How to Identify the Right Customers for your Minimum Viable Product?

how to identify the right customers for mvp

5 Types of customers you encounter while defining your Minimum Viable Product

  1. Are you expecting to hit the right customers just in your first chance of approaching them? &
  2. Planning to define and develop your minimum viable product for them?

Just wait and think again. Could you imagine some hurdles?

You will observe that when you first approach your audience, they will fall under one of the types mentioned below. You will have to decide on building your product or service around the most suited type of customers for your MVP. Picking the wrong type for problem & customer validation may affect your business sustainability and growth during the later stages.

Thus, being aware of the type of audience you are approaching will make your process of customer and problem validation quicker as you can then tackle them calmly without getting shocked by the unexpected & unfavorable responses.

Note that your MVP is not yet defined when you are planning to approach the audience. You need to define your MVP after doing these things.

Let’s now understand each of the following types of audiences you will approach and how you can identify the right customers to define your MVP.

Those unaware of their problems

The unawareness about the problem is an indication that you are planning to approach a hypothetical group of customers for your MVP that will not fall under any of the profiles for user persona based on interests, demographics, psychographics, etc.

Image Source: Hubspot

When you approach them, you have to put a lot of effort to first make them aware of the problem they have. Even if they get convinced, the chances are that they will not pay you for what you would build for them. And even if they pay you for it after all those efforts, you will have a hard time convincing the majority of those customers (falling under that segment) through advertising, social media platforms, content, etc.

Though it may seem to be the cheapest & easiest to reach such an audience, the truth is they are the most expensive ones.

Those aware of the problem & desperate to solve it

This is the ideal audience to go after but since the problem is obvious with an intense desire to solve it, chances are that they have found a substitute to escape the problem (if they could not solve it).

For example, a few years back, restaurateurs in India switched to using wood stoves from LPG when the prices of commercial LPG sky-rocketed. Quite often, the substitutes have some drawbacks associated with them (in this case; the discomfort associated with wood stoves like smoke, absence of flame control, etc.) and hence most of the time customers get convinced to prefer the solution over the substitute.

Sometimes, it may so happen that a different problem is discovered while interviewing customers for the intended problem. You may then decide to go after the second problem as it is a bigger headache for the customers and they crave to solve it.

Those aware of the problem but don’t want to solve it

This type of customers for your MVP is unwilling to get their problems solved for mainly three reasons:

  1. The problem is not painful for them.
  2. The existing solutions do not deliver the right value for money.
  3. The solutions stand far away from what is truly needed.

If the reason is the first one, they are not the right customers for your MVP but if they are unwilling because of either the second or the third reason, they are quite valuable for your startup. You can have them on-board and that too along with those who are aware & willing to solve the problem. It’s because your MVP would solve the exact problem they have with a unique value proposition.

You can influence them by emphasizing your competitive advantage and how your solution can put an end to their problem forever.

Be aware that the perceived value of your solution in the minds of the audience should be considerably greater than what they have to pay for.

Those paying but unsatisfied with the existing solution

This is where you have the opportunity for disruption. This is also one of the most obvious audiences to go after as people are already aware of the problem and the shortcoming of the current solution. They know what they truly need to solve their problem.

If you choose these customers for your MVP, it’s important to know three important facts:

1. They are the customers of your competitors and their dissatisfaction provides you a great opportunity of building a better solution for them.

2. You have to go really deep in understanding them and why they are dissatisfied with the current solution. Again the perceived value of your solution should be much higher than what these customers will have to pay. If the value that they expect is lower or insignificantly higher than the price, they may choose to opt-out from your MVP and never turn back.

Your MVP should necessarily solve their biggest pain point and eliminate the reason for their dissatisfaction with the current solution.

3. Sometimes such customers can be unhappy when the current solution solved their problem in the past but is now failing to solve the same problem due to the change or improvement in their process. In this case, they need a new innovative solution. To have them in your target list forever, you need to keep innovating (even after you have built an MVP) and not restrict yourself to solving just the current problem. It also proves that the competitors have missed or are not interested to solve their evolving problem.

Those paying and happy with the existing solution

This type of audience is the most difficult type to convince even for interviewing let alone building MVP and you should keep yourself away from them at least during your validation phase unless you have something extraordinary to offer.

Since they do not have any pain or problem with the existing solution, they can become your customers only when they see something they have not expected; something that surprises them. If this is the case, it’s an indication that you are on the track of reshaping the industry by building something transformational.

If you can offer them such a thing, their “no problem” with the current solution (the competitor’s offering) immediately converts into a problem as they now have an option to buy something which has triggered an intense need they were not aware of. For example, Henry Ford revolutionized the American Industry this way by building a simple, reliable, and affordable car that the public could afford.

To Wrap Up

When you roll out your idea to your target audience, it’s very important to know their type. If you are aware of it before you start to interview them, you can prevent yourself from falling into the court of wrong customers and save a lot of time which is the most crucial thing to have during the very early stages.

Do you feel there is something more to be included? Kindly write to us. We will be more than happy to consider your valuable suggestions.