class 4 berkeley/columbia demand creation

The Lean LaunchPad

Session 4: Customer Relationships (Demand Creation)Session 4: Customer Relationships (Demand Creation)

Professors Steve Blank,Jon Feiber, Jim Hornthal, Oren Jacob

https://sites.google.com/site/xmba296t/

XMBA296T



Agenda

• Logistics• Customer Discovery/Validation – in the real world• Demand Creation Definition• Demand Creation Physical• Demand Creation Web/Mobile/Cloud• Metrics and Experimentation

How Are You Doing?

• Teamwork– Roles– Conflicts– Blogging

• Pivots– If you haven’t done any it’s the wrong class for you

• Speed– If you’re working in your comfort zone it’s 10x too slow

The Customer Development Process

Customer DiscoveryCustomer Discovery

Customer ValidationCustomer Validation

Customer Creation

Customer Creation

Company Building

Company Building

Pivot

The Customer Development ProcessCustomer Discovery



Customer Creation

Customer Creation

Company Building

Company Building

Bus Model Canvas

Bus Model Canvas

Extract Hypotheses

Extract Hypotheses

Test Problem

Test Problem

Test Solution

Test Solution

Pivot or ProceedPivot or Proceed

Customer Discovery: Physical/Web

Bus Model Canvas

Bus Model Canvas

Extract Hypotheses

Extract Hypotheses

Test Problem

Test Problem

Test Solution

Test Solution


Customer Discovery

Bus Model Canvas

Bus Model Canvas

Extract Hypotheses

Extract Hypotheses

Test Problem

Test Problem

Test Solution

Test Solution


Customer Discovery - Physical

Bus Model Canvas

Bus Model Canvas

Extract Hypotheses

Extract Hypotheses

Test Problem

Test Problem

Test Solution

Test Solution


• TAM/SAM• Product MVP• Customers• Channel • Market Type• Customer Relationships: Get/Keep/Grow• Key Resources• Partners• Pricing

Customer Discovery - Web

Bus Model Canvas

Bus Model Canvas

Extract Hypotheses

Extract Hypotheses

Test Problem

Test Problem

Test Solution

Test Solution


• TAM/SAM• Low Fidelity MVP• Customers/Source• Channel • Market Type• Customer Relationships: Acquire/Activate• Traffic Partners• Pricing


Bus Model Canvas

Bus Model Canvas

Extract Hypotheses

Extract Hypotheses

Test Problem

Test Problem

Test Solution

Test Solution


• TAM/SAM• Low Fidelity MVP• Customers• Channel • Market Type• Cust Relationships• Traffic Partners• Pricing

• Customer Contacts• Problem Understanding• Customer Understanding• Market Knowledge


Bus Model Canvas

Bus Model Canvas

Extract Hypotheses

Extract Hypotheses

Test Problem

Test Problem

Test Solution

Test Solution



• Customer Engagement• Test Low Fidelity MVP• Customer Understanding• Traffic & Competitive Analysis


Bus Model Canvas

Bus Model Canvas

Extract Hypotheses

Extract Hypotheses

Test Problem

Test Problem

Test Solution

Test Solution



• Update Bus Model• Create Prototype/Prod Presentation• Test Solution with Customer• Update Business Model• 1st Advisory Board Members


Bus Model Canvas

Bus Model Canvas

Extract Hypotheses

Extract Hypotheses

Test Problem

Test Problem

Test Solution

Test Solution




• Update Bus Model• Test High Fidelity MVP• Measure Customer Behavior• Update Business Model• 1st Advisory Board Members

Customer Discovery – Web/Physical

Bus Model Canvas

Bus Model Canvas

Extract Hypotheses

Extract Hypotheses

Test Problem

Test Problem

Test Solution

Test Solution


Verify the:• Value Prop• Cust Segment• Cust Relationships• Channel• Revenue Model• Pivot or Proceed



The Customer Development ProcessCustomer Validation



Customer Creation

Customer Creation

Company Building

Company Building

Get Ready to Sell

Get Ready to Sell

Sell, Sell, Sell

Sell, Sell, Sell PositioningPositioning Pivot or

ProceedPivot or Proceed

Customer Validation - Web

Get Ready to Sell

Get Ready to Sell

Sell, Sell, Sell



Pivot

Customer Validation - Physical

Get Ready to Sell

Get Ready to Sell

Sell, Sell, Sell



• Craft Positioning• Develop Sales Materials• Hire “Sales Closer”• Sales Channel Action Plan• Refine the Sales Roadmap• Formalize advisory board


Get Ready to Sell

Get Ready to Sell

Sell, Sell, Sell



• Craft Positioning• Acquire/Activate Plans and Tools• Build High Fidelity MVP• Build Metrics Toolset• Hire data analytics chief • Formalize advisory board

Customer Validation - Physical

Get Ready to Sell

Get Ready to Sell

Sell, Sell, Sell



• Craft Positioning

• Acquire/Activate Plans• Build High Fidelity MVP• Build Metrics Toolset• Hire data analytics chief • Formalize advisory board

