With the current Covid-19 pandemic, business is certainly not ‘as usual’. Some businesses have seen their sales slump, while others have been forced to shut down. Yet, even in this crisis, the concept of entrepreneurship has not changed. At its very core, entrepreneurship is about solving problems in ways that draw customers to buy your solutions. Successful entrepreneurs are good at identifying and solving problems in profitable, sustainable ways.
The Covid-19 crisis has come with a unique set of problems. These problems continue to affect various consumer segments. As people’s normal lives have been interrupted, their needs have changed. For entrepreneurs to thrive during this season, they need to find their ideal customer segment. This process begins by identifying new consumer needs and meeting them within a business framework.
It’s About the Customer not the Product
When offering a solution in a time of crisis, many entrepreneurs will focus on sourcing or making a product without giving much thought to the consumer of the product they create. Take face masks, for example. We have seen many businesses venture into manufacturing or supplying face masks as demand rises. Such entrepreneurs may have capitalised on a short-term opportunity and offered a minimum viable product (MVP) that generated quick and easy returns. This type of product can be a very valuable learning tool, as it allows you to gauge what will work or not work with future customers.
As face masks have become mandatory or viewed as a necessity, entrepreneurs in the health and fashion industries will need to think beyond offering a basic, short-term use product. When used daily, people may consider their masks to be a way to show their style, much like wearing a shirt or jacket. Face mask innovators will need to lean towards consumer-centric designs that have a fashionable style in addition to necessary protective health features.
Who Are Your New Customers?
Let’s keep developing the example of face masks. As the demand for face masks increases, different people will want different styles of masks. As a smart entrepreneur, you need to segment the population into various consumer groups. These could include school-going children, banking staff, military personnel, and even celebrities. The list of consumer groups is endless. It is essential to recognize that you cannot serve all these customer segments, because they have very unique needs and desires. So how do you know which ones to serve?
At Sinapis, we train entrepreneurs to think first about the customer through the process of customer development. Before investing in product development, you need to consider the people who will use those products. If the customer doesn’t like the features you are offering, your product is unlikely to sell. In addition, getting your initial customer segment right will give you a higher chance of scaling from start-up to growth level.
Your Visionary Customer
While you might eventually grow your business to serve multiple segments, start by identifying one segment that you can reach. Successfully reaching this segment will allow you to make a profit during difficult financial times. This customer segment is called the visionary customer. These are the people who have a great need for your product and therefore are willing to take an early risk on it. Visionary customers have the following characteristics:
- They have a need
- They know they have a need (some customers don’t know they have a need)
- They are actively looking for a solution and have a timeframe for finding it
- Their need is so big that they may have cobbled together a short-term solution that isn’t working well (maybe it is poor quality or too expensive or difficult to acquire)
- They already have or can quickly acquire the funds to solve their problem and have their need fulfilled
From Making Assumptions to Forming a Theory
With these five factors in mind, you may be quick to assume who on our list of customer segments (school-going children, banking staff, military personnel and celebrities) is going to be your visionary customer. Perhaps celebrities, because they are willing to pay a higher price for a stylish face mask, compared with the other customer segments. Perhaps school-going children, because their parents or school heads would do anything to ensure the children stay healthy, safe, and presentable. However, be careful not to go with your first assumptions at this point.
Using the Sinapis Customer Development Toolkit, you can use your early assumptions to form a theory that can be tested later. This theory will be formed by determining which of the segments:
- Has the greatest depth of need
- Is most profitable to serve
- Is most sustainable in the long run
Overcoming the Crisis
Even during this financially trying pandemic, there is still hope for your business. Instead of giving up due to a difficult market, you can look more closely to discover your visionary customer. If you build your products to appeal to this customer segment, you can draw in customers, even during a crisis like Covid-19. Additionally, with the educational programs at Sinapis, you can analyze your customers’ depth of need, find the customer segments that will give you the most profit, and discover a sustainable customer base that will stay loyal to your business. With these tools, your business can shine through a difficult economy and reach your best customers.
Written by Ann Gitari
Ann is a Sinapis trainer as well as a Business Innovation Consultant & Trainer. She has a strong passion for local entrepreneurs who are working to transform the nation with their business ideas. When she isn’t training, Ann can be found running The Writing Agency (K) – a brand storytelling enterprise she founded 7 years ago. The agency helps businesses identify and tell their authentic stories with clarity, helping them become more visible, marketable and profitable.