2.4. Segment Hypothesis

We live in a world that is stuffed with things the intended purpose of which sometimes seems incomprehensible. More and more products appear on the market each day and their lifetime fully depends on people: whether they need them, are going to use them, buy them, etc. The same situation can be viewed a bit differently if you’re the provider of those products. If you don’t want your creations to be left on dusty shelves and for your business to close before it even opened, then you need to thoroughly consider and be 100% sure who the potential customers of your products will be. Accordingly, segment hypothesis can help you with that.

How to Formulate?

People from this segment of consumers/users/customers are suitable for our solution/product/business. Of course, it’s much easier when you already have your solution and would simply like to test it on a certain segment of people. Nevertheless, you have to be open-minded and wisely choose your segment. It would be stupid to think that older people will be suitable for your newly developed video game or that people who don’t have or use phones will be interested in mobile apps.

How to Check?

There are three ways to check segment hypotheses and all these ways are related to customers. First of all, you can do CustDev. With CustDev it doesn’t even matter whether you already have your product or not (you may have only MVP), but you need to question the customers and get to know their thoughts about your (potential) product. If you already have your solution, you can do targeting. Targeting also implies asking the clients and getting their feedback, but you test and focus on a certain group of customers that you think will be interested in what you are offering them: you can test only with potentially new customers, or only with existing customers, or only with customers who work in the evenings, etc. Finally, there is also user segmentation, when you group customers on the basis of certain characteristics, such as age, gender, financial opportunities, etc. and run your hypothesis on this small (or not so small) audience.

Interview Questions

As with other hypotheses, in order to check segment hypothesis and gather necessary information, you need to ask your customers a lot of different questions related to their age, gender, ethnicity, marital status, occupation, place of residence, or other questions that are relevant to you. You need to discover if the customer has a problem and if he does, how often he experiences difficulties because of that problem and how much time he spends on solving it. You also need to ask money-related questions, such as how much money the customer spends on something or how much money he is ready to spend. It is necessary to ask him that in case you are to provide a solution, would he be ready to pay for it and how much money he would pay for it. Of course, the choice of the questions to be asked is wide. The types of questions described are only an example, you yourself need to create and choose the ones that are important to you. The main idea behind all that is to understand if a certain segment needs your product and is able to pay for it. If the segment is ready and can pay, that means that the hypothesis is true, or if not — then you need to reject and get rid of this hypothesis and start a new one.

Final Words

When you’re in the process of introducing your product on the market you need to know exactly what customer segment will mostly buy and use it. The wants and needs of every person are different. You cannot develop a product that will serve the needs and solve the problems of all people in the world. Accordingly, conduct research, do tests, run segment hypotheses to gather information and be able to narrow down your focus to the segment that will appreciate your efforts, products and services the most.