A brilliant concept or innovation is an exciting prospect for any motivated business-minded individual. Once the idea is born, the next question is who will buy it, for how much, where, and why.
Entrepreneurs looking to begin or scale a business must complete a Customer Discovery before investing their hard-earned money or valuable time.
What is Customer Discovery?
As previously mentioned, a Customer Discovery is a deep dive into researching your potential consumers' who, how, where, why, and what about the product or service you offer. Your Customer Discovery is a complete understanding of how your product or service fills a niche need or want for a consumer base.
It includes statistics on spending habits, age groups, and the pain points your product or service fulfills; and also details specific demographics like where the customer typically shops, lives, eats, travels to, and what car they drive. It even includes how large of a family they usually have and their level of education.
A customer discovery creates a personalized avatar, or characterization, of the ideal customer you want to target. Rather than guessing who your consumers are, your methodical research will back up precisely who your customers are and where you’ll find them.
Yet, it also tests your theory on the right group of people. The four phases of Customer Discovery include:
● State Your Hypothesis
● Test Your Hypothesis
● Test Product/Service Concept
Why Customer Discovery is so Important
By understanding your genuine customers, you can then tailor your product or service to meet their needs. In other words, they will HAVE to buy from you because you understood them well.
Of course, that is every entrepreneur’s goal.
Yet, by doing the work of Customer Discovery research, you will know where to spend marketing dollars, how to fine-tune your product/service, and how to address your customer’s needs in messaging specifically.
Knowing the specifics about your customer also saves you countless hours and dollars from ill-placed marketing or developing a product that no one needs or cares about. Furthermore, you will know how to tweak your offering or pivot if necessary.
How to Complete Customer Discovery
Customer Discovery information is found through research and sets the stage for success. For example, knowing your customer base will answer the question, “Who will buy it?” It also helps you test your product or service on the right demographic.
Here are four ways to complete your Customer Discovery.
1. Statistics - Get direct statistics from Stats Canada about your industry, spending habits, geographical demographics, marketing, etc.
2. Competitor Analysis - Glean as much information as possible from your closest successful competitors to see who they target, what works for them, and what doesn’t.
3. Customer Surveys - Go directly to the source, based on your stats research, and ask away! Get as much feedback about your offering as possible by asking pertinent questions. (But be mindful of their time)
4. Testing - Send samples or ask your target market to try your product. Ask how they liked it, what they didn’t, and what needs improvement.
Applying Customer Discovery Data to Your Business Plan
Once you have completed your extensive research, you can use this information to solidify your request for funding along with assured next steps in your product or service development.
As you format the information into the who, what, where, when, and why, you will clearly define how your offering solves your customer’s need or want. The reader can see the due diligence process you applied to your concept, which gives them more confidence in granting funds or approving financing— not to mention your reassurance that your idea is sound.
Developing Your Business in Central Alberta
Starting or scaling a business is not an easy task; however, Central Alberta entrepreneurs are not alone. The Central Alberta Regional Innovation Network (CARIN) is the answer for those looking for direction or support on innovation development.
With tools like mentoring, information on partnering organizations, and coaching through their Catalyst Incubator program, entrepreneurs can confidently take their business concept to market with a clear path to success.
Please visit CARIN's website for information or to register for the next Catalyst Incubator program.