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How to understand your customer better through big data
This episode of “Better Innovation,” Global Tax Innovation Leader and host Jeff Saviano continues his interview with Dave Duncan. Dave is the author of The Secret Lives of Customers: A Detective Story About Solving the Mystery of Customer Behaviour.
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One episode was not enough, so we broke it in two. Here's the second part of Jeff's interview with Dave Duncan. Dave is the author of The Secret Lives of Customers: A Detective Story About Solving the Mystery of Customer Behaviour. Through a very engaging parable, Dave dives into what motivates customers across the functional, social, and emotional spectrum, with an emphasis on the important questions you're asking about your customers.
Whether your customer is a coffee shop or large enterprise, Dave’s principles will help you better align your product or service to what matters most to your customers. In this fascinating two-part discussion, Jeff and Dave dive into the key messages from The Secret Lives of Customers to help you discover new ways to meet rapidly changing customer needs.
For your convenience, full text transcript of this podcast is also available.
Jeff Saviano
He'd better innovation as promised. Here is the second half of my discussion with Dave Duncan. Hope you enjoy. And I think it's it is such a powerful idea and this notion of hiring products and services to solve for a customer problem or to help address an opportunity really is powerful. It's not it's not meant to be defined by the employer/employee relationship of a job in in a narrow sense. But I love how you put it. It's really used as a metaphor to determine how we hire those products and services. Why is that important here, Dave? Why is this job to be done theory and applying it to the main ideas in the book of discovering something new about your customer how do you link jobs theory to the customer discovery process that that you lay out in the book?Dave Duncan
One of the reasons that it's so useful is that it gives you a sharp vocabulary for describing what it is you want to know about a customer, right? There there's something about forcing you to answer the question, "Well, what job are they trying to get done?" that has more precision than, say, asking about needs, which is a fuzzier term that could you know, because you could say, "Well, I need a product," or, "I need to have a problem solved."And the job-to-be-done language forces you to focus on the problem or the goal that the customer has. And it's not the only thing you want to understand. That's not the only part of the language. But it's a fundamental one.
And so, as you're interacting with customers, you're looking for clues or direct evidence as to what the jobs they're trying to get done are. Some of those could be functional jobs. Some could be social or emotional jobs. Those are other elements of language that that you want to learn. And you can probe for that in your conversations if you if you have that framework and you know how to prompt people to give you clues about those things.
Saviano
I love how you explained it in the book, that you're trying to identify the root causes of customer behaviour across the, you know, functional, social, and emotional needs. Maybe to bring it back to the story, Dave, that you introduced earlier and the coffee shop is called Taza, why people were hiring to meet a particular need. And I and do I have that right? Is that the right application of the job’s theory to the story that you that you used in the in the book?Duncan
That's right. So, the primary goal of the market investigation that the market detectives are undertaking is to firstly understand why customers are hiring Taza today, right, currently; why have they hired it historically. If you can hire something, you can also fire it, right? So, they were losing customers. So, some of their customers had decided to fire Taza. So, the central question they're trying to answer is why people hire and fire Taza. And that gives you insight into what you might change to get people to come back, what should you invest more in because it gives you an understanding of what your most loyal customers care about the most.And it also clarifies who you're really competing against cause and that's one of the, I'd say distinctive sources of value of the job’s framework, is it clarifies who your real competition is, right? Not as defined by other solutions people might be hiring or considering hiring for those jobs to be done.
