Customer needs: how to identify and meet them

Genuinely understanding customer needs can be the make or break of your business. We give you a crash course to ensure you can maximise your customer conversion and retention.

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Day one of most business schools will start with ‘customers are at the heart of everything’. Even if you don’t have an MBA, however, this should be common sense. Without people buying your products, you have no financial lifeline, no reach, and –you guessed it – no business.

Meeting customer needs can be the make or break of your entrepreneurial success. If there’s a disconnect between what customers want and what you’re offering, it’s likely they will take their business elsewhere. Therefore, to avoid an ugly situation where you’re left empty handed , we give you a crash course on t customer needs.

All customer needs are unique and speak in their own dialect. Locating a strategy that can simultaneously please many different types of customers is tricky. However, by the end of this guide you should feel like a polyglot that can speak to multiple customer languages.

What are customer needs?

Although customer needs as a concept is pretty intuitive, understanding its building blocks is key to constructing a golden business strategy. Customer needs are the psychological and physical motivations that drive a customer to bring a product to the checkout counter. As an added bonus, if you know how to meet customer needs, you’ll also foster customer loyalty. Happy customers result in higher retention rates, lifetime value, and brand reach as they raise the hype on your business.

However, the key ingredient to an infallible customer needs strategy is the willingness to go above and beyond. You shouldn't just be doing the bare minimum to please customers, you should be concocting ways of adding value that customers weren’t expecting. This element of surprise will have a differentiating edge over the competition.

Why should customer needs be identified and addressed?

Customer needs are no joke. You shouldn’t be acting on a gut feeling and throwing a product out into the market. A robustly designed customer experience that genuinely takes customer needs to heart can make a world of difference.

Statistics show that 86% of buyers are willing to pay more for a great customer experience and 59% of buyers have made impulse purchases after receiving a more personalised experience. Companies also echo the sentiments of buyers as 81% of organisations already cite customer experience as a competitive differentiator. Whilst constant innovations and shiny discounts can get a customer’s attention, it won’t necessarily translate into customer retention and loyalty. Instead, customers will choose to stick around if they have a good customer experience and find a product that is convenient and works well. Therefore, addressing customer needs can foster trust, provide value, make customers feel heard, and set you apart from the competition.

Identifying customer needs

Understanding what customers need is a data-heavy exercise. Here are some approaches you can employ to make sure you’re not randomly throwing darts in the dark.

🔍 Nailing your market research techniques → there are four main methods you can use to get a feeling of what customers are looking for and what the market you’re trying to enter currently looks like:

  1. Surveys: an inexpensive way of gathering customer data that’s easy to process and analyse. You can send them as post-purchase emails or insert them in your website.
  2. Interviews: one-on-one conversations with members of your target market. Interviews can help you dig deeper and get more detailed answers about what customers need.
  3. Focus groups: this is one for the more mature businesses as they can be trickier to set up and sometimes expensive. For this, you’ll need to select a small group of people that fit your target market and have a moderator to simulate product use and receive feedback. It’s best not to cut corners with this method – otherwise you can fall victim to moderator bias or other sorts of errors that could corrupt your data.
  4. Observation: you can think of this as fly-on-the-wall exercise. You get a group of customers that fit your target market and make notes based on their use of the product. For best results, they shouldn’t be aware they are being assessed so the user experience is more authentic.

🙎‍♂️ Building customer personas → these are like fictional avatars of your idea customer. In order to create this persona you need psychographic and demographic data from people that have already used your product or visited your website. Having this prototype will help you simulate what experience your target market would have with your product and how you can improve your offering.

To sketch out your customer persona, you’ll need to put out an interview either through email or on-page to understand who your users are. You should ask questions about who they are, what their main goal is, and what the main barrier is to achieving this goal (in the context of using your product).

⚖️ Assessing customer needs → to understand customer pain points and expectations, here are a few things you can to equip yourself with insights.

  • Ask questions through surveys and other customer feedback collection methods→ this will help you understand pain points and rework your products accordingly to ensure customers aren’t frustrated or disappointed upon purchase.
  • Review customer data → crunching the numbers to translate into insights will show you who your active customers are, spots where customers are falling by the wayside on the path to the checkout finish line, and what parts of the customer journey are strong.
  • Watch the industry and assess competitors → keeping your friends close and enemies closer rings very true when it comes to devising your customers' need strategy. Competitor analysis will unveil what the current offering in the market looks like and where others are providing more added value to customers in a way you could think of replicating or developing further.

🏅 Prioritising customer needs → it’s one thing to make it look like you’re listening to customers but a very different to actually listen. What makes the difference? Placing customer needs at the heart of your product strategy and prioritising their needs. You can do this by finding customer experience trends, evaluating customer requests based on urgency and team resources, incorporating customer feedback into your product roadmap, and showing evidence that you’re translating customer requests into reality.

Free business template

Are you at the early stages of business planning and addressing customer needs? Check out our free business plan template

5 types of customer needs

✔️ Utility: customers are looking for products that are both useful and can melt right into their preexisting routine. For instance, smartphones are a great example of utility being met to fulfil customer needs. From taking photos to paying for your rent, you can do plenty of things from a device that fights right in your pocket.

