Product management basics – Understanding your customers.

Product management basics – Understanding your customers.

In this article, we will briefly discuss

  • Customer segments
  • Personas

Customers are a lifeline for product managers. They provide important information to create and market products. However, the basic premise that there is an entire world of potential customers waiting to buy your product is wrong. There are only limited numbers of customers willing to accept a new product or buy a new product.

Product management basics – Understanding your customers.


Product managers need to target customers depending on the products attributes in order to gain product penetration. Defining a customer segment and sharing it with the company’s sales and marketing department is the first step.

Before taking a deep dive, let us first understand some marketing terminology.

Markets are customer groups. Also known as choice groups. Each group decides to interact with and purchase products based on different set of criteria.

Target Market is the market, which a product manager determines as most interesting for the product to succeed. Deciding the target market is a valuable process of segmentation. Segmentation is dividing customer groups based on attributes they collectively share or product attributes they collectively expect.

Product management basics – Understanding your customers.


Determining market segments

Step 1: Determine if your product is consumer, oriented (B2C) or business oriented (B2B).

Step 2: If your product is consumer oriented, segment markets based on the following

  • Demographics : Age, sex and income
  • Psychographics : Personality traits , values, interest, lifestyle, daily usage
  • Verticals : Education, hobbies, expertise
  • Cultural: cultural and religious behaviors can help you distinguish the actions of one group from another.
  • Geographic : City and country affect customer price and attribute preference

Step 3: If your product is business oriented, divide your market based on the following

  • Firmographics : Divide companies based on industry, size, Capital structure, business type (LLC, private)
  • Verticals: Company’s core revenue (Telecom, construction, software dev, insurance).

Product management basics – Understanding your customers.


Harnessing the power of personas.

Though using customer segmentation is useful it sometimes becomes impersonal. In order to add depth and flavor to the discussion. Creating archetype for the market segment helps resolve this issue. A persona is a character that the broadly represents every customers in that segment. As your personas become more lifelike, your product and marketing team will find it easier to develop product offerings that target the customer segment.  

Example: Assume you are developing an application that tracks workout progress. Instead of defining your market as people who work out regularly and people who work out when they feel motivated to. Define two personas Jane Doe and John Doe. You will soon hear your team talking about Jane and John. Your team will start to develop empathy for the customer. This leads to better input from the team instead of imposing their own worldview of the customer.

Product management basics – Understanding your customers.


How to develop a product persona

Decide the primary purpose of your persona is it for product development or marketing. What is the type of your persona?

Conduct user research into actual customers. Click here to see the list of questions that you can come up with for the persona.

Synthesize the data that you collected and group them

Refine the persona and add personal real life touch.

All persona descriptions should at least contain the following information.

  • Goal: What is the personal trying to accomplish by using your product.
  • Background: Demographics like age, height, weight, income etc
  • Verticals: Interest, buying habits, expertise
  • Attitude : Smart, clumsy, motivated, laidback
  • Behavior: Adventurous, adopters
  • Type of persona:
    1. Buyer: The buyer persona represents the entire class of buyers. Break down the different parts of the buying process. Is your customer a consumer, a Chief technology officer or a department manager? They all have different needs and need different quantities and quality of the product.
    2. Purchaser: This term is commonly used in B2B. The purchasing persona may have an entirely different set of criteria when deciding between products and offerings. For example, purchasing departments may get bonuses based on the discounts they get from suppliers or insist that the payment terms be longer than the usual 30 days. You need to document this information correctly and prepare your salespeople for the reality of their purchaser persona. In both the B2B and B2C context, the purchaser can also be a channel partner. A channel partner is an organization that sells your product on your behalf. They are the distribution channel for your product.
    3. Influencer: Influences provide a completely different angel on large purchases. When people buy smaller items and if it does not meet their needs. The cost of making a mistake here is less. But incase it’s a bulk or larger purchase order people generally go for second opinion. They get their news from internet, television and news.

Product management basics – Understanding your customers.


101 Questions to Create Your Persona

Background and Early History

1) What is his name?

2) What is his age?

3) What is his gender?

4) Where was he born?

5) Where did he grow up?

