Design Your Customer


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"Design your Customer before you Design your Product" -- a presentation by David Taber

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Design Your Customer

  1. 1. Before you design your product, design your customer. – Somebody Brilliant™ ™ David Taber &Associates, all lefts reserved Graphics courtesy PC Week © 2008 DOTnet CONSULTING
  2. 2. Who is David Taber? • 25 years in Information Technology • Now a consultant to startups Product strategy, go-to-market, SFA best practices • Virtually all experience in Software Finance, Telecom, Manufacturing, & Defense industries • MBA, BA from University of California Instructor, UC Berkeley extension © 2008 DOTnet CONSULTING
  3. 3. The Newtonian Model of Product Development • Product design is an inbound process • Product Marketing influences engineers Engages prospective buyers Makes mid-course corrections Tweaks messages to fit product reality © 2008 DOTnet CONSULTING
  4. 4. Problems with the Newtonian Model • Engineers design for themselves “Stupid customers” • Marketers write requirement tomes Nobody follows most of the Great Ideas Documenting after the fact • Customers don’t know what they need Often follow ideas put in their heads by your competitor Suffering from future shock (undigested shifts) They don’t care the way you do… • Which customer are you designing for? © 2008 DOTnet CONSULTING
  5. 5. Infinite Loop / Simultaneous Equation Segments Customer Response Channel Needs Pitch Features Press Story Market Size Value Prop & Messaging © 2008 DOTnet CONSULTING
  6. 6. Breaking the Infinite Loop • Don’t use the waterfall model anywhere • Recognize that the Business Case is part of a large simultaneous equation Who are we selling to? Why will they buy? What will they value? What will they pay? How many will we sell? What’s the P&L? © 2008 DOTnet CONSULTING
  7. 7. The Iterative Cycle Value Proposition Target Market Business Thesis Product Features Target User © 2008 DOTnet CONSULTING
  8. 8. Define the Target User The User is the person who touches your product every day • Not the purchaser, installer, or “business beneficiary” • You need to know their business card title, who they work for, Product how they are measured, what other products they use Thesis • Age, sex, educational level, basic expectations, “cult” expectations (e.g., Mac user) • You need to understand what they value and what their perceived problems are • “A Day in the Life…” Personas are different types of users • Such as power user vs secretary or architect vs coder • Personas may need to cover “operational” or “support” people © 2008 DOTnet CONSULTING
  9. 9. Define the Target User Roles • Goals, intentions, and activities of the Personas • Think roles through for details of access, occasions, circumstances Use cases & Stories • How would users work with the product? • What are the characteristics of the environment they use it in? • What other products / services would they use at the same time? Relationship to purchase decisions • How does the user evaluate this kind of product (e.g., trial) • How do they make their personal purchase decisions? • Whom else would they need to influence to get a purchase © 2008 DOTnet CONSULTING
  10. 10. In Thinking About the Target User… • It’ll has to be (or become) “in your blood” Psyche, not just numbers • Most of the time, forget about analysts Except for questions of “alternatives” and “willingness to pay” • Find and interview Domain experts People who are gurus, practitioners, authors Trend-setters at the root of a nascent fad Consultants who mentor and advise on best practices Boutique / specialist implementers for your users © 2008 DOTnet CONSULTING
  11. 11. Designing the User First • What is it? A pen radio • Who’s the customer? A teenager? • What’s their need? Needs to listen to radio while taking a test • What’s the product feature set? One-color ink, one-channel FM radio • What’s our message? Ummmmm… it’s just $6.95! • What’s the media / influencer capable of transmitting? Ummmmm • What’s the channel capable of selling? Pens on aisle 3, radios on aisle 12 • Telltale sign of problems: How come nobody shoplifts this thing? © 2008 DOTnet CONSULTING
  12. 12. It’s Not Just Pen-Radios… © 2008 DOTnet CONSULTING
  13. 13. Design the Target Market Markets are defined by groups of customers, not vendors Customers are companies or organizations that buy things • They are the business beneficiaries • They pay the bills Markets are a collection of segments • A segment is a group of customers who have similar needs and buy for similar reasons Target Markets are the core of your product’s business feasibility © 2008 DOTnet CONSULTING
  14. 14. Defining Segments Along the Right Lines • Knee-jerk: B2B: vertical industry, company size, geography… B2C: age, family status, wealth… • More interesting: something about the buyer and their problems B2B: Organization / role – CFOs needing SarBox compliance B2B: Technology base – BEA WebLogic users B2B: Business process – Order-to-cash cycle B2B: Quality / Attribute – Industrial processes needing PPB purity B2C: Family role B2C: Psychographics / self-image / perceived needs © 2008 DOTnet CONSULTING
