Over the past couple of weeks, we've had quarterly results published by major corporations. This week it was Big Tech. Their performance over Q3 has been phenomenal and shows increased demand for their products and services. Here are some highlights:
- Facebook's monthly active users grew by 12% to 2.74 billion.
- Amazon has hired an extra 400,000 people this year to cope with the demand on their platform. This helped drive a 37% increase in net sales to $96.1 billion.
- Demand for Google's entertainment services grew. YouTube TV now has 3 million subscribers YouTube has and 30 million premium subscribers.
- Net sales in Apple's services experienced a strong 14% growth this quarter.
When reading the news about Big Tech extending their dominant position throughout the pandemic, we hear a lot about technology rapidly changing customer needs. It's easy to understand why when you see these kinds of quarterly performance metrics. But we need to be careful with how we talk about 'needs' and understand how and why customer behaviour changes. The macro trend is indeed a shift to digital, but getting digital right requires a deeper understanding of human behaviour.
A big part of my job is to understand how to generate demand and find new pathways for growth in a human-centred way. It's very common to hear product teams solutionising far too quickly because we're now "all-in on digital technology". Being "digital" alone will not drive sustainable growth. Plugging AI into your product without understanding what outcomes it will drive for your customers, is a waste of time. Yet, businesses feel the pressure to do this because it's a way of differentiating and giving customers what they want.
Whilst technology has an influence, the biggest catalyst for fueling demand for your product is understanding your customers' context. With the pandemic and resulting lockdown measures, we're currently experiencing one of the biggest context shifts in generations. Which means there's a lot we don't understand about what customers need!
Unpacking customer needs and its relationship with technology
There is no commonly accepted definition for customer needs. As a result 'needs' are very abstract and can vary in definition significantly. As an example, when I search for customer needs, this Hubspot article ranks high in the results. As a designer or product manager, what would you do if you were told your customers wanted "options", "design", and "convenience"? Understandably, it would be a facepalm moment because this is obvious, vague and open to huge interpretation.
Understanding customer needs is really important, especially at the moment, but we need a common language to articulate them. Many people in the business world have a different interpretation of 'needs' and use it interchangeably with other terms like need states, values, emotions, purchase drivers, customer expectations and customer outcomes. All of these things are different. The best definition of "needs" I've seen is by Everett Rogers in his book "The Diffusion of Innovation". He describes it as:
"A need is a state of dissatisfaction or frustration that occurs when an individual’s desires outweigh the individual’s actualities."
A need arises out of a state of dissatisfaction, frustration or struggle. Without it, there is no motivation to make a change or adapt behaviour. This sounds very similar to the frameworks we use in Jobs to be Done. One of the great use cases for Jobs to be Done is to better understand customer needs by giving it more structure. I regularly describe Jobs to be Done as a set of frameworks that translates the intangible complexity of human behaviour to a clearer and more tangible insight that product and marketing teams can use.
Here's an example of how Jobs to be Done helps with the structure, detail and nuance of understanding human behaviour.
This goes way beyond the vague one word needs outlined in the Hubspot article.
- Level 1: the Jobs to be Done are higher-level areas of one's life. They rarely change and customers hire different products or services to help them make progress.
- Level 2: is the struggle and desired outcome people experience day-to-day. As Rodgers says, when the strength of desire outweighs the current state (what people are struggling with) a need for change occurs. This is heavily impacted by context.
- Level 3: are the motivations that people experience when trying to make progress. They include drivers and barriers to change and understanding this level of detail helps design better product experiences and create more effective marketing material.
When everyone is digital, understanding levels 2 and 3 are essential to differentiation and driving sustainable growth.
The benefit of thinking in a Jobs to be Done way rather than a customer needs way is the ability to separate the change from the stability. Jobs tend to remain stable but outcomes change over time. This is important when thinking about the relationship between customer behaviour and technology. We've always needed to effectively communicate with our colleagues at work and our friends in our personal lives. Over time we've hired different solutions, from telegrams to postal mail, email, telephones, pagers (anyone remember them?), instant messaging and video calling.
Sidebar: This reminds me, I read a few weeks back that Putin still uses telegrams 🤯. He sent one to Trump to wish him a speedy recovery from Coronavirus. I'd love to unpack his decision making in that situation!
In many cases, these technologies are the enabler to progress. The bigger question is why do customers choose one product over another. Especially when the pandemic has shifted everything to digital. Having a digital technology product is not a point of differentiation, it's table stakes for customers considering your product.
Why context changes everything:
It's been fascinating being a researcher during the pandemic. I get to speak to lots of people about how their lives have changed, the products they are using and what they are trying to achieve with them. My research aims to understand what causes people to choose one product over another or why they behaved this way instead of that.
In all of those conversations, the key thing is that behaviour changes based on a struggle. It's a struggle that's severe enough to overcome deep-seated inertia and break people out of their existing habits. A big reason (and there are others) why people are jolted into looking for a new solution is because of a change in context that makes the old solution a struggle. The pandemic has been an obvious context shift, but there are others especially big life moments like getting your first job or getting married. To show how our workflows can be disrupted by a change in context, I've provided an example below that visualises the Hierarchy of Needs diagram above.
In this example, the context change of lockdown and working from home has meant that the Job to be Done of effectively communicating with teams has now become difficult. It's created new struggling moments for people so they now need a new solution. Technology acts as an enabler for people to make progress on this Job to be Done again. It's the foundation of the solution to the problem. But going beyond the technology and understanding how the change in context has impacted how customers want to use the product is the key to unlocking growth.
This means understanding the details at various levels of the Hierarchy of Needs is super important. For example, with enterprise products, there's always an interesting dynamic between the struggle/outcomes and motivations of users and buyers. The construction of the need is very different for the employee and the organisation. Undoubtedly, companies like Zoom and Slack have been trying to balance these differences as they try to compete with incumbents like Cisco and Microsoft. The macro trend is an acceleration to digital solutions. The decision of which digital solution to use is won and lost when trying to understand the struggling moment and the motivations for change.
This becomes even more complex when people adopt a new solution. That solution creates new struggling moments. Did anyone start using Zoom at the start of the pandemic and then move to a different product because of security concerns? The decision-making process and the drivers and barriers to change are constantly evolving. It would be a fascinating piece of work to look at how and why people have increased their usage of the services of Big Tech. What is it replacing? What struggle does it overcome and what new struggle does it create. The opportunity for growth is hidden in the answers to these questions.
Whilst the world seems to be changing rapidly right now, the difficult thing to keep up with is not technology, it's how that technology is being used.
- Resist the temptation of thinking that new technologies are the solution for growth. Blindly integrating them into your product is not the answer.
- Customer needs are not single-word descriptions. They are multi-layered and highly complex.
- Jobs to be Done is a great framework for adding structure and detail to understand customer needs and human behaviour. It's focus on context helps you understand what changes over time and what remains stable.
- To create successful products that people want, identify the struggles people face and better understand the drivers and barriers to making progress towards their desired outcomes. This will provide the insight required to create truly disruptive products.
- Everything is becoming digital by default. To win in this new world your first task is understanding why customers pull different products into their lives and how they use them. Answers to these questions will unlock growth for your business.
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