customer needs business plan

16 Types of Customer Needs (and How to Solve for Them)

Published: March 24, 2023

Companies want to stay relevant and innovative and often look at other successful companies, hot industry trends, or new shiny products for inspiration.

However, a vital component to growth is at every business's fingertips — it's customers. Honing in on customer needs can improve the longevity and progress of your business. Happy customers result in higher retention rates, lifetime value, and brand reach as they spread the word in their social circles.

The first step toward creating the types of customer experiences that result in happy customers is by understanding and meeting customer needs.

In this article, you'll learn:

• The Definition of Customer Needs
• The Types of Customer Needs

How to Identify Customer Needs

• What a Customer Needs Analysis Is
• How to Solve for Your Customers' Needs

Types of Customer Service

What are customer needs.

A customer need is a motive that prompts a customer to buy a product or service. Ultimately, the need is the driver of the customer's purchase decision. Companies often look at the customer need as an opportunity to resolve or contribute surplus value back to the original motive.

An example of customer need takes place every day around 12:00 p.m. This is when people begin to experience hunger (need) and decide to purchase lunch. The type of food, the location of the restaurant, and the amount of time the service will take are all factors to how individuals decide to satisfy the need.

Customer-centric companies know that solving for customer needs and exceeding expectations along the way is how to drive healthy business growth and foster good relationships with the people your company serves.

Although customer centricity is not a new concept, the right steps to achieve a customer service focus are still hazy.

Why are customer needs important?

Anticipating customer needs will help you cater to customers before they feel the need to put in a request for a new feature, product, or solution for you. If companies can begin to make changes before their customers' needs aren't fulfilled, this can ultimately lead to growth, innovation, and retention.

Creating a customer-centric company that truly listens to customer needs can be daunting, and there's a steep learning curve if you haven't paid close attention to customers before.

Below are the most common types of customer needs — most of which work in tandem with one another to drive a purchasing decision.

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The types of product needs can be split into two categories: product and service.

Product Needs

1. functionality.

Customers need your product or service to function the way they need in order to solve their problem or desire.

Customers have unique budgets with which they can purchase a product or service.

3. Convenience

Your product or service needs to be a convenient solution to the function your customers are trying to meet.

4. Experience

The experience using your product or service needs to be easy — or at least clear — so as not to create more work for your customers.

Along the lines of experience, the product or service needs a slick design to make it relatively easy and intuitive to use.

6. Reliability

The product or service needs to reliably function as advertised every time the customer wants to use it.

7. Performance

The product or service needs to perform correctly so the customer can achieve their goals.

8. Efficiency

The product or service needs to be efficient for the customer by streamlining an otherwise time-consuming process.

9. Compatibility

The product or service needs to be compatible with other products your customer is already using.

Service Needs

10. empathy.

When your customers get in touch with customer service, they want empathy and understanding from the people assisting them.

11. Fairness

From pricing to terms of service to contract length, customers expect fairness from a company.

12. Transparency

Customers expect transparency from a company they're doing business with. Service outages, pricing changes, and things breaking happen, and customers deserve openness from the businesses they give money to.

13. Control

Customers need to feel like they're in control of the business interaction from start to finish and beyond, and customer empowerment shouldn't end with the sale. Make it easy for them to return products, change subscriptions, adjust terms, etc.

14. Options

Customers need options when they're getting ready to make a purchase from a company. Offer a variety of product, subscription, and payment options to provide that freedom of choice.

15. Information

Customers need information, from the moment they start interacting with your brand to days and months after making a purchase. Businesses should invest in educational blog content, instructional knowledge base content, and regular communication so customers have the information they need to successfully use a product or service.

16. Accessibility

Customers need to be able to access your service and support teams. This means providing multiple channels for customer service. We'll talk a little more about these options later.

With so many types of customer needs, how do you understand which ones apply to your customers specifically? Next, we'll dig into how to identify them.

• Use Existing Data
• Solicit Customer Feedback
• Customer Journey Mapping
• Input from Service Team
• Study Competitors
• Social Media Listening
• Keyword Research

"You've got to start with the customer experience and work backwards to the technology," Steve Jobs notably stated . "You cannot start with the technology and try to figure out where you are going to sell it."

Whether you sell technology or some other product or service, the underlying message he's saying here rings true.

This means understanding where they're coming from when they've chosen to make a purchase, what expectations they're bringing to the table, and what bumps they'll encounter along the way.

Identifying Customer Needs

You can gain more knowledge about what your customers want using a few different strategies.

1. Use Existing Data

Most likely you have some customer data already, especially if you’re using a CRM. This is the best place to start your search. Are there pain points or issues you can glean from just looking at this customer data? Are there any patterns you can identify? Taking note of who your current customers are and their past interactions with your brand to get a better idea of where customers are coming from and if you’re meeting their needs.

2. Solicit Customer Feedback

When trying to identify consumer needs, go straight to the source. This can be done using surveys that live on your site, or sent via email. Additionally you could conduct focus groups to gain more in depth insight to customer needs and their overall experience with your product or service.

3. Customer Journey Mapping

To better understand and assist customers, you’ll need to first know what phase of the customer journey they are in and what they’re looking for. This is where customer journey mapping can help, giving a visual representation of how customers interact with your brand. This exercise will help you create a more proactive customer service approach and improve retention.

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4. Input from Service Team

In addition to getting customer feedback, it’s important to consult those who work with them most — your service team. They’ll often have insights you may not be privy to and can help you anticipate the needs of your customers as well as solve existing issues. They’ll also be able to explain how customers are currently using your product or service and can identify any hiccups in the process.

5. Study Competitors

It’s common to study competitors when conducting market research, but you should also consider them when identifying customer needs. There might be overlap in your target audience, meaning your brand could benefit from reviewing any issues competitors are experiencing and gain insight on how they went about fixing it. You might find that some of their strategies would be worth implementing at your company, or discover gaps in service that your company can fill.

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6. Use Social Media

Chances are, your customers use a variety of social media platforms in their day to day. Take advantage of that by using it as a way to listen in on what customers are saying about your products and your competitors. Are people asking questions under your posts? What sorts of comments are they making? Are they giving praise, asking for assistance, or do they want new features? Using a social media monitoring tool like Hootsuite will help you identify trends, mentions, and hashtags relevant to your brand to better inform your strategy.

7. Keyword Research

People turn to the internet for most things, so Google is an excellent resource for figuring out customer needs. How are customers finding your brand online and what are they typing into the search box to find it? Doing keyword research can give you a broad overview of what your customers need based on search data. Keyword research will also help you optimize your site for search engines by aligning the content of your site with what customers are searching for.

If you design your process with these things in mind, you'll be able to uncover consumer needs at any stage of their lifecycle. You can take a deeper dive into their needs by conducting a customer needs analysis.

What is a customer needs analysis?

A customer needs analysis is used in product development and branding to provide an in-depth analysis of the customer to ensure that the product or message offers the benefits, attributes, and features needed to provide the customer with value.

To conduct a customer needs analysis successfully, you need to do the following:

1. Customer Needs Analysis Survey

The customer needs analysis is typically conducted by running surveys that help companies figure out their position in their respective competitive markets and how they stack up in terms of meeting their target customers' needs.

The survey should primarily ask questions about your brand and competitors, as well as customers' product awareness and brand attitudes in general.

Questions can include:

• Questions about positive and negative word associations with your brand
• Questions asking customers to group your brand in with similar and/or competing brands
• Questions comparing and sorting brands according to their preferences for usage

You can learn more about which questions to ask in this survey in our guide and this guide from dummies.

2. Means-End Analysis

Once you've conducted the customer needs analysis survey, you can use the answers to get a fuller picture of the reasons why your customers purchase from you, and what makes your product or service stand apart from your competitors.

A means-end analysis analyzes those answers to determine the primary reasons why a customer would buy your product. Those buyer reasons can be divided into three main groups:

1. Features: A customer buys a product or service because of the features included in the purchase. If the customer were buying a computer, for example, they might buy it because it's smaller and more lightweight than other options.

2. Benefits: A customer buys a product or service because of a benefit, real or perceived, they believe it will offer them. The customer might also buy the computer because it syncs easily with their other devices wirelessly.

3. Values: A customer buys a product or service for unique, individual values, real or perceived, they believe it will help them fulfill. The customer might think the computer will help them to be more creative or artistic and unlock other personal or professional artistic opportunities.

As you might imagine, these reasons for purchasing something can vary from customer to customer, so it's important to conduct these customer surveys, collect the answers, and group them into these three categories. From there, you can identify which of those motivating factors you're solving for, and which you can improve on to make your product or service even more competitive in the market.

3. Customer Feedback

If you want to know what your customers think about the experience of working with your company, ask them. Interviewing your customers and members of your service team can contribute to a customer needs analysis and improvements to your customer lifecycle .

As you gather data from your customer needs analysis, it's important to identify the points of friction that your customers experience and the moments in their journey that provide unexpected delight.

• What can your company change?
• What are the elements that you can build from?
• What parts of the experience needs to be worked on?

Asking these questions can lead you to valuable insights as you work to solve for your customers.

How to Solve for Customer Needs

The first step to solving for your customers is to put yourself in their shoes: If you were the customer when we purchase your goods, use your technology, or sign up for your services, what would prevent you from achieving ultimate value?

Your customer needs analysis is a good starting point for getting in the mind of your customer, especially when it comes to identifying common pain points. From there, you can build a proactive plan to implement your customer-first values throughout the customer lifecycle. Here are some tips for doing so:

1. Offer consistent company-wide messaging.

Too often customers get caught up in the "he said, she said" game of being told a product can do one thing from sales and another from support and product. Ultimately, customers become confused and are left with the perception that the company is disorganized.

Consistent internal communications across all departments is one of the best steps toward a customer-focused mindset. If the entire company understands its goals, values, product, and service capabilities, then the messages will easily translate to meet the customers’ needs.

To get everyone on the same page, organize sales and customer service meetings, send out new product emails, provide robust new employee onboarding, and require quarterly training and seminars or staff-hosted webinars to share important projects.

2. Provide instructions for easy adoption.

Customers purchase a product because they believe it will meet their needs and solve their problem. However, adoption setup stages are not always clear. If best practices aren't specified at the start and they don't see value right away, it's an uphill battle to gain back their trust and undo bad habits.

A well-thought-out post-purchase strategy will enable your products or services to be usable and useful.

One way companies gain their customers' attention is providing in-product and email walkthroughs and instructions as soon as the customer receives a payment confirmation. This limits the confusion, technical questions, and distractions from the immediate post-purchase euphoria.

A customer education guide or knowledge base is essential to deliver proper customer adoption and avoid the ‘floundering effect' when customers are stuck. Other companies provide new customer onboarding services, host live demos and webinars and include events and promotions in their email signatures .

3. Build feedback loops into every stage of the process.

Lean into customer complaints and suggestions, and it will change the way you operate your business. Criticism often has negative connotations. However, if you flip problems to opportunities you can easily improve your business to fit the customer's needs.

Just as you solicited customer feedback in your needs analysis, you can keep a pulse on how your customers feel at scale with customer satisfaction scores , customer surveys , exploration customer interviews, social media polls, or personal customer feedback emails.

If you're able to incorporate this into a repeatable process, you'll never be in the dark about the state of the customer experience in your organization, and you'll be enabled to continue improving it.

Take customer suggestions seriously and act on those recommendations to improve design, product, and system glitches. Most customer support success metrics are paramount to the customer experience and this mentality should trickle down to every aspect of the organization.

4. Nurture customer relationships.

When a customer buys a product or service, they want to use it right away and fulfill their immediate need. Whether they are delighted within the first hour, week, or a month, it's important to constantly think about their future needs.

