Milkshake Marketing for Startups and Small Businesses

Milkshake Marketing is a compelling notion by Harvard professor Clayton Christensen. Christensen first published the idea in a 2007 MIT Sloan Management Review article. While the concept of Milkshake Marketing has been around for a while, it is all the more relevant today as companies struggle to survive the Covid-19 pandemic. Christensen argues that beyond segmenting the market through demographics and psycho-graphics, marketers must consider a term he coined Jobs-To-Be-Done (JTBD).

Milkshake Marketing rides on the premise that a customer looks into what “job” the product does for them. It aims to discover groups of potential customers that have similar needs and effectively position the product as a solution to those challenges.

Why Milkshake Marketing?

Mcdonald’s was looking to boost their milkshake sales. Previous consultants simply focused on trying new flavors and experimenting with the texture and consistency of the product but to no avail. Christensen came up with a new methodology to clearly identify different market segments who are keen to buy the product. They found out that purchase motivation stems from a defined set of circumstances that allows the product to meet the needs of the buyer.

Christensen and his team dug deeper into the reasons why customers were buying milkshakes and realized that 40% of sales were from solitary men who drank the milkshake inside their vehicles. The “job” or JTBD that was expected of the product was for the milkshake to help them get through long and uneventful commutes. Milkshakes were easy to hold and did not create any mess. Because they are sipped from a thin straw, they also took longer to consume and kept hunger at bay.

McDonald’s then took action by creating thicker shakes with fruit to make them more interesting. They also installed dispensing machines for easy access. The new approach was a resounding success. Milkshake Marketing helped marketers zero in on the real motivations why customers were purchasing the product by leveraging the specific “job” the product delivers.

We look into how Milkshake Marketing can be applied to B2B products through the age-old 4 P’s approach and the benefits of segmenting by “job” when applied to the 4 P’s of any marketing plan.

1. Promotion

Promoting brands in terms of the “job” it can do for potential customers allows communicators to market the product more effectively thereby decreasing advertising costs, especially for early stage businesses. The critical thing is to define a product by its outcomes, not its features.

In B2B markets, also consider that there are often more than one decision maker when purchasing the product. Thus, you will need to develop different messaging depending on who you are engaging with. It will be beneficial to categorize your target JTBD targets into 3 buckets: The core user – those that are responsible for getting the actual “job” done; the support team – people who provide input including technical experts and those that may provide support to help in implementing the “job”; and the buyer – the final decision maker who holds the purse strings to purchase the product.

2. Product

Understanding the true “job” of your product helps you design your product to improve your customer’s experience. This is in contrast to adding superfluous fluff that you think your target customer might value. In order to find success with your product, it is absolutely necessary to determine, not necessarily the features of your product or service, but essentially the benefits. In the B2B world, this is a simple principle that is seen across how content is developed, how value propositions are created and how meetings are conducted to ultimately close sales.

Milkshake Marketing is about zeroing in on the various “jobs” that your product should address and you will be able to develop the ideal solution for your customers. This will be the competitive edge that will differentiate your product or service from the competition.

In the B2B context, we can look at a Subscription-as-a-Service (SaaS) business. Applying the JTBD methodology will help you understand the big picture, customer behaviors and motivations, and their desired outcomes. It may be helpful to utilize a tool referred to as a Job Map. The purpose of the Job Map is to identify what “jobs” the customer want to accomplish in various stages and develop an entire solution that helps him solve a problem or to realize his goals.

3. Price

Your price is often determined by your competition. Understanding your product or service’s “job” will lead you to discover your true competition (who may not be who you initially think they are). Think about what need your product or service addressed and why certain customers opted for your solution. Use those ideas to help guide your pricing structure.

The significance of of using the right value metric should not be overlooked. The willingness of your customers to pay for your product or service will be influenced by their perception of the value you bring in getting the “job” done and the benefits they get from it.

Don’t treat pricing as an afterthought and don’t get stuck with a static pricing scheme. Take time to review your customer’s needs to see where your product or solution’s price fits best.

4. Place

Understanding the “job” of your solution can help you get your product to the right place at the right time. Use the placement of your product to work with the experience you want to give to your customers. Remember to always consider your customer’s buyer process, it often trumps your sales process. How is your placement going to contribute to the “job” being completed? As a startup, choosing to segment by “job” rather than traditional methods offers an number of benefits. These include increasing market size, understanding your true competitors and tweaking your value proposition. It helps you better target your products or services, and “escape the traditional positioning paradigm”. Continue to experiment with situational case studies in your sales and marketing process, to gain actionable and practical insights.

To learn more about how Milkshake Marketing could apply to your business, please don’t hesitate to contact us. For further readings on marketing best practices download one of our white papers.

This blog post was originally written by Sam Brennand and updated by Janina Bernardo.

Milkshake Marketing for Startups and Small Businesses