What steps the Customer Development approach includes
Every year millions of startups appear in the world, but only a few succeed. Often the reason for failure is the lack of demand for the product by consumers, as a result of errors in analyzing and defining the target audience and its needs. To avoid this situation, marketers use the Customer Development approach. It provides an opportunity to test the attitude of consumers toward the product, with the help of this concept it is possible to develop goods or services which will be interesting to people.
The Customer Development model was developed by the American businessman Steve Blank. It is based on a study of the customer needs, understanding the underlying motives that drive a person, and the patterns of behavior. Customer Development gives the specialist an understanding of what qualities the consumer puts into determining the usefulness of the product, and already adjusts the product to these characteristics.
Blank divided the concept into four steps:
- Customer discovery. This phase begins before product development and includes gathering information to help better understand customers. In this case, experts test a number of hypotheses, as well as target consumers. Customer discovery helps to know the problems of potential customers and understand how to make your product able to solve them. In addition, at this stage, it is necessary to identify sales channels and allocate the resources that will be required for their implementation and calculate the cost of release.
- Customer validation involves the development of an MVP – a product that should already have a set of features needed to solve the problems of the target audience. Thanks to the MVP, specialists track the acceptance of the product by consumers, and the willingness of people to pay money for its use. In addition, in this case, they determine the level of readiness of the product to be marketed to a wide range of customers.
- Scaling the customer base. Now that the product has every chance to become successful, and there are already the first customers, it is important to start selling to a wide audience. At this stage a promotion strategy is developed, positioning is carried out, and the product is demonstrated to a large number of potential customers. Here also begins the development of key customers and the formation of relationships with them.
- Building a company is the final stage of Customer Development when an idea is transformed into a real and competitive business. Here you already have a clear vision of your target audience, its problems, and ways to solve them, and it is important to outline the vector of development for the long term.
It should be understood that the goal of the Customer Development approach is to regularly improve the product based on customer requests. Therefore, it is important to periodically return to this or that stage of Customer Development to monitor changes in the attitude of the target audience and work on business improvement based on their requests.
