How Marketing Discovers Customer Needs
Convincing a customer that your product will meet and exceed their needs is the main objective of marketing.
In this article we explore: 1) the relevance of identifying customer needs to marketers, 2) main customer needs and marketing techniques used to discover them, 3) customer discovery 4 steps -3 phases, 4) customer validation, and 5) modern marketing strategies to implement in business.
THE RELEVANCE OF IDENTIFYING CUSTOMER NEEDS TO MARKETERS
Customer attitudes are shaped by their experience, opinions, and dealings with your company whether direct or indirect. Without a clear understanding of what customers need or want, companies will be at a loss when trying to encourage them to buy their products, no matter how good they are.
However, with a marketing strategy in place to uncover, create and demonstrate why your current and prospective customers need what you offer, your business will be well on the way to success. Businesses should keep in mind that customers rarely purchase without a list of requirements. It is the marketing team’s job to clearly understand what those requirements are and define why your company is the only one that can effectively meet those needs, just the way they desire.
Users are the experts and fuel of any business or as so eloquently put by the great Sam Walton, “There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else.” So in order to attract and keep customers, your main goal, as a business should be discovering, meeting and exceeding your customers wants and needs.
TOP TEN THINGS MARKETERS NEED TO KNOW ABOUT CUSTOMERS
No single company can satisfy every need of every customer, but by knowing the specific needs of the customers you are targeting, your enterprise can deliver value and encourage customers to become loyal and even spread the word to others. To truly understand and segment your market, there are ten things your team must continuously address about your customers.
1. Who are your customers?
Individual customer files should include age, gender, marital status, occupation and what type of customer they are loyal, discount, impulse, needs-based or wandering. If your customers are businesses or industrial clients, they tend to buy in larger quantities and have different requirements than individuals.
2. What do customers buy?
If you know what products and services have a great reputation, you can adjust your inventory and produce goods with the qualities customers are eager to pay for.
3. What do customers do?
It helps to know the occupation of your consumers and what the industries you sell to are trying to achieve so you can tailor your products and services to meet their needs.
4. Why do customers buy?
Knowing why a certain product is in demand gives you the advantage to match customer needs and supply the benefits they seek.
5. When do customers buy?
Providing a customer with an item when they want it increases your chances of success and reduces your chances of producing goods that are no longer desired. Studying buying patterns will also help with successful launches of new products and knowing when to offer added value for products that are not very popular.
6. How do customers buy?
There are various outlets for people to shop such as online, face-to-face, catalogues and wholesale. Knowing how each customer enjoys shopping helps your business tailor the advertising to meet his/her needs.
7. How much do customers spend?
Patterns of customer spending give an accurate picture of consumer behavior and shows economic, household, social and market trends. According to Office of Consumer Affairs, “the increase in average household spending on communications, more than tripling between 1982 ($375) and 2002 ($1225), reveals the “connectedness” of today’s society (Statistics Canada 1982 and 2002a).”
8. Whom do customers buy from?
People buy to solve problems, so knowing who is currently solving their problems helps you tailor your solution strategies.
9. What do customers think about you?
If you are giving them exceptional customer experience, they will continue to buy. There are various ways to measure your customers’ satisfaction.
10. What do customers think about your competition?
Seeing your competitors through your customers’ eyes gives you a better chance to stay ahead of the rivaling companies.
MAIN CUSTOMER NEEDS AND MARKETING TECHNIQUES TO DISCOVER THEM
Latent Needs/Observation Technique
These are hidden customer needs, such as problems they face, but have not yet realized. Marketers should keenly observe the consumer in their natural setting to see or hear frustrations and longings. To understand the prospects true self, doing exactly what they would with the product. The results of this method can help to modify research and results. A common observational technique is computer cookies that track web views and visits.
Direct Needs/ Research or Conversation
Expressed needs are clearly articulated by the customer. Market research gathers data to help businesses make decisions about products and services. This method has many types. Primary, for new information, qualitative and quantitative which are opinion panels such as online polls and questionnaires, testing done by users and secondary research which uses existing information to determine trends.
Assumed Needs/Feedback Method
Probably the riskiest is the assumption businesses make about what their customers require. The best way to test these assumptions is through gathering customer feedback through interviews, surveys and contact forms.
There are many other aspects to customer discovery, however focusing on these basic needs is a great place to start.
CUSTOMER DISCOVERY: 4 STEPS-3 PHASES
The Customer Discovery Process has 4 Steps
- State Your Hypothesis – Write your core business assumptions so they may be tested.
- Test Your Hypothesis – Validate or disprove your hypothesis through your target market, potential customers and media. Avoid centering the conversations on sales.
- Test Your Product Concept – Once the main customer problem has been highlighted, testing can be done to see the relevance of your idea to the customer and the solution it offers. Customers should be engaged in this process, and changes should be made at this stage.
- Evaluate Feedback and Plan Next Steps – Based on the information garnered in phases 2 and 3, determine if you are ready to proceed or reevaluate the project.
Professor Steve Blank believes once your product has been proven to be the solution to your customers’ particular problem, the customer discovery process must go through the following 3 phases.
- Problem-Solution fit – This phase is to ensure the problem is worth solving. It usually takes weeks or a couple of months to complete
- Minimum Viable Products (MVP) – This phase is sometimes called “valley of death,” because it is the hardest stage due to all the iterations (repetition of processes) and solutions needed at this stage. Some companies run out of ideas or money in the numerous years this phase can take.