Proactive relationship-building is essential to prevent customers from losing their post-purchase excitement and ultimately churning. If customers stop hearing from you and you don't hear from them this can be a bad sign that they are about to churn .

Companies solve for customer relationships with a combination of customer service structure and communication strategies. Solve for the long-term customer need and create a customer service team dedicated to check-ins and customer retention , show appreciation with rewards and gifts to loyal customers, host local events, highlight employees that go above and beyond and communicate product updates and new features.

5. Solve for the right customer needs.

Excluding customers from your cohort of business can seem counterintuitive to solve for your customers' needs. However, understanding whose needs you can fulfill and whose you cannot is a major step toward solving the right problems. All customers' needs can't be treated equally and a company must recognize which problems they can solve and ones that aren't aligned with their vision.

To find the right customer priorities, create buyer personas and uncover consumer trends, look at customer's long-term retention patterns, establish a clear company vision, provide premier customer service to valuable customers and communicate with your ideal customer in their preferred social media space to capture questions, comments, and suggestions.

Successful startups, brick-and-mortar shops, and Fortune 500 companies solve and prioritize customer needs to stay ahead and establish industry trends.

6. Provide great customer service.

If a problem arises, your customers want to get it resolved and feel heard in the process. This starts with being able to meet their needs with empathy, but along the way, the process for obtaining support should be easy and on a channel that's convenient for them.

Some customer needs are time-sensitive and require immediate interaction via phone or chat. Others are less critical and can be resolved at a more casual pace. Let's break down the types of customer service and how each optimizes your team's ability to fulfill customer needs.

• Social Media
• Call Back Service
• Customer Self-Service
• Interactive Virtual Assistant
• Integrated Customer Service

Email is one of the most fundamental forms of customer service. It allows customers to fully describe their problems, and it automatically records the conversation into a resourceful thread. Customers only have to explain their issue once, while reps can reference important case details without having to request additional information.

Email is best used with customer needs that don't need to be resolved right away. Customers can ask their question, go back to work, and return to the case once the service rep has found a solution. Unlike phones or chat, they don't have to wait idly while a rep finds them an answer.

One limitation of email is the potential lack of clarity. Some customers have trouble describing their problem, and some service reps struggle to explain solutions. This creates time-consuming roadblocks when the issue is overly complex. To be safe, use email for simple problems that require a brief explanation or solution.

When customers have problems that need to be answered immediately, phones are the best medium to use. Phones connect customers directly to reps and create a human interaction between the customer and the business. Both parties hear each other's tone and can gauge the severity of the situation. This human element is a major factor in creating delightful customer experiences.

Phones come in handy most when there's a frustrated or angry customer. These customers are most likely to churn and require your team to provide a personalized solution. Your team can use soft communication skills to appease the customer and prevent costly escalations. These responses appear more genuine on the phone because reps have less time to formulate an answer.

The most common flaw with phone support is the wait time. Strive for shorter wait times as 33% of customers are frustrated by being waiting on hold. Customers hate being put on hold, and it's a determining factor for customer churn .

Chat is one of the most flexible customer service channels. It can solve a high volume of simple problems or provide detailed support for complex ones. Businesses continue to adopt chat because of its versatility as well as the improvement in efficiency it provides for customer service reps.

When it comes to solving customer needs, chat can be used to solve almost any problem. Simple and common questions can be answered with chatbots that automate the customer service process. For more advanced roadblocks, reps can integrate customer service tools into their chat software to help them diagnose and resolve issues.

The limitations of chat are similar to those of email. However, since the interaction is live, any lack of clarity between the two parties can drastically impact troubleshooting. As a former chat rep, there were plenty of times where I struggled to get on the same page as my customer. Even though we resolved the issue, that miscommunication negatively impacted the customer's experience.

4. Social Media

Social media is a relatively new customer service channel. While it's been around for over a decade, businesses are now beginning to adopt it as a viable service option. That's because social media lets customers immediately report an issue. And since that report is public, customer service teams are more motivated to resolve the customer's problem.

Social media is an excellent channel for mass communication, which is particularly useful during a business crisis. When a crisis occurs, your customers' product and service needs become the primary concern of your organization. Social media is an effective tool for communicating with your customers in bulk. With a social media crisis management plan , your team can continue to fulfill customer needs during critical situations.

Social media is different from other types of customer service because it empowers the customer the most. Customers tend to have more urgent needs and expect instant responses from your accounts. While this type of service presents an enormous opportunity, it also places tremendous pressure on your reps to fulfill customer demand. Be sure your team is equipped with proper social media management tools before you offer routine support.

5. In Person

As the oldest form of customer service, you're probably familiar with working in person with customers. Brands who have brick-and-mortar stores must offer this service for customers living near their locations. This fulfills a convenience need as customers can purchase and return a product without having to ship it back to the company through an online service.

In-person customer service is great for businesses with strong service personnel. Without dedicated employees, your customer service team won't be able to fulfill your customers' product or service needs. Successful teams have reps who are determined to provide above-and-beyond customer service .

5. Call Back Service

Sometimes it's not about how quickly your business can provide a solution, but rather how efficient you can make the service experience. For example, say a customer has a simple question about pricing that should only take a few minutes to answer, but their expected wait time for phone service is over 15 minutes. Rather than making this customer spend more time on hold than actually speaking with a representative, you can offer a call back service where your team reaches out to the customer as soon as the next rep is available.

Another situation where this type of service comes in handy is with text-based mediums like email and live chat. In some cases, these channels aren't ideal for troubleshooting and can lead to friction if the case isn't transferred to another platform. Having a call back service available allows customers to schedule time to speak directly with reps, particularly when they feel like they aren't gaining progress on their case. Instead of having to create a completely new support ticket , call backs seamlessly transition the conversation to a more effective channel.

6. Customer Self-Service

Self-service teaches your customers how to solve problems independently from your support team. Rather than calling or emailing your business whenever they need assistance, customers can navigate to your knowledge base and access resources that help them troubleshoot issues on their own. Not only does this get customers faster solutions, but it also saves them from having to open a ticket with your team. This makes the experience feel much less like a formal support case and more like a quick roadblock that your customers can handle on their own.

Self-service is advantageous for your team's productivity as well. If more customers use your knowledge base, less will call or email your team for help. This will free your reps up more to focus on complex service cases that require a longer time commitment.

7. Interactive Virtual Assistant

Chatbots are no longer novelties that customer service teams use to show off their technological prowess. Now, they're integral pieces of support strategies as they act more like interactive virtual assistants than simple, question-and-answer bots. Today's chatbots are powered by innovative AI technology that interprets customer needs and can walk people through step-by-step solutions.

Image Source

The image above shows a perfect example of how useful today's virtual assistants can be. In this situation, the customer is learning how to use their new car — a product that typically offers a lot of unique features and an extensive operator's manual. To help new users navigate the car's basic features, this brand offers an augmented reality tour hosted by a virtual assistant. The user simply has to scroll their camera over different parts of the car and the chatbot will tell them everything they need to know.

Interactive features like this show that you're investing in more than just product development. You're thinking about how you'll support customers and what services you can adopt that will make their lives easier. Customers pay attention to this type of customer service and it can often be a reason why many will return to your business.

8. Integrated Customer Service

Integrated service can be described as all of the little things your brand does to remove pain points from the customer experience. Some of this is proactive, like sending customers an automated newsletter that informs them about major updates or announcements, and some of it is reactive, like pinging a customer success manager whenever someone submits negative feedback to your team.

Even though these pain points may seem small, they add up over time if left unchecked. The best way to remove most of these points of friction is to adopt automation as you grow your customer base. Automated customer service tools like ticketing systems, help desks, and workflows help your team keep pace with increasing customer demand. This technology lets you maintain that same level of personalized customer service even as more people reach out to your business for support.

There's no "best" type of customer service. Each medium complements the other and optimizes your overall performance when used together. This creates an omni-channel experience for your customers which will keep them coming back for more.

What do customers want from a typical customer service situation?

It’s important to note that customer service is reactive. That said, there are a few things to keep in mind to ensure you’re providing excellent customer service.

• Listen : While it’s normal to want to quickly get customers in and out of your service queue, it’s important to actually listen to what their issue is before giving them a solution. They may have a more nuanced issue that a boilerplate response can’t provide. There’s nothing more frustrating than providing customers with a canned response that doesn’t actually solve their issue. Automation is great, but just ensure that it is helping customers.
• Don’t Make Customers Repeat Information: No one wants to answer or submit the same questions repeatedly . Not only is it inconvenient, it shows the customer that no one is listening or paying attention. If you have a ticketing system, review the customer’s history or profile to get familiar with their situation before responding.
• Be Pleasant: Tone is much harder to convey over written communication and can unintentionally come across as cold. To convey some warmth you could introduce phrases like “I’d be happy to help with that,” or “Hope your day/week is going well.”
• Be Responsive : Not only do customers want their problem solved, but they prefer it’s resolved quickly. If you can’t solve their issue easily when they first contact you, set expectations around when it will be resolved (24hrs, 2 business days?) and keep them in the loop. Don’t ghost them.

What Customers Want

• Simple Solutions
• Personalization
• Transparency
• Accessibility

Each customer has their own unique needs, but there are a few that are universal.

1. Simple Solutions

While your product or service may run using a complex set of algorithms and procedures, customers don’t need to know that. They simply want a solution that resolves their issue with as little fuss as possible. Keep your messaging simple and focus on how your brand will solve the customer’s problem.

2. Personalization

Treat your customers like people and not numbers on a spreadsheet. Zendesk found that 54% of customers expect all experiences to be personalized. Use their name in communications and tailor your messaging to the buyer persona they most closely align with. Adding a personal touch when it comes to marketing lets customers know that their needs are at the forefront of your brand’s mission.

Does your product or service outperform the competition or provide a more cost effective solution for consumers? If so, drive that point home in your messaging. Explain how and why they should choose your product or service over others on the market. How will customers benefit when they choose your brand?

4. Transparency

One of the easiest ways to build trust with consumers is to be transparent. No one wants to feel duped by disingenuous, bait-and-switch advertising. Be honest about your product or service’s capabilities and pricing whenever possible.

5. Accessibility

While it is always encouraged to empower customers to help themselves with features like a knowledge base, getting extra assistance when they need it shouldn’t be difficult. Whether it’s phone, email, or chat support, it’s important to be responsive to consumer needs. At the beginning of this article we identified accessibility as one of the most common types of customer needs. If your team is unresponsive to their needs, customers will trade your brand in for a competitor that fills the gap.

Understanding Customer Needs and Expectations

One of the best things you can do is continue learning based on the types of issues that come up so that you can proactively address consumer needs and continue improving on the experience.

While the process requires quite a bit of legwork, the results will be instrumental in the success of your brand. Once you understand customer needs and expectations, you can work towards delighting them with your product.

Editor's note: This post was originally published in September 2020 and has been updated for comprehensiveness.

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How to Write a Customer Analysis Section for Your Business Plan

Free Customer Analysis Template

• July 12, 2024

A customer contributes significantly to building a winning brand.

Understanding your target consumer, their needs, the problems they face, and the way they behave assists you in creating products and services that can satisfy your customer needs.

Customer analysis is a quintessential part of your business plan. Writing it accurately will help you make informed decisions for other aspects of business planning, i.e. product development and business strategies.

So let’s get started. This blog post describes the process of creating customer analysis in a business plan and guides you with a customer persona example.

What Is Customer Analysis?

Customer analysis is an important section of your business plan offering a comprehensive and in-depth understanding of your potential customer. It is a study of their behavioral, psychological, and demographic patterns to help you make sound business decisions.

