The Lean LaunchPad Session 4: Customer Relationships (Demand Creation) Professors Steve Blank,Jon Feiber,  Jim Hornthal, O...
Agenda <ul><li>Logistics </li></ul><ul><li>Customer Discovery/Validation – in the real world </li></ul><ul><li>Demand Crea...
How Are You Doing? <ul><li>Teamwork </li></ul><ul><ul><li>Roles </li></ul></ul><ul><ul><li>Conflicts </li></ul></ul><ul><u...
The Customer Development Process Customer Discovery Customer Validation Customer Creation Company Building Pivot
The Customer Development Process Customer Discovery Customer Discovery Customer Validation Customer Creation Company Build...
Customer Discovery: Physical/Web Bus Model Canvas Extract Hypotheses Test Problem Test Solution Pivot or Proceed
Customer Discovery Bus Model Canvas Extract Hypotheses Test Problem Test Solution Pivot or Proceed
Customer Discovery - Physical Bus Model Canvas Extract Hypotheses Test Problem Test Solution Pivot or Proceed <ul><li>TAM/...
Customer Discovery - Web Bus Model Canvas Extract Hypotheses Test Problem Test Solution Pivot or Proceed <ul><li>TAM/SAM <...
Customer Discovery - Physical Bus Model Canvas Extract Hypotheses Test Problem Test Solution Pivot or Proceed <ul><li>TAM/...
Customer Discovery - Web Bus Model Canvas Extract Hypotheses Test Problem Test Solution Pivot or Proceed <ul><li>TAM/SAM <...
Customer Discovery - Physical Bus Model Canvas Extract Hypotheses Test Problem Test Solution Pivot or Proceed <ul><li>TAM/...
Customer Discovery - Web Bus Model Canvas Extract Hypotheses Test Problem Test Solution Pivot or Proceed <ul><li>TAM/SAM <...
Customer Discovery – Web/Physical Bus Model Canvas Extract Hypotheses Test Problem Test Solution Pivot or Proceed <ul><li>...
The Customer Development Process Customer Validation Customer Discovery Customer Validation Customer Creation Company Buil...
Customer Validation  - Web Get Ready to Sell Sell, Sell, Sell Positioning Pivot or Proceed Pivot
Customer Validation  - Physical Get Ready to Sell Sell, Sell, Sell Positioning Pivot or Proceed <ul><li>Craft Positioning ...
Customer Validation  - Web Get Ready to Sell Sell, Sell, Sell Positioning Pivot or Proceed <ul><li>Craft Positioning </li>...
Customer Validation  - Physical Get Ready to Sell Sell, Sell, Sell Positioning Pivot or Proceed <ul><li>Craft Positioning ...
Customer Validation - Web Get Ready to Sell Sell, Sell, Sell Positioning Pivot or Proceed <ul><li>Craft Positioning </li><...
Customer Validation - Physical/Web Get Ready to Sell Sell, Sell, Sell Positioning Pivot or Proceed <ul><li>Craft Positioni...
Customer Validation - Physical/Web Get Ready to Sell Sell, Sell, Sell Positioning Pivot or Proceed <ul><li>Craft Positioni...
images by JAM customer segments key partners cost structure revenue streams channels customer relationships key activities...
<ul><li>Test Hypotheses: </li></ul><ul><li>Problem </li></ul><ul><li>Customer </li></ul><ul><li>User </li></ul><ul><li>Pay...
CUSTOMER RELATIONSHIPS what relationships are you establishing with each segment? personal? automated? acquisitive? retent...
Demand Creation <ul><li>How will customers segments hear about your product? </li></ul><ul><li>How does market type impact...
Market Type <ul><li>Market Type determines: </li></ul><ul><li>Rate of customer adoption </li></ul><ul><li>Sales and Market...
Demand Creation by Market Type <ul><li>Create, drive demand into your sales channel </li></ul>Existing Resegmented New <ul...
Who needs to hear about you? Suppliers Channels Government Partners End User Influencer / Recommender Economic Buyer Decis...
Demand Creation Feeds  the Sales Funnel Demand   Creation Acquisition Paying Customers $
Demand Creation Feeds  the Sales Funnel Demand   Creation Acquisition Paying Customers $
Getting Free Users <ul><li>SEO (without consultants) </li></ul><ul><li>Blogging / Sharable content </li></ul><ul><li>Socia...
