Identify Opportunities
The third step in Outcome-Driven Innovation is to quantify opportunities. Market opportunities exist not because a company can generate a new idea, develop a product, or invent a new technology. Growth opportunities exist because customers are struggling to get a job done at a price they are willing to pay. If customers cannot perform a job with the speed, stability, and output they desire, they will adopt a new solution to get the job done. If there is little opportunity to help customers get a job done better or at lower cost, there is no reason to invest in developing a new product or business model.
In order to quantify a growth opportunity, we measure both the importance and the satisfaction customers attach to the job and its outcomes. We developed an algorithm to quantify opportunities that has proven highly accurate in every type of market. We ask customers to quantify the importance of every job and outcome. And we ask them to quantify their satisfaction with their ability to get a job done and successfully achieve each of the outcomes.
The opportunity algorithm allows us to determine with a very high degree of accuracy where the market is underserved, appropriately served, and overserved. An underserved market has high importance and low satisfaction levels, whereas an overserved market has lower importance and higher satisfaction levels.
The opportunity algorithm also enables us to accurately size different market segments. Companies traditionally define market segments with demographics (e.g., age, income), psychographics (e.g., purchase behavior), or product attributes (e.g., product type, price point).
But in order to size opportunities accurately, markets should be segmented based on job and outcome opportunity scores. These scores identify segments of the customer population that agree on what they value, regardless of their age, income, or purchase behavior.
We quantify opportunities based on jobs and outcomes with a very high degree of accuracy. This enables us to project the potential revenue from a product that helps customers get a job done better or at lower cost. It enables us to create growth plans that work. So which strategy should we use to launch a product and grow revenue?
