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Can Customer Insights Really Drive Innovation for Your Online Business?
9th February 2017 • The Digital Entrepreneur • Rainmaker Digital LLC
00:00:00 00:31:49

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If you think that innovation is derived from a deep understanding of your customer, think again.

In Clayton Christiansen’s new book – Competing Against Luck – he tackles the long held belief that innovation comes from understanding the customer. But based on his research, that thinking is wrong!

His theory is that real innovation comes not from customer insights, but from a deep understanding of why people “hire” your product.

Put in a simpler way, true innovation does not come from understanding the characteristics of your customer, it comes from identifying what “job” your customer is “hiring” your product or service for.

In this 32 minute episode, Sean Jackson and Jessica Frick provide new insight into The Digital Entrepreneur’s journey, including …

  • Why you should, or should not, abandon social media
  • How you can apply the theory of Jobs To Be Done to your online efforts
  • And, the tools and information website sites that may help you improve your online efforts

Listen to The Digital Entrepreneur below ...

The Show Notes

The Transcript

Can Customer Insights Really Drive Innovation for Your Online Business?

Voiceover: Rainmaker.FM.

You’re listening to The Digital Entrepreneur, the show for folks who want to discover smarter ways to create and sell profitable digital goods and services. This podcast is a production of Digital Commerce Institute, the place to be for digital entrepreneurs. DCI features an in-depth, ongoing instructional academy, plus a live education and networking summit where entrepreneurs from across the globe meet in person. For more information, go to Rainmaker.FM/DigitalCommerce.

Sean Jackson: Welcome to The Digital Entrepreneur, everyone. I’m your host Sean Jackson.

Jessica Frick: And I’m Jessica Frick.

Sean Jackson: We are the new hosts of The Digital Entrepreneur. Welcome, welcome, everyone. The format of the show is going to be a little different. If you’ve been listening in the past, you’re going to see some changes. Part of those changes is going to be right at the top of the show because Jessica and I are going to bring up a topic, and we’re going to take opposing sides. I think you’ll enjoy it.

Why You Should, or Should Not, Abandon Social Media

Sean Jackson: Jessica, you ready for a little bit one-on-one, mano-a-mano debate?

Jessica Frick: We are coming out of the gate with a fire this time.

Sean Jackson: That’s absolutely true. Okay. So, Jessica, what is the topic for the week?

Jessica Frick: Okay, this one is going to get kind of heated. Should you nuke your social media accounts?

Sean Jackson: Absolutely.

Jessica Frick: You’re out of your head, Sean.

Sean Jackson: Absolutely. You should nuke those suckers right now. Okay, all right. Let me clarify.

Jessica Frick: You’re insane, but yes, please.

Sean Jackson: Let me clarify really quickly what I mean by the nuking.

Jessica Frick: Okay.

Sean Jackson: There’s no question that social media when it first started out was a phenomenal tool. From Myspace to Friendster, to LinkedIn, to what’s that other one? Oh, Facebook. It was a great way to have conversations, but as content marketing has been on the rise, right now social media is a wonderful syndication platform for all of that juicy content that you create up.

Other than that, why waste your time on it? Why waste your time trying to engage with anybody on that? Just use it as a publishing tool and call it a day. If someone likes it, Retweets it, thumbs it, hearts it, whatever they do on these things — let them do that. But for the real entrepreneur, the time is better spent not getting into little cat fights on Twitter, the time spent on working your online business. What say you, Jess?

Jessica Frick: I say you’re wrong. How are you going to grow your audience if all you’re doing is speaking into an echo chamber? Are you going to take out a billboard?

Sean Jackson: Yes, yes, pretty much. Think about it. Look at it. Look at Pinterest.

Jessica Frick: Put an ad in the newspaper?

Sean Jackson: Yes, exactly. You put the ad in the newspaper, which is called Craigslist nowadays. No, think about it. Look at Pinterest is a phenomenal tool. Now, I’m sure and I know, for instance, that many people follow others on there, but what are they following? They’re following the content that these people put on the thing.

Yes, if you want to have a one-on-one conversation with Aunt Millie, sure you could do that over the phone, on Facebook, via email, but at the end of the day, the conversational aspect of social media is really not there — so why even worry your head about it? Just put the social share icon, once you publish that piece of content, get it into those social media channels, and call it a day.

Jessica Frick: I can tell from your position on this, Sean, that you don’t run an eShop selling mason jars because Pinterest is basically made for that.

