20. instruments for customer modeling (customer...

Fakultät Informatik - Institut Software- und Multimediatechnik - Softwaretechnologie – Prof. Aßmann - Software as a Business

20. Instruments for Customer Modeling (CustomerDevelopment)

Prof. Dr. Uwe AßmannSoftwaretechnologieFakultät InformatikTechnische Universität Dresden2016-1.0, 12/9/16http://st.inf.tu-dresden.de/teaching/saab

1) Customer Development

2) Different Kinds of Fits

3) Customer Analysis

1) Situation Analysis

4) Customer Validation

1) Customer Interviews

2) Measuring Customer Feedback

3) Channel Analysis

5) Customer Double Funnel

6) The Evolving Nested BMC Cactus

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2 Software as a Business

Obligatory Literature

► A. Osterwalder, Y. Pigneur et al. Value Proposition Design. Wiley.

► [BlankDorf] Steve Blank, Bob Dorf, Nils Högsdal, Daniel Bartel. Das Handbuch fürStartups – die deutsche Ausgabe von 'The Startup Owner's Manual'. DeutscheÜbersetzung von Kathrin Lichtenberg. 2014. O'Reilly.

■ http://www.daniel-bartel.de/das-handbuch-fuumlr-startups.html

At one period of those early days I think that I must have had fully three hundred watches. Ithought that I could build a serviceable watch for around thirty cents and nearly started in thebusiness. But I did not because I figured out that watches were not universal necessities,and therefore people generally would not buy them.

Henry Ford. My Life and Work. Www.gutenberg.org Ebook #7213

At one period of those early days I think that I must have had fully three hundred watches. Ithought that I could build a serviceable watch for around thirty cents and nearly started in thebusiness. But I did not because I figured out that watches were not universal necessities,and therefore people generally would not buy them.

Henry Ford. My Life and Work. Www.gutenberg.org Ebook #7213

http://Www.gutenberg.org/

http://Www.gutenberg.org/


20.1. Customer Modeling (Customer Development)

Find out who the customer is, what she needsand desires.. a specific part of the Lean Innovation process[Blank]

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The Customer Development Process

Customer Discovery CustomerValidation Company BuildingCustomer Creation

Customer Search Customer Building

Customer Development (Customer Modeling)

Customer Development, a company-centric process [Blank/Dorf] 2008

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Q3: Blank's Customer Modeling Process “CustomerDevelopment”

1. Customer Discovery

(Customer Analysis)

2. Customer(Hypothesis)

Validation

3. Customer Creation

(Kundenaufbau)(Selling)

4. Company Building(Unternehmens-

Aufbau)

I. Customer Search

Disillusioned?StrategicChange

Verified

Found Verified

II. Customer Building

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Q3: Blank's Customer Development Process Blendedwith Maurya's Running Lean Process

Customer Discovery

Customer(Hypothesis)

Validation

Customer Creation(-aufbau)

Company Building(Unternehmens-

Aufbau)

Customer Search

Disillusioned?

Verified

StrategicChange

Found Verified

Customer Building

Problem-Solution Fit Product-Market Fit

Efficiency (Sell) Scale

(Startup Genome Report)

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Q4: Step 1: The Customer Discovery Subprocess(Problem-Solution Fit)

1.1 Customer Vision

1.2 Customer Interviews

(MVV testing)

2.1 Customer tests

(MVP testing)

StrategicCrisis

1. Customer Discovery

Disillusioned?

StrategicChange

Verified

MVVFound Verified

2. Customer (Hypothesis) Validation

Problem-Solution Fit

No

Yes

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Q4: Step 2: The Customer Validation Subprocess(Product-Market Fit)

2.1 Sales Preparation

2.1.2 IdentifyEarlyAdopers

2.1.3 OptimizationPlans and Tools

2.1.4 Sales Roadmap(Vertrieb)

2. Customer Validation

Disillusioned?StrategicChange

2.1.5 CustomerBinding and

Development

2.2 Product Development

2.3 Assessment

Uwe Assmann, 09.12.2016

Some phases are not yet detailed, e.g., 2.1.3 and 2.1.5


20.2 Different Kind of Fits in the Value PropositionDesign Process

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Stages of Fitness

Product-Market

Fit

Problem-SolutionFit

(Vision Fit)

Business-Model-Venture-Capital

Fit

Scale Fit(Virality)

