Tag: Customer outcome

Going Beyond Demographics: The Advantages of Behavioral Segmentation in Customer Discovery

Shashank

Using Behavioral Segmentation Based on the Solutions Users Use to Accomplish Their Intended Outcome to Understand their challenges and pain points with regard to the Solutions they Use currently and also with regard to other options available to them currently for a customer discovery of a new product idea

When developing a new product, it’s essential to understand your customers’ needs and pain points. This is where customer discovery comes in. Customer discovery is the process of talking to potential customers to learn about their challenges, pain points, and what they need from a product. By understanding your customers’ needs, you can create a product that solves their problems and meets their needs.

Traditionally, businesses have relied on demographic and psychographic segmentation to understand their customers. Demographic segmentation divides customers based on characteristics such as age, gender, income, education, and occupation. Psychographic segmentation, on the other hand, divides customers based on their attitudes, values, interests, and personality traits.

While demographic and psychographic segmentation can be helpful in understanding your customers, they have limitations. These segmentation methods assume that people with similar demographics or psychographics have similar needs and challenges. However, this is not always the case, especially when it comes to developing a new product.

Behavioral segmentation is an alternative approach that is gaining popularity in customer discovery. Behavioral segmentation divides customers based on the actions they take and the solutions they use to accomplish their intended outcome. This approach is particularly useful when developing a new product because it focuses on customers’ actual behavior and the solutions they currently use to accomplish their intended outcome.

Using behavioral segmentation based on the solutions users use to accomplish their intended outcome, you can identify four segments of potential customers: users using direct competing products, users using indirect competing products, users using substitute competing products, and users who do not use any of the existing solutions to accomplish their intended outcome.

Users using direct competing products are those who use a product that directly competes with the product you are developing. For example, if you are developing a ride-sharing app, users who currently use Uber or Lyft would fall into this segment.

Users using indirect competing products are those who use a product that indirectly competes with the product you are developing. For example, if you are developing a meal delivery service, users who currently use a grocery delivery service may fall into this segment.

Users using substitute competing products are those who use a product that solves the same problem but in a different way. For example, if you are developing a home security system, users who currently use a guard dog for security may fall into this segment.

Users who do not use any of the existing solutions to accomplish their intended outcome are those who do not currently use any solution to solve the problem you are addressing. For example, if you are developing a mindfulness app, users who do not currently practice mindfulness may fall into this segment.

By understanding these four segments, you can gain insights into your potential customers’ behavior and the solutions they currently use to accomplish their intended outcome. This information can help you identify your target market and develop a product that meets their needs.

Using behavioral segmentation also allows you to understand your potential customers’ pain points and challenges with the solutions they currently use. By conducting customer discovery interviews with each segment, you can gain insights into the strengths and weaknesses of existing solutions and the opportunities for improvement. This can help you create a product that addresses the pain points and challenges of each segment.

Another benefit of using behavioral segmentation in customer discovery is that it allows you to identify potential customers who are not currently using any solution to accomplish their intended outcome. These customers may be an untapped market, and understanding their needs and challenges can help you develop a product that meets their needs and solves their problems.

Are you tired of relying solely on demographic data to understand your target customers? It’s time to take your segmentation game to the next level with behavioral segmentation. By downloading our free ebook “Discovering Your Target Customer: A Behavioral Segmentation Playbook,” you can unlock the key to understanding your customers’ behavior and motivations. Say goodbye to one-dimensional demographics and hello to a deeper understanding of your customers’ needs and desires.

Why Articulating the “Customer Outcome” is Crucial for Using Behavioral Segmentation in Customer Discovery

Shashank

In customer discovery, understanding the customer is a crucial step in creating a successful product or service. One approach to gaining this understanding is behavioral segmentation based on the solutions users use to accomplish their intended outcome. However, before diving into this approach, it’s essential to articulate the job to be accomplished or the customer outcome. By connecting the customer outcome to the fact that some solution would be at use and finding gaps in satisfaction level of that existing solution and reasons for the gap, one can better understand the customer’s needs and how to serve them.

What is the Job to Be Accomplished or Customer Outcome?

Before diving into why it is crucial to articulate the job to be accomplished or the customer outcome, it’s important to understand what these terms mean.

A job to be accomplished refers to the underlying goal that a customer is trying to achieve when they use a product or service. It’s not about the product or service itself but rather the desired outcome that the customer is seeking. For example, a job to be accomplished for a customer could be to reduce stress or to save time.

