Customer Development
Getting clear on your target!
09/02/10 13:18
Last week I had the opportunity to once again present the "Accelerating To First Customers" session at the Lead To Win program. As always, this fantastic program had some of the greatest new companies in Ottawa participating.
One of the key things that I cover in this session is how to get crystal clear on the true target market for your product or service. This is one of the core fundamentals of any business no matter their size, maturity, etc. It does not matter if you are a start-up who is going through the Customer Development and Lean Startup processes or if you are an existing company that has some great sales results already on the scoreboard. If you do not get this step right, then the list of potential problems ranging from spending precious marketing dollars on marketing to the wrong audience all the way through to even developing a solution that is not truly needed by the market can present itself. The ripple effect of this core mistake can be felt right across the whole company and the problems will present itself in many different forms.
I have done previous posts on this topic so I will not repeat any of these. However, there are two sources of additional information that I have come across and I wanted to share regarding this topic. First, if you are a follower of the Lean Startup and Customer Development methodologies then you may have heard of Giff Constable who is the CEO of a new upcoming start-up company called Aprizi. If you are not familiar with him then be sure to check out his blog. He just did a recent post entitled Targeting Matters! which I think is worth the read.
Second, during the recent presentation that I did with the Lead To Win program, I had them conduct an exercise. The exercise was simply to write to themselves a thank-you letter from one of their hypothetical customers. I first learned about this item from the Lean Startup Wiki and a post Kent Beck did on his blog Three Rivers Institute. This was a great tool to not only help to get people approaching their solution from the customers perspective (the only one that matters), but also to begin identifying the true target market for their solution. In this letter they were asked to write it from the perspective of their "ideal" customer, and were to focus on the benefits (not features) of the solution that they provided to the customer. I found that this was a great tool.
So, are you 100% crystal clear on your target market? If you are not sure, then now is the time to get clear. One way to find out is to write yourself a hypothetical thank you letter from one of your customers.
One of the key things that I cover in this session is how to get crystal clear on the true target market for your product or service. This is one of the core fundamentals of any business no matter their size, maturity, etc. It does not matter if you are a start-up who is going through the Customer Development and Lean Startup processes or if you are an existing company that has some great sales results already on the scoreboard. If you do not get this step right, then the list of potential problems ranging from spending precious marketing dollars on marketing to the wrong audience all the way through to even developing a solution that is not truly needed by the market can present itself. The ripple effect of this core mistake can be felt right across the whole company and the problems will present itself in many different forms.
I have done previous posts on this topic so I will not repeat any of these. However, there are two sources of additional information that I have come across and I wanted to share regarding this topic. First, if you are a follower of the Lean Startup and Customer Development methodologies then you may have heard of Giff Constable who is the CEO of a new upcoming start-up company called Aprizi. If you are not familiar with him then be sure to check out his blog. He just did a recent post entitled Targeting Matters! which I think is worth the read.
Second, during the recent presentation that I did with the Lead To Win program, I had them conduct an exercise. The exercise was simply to write to themselves a thank-you letter from one of their hypothetical customers. I first learned about this item from the Lean Startup Wiki and a post Kent Beck did on his blog Three Rivers Institute. This was a great tool to not only help to get people approaching their solution from the customers perspective (the only one that matters), but also to begin identifying the true target market for their solution. In this letter they were asked to write it from the perspective of their "ideal" customer, and were to focus on the benefits (not features) of the solution that they provided to the customer. I found that this was a great tool.
So, are you 100% crystal clear on your target market? If you are not sure, then now is the time to get clear. One way to find out is to write yourself a hypothetical thank you letter from one of your customers.
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Come on...why would they want to help us?
24/01/10 14:10
The answer to this question in many ways is simple. However, it is only once we have had the opportunity to explain it to the client does it truly appear to be simple. The following is how we approach answering this question, and hopefully it may be able to help you as part of your Customer Development process....
1. You are not selling anything! As we highlight in our book and what Steve Blank has laid out in his methodology, the point of this exercise is to truly understand the customer, their requirements, and their definition of value. The goal is not to “sell” something. This is a very important distinction that people have a hard time overcoming. If you approach a situation where you have a sincere desire to learn and understand, people will know and sense this. If however, you approach it as a sales exercise, no matter what words come out of your mouth...clients will see right through this and will not truly open up to give you the information that you are trying to uncover.
2. Do your homework. This is extremely important for the next item on this list, but as far as we are concerned it is a “business basic”. The bottom line here is that many of these people will be less likely to spend time with you trying to help you understand their needs and requirements when you have not taken the time to do some basic homework. Go to the company website to better understand what they do and how they make money. If they have annual reports available, take the time to read the most recent one so that you can understand the companies strategic goals and directions. Use tools like LinkedIn, Spoke, Hoovers, Facebook, or even Google to find out more about the company and the individual. Find out what are some of their issues...and their motivation...
