I am constantly surprised by how many companies no longer talk to their customers. If they do, it is seldom the Product Team doing it. It is Customer Support or Services. Case and point, a few years ago when I was on a job hunt I spoke to 6 companies about Product Management roles. I asked each of them, “how many hours per week do your Product Managers spend talking to customers and prospects?” The answer from each organization was a resounding, “None. It is not part of the job.” I continued to hear this same sentiment from Product teams even today.
To be clear, that is insanity. You can build anything you want. Nobody has to buy it. I do not know about you, but I would rather build the product people want to buy than the product they don’t.
In a market that is as competitive as marketing technology, you can gain a competitive advantage by talking to your prospective buyers and understanding the problems that they want solved. It is also the only way to know if your new product ideas are worth pursuing.
When I say “talk to,” I do not mean lecture at. I mean engage with. Not for the purpose of writing down every feature request they think of, but rather to validate your product ideas to see if people will want to buy them.
There are specific terms for what I mean: Customer Discovery and Customer Validation. In fact, these two terms are actually phases in what is called Customer Development. If you want to dive deeper into Customer Development, check out this great presentation at Startup2Startup by Steve Blank and Eric Ries.
In the a new business, Customer Discovery and Customer Validation are baked into its DNA. It is the only way a startup succeeds. However, at some point, companies seem to turn inward, and stop engaging in discovery and validation. They focus on user stories, deadlines, and release dates, but not the customer. They may run Beta Programs or Early Adopter Programs with clients, but not to validate the product: only to debug it.
To be clear, there are real benefits of larger businesses getting back to their roots, and starting to engage again with their buyers.
Ensure that new products will make money
Finding problem/solution fit is your number one priority, and there is no better way to know that you found it than when prospective buyers are willing to talk about money. Feedback and kind words are nice, but money speaks loudest. After all, you are not trying to just build a product. You are trying to build a product people will pay for, and hopefully pay a lot for. Customer Development is about cultivating early customers. Preorders are the best type of validation. That is why crowdfunding sites are a great option for B2C businesses. But in B2B, there is no substitution for getting out of the office and knocking on doors.
Derisk the product development process
When would you prefer to know whether anyone will buy your product or not? Or whether only 5 people will buy it and not 100. Or the problem you think you are solving is not really a problem at all.
Would you want to know the answer to these questions before you build the product or after? By engaging in customer discovery and validation, you minimize substantial risk before making large capital investments. Those questions will be answered at some point or another, but waiting until after the product is Generally Available means you wasted a substantial amount of resources when you did not have to.
Ensure Go-To-Market is a Success
What is the key value proposition of your product? Who will buy your product? Who will use your product? How much will they pay for your product? These are all vital questions that feed into your larger go-to-market strategy. Everyone from Sales, Marketing, Services, and Support need to know the answers. Not knowing these answers before you go-to-market has real negative consequences:
- New sales will be hindered – Without early customer advocates of the new product, Sales will have no proof points to use with new prospects. It is hard to advocate for a prospect to buy a new product if you have no outstanding success stories.
- You may have to drop price to drive adoption – If you miss the mark on problem/solution fit you miss the mark on value. The direct derivative of value for the customer is price, which means that you will likely cannot command the price that you wanted – the product simply is not worth it the customer. So what do you do? You drop the price to drive adoption, because you need customers using it to get the success stories to drive more sales.
- The company will sweep the new product under the rug – Unless you are fully committed to going through rapid customer-driven iterations after a product is Generally Available, chances are the new product will be sweep under the rug. A product release can garner a lot of momentum. It is a time when multiple departments are aligned to push new sales. If you are wrong about problem/solution fit, that momentum comes to an abrupt stop. The Sales team will quickly compensate for slow sales by lowering the effective price, and if that does not work, Product Marketing will bundle the new product with the existing capabilities in order to retain some pricing premium.
I have seen a lot of companies fail to do customer discovery and validation. None of them are better for it. It is what made those companies successful to begin with, but somewhere along the way they forgot that. If you want to grow your company beyond the initial capabilities that originally made it successful, it is time to get back to your roots.
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