October 1

5 ways to do Customer Development

Customer Development

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One common mistake I have seen new founders make is refusing to do Customer Development before building the product. I have seen a few who claim that their customers don’t know shit and they know better.

The only companies which can afford to not talk to customers are the ones which don’t need customers to pay. All others, better do some quality customer development before you even think of writing your first line of code.

What is Customer Development

Customer Development is a way to get customer insights and ideas for products and services by conducting interviews and structured experiments. Customer development is used to help build products that customers want and most importantly avoid spending time and money on products customers don’t want.

By ensuring that you optimize the entire process for building only features and products that customers ask for, you save a lot of heartache and failure later.

Customer Development doesn’t have to be expensive. Today, I was talking to a market research company that was trying to make me use their services to conduct customer research and questionnaires. He was showing me all kinds of fancy reports and graphs of case studies that he has done, which would have cost me a couple of thousand dollars at the minimum.

I said to him that I am at a very early stage in building my product and I can instead do the same level of research with less than $100. And this post is a way to show you how you too can do customer development for your products or services easily.

Here are 5 tips to do customer development for cheap

1) Talk to your Customers

Duh! Talking to your customers is the first method every founder needs to do. Drop an email to your customers asking if they would be willing to spend 15 mins on a skype call. Just use this following script:

Dear Jane,

I see you have been a user of PRODUCT_NAME for 2 months. Can we get on a short 15-minute call to help me understand how you are using our product? It would help a lot in improving it for the next release.

Reply back with a time that would work for you.

Thanks.
Srini.

During the call, ask a few basic questions about why they use their product, what is the one problem that is currently being unsolved by your product, etc. It is important to make the customer talk 90% of the time during this call.

If you can extend the call, ask them if they could share their screen while they use your product. Observing users using your app in the wild reveals a lot of interesting behaviors.

During one such session, I noticed that the user was trying to select multiple pages of HTML tables and pasting them in an Excel Spreadsheet. It was literally painful to watch him do it. The user was non-technical and he was generating these reports by hand once a week. But he didn’t bring this up during any of the regular interviews.

We rolled out a quick “Export to CSV” feature and it immediately increased the productivity of the user. And instantly, we became heroes.

What would you do if you are still

2) Talk to your competitor’s customers

Competition research is a separate topic altogether. But in the context of customer development, it is important to talk to your competitor’s customers too.

This is useful for two reasons:

  1. As an early-stage startup, you wouldn’t even have a product or customers to talk to. Just because you don’t have customers, doesn’t mean you can’t get the insights you need.
  2. What better person to talk to understand your field and industry than talking to existing customers and asking them what their problems are and how the current company is solving them.

3) Test before you build

Many startups make this common mistake of building their product in a vacuum without testing whether it works or not. It’s important to test a prototype or a Minimum Viable Product (MVP) before spending all your money, time and effort on it.

The quickest way to test it is to draw a wireframe of the product and test it with 5 potential users. You can find them easily on various user testing sites, forums, Reddit, etc. If you have a physical product, build a prototype and go to your nearest Starbucks and ask people if they are willing to test it out for a free coffee.

By spending a few hundreds of dollars on testing the initial version, you can save hundreds of thousands later.

4) Attend Meetups, TradeShows, and conferences

You can meet potential customers at various events in your city. Spend some time attending these events and talking with them. Listen to their problems. Understand their needs. Help them out and they will remember you when you email them when you launch.

Networking doesn’t mean selling. It involves helping them without any expectations. When you are seen as someone they can trust, then you can reach out to them and sell later.

5) Be your own customer

Every founder should try their own product or service as a customer themselves. If you have a SaaS product, signup for it, go through the onboarding, fill in your credit card, try to accomplish everything you wanted your customer to do.

If you have an agency, get your salesperson to sell to you and see how you are being handled. Only if you live the life of your customers, you would understand what they go through and how you can improve it.

Even a single conversation would trigger a massive change in your process that would increase the success of your business.

Customer development is a continuous process and you might have to experiment with various models to truly understand the right way to do it. But unless you do it, you would be stuck at the same level for a long time.

Do you have any other ideas that you have used for customer development?

About the author 

Srinivasan Rangarajan

Srini is an Entrepreneur who loves building and growing SaaS products. He has experience working with various startup and businesses in different industries.

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