Noun-Based Versus Verb-Based Market Segments

Driving Product Line Performance with Jobs-to-be-Done Analytics

by Paul O’Connor

I bet you’ve never heard there’s a difference between Noun-Based and Verb-Based market segments. The notion of Verb-Based market segments sounds more like slick branding, not a valuable tool. But I hope to prove that wrong.

In the past, whole industries have been defined using Noun-Based segmentation. When you buy a market research study, it’ll break down an industry by Noun-Based segments. But driving greater value from innovation and product development demands we complement the noun approach with verbs.

O.K, now I promise not to get all “English major” on you. Please stick with me; you may find this insightful.

Traditional Noun-Based Market Segments

Think about market segments for a moment. Name a segment or two that get talked about in your company. Or think about a segment you’ve studied. Chances are these are Noun-Based. You’ll also see traditional segmentation schemes like geographies, demographics, and psychographics, which are taught in business school. These are all Noun-Based. Or you may hear segments tagged as product types or user titles. These are also Noun-Based.

Noun-Based segmentation is a cornerstone of marketing and selling. You’ll see a sales team divide its efforts by geographical nouns, while a marketing group focuses communications on demographic or psychographic nouns.

Business strategists are also well-served by knowing growth rates for Noun-Based segments. Plus, it’s important for a Board of Directors to make intelligent business moves related to Noun-Based segments. They don’t want missteps in the Chinese market during a trade war or in the European and UK markets during Brexit.

Beyond these insights and understanding, product developers gain little from dividing customers into groups defined by nouns. Sure, Noun-Based segmentation sets up traditional voice of the customer techniques. But V-O-C informs developers only of customer likes and dislikes. The developer must dig deeper to gain more insight into the customers’ fundamental needs, wants, and aspirations.

Verb-Based Market Segments

Probing into Verb-Based segmentation is precisely the digging that’s needed. It’s a way of describing how Jobs-to-be-Done thinking divides markets. And it’s based on a customer’s wish to carry out activities or make progress toward an outcome. Jobs-to-be-Done thinking builds on the notion that people don’t buy products. Instead, we hire products to do a job.

If you gear your thinking toward buying products, you’ll end up with traditional Noun-Based segments. And when you embrace the hiring products notion, you’ll land on a Verb-Based approach. The big deal is that the Verb-Based actions tie directly to the outcomes that customers want. And these outcomes become targets for product attributes. Verb-Based segments are clusters of customers who wish to hire products to produce common outcomes.

Product Features Matching Outcome Clusters

Developers who know the Verb-Based groups defined by common outcome priorities can target the product features that deliver those outcomes. Old fashioned Noun-Based segments don’t do that. They leave development efforts hanging.

Creating products differs from selling products. Still, many managers don’t consider how segmenting markets matters. To them, everything starts and ends with selling. You’ll see people work their tails off positioning products to sell more. And they organize whole companies to improve sales. To the marketing and salespeople, a company’s primary mission is to sell.

Advancing Your Product Line

In the real world, it’s enormously helpful to create new offerings that sell themselves. To paraphrase Peter Drucker, good product development should put the sales force out of work. And that’s where we see the split between Noun-Based and Verb-Based segmentation. Old-fashioned marketing and selling both demand Noun-Based segments. But superb product development demands developers employ intelligent and insightful Verb-Based segmentation.

Notice the problem when developers begin with Noun-Based segments. They must also conduct research to find opportunities. It starts by using logic. But most often, such logic is also tied to hope and luck. It’s not based on knowing, as a fact, that an opportunity exists within the Noun-Based segment. Sure, you may find potential developments. But it’s unlikely those will deliver the most significant impact in the near and long term. Too often, they’re one-off hits that lack coordination with higher-level goals.

Advancing with Verb-Based Outcomes

The Verb-Based mindset shifts how companies develop products. And most notably, it changes how businesses advance their product lines.

