the savvy innovator’s guide to customer interviewsyour concept creates customer value provides the...
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The Savvy Innovator’s Guide to
Customer Interviews
By: Dorian Simpson, BSEE, MBA
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The Customer Value Challenge
The core of a rock solid opportunity proposal is being able to show how your idea
creates value for customers – as proven by real potential customers
Introduction
As discussed in previous chapters, you can’t forget that your internal customers for your ideas
are corporate decision makers. However, to get them to accept the risk of funding your idea, they
must first be convinced that real customers will actually buy (or adopt) the product or service
that is the result of the investment. If you can show them that real potential customers are saying,
“Wow! That concept is not only cool, but I will buy it!” your executive audience will lean
forward and eager to hear the glorious details of how you will convert that customer excitement
into profit. This starts by proving your idea has customer value.
As defined in Chapter 5, customer value comes down to how much worth a customer places on
your innovation versus purchasing alternatives or doing nothing. Providing solid evidence that
your concept creates customer value provides the core of any great opportunity proposal and
becomes the basis for every analytical and strategic element that follows.
As a Savvy Innovator, before you ever present an idea for funding you need to precisely define
who your potential customer, why your idea creates value for them and how much value your
idea creates. Your challenge is how to get this information quickly, efficiently and believably –
based on real customer input – when all you may have at this point is a concept.
Key questions to Rate Your Current Innovation Skills
1. Can you describe your typical customer and clearly articulate their problems and needs?
2. Can you explain exactly how your idea fulfills customers’ specific needs, wants and
desires?
3. Do you know how to prioritize customer needs in order to objectively evaluate the value
your idea creates for customers?
4. Can you describe the value your idea has for customers so that executives will absolutely
agree with you?
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5. Do you know the best research technique to gain customer insight for concepts that don’t
currently exist?
The Basics of Determining What a Customer Values
Many innovators struggle when asked to prove their concept for a new product or service has
real customer value since either they believe 1) the value seems obvious or 2) they may not know
how to get this evidence. Each case leads to costly assumptions that an idea is valuable to
customers without taking the time to find supporting data. For example, if I asked you if your
concept has value, you might respond, “This idea is so amazing, customers will love it! It uses
this technology and has these features!” This sounds nice, but can come across to decision-
makers as blah, blah, blah since the answer doesn’t provide the hard data required to make a
funding decision. This was the case with Nathan.
Nathan is an innovator for a software company that develops 3D video editing tools for
professionals. He started his presentation for a new 3D tool for non-professionals as
many innovators do by showing drawings of the potential product. Nathan was clearly
excited and had spent a lot of time making the screen shots look professional. The first
question came two minutes into the presentation from the CMO Heath, “I’ve seen other
companies doing this. How does this compare with their applications?” Nathan
responded, “Yes, there are several startups and we’re pretty sure some of our key
competitors are also working on 3D tools, but they don’t have our interactive website
that makes the editing easier for non-professionals.” The CMO came back, “So what is
really unique here? I know the other websites are interactive. What will drive demand
from customers?” Nathan had a response, “Well, I’ve identified a list of features the
other applications don’t have.” The CMO responded, “Ok, but how do you know this is
what customers want?” Nathan paused. He was not sure how to respond. He thought to
himself, “Who was Heath expecting him to talk to so soon?” He finally answered, “Our
tools will be more advanced than anything on the market.” This was not the answer
Heath wanted to hear, but he stopped his questions and let Nathan continue. Nathan went
on to describe the potential price, revenue and return-on-investment. The meeting ended
with a whimper as the executive team agreed to “think about it.” Nathan was doomed.
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He completely missed Heath’s need to see data that showed what potential customers
needed in a 3D editing product that would make them choose Nathan’s product over all
others. Without this data, they found nothing else credible and just tuned out the rest of
the presentation.
As the CMO correctly pointed out, customer value is not found in the features and functions of
products or technology, it’s found in the heads of customers. Or stated simply, value only exists
if your customer says it exists. For Nathan to correctly address the CMO’s inquiry as a Savvy
Innovator, he should have clearly define his potential customers’ needs and then convinced the
CMO his innovation meets those needs better than alternatives. As an innovator, you don’t get
many chances to present an idea. A sure way to turn off your audience is to create something
‘amazing’ that isn’t backed with data that proves customers will find it amazing as well.
