Customers and Causality

(This is part of a series of posts about testing product/market fit. You can download the Product/Market Fit Storyboard here.)

 Customers and CausalityWhen looking for product/market fit, we start with the customer. That’s the “market” part of product/market fit.

Everything starts and ends with the customer.

Sometimes we start with the product or the friggin’ awesome technology. Sometimes we might fool ourselves into starting with what we can get funding for. But at some point, we always backtrack to the customer.

Having a clear customer hypothesis is the first part of an MVP.

Our value proposition is a value proposition for a specific customer segment.

Our channels are channels to reach a specific customer segment.

Our relationship with our customers,  depends how a specific customer segment prefers to communicate.

So what makes a customer a customer?

Personas, Maps, & Descriptions

 Customers and CausalityThere are many ways to describe your customer including the Empathy Map, Moves the Needle’s Customer Focus Tool, or Luxr style personas. Personally I favor the Luxr format, but anything will do.

(To dig in to the Luxr appraoch, read my post on customer personas, Spike Morelli’s post, or signup for the Luxr curriculum.)

The most important thing about a persona is that it should be useful. A description written on a txt file unseen & buried on our hard drive is wasteful.

In lean, we try to avoid waste.

A useful persona is one that outlines a causal relationship between the customer and a problem.

We strive to answer, why do our customers have a problem?

100% Conversion

illustration hummer 300x213 Customers and CausalityOur customers are 25-40 year old men with Hummers. Our market research shows that 10% of the market has a need for erectile dysfunction medication.

Why 10%? Why not 100%? Clearly the 90% that don’t have the need aren’t in the market for a solution.

A customer persona riddled with probabilities and demographics is a clear sign of poor targeting and zero empathy.

Remember, this is about product/market fit.

A landing page with a low conversion rate means either:

  1. we’re presenting the market with a bad solution,
  2. or we’re presenting a great solution to the wrong market.

Probably both.

If we truly understand our earlyvangelists perfectly, 100% of them should want our product.

Cause & Effect

birds and bees 1024x465 Customers and Causality

We need to grasp the causal relationship between this person and their problem. What situation always results in a problem for our customer?

As a        (customer)          , when I          (situation)           , I want/need          (goal)         .

  • As a graphic design team member, when I am working remotely, I need to transfer files larger than email will handle. (Dropbox)
  • As a diabetic, when I have low blood sugar, I want to take my medication without pain. (mhi-500 needle free injection)
  • As a 17 year old boy, when I have an acne breakout, I want to look good. (soap)

(This is like a user story which has a similar format: As a        (user)          , I want          (need/goal)          .)

By detailing the cause of the problem, we can understand and target only those customers who truly need our product, exactly when they have the problem.

From Bad to Better Personas

Thinks about cars a lot.

This is not a helpful description in a persona. (Unless we can read minds.)

Reads Car & Driver magazine.

Better.

We can look for people buying Car & Driver in a book store. (Those still exist, right?)

But surely lots of people read that magazine. Are all of them our customer?

Asks on Car & Driver’s forum if there is a better way to increase MPG instead of filling their tires with air regularly.

Even better.

This is not only observable but indicates they are spending effort to cobble together an unsatisfactory solution.

Asks on C&D’s forum for a good mechanic that can improve their MPG by changing their gear differential for under $1k

Nice!

A customer who is not only looking for a solution, but has allocated a significant budget towards one. This is a great description that’s useful for marketing and indicates a real need.

Customer Causality

But why? Why are they trying to change their gear differential? Why not just buy a car with a better MPG?

Let’s add a causal relationship.

As a car enthusiast who likes to show off, when I install 22″ rims, I want to avoid paying an extra $200 a month at the pump.

This customer isn’t improving their MPG because of environmental concerns. They’re not looking to buy a Prius. The MPG consideration is the result of tweaking their car for appearances and wrecking their fuel efficiency.

This casual statement is not a replacement for a good description, it is in addition to that description. The causal statement effects everything.

We can’t market in environmental magazines. That channel is a bust.

Our bright green tailpipe that looks terrible but miraculously improves MPG, is a no go. Our value proposition is completely wrong!

When we know the cause of the pain, we know how to talk to, sell to, and create customers.

Starting the Storyboard

The Four Parts of an MVP 300x281 Customers and CausalityIf you’re following along with the Product/Market Fit Storyboard, the story starts with the customer.

Make sure your persona has a observable behaviors and a causal relationship. Then place the persona in the customer section. Once we have a basic customer hypothesis, we can go on to the Value Proposition.

If you’d like feedback as you go, you can tweet me an image of your board.

Any issues you have, I’ll use to make the instructions better.

(To be continued…)

(Illustration credit for the good ones goes to Emily Chiu)

So…what should I post next? Tweet to tell me what to write:

Show me how to test product market fit!

or

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4 comments

  1. I really like two things about this post….
    1. The 100% conversion rule. I’ve used fractions of 1 forever, but there’s clearly a difference between the customers and non-customers in that fraction. Learn how to remove the fractions and get to 100% …so good, I hadn’t thought like this before. This is a “duh” moment.
    http://bit.ly/1pU6oIv

    2. Finishing with causality is so important and often over looked. People get excited and think they “get it” if conversions are happening and don’t take the extra step to understand WHY.

    • Tristan says:

      Yeah. Realistically we’re never going to get to 100%. No marketing channel is that perfect and certainly there will be competitors. But it’s a nice ideal to move towards.

      I think benchmarks on conversion rates are sorely lacking and hard to come by.

  2. Gregory says:

    “Having a clear customer hypothesis is the first part of an MVP.” – why does it have to be a hypothesis? As Deming said – “there is no substitute for knowledge”.

    Perhaps the first step should be a clear understanding of what “job” customers will “hire” your product to do.

    • Tristan says:

      It’s always a hypothesis until you prove it. That’s when our guess becomes knowledge.

      I like the jobs to be done model. I consider that part of understanding the customer.

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