Content
- What is customer development?
- Why is customer development needed?
- How is customer development conducted?
- Conclusion
What is customer development?
Customer development, abbreviated as custdev, is a method that begins with researching the needs of potential or existing customers, and then bases decision-making on this. Originally, this term described the process of startup development focused on the needs of the audience and the market. In a modern context, it is often reduced to in-depth interviews, making it a specific tool in marketing. In any interpretation, the essence remains unchanged—making decisions based on customer needs.
Custdev is used to test hypotheses and assess the feasibility of investing in a new business or modernizing an existing product. Typically, this involves personal interviews with representatives of the target audience, during which it is determined how necessary the new development is and whether it can solve existing customer issues. If the answer is negative, a decision is made to adjust the idea or, in rare cases, to change the target audience. This process continues until an optimal solution is found that meets the needs of the audience or a specific market segment.
Why is customer development needed?
Custdev can be applied to any product or feature that is used or will be used by customers. The method is most often used in two key scenarios:
- Launching a new product: Custdev helps to determine in advance whether the new project will have potential customers. Even if a manager believes the product has potential, this is not always confirmed by the opinions of the target audience. For example, to successfully open the Jolly Wine and Food restaurant in Rostov-on-Don, several rounds of interviews were needed, and the concept was adjusted based on the data obtained.
- Implementing updates: Custdev helps save time and resources on updates, whether it's a small feature in an app or a complete rebranding of a company. Product managers and other specialists responsible for product development constantly monitor the relevance of the product and identify existing and potential problems.
For example, GetCoach noticed that users often submit requests for services but refuse to pay. Instead of trying to solve the problem independently, they conducted a series of custdevs which revealed that customers submit requests based on emotions and then become more rational. This insight helped them realize that customers lacked an instant payment feature.
How is customer development conducted?
The process of conducting custdev includes several stages:
- Formulating hypotheses: The idea of a new business or feature is broken down into several hypotheses for testing.
- Selecting audience segments: Usually, a narrow segment is chosen based on persona methods or the "Jobs to be done" (JTBD) concept.
- Finding respondents: To conduct custdev, at least ten respondents need to be found, which can be done through thematic groups on social media or in places where the target audience spends time.
- Conducting interviews: Interviewers ask questions to identify common pain points and gather insights. The questions should be the same for all respondents.
- Adjusting hypotheses: If a hypothesis is not confirmed, another audience is chosen, or the proposal itself is refined.
- Prototyping: This stage is not mandatory, but it is useful when developing costly solutions. Prototypes can be tested on respondents who have already been interviewed.
- Making a decision: After all adjustments, a decision is made about the implementation of the project or its rejection, based on the information obtained.
For instance, owners of a fitness club may conduct custdev to understand how interested their target audience is in new offerings, and what changes are really needed. After a series of interviews, it may be revealed that customers prefer to work out at home rather than in the gym, which could lead to the creation of new online programs.
Conclusion
Custdev is an important tool for businesses that helps make informed decisions based on the real needs of customers. It not only identifies problems and opportunities but also adapts offerings to meet the expectations of the target audience. Proper application of custdev can significantly increase the chances of success for a new product or update, providing a deeper understanding of customer needs and preferences.