The importance of validating
Really understand your customers

There are many ways to develop a proposition. The Proposition Development Map - developed by Faebric - gives you an overview of the different activities and different routes you can take to develop a people-centered proposition. Why people-centered? Looking through the eyes of your customer is the key to develop a successful proposition. Identify with them and search for insights that matter to them. Do not forget a crucial step: validating these insights. This article describes the importance of validating insights to grasp a deeper understanding of consumers. This will be done by looking into an interesting case of SnappCar.

 

SnappCar is a rapidly growing car sharing platform with the mission to make a tangible impact on the world by changing mobility from car ownership to car sharing in order to reduce pollution and create more space for us all. To stimulate the number of shared cars on the road they also offer a Private Lease & Sharing proposition. It is a proposition that builds upon the credentials of SnappCar offering car sharing, thereby using a lease construction. The proposition is created around having the convenience of a lease car and being able to lower the monthly expenses by offering your lease car for sharing. How to accelerate growth of this proposition in both numbers of private lease cars as well as the number of sharing transactions is the main design challenge of this case.

Starting with an exploratory analysis of the service blueprint

To get towards the opportunities of how to accelerate growth, a real understanding of the current situation is crucial. That is why we started an exploratory analysis which consisted of research into all customer feedback available at the sales and customer service departments of both SnappCar and the private lease partners. Secondly, we looked into the data we gathered from the retention cases. Why do customers retain their private lease contract, or what are their main reasons for churn?

Since the proposition is about sharing, SnappCar expected to attract primarily people who are open to share. Looking into the main reasons for churn, we concluded that there was a mismatch with a part of the customer base and the proposition. SnappCar did not only attract the car sharers, but also a significant number of customers who were attracted by other elements of the proposition. Besides this mismatch we also discovered obstacles by existing customers - with a strong intention to share - regarding different features of the Private Lease & Sharing proposition.

The main conclusion that was drawn from the exploratory analysis was that SnappCar’s proposition was missing the right valuable fit of the consumer needs. If customers were attracted by aspects other than the sharing aspect it would increase the number of Private Lease cars on the road without meeting SnappCar’s main objective of increasing the number of sharing transactions.

This was the turning point for SnappCar to decide to take a step back and get a better understanding of the customer profiles and their main needs, pains and gains. 

A step back to customer profiles: enrich and validate insights

To get a better understanding we used the Value Proposition Canvas. We mapped out the different customer profiles by describing the main customer needs and jobs they are trying to get done, the pains they are facing and the gains they are seeking for. These customer profiles were mainly focused on current behaviour and were assumption-based. Therefore, validation of the set of assumed and observed customer characteristics was needed before drawing to conclusions. 

The key takeaway is the importance of validating these customer insights. It helps to create a real understanding of the consumer’s perspective. It is definitely the starting point to turn perceptions into propositions. Propositions that customers really want to pay for.

 


How to validate these profiles?

Combining quantitative research and qualitative research generates the best insights. Qualitative data strengthens the understanding of the numbers and vice versa. 

 

Qualitative research is essential to grasp a deeper understanding of consumers. It is the first step. The logical second step is quantitative research: analyzing, and especially validating the consumer insights you gathered. 

Starting with qualitative research literally means getting out from behind your desk and meet your (potential) customers. And that is exactly what SnappCar did. Starting a dialogue with their customers and observing their behaviour, was crucial to find out whether the gathered insights and assumptions were right. This is not just about validating insights, but also about grasping a deeper understanding of your customer and enriching your insights.

 

Twelve face-to-face in-depth interviews were taken to offer the possibility to keep asking follow-up questions and observe behaviour and non-verbal communication. Asking the right questions was essential to gather useful information. We needed to gain a deep understanding of customer aspects such as: drivers and motives, values, needs (functional, emotional and social) and wishes, annoyances and expectations (all related to the proposition). The interviews were set up to get answers to questions such as: 

• What do people find important in their lives?  
• Why do they do things?  
• How important is mobility? 
• What are their thoughts about the sharing economy? 
• What are their main drivers for choosing Private Lease & Sharing?  
• What alternatives did they look at? 
• What do they like about Private Lease & Sharing? 
• What problems do they encounter and how do they deal with them?  
• What would one like to see different and why? 
• What is the importance of the different needs, pains and gains? 

The ‘why’ question - the question behind the question - is key. It is common to ignore this customer insight and miss the point completely. A waste of all your work and effort. 

 

As a result of these in-depth interviews SnappCar gathered many valuable insights about the main drivers for choosing the Private Lease & Sharing proposition. But in the proposition we identified a few pain points that could drive customers away. 

After reaching our main conclusions and enriching the insights from the qualitative research, the next step was to validate these insights by quantitative research. This was easily done by an online questionnaire with a good and quick response of 300 customers and non-customers. Accessing enough data to provide a comprehensive overview of your customer profile(s) is often the biggest challenge of online questionnaires.

No need for change in the customer journey, but certainly in segmentation 

SnappCar gained valuable insights from the qualitative and quantitative research. When asked to rank the different features of the proposition based on importance, customers chose a different order than SnappCar had expected. These insights helped to enrich and come to genuine and validated customer profiles. The research showed no need for a change in the customer journey, but gave new insights that helped to adjust the segmentation and to decide on the target segments, with each a different attitude towards car sharing. 

The key takeaway about segmentation was a necessary shift in focus.

New proposition design and validation

Now that SnappCar grasped a deeper understanding of their customers, they were able to look into adjustments to improve their proposition. The customer profiles gave SnappCar a clear insight in main needs and gains. 

We started value-mapping the insights to match the customer profiles and the proposition. The service blueprint was changed by reworking the price points, adjusting the car offering and improving the end-to-end sales and delivery process. And of course we looked into the marketing and communication strategy for attracting the right customer, with increased focus on sharing. 

But before SnappCar adjusted its proposition, the ideas were validated in focus groups first. A focus group is an effective way to get feedback from several people at the same time. Besides getting feedback, we also played the game buy-a-feature. Respondents could buy features with Monopoly money. Of course they did not have enough money for all the features and they were forced to make choices. This gave a good insight in what features in the proposition are most important to customers.  

Adjustments in revenue model

Last but not least: to fulfil the customer needs and to make it economically feasible, SnappCar needed to make adjustments to their own revenue model as well. Together with their leasing suppliers, they improved the Private Lease & Sharing proposition to give a boost in both numbers of private lease cars on the road as well as the number of sharing transactions.

A stronger answer to customer needs 

This SnappCar case proofs that validating the customer profiles helps to create a real understanding of the consumer’s perspective. You may find traits of your target customers you never thought of. Or it turns out that they do not have the needs you thought they would have. Valuable information that avoids you falling into the trap of making assumptions. A real understanding of the consumer’s perspective will help to develop both new propositions as well as improving existing ones. A few changes to their proposition gave SnappCar a much stronger answer to their current and future customer needs and made Private Lease & Share more successful.

Key takeaway is that qualitative and quantitative validation helps to find and focus on the areas that can be improved. Even when a proposition is already available in the market it might be useful to review and revise your proposition to check whether it still fits the needs of your customers.

 


Guest author: Nicole Keijser, keijserskijk