According to an HBR study, one of the two most frequent causes of startup failure is launching without conducting proper customer research. My name is Anna Leshchuk and my main responsibility as a Head of Research at Refocus, it’s to save our company from unpredictability.
Apart from qualitative studies, I analyze the market in many other ways: search for information on the Internet, study articles, and so on. However, it’s not enough. Here is the list of reasons why one should pay attention to proper Customer development.
First of all, it’ll prevent you from creating a good product.
1. The product will not match the values of customers.
For example, people in the Philippines are religious and focused on family. Since Refocus is an international company, we knew about it only theoretically and therefore made a mistake once. Once we held a webinar where a female speaker was wearing an off-the-shoulder top. She was the perfect mentor and shared useful information, but for some reason, people kept leaving the webinar. It wasn’t until we talked to the students later that we found out that they just thought a lady dressed like that wasn’t reliable enough to teach them anything. Since then, we have asked speakers to dress more formally.
2. The product will simply be unsuitable for your target audience.
This mistake can have various measurements, but in the case of educational courses, the most likely of them are the following:
- The program will be uncomfortable to acquire.
Even when the product is ready and seems to suit the audience, it does not have to be the end of qualitative studies. After we conducted CustDev with our first students, we learned two opposite things: re-skillers who were starting from scratch found Module 1 too difficult while up-skillers got bored with the basics. Therefore, we changed the program a little bit by adding an Introductory Module where beginners learn more about data analytics and the field in general. This way, re-skillers can start with the basics while up-skillers can skip them and proceed to the more advanced lessons.
Moreover, CustDev with up-skillers showed that they are usually embarrassed to admit that they forgot something from the very beginning, even if they did. So this approach allows them to study something new for the sake of “revision” without having to show they are having difficulties. Thus, we were able to kill two birds with one stone: make the course both more educational and comfortable to study.
- The payment system will be determined incorrectly.
Obviously, it’s impossible to determine a product price that everyone can afford just by googling the average salary in a certain country especially when your product is an expensive one like an 8-month course that helps you secure a new job without experience. So we talked to our clients, and to make the course affordable, we updated our payment scheme: we now offer no-interest installment plans where students can choose a longer or shorter payment term.
The Sales Department saw how effective this is: they described various cases when potential students were afraid of enrolling in the course because of its price but changed their minds when they were informed about the payment scheme options.
3. It won’t fit your client’s lifestyles.
This is especially the case when you’re entering foreign markets where cultures are different from what you are used to. For example, in some regions of the Philippines, the majority of the residents are Muslims who pray several times throughout the day. Their prayer time changes but it’s easy to determine when it takes place in general. Because of this, we take into account their praying time when scheduling our webinars or live sessions. The pretty obvious thing, right? But If we did not learn this, we would have lost a huge chunk of our target audience.
Second of all, it’ll negatively affect the marketing strategy.
1. One will underestimate or overestimate the target audience.
It’s almost impossible to measure demand for your product without talking to people who are curious about buying it. For example, when Refocus was designing its course for the Philippine market, we assumed that our audience was re-skillers or people who wanted to change occupations completely. In other countries, we targeted up-skillers or those who wanted to improve their skills, but since the Philippines is facing a tremendous lack of digital specialists, we didn’t think this would apply to its residents.
However, when we conducted CustDev, we were surprised to comprehend that there are many Filipinos who already work in the Data Analytics field yet still want to register in our course to become more qualified and consequently valuable and well-paid specialists. As soon as we realized this, we came up with pitches and other creative materials to target them — and now we have them among our students.
2. One will create weak target ads.
In general, there are two possible targeting extremes a business can fall into:
- Trying to narrow the settings of ads as much as possible, specifying every little detail, and aiming to address only those who absolutely need the product
- Trying to appeal to a broader audience since many potential customers don’t go through the funnel
At Refocus, we’re trying to find our golden mean and not make our settings either too broad or too narrow. That’s where the sociodemographic part of CustDev studies comes in handy for us. Because of it, we can create profiles of the general representatives in each segment and target people similar to them.
Moreover, CustDev is crucial in creating advertising materials as it allows us to understand our client’s values and pains, which we appeal to in our materials. During qualitative studies, we appeal to the clients’ Jobs-To-Be-Done and understand what problem the product is aimed to solve for them and what are their fears in reaching it.
For example, people tell us that they value the opportunity to work as a freelancer — and we focus not only on the goal they have but also on explaining why it’s reachable for anyone who graduates from our course.
To summarize, the list of things one has to pay attention to when launching a new product, especially if the market is foreign for you, is just enormous. So spare no time and money on researching your audience properly. Otherwise, you will have to pay twice as much.
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