The role of customer development in building a company’s marketing strategy: hypothesis formation and product sampling
What exactly is Customer Development?
Development of customers is a methodological approach designed to assist startups in understanding the needs of customers and create perfect products that fulfill their expectations.
This means making sure that the assumption is tested and confirmed that there is a demand for the item or service. It also includes confirming the problem your product solves as well as creating and improving your solution in order to address the demands of the intended customer base.
The aim in customer research is decrease the chance of failure helping startups gain a thorough understanding of their customers as well as the marketplace they’re operating in.
Let’s go deep into every stage of the process for developing a customer:
Step 1. Customer Discovery
Customer discovery is the process where founders outline all of the assumptions regarding their product and transform them into hypotheses that can be tested. These hypotheses are based on assumptions about the issue that they face, the market in which they target, and their solutions. The next step is to come up with strategies for testing these hypotheses through discussions with customers.
The purpose for customer exploration is to confirm the issue that the company wants to address, and to determine a connection between both the product and issue. This is accomplished by speaking to prospective customers, understanding their requirements, and evaluating assumptions regarding the product.
This process helps in answering the most important questions like:
- Who are our ideal customers?
- What’s the issue we’re trying to fix?
- What are the solutions currently available?
- What do consumers like or dislike about the current solutions?
Step 2: Validation of the Customer
Customer validation is the process where companies test their theories about market-product match. It’s about finding the solution to the question, if the business model can be repeated and can be scaled? It is accomplished by the launch of an MVP and evaluating the business concept in the market. If the MVP proves successful, it is a market-ready product.
The purpose of customer validation is to confirm the business model as well as discover a repeatable and efficient method to gain customers. This helps in creating an efficient sales strategy that is repeatable as well as a growth plan.
Step 3. Customer Creation
Customer creation is focused on the acquisition of long-term customers as well as expanding the business. In this stage we develop the product, introduce it, and then acquire customers. The phase of customer creation focuses on creating a demand from the end-user to purchase the item.
Step 4: Building the Company
The building phase of a company is when businesses move from their learning, informal and research phase to an official, organized and focused execution phase. At this point we are focused on establishing the teams, processes, and systems that will allow us to grow the company.
The purpose of building a company is to establish a solid base for growth. This is achieved by putting the appropriate people in the correct positions, establishing the right business processes and processes, and securing funds from the appropriate investors.
Customer Development and Product Development.
Product development addresses this question “When (and what) can they buy?”.
Customer development responds with the query “Will they buy it?”
The process of developing a product is of creating a brand new product or service , and (one hopes) making it available for sale. Begin with a plan, identify the requirements and then build the requirements. try the prototype then refine it before deciding to launch it.
The process of developing the product can vary greatly according to the process your company follows. What all methods of product development are able to share in the desire for result: a finished product that consumers can purchase.
What happens if the item you design isn’t an item that customers would purchase? Do you consider “product” the biggest risk your team is exposed to? What is the risk of the market?.
When you develop customer relationships you’re growing your customer base as you create an item or service that addresses their particular needs. It isn’t a substitute for the development of products; it’s an additional process that is carried out in conjunction with the development of your product.
If you’ve completed customer development in conjunction with product development You don’t have to wait until the day your product launches to find out if people are likely to purchase. You’ll be able to tell, since you’ll already have beta clients, ambassadors and customers who pay.
Product development and customer development are two separate actions, both crucial to maximize your business’s chances of success.
Customer Development Doesn’t Replace Product Management.
Customer development does not replace product vision. Communicating with your customers should not involve asking them what they’d like to hear and then writing it down. Product management requires a structured method of gathering data from various sources, deciding what information to consider and then finding out the best way to organize them.
Customer development is simply two elements: a commitment to challenge and prove your assumptions and a commitment to gaining a deep understanding of your customers’ issues and demands.
Customer development doesn’t offer all the solutions. While it may be able to change the assumptions you’ve made with real data however, it is still dependent on an experienced product manager to determine what pieces of information to consider and what to do with them, what to do with them and also how to use the information you’ve gathered and transform it into a product, feature or business.
About Author: Daniel Howard is a writer who lives by the power of words. Daniel is an online blogger who devotes the majority part of the time creating content on the Study Crumb blog. As a journalist writer, he composes essays that are a hit with readers.