The Best Customer Problem Statement

When I'm explaining the LeanInno framework, I refer to "Problem, Solution, Business Model, in that order."

I have so many examples of companies building solutions without knowing what problem they are solving for customers. The infamous "hammer looking for a nail." If you're reading this, no doubt you have several examples yourself. Do you have a R&D department that first develops technologies and THEN looks for a "path to commercialization?"

Just like design thinking, the problem phase of any new business innovation first needs to diverge and listen to all the the problems through customer discovery and observational research. Only then can they apply evaluative techniques to zero in on the most critical problem(s) that solving will have the biggest impact to the customer.

Filling out the customer problem statement is a great way to focus amidst the chaos and evaluate which of your big list of problems is most critical and will have the biggest impact of solving.

Without further ado, the best customer problem statement I've used is as follows:

[Customer Segment] needs a better way to [complete job] because of [problem]

As you're working through this, it's a great idea to create multiple customer problem statements with multiple segments, multiple jobs and multiple problems to lay things out.

The first item in the template is the customer segment. I encourage my teams to create custom segmentation for your project. Don't just rely on previous customer segmentations or segmentations that apply to your entire firm. Customer segments are defined when you find that customers answer your questions in different ways. Choose the best customer segment for your problem statement. Be specific enough to capture the hard work you've done defining your custom customer segments.

Next is the job to be done. This is critical in the customer problem statement. Clayton Christensen, HBS professor and author of The Innovator's Dilemma has made the "Jobs to be Done Theory" or simply "Jobs Theory" famous with his McDonald's milkshake example. In this example, he describes how McDonald's tried the traditional approach of asking it's customers what would make a better milkshake and then found that after implementing those changes, it did not wiggle the needle on sales.

Through observational research, Clayton and his colleagues set out to answer the question, "What job are McDonald's customers 'hiring' a milkshake to do?" He observed two types of customer segments buying the majority of milkshakes. The first bough milkshakes by themselves, before 830AM, and took the milkshakes with them and didn't drink them in the store. The second group bought milkshakes in the afternoon, were not alone, and bought a milkshake with some other food.

The first group are morning commuters. The morning commuters "hired" a milkshake to keep them awake and interested during their morning commute (note: it takes an average of 23 minutes to drink a milkshake through that tiny straw) and to keep them full all the way until lunch time. In this case a McDonald's milkshake was not competing with a Burger King milkshake, but it was competing with bananas, donuts, coffee, etc. that all help complete the job to be done.

The second group of people were often Dad's looking to seem kind, caring, and loving to their kids. A milkshake was a good "hire" to complete the job of making their kids happy for less money than going to the toy store and less time playing at the playground.

The solution to grow the sales of milkshakes for McDonald's is different for each of these

customer segments because the jobs to be done are significantly different. The solution for the commuters might be a milkshake machine that customers can directly pay for by the ounce by credit card and more quickly get back in their car and on to their commute. The solutions for the Dad's might be totally different like a smaller kid's size so that the dad feels less guilty about giving an unhealthy snack to his children.

Lastly, probably the easiest part to the customer problem statement is the problem itself. How do your customers get this job done today? Or why can't your customer's get this job done today? What existing "hires" have tried to get this job done and are doing a bad job? It's costly to hire someone who does a bad job.

Let's create a customer problem statement for the two types of customers in the McDonald's milkshake example. The first group would be something like this:

Morning commuters with a long, boring commute need a better way to stay awake and entertained during their commute and have a long lasting feeling of being full until lunch time because existing solutions are eaten too quickly, are not simple to eat while driving, and don't keep the commuter full until lunch.

And for the second group:

Dad's with young kids need a better way to provide a fun and entertaining experience to their children because existing methods are either too expensive (toy store) or take too much time on a busy day (playground)

Remember that this customer problem statement can and should be used to synthesize the data you're getting from dozens of customer interviews. Force yourself and your team to write out these customer problem statements for multiple segments, jobs to be done, and problems. Look at them, reflect on them, create follow up questions for follow up customer interviews. Determine which of them, if solved, would have the biggest impact on your customers.