How To Nail Customer Insights

Developing deep customer insights is not just a nice to have. It’s a must do.   And if it’s a must do, it’s worth understanding how to do it…

How To Nail Customer Insights
Photo by Brett Jordan / Unsplash

In my deep dives into Sardine and Fraugster, I made the case that customer insights had a big impact on both companies. But for very different reasons.

Sardine used customer insights to bolster their focus, speed to market, and sustained growth. 

Fraugster completely missed on their customer insights.  And...they were unfocused, slow to market, and stagnant.

Were there other issues at play for both Sardine and Fraugster?  No doubt.

Still, I can argue that developing deep customer insights is extremely beneficial to a startup. 

It’s not just a nice to have. It’s a must do.

And if it’s a must do, it’s worth understanding how to do it… 

So, this week I’ll answer the following three questions:

  • What is Customer Insights?
  • How can you develop deep Customer Insights?
  • How do you know you’ve nailed your Customer Insights?

Let's do this. 

So, what exactly is Customer Insights?

There are two things you need to understand well to develop customer insights: 

  1. Your customers. 
  2. Their problems (aka needs).

To make it more practical, I break it down into 5 questions across 2 buckets.

Bucket #1: Problem Understanding

  • What specific problem are we solving?
  • Who has this problem?
  • What are target customers currently doing to address this problem?

Bucket #2: Customer Understanding

  • How do we best engage our target customers?
  • How can we create the most value through these engagements?

Both buckets are important to build a successful business.

Because it’s not just about building a great product. It’s also about connecting with your customers. Meeting their needs.  And selling them your product… 

This idea of understanding your customers’ needs is not new.  

Steve Blank calls the process Customer Discovery. This teaching forms the foundation for The Lean Startup, which has been part of the startup lexicon for many years now.

So, when the topic comes up most entrepreneurs are already familiar with it. They usually nod their head in complete agreement.  

And I think most startup founders make a real effort to get out of the building and talk to customers. 

Yet, most founders still miss the mark with this effort. They don’t truly nail customer insights.

I think there are 3 reasons why.

Reason #1: They half-ass it

Some just don’t put in the work.

They kind of go through the motions but don’t follow a systematic, thorough process that produces tangible results.

In fact, the author of Why Start-ups Fail states this as a primary reason why startups fail.

Reason #2: They pre-define the problem

Some only focus on the problem they think needs to be solved.  

Put another way, they think they already know what the problem is.  And they already have a solution in mind for it.

Usually this means the entrepreneur is focusing on a very high-level, obvious problem. 

But because of this, they don’t take the time to get to know the target customers.

They might end up with a beautiful product. But they have no idea how to sell it or distribute it. 

Reason #3: They’ve never seen awesome customer insights

Some just aren’t sure what the process should look like. It’s not clear to them what “good” customer insights looks like. 

My goal is to help address each of these three issues.

Ok, so let’s do it. Let’s make customer insights more concrete!

How Do You Develop Deep Customer Insights?

Deep customer insights come from talking with your target customers. 

You might be tempted to skip the talking and jump right into running experiments.

But talking is the only way to understand not only what people are struggling with but why they are struggling.

The context and subtext you get from a conversation matter tremendously.

Given how important this is, I have three guiding principles to ensure these conversations are incredibly beneficial to you:

  1. Be sincere. 
  2. Be structured.
  3. Be selfless.  

Guiding Principle #1: Be sincere

It’s about embracing intellectual honesty. 

The goal is to unearth real customer insights you can leverage, not just prove that your way of thinking was right all along.

If you just want someone to tell you how awesome your idea is, call your mother.

If you want to build a successful business, look for alternative viewpoints, challenging questions, and new ideas. 

Guiding Principle #2: Be structured

This is about finding a consistent way in every conversation to identify someone’s root problem. 

A structured approach will help you get to a specific problem and move beyond a high-level, generic problem. 

Here are four helpful frameworks for this:

Framework

Definition

Key idea

The 5 Whys

A technique to find the cause-and-effect relationship of a problem.

Keep asking questions until you understand what is happening. Don’t assume anything. Always ask.

Jobs To Be Done

JTBD attempts to make innovation more predictable.

What problem is the person trying to solve? Or what are they trying to accomplish? Why are they doing what they are doing?

First Principles Thinking

The practice of questioning every assumption you think you know about a problem.

Keep digging until you get to the fundamental parts that you know are true.

Human-Centered Design

An approach to problem-solving that puts the end-user at the center of the design process.

The focus is on the person, their problems, and what they are trying to accomplish…not your idea!

You might choose to use just one of these frameworks. Or you might use a combination of them.

