Customer Development: How to build products your clients need
It may be easy to think that we know what the needs of our client are, even if we just had a couple of meetings with him, followed by a few phone calls, and searched for key information in the client’s website.
Whatever we may thing, we don’t really know that much. In order to understand our client well, we should first know who he is, how to work towards him and which channels are to be used in our interactions with him. This looks like an easy task, but I must admit it is quite a difficult one.
Besides, it requires constant effort and perseverence if we are to achieve the goals we have set for ourselves.
What’s the point in having an innovative, novel product if your client does not buy it? CLIENTS are what makes a product / service successful. If no clients are willing to buy our product, all we mentioned before is just meaningless.
Therefore, it makes no sense to devote most of our time and efforts in the optimization of our product development process... Don’t you think so?
Customer Development could be defined as the closest approach you should devote to your client. This includes investing as much time as possible in understanding who your client is, what his needs are, what his key points are and how to provide him with a solution that caters for his needs while including an added value.
This should be based in a sustainable business model for us, which has a potential for market growth as well.
I will never forget the words that the World Sales Vicepresident of a large multinational company (Nokia) used to say: The more time you spend with your client, the better you will understand his problems, and the more choices you will have to show how different you are from your competitor. That’s what it’s all about: finding out what your client needs so that you may create products and services that get bought.
Yes, I know. You may be thinking that everything I said looks wonderful in writing, but how do you do it in real life? I advise you to ask yourself the 4 questions written below:
- Who is my client?
- What is his problem or need?
- How is he solving his problems?
- What information will your client provide so that he may buy your product or service?
Most probably, you have many ideas and gut feeling to tackle all the answers, but let’s say you have hypothesis... Everything you do in “Customer Development” focuses on testing such hypotheses.
The “amount” of client development will depend on several factors: your attention to the validation of a new business idea, the launching of new products in an already-established client base or just adding new qualities to an already-existing product. It’s up to you to decide in which point in the cycle you find yourself.
The cycle of Customer Development should move around 3 areas: 1. Learning. 2. Building and 3. Measuring. In order to move around these areas we will need to take four steps.
Which are the 4 steps for Customer Development?
Step 1: Customer Discovery
Everything starts with an idea in which you need to establish your position by identifying your target, the problems or needs it solves and what is the output of the story you want to send to the user or client.
In short, this is a hypothesis for an idea that may be fully developed following a given model.
Step 2: Customer Validation
Customer validation resolves one of the pillars of the idea. The goal of this step is to build a “map” that should be repeated when necessary. Later on, the Marketing and Sales Departament can turn this into an ongoing process while developing customer loyalty.
Customer validation shows that we have found a set of clients and a market that reacts in a positive manner to a product for which they are willing to pay a price.
Completing the steps involved in customer discovery and customer validation verifies the existence of the market and its approval of the product’s perceived value.
IF clients repeat the buying process and a sustainable business model arises, the following step involves growth.
Step 3: Customer Creation
Customer creation is based on the success the company showed in first-time sales. Now your goal is set on the creation of a constant demand that involves the client, and having him meet his needs using the channel we have chosen to reach him.
From now on, you must carefully determine how to grow with a sustainable business model and a clear outline for the “obtention” of new clients.
Step 4: Company Building
In the last step, the company starts building and broadening its salesforce, its marketing department and, above all, its business development. New teams now focus in building departments devoted to missions that may make the most of the initial success of the market chosen by the company.
If you are planning to develop a new business idea or wish to focus on a broader range of products, “Customer Development” will be extremely helpful.
Above all, don’t forget to define your 4 steps properly, as each of the aforementioned steps needs to carry along a set of clear, well-defined results that provide the company and its shareholders with well-grounded evidence that shows customer development is moving in the right direction.