What are Examples of Customer Development?
Customer Development consists of asking potential customers open-ended questions and presenting them with hypothetical solutions to evaluate just how on or off-target they might be. It is not a sales pitch or a way to nurture leads; it is 100% information gathering, discovery, and confirmation of assumptions.
1. Dropbox
- Dropbox remains a wildly popular product and one of Silicon Valley’s most outstanding achievements. However, this achievement did not come without difficulty.
- Despite having a strong engineering team, Dropbox lacked experience in marketing, which led to them overspending on a variety of marketing platforms. They used to spend hundreds of dollars acquiring new customers for a product that only cost $99 to make.
- Then Dropbox gave up on conventional marketing strategies and started concentrating on customer development. They shifted their focus to working with their clients, and this allowed them to effectively deploy word-of-mouth marketing.
2. Groove
- Groove is an online support desk solution for companies. At first, Groove was a profitable subscription business.
- Groove could bring in new business, but they struggled to hold onto their existing clientele. Their 3 percent attrition rate was excessive, and they were unable to identify the reason even using remote customer surveys.
- Groove made the decision to reconsider its approach after discovering consumer development. They took extra time to get to know their clients and present Groove to them.
- Groove was able to solidify its place in the market with the aid of this innovative tactic. Additionally, they gave Groove users a more tailored experience and focused on SMBs.
- These small changes drastically lowered its rate of attrition.
3. Buffer
- Despite having a large number of paying clients, Buffer found that many of their customers’ decisions to buy and use their solutions were still unclear to them. Nowadays, they use a social media network to speed up the process in addition to running every theory and assumption through the Customer Development process to validate it.
- Buffer merely calls on consumers within a specific market or feature set to join a virtual call and offer feedback. This allows them to get same-day feedback on customer development while saving time managing large contact lists and scheduling interviews.
What is Customer Development in Product Management?
Customer development is a way to learn about your customers and find out if the product you make meets their needs. Customer Development is part of the Lean Startup process that focuses on problem understanding. This requires thoroughly screening the prospect and confirming that the suggested remedy would satisfy client demands. Typical product development methods start with the ideal solution in mind and proceed straight into execution; this is not the case with customer development.