3. Try to find their motivation. This is where you need to do your “homework”. Once you have identified the right person to contact, and before you pick up the phone, make sure you have put some thought towards why this person may be motivated to share some of their valuable time with you. Using the tools mentioned above, you can often get some insight into what motivates them. Often, motivators fall into one of the following categories:
• Recognition - People who are motivated by "Recognition" are interested in respect, admiration, notoriety and celebrity. They want to be recognized by people around them as someone important, credible, and someone to be associated with.
• Influence - People whose primary motivator is "Influence" find power, control, competition, independence, and order to be most important. These people are similar to recognition seekers in many ways; however it is more about what they feel the recognition will give them. They may view this power, or influence, as something they need to accomplish their goals.
• Internal - Some people are motivated by "Internal" factors like morals, duty, intellect, creativity, philanthropy, and honor. These people are less affected by what others say than they are about what they say about themselves. This inner voice is what will make them take action, if they believe in the cause.
• Profit - “Profit” motivated people strive for success with money, possessions, acquisitions, wealth, income and growth. Most often people who are in this category will be very upfront and direct about it, which makes it easier to understand and work with them.
4. Just Ask. Not sure how else to describe this other than the fact that people do want to help others. Yes, you are going to come across some people who could care less about you and your desire to learn. However, the world is still a good place, and there are still people out there that are willing to help you if you just ask. If your solution is appropriate and can have a tangible impact on them, their company, and their industry then do not be afraid to pick up the phone and just ask.
The power of the Customer Development methodology is that you can be building your potential customer base while you are developing products and services that clients truly need, and are willing to pay for. With a sincere desire to understand and learn, combined with doing a bit of homework ahead of time will allow you to get the most out of the CD process.
This is how we approach getting meetings with real-life potential clients for our customers. What are some of the things that you do in order to generate live discussions with potential clients as part of your Customer Development process?
Our own guidelines for using email and surveys in the Customer Development process
16/01/10 16:26
Recently, I have noticed more blog posts and discussions within the Lean Startup Circle and other areas regarding the use of email and surveys as part of the Customer Development process. Email and surveys are fantastic tools, and can add a great deal of value, however in our business we have learned that they are not the ONLY tools to be used in order to gather the vital customer information for our clients.
Email has become a day to day tool used by just about everyone today. Email is one of those revolutionary tools that has helped all of us to communicate in near real-time (with mobile devices) and to open up the lines of communication with companies and individuals from all parts of the world. As email will never replace the power and benefits of a one on one interaction, our team has put in place some guidelines for ourselves on the use of email within our implementation of the customer development process.....
1. We never use email as the only way to make initial contact with someone, however it can be used to set the stage for a phone call within the next 48 hours.
2. Email can be used to follow up on a phone conversation or meeting to thank the client for their time, confirm meetings, confirm action items, next steps, etc.
3. Email is a tool that can be used in order to help a client provide an introduction or referral for us. Note...Kevin Dewalt recently did a good blog post on this topic.
4. Email can be used for quick communication with an existing client only after we have met them in person or have had an in-depth conversation with them by phone (Skype, Go-to-Meeting, etc.)
5. Email can be used to provide customers who have been involved in the customer development process with updates, etc. However, if additional requirement gathering is required, or if we need to better understand a specific component about their business / process then we do it through a live conversation.
6. Email is never used to gain any type of customer commitment. It can be used to confirm this commitment, but it is never used to ask for the commitment.
Surveys are also a fantastic and useful tool. The following are some of the ways in which we now govern our use of surveys....
1. Surveys can be used to validate some high level concepts, but are done to compliment or augment the one on one interviews we conduct with the key 10 to 15 key customers.
2. Depending upon the market, and the solution being developed surveys may be used as a way to identify and “qualify” potential candidates for follow on one on one conversations. We make this completely clear to anyone completing the survey.
3. All surveys are set up for a specific target audience, and typically a very specific topic. General market information is gathered by other means (analyst reports, web, etc.)
As the majority of our clients are B2B companies, we recognize that some of these rules may need to be adjusted for B2C customers, or different industries. However, we have put some of these guidelines in place for ourselves to ensure that we are able to get the full benefits that come from “getting out of the building” and having live conversations with the true target market for our clients products and/or services.
What are some of the guidelines (documented or otherwise) that you have as it relates to the use of email and surveys within the Customer Development and Lean Startup processes?
Email has become a day to day tool used by just about everyone today. Email is one of those revolutionary tools that has helped all of us to communicate in near real-time (with mobile devices) and to open up the lines of communication with companies and individuals from all parts of the world. As email will never replace the power and benefits of a one on one interaction, our team has put in place some guidelines for ourselves on the use of email within our implementation of the customer development process.....
1. We never use email as the only way to make initial contact with someone, however it can be used to set the stage for a phone call within the next 48 hours.
2. Email can be used to follow up on a phone conversation or meeting to thank the client for their time, confirm meetings, confirm action items, next steps, etc.
