Competing Against Luck Book Summary: Consumer Buying Decision Process

by Accessory To Success December 23, 2020

Competing Against Luck Book Summary: Consumer Buying Decision Process

Factors Influencing Consumer Buying Decision

Many companies rely on sheer luck to propel them forward. Though they spend millions on market research, sales and marketing, they rarely achieve their intended sales and profitability. This book tells you why.

Reading Competing Against Luck will completely change the way you look at your products or service offering. It is full of tips and insights on how companies can zero in on what customers actually want and then work on offering those products or services in a way that speaks to them correctly.

This book helps you figure out the customers’ purchasing behavior and reason for buying. Spoiler alert, it's not going to be what you think.

*Don’t stop reading until you finish the milkshake story.

Learn The Customer Decision Making Process

  • Why customers are buying your products or services
  • How to define your business and your competition
  • Understand why customers ‘hire’ or ‘fire’ a product
  • Create products that customers want to buy at any cost
  • Understand and implement the ‘job to be done’ approach and how to effectively use this theory in real life
  • How to ask clearly defining questions to understand customer behavior

Competing Against Luck Book Summary

Each time anyone buys a product Clayton says that we “hire” it to do a job for us. Perhaps you’ve hired a magazine to entertain or educate you while on the subway. If the product does the job well, we will hire it again when we are faced with the same problem. However, if the product doesn’t solve our problem or does a subpar job, we will “fire” it and look to hire another product to do the job and successfully solve our problem.

The growth and success of any company is driven by consumer behavior and consumer buying behavior. Companies know that purchasing behavior of customers form the basis of their sales and marketing. They know that to scale up and soar ahead of their competition they need to innovate and come up with products or services to address the needs of the customer.

Competing Against Luck Book Summary The Story of Innovation and Customer Choice Quote 1

Yet, companies rely too much on luck for their progress. The business and the entrepreneur, would benefit tremendously if they read this book, fully digest it and implement it.

A few more sentences from the introduction got me thinking - "How do leaders know how to grow? How can they create products that they are so sure customers want to buy and can innovation be more than a game of chance?" In this book, Clayton examines what causes growth, how to create it and how to analyze it.A contrasting look at this question can be answered in a different way in the book INFLUENCE.

The Milkshake Story is powerful and applicable to every single business across every industry.

Clayton was asked to conduct a research by his employer, a major fast food chain. The research was needed to figure out how to boost their milkshake sales. To do this, he sat in restaurants and took down notes on the characteristics of the consumers buying the milkshake. After they were done with their purchase, he would attempt to analyze their buying behavior.

Competing Against Luck Book Summary The Story of Innovation and Customer Choice Quote 2

Stopping patrons on their way out he asked them questions about why they liked the milkshake and what would they change about it. Many suggestions about making the straw thicker, lid tighter, adding more chunky bits to the shake, etc. poured in.

Based on post purchase behavior research, the company made all the requisite changes. They launched a big campaign announcing to their market, all the changes made and presenting their new and revamped milkshake…But nothing happened! The response was zero and nothing changed as far as sales went. This proved to be a defining moment for Clayton.

He understood then that he needed to ask the right questions and to develop a better understanding of consumer buying behavior. He then stumbled upon what he calls the ‘theory of the job to be done’.

Wiser and armed with a keener insight on the right question to ask, he goes back to his table in the restaurant. Now he's asking people “What job did you hire this milkshake to do for you?”.

He uses a quick example in Competing Against Luck to describe what he means by that. If you are waiting for a train you are going to board for a three-hour train ride and you decide to purchase a Newsweek magazine, you are not necessarily buying Newsweek magazine because you love the magazine. Most likely, you are buying Newsweek magazine because you want to read it to entertain yourself during the three hours on the train.

Competing Against Luck Book Summary The Story of Innovation and Customer Choice Quote 3

On asking people what job they hired the milkshake to do for them revealed many answers which had no relation to the characteristics of the milkshake.

People buying it in the morning gave reasons like it worked in lieu of breakfast and kept them feeling full for a longer time. It was a tall, chilled drink that lasted them well through their commute to work. It was a fun treat and helped them delay their lunch. In most cases, buyers compared it favorably against a protein bar or banana, which were gone far too fast and not nearly as fun to eat.

Research on weekend buyers coming in with children, revealed that they bought the milkshake as a small treat for their children. This treat being pocket friendly and not too overwhelming, eased their guilt and made them feel like good parents.

Competing Against Luck Book Summary The Story of Innovation and Customer Choice Quote 4

None of them focused on the attributes like yummy, chocolaty, caramelly, straw thickness, how tight the lid was, or if the amount of chunky bits in the shake were right.

Based on this research the company set up quick kiosks and buying experience where people could just pick up their milkshakes and swiftly exit. Guess what, sales shot up!!

This study was a revelation on addressing the right question – what job is the buyer of the product, hiring this product to do for them. It developed the theory of the whys of consumer behavior and customer buying behavior. Another book to be enjoyed with reframing your perspective on this is Blue Ocean Strategy.

Every company should adopt this evaluation practice for all of their products, brand or at least each product line. Many more examples are strewn through the entire contents of the book supporting this theory. A final book suggestion on standing out and being different than other brands would be Purple Cow.

About The Author Clayton M. Christensen

Clayton M. Christensen, Professor at Harvard Business School, is the author of eleven books and five-time recipient of the McKinsey Award for Harvard Business Review's best article. He is the cofounder of four companies and has twice been named the world's most influential business thinker in a biennial ranking conducted by Thinkers50. He passed away in February 2020.

David S. Duncan, is a trusted advisor to top leaders at many of the world’s most iconic companies, helping them to navigate disruptive change, create sustainable growth, and transform their organizations. Over the past decade, his work helping to develop and implement jobs theory has made him one of its most authoritative practitioners.

Karen Dillon is the former editor of Harvard Business Review and co-author of Christensen’s New York Times best-seller How Will You Measure Your Life?

Taddy Hall is a Principal with The Cambridge Group and Leader of Nielsen’s Breakthrough Innovation Project.

Accessory To Success
Accessory To Success

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