Segments of opportunity often exist in even the most mature markets – success awaits those who discover them."
Stategyn CEO Tony Ulwick



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Identify Segments of Opportunity

While identifying broad market opportunities is essential to the process of outcome-driven innovation, it is equally vital for companies to segment their markets to uncover groups of customers that have unique sets of underserved outcomes.

For decades, it has been common practice for companies to group their customers by such attributes as product type, price point, age, risk aversion, role, or other demographic or psychographic classifications. Unfortunately, although these groupings may be useful for certain marketing or sales tracking purposes, they thwart the process of innovation by focusing resources on phantom targets: people who are demographically similar do not necessarily agree on which outcomes are important and unsatisfied.

If firms are to transform innovation from an unreliable process to a disciplined one that can guarantee successful new product introductions, they must stop relying on convenient demographic or psychographic methods of segmentation or even traditional needs-based or roles-based methods and move to segmentation based on what customers want to achieve when using a product or service.

The only way to find a group of customers with a unique and shared set of underserved outcomes is to use that variable (outcomes or jobs) as the basis for segmentation. This thinking is at the heart of Strategyn's approach. Companies using our outcome-based or job-based segmentation methodology discover unique segments of opportunity, and that discovery enables them to find new targets for innovation (even in mature markets), identify emerging markets, and locate market entry points for disruptive technologies. These concepts are referenced by Harvard Business School professor Clayton M. Christensen in The Innovator's Solution (2003).

8-Step Methodology

1. Formulate Innovation Strategy
 
2. Capture Customer Inputs

3. Identify Broad Market Opportunities

4. Identify Segments of Opportunity

5. Target Specific Opportunities

6. Reposition Current Offerings

7. Prioritize Development Pipeline

8. Define Breakthrough Concepts