Wednesday, May 18, 2016

Three types of Customers

As a Product Owner and/or member of an agile team, you might be challenged with the concept of "customer value". Some people consider that only things which are useful to those who are end users of the product have real value. However, that falls short of what a customer is, so here is an overview of which groups of customers you must consider.

Primary Customers

Also known as "end users". The people who actively use your product until the end of the product's lifecycle. If we consider a Teddy bear, that might be the kid who actually plays with it.
This group of customers is typically the easiest to please, because you can directly study their behaviours.
A Product Owner should understand their Primary Customers to make a great product.

Based on the Kano Model, you can please them by triggering their "Excitement".

Secondary Customers

Also known as "Buyers". They are the ones making the purchasing decision. For some products, they might be "users", for others - not. If we consider the Teddy bear, that might be the parents or relatives who wants to buy a present for a child.
This group of customers may not even understand what incites the Primary customers and may even have conflicting interests with them.
A Product Owner must be aware of the Secondary Customers, because they determine the financial success of the product.

Based on the Kano Model, they typically look at "Performance" criteria and try to find the best value.

Indirect Customers

Also known as "Regulators". They might neither buy nor use your specific product, but they still want some say. If they actually get in touch with your product, that may be because of a dual role. If we consider the Teddy bear, that could be an activist group asking for a statement that you pay Fair Wages and provide Safe Working Conditions - it could also be the government demanding the teddy to be non-flammable and non-toxic.

This group of customers is impossible to please and will not generate a cent of revenue. The best thing you can do is not to displease them or draw their attention towards you. Keep them satisfied with minimal cost and effort.

As Product Owner, you must understand the demands of your Indirect Customers, because if you don't - they'll kick your product off the market. The hardest part may be not diluting your Product Vision in doing so.
Indirect customers are the worst nightmare of every product owner, because they will add as many non-value adding, potentially counterproductive requirements as possible into even the simplest product.

Based on the Kano Model, they require "Hygiene" criteria.


You must be aware of all customer groups. Never lose sight of any of these groups. Invest sufficient time to understand them. Do what is necessary to make your product positive towards their needs and demands.

Suggestion: Do you want to make these explicit in your Plannings?

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