segment that values face to face contact, continual contact and high quality work as the three most important Value Factors and another segment that has high quality work, speed of delivery, and reputation as the three most important Value Factors. You’d know that two distinct offerings or services would be needed right there.
Yet, segmentation provides more than that, because only when we know the different segments can we decide upon ideas, and can we see what competitors are doing for those segments in Step 2.
The question we ask is “What jobs are people trying to get done today that they are unable to get done satisfactorily given the products and services that are currently available?”
You may find an entire segment with a job to be done, or a smaller segment with a group of outcomes for a job that are not being met. You’ll have to pay close attention to the opportunity score; this is where there are unique opportunities. The importance score for the segment is of course important, but if consumers are well satisfied, matching is all you need to do.
Traditionally, people would argue that this is different from segmentation for communicating value, which is how people will respond to the offerings. In other words, some experts argue that we should separate identification of value segmentation from communication of value segmentation. I think the two go hand in hand, because in both cases the value that people want differs. Even though in reality the value you create might be the same you may need to communicate it differently to different segments. It doesn’t harm you to have both firmly in mind now. Later, when it comes to communicating value, it might be time to look at the specifics of communicating the same offering to different segments in more detail. So the two are linked, but at this moment in time, you are looking to see if and how many different offerings will have to be made to best satisfy the jobs and outcomes segments want to achieve.
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