But companies must pursue these gains deliberately. The task is more than getting people to read a few books or attend training sessions. You need to dig in and make a meaningful investment. That starts by researching the jobs that customers want done and the outcome priorities customers embrace.

It also demands intelligent analytics with enough data to figure out the Verb-Based segments. You’ll see that each segment is a mathematically derived cluster of customers who hold similar job outcome priorities.

The Jobs Worth Doing

Consider these five tasks if you wish to gain the most from Verb-Based segments. They’re not obvious to everyone.

 1. Figuring Out Job Outcomes

First, you must figure out how to layout and measure customer desired jobs, the outcomes customers are seeking, and the priorities customers give to the outcomes. Specifically, it’s the measure of progress toward getting jobs done better. But to get your mind around the task, consider that markets (that is all segments together) can have over one hundred outcomes needing to be measured. And the measures will capture the customer’s desire to do the jobs faster, more reliably, and more efficiently. That demands smart data analytics. The good news is it opens many opportunities. Plus, the data are enduring. That makes this Verb-Based data an asset, not an expense.

2. Calculating Outcome Clusters

Next, you must calculate job outcome clusters to define each Verb-Based segment. The key is a technique called “multi-variate cluster analysis,” and it’s employed on the large data set. Don’t get scared by the technique’s name. It’s used in empirical research all the time.

There are nuances to the approach, so don’t expect a plug-and-chug answer to pop out. Knowledgeable managers will need to spot the logic behind each cluster. They need to rationalize why the outcomes form the clusters.

Usually, the cluster exists because a few dominant outcomes tie together. You can then tag the Verb-Based cluster with a name that captures these outcomes.

3. Decide how to use the Data

Having the Verb-Based market data is one thing; using it is another. Many companies slip up here. It’s because there are a couple of paths you can take. The choice is to use the Jobs outcome data to help improve an existing product or a development project underway. Or it’s using the data to start a new project from scratch. Most managers choose to use the data to help a development project that’s underway or to recast an existing product. Unfortunately, that can cause conflict with old ways and old thinking. And that’s not always the best approach to introduce Jobs-to-be-Done outcome data into established organizations.

The better approach uses the data to create one or more new projects. It’s translating outcome clusters into targets for product attributes. This work demands companies build the practices and tools that pull value from the data by clustering and uncovering competitive openings.

4. Ramping Up Product Line Strategies

Companies also gain when they use Verb-Based segments to help form product line strategies. This approach creates a game plan for multiple products, not just one development. And it’s also where Verb-Based thinking shines. The idea is to use the Verb-Based clusters to complement traditional Noun-based segments, not replace them. And when competitors stick only to Noun-Based thinking, your product line will develop a distinct advantage. The reason is simple. You’ll be basing your developments on what customers want, not who they are.

5. Attribute Targeting

Once Verb-Based segments are set up, it’s then time to use the outcome sets to form detailed targets for concept development. This task comes before knowing the exact product to be developed. The targets, also known as Innovation Charters, create a critical driving force within a product line.

Each set of outcomes is a vital component within a charter. Other components address the why and how of any potential innovation or development. Just as a company manages a portfolio of development projects, they should also manage a portfolio of innovation charters.

Verb-Segments in Action

To see Verb- and Noun-based segments in use, consider the product line roadmap in Figures 1 and 2. This example is a B-2-B case of a building materials product line within the construction market.

Figure 1. A full view of a product line roadmap (happy to share if you contact me.)

Nound-Based-Verb-Based Segments

Figure 2. Close up, detail view of Market Segment Swim lane within Product Line Roadmap

The roadmap diagram has two rows within the market segment swim lane. One row is for Noun-based Segments, and it includes new residential housing, multi-family construction, home remodeling, and D-I-Y improvements.

The second row shows Verb-Based segments include stopping fires, minimizing sound, speeding work, and protecting furniture. Remember, the Verb-Based segment title does not mean the title is the only outcome in the set. The title merely represents the outcome cluster and indicates a key priority.

