How to identify and meet customer needs

All businesses aim to meet unique customer needs. Whether those needs are functional, social, or emotional, businesses need to understand what those needs are early on to ensure they develop products and services that solve meaningful problems for their customers and make their lives easier.

Having a good understanding of what your customers need enables you to create a strong value proposition and increases the chances you’ll be able to sell them on your proposed solution. Continually checking in on your customers lets you tweak your product to fulfill additional customer needs.

Types of customer needs

Before you start defining your customers’ needs, it’s helpful to come up with categories for the prospective needs. Harvard Business School puts them into three categories: functional, social, and emotional.

Functional needs

Products or services that meet functional customer needs help the customer achieve a certain outcome. These needs tend to be concrete and easier to spot than others. A purchase or a hire usually solves a functional need. For example, a customer might need to feed 100 kids for a surprise party, and they could meet that need by purchasing 20 boxes of pizza.

Social needs

Social customer needs relate to how the customer wants others to perceive them. Customers don’t tend to consciously think of their social needs when purchasing a product, but these needs might influence which product they buy.

Returning to our pizza example, one customer might want others to consider them a health-conscious parent, so they may order pizza from a restaurant that sources only local, organic ingredients. Another customer might be more concerned about the children liking them, so that person might focus on the fast food chain all the kids like. This customer may think that picking up pizzas from the chain would make them the cool parent.

Emotional needs

Emotional needs are related to how the customer wants to feel. Like social needs, emotional customer needs are secondary to functional needs, but they still have a role to play. In the pizza example, a customer choosing based on an emotional need might select the pizza that reminds them most of their own childhood.

Each of these categories informs the core needs customers consider when making purchases. Here are some customer needs you might want to consider when making decisions.

1. Price

Every customer has budget constraints and a specific price that works for them. The base price they’re willing to pay might reflect how much they functionally need the product in their life as well as how much disposable income they have. Some customers might pay a little more if the product meets a specific set of their emotional or social needs, but for the most part, a product’s price can’t outpace its functionality.

Depending on the type of product, you can use different pricing strategies, such as giving bonuses for customer loyalty or bundling products that a customer might use together.

Price ends up being one of the most important customer needs because most customers will weigh all of their other needs in relation to the price, asking themselves, “Am I getting the most for my money?”

2. Functionality

For most customers, functionality matters almost as much as price. They need a product or service to solve a specific problem, and if your product doesn’t solve that problem, they’ll look somewhere else.

Just as you can meet a customer’s price needs by bundling goods, you could also make your service more appealing by increasing its functionality — for example, a toaster oven that lets you toast bread and roast vegetables on your countertop. For someone without an oven, this extra functionality may be worth a big price bump.

3. Reliability

Reliability goes hand in hand with functionality. If a product is reliable, that means it performs its intended function each time you use it. Some customers might find reliability more important than others.

Similarly, some products might naturally be more reliable than others. For example, if someone buys an orchid, they likely won’t expect the orchid to grow perfectly since orchids are rather temperamental. Instead, they’ll understand that it will only be as reliable as the care they give it. But if they buy a succulent, they’ll expect a plant that can grow without much care.

4. Control

Some customers want a high level of control and customizability — especially in services. Providing customers with more control might entail giving them the ability to build their own salad bowl or invest in a service that offers highly customizable templates.

5. Quality

Just as different customers have different price points, they also look for different levels of quality. They may even have different understandings of what makes a “quality” product.

While all products and services need to provide a certain level of functionality, a product’s quality might come down to how it suits a customer’s social or emotional needs. In the pizza party example, the health-conscious parent likely believes that the organic, local-ingredient chain has higher-quality pizza, while the parent looking to please the kids might see the local fast food chain as higher quality.

6. Transparency

Customers want to know what they’re getting for their money. If they invest in a service, they want to know what that service will get them as well as who will perform it and at what pace. Customers also need to know what fees might be charged for a particular service, as well as what ingredients go into their food or what goes into making a product.

Establishing transparency can look different for different products and services. Online reviews and testimonials can help customers better understand what they’re getting out of a product, and a business that provides clear price breakdowns before a purchase can help customers feel like they got a better deal than they would if there were hidden fees.

7. Sustainability

Today, many customers demand products that cause less harm to the environment. Sustainability can include using fewer resources or less energy to manufacture the product, investing in recycled packaging, or reducing waste. Transparency and sustainability often go hand in hand, given that customers may need to trust that the manufacturing processes are sustainable.

8. Convenience

At the end of the day, some things come down to convenience. Customers are regular people with a thousand different needs and demands in their average day. While they may prefer the coffee chain across town, they might choose the coffee place down the block more often because it fits into their daily schedule.