✔️ Choice: although the utility and functionality of a product might be the same regardless of colour, size, or material, by offering a range of choice there’s a higher likelihood you’ll meet the needs of a larger cross-section of customers. You can probably relate to this if you’ve ever been in a store and just wished they had that in blue instead of just yellow.

✔️ Convenience: new products should be easy to set up and assemble. In more colloquial lingo, your product should feel like assembling a Kinder Egg toy rather than a one thousand piece puzzle. Anything that complicates the user experience will likely make your customer disgruntled and force them to switch brands.

✔️ Quality: although this doesn’t necessarily mean all customers are looking for luxury grade standards, customers are looking for the quality of their product to match the price point. If a £30 t-shirt tears after the first wear, customers will obviously be disappointed. Customers want value for their money so understanding the quality level they’re expecting is paramount.

✔️ Information → accurate and well-presented information regarding available products helps to inspire confidence and generate sales. Customers are more savvy than experts and expect to be able to find out more about a product or business before they make a purchase. For instance, customers are increasingly driven by value-based purchasing which means disclosing your sustainability or company labour practices could help convert some buyers.

Serving your customer needs

Strategies for meeting customer needs

  • Listen to customer feedback: when collecting your customers’s thoughts, take this as an opportunity to candidly understand your performance and correct gaps. To succeed in this strategy, you’ll need to set up multiple organic feedback channels that encourage customers to share their product experiences.
  • Acknowledge your customers: respond to feedback directly or make changes based on that feedback. This sort of acknowledgement can help make your customers feel valued as people, and not just a source of money for your business.
  • Build a customer-focused company culture: it’s not just about having your sales and marketing teams care about what customers think. If all of management and your employees work towards the same goals centred around customer needs, it’s more likely you’ll naturally develop more customer-centric strategies that make users happier.
  • Be honest with customers: people appreciate honesty, so displaying transparency with your customers can demonstrate your respect for them. In short, don’t wrongly advertise a product – be clear about what customers can expect from their purchase.

Creating a customer-centric experience

Customer-centricity is all about building a business framework that creates a positive customer experience at every stage of the customer journey. In other words, you’re still thinking about the customer even after they purchase a product, finding ways of keeping them satisfied and engaged beyond the checkout counter. This way, can nurture long-term customer advocacy and loyalty.

Some ways of being genuinely customer-centric is to anticipate customer needs, collect customer feedback, and provide proactive customer service that gives customers the tools they need to solve problems on their own.

Understanding customer journey and designing experiences around it

The customer journey is a long path that doesn’t just start and end with the purchase of a product. Engaging customers at every stage is key so they can enthusiastically press the ‘buy now’ button. Things like personalised messaging, quick replies, and active engagement are all avenues to differentiation which will give you an edge over the competition.

Developing products and services to meet customer expectations

Involving your customers, in the most literal sense, can be a massive boost to your customer engagement and loyalty. Get customers to tell you what works with your product and what doesn’t, encourage reviews, and actively apply the feedback you receive. Through this method, you’ll be placing customer experience at the heart of your product development and digital marketing, which will translate into more conversions later down the line.

Conclusion

Businesses need customers and customers need to have businesses address their needs. It’s a cyclical relationship that no enterprise can run away from. Understanding where customer needs stem from and what purchasers are expecting from your product is therefore key to avoiding your business lifeline from flat-lining. Things like adopting a customer-centric culture, actioning insights from analysing customer feedback, and adapting to customer needs will help inject a boost of trust and loyalty into your customer feedback.

If you can integrate customer feedback into how you design the customer journey, you’ll be onboard a pretty smooth sailing entrepreneurial cruise.

Frequently Asked Questions
  • How do you identify your customer needs?
    To get a grasp of what your customers need, you can conduct keyword search, surveys, focus groups or social listening to see what they think and require from a certain product. Customer and market research are key to untangling customer needs, so remember this is a data-backed process and not based on your gut feeling.
  • Why are customer needs important?
    Understanding customer needs is a one-way ticket to fostering customer satisfaction and loyalty. All customers have unique needs so if your company can’t understand or address them, they’ll take their business elsewhere.
  • What are the main 4 customer needs?
    There are plenty of different customer needs but some of the main guiding ones are price, quality, choice and convenience.
Written by:
Fernanda is a Mexican-born Startups Writer. Specialising in the Marketing & Finding Customers pillar, she’s always on the lookout for how startups can leverage tools, software, and insights to help solidify their brand, retain clients, and find new areas for growth. Having grown up in Mexico City and Abu Dhabi, Fernanda is passionate about how businesses can adapt to new challenges in different economic environments to grow and find creative ways to engage with new and existing customers. With a background in journalism, politics, and international relations, Fernanda has written for a multitude of online magazines about topics ranging from Latin American politics to how businesses can retain staff during a recession. She is currently strengthening her journalistic muscle by studying for a part-time multimedia journalism degree from the National Council of Training for Journalists (NCTJ).

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