Lean Innovation Process

Fitness stages

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Steps in the Stages of Maturity

Product-Market

Fit

Problem-SolutionFit

Business-Model-Venture-Capital

Fit

Scale Fit(Virality)

Lean Innovation Process

Fitness stages

red yellow green red yellow green red yellow green red yellow green

Example

► A green problem-solution fit is a value proposition stable pain/gain analysis, butwithout services and products

► A green product-market fit is a value proposition stable pain/gain analysis with services and products, i.e., a stable BMC

► A yellow BM-VC-fit is a BM that has been matured after one round of correction by theventure capitalists (VCs)

Uwe Assmann, 11.12.2015

Bringe das mit Kap 30 in sync.


20.3 Customer Discovery:Analysis of the Customer's World

Before understanding the pain and gain of thecustomer, we need to understand its world

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The Major 4 Obstacles to Customer Know-How CanOnly Be Remedied by Testing the Customer Hypotheses

► In a group, untested information about the customer can be collected bycanvases

► Hypotheses about the customer have to be formed► Hypothesis must be tested by getting out of the building

[Alvarez, Blank/Dorf]

Engineer'sIgnorance

Self BiasIgnorance of

Customer Search

Bias towards one's own great idea and technology

Being an engineer seduces to skip validating ideas

Ignorance to know how to find customers

Ignorance ofStart

Ignorance to know how start

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Empathy Map for Customer Modelling

15http://blog.8thcolor.com/2011/08/who-are-our-posible-customers/empathy_map/

https://dschool.stanford.edu/wp-content/themes/dschool/method-cards/empathy-map.pdf

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Simpler: Modelling the Customer's Feelings

Prof

. U

. Aßm

ann,

TU

Dre

sden 20.

wp-content/uploads/2013/02/mitroff.fig2_.jpg

http://www.johndoyle.ie/?p=92

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Modeling the Customer's DayHow should a good “Customer Day Canvas” look?

NightMorning

BreakfastMorning

WorkLunch

AfternoonWork

DinnerEveningHome

EveningOut

Go to BedFallingAsleep

► Use the Customer Empathy Map to run through the customer’s day

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Analyzing the Customer's Relationships

► An organizational / influence map draws the network of the customer that caninfluence his buy-no-buy decisions

► Analysis can start with a table or a graph

► Analysis constructs a dependency graph (partial or total order)

► Deciders are the sinks of the dependency graph

[Blank/Dorf]

Managerial Technical Financial

High Departmentboss

Accounter

Middle Engineer

low Project leader End user

1 2

3

4 5<<depends on>>

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Customer Relationship Analysis with Business ModelYou

► Play your customer …. and fill a BMY Canvas.

Key PartnersWho helpsYour customer?

CustomerRelationshipsHow does sheinteract?

Customer SegmentsWhom doesYour customer help?

Key activitiesWhat do Your customer do?

ChannelsHow do they know him?How does shedeliver?

Key ResourcesWhat she isand has

Value PropositionHow does Your customer help?

Cost StructureWhat does he give?

Revenue StreamsWhat does she get?

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Customer Profile (Persona)

► A Customer Persona (profile, archetype) is a story about an average customer from acustomer segment.

■ Derived from Empathy Map, Influence Map, VPA, Problem Analysis,Customer's Day, Customers influence map

► Table form of Persona:

Highlights in the customer's day,problem canvas, VPC, or influencemap

Hints for aquisition

Gets up with difficulties Don't call him before 10:00; send hima coffee kit for advertisement

Doesn't like to read Send him a DVD with video

Has friends in political party PDU Analyze partie's opinion about theeffects of your product

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The Market Slices with Different Customer Segments

Target Person Group

Target Market (TM)

Served Adressable Market (SAM)

Total Adressable Market (TAM)

Target Person Profile (Persona)

[Blank/Dorf]

Concretenesslevel


20.4 Customer Validation(Potential) Customer Interviews as Simple Tests forHypotheses

Customer Interviews are a special form of sales meetings (pre-sales). Theyhave to conduct pain-gain analysis, guide the customer modeling by testingcustomer hypotheses, and guide the BMC development.

