How JTBD Improves Market Segmentation

Market segmentation often falls short because it relies too much on demographics or product features. The Jobs-to-be-Done (JTBD) framework solves this by focusing on what customers aim to achieve, not who they are. This approach leads to better product alignment, increased retention, and new growth opportunities.

Key takeaways from this article:

• JTBD Core Elements: Focus on customer goals (jobs), success measures (outcomes), context (circumstances), and barriers (constraints).

• Challenges Solved: JTBD addresses demographic blind spots, product-centric thinking, and missed opportunities.

• Proven Results: Companies using JTBD see higher product success rates and improved metrics like retention and customer satisfaction

Why it matters: JTBD helps businesses uncover unmet needs, create customer-centric solutions, and align teams for better results. Learn how to implement it with actionable steps and tools like customer interviews, job maps, and outcome analysis.

Common Market Segmentation Issues

Issues with Product-First Segmentation

Focusing on products instead of customer needs can hinder growth in several ways:

• Innovation Constraints: Companies get stuck making small improvements instead of addressing core customer needs.

• Market Misalignment: By segmenting based on product features, businesses often overlook emerging needs and broader opportunities. For instance, B2B software firms might focus on "Gantt chart users" or "time-tracking needs", missing the bigger picture of what customers are trying to achieve: effectively managing their time.

• Value Creation Barriers: Private equity firms face difficulties when portfolio companies lack a clear understanding of customer needs. This leads to poor acquisition strategies, missed cross-portfolio opportunities, and inefficient resource allocation.

The downsides of outdated segmentation methods go beyond marketing. Companies using traditional approaches often see higher churn rates and lower customer satisfaction.

JTBD Solutions for Better Segmentation

JTBD addresses segmentation challenges by focusing on real customer tasks and improving collaboration between teams.

Customer Outcome Segments

JTBD shifts segmentation from surface-level traits to shared customer goals. Customers aren’t looking for a customer service chat tool, they are trying to get assistance with their issue. Building tools around the desired customer outcome increases customer acquisition and retention, higher satisfaction and revenue growth. By focusing on what customers are trying to achieve, businesses can also uncover how specific situations influence their customers’ needs.

Situation-Based Customer Groups

Building on outcome-focused segments, JTBD adds another layer by considering the context in which customer needs arise. Customers’ priorities often shift depending on their circumstances. Understanding these situational changes allows businesses to tailor their offerings while still addressing the same customer base. Companies using this approach saw an increase in retention and upsell opportunities.

Cross-Team Coordination

JTBD also fosters better internal alignment. By focusing on customer needs, product, marketing, and sales teams can work together more effectively. For instance, product teams can develop features that solve key customer problems, marketing can create messaging tailored to specific customer goals, and sales can refine their pitches. A food delivery service study highlighted this with three distinct customer groups:

• Fast and Diverse Diners, who value speed and variety.

• Cost-Conscious and Ethical Eaters, focused on affordability and worker rights.

• Health-Oriented Foodies, prioritizing nutrition and dietary needs.

This segmentation allowed the company to deliver targeted solutions and marketing based on desired customer outcomes, increasing customer satisfaction and expanding market share.

Applying JTBD Segmentation

Finding Customer Jobs

To pinpoint customer jobs, you need a structured approach that blends various research methods. Start with detailed customer interviews that focus on their goals and challenges, rather than just product features. Dive into customer support data and feedback to uncover recurring problems and unmet needs.

Here are a few methods to consider:

• Customer Interviews: Understand motivations and desired outcomes.

• Support Data Analysis: Identify common pain points through support tickets and feedback.

• Behavioral Observation: Watch customers in real-world settings.

• Sales Call Analysis: Analyze sales transcripts to extract useful insights.

Once you've identified customer jobs, the next step is to analyze them effectively using specialized tools.

Using thrv for Job Analysis

After mapping customer jobs, tools like thrv's JTBD platform can simplify the analysis process. This platform offers features that help teams identify and prioritize customer needs. One standout feature is the Importance vs. Satisfaction analysis, which is especially useful for private equity firms assessing portfolio companies.

Key tools in the thrv platform include:

These tools can even integrate with business intelligence platforms, combining JTBD insights with customer data for deeper analysis.

Testing Segment Accuracy

Once you've used tools like thrv to analyze customer jobs, it's essential to validate your segments to ensure accuracy.

Quantitative Methods:

• Conduct large-scale surveys to confirm segment characteristics.

• Use predictive modeling with behavioral data.

• Perform cohort analysis to track segment consistency over time.

Qualitative Methods:

• Hold in-depth interviews with representatives from each segment.

• Organize focus groups to observe how segments interact.

• Gather feedback from sales teams about segment responses.

A/B testing is another powerful way to validate your segments. By crafting targeted marketing messages or product features for each segment and measuring their performance, you can refine your segment definitions to better match real-world market distinctions.

Action Steps for PE Teams

Private equity teams should focus on:

• Identifying and quantifying untapped market opportunities.

• Building actionable profiles based on customer needs.

• Crafting precise product strategies tailored to customer jobs.

• Aligning portfolio company teams to prioritize customer outcomes.

To track progress, monitor these critical metrics:

Conclusion: JTBD Segmentation Results

Main Points Review

JTBD segmentation sharpens market insights by focusing on what customers aim to achieve rather than who they are. By prioritizing customer objectives, companies have seen measurable gains in product adoption and market positioning.