Paid Channels <ul><li>PR </li></ul><ul><li>Demand Capture </li></ul><ul><ul><li>SEM </li></ul></ul><ul><ul><li>“ Free” pro...
Get Customers Funnel -  Physical “ Get Customers” Funnel
Get Customers Funnel - Physical Enterprise Software Paying Customers $ Leads Qualified Lead First Sales Call Demonstration...
Keep  Customers Funnel -  Physical Earned  and   Paid Media Get Customers Keep Customers Customer check-in calls   Custome...
Grow  Customers Funnel -  Physical Earned  and   Paid Media Get Customers Keep  Customers Customer check-in calls   custom...
“ Get Customers” Funnel Viral Loop
Earned and  Paid Media “ Get Customers” Funnel PR SEO Advertising Blogs/Website Tradeshows Viral Mktg SEM/PPC Affiliate Mk...
Contests, events Blogs, RSS, emails product updates  Affiliate Programs “ Get Customers” Viral Loop Earned  and   Paid Med...
Keep  Customers Contests, events Blogs, RSS, emails product updates  Affiliate Programs Grow  Customers Loyalty Programs V...
<ul><li>How many come through the first step? </li></ul><ul><li>How much does that cost? </li></ul><ul><li>What is the con...
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Class 4 Berkeley/Columbia demand creation

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Class 4 Berkeley/Columbia demand creation

  1. 1. The Lean LaunchPad Session 4: Customer Relationships (Demand Creation) Professors Steve Blank,Jon Feiber, Jim Hornthal, Oren Jacob https://sites.google.com/site/xmba296t / XMBA296T
  2. 2. Agenda <ul><li>Logistics </li></ul><ul><li>Customer Discovery/Validation – in the real world </li></ul><ul><li>Demand Creation Definition </li></ul><ul><li>Demand Creation Physical </li></ul><ul><li>Demand Creation Web/Mobile/Cloud </li></ul><ul><li>Metrics and Experimentation </li></ul>
  3. 3. How Are You Doing? <ul><li>Teamwork </li></ul><ul><ul><li>Roles </li></ul></ul><ul><ul><li>Conflicts </li></ul></ul><ul><ul><li>Blogging </li></ul></ul><ul><li>Pivots </li></ul><ul><ul><li>If you haven’t done any it’s the wrong class for you </li></ul></ul><ul><li>Speed </li></ul><ul><ul><li>If you’re working in your comfort zone it’s 10x too slow </li></ul></ul>
  4. 4. The Customer Development Process Customer Discovery Customer Validation Customer Creation Company Building Pivot
  5. 5. The Customer Development Process Customer Discovery Customer Discovery Customer Validation Customer Creation Company Building Bus Model Canvas Extract Hypotheses Test Problem Test Solution Pivot or Proceed
  6. 6. Customer Discovery: Physical/Web Bus Model Canvas Extract Hypotheses Test Problem Test Solution Pivot or Proceed
  7. 7. Customer Discovery Bus Model Canvas Extract Hypotheses Test Problem Test Solution Pivot or Proceed
  8. 8. Customer Discovery - Physical Bus Model Canvas Extract Hypotheses Test Problem Test Solution Pivot or Proceed <ul><li>TAM/SAM </li></ul><ul><li>Product MVP </li></ul><ul><li>Customers </li></ul><ul><li>Channel </li></ul><ul><li>Market Type </li></ul><ul><li>Customer Relationships: Get/Keep/Grow </li></ul><ul><li>Key Resources </li></ul><ul><li>Partners </li></ul><ul><li>Pricing </li></ul>
  9. 9. Customer Discovery - Web Bus Model Canvas Extract Hypotheses Test Problem Test Solution Pivot or Proceed <ul><li>TAM/SAM </li></ul><ul><li>Low Fidelity MVP </li></ul><ul><li>Customers/ Source </li></ul><ul><li>Channel </li></ul><ul><li>Market Type </li></ul><ul><li>Customer Relationships: Acquire/Activate </li></ul><ul><li>Traffic Partners </li></ul><ul><li>Pricing </li></ul>