The Customer Value Equation
Being able to explain if a concept has value to customers starts by understanding how they make
purchase decisions. Consider how you bought your last TV. You may have visited a retail store
or searched online and weighed the screen size, features, price, customer reviews, brand, and
design inside your head and said, “This one.” Your brain considered the various attributes of
each product and then made tradeoffs based on your needs and the attributes that best filled those
needs. These tradeoffs can be summarized in a Customer Value Equation as follows:
Customer Value = Fulfilled Needs – Pain
Solving this equation for customer value requires that you understand how well your concept
fulfills customer needs relative to the pain of adopting your concept. The more needs that are
fulfilled by your product or service, the more value it has for customers and the more pain they
can tolerate. If alternatives exist, and there are almost always are, then you further need to
determine if you are creating more value than other options. Of course the definition of need is
very broad. As a consumer, I don’t need a 5000 square foot home and as a small business, I don’t
need a 100Mb/s web connection. Need is a perception in the mind of customers that includes
anything a customer wants, desires – and in some cases – actually needs. A customer might have
financial needs, the need to complete a specific task or the need to feel proud about their
purchase. I’ll use customer needs as shorthand to describe anything that a customer believes is
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important to them when considering adopting or purchasing a product or service. The definition
of pain is also broad. It includes the obvious pain created by the price a customer pays, but also
the pain of learning something new, driving 10 miles to find a dealer or figuring out how to
discard whatever product your concept is replacing. As a Savvy Innovator, you need to explain
the type of need that your BIG idea is fulfilling, how important that need is to potential
customers, and if they believe your concept is superior when compared to alternatives.
The Priority of Customer Needs Form a Pyramid
Customers typically have many needs, especially when buying a something complex such as an
automobile, home or electron-tunneling microscope. Before evaluating if your idea is worthy of
customers’ purchase decisions relative to all of their other options, you must determine which
needs are the most important to them. Some needs must be met for customers to even consider
purchasing your product or service, while other needs may have value, but are less important. By
placing customer needs in a hierarchy of importance, you can determine exactly how and why
Figure 7.1: The Customer Value Pyramid
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your idea is creating value. This hierarchy forms a structure that I call a Customer Needs
Pyramid (CNP) where the most critical needs form the base and the importance of needs decline
as you move up the hierarchy. Your challenge is to uncover these needs, determine which ones
are most important and then explain how your product or service fill needs that aren’t being
filled by current products and services or fills these needs better.
The four levels of a Customer Needs Pyramid are show in Figure 7.1. Each level of the pyramid
might include a variety of financial, functional or psychological needs. When seeking the exact
same type of product, some customers will have critical needs to accomplish an explicit task or
solve a specific problem, while others might have more critical psychology or financial needs. I
know many people that would never buy a Hyundai just because they think it doesn’t create the
personal image (a psychological need) they are looking for – regardless of the price, features,
service, or any other factors. The four levels of a Customer Needs Pyramid include:
1. Essential Needs – At the base of the pyramid are essential customer needs. The needs at
this level must be met by a product or service or customers will never consider your
product or service. For example, if someone is purchasing a tripod to take photographs
with their camera, he may have several essential needs to fill such as it must be light to
carry, easily attach to his camera, have a price of less than $30 and have received positive
customer reviews. Once these essential needs are met, he will consider fulfilling other
needs.
2. Non-essential Needs – The next level of the Customer Needs Pyramid are needs that are
not essential, but still important. Our tripod customer might have non-essential needs to
fit the tripod in the glove compartment, to extend the height in order to look over objects,
or to be stable on uneven surfaces. Other non-essential but important needs might be the
need to buy it from home, to return the product easily and to buy it for $20 instead of
$30.
3. Bonus Needs – The third layer of the Customer Needs Pyramid exist when a customer
has what I call Bonus Needs. These are needs that are less important than non-essential
needs, but might still be valuable to a customer if they are fulfilled. Our tripod customer
might have bonus needs such as the desire to return it if it ever fails, to get tips on how to
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take the perfect picture or to recognize the brand. Filling bonus needs may not drive a
higher price, but often tip a customer into selecting your product over a competitor’s.
4. Don’t Care – The top layer of the Customer Needs Pyramid does not really include
customer needs at all, but considerations in a purchase decision that customers just don’t
care about. Our tripod customer may not have the need to store the tripod in a bag or need
the comfort of a long warranty. As a Savvy Innovator, it is as important to understand
what customers don’t care about when seeking a solution as it is to understand what they
do care about. By adding attributes that customer don’t care about, you’re just adding
cost and complexity that doesn’t add value and in many cases will actually reduce value
by inflating a price or making the product too complex. If a product or service includes
attributes that aren’t fulfilling any of the real needs, customers will choose lower price
options or may think, “I don’t need all of that. It will just make it more confusing or
cause it to break.”
Savvy Innovators know that understanding this hierarchy of customer needs is at the core of
good innovation. What’s most important is to understand that a Customer Needs Pyramid is
based on what each customer cares about most. When you’ve identified a set of customers that
have a similar set of needs, this defines a potential target market. The more customers that exist
with important needs that you can satisfy better than existing products and services, the bigger
the market potential is for your idea.
Customer Needs are not the same as Features
Separating customer needs from features is one of the most difficult challenges for innovators as
well as seasoned marketers. Even customers find it difficult to distinguish needs from features.
