Welcome to our conversational guide to customer needs. You're about to learn all the important aspects of a modern approach to identifying, organising and prioritising customer needs that will enable you to design and improve products or services in your business. We'll start from the basic definitions and move towards more advanced concepts. Feel free to read the contents of this guide in order or jump straight to the section that sparks your interest. Here's a list of the most important topics covered in this guide:
- The Definition of Customer Needs
- Types of Customer Needs
- Identifying Customer Needs
- Organising Customer Needs
- Prioritising Customer Needs
- Satisfying Customer Needs
What are Customer Needs?
Customer needs are the reasons that motivate potential clients to purchase a product or a service that solves an actual or imaginary problem. They describe the outcomes and benefits customers are looking to achieve by satisfying them, and in many industries, they're the main drivers behind the buying decisions.
What are The Types of Customer Needs?
From a high-level perspective, customers have two main types of needs:
What are “Basic Customer Needs”?
“Basic customer needs” describe clients' simplest needs about your products, services, or supporting activities that enable them to accomplish their goals. Basic needs are often broken further down into two subcategories:
What are “Functional Customer Needs”?
“Functional customer needs” specify the details of a product or service needed to perform a particular function or serve a specific purpose. They need to improve basic daily activities or quality of life.
Why are “Functional Customer Needs” Important?
Ensuring the delivery of functional needs is a must at the consideration stage when customers evaluate potential solutions to their problems. Not satisfying them means that your solution doesn’t solve the problem or meet the industry standards.
What are “Supporting Customer Needs”?
“Supporting customer needs” describe all the supporting activities relevant to purchasing or consuming the value. Depending on the nature of your business your clients supporting needs might fall into one or more of the following categories:
What Are “Buyer of Value” Needs?
“Buyer of value” needs are the most common supporting needs customers have. They are related to purchasing a value from a business either in the form of product or service and consist of three major areas:
- Making an educated purchase decision involves educating themselves, seeking relevant information and guidance, evaluating companies, and comparing offers.
- Completing a purchase involves checking product or service availability, scheduling an appointment or delivery, and making payment arrangements.
- Taking the delivery of a product or service includes arriving on time at the right time or rescheduling an appointment or delivery of a product or service to a more suitable date.
What Are “Cocreator of Value” Needs?
“Cocreator of value” needs consist of all the activities related to customer’s participation in value creation with a company. They often include
- Providing unique requirements
- Sharing feedback
- Posting reviews
- Referring a business to a friend or family member
What Are “Transferrer of Value” Needs?
Transferrer needs become relevant at the end of the product or service lifecycle and include activities like
- Acquiring intellectual property rights
- Cancelling orders or appointments
- Claiming refunds
Why are “Supporting Customer Needs” Important?
Even if your solution satisfies functional customer needs, not satisfying supporting client needs can make the customer experience frustrating or even impossible to complete.
What are “Aspirational Customer Needs”?
“Aspirational customer needs” describe customer desires to stay aligned with their values and core beliefs. Customers express aspirational needs by their willingness to enhance their perceived status or a sense of self-worth. Preference for socially responsible brands, even when the prices are higher, is one of the examples. Aspirational needs have two subcategories:
What are “Social Customer Needs”?
“Social customer needs” describe how a customer wants to be perceived by others. Solving these needs is often related to acquiring signs of power or status.
Why are “Social Customer Needs” Important?
While “social customer needs” are less tangible than functional ones, satisfying them can be vital in some niches. Helping your customers develop a favourable vision of themselves can be a powerful differentiating factor.
What are “Emotional Customer Needs”?
These are some of the most advanced needs. “Emotional customer needs” describe the necessary conditions for them to experience happiness and peace.
Why are “Emotional Customer Needs” Important?
Whether rational or irrational, “emotional customer needs” can make a huge difference. Solving deeply held emotional needs is about making your clients feel good and can lead to an emotional attachment to your brand, resulting in an unprecedented growth of your business.
How to Identify Customer Needs?
Customer needs identification is defining important factors that help solve customers' problems. There are two main categories of methods to identify customer needs. Often people start by making educated assumptions and then challenge them over time with research-based methods to identify and close knowledge gaps. Here’s a list of four useful techniques for identifying customer needs.
What Categories of Methods are Used to Identify Customer Needs?
At the high-level, methods for identifying customer needs fall into two categories:
What are Assumption-Based Methods?
Assumption-based methods rely on the creator’s expertise, past experiences and imagination to generate ideas about target customer needs. Empathy immersion is one of the assumption-based techniques used to identify customer needs.
What are Research-Based Methods?
Research-based methods rely on data collected from real people during relevant activities. Gathered data is then processed and analysed before forming conclusions about customer needs. Here’s a list of three research-based methods to identify customer needs:
How do Assumption-Based, and Research-Based Methods Compare?
