Earlier at the CSUF Startup Incubator in Irvine Michael Sawitz gave a powerful talk on what it actually means to hustle as an entrepreneur. In his talk, “The Art and Science of Customer Development”, Michael talked about how he has been able to acquire customers as a startup.
Michael’s talk was wide-ranging and, while ostensibly about customer acquisition, he touched on topics as diverse as meaning in life, passion, and, yes, finding customers. What are the steps?
How To Find Customers
The first step in customer development is to figure out exactly who your customer is. For a startup, this may prove to be difficult but that just makes it a more important step to take. Michael’s advice is in complete alignment with what we teach in the classroom and to our resident entrepreneurs at the CSUF Startup Incubator: get out of the building and actually talk with people.
This process, called long interviews or customer interviews, is important, especially for startups, because while you are having a conversation with a customer or potential customers you will find out unexpected things. Maybe you will discover that customers would rather purchase your product or service on a monthly subscription basis as opposed to all at once. Or you could find out that they don’t even care about all those special features on your product that you have been working too many hours on.
There’s certainly a lot more to finding customers than simply going out and talking with them. You need to ask the right and sometimes uncomfortable questions, follow up with surveys, etc.
Build. Test. Learn.
If the first step in customer development is figuring out who your customers are then the second step is figuring out why they purchased your product or service.
Was it the packaging? Price? Feature-set? Salesperson?
There are ways to figure this out to varying degrees of certainty. If you’re selling a product online, you can do multivariate (A/B) testing by posting two or more landing pages or ads and seeing which one converts more frequently. Multivariate testing in this way is a great way to figure out if your messaging, and all that comes with it, is working or at least how well it is working.
You can test messages in different mediums using this technique. If you’re testing a radio advertisement then you can change the actual words or maybe you want to simply change the way the person is delivering their lines. If you’re testing in-store interactions at a retail store then you can change up the script that your sales personnel use.
Beyond testing messaging, you can also test what features your customers actually want in your product. You can do presales or do test runs of new products.
Michael shared a video that goes into depth about all of this, here it is:
Michael’s Parting Thoughts
As the video above shows, even people who have been working at figuring out what customers want for years professionally do not know everything and do not get everything right all the time. Far from it.
While getting things wrong is par for the course it does not mean that as an entrepreneur you can shirk your responsibility and not get to know your customers as well as you possibly can. Your goal is to provide superlative value to your customers and the best way to figure out how to provide value to your customers is to get to know them. So, get out of the building and start talking to the people who are buying your products and/or services.