You have been reading so many books about the business strategies? But could not find “the one” for your company? If you are seeking to find the best solution for your business, you’re lucky to reach the JTBD (Job-To-Be-Done) theory here. JTBD can put a period on your endless journey of browsing the random sound-good books. The principle of JTBD is completely different from any other business advice or strategies. Here, you will find what exactly the JTBD is, and how it can lead your business to success.
This article explains JTBD theory based on the book “When Coffee and Kale Compete.” If you want to learn more details after reading this article, you can read it online, or find e-book/ free PDF in the link below.
Why JTBD Is Effective
Have you heard of this proverb from ancient China?
Give a man fish and you feed him for a day.
Teach him how to fish and you feed him for a lifetime.
The reason why the books you’ve red actually didn’t work is that they only give you the fish. Because we all, in general, tend to be attracted by a simple and quick solution, those books mainly focus on what to do, and not the theory or logic behind it. However, each company has its unique characteristics and needs, so it is almost impossible for “one simple solution” to solve all companies’ issues. In JTBD, on the other hand, you will learn how to fish; the theory explains “why” and how it works. Understanding the JTBD concept will helps you apply the theory to a variety of real-world situations according as a problem comes up.
Creative Destruction Cycle
In JTBD, you will focus on customers’ motivation, and why customers want to purchase a certain product. Why is it important to pay attention to their motivation? It is because the customers’ motivation is relatively stable and even invariable sometimes, while the technologies and solutions are continuously changing. This phenomenon, in which the new/ innovative ones take over the incumbent one endlessly during the companies’ competitions, is called creative destruction.
As shown in this model, the popularity growth of a product always slows down and stops at some point; this is the time the new product replaces it. Therefore, it is essential for companies to predict what customers want next so that you can be the one to take over the market.
“Job” In JTBD
It is crucial to understand what the “job” to be done for your company. Job is the customers’ struggle to make changes for their better life. The job is done when you successfully offer the solution that can help people fulfill their ideal life. When a customer is looking for a product, they picture themselves in the improved situation by using it. The desire may or may not change over time, but the motivation behind it will not change right away. Therefore, JTBD focuses not on how, but on why. In other words, “job” should be defined by people’s motivation, not the activities or means of solving it.
So, What Exactly is JTBD Theory?
The main theory of JTBD is that “people buy and use a new product because they want to make themselves better in a particular way.” JTBD teaches you how to successfully predict what customers want next. Here are 5 major points that you should keep in mind in learning JTBD.
1. Improve systems instead of customers’ needs
In this competitive business world, the winners always think outside of the box. To make it easy to understand, I will show the example introduced in the book. Long time ago, when people were using letters as the main means of communication, they were not happy about how lengthy the delivery processes took. Some companies tried to come up with a new idea to deliver the letters more quickly and smoothly. It could actually improve the delivery process at some degree. However, the innovative one came up with the telephone service. The next moment, all the efforts people put in to make the delivery process better became nothing; because telephone fundamentally fulfilled people’s motivation to communicate more efficiently.
2. Product itself does not have any value
People buy products to make their life better. It is the realization of the better life that has value, and the product itself does not have any value for the customers. As often expressed in marketing strategy, “ Customers don’t want a quarter-inch drill bit, they want a quarter-inch hole.” You will be able to come up with the innovative ideas only by understanding this concept. The book introduces the quote from Charles Revson, the founder of Revlon. “In the factories, we make cosmetics; in the drug stores, we sell hope.” Revlon has been one of the successful cosmetic sellers because they knew what customers want was not to put the chemicals on their face; but to have a hope in their life by making their appearances better. In considering new business ideas, or how to improve your product, it is extremely important to know what customers really want to get through your product. It will guide you to the right direction when you try to make changes on your company or its products.
3. Data-driven operation is not always a good idea
The marketing team often spend the massive amount of time collecting the data. Those data can help you analyze the market needs objectively. However, remember that the data is helpful only if you use it in the proper way. Data does not describe everything about the market or the customers. It is just a small piece of the world showing some results of the system; the real world consists of not only the visible factors but also a number of contexts surrounding them. For instance, customer satisfaction score, often known as CSAT, is a commonly used data based on customers’ self-reports. It is not necessarily true, however, that the products customers buy always have the high rate. Customers are not happy at all about the airline services, but they purchase the tickets because they kind of have to. Like this example, the single data cannot describe everything about the market. Always keep in mind that entirely data-driven marketing could prevent you from appreciating the customers’ voices.
