Idea validation vs. customer research (and how to do the better one)

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Laura Bosco

The featured image for this blog post.

Companies often assume what their customers think, feel, and want.

But that’s like trying to assess a home’s curb appeal from inside the living room or trying to draw a street-level view from the penthouse. You may get in the ballpark (if you’re really lucky), but you don’t have an accurate vantage point. Your perspective isn’t enough to tell you their perspective.

Our best clients get this and go directly to their customers to find out what’s going on. Then they use rich customer understanding to do things like find product-market fit in less than 18 months or increase daily active users by 62%.

And they’re not alone.

More and more, successful founders are ditching tactics like idea validation in favor of more effective approaches like in-depth customer research.

Customer research vs. idea validation

Idea validation is proving your target market will pay for your idea before you build a product or business.

Customer research is learning more about customers’ wants, needs, fears, motivations, and more so you can build a product or service they love.

In the past, founders have used either method (or a mixture of both — many validation processes involve customer research) to build successful businesses. But in today’s SaaS world, validation is a much riskier approach.

Why?

Several reasons:

In software today, companies with the best customer understanding (not the best idea) are the ones who win. We’re in the age of the consumer and, to put it bluntly, consumers care very little about your product and a whole lot about the value you’re delivering. The companies who understand what customers value and why are the ones on the top of the charts (think Apple vs Sony, Amazon vs Borders, Netflix vs Blockbuster).

                               

David Cancel tweet on why customers are a cornerstone

                       

Tl;dr idea validation gets things backward. It starts with an idea, where the best starting place is your customer.

Why profitable businesses start with customer research

A while back, we spoke with Amy Hoy (founder of Noko and co-founder of 30x500) about growing businesses in a recession, she outlined the approach she’s been teaching since 2010 — in good and bad times.

It’s an approach that has helped founders cross $40k in monthly revenue, 10x their business, and cross major revenue milestones.

That process is:

  1. Choose an audience that pays for things
  2. Study them to find out what they do
  3. Build something you know they will buy (based on their actual buying behavior)
  4. Build trust with educational content
  5. Don't quit your day job until you've got a stable income stream

Did you catch those first two steps of selecting and studying an audience?

That’s customer research!

And it’s not just folks who follow Amy who see results from focusing on the customer:

Why?

Because customer research helps answer questions like:

Once you know those things, you have a better idea not only of what to build, but how to market, sell, and improve something (more on that later).

Of course, if you’ve heard some of this before, you may be nodding your head — but no less stuck. You know you should do customer research (kinda like you know you should eat well, sleep, and exercise), but that doesn’t mean you do it.

Maybe because the how to research piece is about as clear as those foreign language assembly instructions you got from Amazon.

Let’s clear things up in plain English.

A near-comprehensive list of qualitative customer research methods

There’s a pretty wide range of customer research options. Which one is “best” for you will depend on your time, budget, and knowledge gaps (e.g. what question you’re trying to answer).

For example, a founder who’s worked in the cyber security niche and wants to build a better picture of customers has a different problem from a two-year-old cyber security company struggling with heavy churn.

The first will probably lean more heavily on the passive research options below vs. the second, which would benefit from 1:1 customer interviews with new sign-ups and recently churned customers.

But I’m getting ahead of myself a bit there.

Let’s look at your research options first, then tackle where to start.

Free, easy, and (mostly) low-effort research options

Best for:

Main Methods:

                               

Wall of customer reviews on Notion homepage

                                                   

                               

Sparktoro homepage

 

Keep in mind: As you’re observing and gathering notes, you’ll need to read between the lines with this kind of research. Alex Hillman (co-founder of 30x500 and author of Tiny MBA) reminded me that what an audience says they’re struggling with may not be what they’re actually struggling with.

So, treat insights like clues. Alex recommends, “interrogate the clues and say, ‘Why is this here in the first place for this population?’...You have to look at the environment. Go a little Scooby-Doo on the situation. Investigate, look for more clues.” This takes effort, but Alex says it’s “the work that your competition will never do to really understand your customer” So, it’s well worth your time and effort.