9. Compatibility

We’re surrounded by countless products in our homes and workspaces, so compatibility with other goods and products that we own, particularly when it comes to technology, can provide significant convenience and reliability for customers.

You can address customers’ needs for compatibility in two ways: You could expand the compatibility of your service or product to work for more customers or, like Apple, make it difficult to integrate other products with yours and expand the type of products you make.

10. Safety

Finally, customers need safety. They must be able to trust that the product won’t cause them harm. They might consider extra privacy protections or a clear and transparent ingredient list as ways that businesses increase their safety.

To get an accurate understanding of how to present your products or services, you might ask customers about different combinations of the needs listed above — as well as others not listed here — at different points in their customer journey. The tools below can help you understand and address your customers’ true priorities.

Tools for identifying customer needs

Market research surveys

Market research surveys help you identify your target customer and learn more about their needs. These surveys are particularly useful for identifying the ideal price, the necessary functions for your product, the quality needs to consider, the products it needs to be compatible with, and more.

Jotform’s Survey Maker lets you customize survey templates with your company’s branding, including custom fonts and colors, and your own survey questions. You can also integrate your survey with existing tools such as Salesforce, HubSpot, or Airtable to keep your data flowing seamlessly.

Customer needs surveys

Once you know your customers and their needs, using focus groups and customer needs surveys can be helpful for refining your product or service offering. Customer needs surveys tend to be more narrow than market research surveys, as they look more at specific questions about products and less at general demographics, behaviors, and preferences.

Focus groups go one step further and provide opportunities to gather more nuanced feedback about specific aspects of the product. Focus groups can allow you to identify some of the social and emotional customer needs that you might not realize are driving decision-making.

Customer feedback surveys

Once you’ve begun selling your product or service, getting consistent customer feedback and conducting customer feedback analysis will increase transparency between you and your customer, and enable you to meet new needs as they arise.

While many customers provide negative feedback, either via reviews or strongly worded emails, most customers don’t think about sharing positive feedback unless someone prompts them. Providing customers with an easy option to provide feedback through a customer feedback form increases your chances of receiving positive feedback.

Getting balanced feedback ensures that you’re not over-correcting your product and losing your silent majority of loyal, happy customers.

Methods for addressing customer needs

Sometimes you’ll need to change your product or service to address customer needs. That may involve adding new functionality, changing the price, or being more transparent.

Recently, companies have been responding to customers’ increasing demands for sustainable products. First Insight reported in a study of Gen X consumers that almost 90 percent of them wouldn’t mind paying 10 percent more for a product they considered sustainable. Food companies have responded to these changing customer needs by investing in sustainable packaging, which saves them money and increases their customer approval.

In Japan, the Bank of Fukuoka saw customers’ needs changing as younger generations moved away from brick-and-mortar establishments to online banking apps. After seeing their customers’ branch use drop by 40 percent, the bank invested in a cloud-driven banking system called Minna Bank, a simpler and more helpful banking solution for their customers.

In both of these cases, companies responded to customer needs by updating their business offerings. But deciding when to meet needs and when to stay the course can be challenging.

Challenges in meeting customer needs

Not all customers need the same things. Deciding whose advice to take into account and how much to change your business requires good data-collection tools and smart decision-making. Some common challenges in meeting customer needs include identifying your target customer, categorizing different customer types, and deciding when to prioritize price vs quality.

One of many businesses’ first struggles in meeting customer needs tends to be understanding their different customer profiles. Getting a good grasp on functional, emotional, and social needs as they relate to other needs that include price, functionality, quality, reliability, control, and more requires using surveys and other tools. These surveys can help you separate your customers into different types, such as “high-price, high-control” customers or “mid-price, high-safety” customers.

Identifying different customer types can help you tailor your services and better meet different customer needs by tweaking your product or service. The customer categories this data creates will help you address one of the most common questions you’ll ask when examining customer feedback: “When does it make sense to increase price in order to increase quality?”

A powerful tool to help you measure satisfaction and adjust your strategies

Adjusting to customers’ changing needs can be another common challenge for businesses. Sometimes you implement a change to meet one customer’s need only to discover you’ve stopped meeting the needs of another.

Consistently measuring how well you’re meeting customer needs and adjusting your strategies can help you overcome some of the challenges mentioned above. Jotform offers customer satisfaction surveys that can be sent automatically at specific points in the customer journey to gather quantitative and qualitative feedback. This survey data can translate into key performance indicators (KPIs) that will help you track data in the form of customer satisfaction scores. These scores help you decide when changes are working for customers and when they’re not.

Photo by Mimi Thian on Unsplash