Your customers have problems…lots of them. That may sound like a bad thing, but it’s not. It’s an opportunity! You see, if your product solves a valuable problem, people are happy to pay for the solution. Today, we’ll look at a how to analyze customer needs to improve your products and your marketing.
Understanding the Customer Experience
Most business owners can tell you their customers needs at a high-level, but the real insights come from zooming into each step of the process. For instance, a plumber knows his customers may need help with fixing a leak, but what steps does the customer have to go through to get that leak fixed?
Let’s map out the process.
- The customer realizes they have a leak.
- They consider whether to fix it themselves.
- The customer decides to find a plumber.
- Next, they search for potential plumbers online.
- The customer calls plumbers to get prices and availability.
- After a few calls, the customer schedules service.
- The customer waits for the plumbing technician.
- The tech assesses the repairs needed and gets permission to proceed.
- The repair is completed.
- The client pays for services.
You can see that even a straightforward product actually involves lots of steps. Now consider that each of those steps comes with their own opportunities to gain or lose customers. For example, what if the customer does not know they have a leak in step 1? Simply helping customers know the signs of leaks could create new business.
Finding Pain Points In the Customer Journey
So how do we find the opportunities to improve the customer experience? We find the major pain points at each step in the process, and we brainstorm ways to address these needs. For instance, paying for the service presents several potential problems in the minds of your customers.
- What methods of payment are available?
- How will I afford this expensive repair?
- Can I trust the employee with payment info?
- What happens if it breaks again?
- How can I keep track of what I’ve paid for?
You may identify customer needs that can be fixed easily, but others will take more effort and consideration. For these types of problems, you will need a way to prioritize the customer needs you want to focus on.
Prioritizing Your Opportunities
Harvard Business School’s Innovation Lab suggests a 4U framework to consider which problems present the best business opportunities. Each "U" describes a characteristic of a problem that has the highest likelihood to motivate a person to find a solution. The more of these traits that apply to a problem, the better:
- Unworkable – An intolerable problem with severe consequences.
- Unavoidable – A problem that people will definitely encounter.
- Underserved – A problem no one else recognizes or has fixed.
- Urgent – A problem that can’t wait.
We will dive deeper into these traits in a future post, but let’s apply this framework to our customer needs analysis for payments.
Analyzing Business Opportunities From Customer Pain Points
We can think of each trait in the 4 U Problem Evaluation framework as a range. To keep it simple, let’s use a number from 0 to 10 to score how much each characteristic applies to a pain point. Zero will mean not applicable, and ten will mean very applicable. Now let’s see how this applies to the customer’s payment needs.
Looking at the scores, you can see that payments are an important, but largely solved, problem in the industry. That’s why most pain points scored low in the Underserved and Urgent categories. However, one customer need did outscore the others: affordability. So out of all the needs considered, finding a solution for affordability will likely have the biggest impact.
Finding Customers’ Hidden Needs
A leaky pipe clearly needs to be fixed, but sometimes the problems you solve are not so obvious. What if you’re selling handmade bracelets or gourmet dog treats or something else no one absolutely needs? These types of products still serve some customer need, but they may be psychological or social rather than physical.
Consider why a shopper buys luxury clothing for example. A generic t-shirt can do just as good of a job covering your body, so why spend the extra money on a premium brand? For one thing, the luxury brand has exclusivity because of its price point, so wearing Gucci or Chanel communicates something about social status. You can afford this expensive clothing.
So then what need does the luxury clothing actually serve? These customers have a social need to communicate their status, and they may also have a psychological need to portray their identity as a fashion forward person. A company can capitalize on this need by building a brand that appeals to the market segment with this need.
Understanding the Marketability of Solutions
Now that you understand how identify customer needs, you also need to understand the relative difficulty of the problem you’re solving. Of course, you’ll need to figure the logistics of getting your product to market like finding suppliers and building your website, but there’s more. You also need to understand the marketability of your offerings.
The 4 U problem framework we mentioned earlier can offer some insights, but we can also evaluate customer needs using a BLAC matrix. Like the 4 U’s, the BLAC matrix is another framework from the Harvard Business Innovation Lab. With the BLAC matrix, you will judge the customer need on 2 axes:
- Blatant vs. Latent
- Aspirational vs. Critical
Blatant vs. Latent Needs
On the first axis, blatant refers to an obvious problem that customer readily knows they need to solve such as the leaky pipe example. Latent describes needs that the customers are not explicitly aware they have. The need to communicate social status would be a latent need.
Most problems will not be perfectly blatant or latent. They will occur on a spectrum, and, in general, a blatant need will be easier to market and sell than a latent need. That’s because you have the extra work of building awareness of the latent need before you can even try to sell the product. It is not an impossible task, but it may require extra time and expense.
Aspirational vs. Critical Needs
The aspirational vs. critical axis refers to how important it is to meet the need. Aspirational needs things people want but they can get by without. Critical needs must be met or there will be some negative consequences. Critical needs will typically be easier to market and sell.
If we bring this together with the Blatant vs. Latent axis, we can see four ways to classify customer needs.
- Blatant and Critical Customer Needs – Solutions will be the easiest to market.
- Blatant and Aspirational Customer Needs – Solutions are moderately easy to market.
- Latent and Critical Customer Needs – Solutions can be marketed but may require time to close sales.
- Latent and Aspirational Customer Needs – Solutions will be most difficult to market.
Adjusting Your Product and Marketing
After identifying your customers’ needs, you may have the realization that you are on the wrong path. Or maybe the needs that were once blatant and critical ten years ago are no longer so critical. Believe it or not, that’s good! You’re now aware of the problem holding your sales back, and you can do some thing to fix it.
All companies have to pivot sometimes. Netflix once mailed DVD rentals. Now they are a streaming giant. Play-doh was once used for cleaning walls. Toyota used to sell looms. With these frameworks for analyzing customer needs, you’ll be able to pivot in the right direction.
So maybe you’re a plumber that needs a website to meet customer’s changing expectations. Or perhaps it’s time to rebrand your clothing store to attract a new audience. Or maybe you have a great app idea you want to vet. Whatever your business, knowing your customers needs will point you towards success.
Until next week. Take care and God bless!
