3 Steps to Understanding Customer Needs

3 Steps to Understanding Customer Needs

The core of every business organisation’s mission is to answer customer needs.  In order to do so you must first identify and understand them.

Understanding your customers’ needs is essential but superficial knowledge is not enough to ensure your organisation’s profitability. To achieve product/market fit, the point where you answer needs better than your competitors, you must get to a deeper level of understanding of those needs.

Benefits of understanding customer needs

An added bonus to mastering customer needs (and providing a solution that fulfills them) is that every marketing dollar spent will yield higher returns than those of your competitors, who don’t have the same depth of knowledge.

A deeper level of understanding your customers’ needs will also ensure an overall better customer experience, which we already saw in a previous post on the customer experience journey, leads to higher profitability.

Ok, so now that you are convinced understanding customer needs is in your organisation’s best interest, the question you may be asking is how to go about mastering them.

First you have to identify the needs you will be fulfilling (hint; don’t stop at the needs attached directly to your product/service, also look at the ones surrounding the entire customer experience). Once you have zoomed in on the needs to fulfill, you must not only understand the needs but the whole story around them.[1] This process requires lots of effort, time and knowledge of data gathering techniques. It isn’t as straightforward as it may seem.

As a marketer a huge part of my role, aside from finding the right customers, is to identify and understand their needs. Over the years, I learned that there are three steps to any quest aiming to either identify or understand customers’ needs.

Those steps are; Listen, observe, and empathise

Listen

customer needs - Baker MarketingThe very first thing you should do when you have a business idea is to talk informally with potential customers. This mostly means listen to their answers.   It also helps you figure out who your early adopters are. If it’s not possible for you to talk directly to potential customers, find people who know your potential customers inside out, and talk with them.

Don’t forget to set objectives for your conversation. Examples of conversation objectives are; to see whether the needs you think exist actually do, how they are being filled and the relative importance of those needs. In order to maximise the amount of information you take in, not only do you have to limit how much talking you will do, but you need the proper mindset. Your mind should be open and devoid of as many filters as possible. Always remember that explaining your project in length and your view of the world is just taking time away from achieving your goal. Listen.

On a side note, many of the entrepreneurs I meet are worried that someone will steal their idea before they get a chance to develop it. Unless you have a truly patentable solution (very few are), and potential customers can either beat you to market (they already operate a company in the same field) or spill the beans (to an existing competitor), you have nothing to worry about. Honestly, initial business ideas are very rarely marketable. Even if they were, almost no one wants to put in the blood, sweat, tears and go through the hell that starting a new business entails. Furthermore, even if they did, they’d most likely end up with a completely different business than yours in the end. Lastly if the threat of theft is real, there are still ways to explore the needs of potential corporate customers without spilling your own beans.

Please do not let the fear of someone stealing your business idea prevent you from engaging with potential customers.

Observe

Customer needs - Baker MarketingObservation is essential to identify less obvious needs and understand all pertinent customer needs at a deeper level. Asking potential customers won’t yield the information you seek because people don’t or can’t always tell you the truth.

There are many categories of observation techniques.

 

Natural observation

Natural observation techniques allow you to observe your potential customers while they are naturally fulfilling the needs you want to address. Ideally, without them noticing you too much so their behaviours are not altered.

Such observation experiments will yield huge amounts of customer knowledge. Hence you need to ensure you set observation goals for your experiments. Your observation goals can pertain not only to your subjects’ actions but also their interactions, environments, and the tools they use.

You will most likely need to repeat such experiments many times to take in all the knowledge you will need. Alternatively, you can task multiple people to observe the same situation while giving them different observation goals.

Two of my favorite natural observation techniques are shadowing and A day in the life.[2]

Directed observation

These techniques are associated with a goal of understanding a specific thought process or behaviour in a given circumstance.

They require putting the customer in a specific situation or assigning him, or her, a task and then observing. This can be followed by a question period to help interpret what you observed. It can be done face to face, remotely with cameras or on the web (such as A/B testing).

Third person observation

This technique is used in addition to one of the previous ones where the observer is someone who has a vision of the world that is significantly different from you or anyone in your industry. This technique yields much richer interpretation/insights from the data you collect.

Empathise

Customer needs - Baker MarketingWhenever possible, put yourself in your customers’ shoes or, even better; take the time to get to know some of your favorite customers personally. This will enable a relationship of trust and maybe even friendship (personal bonus for you) to develop over time.

Get involved in activities or causes your customers are passionate about. This will give you an even deeper understanding of their values and what is important to them.

Sharing your customers’ values is a requirement to attract them into your community.  If you are unsure of what I am referring to here, see this previous post on community marketing.

The 360 view of customer needs

Customer needs - Baker MarketingApplying all of these techniques to understand your customers’ needs is required to get a 360 degree view of them. Using many different perspectives to master your customers’ needs will yield rich and actionable information. It will also facilitate innovation in your organisation.

 

Customer Feedback Flow

Customer needs - Baker MarketingStriving to understand customer needs is a continuous process. Set up processes and assign resources in your organisation to make it an integral part of your business activities.