Interviews are the fastest, cheapest way to learn more about what yourcustomers are doing and what problems they're facing. [Alvarez]

People will talk to you because we all like to help others, like to sound smart,like to fix things, and like to complain. [Alvarez]

It's not the customer's job to know what they want. [Steve Jobs]

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Forms of Interviews, based on Sales Funnel Traveling

Problem Interview

Finding out the customer's problems and pains

Filling a problem canvas

Solution Interview

Finding out which solutions and gainsthe customer needsFilling a VPC canvas

SPIN interview

Walking with the customer from implicit needs to explicit needs

[RunningLean, Alvarez, Rackham, Bosworth]

Solutions Selling Interview(Pain Sheets)

Walking with the customer from reasons to capabilities

Pain-Gain Banana Interview

Walking with the customer from hidden needs to competitive advantage

Problem &SolutionInterview Problem-Solution-Sheet

Interview

Walking with the customer from hidden needs to competitive advantage

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Problem Presentation [Blank/Dorf]

► The problem presentation shall help to find information from the customer about hisproblem.

■ It presents the current state of problem hypotheses in form of a problem-solution list

■ It shall ask questions for problem analysis and VPA, preferably prepared byfilling the canvases before

■ Using “What-if”-questions■ Using “Hidden-effect”-questions■ Using “Cost” questions■ Using “Pain” questions

Problem Solution Today Solution Tomorrow


20.4.2 Measuring Customer Feedback

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Customer Feedback Opportunities

► Domain-specific Fairs are a good place to meet domain experts

► User Days: allow for questions and discussions with customers

► User Conferences with talks■ Exhibit or give a talk at a potential OEM's conference

► At the beer: customers are honest

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Customer Discovery Report Table [Blank/Dorf]

► The report table estimates with school grading the maturity in the customer funnel ofall potential customers.

► School grading can be 1-3, 1-5, 1-16, 1-100

Customer Enthusiastic

Urgentlyneeded

Importance ofeffects

Improvised solution

120 days Importance ofDecider

120x2 total

Miller 1 1 3 5 5 1 10 26

Bush 1 2 4 5 1 3 2 18

Clinton 5 3 1 1 1 1 2 14

Trump 2 2 4 3 3 5 6 25

Average 2,25 2 3 3.5 2,5 2,5 5


20.4.3. Channel Analysis

How does your product arrive at the customer?

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Channel Flipbook Canvas [LeanAnalytics]

► Put a problem first into the “Product Type” or “Service Type” field, then think aboutacquisition, selling, revenue, and delivery

► Subcanvas of BMC for filling Channel and RevenueStream

AcquisitionChannel

Revenue modelSelling tactic Delivery Model

Product TypeService Type


20.5 Keeping the Customer with Blank’s Double-Funnel

How do you bind the customer? (Stammkunde)

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Blank/Dorf Double Funnel

► Cold customer aquisition is 10 times moredifficult than customer binding

Consideration

Interest (Aquise)

Purchase(Activate)

Awareness

Blank's Double Funnel

Bind

Up-selling

Next-selling

Cross-selling

Referral

Customer relationship management

Customer bonus programs

Customer feedback programs

Blogs, twitter, facebook, emails

Loyality programs (birthdays...)

Rabatt-Programs

Product updatesCompetitions


20.8. The Evolving Cactus of the Nested BMC

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The Dependency Structure of Canvases (the NestedBMC)

► How would you maintain an evolving cactus for all these canvases?

BMC

VPC Customer JourneyCanvas (CJC)

ReqEC

ChannelFlipbook Canvas

Pain CanvasPain Killer Canvas

Pain-GainBananaPain Portfolio

CustomerEmpathy Map

CustomerBMCY

Customer DoubleFunnel Canvas

SPIN™ Canvas

Solution Selling™

Canvas

Gain CanvasPain Creator Canvas

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The End

► Explain the difference between customer empathy, activation, stickiness, virality andreferral.

► What is the difference between untested, assessed, and tested canvases?

► What is a strong real tested pain?

► Why are catastrophies better for a good value proposition than blocking factors?

► Explain the influence of the UCA for virality.

► Why is the pirate metrics important for building good value propositions?

► How can you cross the border between Virality and Revenue in the LeanAnalyticsstages?

► Explain the differences between the SPIN™ Canvas and the VPC. Which canvas do youprefer for a cold call?

► Explain how you use the Channel Flipbook Canvas, the Customer Empathy Map and theCustomer Double-Funnel Canvas for a Customer and Customer-Segment Analysis.

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