Summary
Highlights
McDonald's, a sophisticated marketing company with extensive data, initially attempted to innovate their milkshake product line by identifying a quintessential milkshake customer profile. They invited these customers into focus groups, asked how to improve the milkshake, and despite implementing feedback, saw no impact on sales or profits.
A different approach was taken: understanding what 'job' consumers were hiring a milkshake to do. A colleague observed McDonald's customers for 18 hours, noting details like purchase time, attire, companionship, and consumption location. It was discovered that about half of milkshakes were sold before 8:30 AM, to solitary customers who immediately left in their cars.
Customers buying milkshakes early in the morning were interviewed to understand the 'job to be done'. They struggled to articulate it, so they were asked what they would 'hire' to do the same job if they didn't buy a milkshake. Answers included donuts, bagels (which were dry and messy), and even bananas (unsatisfying) or Snickers bars (causing guilt).
The fundamental job these customers were hiring the milkshake for was coping with a long and boring drive to work and needing something that would keep them full until around 10 AM. The milkshake's viscosity made it last a long time, providing engagement and satiety. From the customer's perspective, the milkshake excelled at this specific job over other alternatives.
The discovery revealed that competitors for the milkshake were not just other fast-food milkshakes, but any product that could address the 'long, boring drive' job, such as bananas, donuts, and bagels. When McDonald's implemented this insight, their perceived market size for milkshakes was seven times larger than previously thought, demonstrating the power of the 'Jobs to be Done' theory in understanding true market potential and innovation.