Such analysis assists in developing products and services addressing the pain points of your customers and in determining your pricing, marketing, and customer retention strategies.

Why conduct a customer analysis?

A thorough and insightful customer analysis offers a plentitude of benefits. Here are a few you should know of:

• Helps optimize product development by offering insights into customer behavior, needs, and pain points.
• Helps gain a competitive advantage by identifying the pain points that are unaddressed by competitors.
• Helps tailor your marketing efforts to cater to specific customer segments.
• Increases customer retention by giving you a thorough insight into what the customer needs and what drives their decision.

If you think of it, customer analysis forms the basis for designing your products and services, devising your marketing and sales strategies, determining your pricing point, and driving your business growth.

How to Write a Customer Analysis Section

Writing a customer analysis includes extensive research and collecting data from various sources. This data consists of qualitative and quantitative aspects which help you write an accurate customer analysis for your business plan.

Let’s now understand a step-by-step process to write your customer analysis.

1. Identify your customers

The first step of customer analysis is to identify your potential customers and collect information about their special characteristics. Such information comes in handy when you want your product and marketing strategies to align with your customers’ needs.

However, what details should you collect and how should you segment it? Well, segmenting in the following manner can help you get a headstart.

• Demographic: Age, gender, income
• Geographic: Location, type of area (Rural, suburban, urban)
• Psychographic: Values, interests, beliefs, personality, lifestyle, social class
• Technographic: Type of technology the buyer is using; tech-savviness
• Behavioral: Habits, frequent actions, buying patterns
• Industry (For B2B): Based on the industry a company belongs to.
• Business size (For B2B): Size of the company

Customer database can help capture the above data for existing businesses. However, for additional details, you can retort to surveys and forums.

If you are a startup, conducting an audience analysis might seem impossible as you don’t have an existing customer base. Fortunately, there are numerous ways through which you can study your potential customers.

A few of them are:

• Identifying who would benefit from your product/service
• Analyzing your competitors to understand their target customers
• Using social media to prompt potential buyers to answer questionnaires

2. Define the needs of your Customers

Now that you have identified your customers, the next step is to understand and specify their needs and challenges. This is the step where you need to go hands-on with your research.

Getting to know your customers’ needs helps you determine whether or not your product or service hits the mark.

You can adopt one of these approaches to understand the needs of your customers:

Engage directly with potential Customers

A very reliable way to get to know your customers is to simply engage with them, either in person or on a call. You can reach out to your customers using one of the following ways:

• One-on-one interviews
• Focus groups
• Beta testing (invite users to test your products).

These techniques can help you collect adequate data for your analysis.

However, before approaching your customers, set up a systematic survey that can get you structured data for analysis. To ensure that your questionnaire isn’t just covering surface-level information but a deep interrogation of customers’ problems, use the technique of five whys .

Collect data from your customer support

Customer support is the place where you can find raw and unfiltered feedback given by your customers. Analyzing this data helps you understand the pain points of your customers.

You can further gather direct customer feedback by contacting the customers who had issues with your products. This will help you understand the pain points and gaps in your products more vividly.

Run surveys and mention statistics

Talking to your customers helps you get qualitative information that can be used to alter your product or services according to your customers. The next part is to attain quantitative information, in other words, presenting numbers to support the previous data.

Conducting surveys is one of the commonly used methods for quantifying information. You can conduct in-app surveys, post-purchase surveys, or link surveys in email and apps, etc.

You can also collect statistical data to support your conclusions from the interviews. These include stating studies related to customer choices, results from popular surveys, etc.

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3. Create a Customer Persona

It is now time to present your collected data using a customer persona.

A customer persona represents a segment of customers with similar traits. It outlines the psychological and demographic features of your potential customer group and thereby assists you in making important strategic decisions.

Consider it as a tool that will make your data analysis process easier and more efficient.

Now, you can either use customer persona templates or an AI tool to generate your buyer’s persona. However, to get a more thorough insight check how a customer profile looks.

Customer Persona Example

This is a customer persona example of an internet service provider(ISP) to help you get a more practical overview.

• About: A lot of customers remain at home and have a minimal and easy-going lifestyle. They need high-speed, interruption-free internet access.
• Demographics: Age is between 30 and 40, has a laid-back lifestyle, lives in suburban areas, and the income range is between $10,000 to $40,000.
• Professional role: Shop owners, employees, freelancers, etc.
• Identifiers/Personality traits: Introverts, like routines, make schedules, prefer online shopping, and stick with the companies they trust.
• Goals: Wants easily available service, and 24×7 customer support, prefers self-service technologies and chatbots over interacting with representatives.
• Challenges: Fluctuating internet connection while working or consuming media. Not enough signal coverage.

4. Explain the product alignment to the Customer’s Needs

You’ve gathered info and created customer personas. The final step is to explain how your product or service caters to the needs of your customers.

Here, you specify the solution you offer to tackle the challenges faced by your customers.

Mention the USPs of your product and its features, and clarify how they benefit the customer. Also, mention how your offerings make the customers’ lives better.

Continuing the previous example of an ISP provider, this company can show how its high-speed Internet plans cater to the needs of individual working professionals. They can focus on aspects like customizable plans, cost-effectiveness, and coverage in remote areas to attract users.

And there you have it—a guide to writing your customer analysis. Just ensure that you maintain accuracy while making assumptions and predictions to make this section useful for making further decisions.

Build a solid business foundation with customer analysis

Understanding you r customers inside out assists you in making profitable decisions for your business. But remember, it is an ever-evolving and continuous process. You need to analyze your customers as often as possible to stay updated about their ever-changing needs.

After all, understanding what your customers need and what they prefer will help you devise strategies that ensure maximum customer satisfaction.

Now quickly create customer profiles for your business with Upmetrics’s AI SWOT analysis generator. However, once you do that, use this tool to streamline your entire business planning process.

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Frequently Asked Questions

What key components should be included in customer analysis.

Here are the key components of a sound customer analysis:

• Market segmentation
• Customer behavior analysis
• Customer profiling
• Customer journey mapping
• Trend analysis and future customer behavior

How can I gather data for my customer analysis?

Here are a few ways for you to gather data for your customer analysis:

• Gather customer feedback using surveys, forums, and questionnaires.
• Use secondary methods to gather industrial data, competitors’ data, and data from publications.
• Use the collected data till data (i.e. social media analytics, customer support data) to form your analysis.

Can customer analysis help in forecasting future trends?

Absolutely, yes. A detailed customer analysis helps you to understand the emerging shifts and patterns in consumer behavior, thereby helping you optimize your product offerings and marketing strategies.

About the Author

Upmetrics Team

Upmetrics is the #1 business planning software that helps entrepreneurs and business owners create investment-ready business plans using AI. We regularly share business planning insights on our blog. Check out the Upmetrics blog for such interesting reads. Read more

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How to Write the Customer Analysis Section of Your Business Plan

Written by Dave Lavinsky

What is a Customer Analysis?

The customer analysis section which incorporates the essential steps of writing a business plan step-by-step is a key component of your business plan and assesses the customer segments your company serves. The objective of the customer analysis is to justify your market choice, identify differentiators, and prioritize the segments you are targeting.

Components of a Customer Analysis

A complete customer analysis contains 3 primary sections:

• Identify your target customers
• Convey the needs of these customers
• Show how your products and/or services satisfy these needs

Download our Ultimate Business Plan Template here

Why Conduct a Customer Analysis?

A thorough customer analysis provides the following benefits:

• Supports your market choice and helps you avoid entering too broad a market
• Helps you focus on serving current customers rather than trying to find new ones
• Enables you to determine which segments to prioritize and how much effort to put into each one
• Helps you craft a strategic marketing plan and platform to reach these customer segments

How to Write Your Customer Analysis

The first step of the customer analysis is to define exactly which customers the company is serving. This requires specificity. It is not adequate to say the company is targeting small businesses, for example, because there are several million of these types of customers. Rather, an expert business plan writer must identify precisely the customers it is serving, such as small businesses with 10 to 50 employees based in large metropolitan cities on the West Coast.

When defining your target market, be sure to identify the following:

• The market segment you are choosing to serve (i.e., age range, annual income, etc.)
• The geographic location of these customers (i.e., city, region, state)
• What is the average revenues/income of these customers?

Once the plan has clearly identified and defined the company’s target customers and the customer demographics, it is necessary to determine the size of your target market: How many potential customers fit the given definition and is this customer base growing or decreasing?

Next, the business plan must detail these customers’ needs. Conveying customer needs could take the form of past actions (X% have purchased a similar product in the past), future projections (when interviewed, X% said that they would purchase product/service Y), and/or implications (because X% use a product/service which our product/service enhances/replaces, then X% need our product/service).

Prioritize the needs of your target customer according to how critical they are, and include a description of each in your customer analysis. Be sure to answer questions such as: 

• What pain points do these customers have? How is their current situation lacking? 
• What will your product/service do to help solve these problems?

The business plan customer analysis must also detail the drivers of customer decision-making. Sample questions to answer include:

• Do the customers find price to be more important than the quality of the product or service?
• Are customers looking for the highest level of reliability, or will they have their own support and just seek a basic level of service?
• Why will customers purchase your product and/or service rather than look for cheaper alternatives?

Prioritize the benefits of your products and services according to how much difference they make for customers and include a description of each in your customer analysis. Be sure to answer questions such as:

• What does your product do? How is it unique or better than other similar products?
• What type of customer could benefit the most from this feature/benefit and why?

Be sure to also show an understanding of the actual decision-making process. Examples of questions to be answered here include:

• Will the customer consult others in their organization/family before making a decision?
• Will the customer seek multiple bids?
• Will the product/service require significant operational changes (e.g., will the customer have to invest time to learn new technologies, and will the product/service cause other members within the organization to lose their jobs? etc.)

Finally, identify each segment you are targeting and how much effort you will put into reaching them. Be sure to answer questions such as:

• How many customers are in each segment and how much revenue will they generate?
• What percentage of total industry sales does this represent?
• What market potential did we estimate for each segment and how does that compare with actual sales? Include the number of leads converted and average deal size.

Example Customer Analysis Template for a Candle Making Company

The needs of this customer segment are that they are looking for high-quality candles that are made with all-natural ingredients. The benefits of their product that are most important to them are that the candles are vegan, eco-friendly, and made with essential oils. Drivers of customer purchase decisions include quality, price, and unique offerings. The company’s target market size is 750,000 people which represent a significant portion of the candle industry. They will put effort into reaching these customers through online advertising, social media posts, and word-of-mouth.

It is essential to truly understand customers to develop a successful business and marketing plan. That’s why including a customer analysis in your business plan is so crucial. Likewise, sophisticated investors require comprehensive profiles of a company’s target customers. By spending the time researching and analyzing customers in your target market, you will develop both enhance your business strategy and funding success.

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Other Resources for Writing Your Business Plan

How to Write a Great Business Plan Executive Summary How to Expertly Write the Company Description in Your Business Plan How to Write the Market Analysis Section of a Business Plan Completing the Competitive Analysis Section of Your Business Plan The Management Team Section of Your Business Plan Financial Assumptions and Your Business Plan How to Create Financial Projections for Your Business Plan Best Business Plan Software Everything You Need to Know about the Business Plan Appendix Business Plan Conclusion: Summary & Recap

Other Helpful Business Plan Articles & Templates

How to Write a Customer Analysis

Elon Glucklich

9 min. read

Updated October 27, 2023

You’ve been hard at work conducting market research into your potential customers— developing a deep understanding of industry dynamics and the potential size of your market .

Hopefully, you’ve also spent time interviewing potential customers—learning about their behaviors and needs, and digging into publicly available data to support your research. 

