Quantitative market segmentation is a powerful tool for the innovation of new products and brands. A good segmentation can uncover segments of customers that need or want products and services that fit your organization and brand. “Unmet needs segmentation” is the most powerful tool for uncovering new opportunities. Unmet needs segmentation focuses only on customer needs that are not currently being satisfied in the market. The relevance of each unmet need is quantified and consumers are statistically clustered into segments that share the same functional and emotional needs. While some organizations use the “jobs to be done” framework to seek innovation opportunities, we find “unmet needs” to be a far better method for generating product and brand innovation opportunities.
The ”unmet needs” approach goes beyond the basic, functional requirements used in the “jobs to be done” context. “Unmet needs” recognizes that consumers are not just looking for functional fulfillment of tasks, but are also driven by aspirations, personal values, emotions, and life context. It identifies desires, unfulfilled expectations, and personal “identity needs” for which there are no current solutions.
The ”jobs to be done” framework assumes consumers “hire” products and services to perform specific “jobs” in their lives. For example, a consumer might “hire” a cup of coffee to jump-start their day, or a music streaming app to unwind after work. While this method reveals the functional needs of consumers (and therefore appeals to logically driven engineers and managers), it overlooks more nuanced, emotional, and situational needs that can be a fuel for “real world” innovation.
The “unmet needs” approach ensures businesses consider emotional and psychological needs, in addition to functional needs. Often customers purchase products based on emotional engagement. The most impactful brands and products are those that resonate emotionally with consumers. “unmet needs” taps into the deep motivations of customers and enables them to create products and services that elicit a strong and lasting emotional bond, leading to brand attachment and loyalty. “jobs to be done” mainly focuses on functional needs, and often fails to delve deep into the emotional or psychological needs.
The primary reason “unmet needs” segmentation is a far better innovation tool than “jobs to be done” lies in its expansive scope and specific focus on “gaps” in the market. “Jobs to be done” focuses on known, existing “jobs” and tasks that consumers are already doing. This approach is far more likely to lead to incremental product improvements and is unreliable in uncovering new, “blue ocean” opportunities where customer needs have yet to be met. The ”unmet needs” segmentation approach provides a much wider lens, considering both existing needs, as well as potential, new needs of which consumers might not even be fully aware yet. This approach presents an ocean of opportunities for radical innovation. By uncovering “latent needs” companies can innovate entirely new products, services, or experiences that cater to unmet desires that can catapult them ahead of the competition.
A personal watercraft manufacturer used “unmet needs” segmentation to evaluate their product portfolio. Using the resulting segmentation they were able to align their product portfolio with the emotional and functional needs of market segments. When doing so, a large segment was discovered that was not satisfied with any existing offerings in the market. By introducing a new model focused on the needs of this segment, sales rapidly accelerated. As a result, they took over the market leader position.
We find the “unmet needs” approach provides much more adaptability to market changes. Today, our clients are facing rapid technological change and shifting consumer behavior. We focus on tools that help our clients stay ahead of the curve. We believe the “jobs to be done” approach, which focuses on “current jobs,” puts organizations at risk as consumer tasks and jobs evolve or even disappear. By using the “unmet needs” approach, we can assist organizations by continually assessing unmet needs, then innovating and adapting in sync with market changes so their offerings remain relevant and appealing.
We choose the “unmet needs” method as our primary quantitative tool for Innovation. At the core, “unmet needs” only focuses on uncovering potential “blue ocean” territories that tap into deeper emotional layers and psychological needs. Most important, it provides our clients the opportunity to be a “disruptor” in the market and potentially make the job that was done in the past, obsolete.
What is the Best Market Segmentation Approach for Innovation