These processes can be as simple as a quick questionnaire you send out on a regular basis, or an automatic feedback one, after a certain task is completed.  Analytics reports, comments on social medias summaries or a managed (live or online) community feedback or observation reports are all valid continuous feedback processes that can yield precious information on your customers’ needs.

Be aware that this feedback is highly valuable to your organisation, if you act on it. Hence, reward your customers adequately (often a simple thank you is enough) for sharing their thoughts and concerns.

Mastering the understanding of customer needs is no small task.  Your rewards for listening, observing and empathising with your customers, will be a tighter product/market fit, greater customer satisfaction and higher profitability.

[1] Needs are always dependant other factors. E.g. The need for a given medicine will be dependant on experiencing specific symptoms at a level that requires relief and not being allergic or prone to adverse effects to said medicine.

[2] The following book describes these techniques : This is Service Design Thinking – M. Stickdorn, J. Schneider et al. – John Wiley & Son

How to identify a good community marketing partner

How to identify a good community marketing partner

In a previous post we looked at community marketing. As a reminder, community marketing is a set of tactics used to involve your customers and/or prospect customers (subsets or all of them) and their network with your organisation.

Community marketing partner- Baker MarketingCommunity Marketing Partnerships

One of the foundations of community marketing is partnering with other organisations. These partnerships are used to leverage all of your marketing and promotional activities to your potential customers. These partnerships can be with your suppliers, clients, customers (either corporate customers or the companies your customers own), or non-profit organisations.

The previous post also showed that, aside from being profitable when done right, community marketing is a great way to:

  • Increase positive brand association
  • Achieve community leadership
  • Obtain great insights in your customers needs
  • Drive innovation
  • Reduce your marketing costs
  • Get free advertising
  • Get you and your team to feel great about your job

So yes, community marketing sounds great, well on paper at least. In reality it requires the right partners in order to achieve a return on your investments.

The question then becomes:

Finding a business partner - Baker marketingHow do I know what the right community marketing partner looks like?

Like any other business partnership, there is no ‘’one-size fits all’’ answer to this question. Furthermore, time can transform an excellent community marketing partner into a negative ROI partner. Hence keeping track of the costs, revenues and benefits associated with a partnership is essential.

In order to identify criteria to help find a good community marketing partner for your company I will use two sources. The first are the studies done by non profit organisations that have applied community marketing strategies for decades to achieve their objectives.  The second will be the various community marketing experiences I have been a part of or observed in the last few years.

The following are some of the most important elements you have to look for when searching for a community marketing partner.

Community Marketing - Baker MarketingShared values

This criterion is by far the most important element to look for when searching for a new community marketing partner.

Your most important corporate values must be shared with your partners. Otherwise something will inevitably go very wrong during the course of your partnership. Usually, issues will occur sooner rather than later.

An example of this was a large food blog that strongly valued leaving the smallest carbon footprint possible. Most of their blog posts transpired this value. Their hosting provider, a community marketing partner of the blog, expanded into a new facility that used significantly more energy than the previous one they were located in. When the hosting company announced on social media it had no intention to undertake any projects to minimize their carbon footprint, it created a strong backlash in the blog readers’ community. Readership dropped more than 25% in the following 3 months. No other events could account for this exodus.

Eventually the blog owners not only lost a community partner but had to find another hosting provider. This project was of course very costly and could have been avoided had the hosting partner shared similar values.

This example brings about another lesson that was learned. Some of your values can generate a significantly higher cost structure for your company. Make certain you are ready to take on those costs before trumpeting your values to your customers.

Community Marketing - Baker marketingA committed partner

Just as any other type of partnership, your partner must be committed to the relationship. In a community marketing partner, this translates into having resources dedicated to managing the partnership and the joint projects.

Partners who also dedicate resources to measuring the outcomes of the partnership will often be easier to work with. The data they accumulated will generally lead to rational discussions with clear demands.

Market segments - Baker MarketingYou are going after the same customer segments

The closer, the match between the customers your business is aiming at to the ones your partners aim at, the better.

The whole idea of community marketing is to gain greater exposure, at a lower cost, to new potential customers. Hence, it would be worthless in that regard to partner with companies that don’t address your target markets.

Also, the closer or more complementary the needs they address to the ones you do in your markets, the better the synergy you will get out of a partnership.

Hence, if your product/service fills a need that is created by a partner’s product/service or creates a need that can be fulfilled by a partner, the partnership has the potential to provide maximum ROI.

An example for our food blog would be to partner with kitchen appliances or dinnerware companies as well as exercise/health related blogs that share similar values.

Reputation - Baker MarketingA reputation that is at least as good as yours

Community marketing is strongly based on social media presence by the partners. Hence, you will be looking for a partner that is not only adept at managing its own social media presence but one that has a reputation that will not tarnish yours.

Before signing with a new community marketing partner you need to do a thorough review of all of its social media presence. You also need to know who its other partners are and what their reputation is.  The stronger the community your future partner is a part of, the more profitable the partnership can be.

There are many other criteria that are important when choosing a community marketing partner. The previous three are, in my experience, some of the most important ones at the outset of a relationship.

In a future post, we’ll take a look at where to find the best community marketing partners. In the meantime, if you have any questions about community marketing strategy or implementation you are welcome to contact us.