Applying the ‘Target Customer Scenario Canvas’ to Cross the Chasm

Narrowing Down the Battlefield

Figure 1 shows the ‘Technology Adoption Life Cycle’ for discontinuous innovations. We can see that such innovations face a chasm between the early and the mainstream market. Crossing this chasm decides if the innovation will become a success or has to leave the market. Innovators have to build first reference customers in the mainstream market to prove having a promising business model and a compelling offering.

“Focus on identifying your target audience, communicating an authentic message that they want and need and project yourself as an “expert” within your niche” (Kim Garst, Marketing Thought Leader).

As Kim Garst states in her quote, the fundamental principle to win first reference customers in the mainstream market is to target a specific niche market as your point of attack and focus all your resources on achieving the dominant leadership position in that segment as quickly as possible. 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 too broad and large 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 on the mainstream market, win a niche and then use those customers as a reference to attack adjacent segments.

Explore the Battlefield

Geoffrey Moore suggests in his book “Crossing the Chasm” 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’ (figure 2).

The header consists of a short stakeholder analysis and a definition of a customer problem that we would like to address:

1. Economic Buyer: The person who ultimately pays for our solution

2. End User: The person who actually uses our solution

3. Others: Other relevant stakeholders, e.g., people that influence the economic buyer

4. 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. An example can be: “Eat healthier”

After having a better understanding of our stakeholders and our customer problem to be solved we focus on understand better the current state:

1. Current Workaround: This describes how the user tackles the problem without having our new solution available.

2. Pain Points: Those describe the negative emotions & outcomes the user has while performing the job with the current workaround

3. Consequences: This is the (economic) impact of the user failing to accomplish the task productively

When we understand how the user addresses his problem today, we can examine how our solution will benefit him:

1. Our Solution: This describes our new product or service and the way the end user makes use of it to perform his job.

2. Pain Relievers: Here we summarize how our solution addresses the user’s pain points, e.g., our differentiators

3. 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

Decide the Point of Attack

Now we have all the relevant information available to score the ‘Target Customer Scenario’:

1. “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?

2. “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?

3. “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?

4. “No competition expected”: Is this problem already been addressed by another company and is occupying the space we would be targeting?

5. “We are confident to win this niche”: How confident are we from 1 to 5 to successfully win the target niche market?

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 the turning point where everybody and everything is focused on winning the target niche market as fast as possible.

Case Study: Business Intelligence Software

Figure 3 shows a ‘Target Customer Scenario Canvas’ example for a company that offers business intelligence solutions for online shops. This company has already won some early adopters that try 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 3. This canvas is representative for the niche market of furniture business-to-business online shops for doctor’s offices in the US. There are around ~20 of such businesses available as potential target customers.

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 on customer behavior data. This lack of data and automated sales funnel management leads to losses of ~USD 50,000 per month on average. 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.

The scoring system shows large potential to win this niche market. 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.

Conclusion

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 center 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 Jobs-to-be-Done Framework and the Value Proposition Canvas.

Sources:

(1) Levitt, Theodore. Marketing Success Through Differentiation — of Anything. Harvard Business Review, January, 1980.

(2) Moore, Geoffrey. Crossing the Chasm — Marketing and Selling Disruptive Products to Mainstream Customers. Harper Business, 1991.

(3) Kalbach, Jim. The Jobs to Be Done Playbook. Two Waves Book, 2020.

(4) Osterwalder, Alexander & Pigneur, Yves. Business Model Generation. Wiley, 2010.

About the Author:

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 & discovery coach at Accenture | SolutionsIQ and helps clients build empowered product teams that develop extraordinary products. His focus lies on product visioning, product strategy, and product discovery.