You started with a pain point, or a passion, or a hunch about a problem. Now you need to go out and learn as much as you can about whether the problem really exists, the extent of the problem, if people might pay for a solution, and who feels the problem most.

This section will introduce you to a number of research and investigation methods for building a solid understanding of the pain points, customer problems, and market opportunity. Evaluate your environment and capabilities to choose tools that will help you better understand the problem you are tackling before jumping into building a minimum viable product (MVP).

2.1 Understand your customers

Quantitative Research

Quantitative research means using statistical techniques to analyze numerical data. For service providers, it generally means conducting surveys consisting of questions with a limited set of answers, and inputting those responses as numerical values to create a dataset. The analysis of usage data and patterns is also considered quantitative research.

Purpose

  1. Demonstrates the market opportunity

  2. Paints a broad picture of a population.

  3. Validates insights from qualitative research with a broader population.

Types of data

  • Demographics data: information about the individual and her household. Note that for a firm providing business-to-business (B2B) solutions, this will be “firmographics”, such as industry, company size, stage, financing, etc.

  • Psychographic & behavioral: Attitudes, opinions, values, product usage data. 

  • Users vs Buyers: For B2B, distinguish between the economic buyer and other stakeholders involved as their needs are distinct. 

  • Availability and use of alternatives :Products, penetration, pricing for alternative offerings and target customer usage trends. 

  • Technology lifecycle adoption: Current stage of your product market in the adoption cycle. For example, will you be targeting innovators and add segments over time?

 

Qualitative Research

Qualitative research uses open-ended questions, conversation, and observation to glean customer insights and understand aspirations, frustrations, rationales, and preferences.

Methods can include:

  1. In-person interviews or structured 1-1 conversations, “intercepts” with passersby or targeted potential users

  2. Focus groups - interactive, facilitated small group discussions about participants feelings, opinions, attitudes, or beliefs

  3. In-home visits - interviews with a participant held within their household (or place of business)

  4. Ethnographic research - observing human behavior in as natural a surrounding as possible, such as watching a customer make a purchase or shadowing an agent as they go about their day

 

2.2 In-person interaction examples in inclusive fintech

Qualitative research can include the following techniques to gather the data:

Use Cases
Present participants with examples of different transactions (e.g., school fees, bills), and ask how they would transfer (e.g., mobile money, cash) money to the intended recipients.

Sacrificial Concepts
Present participants with concepts or product ideas that can be sacrificed or discarded if they don’t like or understand them. Ask participants their impressions and opinions.

Simulated Activity
Present participants with images of common expenses, and ask how they would allocate a hypothetical amount among the expenses.

Extreme, Mainstream
Talk with both extreme and mainstream users of a product or service to understand the needs of fringe users that might be appealing or early adopters.

Phone Show-and-tell
Ask people to show you their phone and walk you through how they send messages, use apps, play games, send money, pay bills, etc.

Intercept Interviews
Stop people on the street or in a market to ask them questions. Great for testing smaller hypotheses, or understand context.

 

2.3 Customer research tips

  • Publicly available data may be limited and fragmented, making it tough to collect a representative sample, and thus impossible to extrapolate results to a larger population.
  • Data on existing behaviors is limited, so needs and preferences will be difficult to assess with just secondary research Infrastructure challenges usually make it difficult and expensive to administer surveys at a large scale.
  • End-customers typically have limited awareness of products and services, and often negative experience with formal financial services.
  • It’s important to build a culture of customer empathy, putting customer experience at the center.
  • Pay attention to norms, whether religious, cultural, gender, etc. Avoid judgement and unhealthy power dynamics, and be aware of privacy and security risks around your presence or conversation topics.
  • Make sure someone on your team speaks the local languages. Use visual aids whenever possible.
  • Respect people’s time and consider incentives, particularly if you’re asking them to forgo work and daily income.
  • Your team needs to get really good at listening closely to what customers say, repeating statements back to ensure understanding, and asking additional probing questions.
  • You want to focus on understanding why customers find certain benefits valuable as this will help you better understand how customers think and what they care about.
  • During customer interviews, different customers will use different words to describe the same idea, and responses will vary widely in how high-level or specific they are. Be prepared.
 

2.4 Personas

A persona is a hypothetical archetype based on real people that represents your target customers, which can help to ensure everyone in the company is aligned with the same target customer.

The key is to select specific characteristics of a number of people you’ve encountered into one holistic portrait.

Good personas should fit on a single page & include:

  • Name, photo, job, demographic data, and a quote that conveys what they care about

  • Needs, goals, motivations, attitudes, and behaviors

  • Frustrations and pain points with current solutions

  • Understanding and expertise in the relevant domain

  • Product usage context (i.e. smartphone in an off-grid village)

  • Technology adoption life cycle segment (innovators)

Resources
1. For B2C businesses:

2. B2B businesses can create Ideal Customer Profiles (ICP) instead of personas to define an ideal customer by more than four factors (company size, industry, geography revenue, pains, needs, etc.)

Persona creation tips

Like any tool, personas can be misused or misunderstood, especially if they lack complete information or are based on pure speculation. Here are tips to create strong personas:
  • Focus on the most valuable information to inform design decisions.
  • View this persona as a first draft that will get revised over time. It's okay if it's not perfect.
  • Refer to the persona as you make design decisions so the team has the person top of mind.
  • Keep talking to customers to refine persona over time.
 

2.5 Customer empathy map

An empathy map is a collaborative tool teams can use to gain a deeper insight into their customers. Much like a user persona, an empathy map makes customers more concrete and relatable. The map can represent a group of users, such as a customer segment.

It is a good idea to complete an empathy map after the user research phase, before jumping into developing your value prop and identifying product requirements. It is a useful tool for distilling and organizing qualitative data from interviews, focus groups, etc.

 

2.6 Customer journey map

The value that a customer derives from a product or service often extends beyond their direct engagement with a product, so it’s important to understand where you can engage them and influence choices.

Customer journey maps are a tool that captures an individual journey through a specific product or service experience. You can generate a map for each persona you developed for your  target customers. This tool is best developed as a group to capture and synthesize knowledge, especially from those with experience in customer-facing interactions.

The customer journey mapping process

  • Understand context: determine which journey you want to describe with the journey map

  • Define the stages in the journey (i.e. awareness, selection, payment, upgrade)

  • Detail the touchpoints with your brand, product, and staff along the journey. Describe what the customer does at each stage

  • Fill in qualitative customer data (e.g., thoughts, feelings, attitudes) at each touchpoint

  • Understand your moments of truth, or highs/lows of experience that illuminate insights and opportunities

Customer Journey Map from Janalakshmi, India From  CGAP Customer Experience Toolkit

Customer Journey Map from Janalakshmi, India From CGAP Customer Experience Toolkit