Either way, be consistent in your approach.

The goal is to find your path to consistently get at the root of what is happening.

Choose the framework that helps you keep digging until the problem is no longer squishy, nebulous, or filled with assumptions.

Guiding Principle #3: Be selfless

Understand that this isn’t about you or your ideas. It’s about trying to truly connect with and understand your target customer.

There are a ton of resources online to help you conduct great customer interviews.

But here are 9 dos & don’ts that will help you capture a deep understanding of your target customer: 

Do

Do NOT

Why it matters

Create a hypothesis

Have a conversation without a stated goal

This helps you measure results and determine next steps (e.g., 60%+ provided validating evidence).

Use an interview guide to spur a free-flowing, real conversation

Follow a script

People open up and are more authentic when you are being real with them.

Ask open ended questions

Ask closed, directed questions

Directed questions are leading and illicit short, surface-level answers.

Understand why the user wants or needs to do something critical

Just ask what they want or need to do

The why will get to the heart of whether something is important.

Understand what the user is currently doing (or has done) to address their want or need

Just ask about intentions, wishes, dreams, or thoughts

If someone isn’t currently doing something to address an issue, it’s not that important to them.

Listen. A lot.

Talk much

If you give people room to talk, they will. And you’ll learn a lot.

Ask obvious questions—maybe even ones that “seem stupid”

Make assumptions

If you infer an answer or interpret what you think a person is saying, you’re likely introducing your own biases.

Ask your core questions from multiple angles

Ask an important question just once

People open up as the interview goes on. Asking from a different angle will yield more insights.

Find a way to record details

Assume you’ll remember the whole conversation

You should focus on an authentic conversation, not taking notes.

The more you make the interview about the person you’re interviewing, the easier these things become. 

How Do You Nail Customer Insights?

Ok, so you’ve talked to your target customers. But how do you know you have what you need?

How do you know you’ve nailed your customer insights?

Three ways:

  1. You can articulate your problem space very clearly.
  2. You can articulate how your target customers think and feel about important topics.
  3. You can see the effect in almost every aspect of your business.

Nailed Customer Insights #1: a very clear problem space

We already reviewed Sardine’s clearly articulated problem space. But it’s so impressive, it’s worth looking at it again.

Sardine's Problem Space at Series A

This is the level of detail you’re aiming for.

On the other end of the spectrum, you’ve got Fraugster:

Fraugster's Problem Space at Series A

The difference between these two is stark. 

But what might Fraugster’s have looked like if it was done well? Maybe this…

What Fraugster's Problem Space might have been...

This type of problem space description would have kept Fraugster much more focused at the start of their journey.

There are two ways you can know that you’ve developed sufficient clarity of your problem space:

  • You have robust details about your target customer, their problem, and the problem context, cause, and impact.
  • This information is actionable. It’s not just interesting. There is a “so what” and it’s clear what to do next. 

Nailed Customer Insights #2: you understand how your target customers think and feel

In today’s attention economy, it’s not enough to just understand the problem you’re solving. It’s not enough to just build an awesome product.

You have to sell your product.

To do this, your target customer needs to know who you are (i.e., your brand). They need to believe what you say.  They need to trust you. 

To build that trust, you have to add value to their lives. You need to understand what they find useful, helpful, or valuable. And you need to provide this to them.

The only way to do this is to understand how they think and feel.

Take a look at some old school, classic marketing techniques help cement this idea:

Classic Segmentation Variables

It’s not enough to just build an awesome product. 

Nailed Customer Insights #3: your business is accelerating

You just need to answer a few questions honestly for this one…

Is your customer understanding deepening? 

Is your product getting cleaner, more impactful as a result?

Are your go-to-market tactics working to create more prospects? And are those prospects converting to paid customers?

These last two questions can be the most telling. Because generally those who have nailed their customer insights have created a specific and simple problem space.  

This keeps them focused.

Focused vs Scattered: based on problem space understanding

They understand 1) what problem they are solving and 2) for who.

The graph above represents both of these vectors.

Is your problem specific or generic?

A specific vs generic problem

Have you simplified your problem? Or is it still rather complex?

A simple vs complex problem

Where you fall on these spectrums will translates directly to your business health.

Your problem space understanding impacts your GTM success

So, which of those funnels best represents your business? 

And is this evident to anyone who objectively looks at your results? Or are you just talking yourself into the idea that “everything is OK”? 

In short, if your business is truly growing and that growth is accelerating, then you’ve likely nailed customer insights. 

If it’s not, then you likely have some more customer insights work to do.

The truth is customer insights work never ends! So get to it!

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