You have an idea for a business: A bookbinding service that binds contemporary paperbacks in old-fashioned leather covers. But you aren’t sure if there are enough interested bibliophiles who could become potential paying customers. One way you can test if there are is by conducting customer validation interviews with real people from your target market.
This is the customer validation process—the point where business concepts meet market reality. You can test more than just business ideas using customer validation—you can also test theories about a target market or specific product concepts. Here’s an overview of customer validation, with tips on how and when to implement it.
What is customer validation?
Customer validation is the process of testing a business assumption about what potential customers will and will not like, including product concepts and business concepts. The customer validation process happens early in the product development process and often involves collecting feedback via surveys and customer validation interviews with real customers. The idea is that interview subjects will validate—or not validate—assumptions you’ve made earlier on in the development process.
Your product team might, for example, conduct customer validation research to learn whether a potential product will resonate with the broader market. Customer feedback may validate assumptions that you have a promising product on your hands and inspire you to start a production run. Or, it may teach you that your in-house product managers like a concept more than the general public does.
When do you conduct customer validation?
Customer validation is one of the earliest steps in launching a new product or brand, preceded only by the customer discovery phase of the customer development model. American entrepreneur Steve Blank first described the customer development model as a four-stage process for matching concepts and products to actual paying customers. During customer discovery, a business proposes products and imagines a potential customer for its offerings. Customer validation is the second step, during which the business interfaces with real people and learns whether its assumptions were accurate.
Conducting customer validation in the initial stages of the product development process allows you to see if there’s product-market fit before committing serious resources to manufacturing and distributing a product. If you want to validate an entire business concept, early customer validation helps you assess whether there’s even a viable market for your business. If you want to validate an entire business concept, you should do so in advance of a public launch.
How to conduct customer validation
- Complete the customer discovery process
- Propose a product concept or business concept
- Interview customers from your target market
- Follow up as needed
A successful customer validation process starts with thorough preparation. It then requires interaction with real members of your target market, whose opinions will guide your next steps. You can do this in four steps:
1. Complete the customer discovery process
Customer discovery is the process of articulating who you think will be interested in purchasing your product. To do this, you can write a positioning statement, which explains the value proposition your business or product will offer to potential customers. For instance, an ecommerce stationery business might imagine a target customer who typically buys fine stationery in brick-and-mortar stores but will readily purchase online if offered a wider variety of options and lightning-fast shipping.
2. Propose a product concept or business concept
With your customer discovery efforts complete, you’ll use your positioning statement to articulate a business concept or a single product concept. Refine your concept to meet a market need and address customer pain points. You’ll need to present your concept to prospective customers, so this step might involve creating sales materials such as a product prototype or a slide deck that describes your proposed business.
3. Interview customers from your target market
You’ll now gather customers from your target market, present them with your concept, and get their feedback. If you already have a business up and running and are launching a new product, you can survey a sample of your existing customers. If you’re proposing a new business, you can advertise that you’re looking for study participants and host a focus group. Use these interviews to collect qualitative data—non-numerical information that businesses use to learn about customer attitudes, needs, and values. Among the questions you can ask subjects include:
- What do you find particularly valuable about this product, service, or business concept?
- What about this product, service, or concept does not feel valuable?
- What are some reasons you would pay for it?
- What are some reasons you would not pay for it?
- What would be the right price for this product or service?
- How could this product, service, or overall concept be improved?
4. Follow up as needed
Your customer validation interviews will give you a sense of whether there’s a viable market for your business or product. You may be pleased by the results and ready to proceed with a launch. Or, you may find that your concept needs refinement in order to appeal to your potential customers. If you end up changing your product or business concept, you may choose to follow up with your interview subjects to test your refined ideas, or you may do a brand-new round of customer validation. You can then use the information you collect from your target market to guide your sales strategy.
Mistakes to avoid in the customer validation process
The customer validation process can give you a valuable preview of public reaction to your product or business concept. It can also help you generate a sales roadmap and marketing plan by helping you better understand your target market. However, this can be derailed by these common mistakes in the process:
- Identifying the wrong target market. Validating your target market is only helpful if you choose the right target. For instance, you may think your target customers are single people in their 20s and overlook a viable market of parents in their 40s and 50s. Consider all potential customer bases during the customer discovery process.
- Capturing an inadequate sample size. If you don’t interview enough people, the responses you do receive won’t be representative of your overall target market. Some individual opinions will then claim outsized importance in your market forecasts. Interview as many people from your target market as you can reasonably afford. For large corporations, this may involve hundreds of potential customers, whereas a small startup may only be able to interview a dozen.
- Ignoring the collected data. Some entrepreneurs follow all the right steps in the customer validation process, only to see their businesses fail because they didn’t adequately respect the data. Your potential customers may tell you things you don’t want to hear, like that they don’t see the value in your product idea or they think it’s too expensive. You’ve sought their opinion, but only you can decide whether you will take action to heed their feedback and shift your business strategy.
Customer validation FAQ
What’s the difference between customer discovery and customer validation?
The customer discovery process involves observing the marketplace and making an educated assumption about who your target customers will be. The customer validation process involves testing that assumption by presenting some of those target customers with a business concept or product and finding out if they would actually pay for it.
How do you identify your target customers for customer validation?
If you’re new to the market, you might target the customers of similar businesses or those who meet your demographic criteria. For instance, a company selling diapers would likely target new parents. If you already run a company, you can target your pre-existing customers who’ve bought from you in the past.
Do businesses create customer personas as part of the customer validation process?
Yes, businesses create customer personas, also called buyer personas, as part of the customer validation process. These give you a clear sense of who will actually pay for your product or service. You can create a buyer persona by describing the exact type of person you foresee wanting to buy your product.
Leave a Reply
You must be logged in to post a comment.