Because we are victims of what we already know, customers will interchangeably mix their
needs with familiar features, functions, brands and prices. A customer may say they need a tripod
to be aluminum, when they really mean light. Or she says it must have independently adjustable
legs, but they really mean stable on uneven surfaces. Your job as an innovator is to go beyond
these stated feature requests to uncover real customer needs.
Customer needs are also very much based on market influences. We all have innate needs, but
we are also victims of our neighbors, family and even advertising that combine to create
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perceived needs. I didn’t know I need to watch movies with earth-shattering bass, to make a meal
in less than 60 seconds or to have a dazzling white smile, but through media and social
influences, these all became needs. The source of customer needs doesn’t matter. However, if
you make a statement such as, “Customers don’t know they need this… yet” you better be
prepared to explained how you’re going to convince them they will.
Nor are customer needs static. As markets mature, the type of customer needs and their priorities
mature with them. Last year I didn’t have an essential need to have voice recognition on my
mobile phone, but this year I do. Products and services compete by fulfilling needs at different
levels, but since customer needs change as a market matures, innovators must be aware of
market trends, consistently evaluate customers’ latest needs, forecast the direction they are going
and continue to innovate to stay competitive.
Disruption happens when substantial new value is created.
If an innovation is able to dramatically meet important essential needs better or remove
significant pain over existing product offerings, this will result in a significant value advantage
and creates the potential for a disruptive innovation. Because price and customer value are highly
related, this may occur either if essential needs can be met at a much lower price or if an
innovation can offer a dramatic performance improvement over existing solutions at the same
price. While most people point to technology as the source disruptive innovation, such as when
transistors knocked out vacuum tubes or DVDs killed VHS, it could also be a business model
innovation (such as McDonald’s use of franchising), a marketing innovation (such as Nike’s use
of sport celebrities), or operations innovation (such as Walmart’s use inventory management
systems.)
Use your Customer Value Pyramid as the basis for everything
Once a Customer Needs Pyramid is understood for your target market by you can use this
information as the basis for all further analysis and develop the rest of your opportunity proposal.
For example, let’s assume you have an idea for a new mobile phone and wanted to enter the
phone market. To even compete in the mobile phone market, you need to meet the essential
needs that customers believe they have with touch screens, a wide range of popular apps,
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advanced sensors, etc. If you were an innovator pitching a new phone, you would need to show
significantly more value than consumers get today. There is no obvious path to accomplish this
except through completely understanding customer needs and then finding ways to meet these
needs better than existing solutions. Microsoft, Nokia, and Palm are all struggling to create new
value for customers. Microsoft has had little traction with Windows- based phones because there
is no noteworthy value at any level of a CNP. However, Xiaomi, a Chinese mobile phone
manufacturer is having great success simply by fulfilling essential needs with Android-based
devices that include the most important high end features—such as large high-resolution
screens—at significantly lower prices. And Google is attempting to develop a whole new way to
meet the essential needs of communicating with friends and accessing applications with their
Glass device.
Once you have a clear CNP, it becomes the basis for comparing your idea against current
competitors and non-competitors, evaluating your innovation’s market potential, estimating a
price as well as developing marketing and R&D plans. To highlight the importance of knowing
your Customer Needs Pyramid, let me share an example of a company that struggled with a new
service innovation.
Josh was the VP of Product Development for a new cloud-based music management
application. He had a clear vision for an exciting new service, but things weren’t going
well. Josh kept trying to convince his CEO Marie that the software was ready and it
should get launched into the market. However, Marie kept trying to use the service, but
she found it to be slow and confusing. Josh kept saying it was good enough to release and
that it would get better over time. “That’s the nature of innovation,” he would argue.
Marie wasn’t convinced. She was frustrated and kept thinking, “How can I release a
service that we are touting as a major new innovation that I can barely use myself?” To
understand the disconnected views between her and Josh, Marie asked Tina in her
market research team to look into the problem. In order to gain more insight, Tina spent
the next week putting the application into the hands of a set of target customers and let
them try it out. She then held discussions with each customer to get feedback on their
experience and summarized the results. Marie called a meeting to review Tina’s findings.
She reported, “Customers are excited about the service. They love the interface, but it
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has several key problems that need fixed related to the speed of downloads and how the
service pulls together their music and videos.” The tension in Josh was clear as he
scrambled to explain the project status and convince Jane to save his vision, but it was
too late. Marie put a halt to the project until the problems were fixed.
The root of the issue was simple. Josh directed his software team to develop a very cool
interface with lots of features to organize music along with a whiz-bang graphical look
and feel. This all made sense if those attributes fulfilled important customer needs.