  15. 15. McKenna’s Marketing Influence Pyramid Customer and their friends Trusted Neutral Sources (Gurus, Experts, Colleagues) Industry Sources (Press, Partners, Associations, Government) Vendors, Channels, Advertising © 2008 DOTnet CONSULTING
  16. 16. Describe the Target Market What’s the target count? • Unit volumes key to quality, price functions What’s the feasible price range? • Be brutally honest! • Watch out: customer’s don’t know what they’re willing to pay What’s is the customers’ purchase / decision cycle • How long is the cycle? • How many steps / moving parts are involved? How do you sell to them? • Direct / high-touch sales cycles? • Distributor / dealer networks? • eCommerce / web / viral? © 2008 DOTnet CONSULTING
  17. 17. Case Study: Fahrvergnugen? © 2008 DOTnet CONSULTING
  18. 18. Case Study: VW Phaeton • 5400 pounds, 12 cylinders, $110,000 Subject to both the Gas-Guzzler and Luxury tax • Telltale sign: ad agency is lost • Results: <1000 cars sold, CEO bounced © 2008 DOTnet CONSULTING
  19. 19. What’s a Value Proposition? The statement of what value your product brings to customers This is what the customer actually pays for A logical hierarchy That’s pretty consistent for all customers That drives engineering, marketing, sales, and YOU The Value that YOUR CHOSEN MARKET will perceive Value propositions are often confused with Messaging Market Positioning Competitive Differentiation Tagline …but a customer never pays you for those things © 2008 DOTnet CONSULTING
  20. 20. Forming a Value Proposition Customer Perspective Purchaser User On-looker Competitive Perspective Get the competitions’ product and play with it Talk to users about it Know what’s real, what’s rubbish Think through your outbound positioning Iterative, has a short life Try to keep the foundation stable for 18 months Tweak the words every six months The message has to be realistic, but show vision © 2008 DOTnet CONSULTING
  21. 21. A Value Proposition Is… • Just a supposition unless you can prove it with real customer data and references • Powerless unless it is: “Unique” Relevant to the target audience Credible Substantiable Achievable by mortals © 2008 DOTnet CONSULTING
  22. 22. Product Features Focus on this LAST Develop Iteratively Think Agile Development / eXtreme Programming Talk with prospects, but don’t take them literally Do not focus on feature lists / competitive parity If you chase the bad guys on their own terms, you will always be behind Do not focus on the “how” Better to focus on the “what” Even better to focus on the “who, when…” Best to focus on the “why” © 2008 DOTnet CONSULTING
  23. 23. Product Features Instead, develop a coherent thesis The core: your theory about what the customer values most • “Our product is best in the world at doing X for users who need to do Y inside customer Z.” Use your thesis to keep scope focused Do a few things exquisitely well Version 1.0 will inevitably be incomplete, but it must not be fragmentary Does enough of the job to show value It can never be too easy to use © 2008 DOTnet CONSULTING
  24. 24. Look Beyond Product Features Product boundary Will the customer think of your 5 line-items as one product? Will they think of your one product as 3 things bundled? Will customers need other stuff to make your product usable? Product boundary determines the scope of competitors & substitutes Pricing and licensing Pricing (and licensing) model Price points Discounts, bundles, and allowances Packaging and OOBE How is the product delivered and installed? What is the initial user experience? © 2008 DOTnet CONSULTING
  25. 25. The Best MRD… • Write a 2-page press release for the product before the team begins What’s the opening gambit? Who gets quoted and what do they say? Who is the channel selling to? What are the visible benefits, and for whom? What’s the pricing, packaging, and distribution? • And have a Wiki for a dynamic view of the product details © 2008 DOTnet CONSULTING
  26. 26. Pulling It All Together Value Proposition Target Market Business Thesis Product Features Target User • P&L Model Market size, scope & segments Engineering, Marketing and Sales budget Schedule • Impact on Company identity Message and brand © 2008 DOTnet CONSULTING
  27. 27. Your Take-Aways • Design your customer first, feature-list last Micro: personas, roles, use cases, stories Macro: awareness model, decision model, influence model, purchase model, consumption model • Develop a “whole product” thesis How customers get it and use it Scope of market and size of forecast You value prop and positioning / messaging What you’re building • Develop/engage a (gated?) community Whether design partners or just enthusiasts • Iterate on product & customer design “Fail faster, succeed sooner.” -- David Kelley © 2008 DOTnet CONSULTING
  28. 28. Thank You! 650-326-2626 © 2008 DOTnet CONSULTING