  10. 10. Customer Discovery - Physical Bus Model Canvas Extract Hypotheses Test Problem Test Solution Pivot or Proceed <ul><li>TAM/SAM </li></ul><ul><li>Low Fidelity MVP </li></ul><ul><li>Customers </li></ul><ul><li>Channel </li></ul><ul><li>Market Type </li></ul><ul><li>Cust Relationships </li></ul><ul><li>Traffic Partners </li></ul><ul><li>Pricing </li></ul><ul><li>Customer Contacts </li></ul><ul><li>Problem Understanding </li></ul><ul><li>Customer Understanding </li></ul><ul><li>Market Knowledge </li></ul>
  11. 11. Customer Discovery - Web Bus Model Canvas Extract Hypotheses Test Problem Test Solution Pivot or Proceed <ul><li>TAM/SAM </li></ul><ul><li>Low Fidelity MVP </li></ul><ul><li>Customers </li></ul><ul><li>Channel </li></ul><ul><li>Market Type </li></ul><ul><li>Cust Relationships </li></ul><ul><li>Traffic Partners </li></ul><ul><li>Pricing </li></ul><ul><li>Customer Engagement </li></ul><ul><li>Test Low Fidelity MVP </li></ul><ul><li>Customer Understanding </li></ul><ul><li>Traffic & Competitive Analysis </li></ul>
  12. 12. Customer Discovery - Physical Bus Model Canvas Extract Hypotheses Test Problem Test Solution Pivot or Proceed <ul><li>TAM/SAM </li></ul><ul><li>Low Fidelity MVP </li></ul><ul><li>Customers </li></ul><ul><li>Channel </li></ul><ul><li>Market Type </li></ul><ul><li>Cust Relationships </li></ul><ul><li>Traffic Partners </li></ul><ul><li>Pricing </li></ul><ul><li>Update Bus Model </li></ul><ul><li>Create Prototype/Prod Presentation </li></ul><ul><li>Test Solution with Customer </li></ul><ul><li>Update Business Model </li></ul><ul><li>1 st Advisory Board Members </li></ul>
  13. 13. Customer Discovery - Web Bus Model Canvas Extract Hypotheses Test Problem Test Solution Pivot or Proceed <ul><li>TAM/SAM </li></ul><ul><li>Low Fidelity MVP </li></ul><ul><li>Customers </li></ul><ul><li>Channel </li></ul><ul><li>Market Type </li></ul><ul><li>Cust Relationships </li></ul><ul><li>Traffic Partners </li></ul><ul><li>Pricing </li></ul><ul><li>Customer Engagement </li></ul><ul><li>Test Low Fidelity MVP </li></ul><ul><li>Customer Understanding </li></ul><ul><li>Traffic & Competitive Analysis </li></ul><ul><li>Update Bus Model </li></ul><ul><li>Test High Fidelity MVP </li></ul><ul><li>Measure Customer Behavior </li></ul><ul><li>Update Business Model </li></ul><ul><li>1 st Advisory Board Members </li></ul>
  14. 14. Customer Discovery – Web/Physical Bus Model Canvas Extract Hypotheses Test Problem Test Solution Pivot or Proceed <ul><li>Verify the: </li></ul><ul><li>Value Prop </li></ul><ul><li>Cust Segment </li></ul><ul><li>Cust Relationships </li></ul><ul><li>Channel </li></ul><ul><li>Revenue Model </li></ul><ul><li>Pivot or Proceed </li></ul><ul><li>TAM/SAM </li></ul><ul><li>Low Fidelity MVP </li></ul><ul><li>Customers </li></ul><ul><li>Channel </li></ul><ul><li>Market Type </li></ul><ul><li>Cust Relationships </li></ul><ul><li>Traffic Partners </li></ul><ul><li>Pricing </li></ul><ul><li>Customer Engagement </li></ul><ul><li>Test Low Fidelity MVP </li></ul><ul><li>Customer Understanding </li></ul><ul><li>Traffic & Competitive Analysis </li></ul>
  15. 15. The Customer Development Process Customer Validation Customer Discovery Customer Validation Customer Creation Company Building Get Ready to Sell Sell, Sell, Sell Positioning Pivot or Proceed
  16. 16. Customer Validation - Web Get Ready to Sell Sell, Sell, Sell Positioning Pivot or Proceed Pivot
  17. 17. Customer Validation - Physical Get Ready to Sell Sell, Sell, Sell Positioning Pivot or Proceed <ul><li>Craft Positioning </li></ul><ul><li>Develop Sales Materials </li></ul><ul><li>Hire “Sales Closer” </li></ul><ul><li>Sales Channel Action Plan </li></ul><ul><li>Refine the Sales Roadmap </li></ul><ul><li>Formalize advisory board </li></ul>
