Understanding Customers

Research Methods

Market research is the process of gathering information about your customer’s needs and preferences. There are lots of ways to get input from customers. Some include:

• Interviews or observations—bring depth to the customer frustrations to help you uncover important opportunities, and refine the target customer in order to make surveys and internet research more directed and valuable
• Internet research—most suited towards covering specific topics such as researching competition or learning more about the market size.
• Surveys—most suited towards gathering quantitative data or rankings, such as determining the most important purchasing criteria for a specific group of customers.

There are advantages to each of the different research methods, though the advantages of interviews, in particular, makes them most suited to this early stage. Interviews allow you to get actionable insights on customer needs to build an offering of value.

Surveys work best after an initial need is uncovered and verified, so that actionable and pointed questions to your target customers can help you design your product. This will be covered in a later section of the course.

How to Interview

What NOT To Do

• Don’t come into a customer interview feeling you have the answers. If your idea doesn't adjust at least some based on these conversations, you're not listening.
• Don’t expect customers to have the answer. They'll know their frustrations and needs, but not necessarily how to solve it.
• Do not sell! This is the time to learn, so do NOT mention your specific ideas for how to solve the problem.
• Do not include friends and family in your interviews - you will not get as realistic perspective on the problems.

What To Do

• Focus on the need, not the solution!
• Beware of confirmation bias — you are NOT there to validate what you think, you are there to uncover a need.
• Do it in person, one at a time — this will allow you to pick up on cues from gestures and facial expressions.
• Ask open-ended questions — this makes it a conversation and allows you to get to more depth of the need you may not have thought about before.
• Get subjects to tell a story.
• Listen much more than you talk!
• Follow your nose and drill down (Why? Why?...).
• Understand their priorities..

Dropwise Example

Interview results / insights

• Renters tend not to have to pay for water usage, so are less likely to implement a solution
• Homeowners would prefer to use less water due to:
  • Monthly costs
  • Environmental impact
  • Water shortages
• Homeowners who have the biggest concern of the above are in locations like California, where there has been a drought

Target customer: eco-friendly homeowners in California who install energy- saving products, such as the Nest thermostat.