How to Do Customer Development | Ep. #340

In Episode #340, Eric and Neil discuss how to do customer development. Tune in to learn the importance of getting every kind of customer’s feedback so that you can to adjust your sales strategy and boost your revenue, today!

Time Stamped Show Notes:

  • 00:27 – Today’s topic: How to Do Customer Development
  • 00:36 – Customer development is reaching out to customers and knowing their preferences and feedback
    • 00:46 – The data and feedback improve what you’re offering so you can increase your revenue and MPS score
    • 00:55 – You can use Qualaroo and SurveyMonkey to help you
  • 01:05 – The two types of data are qualitative and quantitative data
    • 01:06 – Quantitative is what you get from Google Analytics
    • 01:11 – Qualitative is from customer development
    • 01:20 – You can’t easily know the problem just by looking at the data
    • 01:35 – You can get the qualitative data from talking to your customers
    • 01:59 – One of Neil’s friend sells HDMI cables and other electronic devices
    • 02:05 – Customers don’t buy from Neil’s friend’s site because he doesn’t offer free shipping
    • 02:17 – Neil’s friend took the average cost of shipping, added it to the product price and offered free shipping
  • 02:52 – Steve Blank’s 4-step framework
  • 03:27 – Getting your customers on the phone is very important
    • 03:37 – You want to solve your customer's’ problems
    • 03:49 – Make adjustments from the feedback you receive
  • 04:16 – You want to talk to every kind of customer, not just the one paying you
  • 04:39 – Marketing School is giving away a free 1 year subscription of Drip which is an email automation tool
    • 04:56 – Subscribe, rate and review Marketing School
    • 04:59 – Text MARKETINGSCHOOL to 33444 for those in the US
    • 05:05 – For international listeners, just email [email protected]
  • 05:10 – That’s it for today’s episode!

3 Key Points:

  1. Reach out to your competitors’ customers and those who left you—not just your paying customers.
  2. Having both qualitative and quantitative data will better inform the adjustments you can make to your product and services.
  3. Address the feedback and make the necessary adjustments.

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Full Transcript of The Episode

Speaker 1: Get ready for your daily dose of marketing strategies and tactics from entrepreneurs with the guile and experience to help you find success in any marketing capacity. You're listening to Marketing School with your instructors, Neil Patel and Eric Siu.

Eric Siu: Welcome to another episode of Marketing School. I'm Eric Siu ...

Neil Patel: ... and I'm Neil Patel ...

Eric Siu: ... and today, we're going to talk about how you can actually do customer development. Neil, first off, what is customer development?

Neil Patel: Customer development is all about talking to your customers to figure out what they want, don't want, what they like about your product or service, what they love about it. All this data and feedback, it helps you improve what you're offering so that way you can increase your revenue, increase your MPS score. It's a really effective strategy. There's a lot of tools like Qualaroo, you can even do it with like Survey Monkey. The tools are endless, but the whole key about this is, there's two types of data — quantitative and qualitative. Quantitative is like the data you got from Google Analytics where it's all numbers. Qualitative is what you get from doing customer development. Just because someone bounces off a page and it shows in Google Analytics, it doesn't mean that from that data, you can figure out what's wrong. By looking at the data, it shows that everyone's bouncing off your check out page, right? You don't necessarily know what to fix.
Sure, you can use tools like Crazy Egg and Hotjar to get insights on the page, but you still need to talk to customers. By surveying them, getting that qualitative data, you can do customer development and figure out what you need to change within your website, your product, your pricing page, whatever it may be, to maximize your conversions. The best example of this is ... I was talking with one of my buddies, and he sells HDMI cables. He sells other electronic stuff too on his website, and he'll always end up telling me, he's just like ... one of their biggest user complaints, when they're doing customer development was they don't want to buy from his website, not because of his price, but because he didn't offer free shipping. He couldn't give away free shipping because the product was so cheap that he would just lose money because in many cases, the shipping was more expensive than the product.
What he did is he took the average cost of shipping ... because people would order throughout the whole US ... he would take the average, add that to his price of his item, so then he increased the price of his item. He then changed his shipping to free shipping because the total price was roughly the same because he added the shipping cost to the price of his product, so it just cost more, and then made the shipping free so at the end the cost would be the same. His sales went through the roof. He learned that all because he did customer development. Quantitative-like analytics wouldn't have told him that.

Eric Siu: Great, and there's actually ... the guy who coined this term, it's basically a four-step framework. It's from this professor whose name is Steve Blank, really well-known in Silicon Valley. Basically it's what Neil described, but you know, ultimately you're looking to solve ... making sure that you have the right features, basically you're looking to solve the customer's problems. What Neil talked about ... yes definitely, you want to survey people, you can use Qualaroo, and then quantitatively, you can also look at Crazy Egg and Hotjar, but what's also really important when it comes to customer development is actually talking to them. Getting with them on the phone, you know, old school stuff, no surprise, get with them on the phone and see what's bothering them, what they're enjoying about it, and really just find out what their challenges are, because ultimately you're trying to solve their problems.
Then from there, you have a few conversations, you can see people are going to talk about things, a lot of it's going to be noise, but the things that are repeated over and over, that's signal, and those are the things you should consider making adjustments to. There's phone calls, but at the end of the day, nothing beats in person which is why I like to meet ... even customer development, we're talking about it from a product perspective, but even from service perspective, customer development is for me, for us, flying up to clients, talking with them, and learning about what else they need help with, that helps us improve our service overall as an agency.

Neil Patel: Yeah, and when you're doing customer research, you don't want to talk to just customers who are paying. You also want to talk to customers who are paying your competition or customers who canceled your service or returned your product. Or potential customers who would have bought or are looking for a solution within your space but didn't end up buying.

Eric Siu: That's it, I think it's pretty straightforward. If you want to read the book, Steve Blank actually has a book, or really good articles on customer development so you can learn more about it ... but before we go, we do have another special giveaway. This is a one-year annual subscription of Drip, which is my favorite email automation tool, and basically has a whole host of features, tagging, lead scoring, split testing, revenue reporting, and more. If you want to get in on this giveaway, all you have to do is to rate, review, and subscribe to this podcast, and then text "marketingschool" that's one word, "marketingschool" to 33444 to prove that you did it. If you're international, just go ahead and email me, Eric, E-R-I-C, at singlegrain.com to prove that you did it from there, and then that's it for today. We'll see you tomorrow.

Speaker 1: This session of Marketing School has come to a close. Be sure to subscribe for more daily marketing strategies and tactics to help you find the success you've always dreamed of. Don't forget to rate and review so we can continue to bring you the best daily content possible. We'll see you in class tomorrow, right here on Marketing School.

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