Saturday, September 21, 2013

How Customer Development can help identify your market cheaply

If feedback was human, he would be my best friend. - purely me.

I would share 2 instances about how customer development can be very helpful.
The first instance was about 3 years ago, I had not heard about the term “Customer Development”.
I was engaging the driver of a yellow taxi cab for the purpose of getting feedback for the idea I had coined “clickacab” as a name for - A taxi booking service that would connect cab drivers with passengers.

There were 2 categories of cab services. The Yellow ones which are privately owned, and the taxi agency owned ones, which were new at that time and more expensive -Red Cab and co.

It was presumptuous to say every cabbie, irrespective of whether they owned the cab or not was going to be a customer, but this wasn't the case. I was biased towards the taxi agencies, the springing up of the new business inspired this idea and it was only right for the service to revolve around them.
I saw them as the main customer.

I was wrong.

The cab agencies did not need help finding customers, there was a system in place already, and besides, the bureaucracy that existed within would not support the model. The time spent crafting the solution around the agency guys was going to be a waste.

Traveling from a Mobile Monday meetup, I and a friend decided to "customer develop" the cabbie, that owned a yellow cab we had boarded. We all spoke for the entire length of the journey, and the feedback was useful. The cabbie welcomed the idea and was willing to pay a fees to have a customer come through the service when asked. That's something the cabbie of a cab agency would likely not want to commit to, because he lacks the flexibility.

The second instance was for validating customer loyalty solution for small stores. Again my presumption was that every small store would need this. This time I had learnt about the lean startup and customer development, so I consciously set out to do custdev before any sort of execution.

It was rewarding.

"Every small store" did not fit my true customer segment. In the custdev session I had with a store owner, she saw the value within, but she simply did not see the need for her subscribing to such service. I observed the environment and discovered she was alone, she had no competitors. This meant everyone would patronize her anyway.

Automatic loyalty it was for her. I told myself - "This woman isn't my customer"

Thanked her and went away happy.

Learn-able Lessons: It is not enough for your customer to fit the "Customer Segment" - e.g Women getting married soon". They may meet some of the criteria of that segment, but those are not enough. The truest qualifier of a customer is the feedback/behavior of the customer when they understand the value you are proposing.

You don't really know your target market until you ask/interact with/customer develop them.

Launching a solution to your "target market" without really knowing them through cust dev, is like serving meat to room filled with hungry people. Some of them may be vegetarians and would not eat the meat prepared.

Leading to waste.

Wastage of time, efforts and resources used in preparing meat for them.

This is what lean start-ups and customer development is all about, eliminating the chances for waste, setting out to meeting the right needs and solving the right problems.

Share your thoughts in the comments space below. Thanks for reading.
By the way, it would be interesting to know if veggies default when there are no other options. :)

No comments:

Post a Comment