Customer development is an important asset to your business, as it can help you launch new ventures and supply what the market demands. Here is a quick Customer Development Guide to help you learn more about its relevance to your business model.
What is Customer Development?
Customer development is a four-step method you can use to discover, unpack and validate different market concerns. The four steps of the Customer Development model are:
- Customer discovery: Understand customers so that you can satisfy their needs.
- Customer validation: Make sure your product will fulfill those identified needs.
- Customer creation: Generate your product and determine whether or not it satisfies all of the customer’s needs.
- Company building: Grow your business in order to support supply and demand for your product.
This framework enables companies to take a scientific approach to validate assumptions about a product or business. Like other scientific methods, it was created to help measure the success of different ideas but through the use of real customers. Businesses use customer development to figure out which solutions will actually address problems.
Customer Discovery and Filling the Need
Customer discovery helps a business determine if they understand and are fulfilling the market need. The most essential step is to identify what that need is. Once you have an understanding of customer need, you have to develop an idea to solve their problems. Identify any assumptions and validate them by engaging with customers to gather data. Formulate a hypothesis based on your customers, the problem and a potential solution.
Contact Your Customers
Customer Development can be used to help your business in multiple ways. If you have just begun implementing customer development, speaking with your customers to understand their needs is essential. Start by asking general questions such as your customer’s age, gender and the products they use. Next, ask your clients how they would be impacted by a particular scenario. Ask questions regarding consumer behavioral choices and encourage them to express their true opinions. Then use that feedback to analyze how your products can improve.
Through this model, you can gain a clear idea of who your primary consumers are and their problems. Utilize customer surveys and interviews to find out more information. Get frequent feedback from your clients in order to really understand if your solutions are meeting their needs. By communicating with your customers, you can use the data to measure price points for your product and create high demand. In the process, you will help your business evolve over time.
Benefits of Customer Development
Customer development helps businesses to gain unique insights that they can use to improve service. Not only can the data be used to make sure you are making the right investments, but it can also help determine when customer needs have changed so that you develop new products. You can also use the data to analyze how your competitors are doing and whether you should adjust your strategy to gain new clients.
As a small business owner, you have to make important product decisions every day and quickly adapt to market changes. If your business doesn’t evolve to meet the needs of your clients, you may lose them to a competitor. Customer development enables you to continually look for and implement better ways to serve your customers. This model can help a company avoid becoming stagnant and remain relevant to specific customer needs.
Customer development can help you save a lot of time and money in the future, enabling you to run a more efficient business. For more guidance on growing your own business, contact the Economic Development Collaborative. Conveniently located in Camarillo, California, we’re here to help and provide regular updates for businesses during the COVID-19 pandemic.