Question

BUS682: Entrepreneurial Management Customer Validation Instructions and Rubric Content For this assignment you will be expected to analyze why Customer Validation is critical to the success of a startup. As you write your paper, consider the following questions as a guide: 1 What, specifically, is Customer Validation designed to do? 2. Done correctly, what is the output of effective Customer Validation? 3. If done incorrectly, or not done at all, what is the possible or likely result? 4. As it relates to the goal of a startup, why is Customer Validation critical? 5. Imagine you don't know about Customer Validation, what would your first steps be in your startup? Please pull from the readings and discussion boards for the class. I will be looking for solid logic and grasp of the Customer Validation process and an understanding its role in building a startup Formatting 4-5 pages • APA Style: include title page, reference page, in-text citations and no abstract required. • Submit your assignment in Moodle

Answer 1

“Customer Development is a four-step framework to discover and validate that you have identified the market for your product, built the right product features that solve customers’ needs, tested the correct methods for acquiring and converting customers, and deployed the right resources to scale the business.” – Brant Cooper and Patrick Vlaskovits

With the above quote as direction, it becomes so apparent that customer development would be the cornerstone for any business. Without gaining customer insights and understanding their needs, it would be foolish for any company to attempt to create products and services. Customer development saves a company, money and other critical resources – a company would produce only those offerings that customers would want and need and not indulge in guesswork to make those that customers may find superfluous and hence not use. Using customer development as a tool, a company can identify problems, find their solutions, test any new ideas / products, and enhance their current offerings and ideas. Over time, with the surge of social media – networking, building relationships and customer development have become critical elements of any business and its promotional campaigns. Before the technological advancements, customer development concerned itself only with gaining an understanding of what existing customers want and then developing offerings around those. There was no understanding or insights about future needs and or potential customers.

In the current scenario, however, producing offerings is a lot easier – shifting the focus from not whether the product can be created to whether the product is needed. The art of customer development helps businesses to gain insights into potential customers, anticipate problems, and know which products to build that would do away with those problems and make the life of customers easier. Customer development would do away with guesswork based on past customer experiences and focus on real time feedback and views from them. It helps to bridge the gap between how customers actually view the service and products of a company versus what the company believes to be true. The main area of disconnect between customers and companies is often due to the fact that companies believe that they are providing customers with what they need, while customers actually attach no value to what the company does or creates for them.

The job of any business / company is to serve the customer consistently and not compromise on quality and effort. Customers must see value in a company’s offerings, over and above the others in the market, and the products must serve to make the customer successful and generate high revenue. By investing in customer development, a company would help its customers achieve all this and more – making the company of great value to them. The fact is that the aim of every company is to make huge amounts of money and be extremely successful. Companies have a vision, which would need meticulous planning and perfect execution – but in order to make the vision a reality, they need the support of their customers. Customer development is not an easy task for any company. Gaining the confidence of customers by speaking to them, requires time, resilience, tenacity, and the willingness to be uncomfortable – it becomes critical for a company to do what the customers seek and do it right each time.

Building a business is not easy – and especially now with so much competition and limited resources. It would be foolish to spend time, money, and effort on creating products and services to which, customers would attach no value. By engaging in customer development, a company can save the vital resources and use them to create something of actual value to customers – something that customers would instantly want and use. Through customer development, a company can further build on its ideas, continually improve, and consistently keep customers happy and engaged. Again, customer development is not easy but it is certainly beneficial to spend time and money on something that customers would prefer than wasting these resources on something that no one would want.

Through customer development, a company can consistently improve upon an existing idea, service, or product to make them something that customers would be extremely interested to buy / use. By using customer development, a company can transform even a low cost product or low-key idea to one that customers would love and be extremely excited to use and promote. When a business can use ideas and thoughts elicited from customers to improve on its current offerings, it is certain that customers would actively contribute to the success of the endeavours – they would want to ensure that the product and or service comes into existence and becomes highly sought. This in turn would mean, that not only would the customers use the products they would encourage others to do so as well by speaking to them and providing great referrals for the company.

As mentioned earlier, customers can prove to be a source of inspiration and great ideas. This is especially useful for companies in a start-up stage. Through customer development, a company can gain some great ideas – the simple task of asking questions and listening actively will allow a company to learn more about the target audience and its existing customers. Since the market environment and customer needs are constantly changing, it is prudent to understand the most current scenario and the existing challenges in order to create offerings that will remove or at least greatly reduce the problem. Through customer development, a company would thus gain customer trust and build stronger and new relationships – a crucial factor for the success of any company.

The customer-company relationship has evolved over the years. It has become more inclusive, interactive, complete, and mutually beneficial. It is no longer just about making a sale but rather ensuring that through the association, the customers can develop, grow, and make a success of their business – this is the process of customer development. The process helps customers to meet consistently their goals, which in turn creates an environment of trust, confidence, and mutual understanding. Customer development helps the customer to grow, share and develop ideas, and interact with the company in a spirit of collaboration, leading to a strong desire to make the idea / product successful. Not only do sales increase, thereby benefitting the company but also the customers remain in control of ideas enhancing the feeling of ownership. Companies would be more aligned to the needs and goals of the customers, which would ensure that they provide them with the necessary guidance and tools to ensure accelerated growth for the customers and their business.

The process of customer development in the current scenario, has paved the path to make the relationship with customers a two-way ‘street’. It is no longer only about maximum profits but rather one that is aimed at creating relationships, building trust, and ensuring that customers become partners in the business. The stronger the relationships, the more likely are customers to spread the good word and get others to do business with the company. So essentially, all that companies really need to focus on is building relationships and trust with customers, who would then do their bit to gain sustainable profits and success for the company. After all, their ideas and expertise would have gone into producing the offerings – it would follow naturally that they would want to see the growth and success of their efforts. Companies on the other hand, save valuable resources on trying to entice new customers – the actions and words of their existing customers would be the best advertisement and promotion for them.

It would seem highly imprudent to waste time and other resources on first building products and sending them into the market to ‘test’ whether they would sell. Would it not be better, to test the ideas first with the people who might actually use it – go the customer development route.