What Your Business Can Learn from Milkshakes

Famed market research firm Nielsen recently evaluated 20,000 new products.

From those, it found only 92 with sales of more than $50 million in the launch year and sustained sales thereafter.

What do these breakthrough products have in common?

And how can they be applied to your business and its change and innovation efforts?

Well, a great book by famed business author Clayton Chistensen offers a simple framework to help companies develop new products that connect profoundly with customers each and every time.

He explains by first illustrating the opposite: how most new products are conceived, designed, and launched based on little more than luck…

…with key executives gathered in a room and guessing as to what new products and marketing campaigns might sell and work.

Chistensen uses himself as an example.

He is a Harvard Business School professor living in an affluent suburb, so, for example, marketing a New York Times subscription to him would make sense – as these demographic characteristics are highly correlated with the paper’s current subscribers.

But characteristics are NOT reasons why he might purchase a subscription.

Reasons are specific and actionable.

As in, he might purchase because he needs something to read on his commute to work…

…or because he’s a sports fan and likes to read about last night’s games.

Or because he wants to (though he might say so out loud), impress his neighbors with his erudition by having the delivered paper prominently displayed on his driveway each morning.

Christensen calls these reasons “jobs to be done,” or “the progress that a customer is trying to make in a given circumstance, what they hope to accomplish.”

One of my favorite “jobs” from the book is the story of the “Reeses Mini,” which in just two short years grew to be a $235 million new business in an almost 100-year-old product category.

Christensen explains it like this:

Hershey’s researchers began by exploring the circumstances in which Reese’s enthusiasts were “firing” their current product formats. They discovered an array of situations—driving the car, standing in a crowded subway, playing a video game—in which the original large format was too big and messy, while the smaller, individually wrapped cups were a hassle (opening them required two hands). In addition, the accumulation of the cups’ foil wrappers created a guilt-inducing tally of consumption: I had that many? When the company focused on the job that smaller versions of Reese’s were being hired to do, it created Reese’s Minis. They have no foil wrapping to leave a telltale trail, and they come in a resealable flat-bottom bag that a consumer can easily dip a single hand into.

The results were astounding: $235 million in the first two years’ sales and the birth of a breakthrough category extension.

How can small companies – especially ones that have been around for a while – apply this kind of thinking and approach to turbocharge and transform their new product efforts?

Christensen’s answer is simple: Talk to your customers.

And talk to them neither in a formulaic “Thank you, we appreciate you” way nor through an anodyne email survey.

No, talk to them conversationally, intimately.

The way Christensen did when he was hired by a famous hamburger chain to help them sell more milkshakes.

He first looked at the demographic data of who was purchasing milkshakes and it was as we would expect – mostly teenagers and parents purchasing for young children.

But there was also a solid category of adult buyers who did so early on weekday mornings, and try as he might Christensen could not put these buyers into any understandable profile.

So…he went to the store and stopped and asked these milkshake buyers why.

And he found they were buying because they had a long and boring ride to work and needed something to keep the commute “interesting.”

And that they were buying because they wanted something that was easy to eat in the car and would keep them from being “hangry” in that late mid-morning “eating dead zone” right before lunch.

Now milkshakes in the mornings have a lot of competitors for these “jobs” – bananas and donuts and bagels, and even candy bars.

But for these buyers, none of them got it done quite like the milkshake. As one happy customer said –

“This milkshake, It is so thick. It easily takes me twenty minutes to suck it up through that thin straw.  Who cares what the ingredients are – I don’t. All I know is that I am full all morning. And it fits right here in my cup holder.”

The “aha” insight here is that only through this “direct-to-human” approach, in ways simply not possible from evaluating data alone, we can become inspired to conjure up and innovate new products and marketing campaigns with breakthrough potential.

So call your best customers today.

To say hello and thank them for their business, of course.

But also to ask them why they bought.  Or didn’t buy.

And don’t settle for superficial answers. Dig down and get to the real stuff.

What you uncover will almost certainly surprise.

And from this surprise, breakthrough new business ideas and action plans will almost certainly be born.