What customers need depends, to a large extent, on the products they are purchasing. For example, what you need from a breakfast food differs from what you need from a healthcare practitioner. At the same time, customers have preferences that they look for when purchasing a product or using a service.
We should distinguish between physical needs and psychological needs. When you buy staple foods, it is because you need them for your survival. Basic foodstuffs fulfil a physical need. However, many of the things we buy, from fashion items to luxury foods or entertainment, fulfil psychological needs.
When we use the term “customer needs” in sales and marketing, we generally do not refer to physical needs. Instead, we are talking about the things customers want from the businesses they support.
These go beyond mere survival and enter the realm of preference. When their needs are unsupported, customers will not suffer undue physical harm, but they will stop supporting your business as soon as they find an option that better serves their needs.
Towards a Customer Needs Definition in Sales and Marketing
In sales and marketing, we can define customer needs as factors that motivate a purchasing decision. They can be categorised as pricing requirements, quality requirements, choice, and the need for convenience.
The specific elements that go into each of these differ according to the product and how customers perceive it. For example, low pricing encourages budget-conscious shoppers but may deter customers who hope to gain status by owning the latest luxury goods.
The Importance of Identifying Customer Needs
Understanding your customers and their needs enables you to develop more effective business strategies, allocate resources more efficiently, drive sales growth, and maintain a stronger competitive position. It is important to identify customer needs so that you:
- Target your market with appropriate messaging, including overall brand voice, marketing copy, content marketing strategy, and social media campaigns.
- Gain insights for product acquisition or product development. When you know what your customers need, you can enhance your products and product range with greater confidence.
- Allocate resources efficiently by investing in aspects that matter to your customers and limiting the potential for waste on unnecessary or unimportant elements.
- Position your brand as a solution to customer problems, offering stronger value propositions and differentiating your business from your competitors.
From a sales perspective, understanding customer needs allows you to take advantage of opportunities you might otherwise miss. Examples of these include:
- Offering the best-fit products to each of your customers based on their goals. For example, a customer purchasing photo editing software as a hobbyist may need fewer features and lower pricing than an advertising executive who wants to use the product professionally.
- Build stronger customer relationships. Customers want to feel that you identify with them and understand them. When you do, they experience a feeling of connection. “They really know what I needed,” is the comment you want to hear.
- Achieving higher conversion rates is simple when you understand what your customers need and offer them just that.
- Upselling and cross-selling opportunities also flow from knowing what customers need. In upselling, you offer a higher-value product that is a better fit for a customer. In cross-selling, you offer them extras that go with their purchase.
With so many benefits in store for those who take the time to know their customers and their needs, taking a closer look at what these may be is a worthwhile investment of your time. Never just assume you know what all your customers want. Your analysis may provide surprising insights.
Customer Needs Example
To illustrate customer needs and how they affect your business strategies, let’s consider a hypothetical example. Both customers want the same type of product, but for different reasons, at different price points, and with varying quality and convenience expectations.
Product: Jewellery
Customer 1: Anna is an 18-year-old student who enjoys following the latest trends. She doesn’t have a lot of spare cash and wants it to go as far as possible. She wants to look pretty when out with her friends.
Anna’s needs:
Quality: Anna is interested in trends over quality
Price: Low, depreciating value
Convenience: Quick gratification, instant purchase, impulse buys
Choice: A range of different colours and designs to choose from, no need for customisation
Customer 2: Mary is a 40-year-old professional. She loves unique items, fine gemstones, and bespoke design. She is not particularly price sensitive. She wants to enhance her image as a lover of the finer things in life.
Mary’s needs:
Quality: Mary is searching for premium quality
Price: High, reflecting desire for quality, rarity, and increasing value over time
Convenience: Expects service, willing to wait for customised options
Choice: A range of design options and customisations
Although both these customers are in the market for jewellery, the type of company and product that Anna would support is very different from what will appeal to Mary. They also have very different reasons for considering a purchase. While convenience is very important to Anna, Mary is willing to search for very special items.
It is likely that a single business would not be able to serve the needs of both Anna and Mary. For instance, seeing premium items at high prices would deter Anna, and seeing mass-produced items at low prices would deter Mary.
Predicting Customer Needs
Using our example above, we can easily predict Anna’s needs. Wherever fashion goes, she will be eager to follow. If she asks for help when making a purchasing decision, her needs will be simple. For example, she would like to know if there is a bracelet to match a pendant.
Mary’s needs will be less subject to change, but are more complex. She may want extras, such as adaptations to existing designs, unique design suggestions, and a selection of gemstones to choose from. She will require access to complete information and technical expertise.
Customer Needs Analysis
Before you embark on your analysis, consider what your objectives are. For example, you may want to know whether your product fits the markets you would most like to serve, be searching for unmet needs you can capitalise on, or hope to identify the reasons why people choose specific products.
Divide Your Customers Into Market Segments
Analyse your customer base and identify market segments based on questions like demographics (including income), lifestyle, behaviour, and, for B2B companies, industry type and business size.
Gather Customer Feedback
Some of the feedback you are searching for may already be in your databases. For example, your customer relationship management (CRM) records can show what customers commonly struggle with and the questions or requests that caused them to reach out for help. Past customer satisfaction metrics and online reviews can also prove enlightening.
Never forget to analyse how customers behave when visiting your website. This is a form of feedback that can give you strong insights into what customers want, when they find it, and when they abandon hope and move on.
If you need more information and have the budget for it, you can conduct further market research. However, do remember that you are likely to have large volumes of useful data that you may not yet have analysed in this context.
Analyse Your Data
Look for problems, pain points, and indications of emotional drivers that influenced decision-making. Refer back to your market segments, and when possible, link data to the relevant demographic. When you aren’t sure of root causes, try out the five “why” questions that help with root cause analysis. Cross-reference information with your customer journey map to identify where you succeeded or failed to address customer needs.
Strategise and Action
Begin by categorising the needs you identified into stated needs, inferred needs, and those rare but beautiful moments when customers were enthusiastic enough to comment on how pleased they were. Next, identify product, marketing, and sales priorities, determining a customer needs-based strategy for each.
Test and Improve
As always, your work is not done until you determine whether you have successfully pinpointed customer needs and found ways to address them more effectively. Benchmarking can be effective, or you can try A/B testing or a pilot program. Throughout, keep analysing customer feedback.
Let Us Help You To Gauge, Meet, and Exceed Customer Needs and Expectations
RSVP offers you a range of services that may help you to identify customer needs and expectations more accurately. For example, our customer service and support personnel will use advanced software to keep you in the picture regarding the needs your customers express. We can even undertake market research on your behalf or help you with back office services that address your customers’ needs for efficiency.
However, if you are searching for market intelligence, our customer service outsourcing offering provides a scalable and professional option that serves two purposes: working to keep your customers feeling that their needs are addressed, and gathering information on what their primary needs are.
Find out why we are a market-leading customer service and BPO company today. Contact us and discover how we can help you get to know your customers’ needs better while you focus on strategising for customer satisfaction, market fit, and sales success.