Saviano
So, people may hire Taza, the coffee shop, for a need for example that that they need a jolt of coffee and need something to start their day. Or they may look at it more as a community. They want to meet friends and they want to meet folks there. I suppose there's lots of possibilities and there's lots of different jobs that people could hire a coffee shop for. Is that right?Duncan
Yeah, that that that's exactly right. And that that that's one of the reasons I used the coffee shop, is because we all we all have I mean, just so just think about your own life, right? And listeners can think about all the different reasons that they might have visited a coffee shop at one time or another. You know, it can range from, "I just want to get, you know an energy burst with a cup of coffee. I want to go in and out and get it" and the coffee shop happens to be on my walk to work. I'd call that a functional job to be done. You know, back in the pre-pandemic days I would often, if I was traveling for work step into a coffee shop to have a kind of mobile office environment where I could get Wi-Fi and get some work done quickly while I was on the road. You know, another functional job. You might have there's all kinds of social jobs that you might hire a coffee shop for. You might go there to connect with friends. You might go there to people watch, right? You might go there to feel like your part of a community. It might be kind of a ritual that's part of your day, right, which is more kind of an emotional job that sort of reinforces your sense of self and, you know, stability, and belonging in a particular place. So, there's really a very wide range of reasons that people hire coffee shops. And some of those come out in the story.Saviano
I think about our own experience. It just so happens the last time you and I saw each other was in a coffee shop. We met for coffee and to catch up and to hear how each other was doing. And I was thinking about in the story of how it's a complicated question. How do people and I'd love I think you're absolutely right, you know, using the metaphor and the story of a coffee shop. Everybody can relate to it. And also, that that the distinction and the interplay with the circumstances that that people find themselves in and you created this this new tool that I think was just so terrific called a market map. Explain what the market map was and this interplay with the jobs to be done and the circumstances that people find themselves in.Duncan
Sure. So, a market map is a way to map out where you as an organization or your products and solutions are playing today, right? So, you know, the latitude and longitude of a market map, you know, equivalent are the jobs that people are trying to get done and then the circumstances within which they're trying to get those jobs done.Circumstance is another key component of this language. So, it's another vocabulary term in the language that's really fundamental to understanding customers, right? Because the jobs you're trying to get done and what types of solutions you'll consider getting those jobs done and how you evaluate those solutions are very relative to the circumstance that you happen to be in, right? So, if I am traveling and I'm in a foreign city and I need a quick place to do my work, I might be willing to just pop into a coffee shop, and sit at in a noisy environment, and you know, do some do some work at a table there. But that's a circumstance-specific solution that I'm hiring because you know, I don't have an office in that city, I don't know my way around. I might recognize this coffee shop from its brand, and so I know I can go there and they'll let me sit there for the price of a cup of a coffee and I can get free Wi-Fi, right? Like, that's a circumstance-specific solution I chose. Whereas, if I'm, you know, in my home city or one where we have an office, I I'll choose the office environment most likely for lots of reasons. So that's why circumstance is kind of as fundamental as the job to be done. The market map helps you to map out all of the different combinations of circumstances and jobs that you're being hired for today.
So, you can visualize where you play f in a customer-centric way, and then you can also map out where your competitors play, like where other company or competitors are competing to solve those jobs in those circumstances. And you can look at the overlap and say, "Well" first of all, it gives you the big picture of everybody you're competing with and gives your ideas for where you might move on the market map if you if you want to play different games.
Saviano
And just would ask the audience to envision I really like how you explained that, Dave. I can see it in my mind's eye, the latitude and the longitude of the jobs to be done and the circumstances. And so, just imagine that grid. Every box on the grid, every one of those intersection points becomes a possible opportunity for the organization to exploit. And do I have that right? Is that how to interpret this market map image that you're that you're shaping?Duncan
It is. Yeah, that that that's a good description of it. And it's independent of the customer in some sense, right? Meaning you could have multiple squares on that map for the same person, right, in multiple different circumstances. So, the same individual could hire a coffee shop in the morning like, on the way to the work for jobs to be done that relate to getting some work done or connecting with somebody. Or they might hire that coffee shop on a Saturday night, and maybe their job to be done is to meet new people, or to be entertained, or to relax. So same person, different circumstances, different jobs, so different squares on the market map.Saviano
And I think about what any market strategy is, Dave. Sometimes it's as much about what you're not doing than what you are doing. And what is your area of focus? What's a core market for a business? And what was so cool what you did in the book, in the section is to is to then be able to take a step back from the circumstances and the jobs and looking at this this grid and find patterns that are developing.And it seemed as though that the purpose of that would be to define so where on this market map does the business want to play. Because probably can't play everywhere. Probably need to make some choices. And it'd be helpful to have you talk a bit about that.
So how do you interpret the market map, and what's the purpose of it? Did I get that right, that it may help in determining what your market strategy is: what do you want to play who do you want to be as an organization?
