Customer Development: Avoiding Blunders, Blockers and Busters

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Customer Development is not a one-and-done strategy. It’s an ongoing process, constantly evolving over time. The hard reality for some businesses is that they unknowingly sabotage their own future success by not staying engaged with the customers that contributed to their accomplishments. I am going to further dive into Customer Development and how it can help capture continuous feedback from your customers. Additionally, I’d like to share the infamous Blockbuster vs Netflix story.

Do you remember the Blockbuster Video? The juggernaut of the video rental industry from the mid-80’s to the early 2000’s. Towards the end of its reign, the company missed the opportunity to partner with nestling company, Netflix. It was a young and aspiring concept with high hopes of taking over Blockbuster’s online presence. To the founder of Netflix, Reed Hastings, this was an opportunity to disrupt an already thriving model. He saw the achilles heel in Blockbuster’s product and decided to act on it. So what did he do?

One of Blockbuster’s main concerns in their existing model was that they made a majority of their revenue from customer late fees. Netflix caught on and intentionally interviewed potential customers to find the solution that resonated with them the most. For one, it was not late fees.

On average, Blockbuster customers’ biggest complaint was pointed toward the late fees they were charged for not returning movies on time. Netflix saw the opportunity to use a subscription model to give customers autonomy on how long they can rent movies and games without any penalties. Today Blockbuster is no longer in existence and as per Forbes, Netflix is labeled as one of the world’s most innovative companies and is worth approximately $41 Billion.

It’s easy to think we know our customers from all the meetings, phone calls, and reports we’ve read about them. To deeply understand how people actually use our products we need to go where they work, where they play, and where they live. – Braden Kowitz, lead designer at Google Ventures

You might be wondering, “how do I take my startup in the direction of a ‘Netflix’ and avoid getting busted like Blockbuster?” Here’s an inkling and a few insights on how to change your perspective on “talking to customers” and start leveraging their feedback.

Convert your mindset from ‘selling your customers’ into learning from them.

The first conversion, matters most. But it might not be the conversion you’re thinking of.  There is so much to learn from Customer Development that most entrepreneurs and some major companies (unfortunately) don’t yet understand, until now! Focus on learning, not selling.  

People are habitual creatures. We all have our own set of idiosyncrasies or behaviors that further define our characters. Customer Development gives you access to learning every bit and piece of a customer’s habits. Focusing on small-batch learning and validation only increases the chances of you understanding those habits deeply.

Before starting Customer Development, the most common questions asked are, “where do I start?” and “what do I say?”  

Start now, with the people you know. Most likely have access to a social media platform. Reach out to your network that fit your target Customer Persona. Schedule a 20-30 minute  conversation with them where you can ask them questions that you’d like to have answered which pertain to your product.

Customer development is never finished. It is only ever abandoned.

someone_busier_than_you_is_running_right_now_poster-rbcdab78e68ae4e94b55c65e1621ececb_wvo_8byvr_512Similar to Blockbuster, far too many companies have products that lose value over time. This is usually related to not properly measuring customer feedback. These are the companies that fail and tend to lose their innovation mojo or so it seems to be the case. At the end of the day, there is always a competitor listening to customer pain points.

Don’t just let initial feedback go to waste and collect dust. Do something with it! First, adjust your offering based on the initial assessment then move forward to your next interview. New client, updated offering. This will help with understanding and delivering a value proposition that will resonate with your target customer.

A common question like, “does it end there?” can be answered with a simple no. It never ends. Your customers are constantly evolving, thinking differently, buying new things in new ways.. Keeping pace with their changes will only enhance your chances of keeping pace with what they will need or want next.

Always be ready to adjust!

Store Closing! Everything On Sale!

FILE - This March 17, 2010, file photo, shows a closing Blockbuster stores in Racine, Wis. Dish Network announced Wednesday, Nov. 6, 2013, it will close the remaining 300 Blockbuster locations scattered across the United States. Dish Network expects the stores to be closed by early January. Dish Network says about 2,800 people will lose their jobs. (AP Photo/Journal Times, Scott Anderson, File)

The last thing you want your startup to end up with is anything similar to a “Store Closing!” sign with a long list of unhappy customers, whose frowns could’ve been turned upside down. The proper implementation of Customer Development will create new opportunities to validate your assumptions.

Think about it.

Get closer than ever to your customers. So close that you tell them what they need before they realize it themselves.” – Steve Jobs, founder of Apple Computers

Joe Gilani
Joe Gilani (Co-Founder at Untangl) is a New York City native, networking enthusiast with a corporate sales background in the professional sports industry and a strong passion for making a profound impact in other people’s lives. He is incessantly hosting monthly meet ups or networking around the city, building relationships and strategically partnering with forward-thinking people. Together, we will leave the world a better place than how we found it.

2 Comments

  1. Love this article! Great eye-opener on how easy it is to lose focus from what is most important, keeping the needs of your target customers in mind. Technology and social media are constantly evolving . Always be ready to adjust and focus on learning from your customers, not selling them.👌🏻 Thank you for sharing!

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