One of the fundamental practices of business is innovating and staying ahead of the curve, and the absolute best way to do this is to know your customer needs. However, many business owners fail at doing just that – not out of lack of trying, but simply not knowing how. Take a look at Amazon’s 2014 Fire Phone. 3D display, object recognition, great hype and market dominance. But it flopped – because it didn’t solve its target customers’ needs.
But how do you identify customer needs for a product or service? This article will go about how to gather customer feedback, understand customer experience, and anticipate customers’ future needs.
Gathering Customers Feedback
Feedback provides valuable insights into a customer’s buying patterns and pain points. Many believe they need to sell and survey their current customers to gather this, but this wasn’t the case for Hamdi Ulukaya – the founder of Chobani. By simply looking at the feedback from customer surveys of competitors, he noticed a great deal of potential customers in those who didn’t like how sugary the opposition’s products were. This enabled him to tap into a customer demand that wasn’t outright stated – that of protein-rich, low-sugar Yoghurts. This propelled him to begin the leading yoghurt brand in the USA.
Let’s look into the ways he did it:
- Customer Observation – The most basic and obvious form of market research is to go into the places where your competitors operate and observe their buying patterns. This initial research allowed him to note customers’ product awareness, how long they’d spend looking at labels, and eavesdropped on conversations. He dressed casually and struck up friendly conversations with yoghurts as the topic, and found that many of his target audience were frustrated with the amount of sugar in each.
- Taste Tests – Ulukaya would host test tastes with various people, including friends, family and sometimes friends. He’d remove labels and note reactions, allowing him to ascertain feedback unbiased by loyal customers or customer expectations.
- Community Engagement – Ulukaya had various channels of engagement. Sometimes he would visit farmers’ markets and community events and offer samples of his prototype yoghurt. Furthermore, Ulukaya would utilise focus groups and online surveying via social media platforms, but this was his most influential work.
The following are in-depth, on-the-ground ways to collect feedback.
Customer Journey Mapping
In 2017, United Airlines faced a public relations nightmare when a video surfaced of a passenger being forcibly removed from a flight. This was a clear lack of understanding of care of the customer experience. The result was a plummet in reputation, and millions lost in potential revenue. However, UA’s failure allows us to understand the customer journey better.
Customer journey mapping provides a visual representation of all the points a customer has with your brand. Access to that damning video is one of them. Identifying the points in which you’re meeting customer engagement is valuable, as suggested by the Watermark Consulting study of 2015 named “Customer Experience ROI Study”. This study found that companies that excel in customer journey mapping achieve 10-20% increases in customer satisfaction.
The following are ways in which you can gather information on the customer journey:
- Direct Feedback – Feedback through customer surveys is still the best way to gain insight. Using surveys such as Customer Satisfaction surveys measure overall satisfaction by identifying pain points. This allows you to identify trends in company policy that cause these unpleasant experiences, such as long wait times.
- Social Media Monitoring – There are many social media monitoring tools, such as Hootsuite or Bandwatch, that can track mentions of your brand. This allows you to gather thoughts expressed with no barriers. It’s important to heed them, as social media is a thought-sharing tool. Experiences are posted online in very specific nuggets, which aids in identifying customer complaints.
- Website Analytics – All companies need a website, and having access to Google Analytics allows you to visualise the journey of customers through your website. Identify pages with high bounce rates/low engagement, and make improvements. Optimise the steps which throw your customers off, and they’ll stay for longer.
Anticipating Customer Needs in the Future
Blockbuster was once a gigantic company with many satisfied customers. They dominated their sector, and many people remember them. However, the unchanging brand attitudes of that era proved to be their downfall. They dismissed Netflix, once even outright refusing to buy them, and now Netflix has their title.
This shows that customers tend to move on when a better product or service is available. This is both a lesson for you to keep your customers happy, but also an opportunity. Just like Netflix and Chobani, finding an alternate avenue that can provide a better product or service is key to success.
How you can find the future needs of your customers are numerous.
- Trend Analysis – Utilising trend analysis tools, such as Brandwatch or Talkwalker is key in identifying customer issues and trends. They can traverse mentions related to your industry. This allows you to keep an eye on customer sentiment not just of your product or service, but the glossier, for example, found there were rising concerns in how some beauty products affected your skin. They wanted instead minimalistic makeup to save and stress, and Glossier provided this with a new product line, propelling them to success.
- Industry Publications – Industry publications, such as McKinsey & Company and Garter, make their money in large part by identifying trends, technologies and innovations. All of these are pushed in large part by other companies identifying customer needs and attempting to capitalise. When organisations such as the Good Food Institute began to report on movements like veganism, others capitalised, such as Beyond Meat and Impossible Foods.
- Customer Advisory Boards – Establishing customer advisory boards of your most dedicated customers will allow you to access in-depth customer data and feedback that you’re succeeding at providing the most. For example, Salesforce, a CRM platform, regularly engages with its board to gain insights. They have used this to identify emerging needs to develop features needed.
Building the Ideal Customer Buyer Persona
In 2015, Hubspot, a marketing automation platform, found difficulty in communicating the value of its services. Marketing messages are broad and completely fail to resonate with customer needs. However, they bounced back by developing detailed buyer personas of former customers. Each persona had a name, demographic, pain points, goals and buying patterns.
This worked. They experienced increased website traffic, higher conversion rates and significant revenue growth. By creating these personas, they narrowed down the customer base to individual customer needs. Epsilon published a 2018 report named “Power of Me”, which found that a whopping figure of 80% of customers will have their purchasing decision influenced by personal decisions.
The following are ways in which you can build a buyer persona:
- Customer Research – Target customers through surveys. Conduct focus groups that consist of open-ended questions that centre open-ended motivations and frustrations. In 2019, Slack, a workplace communication platform, conducted in-depth user interviews to understand how teams used their products. This revealed a lack of organisation and search engine capability in their platform
- Behaviour – Sephora, a beauty retailer, used website analytics to track customer journeys and identify areas for improvement. Through keyword research and optimising the layout of their product pages, they were able to turn around the high drop-off rate.
- Identify Customer Pain Points – Removing friction is the key to innovation. Monitoring customer support team tickets, help desk enquiries and online reviews whilst collecting common complaints and issues can help turn around your low engagement. Zappos, an online shoe and clothing retailer, noticed that their existing customers were in danger of leaving due to high wait times. They implemented a simple “call back” feature that satisfied customers complaints immediately’
Into Action
We have outlined many ways to identify customer needs in this article so far, but now is the method you’ll use to translate those needs into a product.
The countless examples we’ve mapped out should highlight that every company is different. From something as simple as a call back feature to in-depth market research on the ground, solutions are never uniform.
That being said, the best thing you can do is create a minimum viable product (MVP) that addresses common customer needs and pain points. This will serve as a testing ground for gathering further feedback.
- Identify Core Features Needed – Identify the essential features that will address customer needs. Prioritise these features and develop efforts into building a functional needs prototype.
- Deploy – Invite a select group of customers to test it. Observe their interactions, gather feedback, and identify areas for improvement.
- Iterate and Refine – Adjust, redeploy, adjust. Keep doing this until you believe you’ve got the formula that works.
Conclusion
Paying attention is half of the job of ensuring customer needs are satisfied. The right solution lies within the pain points of the customer, as well as unfulfilled demands. In the online world, it’s much easier to get into contact with wider groups of people and track their behaviours. The key is in proper research. We hope this article helped you in your journey to identifying customer needs and acting upon them.