Duncan
Yeah, absolutely. That and that's the central role that it that it plays in the story. And so, the first function of a market map is it shows you where you're playing today. Whether you realize it or not, whether it's intentional or not, it gives you a picture of the full set of places you're playing, you know, intersections of circumstances and jobs.You can also map onto it where your competitors are playing, right? So, you can see where on the map you're overlapping with a competitor and therefore you're competing with them or maybe where you've got a space on the map all to yourself, right? So that's the information you need to then take the next step, which is your which you're suggesting, which is to make choices about, "Well, do we do we want to be competing in all of those places at the same time? Are there some areas where we think we should invest more because that's really our core you know, are the core market that we want to serve? Should we be ceding some places on that map and just not trying to pursue them anymore because we don't think we have a right to win there or it's not really aligned with our core mission?" So, yes, very much it helps you make these big strategic decisions and choices, as you say about where you want to play and where you don't want to play and does it in in a way that puts the customer right at the centre of making those choices.
Saviano
It may also reveal what you call certain "help wanted" signs. What are those?Duncan
So, a "help wanted" sign and I'm extending the metaphor of jobs and hiring, right? So, if you if you are if you're a customer, you have a job to be done, you're hiring something to get those jobs to be done and you're a company who's trying to understand those dynamics and what you might do to solve for those jobs even better, you want to understand what I call the "help wanted" signs, right? So, a "help wanted" sign is some sort of indication that customers' jobs are not getting solved in the best way currently, right? So, they might not be hiring anything currently because they don't see any good solution out there that's adequate, right? That's one type of "help wanted" sign.Saviano
So totally unsatisfied. In that example, you've got a job. It's just unsatisfied. There's a need that's developed that that the organization that you represent, or perhaps nobody else, is serving that particular need.Duncan
Yeah, that's exactly right. So that's one type of "help wanted" sign. Another could be that they are they are hiring something today but they're not that happy with it, right? So, they have a way that they define what a quality solution is and the job is so important that they have to hire something for it, but they're dissatisfied with how it with its characteristics relative to how they define quality, right?So that's another type of "help wanted" sign. Another could be that they are that they're improvising a solution, like they've got a workaround or what we sometimes call a compensating which is the job is so important, right, but there's really nothing out there that is satisfying or that they're improvising a solution. And, you know, keeping with the coffee example, one of the examples I have in the book is if you remember back in the day before we had these little coffee insulation sleeves that we put around our cup people used to just nest two cups together, right, if their coffee cup was too hot to insulate it from their hands. That's an example of a workaround or a compensating behaviour that was just staring us all in the face, right? I mean, it was it was it was literally right in front of our nose every time we took a sip of a cup of coffee. And someone said, "Oh, well you know, we could save paper and have a more efficient solution if we created these little sleeves." Like, so that's a workaround or another type of "help wanted" sign.
Saviano
I forget who said it. Dave, but I love the metaphor that s somebody had in this context that said, "If you want to try to discover what, you know, you call these 'help wanted' signs, look for the duct tape in an organization. Where are they sort of piecing things together where are customers piecing things together using duct tape to just get by?" They have some kind of a solution, but it's really horrible. In our world, we look for customers that are using a spreadsheet formula to solve for something and perhaps there's a need for some for some greater technology application. And so, this idea of a 'help wanted' sign is so powerful that they would typically see, I would imagine you also described this idea of trade-offs, that it's hard to find sometimes the perfect solution, right? So, customers are making trade-offs with what are the features and functions that are most important and what can they live without. Is that something that may come from this customer discovery process and customer examination?Duncan
Absolutely. in these in these customer conversations, right, just to recap, you're looking for the circumstances, the jobs. You're looking for "help s help wanted" signs. And you're also looking to understand how the customer defines quality. And that's so important. Not how you think they define quality, or how you would define quality or how the engine you know, the really super smart engineers in your product development department would define quality, but how does the customer define quality? What dimensions do they use to define what quality is? And then what does "good," "bad," or "great" look on those dimensions? And to your point, what trade-offs are they willing to make? You know, are they willing to trade off some level of cost for some level of performance on one of those dimensions that's important? So that's the final piece of the puzzle, I'd say, that we haven't talked about yet, is understanding quality means. And that's where trade-offs come in.Saviano