But you still need to document these findings in a way that gives you an actionable road map to grow your customer base.

This is where a well-written customer analysis can be extremely useful. 

Including a customer analysis in your business plan will boost your marketing efforts by identifying your target customers , their needs, and how your product or service addresses these needs.

• Customer analysis vs market analysis

A market analysis is a broader exploration of the market and potential customers.  A customer analysis zooms in on the specific behavioral or demographic characteristics of individual customer segments in your target market.

The market analysis includes details like the number of customers you hope to serve and the types of competitors you must contend with. 

By contrast, the customer analysis looks at the specific attributes of your potential customers – their personal habits, values, beliefs, and other characteristics that might affect their purchasing decisions.

• What should a customer analysis include?

Demographics

Some of the earliest information you’ve collected probably about your customers includes:

• Gender/ethnicity
• Income level
• Geographic area
• Education level

Example: Suppose you own a business that creates an environmentally friendly cleaning product . Your customer demographics might include: 

• Age range: 30-60 (old enough to have used a variety of cleaning products in their homes)
• Income: Above average (more likely to buy a higher-priced alternative to discount cleaning products)
• Education level: college degree or equivalent (high enough education level to understand the product’s societal benefits).
• Employment: full-time employee

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Values and beliefs

This section captures the psychological and emotional factors that influence customer behavior. 

• Cultural backgrounds
• Ethical values

Let’s return to the environmentally friendly cleaning product example. You are more likely to attract customers who prioritize sustainability and are willing to pay more for products that match their values.

Buying behaviors

Analyzing buying behaviors involves understanding how, when, and why customers purchase. These behaviors impact:

• The channels customers prefer for shopping
• Price sensitivity
• Factors that trigger a buying decision

Example: Suppose you’re running an environmentally friendly cleaning products business. In that case, you might discover that most of your customers buy their cleaning products from a magazine for homeowners or that they typically buy multiple cleaning products simultaneously. 

Technology use

Nearly three-quarters of small businesses have a website . Even if your business doesn’t have one, your customers are, without a doubt, browsing the internet. 

So it’s critical to understand how your target customers interact with technology and to set up an online presence for your business if you aren’t already active. 

Key questions about customers’ technology habits include:

• Are they active on social media? If so, which platforms? 
• Do they prefer online shopping or in-store visits? 
• Are they more likely to respond to email marketing, blog content, or social media campaigns?

Example: Let’s say you discover that significantly more of your target customers visit websites like yours on a smartphone than a desktop. In that case, it would be important to optimize your website for mobile viewing or develop a user-friendly app . 

• 5 steps to write a customer analysis for your business plan

Now that we understand the individual pieces of a customer analysis, we’ll examine how to write a customer analysis for your business plan .

1. Use existing data

Regardless of your country, there are likely numerous sources of data published by government agencies, private industry, or educational institutions that could be relevant to your business.

Finding existing data is the best starting point for your customer analysis. It’s easy to find, it’s regularly updated, and it’s immensely valuable for providing context for your research. 

For instance, if you determine that your target demographic is people between 30 and 60, Census data can help you determine the number of residents in your selling area within that age range.

We’ll look at some examples of publicly available data for businesses operating in the United States.

U.S. Census Bureau

The Census Bureau publishes official population counts for the country, states, and local communities. Demographic characteristics like age, gender, and race sort the data. Census data also includes useful data for businesses, such as the total number of businesses, employment counts, and average incomes in local communities across the country.

Bureau of Labor Statistics

Data from the Bureau of Labor Statistics tracks changes in the U.S. workforce and the overall state of the labor market. The BLS publishes the Consumer Price Index , tracks consumer spending, and gauges overall consumer confidence. 

Examining this data can give you insights into the willingness of consumers to pay for your product or service.

Bureau of Economic Analysis

The Bureau of Economic Analysis takes a broader look at the performance of the U.S. Economy. You can use BEA data to find personal income and corporate profit data by industry. 

If you make a product or service used by other businesses, these figures can help you understand the financial health of the broad customer base you’re targeting.

Federal Reserve

The Federal Reserve publishes various financial reports, such as consumer credit and spending statistics , as well as the health of banks. 

This data can give you important context about the financial health of your customers, which could help you determine pricing strategies—like whether you should offer flexible payment plans.

Industry associations

There are thousands of private sector industry associations in the United States alone. These organizations not only advocate for the businesses in their field. They provide members with a wealth of helpful information, such as “state of the industry” reports and business surveys. 

You should leverage customer data from these peer organizations as a business owner.

Academic institutions

Many university business schools make their research publicly available online. Scholars make a career out of researching market and industry trends, and much of their work is available through online searches. 

2. Review customer feedback

One of the most direct ways to show an understanding of your customers in your analysis is by reviewing their feedback.

If you’re a new business without direct customer feedback yet, that’s OK. Instead, look around at what people are saying about your competitors . You might find common complaints from customers in your industry about the products available. 

You can then reach out and interview potential customers to better understand their needs.

If you have an existing business, there may already be reviews of your company on Google or social media sites like LinkedIn. Doing so can help you determine if customers are struggling to use your product or have suggestions for improvements. 

Read as many reviews as possible, and use them to show an understanding of your customers’ needs in your analysis.

3. Use third-party data

So far, we’ve discussed free, publicly available sources to find information about your customers. 

But for those willing to dig deeper, third-party data providers can help you uncover information that’s truly unique to your business and your customers.

Google Analytics

Third-party data providers like Google track the activity of users across numerous websites. Google has its own tool, Google Analytics , which makes that information available on your company’s website.

This data is a gold mine for understanding your customers. Besides giving you a demographic and geographic breakdown of your visitors, it can tell if they view your site on a desktop or smartphone, what pages they’re clicking, navigating around your site, and much more.

For new business owners, Google Trends is a powerful tool to discover what people are searching for online. 

For the environmentally friendly cleaning products business we’ve used as an example—you could see how many people are searching on Google for information about products like floor cleaners or dishwasher detergents.

Social media metrics

If your business uses social media, there are plenty of tools to help you understand your audience on these platforms. 

Many social media companies make their data available to businesses at a cost. For instance, the Facebook Audience Insights platform gives you information about the types of people who visit your page or interact with your posts.

There are also third-party tools like Hootsuite, Sprout Social, and Buffer, which track various metrics across social media platforms.

Wherever you find the data, including social media metrics in your customer analysis provides instant feedback about how customers interact with your business.

Specialty tools

Software companies have created numerous tools that collect and analyze customer data from various online sources. 

Audience research tools like SparkToro and FullStory analyze large amounts of data online and spot trends—such as the topics people discuss online and which websites or social media accounts those audiences visit. 

These are insights that would be incredibly time-consuming to get directly from customers. However, understanding where potential customers spend time online and what they talk about can easily turn your analysis into a targeted marketing campaign that addresses their needs.

4. Create a customer persona

After gathering and analyzing all this data, you should have plenty of information about your customers. The next step is to create a customer persona . In case you need a refresher, the customer persona is a semi-fictional representation of your ideal customer based on your collected data.

For example, a customer persona for that environmentally friendly cleaning products business will reflect that audience’s demographics, behaviors, and needs. 

In addition to being an effective tool to focus your marketing efforts, creating this persona can help determine the size of your customer base and how to prioritize your time and resources to attract them to your business. It’s also helpful to show potential investors you know your target audience.

5. Connect to your problem/solution statement

Many business plans include a problem and solution statement as early as the introduction. It’s a reasonable way to start, considering that successful businesses identify a problem and provide a solution. 

So as you put your customer analysis together, ensure the research is grounded in the problems they’re experiencing. Doing so will keep you accountable by making you validate your product or service as the solution they need.

• Get started with your business plan template

A customer analysis is a key part of any business plan. But it’s just one piece. At Bplans, we take some of the pain out of business planning. 

We’ve developed a free business planning template to help reduce entrepreneurs’ time to create a full, lender-ready business plan.

Bplans has also collected over 550 free sample business plans across numerous industries. Find one that fits your industry to get inspiration and guidance when writing your plan.

Elon is a marketing specialist at Palo Alto Software, working with consultants, accountants, business instructors and others who use LivePlan at scale. He has a bachelor's degree in journalism and an MBA from the University of Oregon.

Table of Contents

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How to identify and meet customer needs (+18 most common types)

• The most important in customer needs analysis is to identify the gap between customer expectations and their actual experiences with your product or service.
• To identify customer needs , leverage existing data, direct feedback, digital journey mapping, service team insights, social media listening, keyword research, and focus groups.
• Collect customer feedback to get real-time insights and to inform product development, service improvements, and digital CX strategies.
• To build a customer-centric strategy , engage in market research, personalize customer experiences , distribute feedback across the organization, prioritize features based on feedback, and integrate feedback loops at all stages of your customer digital journey .

Ever scratched your head, wondering what customers really want? You're not alone. Many businesses struggle to pinpoint exactly what it is that makes their customers tick.

Understanding what customers seek is a fundamental aspect of any successful business. Recognizing and addressing customer needs is essential if you're involved in marketing or product development or aim to enhance customer satisfaction. This article delves into the 18 most common customer needs, providing insights into how to identify and fulfill them.

By focusing on these key areas, you will be better equipped to cater to your customers' expectations, which can lead to stronger loyalty and increased business growth. Stick with us as we explore practical strategies for aligning your offerings with what your customers truly want.

What are customer needs?

Customer needs encompass the various factors that consumers seek to fulfill when purchasing products or engaging with services. These needs can range from basic functional requirements to complex emotional drivers.

Why are customer needs important?

Understanding customer needs is crucial because it directly influences your success in the marketplace. When you identify and meet these needs more effectively than your competition, you create value for your customers, leading to increased loyalty and revenue . Identifying customer needs can drive innovation and ensure the development of products and services that resonate on a deeper level with your target audience.

18 Most common types of customer needs

Understanding your customers' needs is critical to your success in the marketplace. Each of the following customer needs comes with its own set of expectations that you should aim to meet or exceed.

➡️ PRODUCT CUSTOMER NEEDS

1. Functionality

Your customers seek products that perform their intended function reliably. They expect the core features to work effectively to solve their problems or fulfill their needs.

Your customers prioritize products that consistently meet high standards and demonstrate superior performance. Quality drives their purchasing decisions.

3. Usability

The ease with which your customers can use your product or service is paramount. They value intuitive design and clear instructions that facilitate a hassle-free experience.

Customers prioritize products and services that ensure their safety and security. They trust brands that rigorously adhere to online safety and privacy standards.

5. Convenience

Your customers appreciate products and services that save time and effort. Convenience can be a deciding factor in their purchasing decisions.

6. Innovation

Customers are often drawn to novel solutions that promise better results or experiences. They respect companies that continually innovate to improve their offerings.

7. Customization

Your customers highly value the ability to tailor a product or service to their specific needs. Personalized experiences can significantly enhance customer satisfaction.

8. Compatibility

Customers expect new products to be compatible with their existing devices, software, or accessories, enabling seamless integration into their daily routines.

9. Sustainability

An increasing number of customers prefer products that are eco-friendly and companies that demonstrate a commitment to sustainability practices.

➡️ SERVICE CUSTOMER NEEDS

10. Accessibility

Products and services should be accessible to all customers, including those with disabilities. Inclusivity can expand your market and build brand loyalty.

11. Responsiveness

Your customers need timely and helpful responses to their inquiries and concerns. A quick reply can often be the key to customer retention .

12. Empathy

Customers value when companies understand and address their emotions and circumstances. Genuine empathy can lead to deeper customer connections.

13. Transparency

Transparency in business practices, pricing, and policies is crucial. Customers appreciate honesty and clear communication from the brands they patronize.

