While everyone talks about product-market fit, finding product-customer fit is equally important when it comes to engaging the right customers and driving success.
Without it, you’d find yourself implementing features for the wrong customers, distorting your value proposition, and leading your customer support (CS) team to burnout from dealing with bad-fit users.
So, how can you determine customer fit and get the right user feedback to ensure customer success?
Let’s go over the concepts.
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Summary of customer fit
- You’ve achieved product customer fit when your product and its functionality help the user get their job done in the easiest and fastest way.
- Product-market fit is about meeting the market’s demand by iterating the product, while customer fit is about attracting the right customers.
- Customer fit is not the same as user persona or ideal customer profile. Product customer fit is about the match in offering vs need, and persona is a more in-depth representation of the specific user type that has that need.
- 75% of companies will break up with poor-fit customers, according to Gartner. Because retaining poor customer fit is expensive and can lead to a product death cycle, degrade your value proposition, and prevent customer success.
- There are six types of customer fit according to Lincoln Murphy, which include: technical fit, functional fit, resource fit, competence fit, experience fit, and cultural fit.
- You can leverage customer fit to bring success by:
- Creating user personas based on successful customers.
- Communicating a relevant value proposition with accurate product positioning.
- Designing your pricing plans to attract good-fit customers.
- Implement an engagement model that fits your perfect customer.
- Use in-app messaging to make customers part of your product storytelling while creating public roadmaps, release notes, or press releases for the big picture.
What is customer fit?
Customer fit means there’s high potential for your customer to achieve success with your product—basically when your customer’s needs and your offer are perfectly aligned to make success possible.
Finding customer fit is essential to enhance customer loyalty, extend customer retention, and ultimately achieve customer success.
Product-customer fit vs. product-market fit
Although easily confused, product-market fit and customer fit have opposite perspectives.
Product-market fit is a business development term for building a product that satisfies a market’s demand. Its framework consists in creating a minimum viable product (MVP) to validate that there’re users willing to pay for it.
And then iterate and improve based on customer feedback.
Product-market fit can be measured with the Sean Ellis test through in-app PMF surveys.
In comparison, product customer fit is about attracting the right customer for your product. The focus on this usually comes after you’ve achieved product-market fit as you have a better understanding of what your product does best and who your perfect customer is.
Customer fit vs. ideal customer profile or user persona
Short story: they’re not the same.
Customer fit is about a customer’s potential to achieve success using your product.
The ideal customer profile is a term used in sales to define the characteristics of a potential customer that would be a fit for a product. It looks more into things such as company size, budgets, and needs, and builds a profile that is used to qualify leads.
Sometimes this is used interchangeably with user persona, but they are not the same.
User persona refers to building a representation of the person actually using the product and it focused mostly on their job to be done and how the product helps them achieve it.
Here’s a user persona example of a customer success manager looking for a product growth platform.
Why should you care about customer fit?
Good-fit customers are way cheaper to retain than bad-fit customers.
Gartner predicts that 75% of companies will “break up” with poor-fit customers by 2025. Or, as Gartner’s director and team manager, Neha Ahuja, says:
“Business leaders are starting to recognize how costly keeping a poor-fit customer can be for business, such as over customization, custom-made solutions and outsize time spent on servicing” Neha Ahuja
However, this problem doesn’t affect your budget only. It also affects your team member’s health and long-term profitability, as Neha expands:
“Combine that with costs associated with emotional damage that leads to attrition among customer service reps and sellers, which are two talent pools already under pressure. Long-term profit erosion must also be kept top-of-mind, as investments in poor-fit customers may boost revenue in the short run, but compromise profitability in the long run” Neha Ahuja.
For SaaS companies, these problems arise because retaining bad-fit customers lead you to:
- Spending budget on developing the wrong features and entering the product death cycle
- Reducing your capability to ensure customer success
- Misleading your brand positioning and value proposition
Let’s go over each:
Bad-fit customers lead to a product death cycle
As your churn rates increase and product usage shrink, all the feedback you can collect is from bad-fit users that will lead you to build unnecessary features.
Without customer fit, you’ll keep trying to add functionality to the product to make it fit the customer.
As a result, you fall into a feature fallacy trap called the product death cycle where you keep building features no one uses.
The only way to get out of the cycle is by listening to the successful customers—not the ones who are churning.
You can’t drive success when there’s a bad fit
Bad-fit users also want to succeed with your product, so they’ll ask for unrealistic solutions, unnecessary features, too much support, and more collaboration—then you’ll waste too many resources trying to make them happy.
In the end, your account managers get burned out, and the customer will churn because the product wasn’t a fit in the first place.
Bad-fit customers erode your value proposition
Poor customer fit plants the seeds for bad word of mouth, negative reviews, and more NPS detractors—degrading your value proposition.
Even if your product is pretty good, bad-fit customers would complain and leave bad reviews when, in reality, the product wasn’t made for them.
Great product positioning reinforces your value proposition and gives prospects more clarity on how your product can help them before signing up.
This helps you in attracting the right fit customer in the first place.
6 Types of customer fit
Now, how can you tell that a customer is a fit?
According to Lincoln Murphy, there are six success potential inputs that define if a customer is a fit, and they include:
1. Technical customer fit
Is your customer’s tech stack compatible with your product?
Technical fit (also referred to as toolkit fit) is when the customer has the required working methods and technology available to make 100% use of your product.