  18. 18. Customer Validation - Web Get Ready to Sell Sell, Sell, Sell Positioning Pivot or Proceed <ul><li>Craft Positioning </li></ul><ul><li>Acquire/Activate Plans and Tools </li></ul><ul><li>Build High Fidelity MVP </li></ul><ul><li>Build Metrics Toolset </li></ul><ul><li>Hire data analytics chief </li></ul><ul><li>Formalize advisory board </li></ul>
  19. 19. Customer Validation - Physical Get Ready to Sell Sell, Sell, Sell Positioning Pivot or Proceed <ul><li>Craft Positioning </li></ul><ul><li>Acquire/Activate Plans </li></ul><ul><li>Build High Fidelity MVP </li></ul><ul><li>Build Metrics Toolset </li></ul><ul><li>Hire data analytics chief </li></ul><ul><li>Formalize advisory board </li></ul><ul><li>Find Earlyvangelists </li></ul><ul><li>Test Sell – Out of the Building </li></ul><ul><li>Refine Sales Roadmap </li></ul><ul><li>Test Sell Channel Partners </li></ul>
  20. 20. Customer Validation - Web Get Ready to Sell Sell, Sell, Sell Positioning Pivot or Proceed <ul><li>Craft Positioning </li></ul><ul><li>Acquire/Activate Plans </li></ul><ul><li>Build High Fidelity MVP </li></ul><ul><li>Build Metrics Toolset </li></ul><ul><li>Hire data analytics chief </li></ul><ul><li>Formalize advisory board </li></ul><ul><li>Prepare Optimization Plans & Tools </li></ul><ul><li>Out of the building Activation Test </li></ul><ul><li>Measure and Optimize Results </li></ul><ul><li>Test Sell Traffic Partners </li></ul>
  21. 21. Customer Validation - Physical/Web Get Ready to Sell Sell, Sell, Sell Positioning Pivot or Proceed <ul><li>Craft Positioning </li></ul><ul><li>Acquire/Activate Plans </li></ul><ul><li>Build High Fidelity MVP </li></ul><ul><li>Build Metrics Toolset </li></ul><ul><li>Hire data analytics chief </li></ul><ul><li>Formalize advisory board </li></ul><ul><li>Prepare Optimization Plans </li></ul><ul><li>Out of the building Activation Test </li></ul><ul><li>Measure and Optimize Results </li></ul><ul><li>Test Sell Traffic Partners </li></ul><ul><li>Company Positioning </li></ul><ul><li>Product Positioning </li></ul><ul><li>Validate Positioning </li></ul>
  22. 22. Customer Validation - Physical/Web Get Ready to Sell Sell, Sell, Sell Positioning Pivot or Proceed <ul><li>Craft Positioning </li></ul><ul><li>Acquire/Activate Plans </li></ul><ul><li>Build High Fidelity MVP </li></ul><ul><li>Build Metrics Toolset </li></ul><ul><li>Hire data analytics chief </li></ul><ul><li>Formalize advisory board </li></ul><ul><li>Prepare Optimization Plans </li></ul><ul><li>Out of the building Activation Test </li></ul><ul><li>Measure and Optimize Results </li></ul><ul><li>Test Sell Traffic Partners </li></ul><ul><li>Assemble Data </li></ul><ul><li>Validate Business Model </li></ul><ul><li>Validate Financial Model </li></ul><ul><li>Pivot or Proceed </li></ul>
  23. 23. images by JAM customer segments key partners cost structure revenue streams channels customer relationships key activities key resources value proposition
  24. 24. <ul><li>Test Hypotheses: </li></ul><ul><li>Problem </li></ul><ul><li>Customer </li></ul><ul><li>User </li></ul><ul><li>Payer </li></ul><ul><li>Test Hypotheses: </li></ul><ul><li>Demand Creation </li></ul><ul><li>Test Hypotheses: </li></ul><ul><li>Channel </li></ul><ul><li>Test Hypotheses: </li></ul><ul><li>Product </li></ul><ul><li>Market Type </li></ul><ul><li>Competitive </li></ul><ul><li>Test Hypotheses: </li></ul><ul><li>Pricing Model / Pricing </li></ul><ul><li>Test Hypotheses: </li></ul><ul><li>Size of Opportunity/Market </li></ul><ul><li>Validate Business Model </li></ul><ul><li>Test Hypotheses: </li></ul><ul><li>Channel </li></ul><ul><li>(Customer) </li></ul><ul><li>(Problem) </li></ul>Customer Development Team Agile Development
  25. 25. CUSTOMER RELATIONSHIPS what relationships are you establishing with each segment? personal? automated? acquisitive? retentive ?
