customer

Speaking of customer, Dan Olsen explains in his book The Lean Product Playbook that:

The main reason products fail is because they don’t meet customer needs in a way that is better than other alternatives.

And that is quite true. You are creating your product for your customers, if they are not willing to pay, at the end of the day you wasted many hours of writing, coding and designing. And that is exactly what I want to avoid with this blog post – I will cover the importance of being focused, how you can get the feedback from your customers and what you can actually do with that feedback.

Focus

“People think focus means saying yes to the thing you’ve got to focus on. But that’s not what it means at all. It means saying no to the hundred other good ideas that there are. You have to pick carefully. I’m actually as proud of the things we haven’t done as the things I have done. Innovation is saying no to 1000 things.” Steve Jobs

The Customer Development model of a startup starts with a simple premise: learning and discovering who a company’s initial customers will be and what markets they are in.

Invest your time as a team writing down all assumptions that you can validate or invalidate. Even if you think everyone is in alignment, they probably aren’t. Make your hypothesis as specific as possible. The narrower your focus, the faster your progress in proving it right or wrong.

Then prepare yourself to start saying “No” to your ideas . It can be very uncomfortable to ask questions that might prove you or your boss were wrong, but it makes the essential part of your success. Customer development is not predictable. You are not able to know what you are going to learn until the moment you start. You will need the ability to think on your feet and adapt as you uncover new information.

Your goal should be to invalidate your assumptions about what customers want, so that you can focus on building what they will actually buy.

Communicate and Understand the Customer

There are various ways that you can communicate and (in)validate your idea. Steve Blank in his book “The Four Steps to the Epiphany” explains:

“You need to pick up the phone and call the top five accounts on your sales pipeline. Ask them this question: if you give them your product today for free, are they prepared to install and use it across their department and company? If the answer is no, you have absolutely no customers on your forecast who will be prepared to buy from you in the next six months.”

Demo video – Dropbox Story

The success of Dropbox started by demonstrating their product in a short video. The challenge was that it was impossible to demonstrate the working software in a prototype form. To avoid the risk of waking up after years of development with a product nobody wanted, Drew Houston, the founder and CEO of Dropbox did something  unexpectedly easy: he made a demo video.

“It drove hundreds of thousands of people to the website. Our beta waiting list went from 5,000 people to 75,000 people literally overnight. It totally blew us away.

Landing page – Buffer Story

Buffer is an app which lets you schedule your social media posts, essentially letting you space out your updates so that you don’t flood your friends’ newsfeeds at one point in the day. When starting out, Joel Gascoigne, Buffer’s founder, didn’t want to get stuck building something no one wanted to use. So he began with a simple test.

Buffer’s first minimum viable product was a simple landing page. It explained what Buffer was and how it would work, encouraged people to sign up and offered plans and a pricing button for people to click on if they were interested. When they did, however, they were shown a short message explaining they weren’t quite ready yet and that people should sign up for updates.

Next, they tested the hypothesis that people would want to pay for this by adding the prices table in between the landing page and the signup form. When someone clicked on the pricing plans button, they were shown the plans to see whether they would be interested in paying for something like Buffer. This showed Joel how many of the visitors to the site could potentially become paying customers. This zero-risk MVP helped Buffer identify the market and shape their product features for upcoming development.

Concierge MVP – Airbnb Story

Instead of providing a product, you start with a manual service. The service should consist of exactly the same steps people would go through with your product.

In 2007, Brian Chesky and Joe Gebbia couldn’t afford the rent of their San Francisco apartment. There was a design conference coming to town, they took pictures of their apartment, uploaded them on a simple website, and soon they had 3 paying guests.

The up-close interaction gave the two cofounders valuable insight into what potential customers would want. This minimum viable product helped validate the market and prove people would be willing to buy the experience. With their initial assumptions answered that not just recent college grads were willing to pay to stay in someone else’s flat rather than a hotel, they started Airbnb (initially called AirBedAndBreakfast).

Fundraising and Pre-order pages


Crowdfunding websites like Kickstarter and Indiegogo, among others, also provide a great platform for running MVP tests. These websites are essentially collections of MVPs where the market response is judged by the interest people show in the form of contributions to the campaigns. 

Oculus Rift, the virtual reality gaming kit, launched a pre-order page for its development kit before they began production. 

A/B Tests and Ad Campaigns

A/B Tests are used to test the effectiveness of any changes to your product. The A/B testing allows you to test two versions of the page or marketing copy and let customer interactions determine which version performs better.

Google and Facebook are platforms that allow you to drill down demographics to the particular target customer you’re trying to reach, and this lets you run a low-fidelity test to see which features or aspects of your product are most appealing to them.

Running a campaign through these services gives you statistics like click-through-rates and conversions which can be valuable information in determining what your product will be and how it will run. These can be combined with A/B tests.

Interview

Sometimes the best way to communicate your idea could be to have an interview with your target customers. It is important to keep in mind that you should avoid closed and suggestive questions (with yes/no answers).

The point of the interview should be to understand what they already do right now as an alternative to solve their problems.

Never Stop Iterating

Your customers are the key of your business and you should never stop listening to them. The hardest thing will be to stick out to your roadmap and keep the focus, but this doesn’t mean that your communication with customers stops once when you defined (and built) your MVP or even your product.

The best way to ensure the growth of your product is to build the customer centricity culture among your teammates. Your support agents should take part of the product/roadmap planning process and their team metrics can become the valuable decision makers – what customers complain the most about, what they find hard in the flow, etc.


How would you validate your business idea?

We would like to read your opinion in comments.  Let’s discuss about this topic together!

 

Customer Feedback: How to Get it and Understand it

Petar Atanasovski

I am leading the ManageWP Customer Happiness Team at GoDaddy. Former president of AIESEC in Serbia, love water polo (former water polo player and coach), boats, playing guitar and exploring new business trends. Studied informatics at Faculty of Mathematics in Belgrade.

When I am not working on Customer Experience, I enjoy developing people, creating new products and making the world a better place.

Category: DefineThoughts
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