Ever wondered what the best approach is to Customer Development (CustDev)? This blog provides a practical How To guide.
One of the most important skills for a Product Manager is CustDev interviews. During the interview process the Product Manager is testing their understanding of their customer’s pains, needs, and jobs to be done. A Product Manager aims to understand the day in the life of a customer. The quicker and more accurately this can be done the sooner the Product Manager will reach product-market-fit. When organizing the interview, it’s always best to do it in person. If not possible, then via phone or Skype is the next best option. Along with the Product Manager and the interviewee, members from other teams associated with the development of the product or service should attend the interview. These members will provide a different perspective or analysis of the data gathered. During the interview, one person, not the interviewer, should take details notes. The CustDev interview process should be something that is done on a regular basis. This helps an organization establish a constant and continuous line of communication with its customers, collection of information, analysis, design, development and releasing of products.
Depending on whether it’s a yet to be created product or something already in production will depend on where a Product Manager looks for CustDev interviewees. For a yet to be created product, a Product Manager will brainstorm five to ten potential customer segments within the market they have recently researched, then choose three that would be most likely to have the jobs, pains, needs that have been identified in the value proposition hypotheses. To find individuals within the chosen customer segments look to:
- Influencer’s audiences
- Online forums
- Meetup and
- People who comment on blogs of competitors
Once a Product Manager has found the customer segment they’re looking for, the next step is to draft an email. There are a few things to keep in mind when drafting an email:
- In the beginning, don’t talk about yourself, speak about them
- Be specific e.g. I read your blog, I saw your tweet, etc. I’d like to help
- Keep it between four and seven sentences
- Be personal
- Don’t use auto generated emails
- Mention how you found them
- Show that the interview you’re requesting will be valuable, not only to you, but to them also
- Mention you’re not from a sales team or that you’re not selling anything
- Always suggest a time and date so as to avoid emailing back and forth trying to arrange something
- Treat them like a VIP. Below is a template and example
Below is an email template that can use to get things started.
Hi [INSERT NAME],
I read you article/blog on [TOPIC XYZ] and found it very interesting. I’m looking to do more of [TOPIC XYZ] and you’ve got me thinking about incorporating this into what I do.
I have a software company trying to solve the problem of TOPIC XYZ. I’m not looking to see anything, but since you have so much expertise in TOPIC XYZ, I’d love to get you input/advice on our product so we don’t build the wrong thing. If you’re available, I’d love to chat for just 20 minutes – Thursday of Friday morning?
Below is the exact template I used to reach out to CEOs of companies that had recently raised between $200,000 and $8 million in Australia. It has been stated in a lot of material that the success rate for getting a response is about 1:3. With the email below, I received a willingness to be interviewed from all but one CEO.
The example below is a real email I used to reach out to a customer segment “founders in Australia who have raised capital.” Out of the 40 founders I contacted, 39 were interviewed and one kindly opted out.
Hi [INSERT NAME],
I saw a recent article about you in the [INSERT BLOG] and thought I’d reach out. I co-founded the business accelerator at Bond University, worked as the program manager at the University of Queensland’s ilab accelerator and noticed capital raising is the most difficult thing a founder faces. In trying to solve this problem I’m reaching out to founders that have or are trying to raise capital to hear about their experiences. From that, I’d like to build a solution to solve some of the challenges they faced. I was wondering if you had time for a phone some time this week?
How To Run A Customer Development Interview Correctly
There are a lot of “dos” and “don’ts” when conducting CustDev interviews. I’ve tried to sum them up as succinctly as possible.
- If you’re in a large organisation, a core team of cross-functional people that will attend every CustDev interview. If you’re a start-up, it might just be you
- Define the three most important things to be learned before starting
- The environment should be comfortable and suitable for conducting interviews
- Always introduce your core team to the interviewee and give the interviewee an opportunity to introduce themselves
- Start with simple, easy questions then lead into more specific questions. As information is gathered during the interview, dig deeper into the specifics of these. It’s good practice to ask open ended questions. If required, give the interviewee and opportunity to vent as it give an indication of the emotions being felt and to what level.
- A Product Manager should be listening 90% of the time and speaking about 10% of the time
- Conduct interviews until you reach the curve of diminishing returns i.e. all the answers start sounding the same and the learning curve is almost flat
- The ultimate aim of the CustDev interview is to identify the top three pain points, that occur on a daily basis, they have tried to fix the problem themselves, the existing solution doesn’t work, they have a budget
As you move to the more substantive questions, a good technique to get to the root cause of a problem is to ask the “5 whys.” Typically, when an interviewee responds with something being a problem a Product Manager will want to know why that’s a problem and how much of a problem it is. Unfortunately, the first answer is rarely the actual cause of the problem. Asking the “5 whys” allows a Product Manager to dig much deeper. An example of the conversation might be something like this:
Another technique to use when interviewing is to use a combination of positive and negative statements to elicit a response e.g. “I find it difficult to find feature x” or “the app is not as responsive as the last version.” Ask if the interviewee agrees or disagrees with these statements.
Don’t introduce the product or service until the very end of the interview. Once done, watch for the interviewees reaction. Explain what the product does. Do they get excited? Are they ambivalent about it? What questions do they ask? When using it, where do they get stuck? Ask them what would they need to see to purchase the product and what price range they’d expect.
When moving into the closing phase of the interview always ask the interviewee:
- What they think the problem are?
- Are you missing any problems?
- How would they rank the problems identified?
- Are there any other people in their network, company, organization that might be experience the same things?
