Customer Archetypes, some rules & samples

We all know that, most of the time when communicating, storytelling is better than dry facts & figures.   And, stories backed up by facts and figures are better still!   Steve Blank‘s Lean Launchpad popularized the idea of using “customer archetypes” to convert dry demographic descriptions of customers into living, breathing people the audience can understand.

Archetypes should follow a few simple rules:

  • Customers are always humans and never entities.  Entities (companies, nonprofits, government agencies, etc) do not make decisions, specific human(s) who work/volunteer there make decisions.  That means you have to care about what will get that person promoted or fired.
  • Archetypes are 1-person samples (real or fictitious) of the “typical” customer.   If your typical customer is a 60 year-old Japanese grandmother, make sure your archetype is a 60-year-old Japanese Grandma!
  • Archetypes are narratives, not recitations of demographic/photographic data.
  • Only describe details that are relevant for your venture’s value proposition.  If your solution doesn’t address their need for beer, don’t talk about how they love to drink :).

Example 1:

Boring demographic version:  English-speaking visually impaired people with internet access at home.

Archetype:

Jane Rook is a retired army nurse who was blinded during her service in the Vietnam war.  She lives on a small, fixed income provided by her government disability payments.  She uses her home computer to email, Facebook, and Skype her children, grandchildren, and friends.  She loves to play cards with her friends from church.  However, as her blindness prevents her from driving transportation is very difficult to arrange.  Add the social embarrassment she often feels when playing with brailled cards or when accidentally knocking over things at a new person’s home and she often stays home, alone and isolated.

Example 2

Boring demographic version:  18-24 year-old college students with annual incomes of $20-40,000 per year from middle & upper class families.

Archetype:

Blair Smith is a senior psychology major at UMass with a full course load working to maintain her B average while working 20 hours a week as a waitress, and frantically looking for a “real” job for when she graduates in a few months.  She has what feels like a mountain of student debt to worry about, as well as a dorm room overflowing with four years of acquired junk.  She has no storage space close by and couldn’t afford to pay for it even if it were available.

Example 3

Boring demographic version:  25-45 year old married women, with children, with average annual household incomes of >$50,000.

Archetype:

Liu Whan is pregnant with her and her husband Juan’s first child and has realized that their one bedroom apartment isn’t going to cut it.  They would like to find a home in which to raise their family.  Liu is a tenure-track junior professor of psychology at the local woman’s college and Juan is a firefighter.  They have just relocated to the area and have little knowledge of it and no family or friends nearby to lean on for advice.

If you have any archetypes you would enjoy sharing, please post a comment.  Thanks!

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Donuts vs Fruit: asking for actions, not intentions, during customer development

Donuts    vs    fruit plate

A woman from a pastry startup walks into an office full of potential customers to conduct customer development interviews.  She asks everyone “You told me you often need snacks in the middle of the day.  What would be better, if I brought a plate of donuts or a plate of fruit?” Most people tell her they would prefer fruit because it is healthier.  On her way out she leaves a plate of each behind as a thank-you gift.  She comes back the next day and discovers there are no donuts left, but lots of rotting fruit! What did she learn?

A novice would think they learned that customers lie so there is no point in asking them.  A pro realizes the importance of how you ask the question.  It is very hard for people to know what they might/would do with any accuracy.  If instead you ask what people have done, or give them a situation to make a real choice, then you get much more usable information.

Note that you have two ways to apply this great lesson:

  1. Before you have a prototype you can ask people what they have done in similar situations in the past.
  2. Once you have a Minimum Viable Product (MVP), give people a choice between your option and the alternative.

Take away:

When conducting customer development interviews ask what people have done, not what they would/might do.

Hat Tip to the man who taught me this concept and the entertaining way to remember it: the great Eddie Binder.

Only a Few Seats Left For Lean Launchpad Demo Day!

There are only a few tickets left for next week’s Lean Launchpad: Pioneer Valley Graduation Celebration & Demo Day.  Because of space (and wine :)) seats are limited and only those who RSVP can attend.  So if you’d like to join us, RSVP here.

Who is attending: primarily angel investors, mentors, and entrepreneurs who want to see first-hand the results of Lean Launchpad training.  Get more details here.

Metrics That Matter

What are the Metrics That Matter for your venture? No… not the vanity metrics that so many of us were taught to pay attention to.  What are the metrics that actually show you if your venture is on the right track?

I watch my students struggle with this a great deal.  I’d like to offer some patterns that can serve as a starting point to anyone considering these questions.

  1. Cost to acquire/get a customer helps you evaluate different channels for their relative value, shows you when your website is doing a terrible job of converting visitors into contacts, steers you towards labor-efficient/scalable techniques, etc.
    Somesubmetrics:

    1. Sales & marketing costs: out-of-pocket + labor (assume a market-rate labor cost so you do not underestimate labor-intensive marketing channels)
    2. # hits to your website, # of cold calls
    3. % that convert to contact you, % that meet with you
    4. % that purchase
  2. Cost to keep/retain a customer helps you spot when you are using unsustainable customer service / product delivery procedures.
    Somesubmetrics:

    1. Cost of customer service team, returns, refunds, etc.
    2. # of customers
  3. Lifetime value of a customer helps you think about customer retention and how to grow revenue from existing customers by keeping them longer or by solving other problems for them via new products.
    1. % of customers who renew
    2. Revenue per customer

These three metrics, while not all-inclusive, are a fantastic starting point.

 

You’re Invited! Lean Launchpad: Pioneer Valley Graduation & Demo Day

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If you’ve been following this blog you know that the Lean Launchpad is the #1 entrepreneurship curriculum in the country.  It has proven it can dramatically increase startups’ odds of success by accelerating their ability to find a repeatable, scalable business model before they run out of ramen noodles (or spousal patience :)).  

WE INVITE YOU TO COME SEE FOR YOURSELF.

The latest cohort of Western Massachusetts teams to complete the Lean Launchpad curriculum is graduating on 4/28 @ 5pm and giving their final presentations.  No spin-ridden investor pitches will be shown this night.  Instead the audience will hear how the companies developed their ideas, field tested them with real customers, changed (often radically) their businesses, and did the whole process over and over again until they got it right or ran out of time.  You’ll see how they learn and how they adapt.  You’ll also see how the Lean Launchpad curriculum is so different.  

And after the presentations… then there will be wine :).

You must RSVP to attend as space (and wine!) is limited.  We would love to have you join us.

Click to RSVP via Eventbrite

Click to RSVP via Eventbrite