Customer discovery can be used to develop successful innovation and deliver new services to the market. But what is customer discovery? And how can you effectively use customer discovery at your company?
Define a Hypothesis
The hypothesis is a clear statement of what is intended to be investigated. It should be:
Sometimes there may be more than one hypothesis. Often, one formal hypothesis is stated, and other alternate or null hypotheses are considered.
Define Your Assumptions
Now let’s define the assumptions you have about your customer. To do that, create three columns for this section. In the first column, list all of your assumptions about who your customer is and what they need. For example, in our case, we’re assuming that our customers are early-stage startups with headcounts of around five employees or less.
Next, put in the second column a list of things that you don’t know about your customers (or maybe you think you know them but aren’t totally sure). For example, we don’t know what other tools they might be using (a spreadsheet? Slack? Nothing at all?), how often they talk to their investors or how they manage their investor communication process currently. We want to find out these answers in our interviews.
And finally, fill up the third column with a list of questions that will help you verify each assumption and learn more about what else is important to your target customer so that you can develop something meaningful for them. For example: Can anyone on the team see who has replied? How do I get people to reply more often? How many rounds of fundraising are you planning right now?, etc.
Ask (Good) Questions
In a customer discovery interview, your goal is to learn about the customer’s world. You are not trying to convince them of anything, so the questions you ask should be open-ended (not yes/no), specific to your customer, unbiased, and focused on understanding the person’s world.
Your first round of questions should focus on the customer’s problem. To do this well, you should avoid asking leading questions that suggest an answer you’d like to hear (“How did this problem make you feel?”). Instead, ask open-ended questions that help you understand the customer’s experience in their own words (“What did it feel like when this happened?”). This will help ensure that they share all relevant information and that they don’t leave out important parts of their story because they didn’t recognize their relevance.
Evaluate and Refine
After each test, you should record what you learned from your tests and use this to refine your assumptions, hypothesis, questions, and solution. If you come across a fundamental change that needs to be made to your product or service, make the changes and retest.
Test your assumptions, challenge the status quo, and ask good questions to put yourself in the mindset of others.
In order to uncover innovation opportunities, you first need to understand your customer. To do this, challenge the status quo and ask good questions in order to put yourself in the mindset of others. Ask why customers are behaving the way they are and what is motivating them to make certain choices.
If you’ve never done this before, it can be challenging at first, but here is a tested approach that will help:
- Define a hypothesis. What do you think the customer needs? Remember that hypotheses require assumptions which can be tested by gathering evidence from customers themselves (e.g., “We believe that customers will switch from our competitor if we offer a better price on our product.”).
- Define your assumptions about why customers might not have purchased from you yet (e.g., “They’re concerned with pricing rather than quality or service”).
- Ask questions—a lot of them!—to test these assumptions (e.g., “What was going through your mind when you decided whether or not to buy?”). You want to gather as much feedback as possible so you can uncover patterns in how your target market thinks and acts (i.e., what their pain points are).
- Evaluate and refine based on what you discover until you get closer and closer to the end goal of finding an untapped opportunity for innovation!
With the customer discovery process, you are creating a relationship with the customer. They will share their story and you will listen intently to understand them and their challenges. The benefits of customer discovery go beyond a good relationship with customers though; your business will grow because of this discovery process as well. In fact, customer discovery is required for innovation.