Three Key Questions
Your next step is identifying who your target market and ideal customer are. This will help you narrow down your business’ focus and ensure you are putting your efforts in the right place. The goal of this stage is to help you identify three things:
Step One: Theories
You should have some idea of who your customers will be based on your groundwork so far. (If not, it might be a good idea to return to that phase and do more outlining and analysis of your idea.) So, start by writing out your assumptions and theories:
Get as much help as you can with this stage. Involve people who will be part of your business, experts in your industry, your mentor, and any other stakeholders.
Step Two: Testing
Next, create a list of at least 50 potential customers. With these people in mind, prepare your product test. Here are some ideas for product testing:
Be sure to have specific questions for participants to answer after the test, such as:
You will also want to prepare a customer insight survey, with questions like:
Keep this survey short and to the point to ensure maximum participation.
Now, ask your potential customers to participate in the product test and insight survey. Be very clear that this is not a sales pitch; you’re looking for their feedback so that you can help them solve a particular problem. Be open-minded during this stage. Encourage criticism, what-ifs, and new ideas. You will probably hear new information that you had not yet considered. It can be hard to incorporate that into your vision, but it is essential for your business’ success.
Remember what Sam Walton (founder of Wal-Mart) once said: “There is only one boss: the customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else.”
Step Three: Take It All In
After the product test and customer insight surveys have been completed, it’s time to evaluate what you have learned and see if your theories were right or wrong. Be open-minded and objective when evaluating the data.
In most cases, you will find that you were right about some things and wrong about others. This means that you will want to adjust your theories, tweak your product test and insight surveys, and conduct another round of testing. (The amount of re-testing and re-evaluation required will depend on the complexity of your business idea.) In the end, you will have a solid description of what you will be selling, who you will be selling it to, where those people are, and what their mindset is.
Developing Your Value Proposition
Now that you have a solid business idea in mind and you know who you will be marketing it to, it’s time to outline your business’ value proposition. Your value proposition tells customers why they should buy from you by describing:
Ask yourself: “What are we promising our customers? Why is it valuable to them?”