A brief recap from a previous post. Customer Development is an essential part of the process when starting a new company because it eliminates unnecessary expenditures and identifies your “ideal” customer. In Four Steps to Epiphany by Steve Blanks, the first step in the Customer Development process is Customer Discovery. Customer Discovery is, “testing whether a company’s business model is correct, specifically focused on whether the product solves customer problems or needs.” (Banks, 2013) The second step is Customer Validation, a process that, “develops a sales model that can be replicated.” (Banks, 2013)
If done successfully, Banks states that Customer Discovery and Customer Validation can work hand in hand and have cyclical nature. Let’s take a look at how both processes can effectively work together.
Harmon wanted to start a kosher hot dog truck but wasn’t sure where to set up for his “ideal” customer. Harmon went through the steps of Customer Discovery and tailored his hot dog business to have a steady flow of repeat customers. Being that his “ideal” customer is typically male between the age of 18 to 35 and is all over town, he wanted to identify prime locations and which times to set up. Harmon started near college campuses and noticed that they preferred evenings around 8 p.m. to 10 p.m. Monday thru Thursdays and Thursday thru Saturday around 1 a.m. to 3 a.m. For his military customers, he noticed that they preferred lunch hours of 11:30 a.m. to 3 p.m. Monday thru Friday and near or on the military post.
To educate his customers of his exact location during certain times of the day, he posted on his social media sites and even offered days he was available for concession. Harmon began posting pictures of his specials for the day and happy customers enjoying their meals. He continuously asked for customer feedback and would try to make necessary adjustments as his business kept growing. Soon his company began to grow, and he had to hire a separate crew just for the concession at events. Harmon was committed to providing excellent product and customer service, as well as sticking to what worked. He relied on heavily customer feedback and utilized his social media sites to stay in constant contact.
Consequently, Harmon is an excellent example of how Customer Discovery and Customer Validation go hand in hand. Harmon was able to identify his “ideal” customer and position himself where his customers needed. He also found that promoting his business on social media with location updates and pictures were effective in driving his sales up.
Banks, S. (2013) Four Steps to Epiphany: Successful Strategies for Products that Win. Retrieved via Amazon Kindle Edition. K&S Ranch Publishing