14. Personalization

Your customers enjoy feeling special and recognized. Products and services that cater to individual preferences often see higher customer loyalty .

15. Efficiency

Time is precious to your customers, and efficiency in your services and interactions is highly regarded. Quick processes and minimal wait times contribute to positive experiences.

16. Follow-up

Post-purchase engagement, like follow-up emails or customer satisfaction surveys, shows that you value their feedback and business, fostering a long-term relationship.

What is a customer needs analysis?

A customer needs analysis is an in-depth exploration into understanding what your target consumers require and expect from your products or services. This strategic process helps to uncover the gaps between customer expectations and their experiences, serving as a guide for business improvements and innovation.

Customer needs analysis survey

Conducting a customer needs analysis survey means systematically collecting data regarding your customers’ preferences and expectations. Through questions crafted to extract valuable information, you'll be able to identify customer priorities and pain points. Key methods include online surveys, in-person interviews, and focus groups.

Means-end analysis

The Means-end analysis is a technique that connects a product's attributes (means) to the customer's end goals (ends). This involves understanding how a customer perceives the utility of a product feature and its role in achieving their ultimate objective. It's crucial to align your product's offerings with consumer goals.

Customer Feedback

Collecting customer feedback is essential for real-time insights into customer satisfaction. Channels for feedback include social media, customer support interactions, and online reviews. This ongoing process ensures your understanding of customers' needs stays current and actionable.

How to Identify Customer Needs

Properly identifying customer needs is crucial for tailoring your products and services to meet market demands. This ensures customer satisfaction and can lead to increased loyalty and sales.

Use existing customer data

You can leverage existing internal data to gain insights into customer behavior and preferences. Sales records, support tickets, and usage statistics are examples of data points that can reveal underlying customer needs.

Ask for customer feedback

Directly ask your customers for feedback through surveys, interviews, and feedback forms. This information is invaluable in understanding their expectations and experiences with your products or services.

Map customer journey

A customer journey map outlines the various touchpoints between a customer and your company. By mapping this out, you can pinpoint where customers have unmet needs or face challenges.

Get input from the Service Team

Your customer service team interacts with customers daily. Gather their insights concerning customers' most common issues or requests, which can inform areas for improvement or innovation.

Social media listening

Monitor social media channels to understand how customers are talking about your products, services, or brand. Tools can track mentions and sentiment, providing a window into customer needs.

Keyword research

By conducting keyword research, you'll discover what potential customers are searching for online, which can highlight unaddressed needs or areas for additional support and information.

Focus groups

Organize focus groups to delve deeper into the mindset of your target demographic. These can provide detailed qualitative insights into the customer experience and expectations.

How to meet customer needs

Meeting customer needs is essential for the sustainability and growth of your business. It builds loyalty and fosters positive word-of-mouth. To achieve this, you must understand your customers, streamline their buying experience, ensure top-notch service, and guide them in using your products effectively.

Know your customers and anticipate their needs

It is imperative to deeply understand who your customers are and what drives their purchasing decisions . Collect data through surveys, feedback forms, and analytics tools to create detailed customer persona profiles. Anticipating customer needs means identifying patterns and trends to allow you to tailor your products and services proactively.

Focus on your B2B buyer journey

For B2B companies, it's crucial to understand the B2B buyer journey , which often involves multiple stakeholders and a longer sales cycle. Map out each stage of the journey and ensure that marketing, sales, and support teams are aligned to provide a cohesive experience. Transparent communication and educational content can help guide B2B buyers through decision-making.

Provide exceptional customer service

Customers today expect quick and convenient support. Make it a point to be consistently available across multiple channels - live chat, email, phone, and social media. An excellent customer service experience means you resolve issues faster, helping to meet customer needs effectively and maintain their trust in your brand.

Make your product easy to adopt

After the sale, ensure your customers can easily adopt and integrate your product or service into their operations. Clear, step-by-step instructions or tutorials can empower customers to fully utilize your offerings, improving satisfaction and reducing the need for ongoing support.

How to build a customer-centric strategy

Embracing a customer-centric strategy is pivotal for any business looking to thrive in today's market. This approach puts your customers' needs and feedback at the forefront of your business operations and strategic planning.

Identify what your customers want

Start by engaging in comprehensive market research to ascertain precisely what your customers require. Utilize surveys, focus groups, and data analysis to understand their preferences and pain points .

Personalize your customer experience design

Once you understand your customers' needs, tailor your offerings to suit their preferences. This may include customizing products or personalizing marketing messages . Aim to create a unique and memorable experience for each customer.

Distribute feedback throughout your organization

Feedback should not be siloed within customer service departments. Ensure that actionable insights are shared across all levels, from product development to senior management. This encourages a uniform focus on customer satisfaction .

Create features based on customer feedback

Use valuable insights from customer surveys to refine existing products and innovate new ones. Align product development with customer needs to ensure that new features truly resonate with and benefit them.

Build feedback loops into every stage of the process

Feedback loops are integral for continuous improvement. Integrate them into every stage, from product design to sales, so that you can consistently evaluate and enhance the customer experience.

Identifying customer needs with Survicate

Understanding and addressing customer needs goes beyond simply checking items off a list. It involves a careful balance of listening to your customers, analyzing their feedback, and responding with solutions that meet and exceed their expectations.

To navigate this complex terrain effectively, Survicate offers powerful yet effortless software to conduct customer research. With Survicate, you can easily create, distribute, and analyze surveys to gather actionable insights. It will allow you to identify customer priorities and pain points, ensuring that their voices are heard.

Try out Survicate with a 10-day free trial of the Business Plan . It allows you to explore all the features without any cost. Take this opportunity to connect with your customers on a deeper level. Start your trial now and enhance your understanding of your customers' needs.

We’re also there

How to Write a Customer Analysis for a Business Plan

• March 21, 2024
• Business Plan , How to Write

Understanding your customers is essential for any business striving for success. A customer analysis provides valuable insights into the demographics, preferences, behaviors, and needs of your target audience .

This guide will walk you through the process of writing a thorough customer analysis, enabling you to tailor your products, services, and marketing strategies to meet the needs of your customers effectively.

Define Your Target Audience

Begin by clearly defining your target audience : the specific group of people you aim to serve with your products or services.

Consider factors such as age, gender, income level, geographic location, and psychographic traits (e.g., lifestyle, values, interests). Understanding who your customers are is the first step in building a successful business strategy.

• Example for a Coffee Shop : Your target audience might include young professionals aged 25-40, living in urban areas, who value high-quality coffee and a relaxed atmosphere for socializing or remote work.

Gather Data on Your Customers

Next, gather data on your customers through various sources, including market research surveys, interviews, focus groups, and customer feedback.

Analyze both quantitative data (e.g., demographics, purchase history) and qualitative data (e.g., customer feedback, testimonials) to gain a holistic understanding of your customers’ needs and preferences.

• Example for a Coffee Shop : Conduct surveys or interviews with your target audience to gather insights into their coffee preferences, frequency of visits to coffee shops, and reasons for choosing one coffee shop over another.

Segment Your Customers

Segment your customers into distinct groups based on common characteristics or behaviors.

This segmentation allows you to tailor your marketing efforts and product offerings to better meet the specific needs of each segment. Common segmentation criteria include demographics, psychographics, behavior, and purchasing patterns.

• Example for a Coffee Shop : Segment your customers based on their coffee preferences (e.g., espresso lovers, latte enthusiasts), frequency of visits (e.g., daily customers, occasional visitors), and reasons for visiting (e.g., socializing, work meetings).

Analyze Customer Needs and Preferences

Analyze the needs, preferences, and pain points of each customer segment to identify opportunities for product or service improvement.

Consider factors such as price sensitivity, convenience, quality expectations, and brand loyalty. This analysis will help you tailor your offerings to better align with customer expectations.

• Example for a Coffee Shop : Analyze customer feedback to identify common preferences in coffee flavors, brewing methods, and food options. Use this information to adjust your menu offerings and pricing strategies accordingly.

Assess Customer Behavior

Examine how customers interact with your business at each stage of the buying process, from awareness to purchase and post-purchase.

Identify patterns in customer behavior, such as browsing habits, purchase frequency, and loyalty. This analysis will help you optimize the customer experience and maximize customer satisfaction and retention.

• Example for a Coffee Shop : Track customer traffic patterns, peak hours, and popular menu items to optimize staffing levels, inventory management, and promotional strategies.

Identify Growth Opportunities

Based on your customer analysis, identify growth opportunities for your business. This could involve expanding into new customer segments, introducing new products or services, or entering new geographic markets.

By understanding your customers’ needs and preferences, you can better position your business for long-term success.

• Example for a Coffee Shop : Identify opportunities to expand your customer base by offering specialty coffee subscriptions for remote workers or partnering with local businesses to host networking events.

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Privacy overview.

Crafting the Customer Analysis in Business Plan: A Comprehensive Guide

In today’s competitive business environment, understanding your customers is the key to success. Customer analysis in business plans plays a crucial role in driving business growth and providing a competitive edge.

Imagine unlocking the hidden potential within your customer base, tailoring marketing strategies, and developing products that resonate with their needs and preferences. This comprehensive guide will explore the ins and outs of customer analysis in a business plan and how to leverage it for maximum impact on your business.

Short Summary

• Customer analysis is an essential part of any business plan, allowing businesses to understand their target customers and create tailored products/services.
• It involves identifying a market, assessing demographics & analyzing customer behavior in order to inform marketing strategies.
• Utilizing insights from customer analysis can help optimize marketing campaigns & product offerings for maximum return on investment.

The Essence of Customer Analysis

Customer analysis is an essential element of any business plan, emphasizing the comprehension of target customers, their requirements, and how your product or service fulfills those requirements. By performing customer analysis, businesses can better tailor their products and services to their target audience , ultimately leading to increased sales and a thriving business.

Understanding the needs of your target customers is key to success. Knowing who your customers are

Purpose of Customer Analysis

The primary objective of customer analysis is to recognize potential customers, prioritize customer segments, and provide guidance for marketing and product development strategies. Understanding your customers’ wants, needs, pain points, and objectives is crucial to creating targeted marketing campaigns and product offerings that resonate with them.

By closely monitoring customer feedback and support requests (Voice of Customer analysis), businesses can gain insight into customer pain points and preferences and even discover unexpected uses for their products.

Key Components of Customer Analysis

The essential elements of customer analysis encompass target market identification, demographic analysis, and behavioral analysis. Demographic analysis provides insights into factors such as age, income, and location, which can be used to create targeted marketing strategies.

Behavioral analysis, on the other hand, entails comprehending the customer’s decision-making process for the purchase, including the steps taken, information sources consulted, and who has the authority to make the final decision. By understanding these components, businesses can better cater to their customer’s needs and preferences, ultimately leading to success.

Conducting an Effective Customer Analysis

An effective customer analysis involves a thorough research process that focuses on customer pain points, goals, and insights on what influences their buying decisions. This process begins with identifying your target market, which is crucial in ensuring a successful business.

By analyzing customer demographics and examining customer behavior and purchasing patterns, businesses can tailor their marketing strategies and product offerings to address the specific needs and preferences of their target customers.

Identifying Your Target Market

Identifying your target market is the first step in conducting a comprehensive customer analysis. By precisely defining the target customer your company is serving, you can focus your marketing efforts and resources on the most profitable customer segments.

Small businesses with 10 to 50 employees located in large metropolitan cities on the West Coast can benefit from having a business plan. This plan should provide clear guidance and instructions for the successful execution of tasks, including target market analysis.

With a clear understanding of your target market, you’ll be better equipped to develop a targeted marketing strategy that resonates with your audience and drives sales.

