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Sebastian Straube started his career as a consultant focusing on digital transformation and digital strategy. Then he was eager to actually execute the strategies and build real products. Thus, Sebastian became a product manager developing mainly eCommerce applications and innovative mobile apps. Building on that experience, Sebastian wanted to bring his passion for product development to other teams. Now he is a product management &amp; discovery coach at Accenture Business Agility and helps clients build empowered product teams that develop extraordinary products. His focus lies on product visioning, product strategy, and product discovery.

Business Agility & Product Coach

Sebastian Straube

<blockquote class="blockquote">Focus on identifying your target audience, communicating an authentic message that they want and need and project yourself as an &#8220;expert&#8221; within your niche”
Kim Garst, Marketing Thought Leader</blockquote>
As she states in her quote, the fundamental principle to winning first reference customers in the mainstream market is to target a specific niche segment as your point of attack and focus all your resources on achieving the dominant leadership position in that segment.
Starting with a niche market ensures focusing on a very specific customer problem and probably little to no competition. The mistake most product managers make is to focus on a broad market segment because they fear a niche market will not be profitable enough. This thinking is misleading as the mere focus should be on getting a foot in the mainstream market. Find your niche and use those customers as a reference to attack adjacent segments. In order to do so successfully, each product manager needs to understand the ‘<a href="https://www.mindtheproduct.com/search-product-market-fit-setapp-found-customers/" target="_blank" rel="noopener noreferrer">Technology Adoption Life Cycle</a>’ model.
This is a sociological model that describes the adoption or acceptance of a new product or innovation, according to the demographic and psychological characteristics of defined adopter groups. The process of adoption over time is typically illustrated as a classical normal distribution (see figure 1).
We can see that innovations face a chasm between the early and the mainstream market. Crossing the chasm decides if the innovation will be successful, or has to leave the market. Innovators have to build first reference customers in the mainstream market to prove that they have a promising business model.
<img decoding="async" src="https://www.mindtheproduct.com/wp-content/uploads/2021/05/4326caf0-211f-419b-b2d2-61ae4ba99104_image2.png" alt="" />
Figure 1: Technology Adoption Life Cycle
<h2>Explore the Battlefield</h2>
Geoffrey Moore suggests in his book “<a href="https://www.amazon.co.uk/Crossing-Chasm-3rd-Disruptive-Mainstream/dp/0062292986/ref=sr_1_1?adgrpid=53405870575&amp;dchild=1&amp;gclid=Cj0KCQjwjPaCBhDkARIsAISZN7RO4KR-9tj7BxUuvNMz9apCL4dCDqXZsH4gSVHBhSrOIPaE3eaGoTkaAmeIEALw_wcB&amp;hvadid=259021111146&amp;hvdev=c&amp;hvlocphy=9045917&amp;hvnetw=g&amp;hvqmt=e&amp;hvrand=18048444719523631793&amp;hvtargid=kwd-298995268976&amp;hydadcr=24404_1748884&amp;keywords=crossing+the+chasm&amp;qid=1616773671&amp;sr=8-1">Crossing the Chasm</a>” to create different target customer scenarios and select the target niche market based on a scoring system. As we do not have yet data available from live customers—or at least, not very many of them—we have to make them up based on our beliefs, opinions, experience, and assumptions.
I have tested several templates to summarize different target customer scenarios, but no one fitted completely my purpose. This is why I combine several good practices and frameworks to my own ‘Target Customer Scenario Canvas’. I have applied this canvas for a company that offers business intelligence solutions for online shops. This company has already won some early adopters that use the solution but now wants to cross the chasm to enter the mainstream market. Therefore, the product management team collected several ‘Target Customer Scenarios’ by interviewing internal employees and some available market research.
The most promising scenario is the one shown in figure 2. This canvas is representative of the niche market of furniture B2B online shops for doctor’s offices in the US. There are around 20 such businesses available as potential target customers.
The header consists of a short stakeholder analysis and a definition of a customer problem that we would like to address:
<ul>
<li>Economic Buyer: The person who ultimately pays for our solution</li>
<li>End-User: The person who actually uses our solution</li>
<li>Others: Other relevant stakeholders, e.g., people that influence the economic buyer</li>
<li>Customer Problem: This is a problem a customer has, and we will solve for him. This is usually described as a job to be done and might also contain social and emotional needs. For example, “Eat healthier”</li>
</ul>
