Birders are known to be a little maniacal in pursuit of viewing their targeted creatures. They’ll get up before dawn, trek through muddy woods, and carry binoculars at all times. When they’re not outside, they’re studying field guides to learn more about the objects of their interest.
Marketers and product developers often get just as excited about customers as birders do about birds, and pursue them just as vigorously. Where are they? Who are they? Oh—look, I think I saw one! Was that a red tail? A yellow throat? No… it flew away.
Small company or large, B-to-B or B-to-C, startup or established, finding the elusive customer and doing work at the front end of innovation is the first piece of your product development process. But how do you identify which market segments to go after? Where do you find prospects, non-users, or users of competitive products? When shifting focus to a new market or market segment, how do you balance the feedback from different types of customers?
We’ll look at these questions one by one and share some best practices that emerged from our recent session at Frost & Sullivan’s 10th Annual New Product Development and Innovation MindXChange.
1. Identifying market segments.
Company strategy answers this one. If you don’t have a strategy, or it isn’t well articulated, you’ll have a hard time figuring out what your customers look like. You’ll be like the birder who doesn’t know whether she’s in search of North American songbirds or African birds of prey.
Best practice: Develop a persona for potential customers. Where do they work? How old are they? What do they value? What gets them out of bed in the morning? This is like dreaming up the customer before you encounter them. While it may sound fantastical, creating personas can be a tremendously valuable tool to help you identify and segment customers.
2. Where to find the customers?
By definition, if you’re entering a new market, these won’t yet be your customers. They’ll be your potential customers, and possibly your competitors’ customers. How do you locate them? Go where the experts are.
In the birding world, groups and clubs bring together neophytes and experts. In the marketing world, you’ll find experts at professional organizations and industry associations. And now social media can play an invaluable role in helping you locate potential customers, with online groups for almost every imaginable interest.
Best practice: Cast a broad net. Tap your existing customers—accessible through customer lists, LinkedIn, and sales contacts—for referrals. Look at conference lists and consider recruiting from social media and online interest groups. (For example, if you want to reach insomniacs, The Circadian Sleep Disorders Network on Facebook might be a place to start your research.)
3. Shifting focus.
You have an established product in a market you understand. Congratulations—you’re an expert! Now you want to move into a new product area or begin selling to a different segment of your existing market. You’re an insurance company, for example, who previously sold only through agents. Now you want to sell directly to consumers. Suddenly you don’t feel like much of an expert.
You can identify potential customers using the same tactics you’d use when entering a new market (see #2). Now you have the additional challenge of balancing input from different segments. Something that’s important to the insurance agent might not matter at all to the insurance consumer—so how do you prioritize feedback? Again, strategy comes to the rescue. Strategy helps you create expectations for each product’s role and define where it fits in the overall product portfolio.
Best practice: Segment your market. Take your market apart into its constituent pieces. Slice and dice it. Break out segments by who is using your product or similar products and by their behavior. Look at customer types, geographical regions, high-end vs. low-end, consumer vs. distributor.
All of these challenges are compounded if you’re creating a new-to-the-world product. We’ll discuss some of the challenges around VOC for new-to-the-world products in our next article.
Where have you gone to find potential customers for VOC work?