Low-cost and moderate-effort research options

Best for:

Methods:

                               

example of a pop-up survey from Stacking the Bricks

                           

Keep in mind: Surveys and transcripts are great for gathering quantitative data or getting answers to very specific questions. But you’ll often want to layer on 1:1 customer research for a richer picture. That’s because, except for surveys, the options above aren’t geared toward in-depth research. They’re useful for sure, but they take place in the context of making a sale or resolving support — the goal isn’t to learn, it’s to sell or resolve. For the most in-depth learning opportunities, you’ll want to do customer interviews.

High effort, high impact research options

Best for:

Methods: The main method here is 1:1 customer interviews. You reach out to a small set of customers, set up a time to chat, interview them, and listen carefully. (Ideally, you do this routinely.)

Keep in mind: You’re not asking, “what do you want?” in interviews. You’re looking for stories, specifics, and rich details.                            

                               

Katelyn Bourgoin tweet about why stories are better than opinions

                               

And, not to be a Debbie Downer, there are a lot of ways to screw this one up. You could interview the wrong customer segment, pollute the interview with loads of leading questions, or talk more than you listen. I’m not pointing this out to discourage you — I’m mentioning it to encourage you not to start from scratch!

There are a lot of great resources out there on this topic. For detailed help selecting who to interview and exactly what to ask them, check these out:

Free

Paid (but worth it)

So, where do you start? With a Big Hairy Question

Like most business advice, a “one size fits all” approach rarely fits. Interviews aren’t always the best options — likewise for surveys and online scouting.

Ideally, you want to start with a Big Hairy Question you’re facing and then use a variety of research methods to uncover answers.

Hannah Shamji tweet on formulating a good customer research question

                       

Take the example we mentioned earlier: you have a two-year-old cyber security product and churn rates are keeping you up at night. Your Big Hairy Question is: what factors cause existing customers to churn?

To answer that, you could use a few different research methods and look for patterns:

Doing a few of these — especially interviewing recent churns — is a good start. Doing all of them will help you paint a detailed picture and understand the why behind those concerning churn numbers.

*Note: This article primarily focuses on qualitative research methods. But keep in mind you can also find quantitative customer information in Google Analytics, heatmaps (check out Hotjar), and product usage stats. Those are worth diving into — especially if you have substantial site traffic or product usage.

You WILL find insights — now, here’s what to do with them

From doing customer research ourselves, we can tell you we’ve never regretted it. And we always learn something.

But once you round up some insights, you’re going to face a potential pitfall. You could learn something and stash it on the shelf. And sadly, that’s what many companies do. It’s not that they mean to waste what they’ve learned — more often, it’s they don’t know how to put it to good use.

To sidestep this pitfall (a shelved insight doesn’t help anyone or any business goals!), make sure you:

Here are each of those steps in more detail.

GATHER: Record and document what you learn

Unfortunately, there’s no easy, affordable way to store and organize all research findings (that we know of). But that doesn’t mean your findings have to live in a hundred sticky notes or text documents on your desk.

Here are a few different ideas for keeping things organized:

Must do:

Could do:

Create an insights repository. Use one of your existing tools (Trello, Airtable, Notion, whatever) to store, tag, and organize insights from various research methods. A living document like this takes work, but it helps team members search and find insights relevant to their question.                      

                               

example of organizing customer research in airtable

I've used airtable to organize research, and it's a great way to keep takeaways in one centralized place.                                

Documenting what you learn will help you with a very important next step: analyzing your findings.

ANALYZE: Find patterns or themes and map to the customer journey

As you amass your research, you want to start pinpointing clues and finding patterns. There are a few useful frameworks for this, but my favorite is the customer journey map.

There are several ways a journey map can look, but the basic idea is this: it outlines how a customer gets to and builds a relationship with you from the customer’s perspective.

                               

customer journey map example from nngroup
Via https://www.nngroup.com/articles/analyze-customer-journey-map/

                       

Note: Most companies approach this from the flip side: they map out funnels, from a business perspective, of how customers interact with the product from “what’s this?” to “renew subscription.” Those funnels have a place internally, but the goal of research is to understand the customer’s perspective, so they’re not your best tool for analyzing research.

To build your own map, the first thing you want to do is identify the key steps a customer takes in their journey. Most journeys include some or all of the points below:

You’ll probably refine whatever journey you start with over time, and that’s great. But as soon as you have that first version, you want to start mapping your existing research to each of those points. This includes doing things like:

From there, it’s all about putting that map to good use.