I love this idea of as you describe it, Dave, in the book around identifying the patterns. And sometimes it's the visual of a market map to see it right before your eyes and start to see patterns of, "Where's my organization playing today, but what are some of these 'help wanted' signs, these unmet needs that may exist? And where are my competitors? Who are my competitors doing something interesting?" Because you know, that's it's the constant search for growth that organizations have, or to better to serve their customers, to delight their customers. That that you know, it just it really stuck me in in getting through this part of the book that that how little these devices are used and how important it is to periodically take a look at your products and services and see how they really align to what customers are asking for. And it really seemed to me that that you are filling a gap in the I don't know what you'd call it, call it the innovation genre, of how do you really examine customers and how do you provide a framework to question, and query, and better understand the needs and the opportunities. And I've just been so interested to ask you that that is that part of the reason why you wrote the book, that you felt that there was a gap in that space?Duncan
Yeah, that that that's exactly the gap that that I was trying to at least help to fill, right, which is and it seems surprising when you think about it, that the gap exists, right, given how important customers are and how much companies talk about them and the importance they place on them. But there really there isn't a standard, you know, way that anybody can learn how to how to learn what they need to learn about customers to get insights into a whole range of business problems. Again, there are there are techniques and market research departments, you know, very sophisticated ones in increasingly, and data science departments. But they tend to be very quantitative and more the purview of a specialist. And the gap I saw was, you know, the job to be done (LAUGH) that that I that I aimed the book at was just "Help me learn how I can be equipped to have useful conversations with customers that give me insights that I can act on."Saviano
I also found that there were just some great practical insights. For example, you know, just envision you're sitting across the able from a customer. And sometimes you should zoom in with questions and understanding, for example, the circumstances that a customer is in when they're trying to get their get their jobs done, sort of the who, what, and the where. Sometimes you zoom out, and come up a few layers, and really try to look, for example, at some of the higher-level questions, the beliefs and the circumstances that people are in their lives when they when they use a particular product or a service. And I thought that that was really novel ground, too, that that when you're actually sitting with a customer and you're questioning and you're probing a bit, that that you know, you could just envision different layers of the questions. And I love the zoom-in and the zoom-out. The other one that I'll just mention quickly is your incorporation of the of the five whys and keep going deeper and deeper, asking, "Why?" and really trying to get to root cause. So, I just wanted to highlight that, that that I thought that was another important part of the work, is to actually help when you're sitting with a customer. So, what do you do and how do you question? And I thought that was particularly helpful.Duncan
Yeah, the zoom-in and the zoom-out idea related to this idea of understanding the circumstances that somebody's in. And just as an ex an example from the story, one of the customers of the café that is interviewed during the story would go there after class to do homework, right? To just to get schoolwork done. And zooming in on the circumstance, right, the local circumstance she's in is, you know, right after class, you know, maybe on a Monday or a Wednesday in a particular part of town, right? So, you're zooming in at a particular time of day on those narrow circumstances. And those influence her choices of hiring, you know, Taza to get this job done. If you zoom out from that, the zoom-out circumstances she's in her, you know, final year of school is aspiring to be a doctor, this particular character, you know, getting ready to apply to medical school you know, has a certain value system certain connection with her family. Those are you know, broader circumstances that she's in but that also influence her hiring decisions of Taza the café in that local zoomed-in circumstance, right? And so, when we're making decisions about products and services we want to hire, it's always a combination of, you know, these bigger factors that define our lives and our circumstances and then, you know, the narrower situation that we're in that influence our choices.Saviano
Well, and to that point, and one of the other principles that I took away that that I think is really often overlooked is this idea of small data before big data. And we touched on it earlier in our conversation today, Dave: the interplay of big data, analytics. It's not as though you're proposing to, you know, throw that out the window. But how small data, how the customer examination can align to these big data techniques. And the way that you told the story I thought, I thought really accentuated that need but there's but that perhaps there's or if I have this right, perhaps there's an ordering to it. That to think small data, get the data, meet with your customers, query and the methods and with the language (as you described), and then you'll have lots more data to apply some of these big data techniques to. Is that right? Did I get that right?Duncan