6) Did he grow up in a rural, suburban, or urban area?

7) What kind of house did he live in growing up?

8) What did his mom do for a living?

9) What did his dad do for a living?

10) Are his parents still married?

11) Did his parents have a permissive parenting style, an authoritarian parenting style, or somewhere in the middle?

12) Does he have any brothers or sisters?

13) Where does he fall in the birth order?

14) What is his racial/ethnic heritage?

15) What were his favorite activities as a child?

16) What are his favorite childhood memories?

Education

17) What type of elementary, middle, and high schools did he attend?

18) What was his favorite subject in school?

19) What types of grades did he get in school?

20) Does he enjoy learning new things?

21) Did he have a lot of friends, a few close friends, or no friends at all?

22) Did he get in trouble at school?

23) Did he attend college?

24) If so, where did he go?

25) What did he major in?

26) Did he enjoy his college experience?

27) If he did not attend college, what did he do after high school?

Employment History

28) What was his first job?

29) What is his current job?

30) How did he arrive at his current position?

31) How long does he stay in a given job, on average?

32) What is his current salary?

33) Does he feel he’s compensated fairly?

34) Does he like his boss?

35) Does he like his coworkers?

36) Does he like the work he’s assigned?

37) What challenges does he face in his current position?

38) What is his dream job?

39) How does he plan to pursue this job (if he plans to do so at all)?

40) When does he plan to retire?

Current Situation 

41) What city does he currently live in?

42) What type of housing does he currently live in?

43) Who lives in his house with him?

44) Is he happy with his current arrangement, or does he wish it was different?

45) Is he close to his extended family?

46) Does he have any pets?

47) Is he single, dating, or married?

48) Is this the relationship status he would prefer? (For example, is he single by choice or because he hasn’t yet found a suitable partner?)

49) Does he currently have many friends, a few friends, or no friends at all?

50) Does he enjoy traveling?

Finances 

51) What is his net worth?

52) Does he have debt? (If so, what type?)

53) Does he make purchase decisions carefully or is he loose with his money?

54) How does he feel about his current spending habits?

55) What factors drive him to make a purchase?

56) Is he a financial decision-maker in his current job?

Personal Life

57) What is his sexual orientation?

58) Is he religious?

59) What is his political orientation?

60) Does he make an effort to stay fit and healthy?

61) Does he care about his personal appearance?

62) What hobbies does he currently pursue?

63) What is his favorite TV show?

64) What is his favorite movie?

65) What type of music does he listen to?

66) Is he a morning person or a night owl?

67) What does he do first thing in the morning?

68) Does he cook at home or eat out?

69) Is he a neat freak or is he okay with messes?

70) How does he spend his weekends?

71) Where does he shop?

72) Does he read for fun?

73) Does he drink?

74) Does he smoke?

75) Does he experiment with recreational substances?

76) What does he wish was different about his weekly routine?

77) Is he tech-savvy?

78) What social networks does he spend time on?

Thoughts, Feelings, and Motivations 

79) Is he an introvert or an extrovert?

80) Is he optimistic or pessimistic?

81) Is he more right-brained or left-brained?

82) Is he quiet or boisterous?

83) Is he practical by nature or prone to flights of fancy?

84) Does he prefer to follow the rules or enjoy situations where he can challenge boundaries?

85) Does he like to take risks or play it safe?

86) Is he an innovator or somebody who tends to go with the flow?

87) Is he flexible or rigid in his thought patterns?

88) Is he spontaneous or does he prefer pre-determined plans?

89) Is he motivated by his own achievements or by what others think of his efforts?

90) How affected emotionally is he by other people’s judgments?

91) What would it take him/her to deem his life a success?

92) What would make him/her think his life was a failure?

Business Insight 

93) What objections does he have to your product?

94) How can you help solve his unique challenges?

95) How does your product help him become his ideal self?

96) How does he prefer to communicate?

97) Is he comfortable making online payments?

98) Is he concerned about online privacy?

99) How can you meet his needs through onboarding?

100) What factors might make him choose a competitor’s product over your own?

101) What are your pain points 

Product management basics – Understanding your customers.

 

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