## Customer Development in B2B: Creating Products Your Clients Will Love

Transforming customer needs into growth opportunities is the goal of Customer Development. In this article, we explore when and how to conduct CustDev, discuss the essence of the method with examples, and at the end, provide a bonus—a checklist to verify the objectives of conducting CustDev.

# History and Essence of the Method

Steve Blank, often referred to as the “godfather of Silicon Valley” and founder of eight successful startups, is the author of the Customer Development (CustDev) methodology. In the mid-1990s, Blank concluded that 90% of startups fail due to a lack of customer interest. He observed that disproportionately more attention was given to product development and developed the concept of a “lean” startup. At its core, CustDev involves in-depth research into customer needs, requiring no less resources than product development itself.

CustDev is the process of studying customer needs through close interaction with the target audience and obtaining feedback from clients. In the classic understanding within the IT sector, CustDev should be conducted before product development or in the early stages. This helps determine whether the product will meet customer needs before significant investments are made in its creation.

# Examples of CustDev: How to Create Products Your Clients Will Love

“The aim of marketing is to know and understand the customer so well that the product or service sells itself,” writes management theorist Peter Drucker. The CustDev methodology has become a working tool, allowing companies to approach Drucker’s golden formula. Below are examples of CustDev that clearly demonstrate why companies should conduct it.

## CustDev in a Startup Company

The term Customer Development emerged in the startup industry, where developers’ ideas often diverge from customer expectations. To test product demand, startup founders not only analyze numbers, metrics, and revenue indicators but also engage directly with potential customers.

A vivid example is Alex Terrell, the founder of SaaS company Groove. He sent out emails to 2,000 clients asking to discuss the product and received an overwhelming response. Terrell personally spoke with each one: within a month, he conducted 500 conversations, gaining a deep understanding of his target audience. This experience helped improve onboarding, retain dissatisfied customers, expand the target audience, and set up a loyalty program.

“Thoughts about how to improve the product for you keep me awake at night,” Terrell wrote in his emails to clients.

## Classic B2C Example

The well-known company Tefal conducted CustDev during the launch of its main product—the non-stick frying pan. Initially, the advertising campaign focused on the fact that the pan doesn’t require oil, promoting healthier cooking. However, a survey among customers revealed that this was not the primary reason they valued the product. Instead, the ease and speed of cleaning were far more important. As a result, the advertising campaign was revamped, and the new message about easy cleaning significantly increased sales volumes.

“Long and simple daily use,” states one of the company’s slogans.

# Conducting CustDev in B2B: What You Need to Know

Obtaining feedback from corporate clients comes with its own set of challenges and nuances. The extended sales cycle and the complexity of products add layers of difficulty. When facing obstacles in hypothesis testing, companies often turn to competitors or firms in related fields to save time and resources. However, executing CustDev in its purest form requires the participation of multiple representatives within the company.

# When Should You Not Apply CustDev

In certain industries, gathering user feedback through CustDev is considered unfeasible. For instance, in game development, it’s challenging to accurately predict the success and demand for a new game. The same applies to sectors where buyers frequently make impulsive, image-driven, or status-oriented purchases—identifying the motives behind such purchases through feedback collection is exceedingly difficult.

# Conducting CustDev

The goal of CustDev research is to better understand the client and incorporate this information into product development and marketing campaigns.

## Stages of CustDev

1. Customer Discovery

   • Process: Identifying your customer.
   • Details: In the initial stage, it’s crucial to study the market and potential target audience, creating a customer profile that includes geography, gender, age, interests, and customer “pains.”
   • Tools: Create a Customer Journey Map to visualize the customer’s path. Utilize the Jobs To Be Done framework to better understand consumer behavior.

2. In-Depth Interviews

   • Process: Conducting a series of conversations with potential buyers to identify ways to enhance the product and meet their needs.
   • Importance: Client interviews are the foundation of all research, helping to determine whether customers will buy the product.
   • Common Mistakes: Many failures occur at this stage. There is a wide array of feedback collection tools available, including telephone surveys, A/B testing, and face-to-face interactions.

3. Developing MVP - Minimum Viable Product

   • Process: Launching a pilot version of the product with limited functionality to assess its demand.

# Bonus: Checklist “When to Conduct CustDev”

Use this checklist to determine the right timing for conducting CustDev and ensure that your efforts align with your business objectives.