Rethinking customer development: Success with personas

A real alternative to traditional product development: Read here how you can optimize your product strategy with the help of customer development and dynamic personas and convince your customers with tailor-made solutions. For your long-term business success.

In today's business world, companies need to develop products that are not only technically convincing, but above all meet the needs of their customers. The reason: traditional development often leads to products that do not solve the problems of the target group. An alternative approach is customer development. What exactly is behind the term? Why is this approach so relevant today and how can personas be meaningfully integrated into customer-centric product development? Find out here.

What is Customer Development?

When companies focus solely on developing technical features and functions without considering the actual needs of their customers, this often leads to major problems. Namely, products that do not solve the problems of the target group. And developing products that do not meet the needs of the target group can jeopardize the existence of the company.

In contrast, customer development places customers and their needs at the center of product development - at an early stage. And while traditional product development takes place in long, rigid cycles, customer development is characterized by short, iterative processes based on customer feedback. The product is constantly adapted and refined until the result perfectly meets the customer's needs.

Customer development vs. traditional product development: a comparison

Overall, customer development minimizes the risk of valuable resources being invested in products that are not well received on the market and increases the chances of a successful market launch and long-term business success. Because the approach is so promising, various internationally successful companies are already using it, including the file hosting service Dropbox.

The US company used an innovative method - a video explaining the core functionalities of the product - to collect feedback. The aim: to ensure that the offer exactly meets the needs of the market before major investments are made. Thanks to this approach, the company was able to ensure that the offering was precisely tailored to the needs of the target group.

The mastermind behind the customer development approach is Steve Blank. The entrepreneur is considered one of the founding fathers of the lean startup approach, from which customer development emerged. This approach aims to develop marketable products quickly and efficiently - by incorporating findings from target group surveys directly into development and promoting continuous learning.

Customer-centered product development comprises four steps:

1. Customer Discovery

Finding out what your customers really need - that is the focus of this phase. To do this, identify the customers with the biggest problems. These are those who are most urgently looking for a solution and are willing to try it out. Many companies make the mistake of skipping the discovery phase and going straight to validation. However, without a thorough understanding of the problems, the solution can come to nothing.

2. Customer Validation

This phase ensures that your product solves the problem you identified in the discovery phase. Find out: Is there really a market for your solution? Can the product be scaled?

3. Growth Hacking

This phase is about establishing your solution on the market and increasing demand. Test different sales channels, optimize your marketing strategies and adapt the product based on feedback from your customers. The goal: to build a sustainable business that grows steadily.

4. Company Building

As soon as your business grows and stabilizes, the next step is to turn your start-up into a functioning, sustainable organization. This is where you build structures, develop departments and scale your marketing and sales strategies. This is the phase where most resources flow. In large companies, special innovation teams often take on these tasks.

Personas in customer development: why they are important

Understanding customers at an early stage, before large investments are made in product development, is crucial in order to successfully position yourself on the market in the long term. This is why personas also play a central role in customer development - especially in the customer discovery and validation phases.

In customer discovery, personas help to formulate and test hypotheses about customer needs and problems. They capture customers in all their complexity and offer precise insights into their challenges. In customer validation, personas help to find the right product-market fit: They help to tailor the solution specifically to the identified needs.

An example: A company wants to develop a new fitness tracking device. The target group data made "tangible" on persona sedcards shows that the target group is not only tech-savvy, but also places a strong emphasis on social interactions and community challenges. This insight is incorporated into product development by integrating functions for social networking and competing with friends.

To ensure that your product strategy is always up to date and meets the current requirements of your customers - or in short: to keep pace with changing customer needs - personas should be updated regularly. Regularly updated personas are called "dynamic personas". Surveys or direct customer feedback continuously provide valuable insights and help to collect relevant data for persona creation and customization. However, product development and marketing must work closely together to ensure that the insights gained do not simply "fizzle out".

How to successfully integrate personas into the customer development process:

• Define clear roles and responsibilities for the maintenance and use of personas.
• Implement regular feedback loops between departments to ensure personas remain current and relevant.
• Use personas as the basis for all important decisions in product development and marketing.

Summary: Dynamic personas in customer development

In the context of customer development, dynamic personas help companies not only to develop products that are tailored to the needs of their customers, but also to optimize their entire market strategy.

• Customer development is an effective alternative to traditional product development, as it focuses on the needs of the customer - even before the actual product is created.
• In contrast to traditional product development, hypotheses in customer development are tested in short, iterative cycles and the product is continuously adapted to the real needs of customers.
• Personas help you to understand the actual needs and challenges of your customers, test hypotheses in customer discovery and find the perfect product-market fit in customer validation.
• In order to meet the current needs of your customers, you should update your personas regularly. For example, use surveys to keep your database up to date.
• Different departments should work closely together to ensure that the insights gained are used optimally. Roles and responsibilities must be clearly defined in order to ensure the continued relevance of the personas.

Use dynamic personas in customer development for the long-term success of your company. With the Persona Institute's data-based solutions, we support you in continuously optimizing your product strategies. Let us advise you or find out more about our various offers.