If you’re like most businesses, building a remarkable product is your primary focus. This is sound logic, because by offering something remarkable, you’ll stand out amongst your competition.
What makes your product remarkable? Ultimately, after the marketing smoke clears, the consumer decides if your product is remarkable, through sales. I know, I know…this is common sense, but nonetheless it’s true that more products fail from a lack of customers than from a failure in product development.
Good products fail all the time, because most businesses don’t have a process to manage their customer development. “Build it and they will come,” has likely never been a winning strategy, yet most ideas find their way to market without much regard for what the customer is “willing” to pay for.
What Is Customer Development?
“Customer Development” is a phrase coined by Steve Blank in his book The Four Steps to the Epiphany. Originally intended for the software industry, it’s a theory of product development that suggests we must continually learn about our customers throughout the entire product development process. Lets take the basics behind this methodology and apply it to the Toy Industry.
An example I will use is (what I think is) a fictional toy: A board game puzzle that knows when it’s complete, and does “stuff” after the last piece is fit into place.
Customer Development Is The Search For The Final Product
Remarkable products start with a problem and are followed by an “a ha” moment. The moment itself is not so easy to explain, but the feeling is something resembling a relief–an itch that has been scratched. I like puzzles, and the anticipation of solving a problem. However, I have always felt that there’s a lackluster finale once that last puzzle piece is fit, once the problem has been solved.
My “a ha” moment is a theory that we can extend the finale of the product with something that a) rewards the user in some way, b) encourages the user to continue playing in some way, or c) convinces the user to make another purchase. These ideas are “theories” I have, but I need to validate them first.
Who Is The Customer?
1) College Graduates who have relevant interests like Puzzles, Board Games, The Rubix Cube, etc. I choose graduates because I assume they are more likely to spend extra money on something like this, as opposed to a younger demographic who might not (I could test this of course). For organization, I’ll call this group “Ol’ School.”
2) Parents of toddlers who want to help with “educational stimulation”. My thought for this is that the puzzle is big and plastic and is an assortment of animal pieces. When put together correctly it announces the animal: “This is a Cow.” For organization, I’ll call this group “New School.”
Research The Customer
My first stop to researching any demographic is Facebook, and here’s why:
It has the numbers: there are more than 1 billion registered users (1/7 of the world’s population and 40% of all worldwide internet users).
The user accounts are real: the network was born as a social communications tool, and as such, there’s less of a reason to be anonymous on Facebook. Furthermore, spammers don’t get very far with a Terms of Service that disallows and pursues fake names and side accounts.
User Accounts are filled with demographic data: age, location, gender and interest are all collected and sorted.
It has proof of engagement: In early 2012, it was reported that 1 in 5 internet page views were within the social network, 250 million photos were uploaded each day to the social network, and for each visit the average user spent 20 minutes on the social network. My point: if you can’t find your niche on Facebook, you might need to have another “a ha” moment.
Spending only about 5 minutes on each of my potential markets, I’ve determined the following (in a real world scenario, I would spend hours, not minutes):
Group: Ol’ School
I chose my demographic to be limited to the United States, over 25 years old, and who have confirmed their interest in Board Games, Puzzles, Strategy, Rubik’s Cube, or Problem Solving. My reach is 2,347,280 and based on my personal experience with running FB Ad campaigns, a decent click through rate (CTR) is about .5% which yields 11,736 potential customers for us to reach out to. More on this later.
Group: New School
I chose my my demographic to be limited to the United States, over 30 years old, and who have confirmed their interest in Toddlers, Diapers and Parenting. My reach is 3,210,500 which yields around 16,052 potential customers I can reach out to.
Get Out Of The Building
“No facts exist inside the building, only opinions,” -Steve Blank. What he means is that we need to get outside and ask our target market specific questions that challenge our new product theories.
My suggestion is to create a free digital survey with a service like google docs (docs.google.com) or Survey Monkey (www.surveymonkey.com) and use Facebook Ads to target the customers we researched earlier.
Learn & Iterate
More often than not, your product is not as perfect as you had originally thought. In this case, use the feedback to “pivot” your idea a bit. If you collected the email addresses like a smart marketer, you can keep these “earlyvangelists” in the loop when you take the product to market.
Show Me The Money
Nothing validates a product theory quite like someone willing to pay for it now.
A great survey question to ask is, “Would you pay for a product like this now” even though we aren’t actually prepared to take money from them at this stage in the game. Despite the survey giving you indication to invest, here’s a little secret I have for getting your product funded:
Kickstarter
If you’re unfamiliar with kickstarter, it is a funding platform for creative projects.
Creating a kickstarter project, we can ask these earlyvangelists to put their money where their mouth is. Put together a great pitch about your product, add a video, product designs, and some information about the company culture.
The best part is that you’re in no way obligated to continue the project unless it reaches the minimum level of funding you require, and it costs nothing to activate your project with Kickstarter. It’s a win, win.
Conclusion
The Toy Industry is a very eclectic and creative bunch, and I’m sure ideas aren’t very hard to come by at events like the American International Toy Fair. My hope is that you start to wrap your head around the idea of customer development, so that you can effectively validate your ideas and build remarkable products. This is only a brief introduction to customer development. For a thorough understanding of the theory, I encourage you to read Steve Blank’s, The Four Steps to the Epiphany.
For information about becoming a TIA member or attending one of TIA's go-to-market events including Fall Toy Preview and Toy Fair, please visit www.toyassociation.org.
