MARKETS, NEED-FINDING AND PLANNING

DEFINING THE FOCAL MARKET: MARKET SEGMENTATION

Three questions:
Why segment?
o Helps you prioritize
o Helps you manage your resources
o Helps you identify the focal market
o Helps you become better than your competitors
Starting with change management. Unclear if market will pay
Starting with LBSAA. Segment into different customers with
pain points. Unclear what the value proposition is that will
meet their needs
Ultimate goal:
o Describe the segment in terms of a typical
customer/buyer.
3Ws:
Who buys?
What product do they buy today?
Why would they switch today and tomorrow?
To look at:
Demographics gender, age
Behaviors routine, usage patterns
Needs pain points
o Describe the size, potential value and growth of the
segment: To compare segments, look at size (total
population), growth (perceived adoption rate) and
profitability (based on customers income)
o Deliver services to the segment. How actionable can I
serve them?

UNDERSTANDING USER NEEDS

4 steps of needs identification

Gather raw data on customer needs:
o Focus groups with 8 10 customers: Highly productive
but expensive
o Interviews: Cheap, effective and fast
Interview all stakeholders users, buyers, advisors
5 20 subjects. Sweet spot is 10
o Surveys: Good for specific companies like pricing and
product features but less useful in opportunity
identification
Interpret the data
Organize the needs by type
Establish relative importance of their needs
CAVEAT: Facebook and Google didnt do it. But it increases the odds
of success. Will the user value the product?
Is change management a pain point?

TO DO:
1. Start with LBSAA. Segment into different customers with pain
points.
2. Clarify what the value proposition is that will meet their needs

Ultimate goal:
a) Describe the segment in terms of a typical customer/buyer.
3Ws:
a. Who buys? Demographics gender, age
b. What product do they buy today? Behaviors routine,
usage patterns
c. Why would they switch today and tomorrow? Needs
pain points. Accessibility.
i. Gather raw data on customer needs:
1. Interviews: Cheap, effective and fast
a. Interview all stakeholders users,
buyers, advisors
b. 5 20 subjects. Sweet spot is 10
2. Forget the product concept and focus on
user need
3. Ask about current behavior rather than
speculating about the future
4. Ask for specific examples rather than
generalizations
5. Identify the steps in the customer journey or
experience
ii. Interpret the data
iii. Organize the needs by type
iv. Establish relative importance of their needs
b) Describe the size, potential value and growth of the segment:
To compare segments, look at:
a. Size (total population)
b. Growth (perceived adoption rate)
c. Profitability (based on customers income)
c) Deliver services to the segment. How actionable can I serve
them?