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Understanding Your Customer

Innovation Tools: Understanding your customer doesn't mean giving them exactly what they ask for

The customer is the source of truth

Now before you go all Henry Fordor worse, Steve Jobs on us, understanding your customers deeply does not mean you ask them what they want and then do what they say. But the fact is that customers are the final arbiters: they either buy or use your product or they don’t. Discovering what makes customers truly passionate is the key to moving the needle.

The better you understand customers and their needs, the more likely you will be to develop a product that not only provides need-addressing utility but also resonates at an emotional level. And to understand customer emotions, we must zoom in on individual people, not traditional personas.

We’ve written and spoken quite extensively about market segmentation. Both startup entrepreneurs often approach segmentation through product categorisation, or a vertical industry, or consumer demographics.

Entrepreneurs love these methods because they result in huge “total addressable market” figures. Large companies use this sort of segmentation because it’s a convenient way to categorise existing customers ex-post facto. It’s not helpful, however, for new endeavours where the value to be created is unknown – where the truth is yet to be revealed. 

To find the truth, you must start by zooming in on individuals -- not large segments -- in an effort to discover what needs you might address with your solution. Once you have found individuals who are passionate, you can use the traits and behaviours to construct your market segments from the individual up.

A market segment is a group of people who share the same pain or passion and speak the same language. By speaking the same language, we mean they will look to each other to refer solutions addressing the shared pain or passion. We’re not looking for huge numbers of people or statistical significance at this point. This is not a bell curve -- it’s a few individual points!

ZOOM IN ON THE INDIVIDUAL

Many teams struggle with starting way too broad, or even worse, do not understand their individual customers. To help you “get focused”, we created a handy tool you can use to help focus your thinking. This tool is based on the “fishing” concepts discussed in my book, The Lean Entrepreneur, so feel free to re-read that chapter if you need background on these concepts.

We call it the Customer Zoom tool, and it's designed to help you focus in on one of your specific customers.

...continue reading on Moves the Needle

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