However, customers made it clear that the product did not even met essential needs at the
base of the CNP. They needed fast access to music and basic status about what the
application was doing. R&D could have easily fixed these problems and gotten a
valuable product into the market. Instead, they focused on non-important attributes that
overwhelmed the available resources and eventually lead to failure by being too late with
the wrong product.
To be a Savvy Innovator, you must determine if your idea is creating unique value for customers,
by solving the customer value equation for your target customer. To this this, you must get inside
the heads of potential customers.
Extracting needs from customers’ heads
The tools and skills to understand customer needs are usually categorized as customer research.
I’ve spent much of my career guiding these research efforts and I’ve discovered two primary
findings; 1) many people perceive that customer research is almost useless for innovation efforts,
and 2) if you don’t conduct market research, then your chance for success—both with gaining
executive support and in the market—is very low. How do you to reconcile these two seemingly
opposite findings?
The problem is that most traditional customer research doesn’t work for innovation initiatives.
The answer is to use the right type of research. Some innovators attempt to justify the futility of
customer research by referring to Steve Job’s famous statement that “Apple doesn’t do market
research.” But Apple does conduct research. They just don’t use typical research tools such as
surveys and focus groups. They use more innovation-appropriate forms of market research such
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as ethnography, rapid prototyping and customer trials. Just like Apple, Savvy Innovators are
smart about how they use customer research for innovation efforts.
Don’t expect customers to tell you the future
There is a great debate as to whether customers can tell you anything that leads to real
innovation. Let me resolve this debate here—it depends on what you’re looking for. If you want
to improve current products, then asking customers exactly what they want can help immensely.
However, if you’re seeking valuable innovation opportunities, you must be aware of a
phenomenon I call backward-looking insight. Customers are very good at telling you what they
want based on their historical perspective. If your current product is word processing software
and you ask customers what they want, they will give you all kinds of feedback on how to make
your product easier along with plenty of ideas for new features. This is great if you are looking
for incremental innovation, but most companies desire innovation beyond incremental and this
type of innovation is based on the future, not the past. Unfortunately, customers are horrible
about telling you what they want in future since they have no awareness of what you can do for
them going forward. Consumers had no idea they could take digital pictures, cook a hotdog in 30
seconds or create a Facebook page.
Customers can’t tell you what the next mobile phone should look like, how you should create a
better stapler or if TV resolution can quadruple again. However, in all cases, customers can tell
you all about what they want to accomplish – whether it’s in their business or personal lives –
and what is important to them in the process. A popular saying is customers don’t care about
drills, they care about perfect holes. I agree with this saying, but I’d take this concept a step
further and say that customers don’t even want perfect holes— they want to accomplish
whatever they needed the hole to do for them. If your innovation is a new type of drill, a
woodworker can tell you all about the type of furniture they are trying to build and the problems
they experience when making joints or combining pieces. Maybe they don’t even need a hole.
The Innovation Market Research Challenge
To summarize the challenge of using market research for innovation efforts, let’s look at the
three most common tools of research – customer surveys, focus groups and interviews.
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1. Customer Surveys. The problem with using surveys is that they don’t provide deep
insight into how customers think or uncover needs. On a survey, you may ask a question
such as, “What would you like to see in the nex t product?” list a bunch of feature
alternatives and then ask the participant to select the top five. This is fine, but is a recipe
for backward-looking insight that I discussed earlier. Yes, you get more statistics you can
show others, such, as “Wow! I didn’t know that 32% of customers want an ice dispenser
on their refrigerators. I thought it was more like 25%.” These results can guide
incremental innovation, but accomplish little to understand true customer needs that lead
to real innovation or help you evaluate new opportunities.
2. Focus Groups. A focus group is a technique where you invite eight to ten participants to
a moderated discussion of a problem or concept. Focus groups work fine if you want to
validate a concept. However, consider that in a 90-minute focus group of ten people, you
can hear from each potential customer for only nine minutes. If you assume the
moderator is speaking for 30 minutes, this goes down to six minutes. The limited time
with participants hardly gives you the depth required to understand their needs and
explore their attitudes toward new concepts.
3. Customer Interviews. This leads us to customer interviews – the technique of inviting a
potential customer to a one-on-one discussion of problems, needs and concepts. I believe
this technique is by far the preferred choice for innovation efforts. You would certainly
gain customer insight from ethnography (the observation of customers) and other
techniques that range from conjoint analysis (computer aided tradeoff decision studies) to
customer diaries (customers tracking thoughts and actions when doing a task), but well-
conducted customer interviews is the fastest and most efficient technique to gain the most
amount of information in a short time period. While I strongly recommend using
customer interviews as your preferred technique, they do have one problem you need to
overcome—if interviews are not properly executed and the results are not properly
communicated, then executives won’t believe your results. Even if you interview 20
customers who all love your concept, many executives will still be skeptical. This is
because they may believe you interviewed the wrong customers, asked the wrong
questions or skewed the results in your favor (think back to the concept of sandbagging.)
