A common misstep I observe in both startups and large companies is the misidentification of their true customer. Any development methodology that relies on customer feedback to iterate on features will live or die based on how quickly they can deliver features requested by entities that are paying their bills. Thus it’s common to conclude that people that give you money are your customers. Simply stated this is a false assumption and it can punish your business.
So repeat after me, write it on the white board for your team to see, tattoo it on your chest backwards so you see it in the mirror every morning:
Not everyone that gives your business money is a customer
A bit drastic? I don’t think so. If you are an ‘intra’-preneur working in a large company the ‘Wrong Customer’ syndrome will be especially pronounced. Let’s examine why.
First, some quick house cleaning. Before we rule out customers let’s define who a good customer is. Your customer is the person that pays to use (or convinced a decision maker to pay on their behalf) your goods or services. For example, if you sell mobile games for children your customer is the child playing your game not the parent that paid on their behalf. If you sell curated videos that get embedded in classroom curriculum then your customer is the teacher embedding the videos in the content. Your customer is not the consumers of the videos or the district superintendent.
Now that we have a grip on who our actual customers are let’s list out who are customers aren’t. Why is this important? Implementing feedback that doesn’t originate from your customer base will result in time spent on features that aren’t directly impacting your customer needs. This, in turn, extends the length of your customer feedback loop. A long customer feedback loop results in unsatisfied customers that will eventually look elsewhere to see that their needs are met.
When I was young I used to play a lemonade stand game. It was pretty trivial. You would set up a lemonade stand and had to budget for lemons, sugar, and ice. You came up with a recipe, a fair price, and got to selling. The customers would be unhappy if the lemonade took too long, the lemonade tasted bad, or was too expensive. The customers would make a sour face if tasted gross. Simply adjust the recipe and you’re back in business. Too much demand for your lemonade? Reinvest your profits in an ice machine or more staff to help out. We receive data from our customers and we iterate.
The issue I commonly see is someone with a financial stake in the business influencing the direction of the business without taking into account the customer feedback. Let’s say that parents bankrolled my lemonade. They drop by the corner to see how sales are coming along and I have a massive line for my lemonade around the block. Rather than get lemons on their hands and help out they decide that our lemonade stand needs to offer pretzels as a complimentary product to the lemonade. The rationale being that they love pretzels with lemonade and the salty snack will encourage customers to buy another cup. While I run to the store to buy pretzels another lemonade stand opens up on the other corner and the customers that were in my queue head over the competition’s stand.
The lemonade stand analogy is a bit simplistic but I see this happen time and time again in small and large companies. An angel investor, a stakeholder in a business unit, someone of the board of directors can all wolves in customer clothing. Their intentions are most likely good but the end result could be disastrous if you’re not solving for customer needs first.
Some may say that challenging the financiers of your business could be disastrous in itself. But there are ways you can navigate these waters.
Establish a Northstar Customer Metric
The first thing you should do is track one customer metric diligently. Here are some examples for a SaaS, mobile, or web based offering:
- Conversion from Trial to Paid Account
- Time Spent in App Per User
- Users with Consecutive Days Logged In
There are a million more examples and each business case will have their own domain issues they’ll need to solve but the point of the exercise is to have a North Star that you can point to in times of experimentation or dispute. If you run an experiment or try an A/B test and your ‘Conversion from Trial to Paid Account’ metric increases then you have data to reinforce your claim that your experiment worked. Capturing this evidence is vital to solving analyzes results. You shouldn’t be experimenting on customers until you have a solid pipeline of ‘North Star’ metric data that’s been normalized over a period of time.
Capture and Distribute Customer Feedback
As you capture metrics, customer surveys, and user experience testing distribute it to your team. Parsing and graphing the data is fine but make sure that you include the raw data to your employees as well. Spinning customer data to meet your own criteria is dangerous and could be worse than if you ignored the customer altogether. However, if you pass along honest customer data to your team it will have a deep impact on their engagement of the product. Deep down everyone on your team wants to make something their customers love to use and will move mountains to make that happen if they have actionable feedback to work on.
JUST DO IT
So you’ve identified your North Star and created some actionable customer items in your backlog. Don’t forget to bring them into your sprints. There’s a tendency for this type of stuff to get buried right next to the technical debt in the backlog. Customer feedback should be at the top of your sprint priority every sprint! At the very least break the feature requests down and see if you can start chipping away at them just a little bit. Get back to your customer and let them know that you’re currently working on it. Just knowing that you’re listening to your customers can go a long way in increasing their loyalty to your product.
In closing, I challenge you to take an honest look at who is influencing the direction of your product or business. If you have multiple customers that’s a bad smell already. Who is using your product? How is it adding value to themselves or their business? Do you have open lines of communication with them? Have you established your business’s ‘North Star’? Getting this all defined and visible to your company can give you a crystal clear look of who will actually be your biggest evangelist or your 1-star review on the App Store.