  26. 26. Demand Creation <ul><li>How will customers segments hear about your product? </li></ul><ul><li>How does market type impact my strategy? </li></ul><ul><li>How much will it cost to acquire a customer using these strategies? </li></ul>
  27. 27. Market Type <ul><li>Market Type determines: </li></ul><ul><li>Rate of customer adoption </li></ul><ul><li>Sales and Marketing strategies </li></ul><ul><li>Cash requirements </li></ul>How does market type influence demand creation? Existing Resegmented New Customers Known Possibly Known Unknown Customer Needs Performance Better fit Transformational improvement Competitors Many Many if wrong, few if right None Risk Lack of branding, sales and distribution ecosystem Market and product re-definition Evangelism and education cycle Examples Google Southwest Groupon
  28. 28. Demand Creation by Market Type <ul><li>Create, drive demand into your sales channel </li></ul>Existing Resegmented New <ul><li>Educate the market about what’s changed </li></ul><ul><li>Drive demand into channel </li></ul><ul><li>Educate the market </li></ul><ul><li>Identify/drive early adopters into your sales channels </li></ul>Clone <ul><li>Copy a business </li></ul>
  29. 29. Who needs to hear about you? Suppliers Channels Government Partners End User Influencer / Recommender Economic Buyer Decision Maker
  30. 30. Demand Creation Feeds the Sales Funnel Demand Creation Acquisition Paying Customers $
  31. 31. Demand Creation Feeds the Sales Funnel Demand Creation Acquisition Paying Customers $
  32. 32. Getting Free Users <ul><li>SEO (without consultants) </li></ul><ul><li>Blogging / Sharable content </li></ul><ul><li>Social Media / Gaming Mechanics </li></ul><ul><li>Communities </li></ul><ul><li>Proven viral coefficient > 1 </li></ul>NOTE: “Viral” isn’t a strategy, it’s a product feature you either have or you don’t Demand Creation
  33. 33. Paid Channels <ul><li>PR </li></ul><ul><li>Demand Capture </li></ul><ul><ul><li>SEM </li></ul></ul><ul><ul><li>“ Free” products (e.g. widgets) </li></ul></ul><ul><ul><li>Biz Dev </li></ul></ul><ul><ul><li>Affiliate Marketing </li></ul></ul><ul><li>Market Education </li></ul><ul><ul><li>Webinars </li></ul></ul><ul><ul><li>Email marketing </li></ul></ul><ul><ul><li>Trade Shows </li></ul></ul><ul><ul><li>Analyst Reports </li></ul></ul><ul><ul><li>Direct Sales </li></ul></ul><ul><ul><li>TV / Radio </li></ul></ul>Demand Creation
  34. 34. Get Customers Funnel - Physical “ Get Customers” Funnel
  35. 35. Get Customers Funnel - Physical Enterprise Software Paying Customers $ Leads Qualified Lead First Sales Call Demonstration Feasibility Proposal Purchase Order
  36. 36. Keep Customers Funnel - Physical Earned and Paid Media Get Customers Keep Customers Customer check-in calls Customer satisfaction survey product updates Loyalty Programs
  37. 37. Grow Customers Funnel - Physical Earned and Paid Media Get Customers Keep Customers Customer check-in calls customer satisfaction survey product updates Loyalty Programs Grow Customers
  38. 38. “ Get Customers” Funnel Viral Loop
  39. 39. Earned and Paid Media “ Get Customers” Funnel PR SEO Advertising Blogs/Website Tradeshows Viral Mktg SEM/PPC Affiliate Mktg Viral Loop
  40. 40. Contests, events Blogs, RSS, emails product updates Affiliate Programs “ Get Customers” Viral Loop Earned and Paid Media Loyalty Programs Keep Customers
  41. 41. Keep Customers Contests, events Blogs, RSS, emails product updates Affiliate Programs Grow Customers Loyalty Programs Viral Loop Earned and Paid Media
  42. 42. <ul><li>How many come through the first step? </li></ul><ul><li>How much does that cost? </li></ul><ul><li>What is the conversion between each level? </li></ul><ul><li>How much in revenues can you get out of each acquired customer? </li></ul>
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