To remove these objections, you need a structured approach to conduct high quality
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interviews with the right customers and communicate the results accurately. I will share
this approach with you in Part III including the specifics of who to interview, how many
customers you need to interview
and specific questions to ask.
As shown in Figure 7.2, your goal in
30 days is not develop a
comprehensive, traditional research
plan, but to gain rapid insight in a
short amount of time and eliminate
any wasted research. However, with
no customer research, you have a far
greater risk of a poor concept and unbelievable opportunity proposal.
Savvy Idea: Why as few as four customers are enough for an opportunity
proposal
To develop a compelling opportunity proposal that includes insight from real customers in less
than 30 days, you may be asking the question, “How can I possibly conduct the right market
research to fully validate an opportunity in less than 30 days?” The short answer is you can’t.
However, you can identify a small set of potential customers, conduct short interviews to
uncover their needs and use this data to support your initial proposal. You will be tempted to skip
this step, but do so at great potential peril since you will always be asked for proof that your idea
has value for customers. Without at least some data directly from potential customers, you are
merely stating your opinion of how customers might react to your concept. While you don’t have
time to do extensive research in 30 days, in Part III I recommend that you find up to 10
customers to provide early insight into what customers find valuable about your idea. However, a
minimum of four intelligent discussions with potential customer can still give you the credibility
you need to receive initial funding. Why four? Few people believe a number less than three, four
interviews shows you made a serious effort, and if you interview four customers and three of
them provide the insight that you are on the right track, you then have the basis of a powerful
story to get funding to do deeper research with more customers.
Figure 17.2: Innovation requires focused customer research
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Five Success Strategies for Savvy Innovators
Consider using these five strategies when determining if potential customers truly value your
idea.
1. Interview potential customers to convince you first. There are two primary uses for
market research in a company; research-to-know and research-to-show. Since you are the
first person you need to convince that your idea is worthy of funding, the first use of
research should be to educate yourself that potential customers value your idea. This is
research-to-know. The second use of research is to convince others that they should
believe you. This is research-to-show. Over time, you need both, but by starting with
research-to-know, the confidence you gain will show through in every other aspect of
your opportunity proposal.
2. Gain agreement on your approach to research first. Depending on your environment,
interviewing a small set of customers may provide adequate data to support your initial
opportunity proposal. However, executives in some environments (especially
Opportunity Clogs and Siphons) may not be willing to even listen to your proposal
without more customer data. Try to gain agreement early with decision-makers on your
market research plan before going too far in developing your proposal. If executives need
to see 20 customer interviews and the results of an online survey in order to invest in
your, guess what, you need to conduct 20 interviews and do an online survey.
3. Listen to Sales – but not too closely. I’ve discussed previously that you should never
consider you as the customer, but a close second is never assume your sales team
members are customers either. It’s important to get sales input on an idea, but they are
usually not going to buy your product. Listen to what they say, particularly for their
understanding of the competition and how to approach sales forecasts, but use their
feedback as input, not answers.
4. Be wary of the guys down the hall - It may also be tempting to ask colleagues down the
hall what they think about your idea, but be careful on how you use this input. Internal
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feedback is great if you want input where they have expertise, but they are rarely your
target customer.
5. Partner with your market research team – but guide them – Most companies have a
market research group tasked with everything from customer satisfaction surveys to
branding effectiveness. This team can be a valuable resource for your research efforts.
They may have a budget you can use, have access to vendors to find potential customers
or be able to coach you on interview skills. Just be certain not to outsource your research
to them at this point! You and not your research group need to hold the discussions with
customers to gain first-hand insight into their needs.
In Summary
Savvy Innovators are able to articulate customer value as the core of their opportunity proposal
and will use this information as a foundation for all the information that follows. They
understand how customers make purchase decisions based on customer needs and use customer
interviews to develop a Customer Needs Pyramid that can clearly communicate exactly how
their idea has real value for real customers.
In the next chapter, I’ll explore the next big challenge for innovators – how to interpret and use
market and technology trends to communicate key elements of your opportunity proposal.
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Interviewing Customers – Step-by-Step
Once you start interacting directly with customers, you’ll wonder why you have never done it
before.
Introduction
When you present your big idea at the executive inquisition, you will be up against opposing
opinions from executives with far more formal authority than your own. Many innovators come
into this meeting assuming their idea, along with all of its cool features and technology will sell
itself. However, without compelling and relevant data to show that customers will value and
adopt your concept, a funding decision will often come down to your opinion versus theirs. To
sway executives towards funding your idea, you must present compelling data obtained directly
from potential customers. As discussed in Chapter 7, the best technique to get this data is through
interviewing a small number of targeted customers.
