People don’t generally open their wallets to spend money without getting something in return. Even when making a donation, there’s an incentive, such as feeling good or connecting with a cause. To be successful, businesses need to tap into unmet customer needs and offer solutions.
Sounds simple — but how do you actually find out what’s on your customers’ minds?
What are customer needs?
Customer needs are the psychological and physical motivations that make someone wish to purchase a product or service.
Physical needs vs psychological needs
Physical needs are usually easier to identify, because they’re much more tangible. If you have a cold, you need cough syrup. If you’re tired, you need to sleep. If you’re hungry, you need to eat. That’s why physical needs are at the bottom level of Maslow’s Hierarchy of Needs – in order for people to move up the pyramid, these basic needs must be met.
In business, the quality of your product or service is closely tied to your customers’ physical needs. For example, a cafe guest is hungry and tired, so they need a scone and a cuppa. Or, a shopper is cold in the wintry weather, and they step into your store because they need a pair of warm mittens. These behaviours can be mapped to certain physical needs, but they’re also intertwined with more complex psychological ones, such as a feeling of belonging or an affinity to a particular brand.
Psychological needs come into play when there’s an emotional reason behind the purchase. Once those basic physical needs are met, the reasons behind purchases become emotional. Any pair of shoes might be just fine to fulfil a physical need for clothing. But you know your favourite brand donates a pair for each one purchased, and that aligns with your personal values. It’s probably cheaper to make your own coffee at home, but it would be more fun to visit Starbucks for a Pumpkin Spice Latte.
Impulse buying is an excellent example of a want becoming a need. Did you really need that fizzy bath bomb? Perhaps. Or, maybe it just felt good at the time — and you needed a little happiness boost. The point is, people are complex creatures, and so are their needs.
Psychological needs are a heavy factor when it comes to brand loyalty. According to the Zendesk Customer Experience Trends Report, 74% of customers feel loyal to a particular brand or company, and 52% of customers say they go out of their way to shop for their favourite brands. Understanding the link between loyalty and customer experience is vital. Loyalty is tied to a customer’s ongoing choice to do business with you, refer others to you, and have a sense of a positive relationship with you. In today’s competitive marketplace, good customer experience can drive the success of a business.
Identifying customer needs
How can you find out what your customers need? There are a few tried-and-true methods to consider.
A focus group is a group of deliberately chosen people who participate in a discussion on a specific topic. These groups are a tool of market research and are facilitated by a moderator to encourage everyone’s active participation.
Focus groups are great for getting a sense for consumers’ feelings and perceptions about your brand. They can also help you gather psychographic data — information about a person’s values, interests and attitudes, and what triggers them to act.
Surveys are a traditional way to gather information from larger groups of people. Most surveys are in Q&A format to provide metrics. Millions of surveys are sent out each year, and are now mostly done online.
If you wish to understand what current customers (or potential customers) think of your product or brand, a survey can help you glean these insights. But surveys are only as good as their design — it’s crucial to be clear on what you want to know, how you word questions, who your demographic is, and how the survey is structured.
Social media listening
More and more businesses are seeing the importance of being present on social media for customer service. Data shows that your customers wish to communicate with you in the same way they do with friends and family — and that often means social channels.
Connecting with customers on their preferred channel also helps to create a more meaningful relationship. And, it’s an excellent way to hear real-time feedback from your customers about what they like (and what they don’t). If you start to see the same questions or issues pop up over time, it’s a good clue that you have a customer need to solve for.
The last time you were wondering where to find the best pair of walking boots, what did you do? Most likely, you searched online for advice. That’s what makes keyword research so important – it helps a business identify popular search terms and phrases people key into search engines. See where your company stands compared to competitors by doing an “incognito” search for your industry or product. If you aren’t on the first page, you’re not as likely to be found by your customers. This is a crucial insight for small businesses and enterprises alike.
People look for different information depending on where they are in the customer journey. For example, “walking boots” will turn up a much different search engine results page (SERP) from “walking boots for women size 7”. The first is a top-of-funnel informational search, whereas looking for a specific size indicates a greater intent to purchase. By investing some time in keyword research, you can optimise your website to rank higher in search results, and gain insights about what your customers are searching for.
“The experience matters at every moment in the customer journey, and customers will judge any impediment along the way. It’s crucial to consider the experience from the customer’s perspective to understand their needs.”
Harry Wray, Customer Success Executive at Zendesk
Customer Journey Mapping
To meet your customers needs, you need to understand what they’re looking for and what phase of the customer journey they are in, from discovery to purchase. Customer journey mapping is the process of creating a visual representation of your customers’ interactions with your brand. It helps you see things from your customers’ perspective, and gain insights about potential roadblocks and how to improve the experience.
“The experience matters at every moment in the customer journey, and customers will judge any impediment along the way,” said Harry Wray, Customer Success Executive at Zendesk. “It’s crucial to consider the experience from the customer’s perspective to understand their needs.”
Data shows that paying attention to customer experience is critical. According to the Zendesk Customer Experience Trends Report, roughly half of customers say they would switch to a competitor after just one bad experience. That number increases to 80% after more than one bad experience. To keep your customers happy and create loyalty, you need to optimise your CX. Customer journey mapping is a tool you can use to find ways to create those good experiences.
How to predict customer needs (and prepare to meet them)
You don’t need a crystal ball to predict your customer needs – but you do need data. The good news is, your customers are creating and sharing more data with you than ever before. 2.5 quintillion bytes of data are created every day. To put that number in perspective, it would take about 210,000 years for a quintillion gallons of water to go over Niagara Falls. It’s a colossal amount of information. But most companies are not using their customer data to make business decisions.
Predictive analytics and artificial intelligence (AI) use science to predict what might happen in the future — from what your customers need to the big trends. Netflix, for example, tailors watch lists for each subscriber based on their data profile — demographics, ratings, watch history and preferences influence what the algorithm will recommend. This focus on machine learning has delivered results: about 80% of what’s watched on Netflix is based on these AI-powered recommendations.
Know your customers
This one might sound obvious, but how well do you actually know your customers? To make demand forecasting effective, you need to collect and integrate data about your customers, your offerings, and the triggers to purchase. Then you can create a buyer persona for each of your customer segments and plan marketing and product strategies for each.
This starts with the basics: demographic customer data such as age, location, psychographic lifestyle and income. Previous purchases are often a good clue to what a customer will buy next. That data is usually easier to collect in online channels like in-app purchases or social media click-throughs. It can be a bigger challenge to collect this data from offline channels — and this is where loyalty programmes can be extremely helpful for tracking buying behaviour.
As well as fostering a better customer relationship, loyalty programmes can help businesses get to know their customers better. That, in turn, helps them create a better customer experience, and the circle continues.
Know the buying patterns of your target customers
It’s critical to understand context when trying to predict customer needs. How do your customers prefer to contact you? If you aren’t present on their channel of choice (email, phone, social media, app) you are missing opportunities. Other factors can affect customer demand — including the season, state of the economy, and even time of day. If your product is a quick impulse item like a box of chocolates, you’ll plan for it differently than for a long-lead luxury piece like a diamond ring. Understanding customer behaviour and planning to meet their demands.
Companies that collect and analyse data about their customers, their purchase patterns and the context can create much more carefully targeted offers. For example, some companies can predict whether you are likely to get married soon based on purchase patterns and tailor their marketing offers to that context. It’s also possible to predict whether a customer is more likely to respond to an offer via mobile phone through data analytics.
Focus on your customers
Understanding what your customers need and how to meet their expectations means putting them first. Design your business round what they wish to achieve, and dig into your data to deliver great customer experiences.