Research-based methods for identifying customer needs in contrast to assumption-based rely on real data and typically provide more reliable results. On the other hand, assumption-based methods are quicker to perform, require less experience and fewer resources.
|Quality of Results||Outcomes depend on the creator’s knowledge and expertise but are usually considered less definitive.||Research-based methods challenge assumptions and identify knowledge gaps that lead to better results.|
|Necessary Resources||Assumption-based methods are simpler to perform and require significantly fewer resources and expertise.||Research-based methods may require subject matter expertise and resources to yield valuable outcomes.|
|Time Needed||Assumption-based methods can yield results faster since they don’t require the data-gathering stage.||Research-based methods take more time since they rely on the data collected before forming conclusions.|
What Techniques are Used to Identify Customer Needs?
Identifying customer needs is crucial to designing great products and services. You can use various methods to achieve this goal, but many can be too scientific, difficult or time-consuming to perform in real-life business scenarios. We’ve selected four techniques that vary in time and effort required. You can start from the simplest one, but make sure to improve your understanding over time by using a good mix of these methods:
- Empathy Immersion
- Search Analysis
- Omnichannel Customer Journey Mapping
- Conversation Metrics
- Customer Feedback
How to Use Empathy Immersion to Identify Customer Needs?
Immersing yourself in empathy is all about using your imagination to put yourself in customers' shoes. You can broaden your assumptions by starting with a basic need or a problem that your target customer tries to solve and then limiting yourself in different aspects by introducing various combinations of constraints like a communication channel, urgency, or budget. Customers might see things differently, and empathy Immersion will help you shift your perspective and identify different customers' needs.
How to Use Search Analysis to Identify Customer Needs?
Search analysis is a form of desk research focused on analysing existing data collected for other projects or purposes. It should be the starting point of all your customer understanding activities because it gives you a head start, letting you start building on the shoulders of giants and avoid reinventing the wheel. Understanding how customers search for information can be an invaluable source of insights into their needs. Going through customer search data enables you to see emerging patterns and helps to understand the drivers behind their decisions.
How to Use Omnichannel Customer Journey Mapping to Identify Customer Needs?
There's no better way to identify and visualise what clients need from you at every step of the way than by breaking down all the interactions customers have with your business into a series of sequential steps paired with relevant touchpoints. Mapping an omnichannel customer journey will help you better understand customer needs at every stage and align your services with the most important factors that drive customer decisions.
How to Use Conversation Metrics to Identify Customer Needs?
Measuring conversations with customers give you a chance to put your anthropologist hat on and observe them from a birds-eye perspective during regular day-to-day interactions with your business. Conversation metrics provide an extensive collection of information about what your clients are trying to do, where they come from, and when they perform these activities, and can be a powerful source of insights about your customers' needs, how they try to solve them, what things can upset them, and what outcomes they aim to achieve.
How to Use Customer Feedback to Identify Customer Needs?
Integrating feedback loops at every stage of the customer journey is crucial to learning more about customer needs, experiences, perceived quality of services, processes, doubts, concerns, or ideas for improvement. After performing a relevant activity, asking customers contextual questions will ensure that their experience is fresh in their minds and enable you to gain valuable insights into their needs. A chatbot can also collect customer feedback in a customer survey.
Why is it Important to Identify Customer Needs?
Your business's existence depends on delivering products or services to its customers, and their needs should be the ultimate source of direction for your company to evolve. Customer needs are independent of any potential solution, and identifying them enables you to shift perspective from what you offer to underlying needs that customers want to satisfy. It's like a battery powering continuous business improvement process that constantly adapts your offerings to suit their expectations better, improving customer acquisition and retention.
How to Organise Customer Needs?
To organise customer needs, you need to analyse all the gathered information, detect patterns, and group similar needs together. Here’s a list of four methods to help you achieve this goal:
How Does Displaying Customer Needs Help to Organise Them?
Displaying customer needs helps to organise them in the following ways:
- It brings structure into complex relationships
- It helps to keep track of the current state and get a quick overview
- Simplifies sharing findings with other team members
- Helps to uncover knowledge gaps visually
- Helps to deepen understanding of customer needs
- Helps to develop empathy for target customers
How Does Grouping Customer Needs Help to Organise Them?
By clustering similar needs together, you get a quick overview of the most common needs and have an opportunity to reduce the overall number by merging the duplicates. Doing this will help you keep a minimal representation and unclutter the view.
How Does Segmenting Customer Needs Help to Organise Them?
Segmenting customer needs helps you to understand how they vary between segments. Collocating needs for each customer segment enables you to focus only on a relevant subset. For example, if your company offers premium services, you might want to focus on the needs of wealthy customers instead of economic buyers since they’re more relevant to your business.
