A Beginner’s Guide to Customer Development

Business Women

By Alex McCarthy

It’s virtually impossible to develop a successful product without knowing who’s going to use it. Enter customer development, the practice in which product managers and user experience (UX) designers interact with customers to learn more about their problems in order to create a product that meets their wants and needs.

Customers include any current or prospective people who buy, use, or support your product. When product managers understand their customers, their problems, the environment in which those problems occur, and the value of solving them, the products will very likely succeed.

Customer Development in Action

Imagine you’ve joined a team to launch a new mapping product for field technicians who inspect oil and gas assets (e.g., oil wells, pipelines, valves, etc.). In many cases, the assets are located in rural locations far from paved roads. The initial hypothesis is the technicians will buy a mapping solution that displays an asset’s geographic location and basic information on a map. In order to test this hypothesis using customer development, you spend several days in the field with customers. During that time, you learn that the technicians already have ways of displaying asset locations on a map, making your proposed solution not valuable.

However, during your time in the field you observe a more challenging problem: the technicians driving to the assets. While sometimes an asset may be only 200 feet off the road, if it’s on the other side of a creek or a hill then it could be 10 miles or more to drive to it. Many technicians rotated through assets and didn’t know the best way to get to them, and finding a path could waste several hours in a day.

The technicians wanted a way to mark how they get to an asset on the map as they were going to it, so each technician would know the best route for future inspections. This would save time and fuel, as well as reduce greenhouse gas emissions. Based on this information, you add waypoints — the ability to mark points on the way to an asset — to the initial product release.

In this example, customer development early in the product life cycle ensured the product would solve a challenging customer problem.

Customer Development Throughout the Product Life Cycle

Customer development starts before the first piece of code is written and continues until the product’s end-of-life stage. As the product progresses through its life cycle, the tools used with customers increases in fidelity from simple sketches, to wireframes, to mockups, to code. The continual customer interactions ensure product managers accurately represent the voice of the customer at each stage.

The product development life cycle has seven phases. During the Conceive and Plan phases, customer development interactions usually consist of interviews, sketches, and wireframes. As the product moves into the Develop phase, the most common interactions are mockups, proof-of-concept code, and beta releases. During the Launch and Iterate phases, the product will expand to solve more customer problems using all of the customer interaction tools. Customer development is important in the Steady State and End-of-Life phases to make sure customers continue to buy the product and can eventually easily migrate to a new solution.

By interacting with customers early and often, customer development increases the understanding of customer problems and how they value them, and provides useful information to turn into potential solutions. By using hypotheses, the most important customer information is identified and collected. The results from practicing customer development are used to prioritize product development and ensures you build products your customers love to buy and use.

Customer Development at General Assembly

Customer development is a core practice in developing profitable solutions with product-market fit that customers love to use. At General Assembly, we cover this early in our part-time Product Management course and reinforce it throughout to ensure that students learn how to apply the appropriate tool to match the situation.

In the course, students select a product idea to use for their course project. Once they identify their target and develop some initial hypotheses, they start the customer development process. As they develop their projects, continual customer interactions ensure they are on target to graduate with a clear and compelling example of the skills learned. Many times, these projects are a critical differentiator as they make a career transition into a new field.

Students in our UX design courses — the full-time Immersive program or part-time on-campus or online courses — also cover elements of customer development through skills like user research, usability testing, customer journey mapping, and more.

Meet Our Expert

Alex McCarthy, a Product Management instructor at General Assembly’s Austin campus, has worked in product management, software development, marketing, and sales roles, at companies ranging from early-stage startups to global, publicly traded companies. Alex has expertise in areas including oil and gas, measurement and automation, Internet of Things (IoT), professional consulting services, and more. He built successful product management and marketing teams for embedded hardware, enterprise software, and web application solutions.

Coming from a long line of teachers, he is passionate about education. He has mentored in public schools and served on various school boards, committees, and organizations. He recently founded Navigate Next, a company dedicated to helping leaders navigate to new careers in which they’re more passionate and engaged.

“Product management is not only critical to a company’s success — it is the best job ever. Knowing my students will have strong PM skills and a competitive advantage in their career transition is very rewarding.”

Alex McCarthy, Product Management Instructor, General Assembly Austin