3. Email is a tool that can be used in order to help a client provide an introduction or referral for us. Note...Kevin Dewalt recently did a good blog post on this topic.
4. Email can be used for quick communication with an existing client only after we have met them in person or have had an in-depth conversation with them by phone (Skype, Go-to-Meeting, etc.)
5. Email can be used to provide customers who have been involved in the customer development process with updates, etc. However, if additional requirement gathering is required, or if we need to better understand a specific component about their business / process then we do it through a live conversation.
6. Email is never used to gain any type of customer commitment. It can be used to confirm this commitment, but it is never used to ask for the commitment.
Surveys are also a fantastic and useful tool. The following are some of the ways in which we now govern our use of surveys....
1. Surveys can be used to validate some high level concepts, but are done to compliment or augment the one on one interviews we conduct with the key 10 to 15 key customers.
2. Depending upon the market, and the solution being developed surveys may be used as a way to identify and “qualify” potential candidates for follow on one on one conversations. We make this completely clear to anyone completing the survey.
3. All surveys are set up for a specific target audience, and typically a very specific topic. General market information is gathered by other means (analyst reports, web, etc.)
As the majority of our clients are B2B companies, we recognize that some of these rules may need to be adjusted for B2C customers, or different industries. However, we have put some of these guidelines in place for ourselves to ensure that we are able to get the full benefits that come from “getting out of the building” and having live conversations with the true target market for our clients products and/or services.
What are some of the guidelines (documented or otherwise) that you have as it relates to the use of email and surveys within the Customer Development and Lean Startup processes?
The movement is underway...
06/01/10 23:25
One of the things that is making me extremely excited about this new year is the movement which I have been watching and participating in as it relates to the true understanding of the importance of customers and the vital role that they need to play within all aspects of a successful companies business processes.
I want to step back for a second and set the stage regarding this topic. First off, in the first part of last year I completed publishing of my book - “Building Sales Momentum Through Client Focused Development”. Although I had done quite a bit of research as part of the building of this book, in approximately May I stumbled upon a video of Eric Ries talking about his experience at IMVU, and what he was calling the Lean Startup Methodology. After watching the video, I did some more research and came across Steve Blank who not only was doing some joint presentations in Silicon Valley with Eric, but is also a professor for the Entrepreneurship program at UC Berkley. Steve Blank had published a book entitled “The Four Steps To The Epiphany”.
Anyway, I purchased the book and read it over the summer. I will not get into all of the details of the book, but will say that in many ways it seemed like much of what I was reading was similar to the main concepts published in my book. At this point I started to focus some time on becoming more involved in the two movements which were starting to gain a significant amount of momentum with technology companies within the United States, and particularly within Silicon Valley. I even went so far as to make contact with Eric Ries to begin discussions about how I may be able to get him to Ottawa for a speaking engagement, but for several reasons I was not able to pull off an event that fit within the timing of his increasingly busy schedule. This will be revisited in 2010!
As time went on, I recommended Steve Blanks book to a number of people and even stumbled upon people within my network who have either read the book or were in the midst of reading it. I also started to recommend the resources and information coming from Eric Ries as well on many occasions to people as the Lean Startup is a combination of both Steve Blanks Customer Development methodology combined with already proven development methodologies like Agile and XP development.
So all of this brings me to the excitement that I am feeling for not only 2010, but also for the next few years...
1. I am excited about the amount of exposure and momentum that both the Lean Startup and the Customer Development methodologies are gaining within the industry. This shows that companies and people are starting to truly embrace and utilize customers within all aspects of their business.
2. I am not going to hide the fact that I am excited about the opportunity this movement represents for Ideas2Revenue. Although there are similarities in some of the material that I have published in regards to our system and approach, the reality is that it is very complimentary to what is being taught by Eric and Steve. Simply put, our documented system is about the actual specific steps that you can take to identify, contact, and engage with real-world clients as part of the Customer Development process which is vital to realizing success with the Lean Startup methodology. In fact, our packaged services are set up to take care of all aspects of this for you!
3. I am excited as we no longer feel like the sole voice trying to communicate many of these concepts to our clients and the world around us. If you are not aware of these two methodologies yet....you will be. Just as a side note, we have updated our site with some additional information regarding these concepts. Check out the Additional Tools section of our Resources page to get some more information about the books, websites, groups, etc.
4. I am excited as I am absolutely convinced that the more companies who adopt these principles and concepts, the better our lives will be as a whole. Not only will companies be focused on building solutions that their customers truly need, they will be doing so without wasting valuable time and money on building solutions that customers ultimately are not willing (or able) to buy. The end result is the development of products and services that provide value which in turn creates a stronger local, regional, and global economy.
5. Finally, I am excited about being part of the growth of a movement...not just simply watching it from the sidelines.
So, the movement is underway, and this is what is exciting me as we come into this new year.
What is exciting you?