Customer Discovery Process For Iowa Businesses
Customer Discovery Process For Iowa Businesses
The key to mastering a brilliant business strategy starts with excellent customer discovery. Understand completely who exactly your product or service is targeting. Having in-depth customer discovery to carry you through your startup journey or innovation pivots will be extremely helpful. IASourceLink provides easy to follow, comprehensive guides on Starting a Business in Iowa and Innovate Your Business. Follow these guides and remember to integrate the customer discovery process throughout your overal strategy.
The goal: know more about your customers than they know about themselves. Knowing all that you can will allow you to take care of your customers and in return they will take care of you! Master this skill and you will have all your questions answered… well almost all of them! So what is customer discovery? How does one conduct customer discovery? And why is it so important?
What is Customer Discovery?
Customer discovery is when the founder takes on the role of a scientist or detective, trying to let evidence lead you to a solution without letting any of your own bias get in the way. The evidence is in the discovery. Gaining insight on the lives, behaviors, families, etc.. to those who are your target audience. Do not let previous assumptions about your product or service fog your vision to the clear picture the customer is painting for you. On the other hand, do not let a few bad experiences keep you from moving forward with the venture. Everyone is entitled to their own opinion. In general just have an open mind and be open to feedback. Remember not everyone is your customer. Customer discovery is also a phase that will tell you who not to target with your product or service. If you are struggling with the concept of customer discovery or really just want some guidance on where to start. Do not hesitate to reach out to your local Iowa Small Business Development Center (SBDC).
Why is Customer Discovery so Important?
Customer discovery will help you uncover unmet needs or wants in the market. Aside from the fact customer discovery will give you a great foundation for your business strategy, it will also save you money. Customer discovery will help you hone in on your target customers and only push efforts towards them. Sure, customer discovery may be time consuming, but in the end it will save you time. Spending a bunch of money on marketing to a customer segment that is not going to buy will be wasting their time and losing your money. Also, developing a product or service that essentially no one will buy is also very time consuming and will lose you money. And who wants to waste time OR lose money?! Nobody.
How to Conduct Customer Discovery?
Let’s break it down into 3 steps to understand where to start with your customer discovery.
Step 1: Form an initial Hypothesis. Craft your value proposition hypothesis. Before you start having conversations with potential customers, you need to have an idea of the problem you believe you are solving with your product. Refer to the Value Proposition Canvas if you need help establishing this mindset. Once you have a basic outline of the problem and your solution, you’re ready to test your hypothesis. Identify what you think the target audience is and what their needs are. Clearly define your hypothesis for the project with an if-then statement.
Step 2: Conduct Primary Research. Keep in mind customer discovery will look different for every company. Do what works best for you with your customers in mind. Set up phone calls and in-person meetings to test your value proposition and demo your product/service. If you do not yet have a minimum viable product (MVP) yet, a framework is good enough at this step. Just be sure your idea is fully illustrated to the potential customer so they have a complete understanding. Use pictures, prototypes, models, etc to help them understand and form the best opinion for your research. You should set up meetings with potential customers in your market and with organizations affiliated with your potential customers. Refrain from setting up interviews with family members or friends. You want to have research and information that is not biased. Remember, you are also going to discover those who will not be a customer.
The more conversations you have the better. Shoot for a goal of obtaining at least 100 conversations with different people. The more people you connect with, the better understanding you will have of the market. Do not simply, ask if they would purchase the product or service. Dig deep into why they would need this product or service. Recall back to Simon Sinek’s famous saying, “People don’t buy what you do, they buy why you do it.” When meeting with potential customers, be sure you get to know them and are understanding their needs and wants. Keep your own bias out of the conversation. Understand what needs of theirs you can meet with your product/service. Always keep in the back of your mind, how can I bring value to this specific customer with my company.
Step 3: Asses Product-Market Fit. Compile feedback and re-asses product-market fit. Now it’s time to pull together all of your findings and figure out if your original hypothesis about the problem and your solution were correct. Assess the response you received and where you may need to pivot in order to best meet the needs of the market.
After completing these three steps, you’ll often find that you didn’t completely understand the problem and/or that your proposed solution is really only a partial solution. You may have discovered a new problem your target audience is having. You may even discover your target market has a different solution to your problem. Maybe your MVP is not as special as you thought it would be. One discovery you can be thankful for is that you didn’t sink tons of marketing and sales dollars into a market for which you didn’t have the right fit!
Looking for a deeper dive into the customer discovery process in Iowa? Want to test out your hypothesis further with trained mentors and like-minded entrepreneurs? Consider taking your business model through Venture School. A program meant to help entrepreneurs test out their aspiring ventures with inviting, growth-minded, and structured curriculum.