Customer and Market Validation Overview
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“Launching a product is the most expensive market research you can do” - use a customer and market validation to discover who is and what’s valuable to the customer, create a Go-To-Market strategy to prove a profitable and sustainable business model as quickly as possible. Spend up to 5% of your funds to ensure the other 95%+ is spent right!
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Customer and Market Validation Overview
- 1. “launching a product is the most expensive market research you can do”
- 2. Customer and Market Validation A discovery process to understand: Who is and what’s valuable to the customer Create a Go-To-Market strategy Prove a profitable, sustainable business model as quickly as possible Spend up to 5% of your funds to ensure the other 95% + is spent right!
- 3. When to do a Customer/Market Validation? Preferably as soon as you have the idea and before developing a product or service If a product or service is already launched and sales are not what you expected then NOW, before hiring a new team, re-launching or re-developing the product
- 4. What does it answer? What problem/s we are setting out to solve? What’s their scale and importance - is the solution a ‘must have’ or merely ‘important’? How to find customers? What positioning resonates best? Who will buy and how will they buy? How much will they pay to solve their problem? How can you create a scalable business?
- 5. How’s it done? Via a 5 Stage Process: 1. Review of existing planning, strategy, research and demos 2. Run Process Preparation meetings – brainstorming to extract and evaluate hypotheses, qualify opportunities based on compelling business criteria 3. Pre-screening interviews and recruiting - screening of targets and arrangement of meetings 4. Customer/market validation meetings - with potential buyers/key decision makers 5. Go-To-Market strategy – including sales roadmap
- 6. Hypotheses – create, test, validate, change, repeat… for each: Problem Hypothesis Positioning Hypothesis Value Prop Hypothesis Differentiation Hypothesis Market Hypothesis Market Type Hypothesis Product Hypothesis - we’re selling this product – not this product plus lots of custom features! Pricing Hypothesis Sales/Distribution Hypothesis Exit Hypothesis
- 7. Example Hypothesis: Market Type Your market must be one of: new product to existing market? new product to new market? new product to existing market and trying to re-segment that market? Each market type has different cash needs, rates of customer adoption and acceptance or requires different sales and marketing strategies
- 8. Example Hypothesis : Pricing If customers don’t ask about price, they probably don’t understand the product concept or aren’t interested in buying it… Pricing research has a very high ROI and very valuable payback in confidence Goal is not just price, but to find out what drives value in the customers’ minds…
- 9. Need Help Designing or Executing a Customer & Market Validation Process? Jeffdrust@comcast.net +1 650 208 5771 Skype: jeffdrust www.linkedin.com/in/jeffdrust
- 10. Testimonials “One on my investors introduced Jeff to help me build a US Go To Market strategy and initial customers. I obtained two Customer and Market Validation Proposals and selected Jeff’s. Now it’s done, I highly recommend Jeff because he really knows how to do it and is very experienced. His structured and logical process gets meaningful results. We talked to real companies and obtained insightful feedback concerning, pricing model, positioning, GTM strategy, competitors and more. The final report is a ‘bible’ to go on and to apply as we develop." “We hired Jeff as an expert in the CAD market who could give us advice on our product and marketing plans. We have been extremely satisfied with his work in this regard. … His marketing recommendations have proven to be right on target.” “Jeff helped to solidify our go-to-market strategy and align it better with our customers for long term success. His deep knowledge and structured methodology is of the highest caliber of any individual that I have worked with.” “Jeff came highly recommended to me as a leader in market strategy and business model development. Jeff led the market validation process for our IT start-up. He is an incredibly organized, motivated and meticulous professional.” “Jeff has been working with our company on a number of critical initiatives including helping to create and focus our market strategy, execute our market research and product validation. Jeff has been one of the most professional executives and consultants with whom I have ever dealt.”
Notes de l'éditeur
- The basic process consists of the following 5 stages: Pre-meeting reading, demos and interviews – Please share with me all existing SynerG planning and strategy documents - if necessary I can sign an NDA. The objective of this stage is for me to get up-to-speed on where you are now and how you got here. Even if plans have not turned out as expected I can learn from the assumptions within them - questions that arise can probably be answered by phone with Michael. An online demo should suffice to show me the product and current customer solutions. Visits to the few existing customers will probably be required for face-to-face interviews – are they all in Seattle? Customer/Market Validation Process Preparation meetings – Initial face-to-face brainstorming to extract and evaluate hypotheses. The objective at this stage is to collect available knowledge and obtain team consensus on the approach to be validated in the market. During these preparations, we will begin by collecting and evaluating the dynamics of various target markets. During this process, we will qualify the opportunities based on business criteria that we deem compelling and potentially viable. The remainder of the project involves vetting these opportunities via interviews and site visits, then defining the GTM strategy to access these opportunities. Pre-screening interviews and recruiting for site visits - initial validation and screening of targets by phone, and arrangements for meetings. These can include early stage prospects - note that these meetings are not ‘sales meetings’ but are ‘validation meetings’ and need to be pitched this way. All of the validation accounts are pre-screened to meet criteria set by the group in the preparation meetings. During these interviews, we also glean additional information on the viability and prioritization of the market. Customer/market validation meetings - at the sites of potential buyers, with the key decision makers. Including reviews of what we learn, changes to our materials, and phase checkpoints. We will try to conduct these meetings in the Seattle (or maybe the Bay Area) to minimize travel expense. Typically we will travel together to the sites to give us the most time together as a group. This is an extensive review of the product, positioning, problems solved, the value imparted and how they would buy and implement the product. Typically we offer something to the clients for their time; often providing lunch is sufficient. Immediately after completion of each meeting, we will summarize the findings as a group, reconcile what we learned, make changes to the presentation to reflect what we have learned, and prepare a list of new questions for the next market validation session. The first round of meetings normally includes six market validation sessions. After about six meetings it is beneficial to have a team meeting to resolve the direction and issues, and make course corrections. Report and GTM strategy – All the learning and deductions from the process are compiled in a report, including both positive and negative discoveries and outcomes. It is anticipated that the positive discoveries and outcomes will form the basis of the GTM strategy. Wherever possible or relevant, answers will be presented in the voice of the customer.
- (Bass Curve doesn’t apply in b) and c) because there’s insufficient initial sales data to make valid sales predictions) Palm – new, Handspring – existing new product to an existing market? Product offers higher performance than what’s already available, competitors define market new product to a new market? Truly innovative, a large customer base gets to do something it couldn’t before new product to an existing market and trying to re-segment that market? Hybrid approach – either low cost or niche
- (Bass Curve doesn’t apply in b) and c) because there’s insufficient initial sales data to make valid sales predictions) Palm – new, Handspring – existing new product to an existing market? Product offers higher performance than what’s already available, competitors define market new product to a new market? Truly innovative, a large customer base gets to do something it couldn’t before new product to an existing market and trying to re-segment that market? Hybrid approach – either low cost or niche