The Four Steps of Customer Development

Build your start-up from the ground at low cost and using customers as your guide. Follow the four steps to start-up success and you have a tried and tested roadmap that you know works before you set off.

The Four Steps of Customer Development

Customer Discovery

We’re not talking about a few surveys and some focus groups here, we’re talking about really discovering who your customers will be and what they want. To do this you need to be on the ground talking to potential customers and listening to their needs and complaints. If these customers site problems with deliveries from existing companies, or they don’t like the way products are presented to them, you can take this early knowledge and build it into your business from the ground up. This means you are getting those potential niggles out of the way right now and not having to change things later.

Customer validation

This step is about validating your customer discovery. So, you know what your customers need and you have a great product to sell. You know your customers are there and now it’s time to sell to them. Remember, these are your early customers, but by establishing the sales you predicted would be there, you are validating your early work on discovery. If, when you reach this step, the sales aren’t there, you go straight back to customer discovery and work some more on why that is. You do this until you get it right and then you can move forward.

Customer creation

This step is where things get muddy depending on what type of start-up you have. Customer creation is in place to create end-user demand and this is where your marketing team come in. It’s important that this step comes after customer validation as it builds on the customers you now know are there and it drives the demand you also know is there into your sales channel. This will vary depending on whether you are entering an existing market, creating a new market, or a combination of the two. But whatever your business, there’s no point pouring money into marketing if you haven’t already established your customers are there to pay attention to it.

Company building

This is where you take your company to the next level. You’ve done the ground work, you’ve found your customers, you know what they want, and you’ve unleashed a marketing campaign on them, now it’s time to move from this early stage of discovery and learning and into bigger departments like business development, marketing, and sales. In other words, make sure you have done all the early foundation work at low cost to your company before you start spending money on these things. Many start-ups fail because they run ahead and try to build their business too big too quick, without knowing if they have a sustainable business. In this step executives can now concentrate on creating mission focused departments, using your company’s early steps and success with customers.

If you follow these four steps, you keep your risks down. By doing the early ground work with customers and establishing what your business needs to do to be successful, you save time and money later on.