A customer outcome, on the other hand, refers to the specific results or benefits that a customer expects to receive from using a product or service. It’s the measurable outcome that a customer seeks. For example, a customer outcome for a fitness app could be to lose 10 pounds in 3 months.

Why is Articulating the Job to Be Accomplished or Customer Outcome Important?

It Helps Identify the Right Target Customer Segment

Articulating the job to be accomplished or customer outcome helps identify the right target customer segment. By understanding the underlying goals or desired outcomes of a customer, businesses can create products or services that cater to those needs. For example, if the job to be accomplished is to reduce stress, the target customer segment could be people who work long hours or have high-stress jobs.

It Enables the Business to Focus on the Customer’s Needs

By articulating the job to be accomplished or customer outcome, businesses can focus on the customer’s needs rather than their own. This enables businesses to create products or services that cater to the customer’s needs rather than just their own business goals. For example, a fitness app could focus on helping customers achieve their fitness goals rather than just making money from the app.

It Helps Identify Existing Solutions and Gaps in Satisfaction Level

Articulating the job to be accomplished or customer outcome can help identify existing solutions and gaps in satisfaction level. By understanding what the customer is trying to achieve, businesses can identify existing solutions that customers use to accomplish their desired outcome. They can then evaluate the satisfaction level of customers using these solutions and find gaps in the market that they can fill. For example, a business might identify that customers are using fitness apps but are dissatisfied with the level of personalized coaching.

It Guides Product Development

Articulating the job to be accomplished or customer outcome helps guide product development. By understanding what the customer is trying to achieve, businesses can create products or services that cater to those needs. They can then evaluate the satisfaction level of customers using these products or services and make improvements to meet customer expectations. For example, a fitness app could develop personalized coaching features to meet the needs of customers who want more personalized guidance.

Using Behavioral Segmentation Based on the Solutions Users Use to Accomplish Their Intended Outcome to Understand Customer Needs

Once the job to be accomplished or customer outcome has been articulated, using behavioral segmentation based on the solutions users use to accomplish their intended outcome can help businesses understand customer needs. This approach involves segmenting customers based on the solutions they use to accomplish their desired outcome. For example,

For example, let’s say a company is developing a new software tool for project management. Before conducting behavioral segmentation research, they should first articulate the job to be accomplished or the customer outcome that the tool will help achieve. This could be something like “streamlining project management processes” or “increasing team productivity.”

Once they have identified the customer outcome, the company can then use behavioral segmentation research to understand how their target customers currently achieve this outcome. They may find that some customers are already using direct competing products, while others are using indirect competing products or substitute competing products. There may also be a segment of customers who do not currently use any existing solutions to accomplish their intended outcome.

Through behavioral segmentation research, the company can dig deeper into each segment to understand their challenges and pain points with regard to the solutions they use currently and also with regard to other options available to them currently. This information can help the company identify gaps in satisfaction levels with existing solutions and the reasons for those gaps.

By connecting the customer outcome to the fact that some solution would be at use and finding gaps in satisfaction levels of that existing solution, the company can gain insights into what features and functionality their new tool should offer to better meet the needs of their target customers. For example, they may find that customers using indirect competing products are frustrated with the lack of integration between different tools they use, which could inform the development of a more seamless and integrated project management solution.

Ultimately, articulating the job to be accomplished or the customer outcome before conducting behavioral segmentation research helps ensure that the research is focused on the right areas and that the insights gained are directly relevant to the company’s product development goals. Without this focus, behavioral segmentation research may yield interesting insights, but they may not be actionable or relevant to the company’s specific needs.

If you’re looking to take your marketing efforts to the next level, understanding behavioral segmentation is crucial. By downloading our free ebook “Discovering Your Target Customer: A Behavioral Segmentation Playbook“, you’ll gain valuable insights and strategies for targeting your audience more effectively.

Why Minimum Viable Products (MVPs) often Fail

Shashank

Minimum Viable Products (MVPs) can often fail when they don’t take into account the desired customer outcome, including the customer goal, appropriate experience, and pain point it solves.

One common mistake that leads to MVP failure is focusing too much on the product itself and not enough on the customer’s needs and desired outcome. An MVP that is built solely based on the product’s features and functions without considering how it addresses the customer’s goals and pain points is unlikely to be successful.

Another mistake is not properly testing the MVP with target customers. An MVP that is not validated by the target customers may fail to address their desired outcomes and pain points, leading to low adoption rates and low customer satisfaction.

A third mistake is not incorporating the appropriate experience into the MVP. The customer’s experience with the product is just as important as the product itself. An MVP that is difficult to use or does not provide a positive customer experience will fail to meet the desired outcome, regardless of how well it addresses the customer’s goals and pain points.

