Every purchase a person makes, no matter how small, is driven by some kind of need - or possibly more than one.
If a customer is cold, they might purchase a scarf or a cup of hot tea. If they’re hungry, they might purchase a sandwich. If they need to get somewhere, they might purchase a bus ticket or a plane flight.
A company must identify customer needs and develop a deep understanding of how they relate to the business to succeed. While this can seem simple, understanding customer needs can be a complicated affair.
What are customer needs?
The basic customer needs definition seems quite simple: the motive(s) that send your customers to purchase a product or service.
But identifying and understanding customer needs goes beyond those basic impulses, though of course, those do matter much of the time.
Identifying customer needs is about determining what they need that has led them to your solution. This could be a combination of their goals, motivations, desires, challenges, etc.
Types of customer needs
There are several different types of customer that needs to be aware of. These types can be further broken down into many categories and varieties as required, but they’re the basic building blocks to know when you’re identifying your customer needs.
Functional needs are obvious and often tangible. If a customer is buying to fulfill a functional need, they’re purchasing to fulfill a task or function.
And the purchase they end up making tends to be the one that helps them achieve that task most effectively.
Functional needs can be comprehensive, or very specific. It depends on the customer and the functional need they’re looking to achieve.
For example, a person looking to buy that coffee on the way to work might simply need a boost of caffeine and energy before they begin their day in the office.
Or they might have specific dietary requirements, like an allergy to milk products, that only some coffee shops can meet their standards.
To fulfill functional needs, companies can develop products that appeal to a broad audience’s requirements or a combination.
Social needs are slightly less pronounced than functional, but they’re nearly as important. A social customer need reflects how a person wants to be perceived by other people due to using a product or service.
Unlike functional needs, social needs can vary quite widely from customer to customer. And customers might not be wholly, or even partially, aware of these needs, making them more challenging for companies to identify.
To continue the coffee shop example, some customers prefer Starbucks because carrying that well-known cup shows that they have the disposable income to spend on that coffee and enjoy something widely popular.
Other customers might choose the high-end, independent coffee shop a few blocks away to demonstrate their outside of mainstream taste, their preference for local businesses, or their knowledge of coffee drinks from different parts of the globe.
Emotional needs, like social needs, are also secondary to functional requirements. But they’re related to how a customer wants to feel when using a product or service, instead of how they want others to see them.
A customer looking to fill an emotional need might choose a coffee shop offering a type of drink that reminds them of where they grew up or a favorite trip they took.
Or they might choose based on how the staff makes them feel like a valued regular customer because they prepare their daily order without being asked and serve it with a warm smile.
Emotional needs can be the most challenging need to discover for businesses. But if you understand what emotional needs your product, services, or brand is filling for many customers, you can target your marketing more effectively and speak to those inner needs.
Importance of meeting customer needs
Now that you understand customer needs, why is fulfilling them so important? You cannot build a customer-centric company if you don’t identify and understand your customers’ needs. But there are several other consequential benefits to meeting customer needs as well.
Improve products and services
You can better tailor your products and services to the needs of your target customers if you know what those needs are.
It’s also a good way to find a need your competitors are currently not filling so that you can meet that need and increase your market share.
Like a product or service, developing a new solution can take months or even years of designing, testing, and tweaking based on customer feedback.
But when you have a deep understanding of customer needs, you can develop the perfect solution faster because you’ll already know the right direction to take.
Increased customer satisfaction
Customers are more satisfied when a company meets their needs. Knowing exactly what customers want helps you to satisfy those needs—whether that’s for a well-priced, high-quality sweater, a tote bag that signifies belonging to a particular group, or a bookstore that provides a welcoming environment for locals.
Improved customer retention
When you offer solutions that fill several customer needs, or a particular need effectively, customers are likely to return to your business repeatedly. Customer retention is higher when their various needs are understood and filled.
Increased customer loyalty and employee satisfaction
Customers are also more loyal when they discover a solution that understands and meets their needs. Fulfilling emotional needs is especially important for increasing customer loyalty - customers are more loyal to brands they have an emotional connection with.
Employees are happier when working for a company that makes an effort to understand and meet customer needs.
How to identify customer needs
Understanding your customers' needs is essential, but how do you know what your customers needs and wants are?
Here’s your step-by-step guide to performing a customer needs analysis.
Use existing data
You probably already have some customer data on hand in a CRM such as Salesforce. Beginning your search here means you can start right away.
Can you identify existing patterns, pain points, or problems from this data? Try looking at your existing customers to understand if you’re succeeding or failing in meeting their needs.
Collect customer feedback
Don’t assume that you know what your customers’ needs are. You must go directly to the source and ask them. Collecting and acting on feedback - the customer feedback loop - is essential to correctly identify every customer need.
There are many ways to gather customer feedback. Here are two of the most effective.
Sending surveys to your customers to ask for their feedback works for various purposes, including identifying customer needs. You can ask a large group of people, including current customers, former ones, or prospects, what they think of your brand, products, or services.