Sean Jackson: Yeah, but are you really having a conversation? Come on, let’s think, really.

Jessica Frick: I’m not saying you should have a conversation. I’m saying there’s definitely value in maintaining it. Now, I’m not saying that, as you astutely noted, you need to get into the scratching and gnashing on Twitter. You certainly shouldn’t go on there and just be a link farm that just constantly broadcasts. But if you’re not engaging with people, if you’re not creating that relationship that’s not just one way, giving people a reason to know, like, and trust you, what exactly are you doing to build your business?

Sean Jackson: You’re spending time on your website, which is where you probably should be spending your time anyway. Now, think about it. It kills me. I ran into this very nice young lady who is a new blogger out there. She’s got a fashion blog. She was very excited because she’s got some followers online, and she’s putting things on her blog. It’s really kind of cool because she’s mixing music and fashion together, so she’s literally playing a guitar with things that she’s wearing. It was cool, it was catchy. But you know what she didn’t consider?

Jessica Frick: What?

Sean Jackson: Email. Like maybe people on your site, instead of just clicking on an affiliate link, maybe they should be signing up for an email list that you have. Why is that?

Because if she’s spending all of her time engaging on social media, then she’s not spending time on the site and doing things like build an email list, which will probably bring more revenue to her than sitting there liking, thumbing, and whatever the other things they do on those things to build that ‘one-on-one special relationship.’ What say you?

Jessica Frick: I say, you just need a hug, Sean, because you are just a little sourpuss today.

Sean Jackson: No, no. Here’s another thing, if we’re really going to get on this. Why spend time on things that are not mobile-first consumption? To that aspect I would say, then why not spending all your time creating videos and putting it on YouTube?

Jessica Frick: Well, why not? Wouldn’t that be considered social media?

Sean Jackson: Yeah, it’s publishing, though. It’s content syndication to a social media site. Really, if you’re getting a comment or two in your YouTube, hopefully it’s not something really spammy or stupid. Really, do you want to spend all your time doing that? Just saying, “Hey, here’s the video. Here’s the call to action” — which most people forget to put in, right? Let’s be honest.

Jessica Frick: Yeah, I’ll agree with that.

Sean Jackson: Instead, they’re like, “Oh, I want to put it out there to see if anyone’s viewed it or liked it,” or, “Maybe they did leave a comment.”

Jessica Frick: Well, yeah, there’s a real risk for social media to become another vanity metric. But I think that it does hold value when used in proper proportion to the rest of your marketing mix. Obviously, if you are spending time on social media at the cost of working on a great website or sending important emails that really make a difference, then you might need to look at how much you’re doing it. But everything in moderation.

Just cutting it off, I think it also depends on what kind of business you’re running. If you’re talking to a digital entrepreneur, some businesses will need social more than others.

Sean Jackson: Yeah, well, I would put it further down the list, spend more time on your website, and think a little bit more about how to increase conversions thereof than worrying about whether Aunt Millie is liking your latest post on Instagram. All right.

Jessica Frick: We’ll have to agree to disagree on this one, but I will say I’m going to sell a lot more mason jars than you are.

Sean Jackson: There you go. Folks, what do you think? Am I completely crazy, is Jessica brilliant, or does she completely not get it? We want to hear from you, so as part of this show, we set up a special email address at Digits@Rainmaker.FM. You can send us an email to Digits@Rainmaker.FM and let us know what you think. Go ahead, what is your viewpoint? Is social media really worth it, or should you just go ahead and nuke your accounts? Send us an email, and let us know. We’ll be right back after this break.

Hey, everyone, this is Sean Jackson, the host of The Digital Entrepreneur. I want to ask you a simple question. What is your business framework for selling digital goods online? Now, if the question perplexes you, don’t worry. You are not alone. Most people don’t realize that the most successful digital entrepreneurs have a framework or general process for creating and selling their digital goods in the online space. And one of the best free resources is Digital Commerce Academy.

Digital Commerce Academy combines online learning with case studies and webinars created by people who make a living selling digital goods online. The best part is that this material is free when you register. Are you interested in joining? Well, I’ll make it easy for you.

If you’re listening to this show on your phone and are in the continental United States, I want you to send a text message to 313131 with the keyword ‘digits.’ When you send that text message, we will send you a link to the registration form right to your phone. Are you outside the United States? Don’t worry. Just send us an email to Digits@Rainmaker.FM. Either way, we’ll send you a link to the registration form so that you can sign up for free for Digital Commerce Academy.

