How Customer Development, Product Management Fit Together

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By Cindy Alvarez (Head of Products and Customer Development, KISSmetrics)

“Isn’t customer development just product management?”

“You don’t really need product management if you do customer development right.”

“Customer development is fine for startups with no process, but it doesn’t fit into a mature product management organization.”

I’ve heard all 3 of these, and I think they’re all completely wrong.

Customer development and product management are two complementary tools. Used together, they provide a competitive advantage to any products company.

Customer development is not the secret to creating a great product. Let me repeat that, because I’ve heard many people claim this: Customer development does not create great products. Customer development is primarily a risk mitigation tool. It replaces that uneasy guesswork of assuming there is a market for your idea based on:

  • Analyst reports
  • What your competitor is doing
  • The opinions of the highest-paid executive in the room

You start customer development with a hypothesis, which you are trying your damnedest to disprove. If you go in trying to prove that you were right, guess what? That’s exactly what you’ll find. Instead, if you go in with a high degree of skepticism and a commitment to pushing beyond “yes/no” answers and vague “sounds like a good idea” statements, and still find that people are yelling/anguishing/laughing/cheering over your problem statement, then you’re safe to continue.

At this point, we move into what most of us have traditionally known as product management — envisioning requirements, prioritizing, identifying constraints, pricing, working with engineers to get the thing built. Of course, the product manager who is also a practitioner of customer development doesn’t stop getting feedback after that initial phase -— they continue talking with prospects and customers to refine and to collect more detailed feedback as the product emerges.

Customer development is also an opportunity identification tool. If you’re a product manager in a more mature organization, you are less likely to be looking for a whole new problem to solve or a whole new product to create -— your company already has customers and product lines. It’s easy to think, “these people are already our customers; we don’t have anything else to sell them: what’s the point?

The point is, even customers who are happily paying you may not be using the product the way you expected them to. They may love your product -— but also wish they could do X and Y. They may not even realize that they’re doing something that is time-consuming or expensive or resource-intensive -— where you could save them time, money, or people by introducing a new feature or way of using your product.

In traditional product organizations these opportunities usually come through VOC (voice of the customer) feedback. But customers are often unable to articulate what they need, especially if it’s something they don’t even realize is a problem. The active “pull” of customer development interviews, as opposed to the passive “push” of VOC, gets richer feedback (and guarantees that you aren’t being unduly influenced by your “squeaky wheel” customers.

This post was originally posted at The Experience is the Product.

About the guest blogger: Cindy Alvarez is the head of products and customer development for KISSmetrics, where she is currently building two products (KISSmetrics and KISSinsights) using customer development / lean startup techniques. Cindy is passionate about helping startups succeed through early focus on product management, user experience, and customer outreach. She blogs at The Experience is the Product. Follow her on Twitter at @cindyalvarez.