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Gartner Research Critical Stepsfor ProductManagers: KnowYour Customers Chris Meering12 August 2024 Critical Steps for Product Managers: Know YourCustomers 12 August 2024 - ID G00787293 - 9 min readBy Analyst(s): Chris MeeringInitiatives:Craft World-Class Product Strategies; Create Differentiated Tech ServiceOfferings Deep understanding of the customer problem that a productsolves is fundamental to product strategy. For successful productplanning, product managers must follow a three-step process thatdefines target customer segments, captures voice-of-the-customer data and creates customer personas. Overview Key Findings Technology and service providers’ (TSPs’) impulse to target large-scope businessopportunities will sometimes prevent them from focused understanding of a specificcustomer problem that their product can solve.■Deep qualitative customer insight is hard to uncover, even though it’s a keyingredient to creating innovative differentiated products; thus, many productmanagers rely solely on past performance data and competitor analysis to driveproduct planning decisions.■The lack of concisely documented personas detailing customer wants, needs andmotivations reduces the effectiveness of using that understanding of the customerto influence product development and product introduction activities.■ Recommendations To ensure they know their customers, product managers should as part of product andservice discovery and validation activities: Create target customer segments by evaluating the capacity to serve the customersegment, intensity of market competition, and the needs and characteristics of anideal customer.■ Gartner, Inc. | G00787293 Exploit a full perspective from voice of the customer (VoC) data by defining VoC as amix of customer-centric market data and face-to-face customer interactions.■ Generate enterprise and individual personas by documenting key customer traits toboth guide development and inform collaborations on customer experience (CX) andgo-to-market (GTM) strategy.■ Introduction Product management leaders consistently rank “understanding needs” in their top threemost critical challenges to solve. With products increasingly becoming combinations ofhardware, software and services and involving numerous customer touchpoints, the“customer” and their “needs” can be a complex matrix that requires deep understanding.Product managers have become leaders in their organizations’ drive toward customer-centricity by using both data-driven customer analytics and design thinking customerempathy to better understand customers. However, many product managers still rely on past performance data and competitoranalysis as the central elements of their discovery and validation activities and to driveproduct planning decisions. Insufficient use of market research and VoC can result in lackof customer focus and unnecessary risk to product schedules and costs. The pace ofdigital competitive environments is forcing product managers to urgently understandcustomers’ needs while innovating and delivering solutions before customers even knowthey need them. The first step in product and service discovery and validation is to ensure that productmanagers know their customers. Product managers must use several methods to bothaccomplish this task and round out target customer segments and customer personas,which will substantiate the product strategy and roadmap deliverables. Product managersshould follow three critical steps (see Figure 1). Figure 1: Critical Steps for Product Managers to Know Their Customers Analysis Define Target Customer Segments Segmenting the market will allow you, as the product manager, to both visualize withincreased precision who the target customer will be, and investigate at a more detailedlevel which needs your product can fulfill. Many providers are hesitant to restrictthemselves to a well-defined target market as to not limit their opportunities; however, thisrisks spreading the organization too thin and delaying initial success. Differentiation and efficiency are two direct benefits that summarize the impact of adefined customer segment: Differentiation — Competition should be more obvious in a defined segment, and thecustomer need that you are addressing should be clearer. These are importantfactors in defining differentiated product features, service points and business value.■ Efficiency — By focusing on the problems of your most likely prospects, yourdevelopment team can focus its efforts on the features that best solve thoseproblems, thus saving money and time. A targeted customer segment will be helpfulin the collaboration with, or handoff to, the product marketing team, and it will makeit easier to create GTM messaging. Additionally, it also helps customers to identifyyour product and service when undertaking their own research into potentialprocurement targets.■ To combat stakeholders who insist on broadening product focus too early in the productli