Milkshakes

Picture: Michael Perini

Recently, the rate of me coming across the milkshake story has increased dramatically.  The story to which I refer is Clayton Christensen's research involving the purchasers of milkshakes at an unnamed fast food chain.  The story resonated with me when I first heard it a few years ago, and I've often casually thought about how to apply it beyond milkshakes.

For those who haven't heard of the research, the best way to learn about it is from Christensen himself in this 7-minute interview: http://www.youtube.com/watch?v=H3fGwsrXuZw.  The gist is that a particular fast food chain wanted to know how to increase milkshake sales.  They had done traditional market segmentation and focus group studies to no avail, so they wanted to try something different.  A researcher spent one day observing a restaurant and noticed that about 40% of milkshake sales occurred during the morning commute hours, so the next day he asked these morning purchasers some questions to understand why they came in to buy milkshakes.  The most popular response was not that they wanted a sweet dessert or that they wanted a breakfast replacement, it's that they all had long, boring commutes and that they needed something to stave off the inevitable mid-morning hunger at work.  In Christensen's words, these were parts of the "job" for which the purchasers were "hiring" the milkshake.  A banana didn't perform the job well because it was eaten too fast to reduce boredom; a donut didn't perform the job well because it left the eater hungry by 10am.  The best employee for the job turned out to be a milkshake since it took 20 minutes to consume (reducing boredom) and left the consumer full until lunchtime.  Thus a successful innovation in the milkshake space would be increased viscosity, further reducing boredom by causing the milkshake to last longer.  Improving flavor would have no impact on sales because the customer wasn't hiring for taste; the customer would not be willing to pay for such an unnecessary feature.

I see two excellent benefits to Christensen's jobs-based approach to innovation:

1. It provides focus for product improvements (or for developing new products) on a small set of important features, increasing both the accuracy and speed of innovation.
2. It aids in identification of competitors.

The second benefit is a bit less intuitive than the first, but it can be just as beneficial as the first in some contexts.  Returning to milkshakes, what would be a competitor for Wendy's milkshake?  One might be tempted to say "a McDonald's milkshake" or "a Burger King milkshake."  While that may be true if you consider only the milkshake market, it is not at all true if you consider what the customer is actually paying for.  The customer is paying for a job that involves reducing boredom on a morning commute and staving off mid-morning hunger.  Thinking in that context, it is clear that many products are competitors for Wendy's milkshakes, including bagels, bananas, donuts, granola bars, and egg sandwiches, to name a few.  If a lot customers are hiring bananas for this job, you must consider what features of a banana are attractive to the customer and use those to better position your milkshake.  For example, a customer can buy bananas in convenient bunches, so she only has to make one trip per week to hire them; perhaps a pre-packaged milkshake sold as a package of 5 would be successful (indeed, note the prevalence of meal shakes).

Thinking about everyday products in the context of jobs being performed casts them in new lights and makes it easier to think of replacements.  Plus, it's fun to think through why I hire one coffee mug over another when all I want is a cup of tea.