LEVERAGE: Use your map to improve product, sales, marketing, and more

Because the customer journey touches every part of your business, a detailed map of is something every area of your brand can benefit from.

Don’t believe me?

Here are just a handful of applications:

Set out to answer your Big Hairy Question, but keep track of other opportunities and applications you come across — trust me, there will be plenty!

Too good to be true? Common roadblocks in real-world customer research (and how to get around them)

Some of my fellow cynics may be skeptical of how good customer research sounds right about now. Surely if this is common knowledge, more founders and companies would be doing it, right?

The fact is, the ones who know this stuff do start doing research...but many have a hard time maintaining it.

And we know from doing customer research why some companies fall off the wagon — or never jump on to begin with.

Customer research is usually pitched like this: research → analyze → profit.

But like most journeys worth taking, it’s more complex than that. There are plenty of road bumps (or roadblocks) along the way. Boulders you have to climb over, rivers you have to fjord, worn-out shoes you need to replace...you get the idea.

And while there are challenges, I promise this isn’t a rigged version of Oregon Trail (“you have died of drowning in surveys”). There are legitimate ways around the roadblocks you have.

Here are some notable blocks we’ve come across and ideas for getting around them:

Uncertainty around the Big Hairy Question

The issue: The first common roadblock is not knowing your Big Hairy Question. This sounds harmless (“can’t you just...pick a direction?”), but it makes research quite difficult. Without a clear question, it’s hard to know who to research, what to look for/ask them, and what to do with the data you find.

                               

                       

How to get around this: Before you use any research method, write out what the heck you’re trying to do. Understand top pain points for an audience? Figure out what jobs an audience hires a product type to do? Understand what factors motivate a customer to choose you? Whatever it is, write it down.

Other priorities compete for time, budget, and resources

The issue: Profitwell found 7 out of 10 organizations are speaking to less than 10 prospects or customers per month. I’m betting at least some of this comes down to competing priorities. When the pain of leaking revenue from dry sales, high churn, or low signups feels acute, it’s tough to prioritize research.

How to get around this: Prioritizing research is something you do in stages:

                               

Stalling out in the analysis stage

The issue: You gather all this great information...and, uh, now what?

How to get around this: There’s no silver bullet here. A lot of it comes down to two things:

To tackle the first, set up some kind of system like the one we described earlier. To deal with the second, consider setting up a recurring meeting on your calendar (with yourself or key team members) to review what you’re learning each week or month. For example, Calendly uses a weekly process where they collect nearly every piece of customer input and then triage to zero.

Believing you’ve “uncovered all the good stuff”

The issue: After a month or so, you’ll have some really good stuff. And you might start to think you’ve gotten the most bang for your buck. Time to move on to other stuff, right? In reality, it’s probably time to move onto another question.

The market and customers are always changing. If you don’t stay on top of research, you’re going to fall behind.

How to get around this: Make customer research a habit. So much so that it’s harder to stop doing it than to start doing it. What this could look like:

Hiten Shah has built and advised plenty of successful companies. Yet he started researching before he built FYI. Then he kept doing research when he launched an MVP and beta. And he’s not stopping anytime soon now that the product is live.

There’s something to learn from Shah’s approach there. Do whatever you need to start building a culture of research where customer understanding isn’t optional, it’s how you do business.

👋 We help companies who want to understand their customers

As advocates of the product-led growth approach (where growth depends on delivering value to customers again and again), we love working with companies who’ve spent time understanding their customers.

We know firsthand how critical customer understanding is to building, launching, and refining an app. One of our long-term clients, GreyNoise, saw 1,300+ new accounts in their first 60 days, plus increased daily active users by over 62%...in a competitive market that’s grown over 39x in the last decade and a half!


The founder had over 1,000 conversations, started with 5 defined use cases (based on customer research), and involved customers throughout the entire project. The result? Customers loved it — really loved it.

                               

Looking to build something your customers will swoon over?

Set up a free strategy call with our CEO, Andrew. We’d love to hear from you.

Laura Bosco is a writer and people person. She helps tech startups do tricky things, like explain who they are and what they're doing. Ping her on Twitter to say hi.