Notice the market segment swim lane. In it, you’ll see the Verb-Based segments associate with the Noun-Based segments. But recognize this association is not a one-to-one, direct relationship.

The Product Line Roadmap

The roadmap diagram also shows how the products (and their features) associate with Verb-based segments. Or, better stated, the desired product features of a product link directly to the outcome set within a Verb-Based segment.

Products show up on the roadmap in one of three states. The first is the product-in-the-market (PIMs – think existing SKUs). The second is the product-in-development (PIDs- think Agile/Waterfall development projects.) And the third is the target for a new product called a product-innovation-charters (PICs- think targets for front-end concept generation).

Verb-Based Innovation Target

Once you understand the PIC, you’ll be well-prepared to tackle Verb-Based influence on PIMs and PIDs. The PIC has much research to support its use and has been in practice for several decades. What’s new is matching the PIC to strategy and embedding Verb-Based outcomes into each PIC. These additions remove much uncertainty from project creation and development work, making Verb-Based segments vital to good product line practices. If you create a development project that matches a PIC, you’ll be on track to deliver a successful product.

But please recognize that even the most excellent Verb-Based understanding won’t solve UX or design issues. Nor will it tell you how to best bundle technologies into a product, or how to deliver the most effective technologies or systems to form a platform-lever. You’ll still need hard work and genius to produce these results. The advantage is that Verb-Based thinking makes these tasks easier. And it gives teams a way to understand what genius is and isn’t. Such understanding goes a long way toward driving successful outcomes.

Empowering Strategies

It’s exciting to see the positive impact of Jobs-to-be-Done outcome clusters on a new product. But the true power of Verb-based segmentation becomes apparent when teams use the segmentation approach to plan multi-product strategic moves. Such moves include actions like incrementally advancing the line, changing platform-levers, or pivoting the entire line. You’ll find outcome clusters embedded into innovation charters to be crucial for making these moves succeed.

The good news for strategies and product planning is that well-defined Verb-Based segments assure that opportunities exist, and projects aren’t betting on luck.

From a different perspective, you’ll see the Verb-Based approach also helps minimize lost opportunities. In strategy, we refer to such lost opportunities as type-2 errors. Teams avoid such errors because smart Verb-Based analytics reveal the gaps in customer need satisfaction.

Better Than Luck

Spotting such gaps within desired Jobs-to-be-Done outcomes need not be a guessing game. The opportunity is then couched in how best to deliver product features that fill the gap. With these insights, the act of skipping an opportunity is a deliberate choice, not an oversight.

Plus, as a real bonus to product line strategies, digging deep into Verb-Based segments can squash competitors who stay locked into traditional Noun-Based thinking.

Adding Verbs to Nouns

The title “Verb-Based” given to Jobs-to-be-Done segments is purposeful. It draws a contrast with traditional, old fashion Noun-Based segments. Credit must be given to the Jobs-to-be-Done experts that figured out its underpinnings.1,2

My goal is to build your awareness of Verb-Based segments in contrast to traditional Noun-based segments. You don’t need to be an expert in the topic. But you need to combine your product knowledge with Jobs-to-be-Done and Product Line Strategy thinking. There’s much to be gained.

Don’t expect a free lunch. Verb-Based segmentation is more like a self-sustaining farm that continually feeds you healthy meals, not a single free lunch! Remember though, if you wish to gain value from Verb-Based segmentation, you must step up and make the needed investments.

Learn More and Take Action

To learn more about Verb-Based market segment and driving powerful product line strategies, consider several Adept’s venues. We focus on Product Line Strategies, Front-end Concept Generation, and Responsive Roadmapping. These are critical building blocks to excellent product development.

More Resources

Here are three short online courses to help you and your colleagues learn the topic and take action to improve your company’s product development and management performance.

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  1. Jobs to be Done: Theory to Practice by Anthony Ulwick
  2. Competing Against Luck: The Story of Innovation and Customer Choice; HarperCollins by Clayton M. Christensen, Karen Dillon, Taddy Hall, David S. Duncan