This chapter includes the following steps to help you quickly gain customer insight and develop
a Customer Needs Pyramid:
Step 1: Develop a Customer Persona
Step 2: Find Suitable Customers to Interview
Step 3: Develop a Needs-first Interview Guide
Step 4: Conduct Probing Interviews
Step 5: Process Your Results and Develop a Customer Needs Pyramid
Let’s get started.
Step 1: Develop a Customer Persona
Once you have identified your target market, your next step is to clarify the characteristics of the
customer you want to find and interview – the target customer. One way to do this is through the
use of a customer persona. A customer persona is not a person, but a profile that represents a
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typical customer in your target market. For your initial opportunity proposal, it’s ok to have one
persona that represents your entire target market. As your opportunity evolves, you will need to
develop different customer personas that define the range of customer types including users,
purchasers, and channel members.
Before you conduct interviews, the persona will be a draft based off of your initial hypothesis of
the characteristics of your target customer. After conducting the interviews, you will refine your
draft and add details to finalize the persona you will present with your opportunity proposal. To
develop a draft persona:
• Visualize the most likely end customer who has the problem your idea addresses,
• Summarize their situation and why the customer needs something better,
• Add a visual that shows your target customer experiencing the problem.
Once you have developed a draft, the next step is to find and connect with customers who match
your hypotheses. I’ll share an example of a customer persona with Mark’s MossBeGone concept
at the end of this chapter.
Step 2: Find Suitable Customers to Interview
Customer interviews at early stages of idea development are more about exploring needs than
validating a specific idea. While many people can tell you what they do or don’t like about
products or services that exist, not everyone is good at articulating their needs. To get the best
data from a small number of customers, it’s essential to identify those who can explain their
needs and provide feedback on ideas that are currently just concepts. One category of customers
to consider first is sometimes called lead users. The concept of a lead user was developed by
Eric von Hippel of MIT in 1986. He defines lead users as advanced users who seek and can
benefit from innovation. In many cases, lead users create new solutions to solve their own
problems. These customers are very aware of market conditions, have thought more deeply about
their problems and can articulate their needs better than the average customer. Lead users are
perfect candidates to gain an early read on the value of a new concept. For consumer products,
lead users are often called early adopters because they research and are the first to buy the latest
and greatest products.
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On a cautionary note, one mistake I see innovators make is getting feedback from channel
partners first, such as retailers or distributors, as opposed to end customers. Channel partners can
provide good insight, particularly with how to bring a product to market, but they are not the
ultimate end customer. Interviewing the end customers of your idea is the best place to start in
order to gain the fastest and most accurate insight into customer needs.
Who Can Help You Find Suitable Potential Customers?
Getting access to suitable potential customers requires a little leg work, persistence and
sometimes ingenuity. The most common place to look first is within your personal network of
industry colleagues, friends and family. As a corporate innovator, one major advantage you have
over entrepreneurs is that you have tremendous access to potential customers through your
coworkers. Sales, business development and marketing colleagues can all help you with the
process. This is especially important if your idea is for a new business-to-business opportunity
where finding suitable people to interview inside a large company can be challenging.
Direct access to potential customers can have a downside since it’s tempting to immediately call
a couple of current customers, share an idea and get quick feedback to see if the idea resonates
with them. This seems like a great start, but it’s often insufficient for a suitable interview because
it rarely provides a true understanding of customer needs. There is also the risk that the
customers may react favorably to the idea just because of your relationship. To obtain relevant
data that executives find credible, you need to be objective when getting customer insight or risk
developing a proposal that appears heavily biased.
People in sales often have the largest database and may be your best source for finding potential
customers to interview. However, sales people are often concerned about sharing what they
might perceive as a “half-baked” idea because it’s their reputation on the line. Sales colleagues
are responsible for building great customer relationships and hitting revenue targets, so it’s
natural that they are protective of their customer relationships. To make sales people feel
comfortable with interview requests, assure them that you are making NO promises to their
customers and that you are just discussing ideas and exploring the customers’ needs.
You can also find potential customers at tradeshows, sales conferences distributor locations or
other creative venues. One innovator I worked with, Hans, developed a new card game for kids
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that included animal statistics so kids could ‘fight’ each other’s animals to win or trade cards.
Kids could learn while playing. Using prototypes of animal cards, Hans conducted two types of
customer insight activities. He stood outside a game store (with the owner’s permission) and
played the game with kids to see their reaction as well as their parents’ response. He also went to
local schools and shared the game at recess—watching and learning as kids played. Based on this
early insight, Hans refined the game and it ended up being a big hit. He later sold it to a major
game company for a tidy sum.
When you seek help from others, request an introduction to potential customers that match your
persona. You don’t need to explain your concept, but you should share the problem you’re
researching. For example, if you are researching a new type of security camera, you might ask,
“I’d like to talk with a couple of people who have valuable possessions and want to ensure they
are safe.”
How Many Customers Do You Need?