Don’t discuss the interview until the core interview team has had an opportunity to summarise the interview individually. This removes the possibility of group-think. Questions to ask include:
- What was the best thing you heard in the interview?
- What was the worst thing you head in the interview?
- What went well?
- What did not go well?
- What do we think the problems are?
Always send a follow up email thanking the interviewee for their time and insight and if it’s ok to keep them up to date as to the progress of the product. Their answer will give you a small indication if the solution resonates with them or if they are not interested.
Things to Avoid
Nobody likes to be made to feel stupid, unheard or uncomfortable in an interview. Here are some things to avoid when interviewing customers:
- Don’t ask questions that would make anyone feel awkward or uncomfortable
- Don’t give them your opinion
- Don’t defend the product or service
- A Product Manager should remove as much of their bias from the interview as possible
- Don’t force the conversation, simply guide it and allow it to flow
- Don’t answer any questions the interviewee may have. For example, if they ask “where do I find feature X?” respond by asking “where would you expect to find feature X?” This provides far greater insight into how the interviewee expects to use the product
- Don’t ask binary yes/no questions
- Don’t ask hypothetical questions
- Don’t ask questions that make the interviewee lie about something
List of Potential Interview Questions
Knowing where to start with an interview can be difficult sometimes, especially if you’ve never done it before. Below are a list of questions that will help you get the most out of interviews
- Which are the must solve rather than the nice to solve problems?
- If you have three major problems to solve in [insert length of time], what are they and why do they make the top three?
- How does your company evaluate new products (price, performance, features)?
- What is the biggest pain in how you work?
- If you could wave a magic wand and change anything about what you do, what would it be?
- How much does this problem cost you; revenue, lost customers, lost time, frustration, etc?
- How do you solve this today?
- Who else shares this problem?
- Are there other people in the same company that share the same problem?
- Are there others in the same industry that share the same problem?
- Are there others with the same job title that share the same problem?
- What conferences or trade shows do you attend?
- What blogs, journals, magazines do you read?
- Who is the best sales person you’ve ever seen?
- How do you hear about new ideas?
Building User Personas
A user persona is created by collecting metrics along with interviewing a large number of users, finding common behaviors and patterns amongst them and ordering their pains, needs, and jobs in order from most to least important. A user persona describes a typical customer for a specific customer segment. It is the aggregate of observed user behavior. Check out this blog “How To Create A User Persona” for more detail. Defining user personas allows a Product Manager to group similar types of people based off key criteria. Customers can be clearly defined based on what they do and do not like, what motivates them and their decision making process. A detailed user persona will have the “day in the life” of that customer type clearly mapped out. The user persona should have a name and brief description. It should included a quote that the user persona might say. This is to give the user persona more of a personality/identity. Working off the value proposition canvas, the user persona should include the pains, needs, and jobs that a user wants to get done. The information for each use persona should be kept relevant to the product or service that is being designed for them and updated when new information becomes available.
Based on this grouping, a Product Manager can more accurately segment their markets and target the right customer with the right products, services, and marketing messages. Below are a list of demographic data that should be included in user personas.
- Are they rural or urban?
- Are they l, m, s cities?
- Which country are they in?
- What is the climate?
- What is the internet speed and connectivity?
- Marital status?
- Personality traits; introverts, extroverts?
- Interests, likes, dislikes?
Questions To Ask To Complete A User Persona
The better you know your customer you will be able to solve their problem better than your competition. You’ll be able to reduce your Customer Acquisition Cost because your targeting and messaging will be more accurate and through the right channels. You’ll increase the Lifetime Value of your customer because you’ll be consistently solving their pains, providing their gains. You’re business model and pricing structure will be more stable because you’ll understand the buying habits price sensitivities of your customers. Below is a list of questions to ask to help you get to know your customers better:
- What are their hobbies?
- What problems are they looking to solve?
- What are they doing when they try to solve their problem?
- What needs are they trying to have met?
- What jobs are they trying to get done?
- How much of a problem/need is the job that needs to get done?
- How frequently are they trying to get the jobs done and what is the context?
- What are the common tasks they perform each day?
- What does the day in the life of a user persona look like?
- What are the emotional triggers for your persona?
- Are the user personas customers or users?
- Where on the technology adoption curve does the persona sit?
- How can you better empathize with your customer/users?
- What is the user path for them to acquire an organization’s product or service?
- What would increase the likelihood of them adopting your product?
- What additional user personas are involved in the purchasing process?
- What are the barriers keeping you from adopting our product?
- How do you reach them with marketing and what are the “buttons to push” when you do market to them? How does an organization get a customer to purchase from them as opposed to a competitor?
- How do customer actually use an organization’s product or service as opposed to how an organization thinks their customer uses their product or service. These are often two different things
Value Proposition Design
A unique value proposition should be created for each customer segment. The value proposition should focus on one or combination of the top three unresolved pains, needs, or jobs to get done. It should be difficult to copy and allow an organization to outperform and differentiate itself from its competition. When your customer reads it they should think “wow, this is exactly what I’ve been looking for.” A template for a value proposition could look something like this:
Our Company help(s) [customer segment]who want to [jobs to be done]by [verb]and [verb]unlike [competing value proposition].
Customer Development and customer interviews are something not many businesses think about or actually do. It’s a time consuming and sometimes challenging practice to undertake. At times it will lead to frustration, unclear data or confusing conversations. But, if done well and consistently, it will be a business’ super power. It will allow them to see further, see things no one else can see, hear things no one else has heard before and take action to do things their competition is not doing and constantly outperform and out execute them every step of the way.
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