Is Your Business Ready to Ramp (Digital Channel)?

That is the question that the Customer Validation stage aims to answer.

WARNING: Customer Validation is very disorienting for experienced sales managers. You’ll need to give them special care and handling through this stage.

In this stage you are not going to hire a staff and sales team. You are not going to execute your sales strategy. Instead you will be validating your hypotheses about who will buy, why they will buy and how much they will pay. You will create your Sales Roadmap.

This is part 10 of our Lean Innovation Series.

This phase of the customer validation process is quite different for physical products vs web/mobile products. This post will focus on mobile products. If you are focusing on a physical channel, skip this post and pick up last week’s post.

Customer Discovery tested your hypotheses with a relatively tiny group of customers who were asked mostly for opinions, rather than orders. Customer Validation goes the next step to determine if your product or service can be validated by actual sales.

Phase 1 of Customer Validation contains the six “get ready to sell” activities listed below.

  1. Develop Your Product/Service Positioning Statement – This is a simple message about your product or service that answers the following questions:
    1. Who is it for?
    2. Why do they need it?
    3. What is the product (describe it)?
    4. What is the key benefit?
    5. How is it better than the competition?
  2. “Get”: Acquire/Activate Customers – You’ve already developed a rough plan to acquire and activate customers. This stage requires you to refine those plans and to build the programs and tools needed. There are three steps to focus on:
    1. Get – Using websites, search, email, blogs, etc. you work to get potential customers to your website and to buy. This plan is a big set of experiments. Measure everything, make corrections and push forward.
    2. Keep – This step is focused on retain clients you gained from the “get” step. User groups, blogs, online help, customization and product tips are all methods that can be used.
    3. Grow – How do you get more new customers via referrals and/or new revenue from existing customers? Upgrades, contests, referral programs and cross-selling are all options.
  3. Build High Fidelity MVP – In Customer Discovery you used your two MVPs to rapidly test and iterate prototypes to learn about the problem and how your solution was received. The goal was not sales, but feedback. This step tests your high fidelity minimum viable product – a more polished functional version of your MVP. This is still not your final product but a more refined version that will yield more accurate test results.
  4. Build Metrics Toolset – Online businesses must focus on data collection and optimization from the day they go live until the day they close the doors. These businesses must test, measure and optimize every step in their sales funnel. And the great news is that they can get the data to it. Brick and mortar businesses would kill for the data available to an online business that uses some of the simplest of tools. Don’t go overboard with metrics. Focus on how many, how much and how fast measurements.
  5. Hire Data Chief – Like the founders in the physical channel who needed to hire a sales closer, the founders in the digital channel need to hire a dedicated data analytics chief. This person will drive continuous improvement through the entire sales cycle by giving the founders the data they need to make good decisions.
  6. Formalize the Advisory Board – Hopefully, you’ve already developed informal relationships with advisors during Customer Discovery. Now you are ready to formalize those relationships. You are looking for two things from your board: great introductions to key customers, talent or advisors; and bold business model design thinking that will dramatically impact your strategy. For a great advisory board roadmap example go to page 352 of “The Startup Owner’s Manual”.

In next week’s post we get to finally push outside of the building to sell! You’ve been diligent to stay with us this long. In the next phase all of your hard work starts to pay off in actual revenue.

As always, I’ve done my best to summarize the main principles in this blog but pick up a copy of “The Startup Owner’s Manual” by Steve Blank and Bob Dorf to dive deeper.

Photo courtesy of http://en.wikipedia.org/wiki/Facebook

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