Finally, MVPs can fail when they don’t properly address the customer’s pain points. If the MVP does not solve a significant pain point for the customer, they may not see the value in using the product, leading to low adoption rates and high churn rates.

To avoid these pitfalls, startups should focus on understanding their target customers’ desired outcomes and pain points, and build MVPs that address those needs while incorporating the appropriate experience. Testing and validating the MVP with target customers can help ensure that the product meets their desired outcome and provides value. By taking a customer-centric approach to building MVPs, startups can increase their chances of success and achieve early traction in the market.

Here are 5 examples of real-world companies that failed to meet their target customer goals with their minimum viable products:

  1. Color Labs: Color Labs was a social networking app that aimed to bring together photos, videos, and text from various social media platforms in one place. However, it failed to meet the target customer goal of providing a user-friendly interface, leading to poor user engagement and ultimately the failure of the app.
  2. Juicero: Juicero was a startup that created a juicing machine that used pre-packaged juice packets. However, the product failed to meet the target customer goal of convenience, as the machine required a Wi-Fi connection to function and the juice packets were found to be easily squeezed by hand, making the machine unnecessary.
  3. Homejoy: Homejoy was a startup that provided on-demand cleaning and home services. Despite raising over $40 million in funding, the company failed to meet the target customer goal of quality, as customers complained about poor service and inconsistent results.
  4. Kano: Kano was a startup that created DIY computer kits aimed at children. The company failed to meet the target customer goal of ease of use, as the kits were found to be overly complicated and difficult to assemble.
  5. Tilt: Tilt was a social payment app that aimed to make it easy for groups to collect and track money. However, the product failed to meet the target customer goal of security, as the app was found to have vulnerabilities that could be exploited by hackers.

And, here are five real-world examples of MVPs that failed to provide an appropriate experience for the target customer:

  1. Juicero: Juicero was a startup that produced a juicing machine that was supposed to revolutionize the way people made juice at home. However, the machine was extremely expensive, and the juice packs that were required to use it were also very costly. In addition, customers found that they could get the same quality of juice by simply squeezing the juice packs by hand, without the need for the expensive machine.
  2. Color Genomics: Color Genomics was a startup that offered genetic testing services to customers. The company’s MVP was a kit that customers could use to collect a saliva sample, which was then sent to the company for analysis. However, customers reported that the process of collecting the sample was difficult and uncomfortable, leading to a poor user experience.
  3. Teforia: Teforia was a startup that produced a high-end tea-brewing machine. However, the machine was very expensive, and customers found that they could get the same quality of tea by simply brewing it in a traditional tea pot. In addition, the machine was difficult to clean, which also detracted from the user experience.
  4. Lily Robotics: Lily Robotics was a startup that produced a drone that was designed to follow its owner around and capture video footage. However, the company’s MVP was plagued by technical issues, and customers reported that the drone was difficult to control and prone to crashing. In addition, the price of the drone was very high, which made it difficult for many potential customers to justify the cost.
  5. Leap Motion: Leap Motion was a startup that produced a device that allowed users to control their computers with hand gestures. However, customers found that the device was not very accurate, and the user experience was frustrating. In addition, the device required special software to be installed on the user’s computer, which made it difficult to use for many potential customers.

Finally, here are 5 examples of real-world startups whose MVPs failed to address the target customer pain points:

  1. Juicero: Juicero was a startup that created a $400 juicer that required proprietary juice packets. However, the company failed to recognize that customers were more interested in convenience and affordability, rather than expensive, high-tech juicing machines. The company ultimately shut down in 2017.
  2. Dinner Lab: Dinner Lab was a startup that aimed to revolutionize the dining experience by hosting pop-up dinners in unique locations. However, the company failed to recognize that customers were more interested in consistent, high-quality food and service rather than unique locations. The company filed for bankruptcy in 2016.
  3. Tilt: Tilt was a startup that aimed to make group payments easier by allowing users to pool money for events or gifts. However, the company failed to recognize that customers were more interested in security and privacy of their financial information. The company was acquired by Airbnb in 2017.
  4. Secret: Secret was a startup that created an anonymous messaging app where users could share secrets with their contacts. However, the company failed to recognize that customers were more interested in positive and supportive social interactions rather than anonymous gossip. The company shut down in 2015.
  5. Yik Yak: Yik Yak was a startup that created an anonymous social media app for college students. However, the company failed to recognize that customers were more interested in positive social interactions and community building, rather than anonymous posting. The company shut down in 2017.