4. Focus on human motivation, not the solutions
As mentioned a couple of times earlier, JTBD encourages you to pay attention to the customers’ motivation behind purchasing a product. To do so, simply ask yourself why questions.
Why do people buy the clothes? —Because they want to be fashionable.
Why do they want to be fashionable? —Because they want to make themselves look better.
Why do they want to look better? —Because they want to gain self-confidence.
Keep considering why people purchase a certain product until you find their motivation. Understanding the customers’ motivation will help you to come up with innovative ideas and to predict what they want to buy next. Like the example of the mailing service, the winners know what could be the alternative solutions that satisfies customers’ motivation.
5. Progress defines the value
Customers feel satisfied if they find the progresses during the use of product. They are seeking for the better life or improved situation when purchasing the product. Therefore, the customer satisfaction will boost if they can see the progresses not only at the very end, but occasionally while using the product. Sometimes these progresses could be more important for the customer than the outcomes of a product, or goals.
Those are very brief framework of the JTBD theory. The biggest feature of JTBD is that you will be able to apply it to a variety of situations; because JTBD is the logic-based theory, not just the solution advice. I highly recommend you to read the entire book, which you can download for free through the website.
It is often said that 90% of the startups have the hard games only to be the failures. However, it is not because they are silly or unprepared. They did a lot of preparations and researches, and they created the detailed business plans just like you. It is because the business world is very severe and extremely difficult to survive. What should you do in order to be the 10% of the winners? Here, you can learn, from their mistakes, how to operate your business during the first five years.
To Begin With, Why Do Businesses Fail?
50% of the businesses close down within the first 5 years. This is very large number, isn’t it? All of those business failures have some patterns. By learning what to avoid, you will be able to protect your precious business from ding out.
Cannot pay the bills
The biggest reason of the failures is not to have enough money to keep paying the bills. The large companies usually have very steady cash flow. They took a long time to pay their bills; the average is four to six months. It is essential to know how to control your company’s cash flow like the large companies do.
Offering the products that people are not willing to pay
The lack of the researches on the market needs always results in the failures. You need to consider extremely carefully about what kind of products you are going to offer and how much the price should be. What you want to create may not always be equal to what people want. Therefore, objective analysis on market needs is essential for the business success.
Adapt cost-inefficient marketing strategies
There are a lot of ways to promote your product, and its costs vary. Which medium is the best to promote your products to the targeted audience? Business failures often cannot find the best balance of the scale of the targeted audience and the advertisement cost.
Not have skills to manage the team & company
Management directly affects the company’s success/ failure. Even if you have a great business idea, resources, and the work team, your business could easily fail without the reliable management source. Also, companies should make sure that they are operated by certain systems; not only by the “knowing-all” founder.
Features Of Successful Companies
What 10% of successful entrepreneurs do? Just like the failures have some patterns, succeeded companies also have the patterns.
Product fits the market needs perfectly
As mentioned above, it is essential to ensure that you are producing something that people are willing to pay for. No matter how greatly the business is operated, there will be no success if nobody wants to purchase your product. Successful companies are constantly offering the products that are right on point for the targeted customers.
Pay attention to everything
Successful companies never neglect or ignore anything brought up as an issue during the business process. It is because they know that “boring stuff” could be the key aspect of the business.
Have a strong team
In starting up a company, versatile work team is necessary. If your team has the great skillset and mindset, you are very likely to survive your first five years. Startups always have a lot of challenges; constantly make changes, adjust to the market, analyze the situations, and adapt something new. It cannot be handled only by the one-man competence. Also, a data shows that the startups with co-founder have the higher rate of surviving compared to the solo founder’s businesses.
Make the business grow fast
You may think that it is unavoidable for many companies to lose their money during the first two years; because that’s the hardest period of time in starting up the business. But it does not mean that you have to lose money too. Growing fast is not a unrealistic thing to achieve. If your company grows fast, you do not have to worry about running out of cash, which is the second biggest reason of business failures. In addition, it is much earlier for them to find the good investors because we all like the immediate profits.
5 Tips To Survive The First 5 years
What specifically should you do to avoid the business failure? What do you need to be a successful business owner? Here are the 5 tips that you can practice for your company.
1. Make commitment
Make a commitment to yourself that you are going to stay in this business for at least the next five years. And also what to achieve during this period of time. The strong will is important and has a great effect on your business growth, maybe more than you expect.
2. Take notice of long-term success
Always think ahead, and do not be swayed by the thought of a quick profit. If you have a solid long-term business plan, and follow it faithfully, your company will bloom soon. It may sounds conflicted about the fast-growing companies mentioned earlier. Growing fast is still possible for the companies, however, only if you do not sacrifice the future profits for a momentary gain.