Analyzing Customer Demographics

Analyzing customer demographics is crucial for tailoring marketing strategies to specific customer groups. By examining your current customer base, you can determine which demographics to focus on for future marketing efforts. Demographic information, such as:

• education levels

A comprehensive view of the messaging that is most likely to appeal to customers and the marketing channels that are most effective in reaching them can be achieved when customers seek multiple bids, as it provides valuable insights into their preferences and decision-making process.

By constructing a marketing strategy around the types of people who have already made a purchase, you can maximize the return on investment of your marketing budget.

Examining Customer Behavior and Purchasing Patterns

Analyzing customer behavior and purchasing patterns can yield valuable insights through customer behavior analysis. By monitoring customer interactions with your products and services, such as website visits, purchases, and customer reviews, you can identify customer needs and preferences and devise strategies to enhance customer retention and loyalty.

Additionally, understanding the drivers of customer decision-making is crucial for creating targeted marketing campaigns and product offerings that resonate with your target audience.

Utilizing Customer Analysis Results

Customer analysis results can be leveraged to enhance marketing strategies, drive product development and innovation, and strengthen customer retention and loyalty. By recognizing customer feedback and customer support requests, businesses can acquire advantageous insights into customer behavior and preferences, which can be utilized to provide direction to marketing and product development strategies.

In this section, we will explore how customer analysis results can be utilized to improve various aspects of your business.

Enhancing Marketing Strategies

Customer analysis results, including customer segmentation analysis, can inform targeted marketing strategies that lead to increased sales and revenue. By leveraging insights from customer demographics and behavior, businesses can create personalized marketing campaigns that resonate with their target audience. For example, a company catering to young professionals may focus its marketing efforts on social media platforms, while a company targeting older adults may prioritize direct mail or email campaigns.

By tailoring marketing strategies based on customer analysis, businesses can optimize their marketing efforts and achieve greater success.

Driving Product Development and Innovation

Insights from customer analysis can guide product development and innovation, ensuring that products and services meet customer needs and preferences. By understanding customer pain points and objectives, businesses can create new products and services that address these needs, resulting in increased customer satisfaction and loyalty.

Additionally, existing customer feedback can be utilized to refine existing products and services, making them more appealing to the target audience and driving business growth .

Strengthening Customer Retention and Loyalty

Understanding customer needs and preferences through customer analysis can help businesses improve customer retention and loyalty. By tailoring products and services to the specific needs and preferences of your target audience, you can enhance customer satisfaction and encourage repeat business.

Furthermore, by identifying gaps in the customer experience and optimizing touchpoints, businesses can improve the overall customer journey and nurture long-lasting relationships with their customers.

Tools and Techniques for Customer Analysis

To effectively conduct customer analysis, businesses can employ various tools and techniques, including data collection and analysis, creating buyer personas, and customer journey mapping. These methods enable businesses to gain a deeper understanding of their customers and make informed decisions regarding their products, services, and promotional activities.

In this section, we will explore the different tools and techniques that can be used in customer analysis.

Data Collection and Analysis

Data collection and analysis play a critical role in customer analysis, as they involve gathering information on customer interactions, demographics, and purchasing patterns. Businesses can utilize various methods for data collection, such as surveys, focus groups, and interviews, as well as analytics tools to track customer behavior online.

By analyzing this data through market research, businesses can identify trends, patterns, and areas for improvement, ultimately informing their marketing strategies and product development efforts.

Creating Buyer Personas

Creating buyer personas is an essential technique in customer analysis, as it helps businesses visualize their ideal customers and tailor marketing and product development strategies accordingly.

Buyer personas are fictional representations of major customer segments, taking into account factors such as:

• demographics
• professional status
• purchasing habits

By developing accurate and detailed buyer personas, businesses can ensure that their marketing campaigns and product offerings resonate with their target audience, leading to increased sales and customer loyalty.

Customer Journey Mapping

Customer journey mapping is an invaluable tool in customer analysis, as it enables businesses to identify gaps in the customer experience and optimize touchpoints to improve customer satisfaction and loyalty. A customer journey map is a visual representation of the stages a customer goes through when interacting with a business, from initial awareness to loyalty.

By understanding the customer journey and identifying areas for improvement, businesses can enhance the overall customer experience and nurture long-lasting relationships with their customers.

Case Study: Successful Customer Analysis in Action

A prime example of successful customer analysis in action is the Buxton case study. Buxton, a leading provider of customer analytics and consulting services, utilized customer analysis techniques to help businesses expand, grow, and market themselves more efficiently. Through a combination of data collection, buyer persona creation, and customer journey mapping, Buxton was able to gain a deep understanding of their client’s customers and develop targeted marketing campaigns that resonated with their audience.

As a result, their current customers experienced increased sales, customer loyalty, and overall business growth and success.

In conclusion, customer analysis is a powerful tool that can drive business growth and success by helping companies understand their target customers, tailor their marketing strategies, and develop products and services that meet customer needs and preferences.

By utilizing tools and techniques such as data collection and analysis, buyer persona creation, and customer journey mapping, businesses can gain valuable insights into their customers and make informed decisions that lead to increased sales, customer loyalty, and overall business success. Don’t miss out on the opportunity to unlock your business’s full potential – start conducting customer analysis today and reap the rewards.

Frequently Asked Questions

What is a customer analysis in a business plan.

A customer analysis is an essential part of a business plan, which identifies target customers and outlines how a product or service meets their needs.

It helps businesses understand their customers better, so they can create marketing strategies that are tailored to their target audience. It also helps them identify potential opportunities and threats in the market.

By understanding their customers, businesses can better serve their customers.

What is an example of customer analysis?

Customer analysis involves understanding consumers’ behaviors through observation and measurement of analytics, analyzing brand recognition and awareness, understanding how customers feel about the competition, and testing different customer acquisition approaches.

This process helps businesses better understand their target audience and develop strategies to reach them. It also helps to identify potential opportunities for growth and improvement. By understanding customer behavior, businesses can create more effective marketing campaigns and better serve their customers.

What should be included in a customer analysis?

A customer analysis should include details on the customer’s demographics, professional status, purchasing habits, values and goals, influences, and challenges. It should also assess their buying patterns, product usage history, spending habits, loyalty metrics, and more to gain an understanding of their wants, needs, pain points, and objectives.

What is the primary objective of customer analysis?

The primary objective of customer analysis is to recognize potential customers, prioritize customer segments, and inform marketing and product development strategies.

By understanding customer needs and preferences, businesses can create targeted marketing campaigns and product offerings that are tailored to the needs of their target audience. This helps to ensure that the company is reaching the right people.

How can customer analysis help improve marketing strategies?

Customer analysis provides valuable insights into customer’s needs and preferences, enabling businesses to create tailored marketing strategies that drive sales. It is an essential tool for effective marketing.

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Customer needs analysis: definition & research methods.

10 min read Customer needs analysis is the process of identifying a customer’s requirements for a product or service. It’s used in all kinds of product and brand management contexts, including concept development, product development, value analysis, and more.

The goal of a customer needs analysis survey is to understand the customers’ needs and their position in the overall market.

What do we mean by customer needs?

Customer needs are the attributes of a product, brand or service that motivates someone to buy. The term covers basic must-haves, such as good-enough quality and affordable price , and also extends to more abstract and complex purchase drivers such as an aspirational brand image or a sense of alignment between a customer’s personal opinions and a brand’s ethics .

Customer needs vary a lot – between individual customers across your target audience , and from product to product and brand to brand. To identify customer needs effectively, you need an ongoing program of analysis that captures and analyzes customer feedback . Surveys can be an important part of that process.

Because customer needs can be complex and deep-seated, you may need to go beyond what customers explicitly tell you in order to uncover the full picture. That’s where customer needs analysis methods come in.

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How does understanding customer needs help?

A good understanding of customer needs helps your business in a few ways.

Firstly, it helps with product development and product packaging decisions. If you know your customers want a range of color and size options in a given product, you can make sure you provide them. If they want a range of colors and sizes but it matters more to them to get your product at the right price, then you know how to prioritize your resources to balance those needs correctly. You can also use customer needs assessments around existing products and services to enhance and develop your product offering in the future.

Secondly, it helps you to market the products you already have in the most effective way possible. You can make sure that your marketing messages reflect a customer’s desires and objectives and highlight the features and benefits that matter the most. For example, if you’re selling outdoor gear, as well as mentioning that it’s durable and waterproof, you could highlight the fact that your sustainable manufacturing methods result in a zero-carbon outcome for every garment. Thanks to your customer needs analysis, you’ll know if that’s something your nature-loving customers really value.

Types of customer needs

Here are just a few examples of customer needs that your analysis might turn up.

• Price The item is affordable and appropriately priced for the quality
• Convenience Saves time and effort
• Image and status (as in an item of clothing or technology) Looks good, impresses others, makes the customer feel good about themselves
• Durability and lifespan Built to last, dependable, and won’t break
• Packaging type Resealable, refillable, recyclable, or all of the above
• Support and aftercare Customer knows they can get questions answered and problems solved
• Effectiveness Gets the job done
• Formulation Free from unwanted ingredients or materials, containing desirable elements (for example gluten-free, or containing active friendly bacteria)

A means-end approach to customer needs analysis

Customer needs analysis is a means-end approach, meaning that customers make purchase decisions based on product features that get them to a value-based goal or state. For example, one consumer might buy a watch because he likes to be timely, and another might buy it because it looks cool. They’re both buying the same feature (time-tracking), but using it for different means (timeliness vs. status).

This principle is the basis of a powerful research technique which has been used to place U.S. presidents into office, successfully re-image industries, achieve competitive advantage over the competition through target advertising messages, and design innovative and successful new products.

Means-end analysis identifies linkages between three areas of product and customer interaction.

• Product features and attributes
• Benefits (real and perceived) a customer gains from the use of the product
• The unique values or traits of a customer that enable them to experience the product benefits, such as a person’s functional, physical, financial, social, and psychological characteristics.

With the right tools, it’s possible to quantify all these elements with respect to a specific product and audience. A Qualtrics study for the development of a new bank credit card found that nine attributes were critical to consumers considering a new card: no annual fee, status, low-interest rate, added value features, acceptance, credit limit, ability to carry a balance, location of the sponsoring bank, and availability.

These attributes were found to be linked to 12 benefits (consequences) that were perceived as part of card usage: not feeling cheated, independence, convenience, dependability, and saving money.

Brand attitudes – and how to discover them

Brand attitude tells us what consumers think of a brand or product and if it solves a particular need. When developing customer analysis surveys, it’s important to determine the consumer’s brand attitude. Here are a few of the elements a good customer needs analysis survey should cover:

Top-of-mind imaging

Positive and negative associations for the brand or product category are elicited, along with reasons why the characteristic is viewed that way. Top-of-mind studies are used to uncover the attributes and consequences that distinguish the characteristic.

Brand category analysis

Identifies similar and dissimilar brand groupings within a product category and the reasons for this perceived similarity or dissimilarity. The primary reasons, most important attributes, and most representative brands are identified, and attributes and consequences are laddered.

Contextual environment scan

The usage context for a brand or product is critical in marketing. Physical occasions (place, time, people), or need state occasions (relaxing, rejuvenating, building relationships, feeling powerful, reducing stress, and getting organized) may exist. A brand or product is associated with a usage context that is critical in effective positioning and advertising.

Preference-usage/similarity-dissimilarity analysis

Comparing brands based on personal preference or usage is a common distinguishing point for brands. Groupings by similarity and dissimilarity also provide a direct method of distinguishing between brands. Success critical attributes and consequences are identified that lead to higher market performance.