Knowing Your Customer’s Desired Outcome Can Boost Your Traction

Shashank

As an early-stage startup, one of the most important things you can do to achieve traction and growth is to understand your customer’s desired outcome. When you know what your customers want to achieve with your product or service, you can create a better user experience and offer more value to your customers. This, in turn, can lead to increased engagement, retention, and growth for your startup.

In this article, we will discuss why understanding your customer’s desired outcome is crucial for early traction and how you can go about learning what your customers want to achieve with your product or service.

Why Understanding Your Customer’s Desired Outcome is Crucial for Early Traction

Understanding your customer’s desired outcome is crucial for early traction for several reasons:

  1. Better Product-Market Fit: When you understand your customer’s desired outcome, you can create a product or service that better meets their needs. This can lead to a better product-market fit, which is essential for achieving traction and growth.
  2. Increased Engagement: When you create a product or service that meets your customer’s desired outcome, they are more likely to engage with your product or service. This can lead to increased usage and engagement, which can help drive early traction.
  3. Improved Retention: When you understand your customer’s desired outcome, you can create a product or service that provides more value to them. This can lead to improved retention, as your customers are more likely to stick with your product or service if they feel it helps them achieve their desired outcome.
  4. Positive Word-of-Mouth: When your customers achieve their desired outcome with your product or service, they are more likely to recommend it to others. This can lead to positive word-of-mouth, which can help drive early traction and growth.

Understanding the two parts of the customer’s desired outcome, namely the customer goal and appropriate experience, is essential in creating a product or service that meets their needs and expectations.

The customer goal is the desired end result that the customer wants to achieve by using a product or service. It is the reason why they are using the product or service in the first place. For example, if the customer is looking for a fitness app, their goal could be to lose weight, improve their overall health, or prepare for a competition.

The appropriate experience, on the other hand, is the way the customer wants to achieve their goal. It includes factors such as ease of use, speed, reliability, personalization, and aesthetics. For example, a fitness app may have various features that help the user track their progress, but if it’s difficult to navigate or has a slow loading time, the user may become frustrated and discontinue using the app.

By understanding the customer goal and appropriate experience, a business can tailor its product or service to meet those specific needs. This can lead to greater customer satisfaction, increased retention, and ultimately, higher revenue.

It is also important to note that the customer goal and appropriate experience may change over time. As a business evolves, so do the needs and expectations of its customers. Therefore, ongoing research and analysis of customer feedback is crucial in adapting to these changes and continuing to provide a product or service that meets the desired outcome.

How to Understand Your Customer’s Desired Outcome

So, how can you go about understanding your customer’s desired outcome? Here are a few ways:

  1. Customer Surveys: One of the easiest ways to understand your customer’s desired outcome is to ask them directly. You can use customer surveys to ask your customers what they are trying to achieve with your product or service, and what their goals and objectives are.
  2. Customer Interviews: Another way to understand your customer’s desired outcome is to conduct customer interviews. This allows you to have a more in-depth conversation with your customers and get a better understanding of their needs, goals, and objectives.
  3. User Testing: User testing can also be a great way to understand your customer’s desired outcome. By watching how your customers use your product or service, you can gain insights into what they are trying to achieve and what their pain points are.
  4. Analytics: Analytics can also provide insights into your customer’s desired outcome. By tracking user behavior and engagement, you can gain insights into what your customers are trying to achieve with your product or service.
  5. Social Listening: Social listening is another way to understand your customer’s desired outcome. By monitoring social media and online forums, you can gain insights into what your customers are saying about your product or service and what they are trying to achieve with it.

Putting Your Customer’s Desired Outcome into Action

Knowing your customer’s desired outcome is just the first step. You also need to put that knowledge into action in order to create a product or service that meets their needs and helps them achieve their goals. Here are some key steps you can take to put your customer’s desired outcome into action:

  1. Create a value proposition: A value proposition is a statement that explains what your product or service does, who it’s for, and why it’s better than other alternatives. It’s important to create a value proposition that speaks to your customer’s desired outcome. For example, if your customer’s desired outcome is to improve their productivity, your value proposition might focus on how your product can help them get more done in less time.
  2. Use customer feedback to inform product development: Your customers are the best source of information on what they want and need from your product. Use customer feedback to inform your product development process and ensure that you’re building a product that meets their needs.
  3. Conduct user testing: User testing involves having real users interact with your product and provide feedback. This is a great way to see if your product is meeting your customer’s desired outcome and identify areas for improvement.
  4. Focus on the user experience: The user experience is how your customers interact with your product or service. It’s important to focus on creating a positive user experience that helps your customers achieve their desired outcome. This might involve simplifying the user interface, streamlining the onboarding process, or providing helpful resources and tutorials.
  5. Measure success based on customer outcomes: In order to determine if your product is meeting your customer’s desired outcome, you need to measure success based on their outcomes, not just your own metrics. For example, if your customer’s desired outcome is to improve their fitness, your success metric might be the number of pounds they’ve lost or the number of workouts they’ve completed.
  6. Iterate and improve: The process of putting your customer’s desired outcome into action is an ongoing one. You need to continually iterate and improve your product or service based on customer feedback and outcomes. This might involve adding new features, improving the user experience, or changing your value proposition based on new insights.

Overall, putting your customer’s desired outcome into action is key to creating a successful product or service. By focusing on your customer’s needs and goals, you can create a product that truly meets their needs and helps them achieve their desired outcome.

Here are 10 examples of real startups that leveraged their customer’s desired outcome to boost early traction:

  1. Airbnb – By understanding that their customers’ desired outcome was not just to have a place to stay, but to have a unique and authentic experience while traveling, Airbnb was able to create a platform that connects travelers with local hosts who offer personalized experiences.
  2. HubSpot – HubSpot recognized that their customers’ desired outcome was to attract and convert more leads into customers. With this in mind, they created a suite of inbound marketing tools that help businesses optimize their online presence to attract more leads and turn them into customers.
  3. Dropbox – Dropbox recognized that their customers’ desired outcome was to have a secure and easy-to-use file sharing and storage platform. By creating a simple and intuitive platform that seamlessly integrates with other tools, Dropbox was able to gain a significant market share in the file sharing and storage space.
  4. Headspace – Headspace understood that their customers’ desired outcome was to improve their mental health and wellbeing. By creating a meditation and mindfulness app that is easy to use and personalized to each user, Headspace was able to gain a large and dedicated user base.
  5. Hootsuite – Hootsuite recognized that their customers’ desired outcome was to efficiently manage their social media presence. By creating a platform that allows businesses to manage multiple social media accounts from one place, Hootsuite was able to become a go-to solution for social media management.
  6. Casper – Casper understood that their customers’ desired outcome was to have a comfortable and restful sleep. By creating a high-quality mattress that is designed to provide optimal comfort and support, Casper was able to disrupt the traditional mattress industry and gain a significant market share.
  7. Slack – Slack recognized that their customers’ desired outcome was to have a seamless and efficient communication platform for their teams. By creating a messaging app that integrates with other productivity tools and allows for easy collaboration, Slack was able to become a leading team communication platform.
  8. Peloton – Peloton understood that their customers’ desired outcome was to have a convenient and engaging way to exercise at home. By creating a high-tech exercise bike that allows users to participate in live and on-demand classes, Peloton was able to become a highly sought-after fitness brand.
  9. Warby Parker – Warby Parker recognized that their customers’ desired outcome was to have affordable and stylish eyewear. By creating a direct-to-consumer model that eliminates markups and offering a wide range of stylish frames, Warby Parker was able to disrupt the traditional eyewear industry.
  10. Uber – Uber understood that their customers’ desired outcome was to have a convenient and affordable way to get around. By creating a ride-sharing platform that connects drivers with riders and offers competitive pricing, Uber was able to transform the transportation industry.

The mix-up between Knowing Your Customer’s Desired Outcome and customer pain point can occur because they are related but distinct concepts. While customer pain points refer to the problems, challenges, or frustrations that customers face, the desired outcome refers to the results, benefits, or solutions that customers are looking to achieve.

One reason for the mix-up could be that addressing customer pain points is often a way to help customers achieve their desired outcomes. For example, a customer may have a pain point of not being able to effectively manage their time, and their desired outcome is to be more productive. A product or service that helps them manage their time more effectively would address their pain point and help them achieve their desired outcome.

Another reason for the mix-up could be that some startups may focus too much on the customer pain points without understanding the desired outcome. They may be so focused on solving the immediate problem that they overlook the larger goal or objective the customer is trying to achieve. This can lead to a product or service that addresses the pain point but does not ultimately meet the customer’s desired outcome.

Therefore, it is important for startups to understand both the pain points and desired outcomes of their customers to develop products and services that effectively address their needs and provide value. By understanding both concepts, startups can create solutions that not only solve immediate problems but also help customers achieve their larger goals and objectives.