Implementing the right framework for customer discovery and development will save you from spending chunks of money developing what a customer doesn’t need. It is very important to develop a learning process from the customer rather than just executing what you assume to be the right business idea. Customer development helps a business become highly focused, resource-efficient and guarantees success.
According to Steve Blank, serial entrepreneur and author, the process of customer development represents the best practises of successful business ventures. It is interesting to note that businesses that undertook this process of customer development had lean spending rates until their business model had been thoroughly validated by finding paying customers.
THE FOUR-PHASE CUSTOMER DEVELOPMENT APPROACH
Customer Discovery
At this phase, the business or startup is required to find out for whom the product is being created or built and whether the problem you are trying to solve is of importance to them. Throwing out all guesses and having direct contact with potential customers will help in discovering whether the problem, product and hypothesis in your business plan are correct and not just wishy-washy made-up facts.
Customer Validation
This next step will help you build a solid repeatable sales road map (that has undergone adequate tests) for your future sales and marketing team players. In this phase, you must have not just tested your hypothesis but have found customers who align with your product/service and have embraced it by an act or acts of exchange – paying for your idea/product or signing up for what you offer.
Customer Creation
You must recognize that your business may be similar or different from others. Not all startups are alike, so customer creation may likely differ from one enterprise to another. Whatever the company type, and going through the first two phases, customer creation builds on the success the company has had in its initial sales exercise. Moving forward, the business takes up the challenge to create customer demand and drive that demand into the company’s sales channel.
Company Building
At this phase, the start-up is evolving from point A of assumptions, tests and validation to point B of solid business structure. Its customer development team has been transformed into a more structured department with the ability and foresight to hire seasoned professionals to execute various roles. In turn, these hired personnel now focus on building mission-oriented departments that have the ability to utilize the company’s early market success.
It is of great consequence for startups or even companies with new products to attempt scaling with little or no validation of their idea, products or services. Assumptions must be validated outside the building with the founder out first making concrete contact with customers. This four-phase process to customer development is the dividing line between great business and those that either perform poorly or have gone extinct.
Divine Beneth
Business Developer and Consultant
Eminent Foundation Africa
divine@eminentfoundationafrica.org