In the example, the target customers are characterized by a single identifiable buyer which is the Head of E-Commerce in most cases and the Data Analysts as end-users. The solution tackles the customer problem of not having a holistic view of customer behavior data
After having a better understanding of our stakeholders and our customer problem to be solved we focus on understanding better the current state:
<ul>
<li>Current Workaround: This describes how the user tackles the problem without having our new solution available.</li>
<li>Pain Points: Those describe the negative emotions and outcomes the user has while performing the job with the current workaround</li>
<li>Consequences: This is the (economic) impact of the user failing to accomplish the task productively</li>
</ul>
The current state in the example shows that the lack of data and automated sales funnel management leads to losses of ~USD 50,000 per month on average.
When we understand how the user addresses his problem today, we can examine how our solution will benefit him:
<ul>
<li>Our Solution: This describes our new product or service and the way the end-user makes use of it to perform his job.</li>
<li>Pain Relievers: Here we summarize how our solutions address the user’s pain points, e.g., our differentiators</li>
<li>Rewards: Those are potential cost savings or additional revenue that can be achieved with our solution. The rewards relate to the economic consequences stated on the left side</li>
</ul>
Transferring this to the example, the offered solution will provide an API that is able to retrieve the specific data sources required for this business and automate the sales funnel management to increase the customer base.
<a href="https://www.mindtheproduct.com/a-guide-to-creating-api-products/">Discover insights on creating API products. </a>
<h2>Decide the point of attack</h2>
Now we have all the relevant information available to score the ‘Target Customer Scenario’:
<ol>
<li>“There is a single identifiable buyer: Is there a single, identifiable economic buyer for this offer, accessible through our sales channels we intend to use, and financially sufficiently equipped to pay for our solution?</li>
<li>“Buyers have a compelling reason to buy”: Are the economic consequences sufficiently significant to make any reasonable economic buyer anxious to fix the customer problem stated in this scenario?</li>
<li>“Our solution is fit for purpose”: Are we able to build a solution to the target customer’s compelling reason to buy in the next three months to address this niche market by the end of next quarter?</li>
<li>“No competition expected”: Is this problem already been addressed by another company and is occupying the space we would be targeting?</li>
<li>“We are confident to win this niche”: How confident are we from 1 to 5 to successfully win the target niche market?</li>
</ol>
We do not collect only one ‘Target Customer Scenario’ but many until additional ones are only minor variants of the already collected ones. Each statement is then scored on a scale from 1 to 5. The worst aggregate score we can get is 5 and the best is 25., with higher-rated scenarios preferred. The most promising one is selected as the committed point of attack. This is the turning point where everybody and everything is focused on winning the target niche market as fast as possible.
In the case study of the ‘Business Intelligence Service Provider’, the scoring system shows large potential to win the niche market of furniture B2B online shops for doctor’s offices in the US. Once won this niche market and having a solution for a furniture online shop at hand, the company plans to use those customers as a reference to attack the very large mainstream segment of business-to-consumer furniture online shops.
<img decoding="async" src="https://www.mindtheproduct.com/wp-content/uploads/2021/05/f9bc24fd-7aa9-46e5-bf61-f5d631cb4394_image1.png" alt="Ein Bild, das Text enthält. Automatisch generierte Beschreibung" />
Figure 2: Target Customer Scenario Canvas &#8211; Example
<h2>Conclusion</h2>
The ‘Target Customer Scenario Canvas’ assesses different potential points of attack for getting the first foot out of the chasm and on the mainstream market. It is a very helpful tool for product managers to segment markets when defining the product strategy and go-to-market strategy. The canvas puts the customer and his problem into the centre and forces the product managers to take the customer’s lens. This is enforced by incorporating state of the art customer-centricity tools and frameworks such as the <a href="https://www.mindtheproduct.com/jobs-to-be-done-by-joe-leech/" target="_blank" rel="noopener noreferrer">Jobs-to-be-Done Framework</a> and the Value Proposition Canvas.
Explore more <a href="https://www.mindtheproduct.com/category/product-roadmap/" target="_blank" rel="noopener noreferrer">Product Roadmap</a> content and, for even more content on a range of product management topics, see our <a href="https://www.mindtheproduct.com/content-a-z/">Content A-Z.</a>
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Crossing the chasm with the ‘target customer scenario’ canvas

Sebastian Straube

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