As a special bonus, we will also subscribe you to our newsletter when you text or email us so that you can stay informed with the latest insights from the show. And don’t worry, we respect your privacy. We will not share your email or phone number, and you can easily unsubscribe at any time. If you want to start building or improving your framework for selling digital goods online, then please send a text to 313131 with the keyword ‘digits,’ or send us an email at Digits@Rainmaker.FM. You won’t be disappointed.

How You Can Apply the Theory of Jobs To Be Done to Your Online Efforts

Sean Jackson: Welcome back from the break, everyone. For this segment, we’re going to do it a little different than other shows where we generally have interviews. For this particular segment, we are going to discuss a book that Jessica and I have both read called Competing Against Luck by Clayton Christensen.

Now, that name may sound familiar to you because Clayton wrote a seminal piece of work back in the ’90s called The Innovator’s Dilemma.

Competing Against Luck is centered on the following premise, that people hire a product or service to do a specific job for them. In other words, that people are not thinking of the features and benefits that you provide with your product or service, but that they are really using your product or service to specifically fill a job that they have in their life — that will either help them save time, get something done faster, etcetera.

To discuss this book, Jess, I’d like to get your thoughts on it. Certainly, I personally felt that it was a really unique way at looking at online products and services. What did you think of it?

Jessica Frick: Well, I think it’s important, not just for the creation of products and services, but working out and fine-tuning how you talk to potential customers about your product and service. I love the fact that he leads off talking about how most companies are doing data wrong. And I agree — it’s so alluring to want to see data points, connect them, and figure that is correctly correlated to a customer cause, but that’s not always the case. Usually customer behavior is more disruptive.

Sean Jackson: Yeah, exactly. That brings up a great point. It was funny — we are awash in a ton of data right now, so everybody looks for, “Well, this person looks like this. They read that. They live here. They earn this. They do this for a living.” By having all those data points, we feel like, “Oh, we know our customer,” when the reality is, we probably don’t.

One of the stories in the book that I thought was hilariously funny was milkshakes. Let me talk to you about milkshakes for a second. There was a fast food chain that sells milkshakes, along with other things that they had, and they did notice that in the morning they had a lot of milkshake sales. They’re like, “Well, that’s kind of an interesting part,” so they went through your typical demographic data.

Who were the people buying milkshakes? What do they look like? Where do they drive? What etcetera? — all the demographic things that you would come up with. But they never answered the question — why were people buying milkshakes in the morning? It turns out that milkshakes, and specifically buying in the morning, had a very specific job. Do you know what that job was, Jess?

Jessica Frick: What was the job, Sean?

Sean Jackson: The job was, because in a long commute, people wanted something that would fulfill them, that was convenient and easy, and did not require a lot of thought process to fill them up and was easy for them to consume while they drove.

Now, coffee is a great, but the problem with coffee, of course, is it’s very, very hot. And it’s not very easy to drink as hot as it is, and it also does not fill you up enough so that on a long commute, by the time you get to the office, that mid-morning craving that you have for food, knowing that lunch is a couple hours away, coffee wouldn’t solve that job.

People were literally hiring a milkshake as a form of on-the-road food to make sure that, when they got to their job, they were filled enough to get them through to their lunch break. Isn’t that crazy?

Jessica Frick: It’s crazy — but imagine how many people wouldn’t get to that if they weren’t asking the right questions. That’s why I think this is so applicable to digital entrepreneurs. Remembering that what people are actually doing — and you and me, too, we do it all day, every day with every dollar we spend — when you spend your money, you’re hiring a product or service for a job. If they do a great job, then you keep hiring them. If they don’t, then you fire them and look for an alternative solution.

Sean Jackson: That’s right. You look at Uber. Uber being another great example. If you really boil Uber down, it really did two things. It basically allows you to call for a car, and it shows you where the car was in relationship to you. But why was the job that you wanted? The job that you wanted is you needed immediate transportation, and you wanted to know that it was on its way, right? You can get a cab anywhere, right? New York is complete with them.

Yet Uber comes on the scene, and now cabs become just kind of a passé thing. They both essentially as a feature did the same thing, which is transport you from point A to point B. But there was a very fundamental difference about the job that you hire Uber to do versus the job that you hire a cab to do.

I think when you look at your online products and services, certainly there’s a bigger reason why people are buying it. That bigger reason is probably because they’re looking at a job they need fulfilled, and if your product...