building value for the customers

BUILDING VALUE FOR

CUSTOMERSIs it Cinderella’s shoe, is Cinderella your customer?

Presenter: Tarun GaurCEO, tringapps, Inc.

Some definitions!Let’s set the context …

The Product… is a collection of features!

CustomersBuy the products you design!

The MarketA grouping of customers!

The MarketIs a set of actual or potential customers,For a given set of products and services,

Who have common needs or wants,Who reference each other while making buying decisions.

THE BUSINESSBusiness is the product, product the business! Your

startup is a business, treat it like one rather than “earn money quickly” trick!

Research and DevelopmentTechnology research and business analysis are two main stays of modern R&D, innovations happen when teams

analyze, research and develop

Product DesignMost established companies have Product Design groups per product, they are responsible for product experience

Product EngineeringProduct team proposes, Engineering team disposes. In most established companies, product and engineering

teams are parallel orgs

Product MarketingThey are tasked with doing things to capture market

shares. They exploit every channel to get the word out. Their efforts result in sales picking up!

Product SalesThey are tasked with selling the product directly, they work

with quotas, targets and reach out to the customer to sell the product. If sales is easy, the marketing team is helping them,

if not - there is a problem with the product or product marketing

Product SupportHow may I help you ma’am? err … sir?

FinanceEvery business requires money, it’s a no-brainer. Rag tag

units that don’t have funds fizzle out

Relationship ManagementWe call it the CRM, customer relationship management. It’s different from Product Support. Good support, results

in good relationships

RecommendationUnderstanding these business roles is crucial, like a

minimum viable product, these roles represent a minimum viable business! Create a spreadsheet to list down activities

under each bucket

STARTUP AS A BUSINESSEntrepreneurs have to wear multiple hats!

Thought LeadersMost product requirements will come from the thought

leaders - by invention or discovery

Action LeadersAction leaders are good at inspiring their teams, they roll up

their cuffs and participate in the development exercise, Thought leader and Action leader should not be the same

person

The BelieversEvery business requires money, it’s a no-brainer. Rag tag

units that don’t have funds fizzle out

Voice of CustomerEvery business requires money, it’s a no-brainer. Rag tag

units that don’t have funds fizzle out

RecommendationSomeone in the team needs to think like a customer, without this role, your startup will fail, for sure! Create a process for

other roles

THE CUSTOMERUnderstanding consumer behavior helps you build

better products, and refine your message

The customer behavior

Understanding your customer is what stands between your product and the market share

Purchasing PowerClassify your customers based on their purchasing power,

establish personas early on. Free Loader, Rationalist, and The King!

The DemographicsAnother way to classify customers, seldom a 20 year old

has the same needs and wants as a 60 year old.

The GenderMen are from Mars, Women from Venus. Understanding

how their needs and wants vary may help you build better value for them

The LocationUrban consumers think differently than Rural Consumers,

their needs and wants are generally different

The CultureGenerally optional, but can give you amazing insights into

purchasing behaviors of customers

RecommendationDevelop personas and validate your features based your

understanding of your customer profiles; then go and verify your findings via surveys

CUSTOMER PSYCHEUnderstanding the customer psychographic profile helps you carve out different strategies for different

type of customers!

InnovatorsThe technology enthusiasts; they love technology for it’s

own sake

Early AdoptersThey have the insight to match an emerging technology to a strategic business opportunity and ability to evangelize it

within their organizations

Early MajorityThe Pragmatists; are the hardest to sell to, they don’t buy into revolutions, they want incremental improvements and

don’t take risks like early adopters

Late MajorityFor every pragmatist, there is a conservative. They

represent one-third of the market but are rarely developed as tech community thinks they are stupid and slow

LaggardsSkeptics; do not participate in the tech marketplace,

except to block purchases. Skeptics don’t buy or act. We should know how to make use of that

RecommendationFocus on Innovators and Early Adopters first, and then pivot to Early Majority but have a customer acquisition strategy for early majority in place from the start as it is difficult to judge

the inflection point at times

SALESFORCE: AN EXAMPLESoftware as a service

There is a better wayMarc Benioff screams continuously, software as a service

will spell doom for packaged software

The backlashSaaS model is inherently insecure and only a fool will put

enterprise data “in the cloud”

The last laughSalesforce is one of the fastest growing software companies

in the world, with revenues touching $4Billion; packaged software is on it’s way out

Salesforce Customer Acquisition

Strategy

Go to the worker beeTarget salespeople and their managers instead of customer

service and marketing teams

The big small companyGo to mid-market companies; big enough to need systems to

compete with the industry leaders in their category, small enough to be unable to afford the IT investments required

The big small companyGo to mid-market companies; big enough to need systems to

compete with the industry leaders in their category, small enough to be unable to afford the IT investments required

The CultureFocus on United States only, in part to stay close to the

customer, in part because United States has always been the early-adopting country in enterprise software

