The best products, services and customer experiences satisfy an important, unmet customer need.
American entrepreneur and creative mind Steve Jobs is famous for saying “customers can’t tell you what they want”. Others argue that "customers don't know what they want until they see it", referencing common innovations such as the Instant Pot, Uber Eats, or the latest iPhone. In a sense they’re right, customers are typically terrible at providing new and innovative solutions that don’t already exist somewhere in the market. So why bother talking to your customers? The answer is simple: to understand them better and to understand the jobs they employ your products or services to do for them. Customers can absolutely tell us about their needs, or the benefits that they seek from a product, service or experience.
Think of customer needs as a source of customer value. A need exists when a customer seeks a benefit, within a specific context, that a product or service could deliver.
There are two categories of needs, which are both critical to understand:
- Stated needs, which customers can articulate through discussion
- Latent needs, which are unspoken, and customers may not even realize they have
Stated needs can be functional, emotional or experiential:
- Functional needs are the most basic needs that products or services must satisfy. Take, for example, purchasing a car. There could be several functional needs associated with the type of vehicle you’re looking for, such as gas mileage, seating, interior features and color.
- Emotional or psychological needs are needs that evoke a deeper feeling beyond the surface. For example, when you choose to buy a certain brand of vehicle, there are various emotions often experienced, such as luxury, wealth, trendiness, uniqueness and environmental consciousness.
- Experiential needs are the benefits that customers seek while interacting with your service, product or brand. Carrying the car example forward, a customer often places a great deal of weight on the dealer service they receive after their automobile purchase. This is often a central driver of repurchase, likelihood to recommend and brand loyalty. In response to critical customer needs, automobile companies have introduced concierge services, incorporated premium food and beverages in their waiting areas and installed working stations with Wi-Fi for those waiting for their car to be finished.
Latent, or unspoken needs, are typically more difficult to uncover:
Best practice is to observe customers using your product or experiencing your service. From this ethnographic research, we can often observe issues or pain points that customers didn’t even know they had. Observing the customer environment can also signal workarounds or hacks customers use to compensate for unmet needs.
Understanding the comprehensive set of stated and latent customer needs is one of the best sources of competitive advantage. Knowing what to focus on ensures we create products, services and experiences that delight our customers and increase brand loyalty.
Are you interested in learning more about how understanding customer needs can transform the way you innovate? Join us for an interactive Voice of the Customer workshop where you’ll learn the in’s and out’s of understanding customer needs and how to use that information in your business strategy.
Tags: Voice of the Customer