• Find Earlyvangelists• Test Sell – Out of the Building• Refine Sales Roadmap• Test Sell Channel Partners


Get Ready to Sell

Get Ready to Sell

Sell, Sell, Sell



• Craft Positioning

• Acquire/Activate Plans• Build High Fidelity MVP• Build Metrics Toolset• Hire data analytics chief • Formalize advisory board

• Prepare Optimization Plans & Tools• Out of the building Activation Test• Measure and Optimize Results• Test Sell Traffic Partners

Customer Validation - Physical/Web

Get Ready to Sell

Get Ready to Sell

Sell, Sell, Sell



• Craft Positioning• Acquire/Activate Plans• Build High Fidelity MVP• Build Metrics Toolset• Hire data analytics chief • Formalize advisory board

• Prepare Optimization Plans• Out of the building Activation Test• Measure and Optimize Results• Test Sell Traffic Partners

• Company Positioning• Product Positioning• Validate Positioning

Customer Validation - Physical/Web

Get Ready to Sell

Get Ready to Sell

Sell, Sell, Sell



• Craft Positioning• Acquire/Activate Plans• Build High Fidelity MVP• Build Metrics Toolset• Hire data analytics chief • Formalize advisory board

• Prepare Optimization Plans• Out of the building Activation Test• Measure and Optimize Results• Test Sell Traffic Partners

• Assemble Data• Validate Business Model• Validate Financial Model• Pivot or Proceed

23images by JAM

customer segments

key partners

cost structure

revenue streams

channels

customer relationships

key activities

key resources

value proposition

Test Hypotheses:• Problem• Customer• User• Payer

Test Hypotheses:• Demand Creation

Test Hypotheses:• Channel

Test Hypotheses:• Product• Market Type• Competitive

Test Hypotheses:• Pricing Model / Pricing

Test Hypotheses:• Size of Opportunity/Market• Validate Business Model

Test Hypotheses:• Channel• (Customer)• (Problem) Customer

Development Team

Agile Development

CUSTOMER RELATIONSHIPS

what relationships are you establishing with each segment? personal? automated? acquisitive? retentive?

Demand Creation

• How will customers segments hear about your product?

• How does market type impact my strategy?• How much will it cost to acquire a customer

using these strategies?

Market TypeExisting Resegmented New

Customers Known Possibly Known Unknown

Customer Needs Performance Better fit Transformational improvement

Competitors Many Many if wrong, few if right

None

Risk Lack of branding, sales and distribution ecosystem

Market and product re-definition

Evangelism and education cycle

Examples Google Southwest Groupon

Market Type determines:Rate of customer adoption

Sales and Marketing strategiesCash requirements

How does market type influence demand creation?

Demand Creation by Market Type

Create, drive demand into your sales channelExisting

Resegmented

New

Educate the market about what’s changed

Drive demand into channel

Educate the market Identify/drive early adopters into your

sales channels

Clone Copy a business

Who needs to hear about you?

Suppliers

Channels

Government

Partners

End User

Influencer / Recommender

Economic Buyer

Decision Maker

Demand Creation Feeds the Sales Funnel

PayingCustomers

$

Demand

Creation Acquisition

Getting Free Users

• SEO (without consultants)• Blogging / Sharable content• Social Media / Gaming

Mechanics• Communities• Proven viral coefficient > 1

NOTE: “Viral” isn’t a strategy, it’s a product feature you either have or you don’t

Demand Creation

Paid Channels

• PR• Demand Capture

– SEM– “Free” products (e.g. widgets)– Biz Dev– Affiliate Marketing

• Market Education– Webinars– Email marketing– Trade Shows– Analyst Reports– Direct Sales– TV / Radio

Demand

Creation

“Get Customers” Funnel

Get Customers Funnel - Physical

Get Customers Funnel - PhysicalEnterprise Software

Leads

PayingCustomers

$

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Earned and Paid

Media Get Customers

Keep Customers

Customer check-in calls

Customer satisfaction survey

product updates

Loyalty Programs

Keep Customers Funnel - Physical

Earned and Paid Media

Get Customers

Keep Customers

Customer check-in calls

customer satisfaction survey

product updates Loyalty Programs

Grow Customers

Grow Customers Funnel - Physical

“Get Customers” Funnel

Viral Loop

Earned and Paid Media

“Get Customers” FunnelPR

SEO

Advertising

Blogs/Website

Tradeshows

Viral Mktg

SEM/PPC

Affiliate Mktg

Viral Loop

Contests,eventsBlogs,

RSS, emails

product updates Affiliate Programs

“Get Customers”

Viral Loop

Earned and Paid

Media

Loyalty Programs

Keep Customers

Keep Customers

Contests,events

Blogs, RSS,

emails

product updates Affiliate Programs

Grow Customers

Loyalty Programs

Viral Loop

Earned and Paid

Media

• How many come through the first step?

• How much does that cost?

• What is the conversion between each level?

• How much in revenues can you get out of each acquired customer?

class 4 berkeley/columbia demand creation

Education

customer validation

customer validation

customer validation

positioning pivot

earlyvangelists test

customer update business

stadvisory board members

optimization plans tools