How Does Synthesising Customer Needs Help to Organise Them?
Each of the described methods for identifying customer needs generates different data as output, and synthesising is about looking for similarities and combining them in meaningful ways. Some of the best discoveries often lie on the edges, so pay special attention to the outliers. While they might be irrelevant, they could also bring fantastic learning opportunities. Selecting relevant needs that appear frequently and rejecting others helps to organise them.
Why is it Important to Organise Customer Needs?
Organising customer needs is an important step that helps to spot patterns and relationships more efficiently and crystalise your understanding. Accumulating large amounts of data about customer needs isn’t enough. You also need to identify patterns and synthesise all that information. Doing this will help you draw meaningful conclusions relevant to your target customers and help your business grow.
How to Prioritise Customer Needs?
Although the significance of customer needs will vary across them, it’s essential to gain a high-level understanding of what's relevant for the majority of your clients and then sort their needs by the level of perceived importance. To decide what truly matters and define the priority of customer needs, you can look at every one of them through the following lenses:
How to Prioritise Customer Needs by Importance?
It’s vital to understand that not all needs are equal, and some are more important than others. A customer need is significant if satisfying it leads to essential gains or not doing that has severe consequences. Ticking both of the boxes is a strong signal for prioritisation. In some niches, emotional needs are more significant than others. To decide if it applies to your business, ask yourself if looking or feeling good might be more important to your customer than finding a great technical solution that satisfies a need efficiently.
How to Prioritise Customer Needs by Urgency?
When a customer wants to satisfy a need immediately, it usually means that not doing so has detrimental effects on their life or work, amplifying its significance and moving it up their priority list. A sense of urgency might depend on the context, which can vary greatly from one situation to another. If that’s often the case in your business, focus on the most common level of urgency to establish the priority.
How to Prioritise Unsatisfied Customer Needs?
When customers commonly communicate a need for something you haven’t thought of or prepared for, it usually means that when they consume the value of your product or service, they experience some pains or a lack of expected gains. In other words, you don't satisfy their expectations or meet industry standards. Prioritising these types of needs will strongly impact the perceived quality of service your business provides.
How to Prioritise Lucrative Customer Needs?
To find out if a particular need has the potential to be more lucrative than others, ask yourself the following three questions:
- How many customers have this need?
- Is this a one-off problem, or does it recur?
- Are there customers willing to pay a premium?
The more positive answers you get, the higher it should be on your list of priorities.
Why is it Important to Prioritise Customer Needs?
Prioritising the most significant needs lets you focus your energy on the things that matter most to your customers. Concentrating on these needs results in increased time spent on adapting your value propositions to suit your customers' needs better and leads to improved levels of customer satisfaction and an advantage over your competitors.
How to Satisfy Customer Needs?
After identifying, organising and prioritising customer needs, it’s time to put this newly acquired knowledge into action and start satisfying them. Here’s a list of practical approaches for satisfying two different types of customer needs:
How to Satisfy Basic Needs?
Satisfying basic customer needs is about making sure that the value of your product or service is aligned with the requirements, is easily comprehensible and consumable. Two approaches will help you satisfy basic customer needs:
How Does “Anticipating Customer Needs” Help to Satisfy Them?
While it’s impossible to anticipate every need customer might have, you should aim to predict the most common ones and prepare ahead of time. Satisfying supporting needs is especially important since they don’t change much from one customer to another. Including proactive customer support can help you to anticipate customer needs, and satisfy them by delivering the correct information at the right time and over the right channel. This way, you can satisfy customer needs before they become problems and make customers feel valued and appreciated.
How Does Continuous Improvement Help to Satisfy Customer Needs?
Your customers constantly judge your value propositions by how well they satisfy their needs. It’s therefore vital not just to create your product or service and wish for the best. Even if you’ve done the initial research and have correctly identified, organised and prioritised customer needs creating a product or service that aims to satisfy their needs additional testing and refining stages are required. To do that, you need to test your services with real customers frequently, measure their satisfaction levels, and continuously improve your business and its offerings.
How to Satisfy Aspirational Needs?
Customers don’t share their true emotions with everyone. That’s why satisfying aspirational customer needs is nuanced, requires top-notch soft skills and boatloads of empathy. While careful listening might have helped you to identify deeply help aspirational needs, satisfying them is about assuring your customers that your product or service is capable of fulfilling their needs to feel or be perceived by others in a certain way and delivering on this promise. Some of your customers might need a little push to make a change they are after but are hesitant to pursue because of a lack of confidence.
Customer needs are sometimes an overlooked source of direction that can boost your business performance by triggering successful change, growth, and innovation processes. By pinpointing them early on and adapting to changing customer demands, you'll be able to deliver products or services better aligned with their needs, which will result in higher conversion rates while also increasing their overall satisfaction.