Most Services Launched This Year Will Fail – Here’s Why
According to Clayton Christensen , 30,000 new consumer products are launched every year—and 95% of them fail.
There’s no equivalent figure available for the public or social sectors – but I’ve been wondering how many services have been launched in 2016 and how many will have met their objectives by next Christmas.
In the social sector services don’t fail in a commercial sense. The lack of a conventional market means they can be propped up artificially using money. Often someone else’s.
The thing I’m really interested in is how many of our services would people actually purchase – if they had a choice?
And in the design of new services – or redesign of existing ones – are we really nailing the job the customer needs done?
Many products and services fail because of ineffective market segmentation. An organisation typically looks at users as groups of people subdivided by demographics, such as age, gender, or income level.
An example of this are “older persons services”. Some of these are eligible for people aged just 55 – nearly a third of the UK population. No-one in that huge group self identifies as being part of some homogeneous old folks club. Designing services to such an ill defined group is certain to fail.
One size fits no-one.
Christensen has said it’s time for companies to look at things the way customers do: as a way to get a job done.
He gave the example of McDonald’s who wanted to improve their milkshake sales. They enlisted a researcher, who approached the situation by trying to deduce the “job” that customers were “hiring” a milkshake to do.
They spent 18 hours in one of the restaurants – observing who was buying them,when they bought them, and where they drank them.
One thing stood out – 40% of the milkshakes were purchased first thing in the morning, by people who ordered them to go and then drove off.
On interviewing customers it emerged that the reason people were buying milkshakes was simple – boredom.
They faced a long routine commute and were using the milkshake to pass the time and stay engaged. The milkshakes did the job better than most alternatives as the consistency meant they’d take about 25 minutes to consume. A banana doesn’t do the job as it’s gone in seconds.
So the answer to selling more milkshakes wasn’t to change ingredients or introduce a new range – it was to make them do the job they were being hired to do, but do it better, by being more readily available to commuters who were in a rush.
How many of the services launched this year have really gone through this kind of problem definition?
We make a lot of assumptions about the people who use our services and why they use them – and it’s time to go to the next level.
At Bromford we are changing how we are doing things – and going through a process of deconstructing our assumptions about customers. It means starting again, getting to know them and the jobs they really need to get done.
The exciting thing about working using a Lab methodology is that even though the new approach isn’t fully operational we are already working with colleagues on the next iteration.
We’ve recently agreed a principle of moving away from a ‘one-size fits no-one’ home repair service – working with a small group of people to design more bespoke service offers. We expect the team to do this thinking over weeks not months – ready for us to take into test as early as February.
The danger is that we start thinking of our customers as problems to be solved. Of “78 year old Betty ” who can’t use her taps as she has arthritis. Once these kind of personas are created they run through an organisation like wildfire and – hey presto – you’ve got a tap fitting service for all 70 year olds.
Our mantra is now community first, services last.
The three questions we all need to ask before launching any initiative in 2017:
- What job does our customer need doing?
- Are we the best people to do it?
- If we are – why is our product or service worth hiring?
Thanks to everyone who has shared my posts, commented or read them this year. I hope you and your loved ones have a wonderful Christmas.