Yeah, that's right. I'd just add that you know, your big data techniques and the insights you get out of it are only as good as the questions that you're asking, right of the data, right? And the data you gather is based on a set of questions you're trying to answer. Small data gathering small data, which you can derive from, you know, having a conversation with a customer gives you a lot more insight and richness of information to then ask the right questions in your big data. And I think both are very important. But I think the thing that is most missing is the making sure you always have the small data, you know, direct voice of the customer conversation before you go too far down in the direction of data analytics. Because otherwise you know, you can spend a lot of time and a lot of money doing things that that aren't going to be helpful.Saviano
Dave, you mentioned earlier that you have been influenced by the great work of Clayton Christensen. And you actually wrote a book together called Competing Against Luck: The Story of Innovation and Customer Choice. Talk a bit about what Clayton Christensen has meant to you and your work.Duncan
Yeah, Clay's had a big influence on me. I knew him for about 15 years before he sadly passed away beginning of 2020. And I you know through worked with him in in a number of capacities but probably most intensely on that book. Over the course of a year, he and I and two other co-authors would meet, you know, for several hours a week. And we'd work on ideas in the book. We'd try to develop what we really thought the theory of jobs to be done was. That that book was entirely about this idea of jobs to be done. And you know, so I learned a lot about the ideas that way, developed my own ideas through those interactions. He's the one who introduced me to this idea I think I mentioned. And interestingly, you know, Clay is probably most known for this theory of disruptive innovation and which he laid out first in his famous book The Innovator's Dilemma. And he would say that he thought the idea of jobs to be done was just as important as the idea of disruption. He thought it was just as big of an idea, even though I think you know, in the popular perception people are more aware of the idea of disruption. And so, I was fortunate enough to be able to collaborate with him on a book on that topic. Clay was also, as you know, just such a great teacher and storyteller and packager of ideas and communicator of ideas. So that was another I'd say, way in which he influenced me. And I don't claim to be, you know, in his league in terms of skills of storytelling and teaching, but that's certainly the ideal I have in my mind to strive for.Saviano
I was so fortunate. There was a day I was so humbled that there was a session that you invited me to years ago where he was presenting. And it was a relatively smallish group. I think one of my bosses' bosses couldn't make it, and I was very lucky to find the backdoor to the event. And there were some real big shot speakers. And then Clay spoke. And boy! you could hear a pin drop. And the respect and you know, his contribution his contribution in the space. And the work that you and the other co-authors did in in that last book was so was so great in expanding upon this job to be done theory. I think he'd be really proud to see this this work and how you've now extended the thoughts and his concepts. I do think, Dave, also that that this book comes out at a really interesting time as we're all thinking about emergence from the pandemic and organizations are taking a fresh look at strategy. Do you think that that this book is coming at a particularly important time because of what we've all been through and what organizations will be going through in the coming next year or so?Duncan
So yes, I do think it is particularly helpful at this time in history to think about how we understand customers and to understand them because so many of the solutions that we had before the pandemic are no longer working for customers, right? So, you know, take education. And we're, you know, slowly, it seems like, migrating back to a similar model to the one we had before the pandemic. But certainly, in the in the early days you know, almost overnight we went from a s situation where we would send our kids to schools every day for the most part to where they were being home schooled and we were having this virtual schooling solution. In the case of my daughter's school, they were incredibly innovative and adaptable, and they did a fantastic job shifting to at-home instruction of kids. And who knows where things are going to land when we get to a steady state, you know, post-pandemic?But the nature of the solutions we're consuming has changed. That's true in the workplace, too, right, where we've all been forced to adopt a virtual work model. And I think a lot of those same patterns and learnings are likely to stick. But that's why the jobs to be done lens is so helpful. The jobs in many ways are still the same as they were pre-pandemic, right? But what's changed is the nature of the "help wanted" signs as these new constraints and circumstances have popped up, right?
I still have the jobs to be done of having my daughter get a good education in in all kinds of ways that I did before. And you know, but now more than ever, it's important to drill in and understand new circumstances, new "help wanted" signs, new definitions of quality, so we can get those jobs done in in new ways.