- Sales Funnel or Customer creation phase – Once your product has shown viability and has started gaining momentum with your customers, businesses at this point will need a lot of growth to raise capital and even secure investments. To ensure the enterprise gets to this stage, marketers need to create a following through advertising or blogging or signs and announcements. And they should also ensure that changes are made early so the products are feasible and valuable to the prospects and they can save on costly recalls.
CUSTOMER VALIDATION: THE FINAL 3 STEPS
So far we have seen that your marketing team has to be on the ball with discovering exactly what it is that your customers need, and ensuring through feedback and testing that the products will be viable and well received. A super marketing group will even anticipate customers’ needs through observation of behaviors and trends and coax out unexpressed needs the consumer was not even aware of. Now if customer discovery is the beginning of the marketing process to pull prospects in, then customer validation is the stage that will ensure they are converted into brand evangelists, and your business model is solid. It is a very crucial step to be taken before you even launch your new products as you can use this process to predict sales outcomes and determine your market position. Once you have gone through the steps of the customer validation process you can scale your business and create a demand for your product.
- Validation of Minimum Viable Product – Simply put, you could lose a lot of time and money not validating your products. Once the need is no longer valid customers will move on to look for what they need at that time. To produce high quality, substantial products, companies must listen to their customers and change little bits at a time. This will ensure customers are passionate about your offerings and you are assured of your core values.
- Validation of Sales and Marketing Roadmap – With the generated momentum through complete understanding of your market segment, and the loyal customers who know are referring your company to others, you can now guarantee your accountant, investors and share holders that for every dollar spent in advertising, is bound to do more than break even. This provides you with a clear objective for sales and gives you confidence in your marketing and advertising strategy.
- Validation of Business Model – Your customers were so pivotal in helping to validate your products, advertising and marketing model, that it is essential to continue involving them in the fine tuning your business model. Encyclopedia defines business model as “a design for the successful operation of a business, identifying revenue sources, customer base, products, and details of financing.” And for simplicity we will define it as your plan of action, which directs all you do in business to create profit and customer satisfaction. So how does a customer help to validate a business model? Simple, you use the facts your research has gathered to change course if you are not meeting their needs, continue with the things they appreciate and tailor your products and services to ensure their business and loyalty.
MODERN MARKETING STRATEGIES TO IMPLEMENT IN BUSINESS
Contemporary consumers want to be involved in the marketing process, and so the use of modern techniques such as search engines, Google Trends, social media and behavior analysis will greatly improve marketing efforts.
- Search engine keywords allow business to learn which terms users are entering to find their businesses and products. Keywords also help in predicting market shifts in product demands and trends. Google Adwords is one of the biggest search engine marketing (SEM) tools that uses both search engine optimization (SEO) and advertising to ensure your business can be found online.
- Google Trends is a great tool to analyze consumer behavior, by viewing their interests and searches over time. This tool is great for helping business with insights on product launch dates, seasonality, and what advertising messages are being received where.
- As of January 2014, 74% of Internet users used social Networking sites such as Facebook, Twitter, LinkedIn and Pinterest. Qualitative online research can easily be achieved through various social media platforms to gather information on people’s internet preferences, for data mining, creating a buzz and for insights on what to market and how.
- Customer behavior analysis provides details on what customers want and need, through their spending habits or lack thereof. This enables marketers to zoom in and pin point exactly what areas of the market they want to target, who is in it and how and why they spend.
“My call to action is that we would figure out the way to return to the consumer’s backyard. We have to rebuild that trust. We need to listen to them on their time and in the ways they want to communicate with us.” Kim Dedeker, Head of Consumer and Market Knowledge, P&G.
Because consumer behavior is ever changing, research and marketing skills, techniques and methods need to evolve to unlock and meet the needs of the customer. Consumers want to feel empowered to give their opinions, when they feel like it and to support or boycott a brand that rises to meet their expectations or falls flat. They also want to be able to incorporate their online lives with off line attitudes and allow that to determine their spending habits. Due to the nature of the modern day consumer, proper care must be taken to observe and converse with but not to bombard them with requests. It is essential to note that modern consumers want to be part of the creative process and to have their thoughts and feelings tapped into and implemented into the creation of products they buy.
Customer Relationship Management
Another way to figure out the customer needs and to understand and follow up with the customers is Customer Relationship Management. Great marketers and companies know that in order to build customer relationships they must:
- Establish mutually satisfying goals between consumer and company as this creates a customer focus, which in the end achieves the initial objective to increase profits through customer satisfaction. With mutual satisfaction, the aim and the customer the focus the businesses main challenge will then be to ensure they can deliver what the customer wants and therefore ensure they are returning and referring. To develop this relationship, businesses must employ a new approach, one that allows for connectivity and satisfaction.
- Develop and maintain rapport with customers, marketers, suppliers, managers and investors. Being transparent and providing company briefings to all those involved will inspire trust and connection. Lots of resources should be dedicated to ensuring the flow of conversation and feedback is continuous, documented and implemented. Consumers do not want to waste time filling out surveys only to be faced with the same problems they have pointed out. Not changing could lead to your customers, “the true bosses” to make decisions that either make or break a company.
- Produce positive feelings in your customers and all those involved with your business. If you have ever looked at a newspaper or article online you are aware that bad news spreads faster than good. It is the same in business and even more detrimental. People will quickly discourage others from using your product or service if they have had a bad experience. Therefore ensure your business puts out quality products consistently and pay strict attention to customer service culture as that is a direct interaction your customers face, and that will be one of the most judged areas of your business.
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