Most organisations these days are under pressure to differentiate their value offers to attract new business and maintain existing customers. Although customers can play an important role in helping organisations define their differentiation, a surprising number of organisations decide to skip this important customer research and launch offerings based on what “we think our customers want.”
How can organisations remain aligned with customer needs?
There are three critical and interdependent steps in the product development process. There are major risks in skipping any one of them entirely.
Step 1. Segment for Discovery:
The goal of the Segmentation and Discovery step is to learn about customer needs and priorities and identify opportunities to meet these demands with new or enhanced value offers.
Through guided one-on-one or small-group discussions, customers describe their unmet needs and their willingness to pay to address these needs. For priority needs, customers also discuss their ideas for potential value offers.
The result of the Discovery step is a set of product and service concepts that deliver what customers need. After these concepts have been fully defined, they are ready to be shared with customers during the Definition step.
Step 2. Value Definition:
Shaping the value offerings to meet customer needs
The goal of the Definition step is to prioritise prospective offerings and identify key features and benefits for each one.
During moderated focus group sessions, customers review and provide feedback on the proposed concept descriptions. Organisations observe as customers sort through the list of potential features and focus in on features with most value.
When there is an issue with a given concept, the moderator works with the customers to define changes that may be required. Often, changes are in how the proposed products or services work or are priced.
At the conclusion of the Value Definition step, the prioritised value offers are described in detail, including key features, benefits and pricing. Customer input is used to refine the descriptions for the final Validation step.
Step 3. Validation:
Ensuring your offerings fit into your customer’s world
As the final step before launch, the goal is to validate that the value offers are packaged and presented in a compelling way.
These checkpoint conversations are often done one-on-one, in person or over the telephone. Customers confirm that the product and service descriptions are clear and are presented using their (the customers’) words.
As customers review the refined product descriptions, they provide the final set of comments to fine-tune the offering and message prior to launch.
The last step continues after the value offering is launched. Organisations reach out to customers to further refine the message, identify future enhancements and surface opportunities for new offerings.
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