I recommend you complete five customer interviews. Getting five interviews in the short amount
of time you have means requesting interviews with at least ten customers that match your profile.
(You should expect that up to half will say no or will be difficult to schedule.) Interviewing five
customers usually exceeds most decision-makers expectations because they rarely get any solid
customer data with initial proposals. Finding ten potential customers for a new concept should
not be difficult. If it is difficult, this may be a clue that getting customers to buy your concept
will also be difficult.
Step 3: Develop a Needs-First Interview Guide
It’s essential that you prepare a set of questions before interviewing customers. This is often
called an interview guide and helps keep interviews consistent and on track. I’ve interviewed
1000’s of potential customers and although there is no perfect interview guide, good ones do
follow a common framework and help prevent the serious problem of confirmation bias.
We all have a tendency to hear what we want to hear in order to confirm a belief we already
hold. This makes it easy to reject any data that goes against your idea. Innovators often try to sell
a concept instead of really listening to potential customers, peers, and executives. The biggest
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mistake innovators make when they meet a potential customer is to show him a prototype and
ask, “Is this something you would buy?” If the customer doesn’t respond with a clear NO, then
any answer heard is likely interpreted as a Yes! Asking purchasing questions too early often
generates misleading results. To overcome confirmation bias, you should always start your
interviews by learning about the customer’s situation, problems and needs before sharing any
information about your specific idea. I refer to this tactic as a needs-first interview approach.
To illustrate the importance of a needs-first interview approach, imagine the year is 1885 and
you are an innovator who invented something called an automobile. There are two different ways
you might initiate an interview with potential customers. One discussion starts with your cool
product and the other conversation starts with understanding the customer’s needs. Here is how a
discussion might go that starts by focusing on the product:
Innovator – “Thanks for coming in. I’d like to talk with you about automobiles today.”
Customer – “What’s an automobile?”
Innovator – “It’s like a horse and carriage, but you don’t need a horse.”
Customer – “Then how will my carriage go?”
Innovator – “It has an engine that takes gas.”
Customer – “What’s an engine? Do mean the gas my horse always has?”
Innovator – “Let me show you a picture… look at this”
Customer – “Darn, that’s an ugly horse. I don’t want one of those. It looks complicated.
I’m happy with my horse.”
In this case, you might make a note such as “Customer doesn’t get it. Find smarter customers.”
The second, more fruitful conversation is based on understanding customer problems and needs
first. This interview might start something like this:
Innovator - “Thanks for coming in. I’d like to talk to you about how you get back and
forth to town with your family.”
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Customer – “Great!”
Innovator – “Tell me about the last couple of times you came to town.”
Customer – “Well… last Saturday, I hitched up and we came in for supplies.”
Innovator – “Great… tell me more.”
Customer – “Let’s see. I had to get a lot of supplies, so we used the four-horse team and
the big carriage. It takes about four hours, so we got an early start because the kids get
scared after dark. We also packed a lunch because I didn’t want to have to eat once we
got into town. It also rained like crazy that day. The wife got wet and was freezing and
ended up catching a cold. When we got home that night, I had to take care of the kids.
She was worthless. Now I’m thinking about getting a new top for my carriage. You
know, one of those new ones where you can seal up the sides.”
Although these dialogues do not represent an entire interview, they highlight the importance of
understanding customer needs first. The interviewer in this situation can then introduce the
concept of the automobile and have an intelligent discussion with the customer based on the
needs they just expressed. He will be able to explore the value of speed to the customer when
getting to town, the value of more horsepower to carry heavy supplies and the value of having an
enclosed cabin to keep out the weather. These are all things that a customer might find valuable
in an automobile. From this information, the interviewer can also ask customers to prioritize their
needs, determine if the concept fulfils their most important needs as well as understand any
objections to adopting the idea.
The 4x25 Rule for Developing an Interview Guide
Successful interview guides follow what I call the 4x25 rule of interviewing. The concept asks
you to develop a set of questions that share time equally between the following areas:
1. Explore the Problem – Use 25% of the time with questions designed to get to know the
potential customer, understand their situation and explore problems that your idea
addresses.
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2. Explore Customer Needs– Use 25% of the time with questions designed to explore what
is important to them when seeking solutions and making decisions.
3. Explore Customer Value – Spend 25% of the time with questions designed to explore
your idea and determine if it fulfills important needs. This may include sharing a paper
prototype or just explaining your idea.
4. Explore Issues and Objections – Spend 25% of the time with questions designed to
understand how customers might visualize adopting your idea and issues that concern
them. This should be an open discussion to allow the customer to talk about what they
want to talk about. Often this is where customers open up and tell you more about what
they really think.