3. Build the good credit
Good credit is necessary for the leasing and other business transactions. However, you don’t need to worry about showing some losses at the beginning. It is unavoidable for many companies to have deficit when they just started operating their business. As long as your company is growing steadily, you will be able to establish the good credit for your company.
4. Plan for success, but not failure
Do not take it wrong. It does not mean you don’t need the exiting strategies; All companies should know what to do in case of closing down their businesses. However, in terms of the business plan, you should build it based on the vision of yourself being successful.
5. Know when to make changes
As you are doing business, you will face to the time when you need to make changes; on your product, branding, or business plan. Listen to the customers and the market, and know when and what to change. The proper shift in the business can give your company the opportunity to enlarge the business scale and increase the profits.
Why do companies go global? Some want to pursue further successes for their companies, and the other go global as responding to the domestic rivals/ competitors. Thanks to the technological developments and the globalization of the world, international business has become much more common and close to every business owner. It does not mean, however, that you can expand your business outside of the border readily. Without numerous researches and the thorough business plan, there is no success in taking your company to the global world. There is a lot of articles introducing the steps on how to expand the business internationally. But here, you will find “Step Zero,” the most basic but vital things you should consider before deciding to go global.
Why Difficult?: International Business v. Domestic Business
Almost 90% of the companies fails in expanding their business globally. Why? It could be due to the similar reasons as the domestic business failures; such as intense competition, insufficient financing options, or lack of invention just like the failures in domestic business. However, most of the companies fail because of the lack of market knowledge and understandings of the language/ culture. Operating the international business is completely different from the domestic one. You know how the business works in your country. You can make the assumptions on how the following elements work in operating the business.
- Wage and work environment
- Government requirements
- Add/ change locations
- Customers’ preferences
- Payment method
- Social media uses
When you cross the border, however, everything that you’ve taken for granted will no longer fit your formula. The government may have much more strict regulations that prevent you from operating your business as you used to do. Customers in the targeted country may have completely different taste and preference, and there is no demand for your product. Failing to understand the differences of these elements will result in the miserable failure. Therefore, you should get rid of all the assumptions you have had, and take each step of going global carefully and steadily.
Benefits of Operating Business Internationally
Taking your company global is very risky, but there are reasons why many companies still try to do so. If you can manage to put your business on track in the new country, its payoffs are incredibly beneficial for your company.
One of the biggest reasons companies go global is that the international business can boost the sales of your company. There are new/ more resources or knowledge available in other countries. It can help your company to create the better products. Or it may greatly cut your expense in producing your products. Additionally, simply by expanding the business globally, you will gain much larger targeted audience.
Reduce dependence on the current market
Unexpected things could always happen. What if a serious natural disaster occurs tomorrow? What if your country goes into the recession? By operating business across the countries, you can reduce the risk of losing your business all at sudden. When your business is not doing well in one country, you can sift your focus to another country.
5 Questions To Ask Yourself Before Going Global
Going global is not necessarily the best solution for all businesses. Some companies may be more successful when they stay local and concentrate on the small group of the audience. To determine if you should expand your business internationally or not, ask yourself these questions.
1. Will the product be sold well in the targeted culture?
Cultural difference is the huge barrier that you need to overcome. Analyze your own product to see if its features will be welcomed by the targeted group of the audience. And also, ensure that your product does not have any cultural/ religious taboo in their culture. The first impression is very important for your company’s strong brand image; you don’t want to give a wrong impression simply because of the misunderstandings or lack of knowledge about their culture. Determine whether your product is ready to be introduced in the targeted country by comparing the product’s features and the cultural trends.
2. Is the targeted market familiar with your product?
It will be much easier to set up your business foundation if people in the targeted country are already familiar with your product. But don’t worry even if they have never seen your product before. If you are the first one to introduce it to the community, the name of your company/ brand could be equal to the product’s name. Of course, you will need to invest much more time and money in introducing your product, so you have to be ready for it.
3. Do you have enough money to deal with unexpected situations?
No matter how much time you spend on researches, unexpected things will still happen to your company. There are a lot of things you can never know until you actually start operating your business. Ensure that you have enough fund to deal with those unpredictable situations.
4. Can you adopt the price level of the targeted country?
Once you cross the border, you cannot always sell your product at the same price as in your country. Each country has different price standard, and you have to much your product’s price to it. In addition, don’t forget that all other operating expense will change as well. Consider every single cost including, the office rent, employees’ salaries, supplies, transportations, and so on. Ensure that you will still be able to make a profit in stepping into a new country.
