A Step-by-Step Guide to Product Discovery & Understanding Customer Needs

Product discovery is one of the best strategies you have for scaling your knowledge of customers and the problems they face every day.

How can you really know what a customer needs? So much of their experience happens behind closed doors, internalized and influenced by their own perceptions of value. It’s a little easier when you have a group of people together who share a similar experience or have similar needs. But you’re always working with imperfect data.

And it can become even more challenging to gain that understanding of customers at scale. That’s why 42% of startups fail — their products don’t address an existing need in the market. Integrating product discovery into your team’s product development process ensures you don’t end as a part of that group.

Product discovery is how you build a comprehensive understanding of customer needs. It helps you systematically approach the way you research, conduct interviews, and document your findings. With this knowledge, it’s not only easier to build engaging products for your audience — it’s also simple to prioritize the way your team builds those products.

Whether you’re updating existing functionality in your service or rolling out a brand new feature for your target customers, product discovery can help.

What Is Product Discovery?

Product discovery is a strategic approach to building out your team’s understanding of customer needs and desired outcomes. It helps you create an organized system for learning about the customer experience and helps you turn that knowledge into a product concept that solves real problems for your target audience.

When you integrate discovery into the product development lifecycle, it significantly reduces your risk of building the “wrong” product. It helps you determine when your product plan makes sense and ensures your product development strategy aligns with the customer’s needs. This confidence allows you to build engaging products that are valuable for both your audience and your business.

You put a lot of time, hard work, and resources into developing these products for consumers, so every release has to help you accomplish your company’s goals.

A well-defined product discovery process also helps your team build empathy with the customer’s real-world experiences through documented interviews. This documentation helps you share high-level takeaways and interesting stories throughout the discovery process and makes it easy to see why customers need particular features or services. Instead of just spending time working through daily tasks and losing sight of the impact that work has, your team will stay connected to your product’s value and its effect on people.

This knowledge also makes prioritizing your product roadmap simple by providing real-world customer data you can use to anticipate customer needs or upcoming shifts in the market expectations.

7 Steps to Defining Your Product Discovery Process

Rolling out a product discovery process for your team requires visibility into all the different types of work that go into expanding your customer knowledge. When everyone on the team understands how to use product discovery to learn about customers, it helps them connect with the process on a deeper level.

The product discovery process follows seven basic steps, each building on the previous to help you refine your understanding of existing problems in the market:

1. Align with Your Team

Before you can start building any process for your team, you need to make sure you have alignment on specific tasks and objectives. The first step of product discovery helps you define key stakeholders throughout your organization, gather their input on essential processes, and determine who’s responsible for rolling product discovery out to the rest of the team.

2. Research the Market

Once everyone understands their responsibilities, it’s time to move into preliminary research. This is the step of the process where you do market research and competitor analysis to better understand customer perceptions of value in the market. It’s also the point in the process where you start nailing down resources for subsequent steps.

3. Interview Your Customers

This is the meat and potatoes of product discovery — talking to your customers. These interviews not only help you connect with individuals on a more direct level, but they also enable you to find out how they feel about your current product offering. Interviews also let you drill down on what they want vs. what they actually need, which can be two entirely different things.

4. Analyze the Data

After researching your market and talking to your customers, you need to analyze your data. This step of product discovery is where you take all the inputs from customers, market, and team and document them. Working through the documentation process helps you identify trends in customer feedback, which are areas of opportunity for your business to innovate.

5. Define Your Product Concept

With everything documented and visible to your team, your next step in the product discovery process is to start coming up with ideas for how to solve the problems you’ve identified along the way. Ideation is where you narrow down areas of opportunity and identify where your team can make the most impact. It’s also the point that traditionally connects with the product planning process and more execution-based product development tasks.

6. Validate and Test Your Idea

Once you’ve come up with an idea for your new product or feature, it’s important to validate the concept with your customers. You’ll revisit your conversations with interviewees and reach out again to see how they feel about your new idea. This step is also a great time to bring back your stakeholders to update them and get their feedback.

7. Iterate, Iterate, Iterate

This step happens after the product development process is complete and you have a real product on the market. Iteration is where you look back at each of the previous steps of your product discovery process and walk through them again with any new information. It’s your chance to refine the product experience and add continual value for your customers.

By defining exactly what happens at each stage of product discovery, who’s responsible for doing the work, and why it matters for your business, you build empathy for the customer as your team evolves. It’s natural to get mired in day-to-day tasks and responsibilities — which is why product discovery is so valuable for your team as they work through more complex or challenging tasks.

Product Discovery Techniques That Build Empathy Throughout Your Team

Once you’ve defined the product discovery process for your team, it’s time to move on to the more practical side of things. There are a lot of moving parts — each one with a unique skill set. These product discovery techniques will help you level up the way you collect, analyze, and act on customer data as a team.

Start by mapping out the customer lifecycle. Every member of your team should understand the customer experience, from when someone becomes aware of your product to when they make a purchase and start using it. Conceptualizing the customer journey in this way helps you identify friction at critical touchpoints along the way and tailor your solutions to address those problems directly.

Make sure to include audience targeting at this point as well. The modern customer journey spans multiple channels — and understanding what makes each experience unique helps you position your solution more effectively.

It’s necessary to coach your team on proper interviewing and user research strategies as well. Being able to capture salient insights via these interviews is the most effective product discovery technique you have at your disposal. Plus, the better you are at interviewing, the easier it is to understand what people tell you they want vs. what they actually need.

These interviews are also a great way to build stronger, more engaged relationships with your brand, which is why you need to document your findings in a centralized location. Your team should be able to review customer insights and documentation throughout their daily tasks and workflows. This visibility makes it simple to integrate discovery into the product development process as a whole.

Defining a product management framework that you’ll use for this process helps you act on product discovery data more effectively as well. The right framework systematizes the way you collect and present data, making it easier to prioritize your work based on customer needs.

The entire goal of product discovery is to build empathy with the real-world problems your customers face every day. And prioritizing these problems into a roadmap for your team is the next step toward delivering continual value with each release.

Product Discovery Makes Solving Customer Problems Easy

A well-defined product discovery process helps your team connect with customers and gain insight into their unique experiences with your product. That knowledge helps you anticipate their needs, communicate the value of your product, and provide proactive support throughout the customer journey. When so much of the customer relationship rides on your ability to solve real-world problems, product discovery helps you nail down which issues matter most.