What is the customer development model, and how does it work?

Munther Al-Dawood- Enterprise Expert (maldawood@growenterprise.co.uk)

Feb 2

Concept

It is a customer-centric approach aiming at discovering, validating, creating, and growing customers. The customer approach differs from the product development approach, which focuses on launching products regardless of the results of the market testing. The customer development model is a lean start-up process that provides tools and techniques to create and grow a new business.

Background

Steve Blank coins the term 'customer development' in the book 'The four steps to the epiphany' 2013. In this book, Steve identified the processing steps to develop customers, including customer discovery, customer validity, customer creation, and building a new company.

How does it work?

In Steve's book, "The four steps to epiphany', the author introduced the customer development model. Here is a brief description of the steps to develop customers (Blank, 2013)¹:

Processes: are actions to discover customers, validate assumptions and grow a new business.
Searching and execution processes are split into two groups: (1) searching processes that aim at customer discovery and customer validation, and (2) execution processes that aim at customer creation and company building.
Customer discovery: involves finding new customers (e.g., who are they? And how to reach them?) and testing the business concept (problem-solution fit, and value proposition).
Customer validation: involves validating your sales model (product-market fit and sales roadmap) and achieving repeated sales. Customer validation is reached when discovered customers accept and promise to buy your new products.
Customer creation: involves creating demand and driving the distribution channels to sell your new product. In this stage, the sales cycle begins, and thus customers are created.
Company building: involves formally forming the company, designing an organisational structure, hiring staff and management, managing resources, and more.

This post is sourced from my new book- Your Guide To Reach Innovation.
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Author: Munther Al Dawood

www.growenterprise.co.uk

maldawood@growenterprise.co.uk

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