When I coach, I am often asked, “do you think this is a good idea?”. My answer is always the same, “Does my opinion matter?”. It does not. Only your clients can tell you whether something is a good or bad idea. The process of customer discovery – to figure out what your clients need and value – has proven to be invaluable for startups. How do you engage in customer discovery as a mature company?
Customer discovery for startups
Customer discovery has been made big by Steve Blank, as the fundamental building block of the lean startup methodology. Before jumping to conclusions about the solution they are going to bring to market, I-Corps startups are to ask at least 100 customers about their needs.
As an I-Corps mentor, I have seen the value of this approach. Even recently, for a startup with a seemingly brilliant idea for an online ordering solution for food trucks. After several customer interviews, it became clear that food trucks rely on foot traffic, not the web, for their customer base. Since none of the food trucks gave them even the slightest hint that they were interested in strengthening their online presence, they pivoted to more fertile grounds.
Customer discovery for mature companies
How do you apply this concept of 100 interviews with potential clients to mature companies? Especially in the B-to-B market were you have only a few loyal clients that you know well?
There is still value in introducing the concept of customer discovery to mature companies, yet the approach needs some adaptation.
Let’s use another example. Zebra Inc. (not the real company name), wanted to move from being a fee for service software solution provider, to a subscription-based provider of cloud-based solutions. From a company perspective, this shift meant a significant disruption to their business model. They thought they had it all figured out. Zebra Inc. was already busy re-training their employees. Their software developers had to become well-versed in cloud-based technologies, know how to maintain this software, and be able to deliver online customer support.
However, they never had asked their clients how they thought about this transition. They assumed their clients would be happy, since they would no longer face high upfront costs. In addition, with monthly subscriptions, their software would always be up to date. Who does not want that?
They could not have been more wrong. It soon became clear their clients were not happy at all with the new offering. One client had just spent over $1 million on developing the new software and training for their back office. Implementation of the Zebra inc solution had taken 6 months just to get the project approval and another year to get it fully functional. Now that they were done, Zebra inc. came to tell them that this was all for nothing? No way!
What can we learn from this story:
A: It pays off to engage in customer discovery
Before embarking on a new service development story, it pays off to invest in customer discovery as a mature company as well. You may know your clients really well. However, they may see the world differently than you do. They may see disadvantages where you see advantages. Or you may find out that your clients use your services for different purposes than you intended. Hence, don’t assume you know, ask!
Lesson 1: Customer discovery pays off, even if you know your clients well. Your customer has a different view of the world than you have.
B: Don’t sell. Listen to your clients
Don’t go to your client and sell them about your new solution. That is not how customer discovery works. Moreover, you will find many closed doors, as nobody likes to listen to salespeople.
If you engage in customer discovery, don’t sell your solution. Focus on listening to your clients. What are their needs, what are their challenges, what do they like about your current services? In the story above the client probably would have been less upset, if Zebra inc. had asked them about the pros and cons of the recently-developed software, instead of offering them their new cloud-based solution.
That way, the client may have informed Zebra inc. that maintaining the system and training their staff is challenging. Instantaneous updates would make it even more difficult to keep everyone up to date.
Take the listen to hart. Don’t promise the customer to solve all their problems, as you simply cannot. You will end up being pulled in all directions and making promises you cannot keep. For example in the situation above, based on this conversation, Zebra inc. may be inclined to start offering training services. Before pivoting to a solution like that, Zebra inc should ask their other clients first. Check if they have similar needs. It will also be worth asking if their clients trust Zebra inc. with providing such training services.
Lesson 2: Customer discovery pays off, if you listen to your clients and let them tell you about their challenges.
C: Today’s customer base may not be your target audience
In the case of Zebra inc., their most recent customers are probably not the best target audience for their new cloud-based solutions.
Therefore, don’t only interview your current customer base during your customer discovery. Also ask non-clients. Why haven’t they bought from you yet?
Again, don’t present them with the solution, that is engaging in sales not customer discovery. Ask these non-clients also about their challenges and needs. In addition, ask them what they currently do to address their problems.
Lesson 3: Customer discovery is not only about your current customer base. Ask all potential customers about their problems, challenges and needs. Include clients you currently don’t serve.
D: Quality over quantity
Depending on your line of business, 100 interviews may or may not be realistic. Moreover, because you are a mature company, you already know many of the things startups typically need to figure out through customer discovery interviews. For example, you have probably already figured out the ecosystem your clients operate in, whom the best point of contact is, etc.. In other words, you can be much more targeted when you gather information during the customer discovery process.
Some firms just have one client, for instance, the government. In that case, ask if you can interview people within the various branches, divisions, or units that are faced with the problem you plan to address or that are using your current solution.
Lesson 4: Do as many customer discovery interviews as are useful. If you start hearing the same stories over and over, you know you have done sufficient interviews.
E: Don’t worry about sharing confidential information
One question that often arises is, “how do we protect our intellectual property during the customer discovery process”? Inventors typically feel very uncomfortable sharing their ideas and other information deemed confidential.
When engaging appropriately in customer discovery, sharing your ideas or confidential information should not be an issue at all. They simply should not be discussed! During the interviews, the focus is solely on the needs and challenges of your clients, not your solution. Let alone the details of your solution.
Lesson 5: Sharing confidential information should not be a concern, as the focus during the interviews is at the clients needs and problems, not your ideas or the details of your potential solution.
F: Visit in person
Another question that frequently arises is, “can I not just simply send a questionnaire to our clients”? No, you cannot.
Questionnaires typically ask closed questions. That is, they ask whether the client prefers a,b,c, or d. These types of questions make it difficult for clients to express that neither a,b,c, or d are truly relevant to them. It forces them to think about a,b,c, and d, while for instance 0.0006, 20, and 3005, are more interesting and valuable avenues to explore.
If you ask clients to invest their time in your customer discovery, be polite and generously offer your time too. Visit the client in their habitat. You are likely to discover a lot more than you set out for. In my experience, clients are delighted that you take the time to listen to their stories and learn how they use your solutions. Trust me, during a personal visit, you will hear to good, the bad, and the ugly. By visiting your clients in person, customer discovery becomes an invaluable experience that is absolutely worth your time.
Lesson 6: Interview clients in person on their premises, it is worth the time investment.
The customer discovery process
By sharing some of the lessons learned from customer discovery in mature companies from the teams I have coached, I hope you are able to also turn it into an invaluable tool for your firm.
Let me know how it goes!
Dr. Floortje Blindenbach-Driessen