An interview guide is not meant to be a rigid set of questions, but a guide to keep you on track
and ensure you cover important topics. Some of the top questions I like to ask in each category
are shown in the following table:
Category Sample questions
Explore the Problem • Tell me about a time when you …
• How big a problem is …
• Walk me through how you approach…
• How do you feel about current solutions and providers today when…
Explore Customer
Needs
• What are the most important results you need to see when…
• What is important to you when looking for a way to …
• What frustrates you when you think about …
• Based on what you said is important, how would you prioritize…
Explore Customer
Value
• What if you could purchase a device that could …
• I’d like to see what you think about…
• How would you compare this idea to…
• From a scale of 1 to 10, how would you rate this for your situation… What
would make it a 10?
Explore Issues and
Objections
• What major concerns would you have about something like this…
• What would you be willing to pay to…
• What would prevent you from adopting something like this…
• What do you really think about this idea?
This same flow can be used for a short chat or a two-hour discussion. I like to keep interviews to
60 minutes, but if it’s a good conversation with a customer who really gets into it, then it should
go long as needed.
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Important! Real Insight Comes from Probing Questions
The most important insight comes from using probing questions to follow up on a customer’s
initial response. This technique should be use throughout an interview to go deeper into the
meaning underneath responses. The three probing questions I shared for interviewing executives
are similar the ones you would use with target customers:
• Tell me more…
• Why did you say that?
• Why is that important to you?
Once you have developed a clear interview guide, you are ready to hold focused customer discussions
that will generate maximum insight in the shortest time.
Step 4: Conduct the Interviews
I remember my first customer interviews. Even with an interview guide, there were many
awkward pauses and I found it hard to listen and probe because I was too busy preparing the next
question in my mind. However, after just three or four customer interviews, I got the hang of it
and the discussions actually became enjoyable.
Listen for needs, not features
One of the skills I had to learn was how to probe for needs when a customer wanted to discuss
features. It is easy to get caught up in a discussion of features and technology, but I’ve realized
the best interview results are based off understanding customer needs and it is critical to stay on
track.
Skilled interviewers know that when a customer says they want or like a feature, it’s essential to
probe for the underlying need. If you were developing a device to enhance the life of bananas,
you might ask a customer, “Tell me what you need to see in a device that extends the life of a
banana.” The customer might respond, “I need it to have a glass door.” However, a glass door is
a feature, not a need. Joan wants to understand why the customer needs a glass door. If she
probed further with, “Why is that important to you?” she might learn that what the customer
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really needs is an easy way to see how ripe the bananas are at any moment. Joan might be able to
solve this with a clear plastic door or no door at all.
Face-to-Face Interviews Yield the Best results
Ideally, your interviews will be face-to-face because information is often conveyed through the
use of body language, intonation, gestures, and facial expressions. If you can’t meet face-to-face,
phone interviews will suffice since time is of the essence and customers may not be in your local
area. You can conduct more face-to-face meetings once you’ve received the first phase of
funding for your opportunity. To get the best results from your interviews, here are some tips:
1) Practice on several people before your first real interview. Friends and colleagues are
good guinea pigs.
2) Allow room for silence to let both you and the customer gather thoughts.
3) Record the conversation so you don’t miss anything because it’s very difficult to think,
write, talk and listen at the same time. Always ask permission first.
4) Bring a teammate if possible to take notes and discuss your findings.
5) Document everything immediately after the interview. If you wait longer, you will only
remember what you want to hear.
Interviewing customers does take some practice, but is well worth your investment to build this
skill.
Step 5: Process Results and Develop a Customer Needs Pyramid
Once you have conducted a series of interviews and have pages of notes, processing the results is
the next challenge. You should remain aware of confirmation bias. Is easy to cherry pick the
information that supports your idea, ignore everything else and conclude that “Customers love
it!” This approach has low credibility.
A better approach is to provide an objective summary that starts with the customer problems you
heard, as well as a clear explanation of their important needs when looking for solutions. This
means organizing customer needs into their priorities by using the Customer Needs Pyramid I
discussed in Chapter 7. Once you establish a clear hierarchy of customer needs, you can then
assess if your idea fulfills these needs by objectively answering the following questions:
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1. Does my concept fulfill the needs that matter most to customers?
2. Do customers see real advantages in my idea when compared to alternatives?
3. Can I overcome the issues and objections that customers have raised?
4. Does this idea create enough value to warrant a first round of funding?
For now, you don’t need definitive answers, but your interviews should provide enough data to
form educated opinions. You will continue to answer these questions and develop better answers
in upcoming steps. Interviewing five customers provides powerful data for your initial proposal.
Just keep in mind that your goal is not to statistically validate your idea at this point, but to
confirm your idea is moving in the right direction. You want to show executives that customers
value your idea, that there are no essential needs that can’t be fulfilled and that your idea is
worthy of a first round of funding.
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Figure 11.2: Sample Interview Guide Questions
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Figure 11.3: MossBeGone Customer Needs Pyramid