Starting a business? You’re going to need a firm understanding of your customer’s wants and needs. Read our blog for our take on customer discovery techniques.
There is a process to starting a business. While not every business is the same, the techniques and strategies needed to succeed are often similar.
Customer Development Model
Many start-ups and entrepreneurs will look to the customer development model (CDM) to get their business off to a flying start.
One crucial step in this model is customer discovery, and it’s not done just one but all the time.
Customer discovery is the process of focusing on understanding your customer. You may think you’ve got this covered with surveys and data capture from purchases and so on, but there really is a lot to it.
For example, commercializing an idea requires taking on the role of a detective or scientist. Your aim is to find evidence to lead you to solutions without any bias or unnecessary information getting in the way. For getting to know your customer better, we have the following tips and examples.
Commence with observing and then defining the problem. To get the answers you need, ask these questions:
- What is the customer need?
- How does our product/service solve it?
Your next step is to develop a theory or proposition for the problem and your solutions. Plus, a hypothesis on the demand creation and buying process. These questions will help you:
- How will the customer find the product/service?
- Who will buy it?
- Who and what will influence the purchase?
6 Customer Discovery Techniques
To know you’re on the right path, you will need to conduct an experiment to test the hypotheses of problem/solution, demand creation and buying process.
There are many techniques for customer discovery that your business can use to boost your revenue, engagement or user experience with your platform, service or product. Let’s have a look over these:
Design thinking is all about seeking to understand a user or customer, challenge any assumptions and redefine problems to try and identify alternative strategies and possible solutions that might not have been apparent before. It’s a solution-based approach to solving problems, a way of working and thinking that is still a culmination of hands-on methods.
This is all about developing and understanding the people for whom you’re designing products and services. The main aspects come down to empathy, ideas and prototyping. Each stage links to the next and works in an ongoing loop to help your service grow or product become more desirable and accessible.
Jobs to be Done
This is an interesting framework that’s quite different to others in that it focuses on a “job” as opposed to the perspective of a user/customer. So while this is a stronger tool for the product discovery process, it can still help determine what drives a customer to want something different.
An example might be a change a person wants to make. Maybe they want cleaner teeth. The old approach would’ve been manual brushing. A “job to be done” solution would be an electric, ultrasonic toothbrush. This approach doesn’t just push you to improve upon a product or service but instead to find a completely different way to solve a problem.
RAT (Riskiest Assumptions Test)
Many startups are waking up to using RAT to help better their products, services and customer understanding. Essentially the focus here is on doing tests of even the smallest prototypes and learning valuable information from clients as soon as possible.
RAT can help determine whether customers are interested in the product or service before even developing anything.
Startups and businesses can use RAT to determine and assess their biggest assumptions about their product, service, business model, users etc. Then, viability and needs can be tested by finding the shortest way needed to validate these assumptions. This can help nail down a market and can give your valuable data on what consumers are after.
An assumption can be anything related to your customer. For example, it was reported in 2019 that 81% of consumers surveyed insisted that they needed to trust a brand before they bought from them.
If you were a fashion brand or a food brand, you could assume that consumers need to feel they can trust you. Your branding and marketing can be curated to ensure this.
There are many tools you can use to establish risks and assumptions.
Sometimes the oldest tricks in the book are still worth your time. For example, conducting surveys on your existing and potential customers is a great way of disconfirming a hypothesis more so than validating one.
If a survey shows there is little to no interest in a certain product/service, then you can move on to a new hypothesis. If there is interest, then there’s still work to be done.
The advantages of this are that it’s easily organized, data-driven, easy to distribute, can be a way of contact collection and is low cost.
On the other hand, sometimes there can be limited responses, and surveys can lack personalization and incentives. These disadvantages, however, can be rectified with proper organization and distribution. Things such as giveaways or discount codes can be used as incentives.
Focus groups can provide unique insights into the likes/dislikes, needs and desires of customers. They can be a bit costly and time-consuming. Still, the data you can collect is often richer as you can receive a more populated and detailed understanding of your assumptions and ideas based on what these customers have to say.
TV and movie studios often utilize focus groups before committing to a project, as do advertising agencies. As a result, they gather their information from uniquely cultivated groups and establish more assumptions based on the reactions of individuals.
Customer discovery could be as simple as reading what customers are saying or doing online.
You can cultivate assumptions and prove or disprove your hypothesis by looking at how consumers are behaving online.
The internet provides you with an endless stream of information. It’s free and takes very little time. However, it’s important to enter into this knowing that comments and discussions online are hard to verify, can be over-exaggerated, and it’s harder to be unbiased this way.
Social media houses so much valuable information about the habits and behaviors of consumers. The trick is being able to wade through what’s important and what isn’t. However, trailing a customer’s social media footprint is a great example of how online observation can unlock crucial customer data.
Ready To Discover
Customer discovery is essential in today’s business world. There are so many options for you to use, and using multiple options alongside each other can unlock so much potentially valuable data for you to better understand your customers.
No matter what, you should constantly be building and questioning assumptions and working to prove or disprove your hypotheses even if your business is already doing well. You still need to stay ahead of the market and understand that your customer’s situations can change.