Purchase and consumption timing

Issues are often related to product or brand choice and usage. For example, a respondent might be asked to identify products used for relief of a stuffy nose across several stages like onset, full-blown, and on-the-mend, or daytime and nighttime. Brand preference is identified for each time-related stage.

Usage trends

Past and expected future usage of a brand is instrumental in identifying attributes and consequences that lead to different usage patterns. For example, respondents may be asked, “Will this brand be used more often, less often, or about the same as you have used it in the past?” Then, reasons for increased, decreased, or unchanged usage are determined. The follow-up analysis of reasons for trends produces a vivid insight into market drivers and potential areas of market growth.

Product or brand substitution analysis

Product and brand substitution methods elicit the degree of similarity of perceived attributes and consequences associated with usage. When questions are asked about the degree of substitutability, attributes and consequences are discovered that inhibit or promote substitution (attributes or consequences that need to be added or removed for substitution or trial to occur). For an unfamiliar brand, the respondent first can sample or be given a description of the brand, followed by a question like, “How likely would you be to substitute (name of the new brand) for your current brand for this occasion—why is that?”

Alternative usage occasions

Alternative uses are presented to the respondent to determine if and why the brand is present or absent from the choice set. Questions might be phrased to ask, “Why would you consider using Brand A for this occasion?”, or “What is keeping you from using Brand A for this occasion now?” Both positive reasons why a brand fits a new occasion and negative reasons why it does not fit can be elicited. Alternative usage occasion analysis identifies market segments and details how to approach them.

How to better meet your customers’ needs

Customer needs assessment needn’t be a one-time event or even a per-product one. You can help make sure you’re continually meeting customer needs by maintaining an overall high standard of knowledge about how your customers think and feel. This will pay dividends not only in designing and marketing your products more effectively, but also in making customers feel known, understood, and valued when they interact with you.

Becoming more customer-centric is a choice that more and more businesses are making, focusing less on operational data and more on experience-based insights that reflect how customers think and feel about the experiences you provide .

With the Qualtrics experience management platform , you can build surveys and dive deep into what matters most to your customers and your business.

Related resources

Market intelligence 10 min read, marketing insights 11 min read, ethnographic research 11 min read, qualitative vs quantitative research 13 min read, qualitative research questions 11 min read, qualitative research design 12 min read, primary vs secondary research 14 min read, request demo.

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How to Analyze Customer Needs and Improve Your Approach Accordingly

10 min read

Want to analyze customer needs in a way that will benefit your business?

In this article, we feature the nitty-gritty of customer needs — from the fundamental meaning and types of customer needs to the most efficient method for conducting a customer needs analysis and acting on customer data for business growth .

Keep reading to uncover your product growth possibilities!

Customer needs stand for the reasons that influence buying decisions. Examples include customer pain points, brand image, product features and functionality, price, and user-friendly experiences.

• When you analyze customer needs, you need to get valuable insights from various customer data sources such as customer feedback , market research, focus groups, and product usage trends.
• Identifying customer needs allows you to build a product that meets customer requirements, which leads to better retention and, as a result, increased sales and customer loyalty.
• Three types of customer needs exist—product, customer service, and emotional customer needs.
• Product substitution, product usage, and user sentiment analyses are the means to conduct to analyze customer needs.
• Here are the essential steps of a customer needs analysis: 1. Identify the customer journey 2. Segment your customer base to collect data more contextually 3. Gather in-app customer feedback 4. Visualize customer data 5. Analyze the data and align it with your business needs
• Create contextual onboarding processes and shift toward a customer-centric approach to fulfill product needs.
• Use Userpilot to analyze user sentiment, gauge in-app engagement , and deliver tailored in-app experiences .

What are customer needs?

Companies analyze customer needs to understand customers better and fulfill their expectations toward the product.

What is customer needs analysis?

A customer needs analysis is an assessment of a customer’s needs for a product or service. The process involves getting valuable insights from various customer data sources such as customer feedback , market research, focus groups, product usage trends, and more.

This enables product and customer service teams to create authentic, tailored customer experiences that impact conversions, retention , and revenue growth.

Why should you always analyze customer needs?

Knowing and understanding customer needs is at the center of every successful SaaS company. Think of it as a heart of a business that pumps its growth. Why? The answer is quite simple.

Identifying customer needs allows you to build a product that meets customer requirements, which leads to better retention and, as a result, increased sales and customer loyalty .

Customer needs contribute to every stage of the customer journey as well as fuel marketing acquisition and retention strategies .

Let’s learn more about it.

The most common types of customer needs

Let’s get familiar with the most common customer needs and how they factor into product growth .

Product needs

• Price : there is a wide range of budgets with which customers can purchase a product or service. You should find the right balance between satisfying your customers’ needs and making the company profitable.
• Functionality: one of the vital parts of the product needs that must resolve the customer’s jobs to be done .
• Usability : this factor can become your competitive advantage. User-friendly interfaces and intuitive in-app experiences enable users to save time while performing tasks. Likewise, a tangled UX leads to frustration and churn.
• Product performance: users are ready to pay for a stable product with no bugs , glitches, or other pitfalls.
• Efficiency: customers need a fast, efficient product or service that eliminates time-consuming activities.

Customer service needs

• Reliability: whenever users deal with service outages, or bugs, that cause friction your product is viewed as a less reliable solution for their needs.
• Transparency: companies that sell products or services should be transparent about their pricing . Customers expect companies to provide honest explanations when prices change or products crash.
• Accessibility: customers expect to access your product/service from their preferred device. So make sure your website is optimized and mobile-friendly.
• Useful information: your customer service team should provide users with actionable insights to help customers get their jobs done.
• On-demand support team: providing customers with on-demand support is a great way to establish customer loyalty and positive brand perception.

Emotional customer needs

• Time: customers want you to respond quickly to their requests and promptly address them. They also want to be able to figure out everything on their own with self-service support .
• Friendliness: depending on your tone of voice, brand attitudes, and comprehensiveness of customer support, user form positive and negative associations with your company. Friendliness ensures good brand recognition and contributes to an increased customer lifecycle.
• Empathy: your customers expect empathy, patience, and understanding from your customer service representatives.
• Control: it’s vital for customers to feel empowered from start to finish when interacting with your business. They want to have control over returning products, canceling subscriptions, etc. So make this information accessible on your website.

Identify customer needs with these types of user analysis

Now that you’ve learned the main types of customer needs let’s find out how to identify them. Below, you’ll find three easy ways to do so.

Product or brand substitution analysis

A substitution analysis highlights weak product areas that undermine user experiences, resulting in drop-offs.

The analysis gives insights into how easy and why customers would give up on the current product and switch to another.

Executives and product owners act on such data to refine the product roadmap and fix unmet customer needs or unfulfilled expectations.

Sentiment analysis

Customer sentiment analysis is a set of methods that allow you to determine the emotions of your product’s users.

Product teams use it to understand customer feedback on new products, features, or even in-app experiences such as a newly introduced onboarding flow, etc.

In a nutshell, customer sentiment analysis helps you identify customer needs, optimize customer experience, and enhance customer service.

Product usage analysis

Product usage is the data that represents how and when your customers are using your product. Particular tools like Userpilot and Hotjar capture in-app users’ actions, hovers, clicks, and much more.

Owning this data helps you determine which product features different user segments engage with the most. Product usage context also uncovers product frictions to resolve.

Make data-driven decisions to improve product performance and stickiness by understanding feature usage .

If you work with Userpilot, use feature tagging to tag any UI element and track user engagement in your product.

How to conduct a customer needs analysis?

Here’s a 6-step process on how to analyze customer needs. Let’s dive right in!

Step 1 – Identify the customer journey

Break down the user journey into stages to carefully examine each. Different customer needs lie from the primary onboarding to the tertiary onboarding stages.

Knowing the pain points of each customer journey stage allows you to improve the customer experience accordingly.

For example, users need more guidance in the primary onboarding process , while secondary onboarding implies the usage of native tooltips to show them features that they haven’t discovered yet.

Step 2 – Segment your users to collect data more contextually

Different usage patterns appear in different user segments . That’s why your next step is to analyze customer needs in various segments in great detail.

That’ll help you to understand customers’ needs and how to improve the overall experience with your product across customer segments.

You can group customers by a low NPS score, web session duration, un/completed goals in the user journey, company’s industry, users that haven’t engaged with a core feature, etc.

Step 3 – Gather in-app customer feedback

Customer feedback is a gold mine for understanding customer needs. It’s applicable for all stages of the user journey and all user segments.

The best user journey stage to begin collecting feedback is from the beginning. Implement surveys during the signup process (or in the welcome flow ) to find out the user’s main goals, job title, company size, etc.

Act on this data by building relevant onboarding flows tied to user needs and creating effective marketing campaigns for target customers.

Learn how Asana has embedded an 8-step welcome flow to gauge important information about its users and move them down the user journey.

Also, gather customer feedback continuously to have better context into what customers are saying. Understand what customers cherish you for and what your areas for improvement are.

See an example of a feedback modal by Slack.

Step 4 – Visualize customer data with the right tools

Visualizing customer data will help you better analyze customer needs and spot trends. With NPS dashboards , for instance, you can understand the percentage of promoters and detractors at first glance. You’ll also identify where the problem lies (i.e., features, customer support, bugs, and so on).

Likewise, access reports that represent feature usage or in-app events’ occurrences. This way, you’ll detect gaps and understand how often particular user segments engage with predefined events.

Step 5 – Analyze data to understand what customers expect

Conduct user sentiment analysis on customer feedback by grouping responses by positive or negative emotions. Use Userpilot’s tagging feature to do so.

Now, you can understand what changes need to be made in order to improve customer satisfaction . You’ll also determine your strongest sides. For example, users appreciate good support and UX in the image below.

Step 6 – Align your business processes with customer needs

Once you gather enough customer data, it’s time to act on it.

For example, you might notice that your product is hard to understand for new customers. It doesn’t mean you need to reinvent the wheel to simplify the onboarding process.

It might be enough to build in-app onboarding checklists for each user segment to prompt them to engage with the relevant features for their needs. This will speed up product adoption and reduce drop-offs.

You can use interactive walkthroughs to guide users toward completing each task and getting value.

Best practices to meet customer needs

Here we’ve compiled 5 best practices to meet customer needs at different levels of engagement with a company. Ready to see some golden nuggets?

Deliver good customer service

Good customer service doesn’t end in friendly on-demand support via support chat. Customers want access to a comprehensive knowledge base where they can find answers to their requests anytime, without contacting your team.

You can fulfill this typical customer need by implementing help centers in your product.

Create contextual onboarding processes

The contextual onboarding process drives in-app engagement and gets users to the “Aha” moment faster.

Instead of long product tours, use progressive onboarding to guide users step-by-step and make them more involved with your product.

Contextual onboarding also improves customer experience and boosts retention.

Collect data at different touchpoints

Gather data throughout the customer journey with goal tracking.

Goal tracking (or goal setting) stands for creating milestones (goals) for users to complete at different stages of the user path. Examples can be completing a checklist or more complex tasks with several steps.

Product teams use these analytics to identify drop-off points and gauge feature adoption rates.

You can set and track custom goals with an eponymous feature Goals in Userpilot .

Measure customer satisfaction and customer experience regularly

Measuring customer satisfaction will help you identify areas for improvement, nurture customer relationships, and fulfill customer needs.

Use CSAT surveys ( customer satisfaction surveys ) to understand what customers feel toward specific features, their experience, or the company. Tie up CSAT surveys to UI patterns/events and gather contextual feedback.

Check out an example of a CSAT survey by HubSpot.

Shift toward a customer-centric approach

SaaS companies can easily fall into the trap of praising product-centric approaches and rewarding their teams for building the best product out there from a technical standpoint.

