Know Your Customer
Peter Monkhouse
kHUB post date: October 20, 2023
Read time: 6 minutes
When I took my MBA, my marketing professor was an engineer who had developed, in his opinion, the world's best personal hovercraft, three times. He had also declared bankruptcy three times. After the third bankruptcy, he decided there was more to building an excellent technical product; you had to market it, which led him to be the professor for my MBA marketing course. In the last decade, I have reflected on his words, and I have come to realize that he was only partly correct. His real problem was that he did not know his customer!
He may have thought the problem was people wanted to move across vast areas of muskeg, swamps, bogs, ice, and snow in northern Canada. But was this the problem his target customers were having?
As project managers and owners, we must know the customers of our products to succeed. We must understand what problem or need our customers have and how our product will address them. In this paper, I will introduce two tools that you can use to help know your customer: the persona and value proposition canvas.
To start, for this paper, a customer is "one who purchases or uses an organization's products or services (Glossary, Product Development and Management Body of Knowledge A Guidebook for Training and Certification - Second Edition, The Product Development and Management Association, 2020) and a product "is a product or service that an organization provides to customers or uses internally to operate the organization" (Glossary, Gen P New Generation of Product Owners Who Care About Customers, Joanna Tivig and Peter Monkhouse, 2019).
To know your customer, you must first be able to identify your customer. A few organizations, such as wholesalers, may only have a handful of customers, but this is rare. Most organizations have many customers, and it is impossible to know everyone. Marketing solved this problem with the segmentation technique. Segmentation involves grouping customers into groups with things in common, such as living in the same location, having similar jobs, incomes, etc. As product managers, we want to extend this technique to create personas.
Personas are fictitious characters defined by product and marketing teams to represent the type of customers, users, or employees in an organization. For a persona, you want to get a good understanding of what makes them tick. It is not about their problem that you are trying solve with your product, but you need to understand them as a person related to your product. A good persona will help you identify what product features will benefit them and where to find them.
The persona, although fictitious, should have a name and a picture, as shown in the example. For example, Flora is a person who is starting her career in Product Management and wants to advance her career.
In general, you want to describe the persona in the following eight areas:
- Demographic. Answer questions such as the person's age (be specific). What is their family situation? Where do they live?
- Personality. Is the person an introvert or extrovert? Are they creative, controlling, organized, active, inactive, etc?
- Life goal. Relative to your product, what is the persona's goal or need?
- Frustrations. Relative to your product, what things bother or cause frustration in the persona?
- Motivations. What is driving the person to achieve their goal?
- Brands. What product brands does the persona associate with?
- Preferred channels. Where does the persona buy their products and get their information?
- Bio. Provide a brief persona bio, including hobbies and larger life goals.
For most product, you will typically have multiple personas. If you have too many personas, your product may be too broad, trying to solve too many problems for too many people.
Once we have defined the personas, one of the tools you can use is the Product Value Proposition Canvas. The Value Proposition Canvas was developed by Alexander Osterwalder, Yves Pigneur, Gregory Bemarda, and Alan Smith in the book Value Proposition Design, 2014 to support their Business Model Canvas.
The Value Proposition Canvas should be completed for each persona. The Canvas provides a link between your product and the customer. Let us look at completing a Value Proposition Canvas, using the example of Flora obtaining her NPDP. When completing a Value Proposition Canvas, you should start with the customer segment side, the circle. After all, the product must deliver value to the customer, so you should know what the customer values!
The customer segment side of the Value Proposition Canvas has three areas:
- Customer jobs are the areas you want to document the tasks and problems the customer needs to complete relative to your product. These jobs should cover the emotional, social and functional side of the customer perspective. For Flora, her job is to obtain the certification and acquire knowledge.
- Gains are the positive experiences the customer has while interacting with your product. The gain for Flora is a salary increase and for the certification to be a differentiator on her resume.
- Pains are areas where the customer is having difficulties and negative or frustrating experiences they are going through. The pain for Flora is her time limitations, the certification requirements and the training cost.
In creating the Value Proposition Canvas, each description should be a simple statement of only two words, and there should be no repeat statements or words between the customer segment circle and the value proposition square and their areas.
Now, let us go to the canvas's value proposition, square side. The value proposition side also has three areas to be completed:
- Product and Services area that describes the features of the product that your organization is providing to the customers. For this example, the product is a certification training course.
- Gain creators are those features that provide more gains for customers than they are looking for or extra value. The training course is well recognized, and there are testimonials from students about getting pay increases and promotions.
- Pain relievers are those features in your product that will address the customer's pains. Registration for the course is online, and there are various pricing options.
When the Value Proposition Canvas is completed, you must step back and ensure that the features in your product truly address the customer's job, solve their pains, and allow them to achieve their gains. Also, review with your customers to ensure an accurate canvas. This should include getting feedback from your customers to confirm your analysis. If your product does not address the customer problem, address the customer pains or gains, then you need to change your product features. Only by aligning your product's features to the customer's jobs, gains, and pains will you deliver value.
With a completed Value Proposition Canvas for each persona, you will have a much better understanding of who your customer is, what your customer's problem is, and what the customer's gains and pains are. This will allow you to prioritize your product features to address your customer's gains and pains.
To learn more about the personas and the value proposition canvas, please see Gen P: New Generation of Product Owners Who Care About Customers or visit www.newgenp.com.
ABOUT THE AUTHOR
Peter Monkhouse is co-founder of NewGenP, an organization providing training, consulting and thought leadership in product management and ownership. He was a Sessional Instructor at the University of Toronto and Ryerson University and was Chair of the Project Management Institute (PMI) Board of Directors.