Customer discovery is an essential process of understanding what customers need and what their pain points are. It defines and prioritises customer characteristics. You can implement this process in new and big companies. Customer discovery is useful when developing new products, or entering new markets.
In another word, it’s a process to question your core business hypotheses. Typically, the business idea occurs with assumptions about the customer, the problem, and the solution. When your assumptions are wrong, then the business is on the rocks. On the other hand, if you have correct assumptions, the investment will be in the right product, and you won’t struggle with reaching out to the right audience.
The entire customer journey depends on discovery. There are common ways to discover your customers, such as interviewing, ethnography and journey mapping.
Highlights of Customer Discovery
- It starts with understanding the pain points of customers. That is, understand the issue you want to solve. Each discovery has objectives, yet many business owners are likely to make mistakes. For instance, when you come up with an unmet need, don’t jump to the solution phase before validating the need. The need you think is unmet might not be so!
- Make sure that the problem is worth solving. Finding a problem and a solution doesn’t always work perfectly. Many start-ups fail because their solutions aren’t needed in the market.
- Identify and prioritise your customer characteristics. When you do so, you can understand the situation and the needs of your customers, as well as their emotions and motivations. The most frequent characteristics are buyers and users.
Check out Harvard Business School’s brochure to understand the basics of customer discovery.
Why Should You Care About Customer Discovery?
Customer discovery allows you to see if your business will fail or not. As said before, many early-stage start-ups fail because of no market need. Let’s assume you came up with an amazing idea, but you don’t know whether it’ll work out. That’s when customer discovery steps in.
Before launching a product, discovering what’s required in the market is imperative. After all, you don’t want to end up with a bunch of products that nobody wants to buy. In other words, customer discovery helps you with proper market research to observe the needs of customers.
You will invest in the right product once you know your customers. Thus, your chances of failing will be lower. If you’re a small start-up owner, you don’t want to ignore this benefit.
Another advantage is you can detect necessary changes before launching your product. You can test the product with customer discovery to see if there’s a problem with it. It’s very suitable for start-up companies.
What Are the 4 Phases of Customer Discovery?
Write Down Your Hypotheses
When you start the process of customer discovery, it’s better to keep a written record of your assumptions, since you will get back to them quite often. These assumptions should be testable. Based on the evidence, you should be able to prove them right or wrong. Moreover, make sure that your hypotheses are specific. They should include who, what, and when.
There are several types of hypotheses that you can come up with. A feasible hypothesis tells you whether you can do it. It involves scalability, main resources, main activities and main partners.
A desirable hypothesis refers to whether they want it. It’s based on everything related to customers. A viable hypothesis tells if you should do it. That is, it involves everything related to costs and revenue.
Don’t forget to include assumptions about your customer profile. Identify your types of customers and what and who influences them. Consider the potential problems they have. Try to see a day through their eyes.
When you’re done with your assumptions, it’s time to prioritise them. You can’t claim that all are very important, right? Try to pick the 3 most essential ones.
Test Your Hypotheses on Problems
The second step in customer discovery is to start testing your hypotheses. It enables you to get a deep insight into your customer profile. To start testing, you need a list of customer contacts. It’s advised to have at least 50 customers on the list.
You can collect your potential customers from social media, friends, colleagues, investors and so on. Don’t focus on one type of customer. The more types you’re engaged with, the deeper insight into the customers you gain.
When it’s time to meet your customers, it’s better to have a presentation about customer problems. It’s a clear way of showing your assumptions. Ideally, it should involve customer issues, current solutions to them, and the solution in your mind.
Don’t just try to validate your assumptions. Listen and understand which problems give the most trouble to customers.
Test Your Hypotheses on Your Product
After validating the problems comes validating the assumptions about your product. Once you can say that you found a problem that is worth solving, you’re ready to present your solution, a.k.a. your product.
In this phase, you’re going to make another presentation because you want to show your solution properly. It has two main goals: getting confirmation that your product solves the customer problem and that your product has the qualities that customers are expecting.
Once your solution is confirmed, you can move on to the second part of testing. It requires you to show all the findings to the entire company. These findings often show:
- Customers like the product, and there’s no need for a change,
- The product is confirmed by customers, but one more feature is expected,
- Customers get the idea behind it, but they don’t tend to use the solution,
- The need for the solution isn’t clear.
As understood, the first two points open the way to the next phase. If your test results mostly involve the first two, move forward. If not, then you need more validation and testing.
The last phase of customer discovery requires verifying everything. It involves summarising and overviewing customer problems and confirming your product and business plan. Assuming everything is well as planned, you can say that you found a problem worth solving, a product as a solution, and your data proves that it can be profitable. This phase seems less complicated, but you need to go through each phase if you find out you miss something here.
The Bottom Line
As discussed above, customer discovery is an initial step in your business to get to know your potential customers. You can implement this process in different stages of a business, although it’s recommended in the early stages.
All you need to do is make assumptions about possible problems and solutions, and present them to get validated. Once you’ve passed all the tests, congratulations on your new product!