The VerticalsThey focussed on technology-savvy industries, beginning with high tech itself, them moving into telco, pharma and

finally financial services

THE CLAIMPassing the elevator test

Down to two short sentences: The claim

• For (target customers - beachhead segment) • Who are not satisfied with (the market alternative) • Our product is a (product category) • That provides (compelling reason to buy) • Unlike (the product alternative) • Quantify the results (brings immense value)

Salesforce Elevator Pitch

• Our product is FOR mid-market tech savvy companies • WHO can’t maintain relationships with customers

effectively like fortune 500 companies • Salesforce is an online CRM suite • THAT reduces costs, maintains data integrity and has

feature parity with cumbersome competitors • UNLIKE Microsoft Dynamics that is a hassle to deploy,

customize and integrate • Provides higher SLAs than enterprise software

Delivering ValueOnce the strategy is in place, the ACTION leaders have to

implement the strategy by pushing the team to deliver. Customer centric approach becomes crucial.

BUILDING VALUE IN YOUR STARTUP

Step by Step Approach

Customer Profiles

Value MapsWho is it for? What does it do?

Startup Failure90% startups fail because of their failure to identify the value

propositions for the customers therefore their business models are flawed. The customers are very smart, if they

can’t derive value, they will not come.

Customer ProfilesWho is it for? What does it do?

Value Maps

Business ModelHow to sell it?

STEP 1Identify Customer Profiles

Customer ProfilesHelp you understand your customers better … and there is a

very simple and established method to do just that.

STEP 2Identify Customer Jobs

Customer Jobsdescribe what customers are trying to get done in their work and in their lives, as expressed in their own words. It could

be the task they are trying to complete, the problem they are trying to solve, or the needs they are trying to satisfy

Customer Jobs

• Functional • Social • Personal • Support

Isn’t it the same?Did you notice how Product Manager’s world is similar to Business Analyst or Software Architect? Customer Jobs result in Scenarios and Use Cases. If Customer Jobs are

well defined, the requirements document is robust.

It’s not the same!Use Cases and Scenarios intend to set boundary to the system and help you define the scope of the software

whereas Customer Jobs help you validate if features make business sense or not.

Jobs have a contextCustomer Jobs depend on the context in which they are performed. A context may impose certain constraints or

limitations.

A ExampleCreate a User Interface for someone who is flying a plane or

someone who is driving a car!

STEP 3Sort Customer Jobs based on their

importance

Job ImportanceAll things that customers do may not have the same importance for them. Some matter more than others

Job FrequencySome jobs are done more often than others, even though they are small but they may carry more importance in the

psyche of the customer

STEP 4Identify Customer Pains

Customer Painsdescribe bad outcomes, risks, and obstacles related to

customer jobs.

Ask a lot of questions!Let’s give them a name: trigger questions. Customer pains can be identified easily if you ask a lot of trigger questions

around empathy maps

Trigger Questions• How do your customers define too

costly?• What makes your customers feel bad?• What challenges do they encounter?• Are they afraid of losing face? • What common mistakes do they make?• What is keeping them awake at night?

Make the pains concreteWhen the customer says “waiting in line was a waste of

time”, ask the customer after how many minutes exactly it began to feel like wasted time. That way you can note

“wasting more than x minutes standing in the line” was a pain.

STEP 5Map the Pains to Customer Jobs

Customer Jobs and Customer Pains

Map each pain point to a customer job or a set of jobs. It will help you get a clear idea of how the customer jobs can help

resolve the pain points and thereby provide value to the customers.

STEP 6Identify Customer Gains

Customer Gainsdescribe the outcomes and benefits your customers want.

Some gains are required, expected, or desired by the customers, and some would surprise them.

Why bother about gains?Your customers achieve functional utility, social gains,

positive emotions, or cost savings

Gain Types• Required Gains• Expected Gains• Desired Gains• Unexpected Gains

Apple Example• Required Gain: Can I make a phone call?• Expected Gain: Apple phones are well designed• Desired Gain: Apple phone integrates with my MacBook• Unexpected Gain: The force touch (for upcoming models)

Difference: Pain and GainPains are negative, gains are positive! Customer frustrations

and rants give you pains, delight gives you gain

Surveys are importantWhenever you engage your potential customers on pains, always end with a positive question: What would make this

pain go away? … and you will most definitely identify the gain.

STEP 7Rank Customer Jobs, Pains and

Gains

Ranking is the keyRanking jobs, pains and gains is essential in order to design value propositions that address things that customers really

care about.

How to rank?• Ranking Jobs: From Important to Insignificant• Ranking Pains: From Extreme to Moderate• Ranking Gains: From Essential to Nice to Have

STEP 8Validate the rankings of customer

jobs, pains and gains

ValidateYou may start with what you think is important for the

customer but do not forget to verify it by interacting with your potential customers at some point

Customer ProfilesWho is it for? What does it do?

Value Maps

Business ModelHow to sell it?

QUESTIONS

INDIA STARTUP IGNITERSWe need YOU to participate, let’s

collectively help fellow entrepreneurs to build cool startups!