Blue Mine Group

Customer research

Having identified your best target customer segment, you need to develop an in-depth understanding of these target customers, their needs and options.

The first step is clarifying exactly who is the customer. For consumer and small ticket business purchases, this is normally fairly easy to identify and define. For high-ticket business purchases, frequently a number of people are involved playing different roles, such as champion, recommender, decision maker, and approver. In all cases, you need to identify the typical profile and motivations of these different players, so you can tailor your marketing and sales approach accordingly.

Next, you must develop a deep understanding of the needs you address. Customer needs can be analyzed in two primary categories:

·         Core needs – these are the functional needs customers have that you address, normally driven by increasing revenue, reducing costs and / or managing risks.

·         Buying needs – these needs are to do with the customer’s ability to buy - what must happen from both a process and budget point of view to get to a purchase commitment.

Both these sets of needs must be clearly understood and addressed in order to secure a purchase order from the customer!

Market opportunity assessment

A market opportunity assessment is a summary overview of the size and nature of demand in a potential market, as well as the vendor ecosystem (competitors and channel participants) that exists to serve that market.  The goal is to develop a clear understanding of the “big picture” - how the industry is operating, and what are the key trends.

You can gather most of the information you need for this analysis through online research. Supplementing and sense-checking this research with conversations with industry insiders will pay big dividends. Industry insiders include leading customers, vendors, trade association executives, journalists and research analysts.

Your market opportunity assessment should include:   

·         a definition of what is and what is not included in the market

·         market size and growth rate

·         primary customer segments and a short profile on each

·         overview of the vendor eco-system (the key players at each stage of the supply chain) with a short profile on each vendor category

·         a summary of your:

o        best target customer segment/s

o        likely competitor categories

o        possible channel partner categories.

Market and product definition

The strategy development exercise discussed over the past few days should define in overall terms the market you want to pursue and your offering to that market. Within those guidelines, almost all new innovations need sharp focus through clear product and market definition in order to be successful.

Market definition enables you to focus on a clearly defined set of customers with an urgently felt need that is not currently being satisfied. Product definition enables you to provide an offering that meets your target customers’ needs better than all other options.  These are accomplished through a specific set of analyses, the results of which are summarized in a product market document.

Note that ideally a new venture should complete at least a reasonable level of market and product definition before beginning to design and build the product. The results of the analyses should define and guide product development. While this seems obvious, in practice many product innovations are developed based on the product developer’s personal experience and preferences, and in advance of systematic market and product definition. In these situations, product and market definition should be completed as soon as possible, preferably in parallel with product development.

Innovation strategy development (part 3)

We continue with our series on innovation strategy development. In addition to the strategy team workshops, selected analyses may be required to gather data and provide fact-based input to the discussions. These might include customer interviews, competitive analysis, channel analysis, and product definition.

The result of this strategy activity is a clear market development plan for the business that ensures consistency across all sales and marketing activities. It is best to summarize the strategy in a short document comprising something like the following sections:

·         target markets

·         target customers and contacts

·         key needs addressed

·         competitive options faced

·         solution offered

·         value proposition and points of differentiation

·         key sales and marketing initiatives

·         metrics and financial plan

Once an initial strategy framework is developed, you should review and update it with the team every three to six months.