5. Do you have the exiting strategy?
Nobody wants to think about failing. It is essential, however, to make a plan on how to exit the market in case your business doesn’t do well in the targeted country. What if your business fails and you’re not ready to deal with the situation? As mentioned earlier, 90% of the companies fail after expanding their business internationally. To minimize the loss, it is essential to think ahead and make the exiting strategies.
Taking your company global is a big move for your company; it is risk-taking, but its payoff is worth it. The key is to conduct thorough researches about the targeted country, especially focus on its society, culture, economy, and politics. The more you prepare yourself, the more likely your business succeeds.
7 Questions To Ask Yourself Before Going Global
How to Take Your Company Global
Why International Business
Many people dream of working from home, but most of them actually do not get to do so. However, going to office every day may no longer be a best style of work. As the technology has been developed, working outside of office became much more realistic and beneficial. Check the benefits of working from home in this article, and it may change your fixed idea about not being at office.
Are employees actually wanting to work outside of their office? Yes they are. According to the survey conducted of more than 500 professionals across companies,
- Almost 90% of people want to work outside of office at least 1 day/ week.
- 77.5% believe that flexibility can make them more productive on work.
Not surprising that some employees prefer working from home to getting paid more. It could be a great solution for your business to let employees work from home, at least once a week, in order to increase the employees’ working motivation.
5 Reasons Why Employees Should Work From Home
There are various benefits of working outside of office proven by the researches. If the followings benefit your company, you should seriously consider letting employees work from home.
Environment is very important for employees, especially those who are required the creative ideas on their work. Offices may not be the best place for the workers to think outside of box since it’s often flat and makes people miserable to be at. Working outside of office stimulates people in many ways, and help them to be more creative; because the feeling that company is controlling them will discourage themselves to come up with creative problem solving or ideas.
Much easier for employees
If you can work from home, you are no longer stressed out by the morning traffic, or uncomfortable work attires. Working from home might have been difficult a decades ago indeed. Thanks to the development of technology, however, it is much easier and costs much less today. Especially, the VoIP service has been dramatically improved; you are now able to make calls or teleconference from anywhere with very cheap price. Also, VoIP can answer employees’ needs in terms of the devices as well; more than 75% of professionals said that they’d prefer smartphone to desk phone for the business calls. Adopting cloud-based phone service could be a smart move if you’re considering the work-from-home work plan.
Stanford University reported its research result showing that working from home could improve the productivity by 13%. Comparing to the office, home (or anywhere the employee prefers) has much less stress. It can constantly refresh the employee’s brain and mind, and also help them to stay energetic. In addition, the employees will less likely to take sick days off or vacations. Going to the office when feeling sick is terrible, but it is not too bad if he/ she can stay at home. Or staying away from office will less likely to make employees feel that they need vacations. It is all because that they can take a burden off their minds by not being at office.
62% of employees feel that their work is stressful, while only 11% thinks that their work-related stress is low. Managing stress from job is necessary not only for employees’ well beings but also for the better job performances. Do you know 5 most common factors stressing the employees?
- Workplace environment
- Safety of others
- The length of workday/ week
By letting your employees work from home, you can get rid of two stressors out of five for them; workplace environment and safety of others. Besides those five factors, interruptions by others is often listed as a stressful components of work. It can be eliminated by working outside of office as well.
This is simple but if the employees work from home, you, as a business owner, can save money spent on office utilities and supplies.
Despite of these benefits, not all companies are able to let their employees work from home. Some businesses may require face-to-face meetings every day. If your company is one of them, here is two alternative ideas that can improve the working environment and employees’ motivation.
Meeting at cafe/ rooftop
One of the easiest ways is to host the meeting outside of the office, such as cafe/ park nearby the office or the rooftop of the company building. Amit Bendov, CEO of SiSense, says that “It’s a great way to get people away from their computer screens. And it provides employees with a safe environment to bring up concerns, a positive atmosphere to brainstorm.” It will have the same effect as working from home in terms of creativity, productivity, and stress management. The employees can appreciate the fresh air without actually taking break from work.
Invest a little money in adding nature to office
If it’s difficult to go outside during the work, spend some money to put the plants in the office. Surrounding yourself with the greens, or have a view of the green spaces, like park or tree, will help you to reduce your stress. Green can improve your mental function, and has similar effect as actually going outside of office at some degree.
Working outside of office will bring the positive results in a number of ways. Especially helpful to support the employees mentally, and as a result, to improve their job performance. Analyze the features of your business to see if it works for your company. Staying away from the office at least once a weekdays may be the best solution to improve your company’s performance.
