How to identify customer segments without coding?

You can’t satisfy every customer you’ve interviewed. You need to identify
clusters of customers whose similar needs are underserved.

My favorite trick involves collecting all opportunity scores in a single view and
identifying clusters visually. Below you can see a simple Excel sheet with
conditional formatting:

Looking at the picture above, we can identify two promising customer

segments:

1. People who care about content for their kids and whose needs are
underserved (Customer 2, Customer 5, Customer 6):

2. People who care about sports events and concerts and whose needs are
underserved (Customer 1, Customer 7, Customer 9):

Select one of those clusters.

That’s your focus group.

How to formulate a value proposition?
The value proposition is a set of Opportunities you will address and, even
more importantly, those you won’t.

When prioritizing Opportunities, include those important for your cluster,

even if your customers are already satisfied with what they already have.

For instance, even if customers in your cluster are satisfied with “Content for
kids,” which lowers the score, this need may still be extremely important to
them. In that case, treat this need as a “must-have:”

How to represent a value proposition?

Now, compare your product with the products of your competitors. Try to
identify the following competitive factors:

• 5-7 core needs your customers/customers of your competitors might

care about
• The relative price of your product

My favorite approach is using the Value Curve.

The result might look like this:

As you see in the picture above:

• Our product aims to be the best at what our specific customers need -
Sports events and Concerts.
• We also prioritized Content for kids, even though our customers are
already happy with what our competitors offered. This is a “must-have”
need.
• We won't prioritize Movies, as it isn't considered important by our
specific customer base.

What matters the most is that our Value Curve addresses the specific
needs of our selected cluster way better than anything else. And that’s
exactly what a good strategy is about. Competing to be unique, not the
best at everything.