Customer analysis is a process where which data from customer behavior is used to help make about target customers and product design and functions.
What does this mean in plain language
You must ask your potential customers (defined in your business model) whether they like your idea and would be willing to use and pay for it. There are many ways to talk to your customers and you need to decide what works best in your case. Usually giving the customer a practical demonstration is a better indicator than a formal “would you like to buy / try this”.
Keep in mind that your goal is to give the customer a solution to a problem and then the customer can evaluate it. You don’t necessary need a prototype of the product, you just need to offer a solution / answer to the customer.
How to do it? – People sometimes lie when asked
- Try to get some real interaction with customers i.e. a demo product or service they can try.
Why: People tend to lie for general acceptance when they are asked for something. Think for example the question:
- Would you like to buy healthy food? How many says no? How many acts differently?
- If you ask a SUV/another large pollution car owner: Do you think protecting environment is important? How many of them says no.
- Creating a demo helps you prepare for manual work, since the most important thing is to get feedback.
Understanding your customers jobs
“Running faster doesnt’ help, if you run in the wrong way”
Understanding your customers and what they value is the most important part of launching a business. If you are not providing something that the customers want, rest of your business is meaningless.
The first step to getting this part right is to move away from thinking that the customers wants features, products, services or specific improvements. Always remember this quote:
In truth, you can start from the assumption that customers do not want to buy products and services. Why would they? They cost money, time and sometimes a lot of stress. In fact, most consumers tend not to buy a product if they can get the job done without it.
Example: You have a computer that contains important information. Do you really like to buy a backup hard disk (costs money) that you need to install (causes stress) and back up the information (takes time)… if you can get the job done without it?
This means that you, as entrepreneur, have the responsibility to find answers to these questions:
- Who are my customers?
- What jobs are they trying to get done?
- What are the outcomes that they value most and have the most difficulties reaching?
Remember that customers only buy your product if it gets the job done. To make your product more desirable you need to answer the following questions:
- How can they do something that they can’t do now (although they would like to)?
- How can they do something better/quicker/cheaper than they do now?
- How to help them feel or look different or better than they do now?
- How to fill the need the best way?
To get a better understanding of what ”jobs to be done” means, watch this short video example where the professor Clayton Christensen gives an example why people really buy milkshakes in hamburger restaurant.
In the attachment you will find more information about customer segmentation and how to think about different outcomes.
Additional reading and resources
Goal of the chapter
- You have identified the most relevant customer segment;
- You have identified what are the main jobs that customers want to understand;
- You have identified what are the outcomes that customers value the most;