Saviano
I think that is so well said, Dave. And for our audience, again, the book is called The Secret Lives of Customers: A Detective Story About Solving the Mystery of Customer Behaviour. If you're looking for a s a little bit more information about the book, you can check out the website. If I have this right, Dave, MarketDetective.com? www.MarketDetective.com.Duncan
That’s right.Saviano
And Dave, really enjoyed this conversation today. Can I also just you know, take this opportunity to thank you for all the help that that you have provided me over the years? I there was a period in my career, go back probably seven or eight years ago, I shifted from serving clients and leading teams around our particular tax areas here at EY organization and dove headfirst into the world of product and service innovation. And we had the opportunity to work together. I had the good fortune of working with you for a few years and really learned so much about what it means to innovate and to develop frameworks and a strategy for an organization. And just wanted to thank you for that. And you've really influenced our work at EY and me personally. And so, thank you for all that that you have given to this profession and to the innovation genre. But personally, really appreciate all of your help and guidance along the way.Duncan
That that's really nice of you to say, Jeff. I learned a ton from working with you and EY as well. And I'm re I'm really grateful for that that experience.Saviano
I'll bet you miss those days of talking about tax innovation. Maybe there's been a little bit less tax innovation in your life since then. Is that fair?Duncan
I have not worked on tax innovation since you and I worked together. But I have to say, I found it fascinating. And I learned a lot about the world of tax and related consulting and what innovation means in that context.Saviano
You made it fun. Dave, we typically end our interviews and our time on Better Innovation, we have kind of a fun close with some rapid-fire questions, quick questions, quick answers. What do you say? Are you up for it?Duncan
Sounds good. Yep.Saviano
Excellent. All right. Here we go. First question: What book do you have on your nightstand? Has to be something other than your own book. What book do you have on your nightstand? What are you reading these days?Duncan
So, I have two books on my nightstand. A book called Home by Toni Morrison. I hadn't read a novel by Toni Morrison before, and I started reading that one. And I have a book called The Almanack of Naval Ravikant which was recommended to me by a friend. I haven't gotten too far in it. But he is apparently a very successful investor and business starter who now blogs and about life, and philosophy and things like that.Saviano
Oh, that sounds so interesting. I gotta check that out. As does the Toni Morrison book. Terrific. Great. You are off to a great start. Here we go. Second question, Dave. Tell us about a historical figure whom you admire.Duncan
Yeah. So, I have an idea for my next book but (LAUGH) it's in a similar format on the topic of creativity. And so, I've been reading the biography of Leonardo da Vinci that Walter Isaacson wrote I think a year or so ago and just learning about his personality, his contributions, kind of how he worked and you know, why he was such a genius. So that's that that would be my answer.Saviano
Oh, I have to check that one out. I've read some other Isaacson. Haven't read that. Oh, now you've piqued my interest for what may be coming next from you. Oh, that's cool. Great, a next book. Okay, here we go. Last question, Dave. What do you see as our greatest opportunity to build back stronger when we emerge from the pandemic?Duncan
Well, you know, I think that one of the impacts it's had is it you know, it it's broken so many old paradigms and assumptions we had about how things had to be done. And you know, in in in in in good ways and in bad ways, right? And you know, I just think about the workplace as just one example, right? I mean, I used to get on a plane and travel for hours to go to a meeting, right? And then and then I'd reverse it, and go home, and travel the same number of hours. And now, you know, we've become accustomed to doing things over video and realize that maybe a lot of those travel hours were not necessary. And you know, I think it's just it's and that's just one small example, right, in one narrow case of a particular type of work that we do.But, you know, I think there's an opportunity to just look at, you know, how whole industries operate, and think about things with a fresh perspective, and try to retain what was good about them before the pandemic but then be open to new solutions. You know, I think in in health care, which is a area that I've been doing a lotta work in recently, there's historically b it's been hard to move towards virtual care and telehealth models not just because of the health care industry but even, you know, what patients are comfortable with and what we expect. But it's you know, it's forced this shift to trying new things, right, trying virtual care and telehealth. And for a lot of things, people realizing it's pretty great. So, you know, I think the biggest opportunity is to just carefully think about what we want to leave behind and, you know, what we want to retain. And I think it's forced an experiment, you know? And obviously we all wish it were for different reasons. And it's been terrible and tragic the pandemic the impact the pandemic's had. But in terms of the opportunity to try new things and to build new ways of doing things this forced experiment has sparked I think I think that has a lot of potential.