Working from home started to sound a good idea to you? Check out how VoIP can make it happens…
Every single lead is a precious pipeline to increase the sales. In the average company, however, 79% of leads are never converted to the customers, and more than 30% are not even contacted by the company at all. It’s unavoidable because the time and labor are limited? No. Take a moment to consider how to make the best use of the limited resources of your sales team. By applying the appropriate strategies on the sales skills and the order of priority, the sales will jump with much less time and effort. Combine those strategies with your business communication skills, and you will soon find the positive change in the sales performance.
4 Tips To Boost The Sales
Immediate response will boost the contract rate. Insidesales.com introduces the relationship between the responding time and the percentage of leads who answer the calls. They are 100+ times more likely to answer the phone calls when they receive responses within 30 minutes after filling out the form on website. Note that the answering rate decreases dramatically after 30 minutes. The contract rate changes accordingly; if they receive the responses while they are still interested in the company or its product/ service, there is much higher possibility to convert them into customers.
Figure 1: The percentage of sales leads who answer the sales calls & Responding time
In reality, however, the limited resources make it almost impossible for companies to respond to every single lead within 30 minutes. The average time required for the companies to respond is 38 hours. But no worries, there is a solution for this. Later in this article, you will find how to speed up your responding process and the proper way to prioritize the sales leads.
Positive comments brings positive results
One big myth of sales is that talking ill about the competitors makes people choose your company. In reality, it does not work, or even has negative effects on the sales. It is because psychologically people cannot help associating those negative words with you. If you want the leads to choose you, you should spend most of the conversation talking about the benefits of your product, not the shortcomings of your competitors. Additionally, remember to always start the sales conversation with positive comments; it can be anything such as a little anecdote or about the good weather. There is an experiment showing that if a waiter in hotel provide a positive weather forecast in the beginning, the tips from the customers increase by the average 27%. Positive conversations lead you to the positive results while negative comments bring you down.
Patience and persistence
Sales requires the persistence. The average times of calls required to convert a sales lead to a customer is 6. Do you know how many times a sales representative calls to each lead on average? 1.5 calls per potential customer, which is significantly lower than the necessary numbers of calls. Do not give up too soon. Especially a potential customer has the high priority in the lead scoring, always remember to practice the “6-calls” rule.
Go for the emotional side, not for logic
The 4P’s Method says “We buy with emotions and justify with logic.” Try to persuade the potential customers with the emotional appeals, not by logics. They actually don’t care the numeric statistics of your products. If they want your product, they will buy it; and the logic comes after it. The important thing is to make them picture themselves using your product. Main task for you is to make the leads to have the clear image of themselves being satisfied with your product.
Prioritize Sales Leads
Not all the sales leads are equal; some visit your website by chance but not really interested in your business, and the others are almost ready to purchase your product. With the limited resources, contacting all the potential customers is almost impossible, and also waste of time and efforts. It is very difficult, however, to prioritize and decide which leads to contact, and which ones not. Actually, each sales representative spends the average 40% of one’s time looking for which sales lead to call. You cannot say it’s a smart way to spend time because, as mentioned earlier, the responding time is one of the essential keys to increase the sales. Here are some tools that can help you to objectively determine the priority of the sales leads.
Take advantages of lead scoring
In order to identify the people who are most likely to be your customers, the objective analysis is vital; not the sales representative’s subjective intuition. Setting up the lead scoring on your website is must-do to fairly prioritize the potential customers. The lead scoring works based on the leads’ personal information and the engagement with your website. It will make your job much easier to prioritize the sales leads, and to determine who to call next. There are a number of sales leads platforms offering you the helpful tools to generate and organize the leads. Check each platform carefully and pick the best one for your company’s features and needs.
Analyze the high-converting lead sources
Sales leads is not the only one that needs to be prioritized. The lead-to-opportunity conversion rate is one of the effective ways to determine the proper allocation of the resources. There are various sources of sales leads such as website, customer & employee referral, webinar, social medias, and so on. Therefore you need to make the priority of the sources. By knowing the conversion rate of each sources, you can logically determine which sources should be the main focus.
Prioritizing the sales leads is not an easy task because so many factors affect each others. If you’d like to know more about sales leads priority, Insidesales.com offers an free e-book “Predictive and Prescriptive Selling Guide.”
Sales is very time-consuming and requires a lot of efforts. You will never ever have enough time or labor in your sales team to deal with all of the sales leads. That is why you need to be a strategist. Applying these sales strategies and prioritizing tips will help your team to maximize the sales with the minimum efforts.