If your software requires integration with a website platform or CRM, make sure that your customers have the required tech stack in place.
For example, if your product provides more value when you integrate it with Hubspot, your target audience must be a Hubspot user, otherwise, you will not achieve customer fit.
2. Functional customer fit
Sometimes, your offer isn’t enough for a customer to be successful. Maybe they require more support than you can afford, or your customer needs a pair of features you can’t develop.
So functional fit is more about offering a product that can bring success to your customer.
For example, if your product is built on top of Salesforce, your business can’t have a functional fit if:
- Your user uses another CRM
- Their sales team requires a more personalized solution.
3. Resource customer fit
Resource fit is about users having the needed resources available to reach success.
Ask yourself: What budget, time, and capacity is needed to succeed with your product?
Success requires investment, and if the customer is unwilling or unable to invest the necessary resources to achieve goals, then there can’t be a fit.
For example, if your pricing starts at $4,000/mo a small team without the budget won’t be a fit even if they’d benefit from the product. There might be better alternatives for them.
4. Competence customer fit
No matter how user-friendly, some products will require a level of competence to be used successfully—and that’s where competence fit should be evaluated.
If a customer doesn’t have the required internal expertise (or willingness to hire it), it simply can’t fit your product.
For example, almost any company would benefit from a data analytics tool. However, without proper visualization or data analysis skills, you won’t have access to the most valuable insights complex tools could offer.
5. Experience customer fit
No SaaS can retain customers without offering a frictionless experience across the buyer journey.
Maybe your product isn’t too complex and has a healthy learning curve so you offer a free trial and low-touch signup and onboarding experience.
But if an enterprise lead comes in and asks for a custom plan with a high-touch onboarding experience, then they can’t be a good fit because you can’t offer the required support without making changes to your product or business model.
Experience customer fit is all about the alignment between the experience the user is looking for and what your product and business model can support.
6. Cultural customer fit
What are the core values guiding your product strategy and business model?
Cultural fit is when your customer’s work ethic aligns with your brand values.
Even when you don’t have direct contact with your customers, if a user is constantly demanding services in an unrealistic or inappropriate way, there will constantly be a clash between your teams and your users.
And in the end, your reputation, brand, and employees are the ones that will suffer.
How to use customer fit to drive success
What steps can you take to leverage customer fit?
To avoid the costs Neha mentioned—such as over customization and wasted time spent on support—you need to start by understanding what a successful customer is and define a user persona that genuinely represents users with high success potential fit.
Only then, you can start following these practices to drive success:
Attract the right customer with a relevant value proposition
With the proper positioning and a targeted value proposition, your marketing and sales strategies can provide enough context to attract customers with a high success potential.
The goal is to clarify:
- What your product can and cannot do
- Who should use the product and who shouldn’t
- The unique mechanism to get the desired outcome
Miro’s homepage is an excellent example of a clear value proposition. As it instantly communicates what their product is – an online collaboration whiteboard platform- and who it was built for-hybrid teams.
Use product-customer fit when deciding on product’s pricing
Leverage your pricing model and keep bad-fit customers away.
For instance, a freemium model for a product with a steeper learning curve would attract too many bad apples, so you’d have to hand hold them, and even then, they might not get to experience the value.
Maybe a trial or demo only will help qualify the leads and attract the right customer.
Also, think about what value are you delivering? You can ask for a high price if your product only adds an enhancement to an existing product they are already using.
But price it too low, and you’ll best customers will have doubts your product will deliver value.
If you start with your user persona and really look into understanding their needs, you can build pricing tiers and bundle features that address specific personas’ needs at a specific point during their lifecycle.
This is exactly what Userpilot is aiming for. The right price for the right customer for the right value.
Use the right engagement model
When you know which customer will be a fit for your product you’ll also know how much support and the type of experience they are expecting.
This means you can determine the best customer engagement model for achieving success.
Implementing the right engagement model won’t only improve onboarding and retention, but also keep the good-fit customers in. For example:
- Low-touch models can focus on creating in-app experiences designed for an automated hand-holding experience across the entire customer journey, for products that are easy to use.
- High-touch models can customize the onboarding process and the product according to the customer’s needs for more complex products.
Drive customer success with product storytelling
Product storytelling is about continuing what you started with the right value proposition and positions inside the product too.
It’s about constantly setting the right expectations and confirming to customers that they are using the right product for their needs, using different means of communication.
It’s about validating the relationship in a continuous manner, through messaging consistency.
You can tell your product story through in-app messaging, for example.
Loom uses the same style, language, and short messages to make guidance part of the experience and give their product a voice.
Tooltips work for them because they know their good-fit users don’t need to read a whole patch note to understand their tools. And by keeping them consistent, it’s easier for the user to recognize them and understand what the product is trying to communicate.
Look at how all their new feature announcement tooltips have the same style.
In Loom’s case, product storytelling is about providing support right when the user needs it. But in the bigger picture, it also means communicating that they are building and scaling the product in the direction the user expects.
While continuously communicating this to users through release notes, having a public roadmap, blogs, and in-app. These together tell the story about your product.
And more than inviting your customers to play a role in your story—it also brings cultural-fit customers and repels those who don’t share your vision.
Conclusion
Working with bad-fit customers is expensive in both budget and energy.
Start by understanding what is the right customer fit for your product and leverage it to drive success.
Tell your product’s story with in-app messaging and retain customers that are a good fit. Book a Userpilot demo with our team to get started.
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