Each product development process will need to start with the right specification of the customer’s needs. How you can start product development if you don’t know what your customers really want?
Generally, it is much easier if you already have customers. In such a way, you can easily start using available data from your company to classify them and select some for the next research. But, if your product development process is part of your startup development, then you can’t use internal data, because simply you don’t have them.
The best way to gain knowledge for your customer’s needs is to start collecting information already available to you. It doesn’t matter if they come from your internal databases or publicly available data. So, the first type of research you will need to do is in-house research. The second type of research and the most important research is out-of-the-house research. This research will require you to go outside your building and spend some time with your customers.
Here, I will cover ten tools that you can use to discover real customer’s needs for the purpose of your product development process. Also, there is a great product development course if you really want to dive into the process of product development and know the basics product design, customer-centric approach, etc.”
In-house Research For Customer’s Needs Related to Product Development
As I have already mentioned, this type of research will be used to collect information to better preparation of the second type of research that you will need to make as a part of the product development process. When you are implementing this in-house research, you want to precisely define your customers as a first. Then prioritize them, and discover general directions related to their needs.
Some of the tools and techniques you can use for this purpose are the following:
1. Internal research.
Start with the information you at your marketing and sales department. These two functions are continuously in contact with your customers. They already have data related to the income your company generates from each of them and the frequency of purchasing. You will also need data about their growth possibilities, what products and services they buy, their complaints, proposals for improvement, and so on.
Another tool that usually I recommend is Google search. Select some of the keywords related to the products and services you want to develop and translate them into the possible customer’s problems. Then use them to find for what type of problems your potential customers try to find solutions through Google. You can read more about this approach in the post titled „how to use Google to improve your offer.”
3. Web-based information.
As a third option you can use are all available web information that you can find on the world wide web. Simply, find your competitors and research what type of needs they satisfy to their customers. You can also find potential customers that complain about similar products and services on forums or social networks. All the data you will collect with this approach will have high value for your product development process and definition of the real customer’s needs.
4. ABC Diagram.
When you have already defined target customers for the products and services, you want to develop; you need to select some of them that will be in the focus of your next research. You will need to use this tool to prioritize your current customers.
For example, you can choose to prioritize based on the largest income from specific customers last year. So, you will analyze your current customers with their effect on your whole income from last year. After finishing with analysis, you can group your current customers as A) generate 80% income, B) generate 15% of income, and C) generate less than 5% of income. This analysis is based on the Pareto principle or 80/20 rule. You can read more at „ABC analysis or 80/20 Rule.”
5. Portfolio analysis.
ABC analysis is based on two dimensions: customers, and the income each customer is generating for your business. What if you want to include an additional dimension in the analysis as potential growth? Then you can use portfolio analysis that will include a customer, income, and potential growth. This graphical presentation will be really useful for you when deciding about customers who will be in the next research about their needs.
This tool comes from the first letters of the question that you will need to answer to connect hypothesis and customers from the research. The questions as who, what, when, where, why, and how will lead you through the process. For example, you could ask:
- Who is the customer?
- What he is doing when he is using our product?
- When the customer uses your product?
- Where he is using our product?
- Why he is using our product?
- How we can improve our product?
Out-of-the-house Research Related to Product Development
Now, you can continue with the second part of your research related to product development. This research is something that I call out-of-the-house research. All previous research you can use to prepare yourself for going outside your building and talk with your customers. These data you can structure in well-defined questions.
Some of the techniques you can use here are:
1. 1 on 1 interview.
This technique will give you information directly from your customers. You can get information about their needs, expectations, values, and attributes they want in your product or service. Information that you will get through this technique is the best information because you can also observe nonverbal behavior. Usually, the interviews are carried out through the following steps:
- Scheduling the interview and explain the reasons,
- Preparation for the interview,
- Request permission to record it,
- Asking questions and
- Analysis of the recorded information.
2. Customers observation.
Observation of the customer’s goal is to observe the interaction of the customer with the product, service, or process that we analyze. It is important for the analysis, customer who will be observed to not know that he is a part of the observation. The purpose is to discover his real interaction with the environment, or better with product, service, or process.
This technique can bring you information that is still not publicly expressed by the customer. It can be implemented in three stages: planning of whom, what, where, and how will be part of the observation, execution of observation, and monitoring and analysis of the collected information.
3. Focus groups.
The purpose of this technique is to discover some general views of the group of customers that will participate in the focus group. The group should represent a specific customer segment to discover the real values that they are valuing. The focus group is performing actually through a meeting with a group of customers who discuss the subject we want to research.
Surveys are used to measure customer’s needs and values and their satisfaction with the product, or service based on many customers from one or more segments.
The techniques aren’t excluded one from another. For example, You could use surveys based on previous in-house research to define more specific customer’s needs. Then, you could use focus groups and 1 on 1 interview for better understanding the specified needs and understanding priorities. And as a last, you could check the hypothesis based on all these researches with the observation technique. When observation will approve your hypothesis may become part of the next stage of your product development process.
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