Pragmatic Venture Blueprint
Card 10 of 18
Evaluate customer health
As you leave the early venture building stages and transition to validating your growth, you need to set in place the means by which you can ensure your existing customers are ‘healthy’. Depending on your product, ‘healthy’ will mean different things measured by different metrics. You need to actively set in place what becomes meaningful for health and the tools by which you are going to measure those items.
Category
Business Validation (3-1)
Author
Reuben Tozman
Here are some common variables to consider:
Frequency of use - Some tools/products aren’t meant to be used everyday and some are. Making sure your customers show the right cadence in their usage is important for understanding health. If you are building digital products, know that there are many tools you can use that automate this measurement.
Willingness to renew - You should always consider asking your customers whether they see themselves ‘renewing’ or purchasing more of your product given what they spent and the impact of the product.
Champions - Have you created champions in your customers? Are they willing to be references and help share news of your product. The products we know that have unicorn status all have in their story some inflexion point where product champions outside of the company itself begin pushing the product on others.
Where do you sit in budgetary planning? - Have you become a line item in a budget, or are you part of ‘discretionary spending. Becoming a line item in a budget speaks to how important you are to business operations for others. Remaining in a discretionary spending cycle is always a threat to renewal.
Are you part of leadership team meetings? - Does your product get used in critical decision making? Are you able to contribute to key decisions for others? Becoming ‘embedded’ in critical workflows is a great sign your product is making an impact.
Finding ‘healthy’ for your business gives you goals to work towards with your customers. Having those goals help you across the board, from marketing, selling and product development.
Additional resources
