We all know, “everyone” isn’t a customer segment. But what do you we do when we’ve got a bunch of potential customer segments?
We could offer appointment reminders plus Salesforce integration!
We could provide on-time metrics for each employee!
We could make an alarm that lets you sleep in or wakes you up early based on how bad traffic is!
We could gamify punctuality so they’re late less often!
We could offer additional information about sporting events, concerts, etc. that could be causing worse than normal traffic congestion.
If we target all of these customers, not only will it take forever to build this product, it’ll be a complete mess. So which group of customers are our ideal targets?
We could interview 20 of each group, but I think there’s a more efficient way.
Gut Check Prioritization
Let’s just gut check prioritize the segments we know about:
- First, add each customer group as a column in Excel
- Assign each group a value of 1-3 (1 = low, 3 = high) for the following criteria:
- Market Size – how “many” of this type of customer exist
- Pay for value – how much we think they’ll pay for this value
- Accessibility – how easy is it to find, contact and sell customers in this segment
- Multiply the scores together and sort them from highest score to lowest
- Start testing hypotheses with the highest scoring segment, and work your way down until you’ve got something people are dying to pay you for
Why I love this process
- It’s fast. Takes < 10 minutes.
- It’s okay that we don’t know the real values, we’re going to test our guesses anyway. This is just a way to prioritize our customers so we don’t get stuck in Lean Startup Paralysis, or start building a product that does everything for everyone.
- We don’t need to interview everybody. If our first couple rounds of testing reveal a lot of interest from our top “gut check” customer segments, but in reality “VP of Sales” were the ones most willing to pay for a product, I hypothesize they’ll make themselves known once the product is launched. No need to stress out testing all of our potential revenue sources – find one that meets our minimum success criteria and go with it.
- I was wrong. Before I did this process I had thought initially thought “VPs of Sales”, the “Chronically Late” and “Regular Commuters” would all be ideal customer segments. This quick process hinted otherwise.
This is Part 1 of our series of on Interviewing Customers:
- Which Customers Should you Interview (The SPA Treatment)
- How to Find Customers to Interview
- Getting Customer Interviews with Cold Emails
- How I Interview Customers
- You’ve Interviewed Customers. Now what?
Join the experiment – follow along via Email or RSS for updates on our next post: Help Investors Believe you – show them Customer Quotes.