Customer Discovery is the first step of 4 in Customer Development, the widely recognized process for creating a startup from initial inception to scale- the brainchild of Steve Blank. Customer Discovery is the hypothesis test phase-does your product/service actually solve a problem that customers care about? More often, the answer is no, and it requires tweaking the product, or finding a different customer segment. Given that 90% of start-ups fail, it’s a good place to start.
So what does this have to do with big business? At the heart of Customer Discovery are Discovery Interviews- interviewing not with a “clipboard” or pre-determined questions, but a more open-ended discussion to uncover what you may have never asked about. As an example, for Uber it may have been finding customers valued not having to pay by cash, in addition to hailing a ride with an app. Such discoveries could be crucial to development of a new product, an there is no reason big business can’t leverage the power of a discovery interview in their own pipeline. A few years ago, JCPenney dropped the concept of coupons and instead adopted a policy of an everyday low price. Customers revolted, and JCPenney was forced to reverse course (The impact on JCPenney’s financials is still felt to this day). Could a well-executed Customer Discovery process have prevented this?
Traditionally, companies have relied on standard market research techniques to understand what their customer wanted. Big data has now come into play, as observed by the purchase of Qualtrics by SAP for $8Billion. But how accurately can this capture the emotional attachment of certain attributes by a customer to a product? And can this uncover new, innovative ideas for which their may be limited data? For now, Customer Discovery has a place, important for businesses big and small.
