What are customer needs and how to identify them
Customer needs are the motivations that make someone want to purchase a product or service and stay loyal to that business. Learn the most common types of customer needs and how to identify them.
Published September 18, 2020
Last updated March 9, 2021
People don’t generally open their wallets to spend money without getting something in return. Even when making a donation, there’s an incentive like feeling good or connecting to 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?
In this article:
- The definition of customer needs
- Types of customer needs
- How to identify customer needs
- How to predict customer needs
What are customer needs?
Customer needs are the psychological and physical motivations that make someone want to purchase a product or service and stay loyal to that business. For example, customers today need quick and convenient ways to reach support online. If a business doesn't provide an online experience that's on par with, or better than, an in-person experience, customers might leave for a competitor that does.
7 of the most common types of customer needs
Most customers have a set of 7 basic needs when they interact with an organization, according to Ben Motteram, Principal and CX Expert.
This is the most basic customer need that's associated with things like courtesy and politeness. Friendly agents are a top indicator of a good customer experience, according to the customers surveyed in our 2020 Trends Report.
Customers need to know the organization understands and appreciates their needs and circumstances. In fact, 49% surveyed in our 2021 Trends Report said they want agents to be empathetic.
Customers must feel like they're getting adequate attention and fair and reasonable answers.
Customers want to feel like they have an influence on the outcome. You can empower your customers by listening to their feedback and using it to improve.
Customers want choice and flexibility from customer service; they want to know there is a range of options available to satisfy them. In fact, high-performing companies are more likely to provide customers with a choice of customer service channels. 50% of high performers have adopted an omnichannel support strategy, compared to 18% of their lower-performing peers.
Customers want to know about products and services in a pertinent and time-sensitive manner; too much information and selling can be off-putting for them. A knowledge base is a great way to provide existing customers with the information they need, when they need it. And high-performing CX teams are more likely to offer a knowledge base, according to our research.
Customers’ time is valuable, and organizations need to treat it as such. 73% of customers said resolving their issues quickly is the top component of a good customer experience. To deliver on that expectation, CX teams need customer service software that arms them with tools to respond to customers quickly and effectively.
Physical customer needs vs. psychological customer needs
Physical needs: 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 an espresso. Or, a shopper is cold in the wintry weather, and they stop into your store because they need a warm pair of mittens. These behaviors can be mapped to certain physical needs, but they’re also intertwined with more complex psychological needs, like a feeling of belonging or an affinity to a particular brand.
Psychological needs: 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 fulfill a physical need for clothing. But you know your favorite 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 run into Starbucks for a Pumpkin Spice Latte.
Psychological needs are a heavy factor when it comes to brand loyalty. According to the our 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 with their favorite 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 success of a business.
How to identify customer needs
To identify the needs of your customers, there are a few tried-and-true methods to consider, for example, focus groups, customer surveys, and social media listening.
A focus group is a group of deliberately chosen people who participate in a discussion on a specific topic. These groups are run by 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 want 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 want 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 hiking 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 is ranking compared to competitors by doing an “incognito” search for your industry or product. If you aren’t on the first page, you aren’t 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, “hiking boots” will turn up a much different search engine results page (SERP) than “hiking boots for women size 8.” 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 optimize your website to rank higher in search results, and gain insights about what your customers are searching for.
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’re 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 optimize 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 aren’t 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. And, the focus on machine learning has proven to deliver results: about 80% of what’s watched on Netflix is based on these AI-powered recommendations.
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 like 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 programs can be extremely helpful for tracking buying behavior.
On top of fostering a better customer relationship, loyalty programs 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 you’re 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 out on an opportunity. 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 candy bar, you’ll plan for it differently than a long-lead luxury piece like a diamond ring. Understanding customer behavior and planning to meet their demands.
Companies that collect and analyze data about their customers, their purchase patterns, and the context can create much more targeted offers. For example, some companies can predict whether you’re 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 through data analytics.
Focus on your customers
Understand what your customers need and how to meet their expectations means putting them first. Design your business around what they want to achieve, and dig into your data to deliver great customer experiences.