However, surveys are only as effective as their design. You need to carefully craft your surveys with the help of a sophisticated survey solution like GetFeedback to ensure you’re receiving accurate, actionable data.
Focus groups are also a great way to collect customer feedback. They will help you gather insights from a smaller group, but your information will be more in-depth and specific.
Focus groups are conducted in-person or virtually, and facilitated by a moderator who can dig into answers and ask follow-up questions. They can help you understand the way behind customer answers and dive deeper into more complex social and emotional needs.
Customer journey mapping
You need to understand what phase of the customer journey customers are in before you can help them find what they’re looking for. Customer journey mapping gives you a visual representation of how your customers interact with your business.
Journey mapping can help you uncover customers' needs at specific points in their lifecycle. For example, what needs are customers looking to fill when doing pre-purchase research, and what needs to keep them coming back after that first purchase?
Customer needs are complex and can shift through the customer journey. Mapping every touchpoint and tying them to the right customer needs helps you understand and meet them more effectively.
Study the competition
Studying what your competitors are doing isn’t just for market research - it can also help you identify customer needs.
You might discover that there’s significant overlap in what you and your competition offer, and their experiences could help you solve issues of your own. Or you may learn about a gap in the market right now that your company can step in to fill and gain new customers in the process.
Social media listening
Social media is great for listening to customers and communicating with them. Listening to what conversations they’re having, on your channels or others, about your products and services can illuminate pain points or benefits that identify met or unmet needs.
Determining what questions people ask you or your competitors can also help identify needs you might not know about. Suppose you run an independent coffee shop, to continue the previous example. In that case, you might notice that people are increasingly asking your business and local competitors if you have oat milk lattes available. Those questions can indicate a growing customer need, and offering and promoting your oat milk lattes can bring new business.
Social media monitoring tools and analytics can help you listen to these conversations and pinpoint action items effectively without spending your time on the Instagram app.
What are people searching for when they want to buy your products or services? Performing keyword research can help you deepen your understanding of the needs that bring customers through your (digital or physical) door.
For the coffee shop, perhaps you believe that people are coming in for your flat whites and fresh croissants. But when conducting keyword research, you learn that quite a bit of your incoming traffic on your website and social platforms is from people looking for cafes where they can access wifi and work. You can incorporate that need into your marketing materials and align your website content so those searchers can find you easily.
Meeting customer needs
How can you improve if you’ve surveyed your customers, conducted focus groups, created your journey maps, and realized that your business is falling short at meeting customer needs? Here are the four steps you need to take to meet customer needs better.
Your first task is to take all of the insights you gleaned from your customer needs analysis to identify your customer needs. Be sure you’re going beyond the functional needs your product fills to see what else you’re providing for customers in social and emotional needs.
Your entire organization must be committed to a customer-centric approach if you want to meet customer needs with ease and excellence. So distributing those customer needs you carefully identified to your stakeholders in your organization is essential.
This information can be shared in various ways, but it’s vital to ensure it’s always easily accessible for the teams that need it frequently. And incorporating customer needs into your values, and mission statement keeps them top of mind for everyone.
If possible, adding information about customer needs to systems like your CRM can also help your sales and marketing departments. Any way that works for your team and organization to keep customer needs at the forefront of decisions will have a positive effect.
Next, you need to create processes that help you meet customer needs with more accuracy and consistency.
Customers who receive one piece of information from your marketing or sales team, and a different story from your product or customer service team, will be confused and dissatisfied. Instead, work to hone your company-wide messaging, so customers know what to expect.
Address the right customer needs
While you might want to meet as many people's needs as possible, that’s not a great long-term strategy. Be sure you’re solving the issues and addressing the needs of your target customer. Recognizing which needs you can solve and which ones aren’t possible for your company helps you stay aligned to your vision.
Provide excellent customer service
One need all customers have is that when they encounter a problem with your product, service, or business, they want it to be resolved quickly and effectively. A well-trained, engaged, and empowered customer service team can make a big difference in meeting this universal customer need.
The customer feedback loop never closes. After creating your new and improved solutions, you should continue asking customers for their feedback to ensure you’re genuinely solving their issues.
By gathering feedback, making adjustments and refinements, and then asking customers what they think again, you’ll be making continuous improvements in the right areas. And you’ll know you’re always doing better at meeting customer needs and increasing customer loyalty and satisfaction along the way.
This loop is the best way to help your company grow and build those vital customer relationships your business needs.
Many businesses assume they’re meeting all the needs of their customers - but few understand the breadth and depth of those needs. And that means missing out on the benefits identifying and meeting customer needs can bring.
Performing a detailed customer needs analysis and acting on the feedback you receive is essential to power your company’s growth. You won’t be able to identify and effectively act on gaps in the market or shift customer needs without a plan. The right platform to help you act on it.
That’s where GetFeedback comes in. Our comprehensive customer experience platform helps you listen to customers, analyze their feedback, and take action on the results. Learn more or request a demo today.