But your business will benefit more by preaching the customer-centric approach , which means building the best solution for your target audience.

In a nutshell, customer-centric companies target customers’ needs which ultimately leads to acquiring more customers and revenue growth.

Best tools for analyzing customer needs

You need product analytics tools to carry out a customer needs analysis. Let’s get familiar with the 3 best solutions to do so.

Build surveys and in-app guidance with Userpilot

Userpilot is best known for solutions to analyze user sentiment, gauge in-app engagement, and deliver tailored in-app experiences. The tool includes features such as:

• NPS surveys and response tagging
• Feature tagging
• Goals tracking
• Advanced user segmentation
• A set of solutions for creating interactive walkthroughs , such as modals, tooltips, and more.

You can access all these features in one product and basically close a need for a product analytics tool for customer needs analysis.

Baremetrics

Baremetrics segmentation is more about financial analytics. The tool pulls all your revenue data in one place and ties it up to different customer segments. This helps you identify the most profitable customer groups and perform a simple health check.

The Trial Insights feature will help you to find trials with the highest value. With API analytics, you can connect Userpilot and Baremetrics data to see how different customer groups contribute to business growth.

Track user interactions and create funnels with Fullstory

Fullstory provides access to user interaction analytics and helps create funnels. You’ll also get access to session replays and heatmaps that are imperative for a comprehensive user behavior analysis.

These features will uncover product frictions and complement a customer needs analysis with real-time information about what users do inside your product.

Customer needs analysis is what drives success for SaaS companies. In doing so, you can get eye-opening insights into what product customers really want and fulfill these needs.

Get a Userpilot Demo and start collecting customer data for customer needs analysis right away.

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Understanding 3 Common Types of Customer Needs

• 01 Sep 2020

Whether you’re a new entrepreneur, an established business owner, or an employee within a company, your success is often measured by how well you convince potential customers to purchase your product or service.

Achieving this requires understanding your business’s market and competition, its differentiating factors and value proposition , and, most importantly, your ideal buyer. Specifically, you need to know the motivations, goals, challenges, and desires that lead them to purchase a solution like yours.

It’s useful to think about this concept in terms of customer “needs.” What does a potential customer need that leads them to your solution? Understanding that need can enable you to not only tailor your sales and marketing messaging, but inform your product research and development, customer service, and other aspects of your business.

Access your free e-book today.

What Are Customer Needs?

A customer need is a need that motivates a customer to purchase a product or service. The need can be known (i.e., the customer can put it into words) or unknown, and is the ultimate factor that determines which solution the customer purchases.

One effective way to determine and evaluate customer needs is by using the lens of “jobs to be done.”

Customer Needs as Jobs to Be Done

According to the jobs to be done (JTBD) framework , championed by Harvard Business School Professor Clayton Christensen, customers don’t purchase a product; instead, they hire it to complete a certain job or task.

In the online course Disruptive Strategy , a job to be done is defined as a “circumstances-based description of understanding your customers’ desires, competitive set, anxieties, habits, and timeline of purchase.”

By this definition, a job to be done aligns with a customer need. With a keen understanding of customer jobs to be done, businesses can avoid disruption and identify new opportunities as they arise.

Related: Jobs to Be Done: 4 Real-World Examples

3 Main Types of Customer Needs

Customer needs can be broken out into many different varieties and categories. For example, a customer might need a solution that has specific functionality, falls within a set budget, or provides a certain level of reliability.

Ultimately, all customer needs can be categorized into three main types: functional, social, and emotional needs.

1. Functional Needs

Functional needs are the most tangible and obvious of the three main types of customer needs. Customers typically evaluate potential solutions based on whether they’ll help them achieve a particular task or function. The product or service that best addresses their functional need is likely to be the one they purchase, or hire.

Functional needs can be broad or extremely specific, depending on the customer’s buying criteria.

For example, a customer who’s planting a garden for the first time might say, “I need a garden hose.” Meanwhile, an experienced gardener might tailor their criteria by saying, “I need a hose that’s long enough to reach my vegetable garden from my backyard spigot.” Another customer who’s dealt with the frustration of using a low-quality product might tailor their need differently by saying, “I need a high-quality garden hose that won’t tear or kink from regular use.”

With this kind of insight into customers’ functional needs, a company that manufactures garden hoses might develop new products, such as hoses that come in a range of lengths and don’t kink.

2. Social Needs

A social need is a customer need that relates to how a person wants to be perceived by others when using a product or service. While social needs aren’t typically a customer’s primary concern when considering a purchase, they can influence their final decision.

Social needs are often more difficult for a company to identify, and vary substantially from customer to customer. By understanding various social needs, you can look for patterns among your users. If enough of your customers share a particular need, consider how it can inform your product development, sales, and marketing processes.

Returning to the garden hose example, imagine the customer is a member of a gardening association. Members of this association have an affinity for high-tech gardening tools and regularly discuss new products they’ve tried. The customer may decide, either consciously or unconsciously, to purchase a hose with advanced features—for example, one that connects to a smart water controller—to bond with other association members.

If, on the other hand, the customer is an environmentalist who’s active in various communities, they might be more concerned about whether a hose is made from sustainable materials that their fellow environmentalists use.

3. Emotional Needs

Emotional needs are similar to social needs in that they’re typically secondary to functional needs. Whereas social needs refer to how a customer wants to be perceived by others when using a product, emotional needs refer to how a customer wants to feel.

Returning once more to the garden hose example, consider the reasons why the customer gardens. If they find gardening to be a relaxing hobby, they may be more likely to choose a basic hose over a high-tech option. Alternatively, if gardening triggers memories of the customer’s grandparents, they might opt for a brand that evokes that nostalgia.

While emotional needs can be difficult to pinpoint, companies that identify those of their customers can use the information to tailor and optimize their product messaging.

Identifying Customer Needs

If you’ve never gone through the process of identifying customer needs , it can feel overwhelming. However, there are several strategies you can use to identify those needs. Reflecting on your experiences, observing others' behaviors, and conducting customer interviews are all effective ways to gain those valuable insights.

By understanding your customers’ needs and the jobs they hire your products or services to perform, it’s possible to not just avoid disruption, but drive innovation within your organization and industry.

Want to learn more about jobs to be done and other theories from Professor Christensen? Explore Disruptive Strategy —one of our online entrepreneurship and innovation courses —and learn how you can acquire the skills and techniques needed to organize for innovation and craft winning strategies.

About the Author

Small Business Trends

How to create a business plan: examples & free template.

Whether you’re a seasoned entrepreneur or launching your very first startup, the guide will give you the insights, tools, and confidence you need to create a solid foundation for your business.

Table of Contents

How to Write a Business Plan

Executive summary.

It’s crucial to include a clear mission statement, a brief description of your primary products or services, an overview of your target market, and key financial projections or achievements.

Our target market includes environmentally conscious consumers and businesses seeking to reduce their carbon footprint. We project a 200% increase in revenue within the first three years of operation.

Overview and Business Objectives

Example: EcoTech’s primary objective is to become a market leader in sustainable technology products within the next five years. Our key objectives include:

Company Description

Example: EcoTech is committed to developing cutting-edge sustainable technology products that benefit both the environment and our customers. Our unique combination of innovative solutions and eco-friendly design sets us apart from the competition. We envision a future where technology and sustainability go hand in hand, leading to a greener planet.

Define Your Target Market

Market analysis.

The Market Analysis section requires thorough research and a keen understanding of the industry. It involves examining the current trends within your industry, understanding the needs and preferences of your customers, and analyzing the strengths and weaknesses of your competitors.

Our research indicates a gap in the market for high-quality, innovative eco-friendly technology products that cater to both individual and business clients.

SWOT Analysis

Including a SWOT analysis demonstrates to stakeholders that you have a balanced and realistic understanding of your business in its operational context.

Competitive Analysis

Organization and management team.

Provide an overview of your company’s organizational structure, including key roles and responsibilities. Introduce your management team, highlighting their expertise and experience to demonstrate that your team is capable of executing the business plan successfully.

Products and Services Offered

This section should emphasize the value you provide to customers, demonstrating that your business has a deep understanding of customer needs and is well-positioned to deliver innovative solutions that address those needs and set your company apart from competitors.

Marketing and Sales Strategy

Discuss how these marketing and sales efforts will work together to attract and retain customers, generate leads, and ultimately contribute to achieving your business’s revenue goals.

Logistics and Operations Plan

Inventory control is another crucial aspect, where you explain strategies for inventory management to ensure efficiency and reduce wastage. The section should also describe your production processes, emphasizing scalability and adaptability to meet changing market demands.

We also prioritize efficient distribution through various channels, including online platforms and retail partners, to deliver products to our customers in a timely manner.

Financial Projections Plan

This forward-looking financial plan is crucial for demonstrating that you have a firm grasp of the financial nuances of your business and are prepared to manage its financial health effectively.

Income Statement

Cash flow statement.

A cash flow statement is a crucial part of a financial business plan that shows the inflows and outflows of cash within your business. It helps you monitor your company’s liquidity, ensuring you have enough cash on hand to cover operating expenses, pay debts, and invest in growth opportunities.

Tips on Writing a Business Plan

4. Focus on your unique selling proposition (USP): Clearly articulate what sets your business apart from the competition. Emphasize your USP throughout your business plan to showcase your company’s value and potential for success.

FREE Business Plan Template

To help you get started on your business plan, we have created a template that includes all the essential components discussed in the “How to Write a Business Plan” section. This easy-to-use template will guide you through each step of the process, ensuring you don’t miss any critical details.

What is a Business Plan?

Why you should write a business plan.

Understanding the importance of a business plan in today’s competitive environment is crucial for entrepreneurs and business owners. Here are five compelling reasons to write a business plan:

What are the Different Types of Business Plans?

Using Business Plan Software

Upmetrics provides a simple and intuitive platform for creating a well-structured business plan. It features customizable templates, financial forecasting tools, and collaboration capabilities, allowing you to work with team members and advisors. Upmetrics also offers a library of resources to guide you through the business planning process.

Business Plan FAQs

What is a good business plan.

A good business plan is a well-researched, clear, and concise document that outlines a company’s goals, strategies, target market, competitive advantages, and financial projections. It should be adaptable to change and provide a roadmap for achieving success.

What are the 3 main purposes of a business plan?

Can i write a business plan by myself, is it possible to create a one-page business plan.

Yes, a one-page business plan is a condensed version that highlights the most essential elements, including the company’s mission, target market, unique selling proposition, and financial goals.

How long should a business plan be?

What is a business plan outline, what are the 5 most common business plan mistakes, what questions should be asked in a business plan.

A business plan should address questions such as: What problem does the business solve? Who is the specific target market ? What is the unique selling proposition? What are the company’s objectives? How will it achieve those objectives?

What’s the difference between a business plan and a strategic plan?

How is business planning for a nonprofit different.

• What is a customer needs analysis?

Last updated

16 September 2023

Reviewed by

Miroslav Damyanov

Understanding and meeting your customers’ needs is the cornerstone of business success, regardless of your industry or size.

Hard data is one of the best ways to deeply understand your customers’ needs so that you can align your offerings with them.

A customer needs analysis is a data-based evaluation of a customer’s need for a product, service, or solution. Data for this analysis can come from various sources, including in-person or online surveys, market research , focus groups , customer feedback, or product usage trends over time. Once collected, this data allows customer service and product teams to tailor their offerings to meet specific customer needs.

A customer needs analysis can help a business learn more about its customers and lead directly to revenue growth, customer retention , more conversions, and happier clients.

• What are customer needs?

Customer needs encompass all the factors that influence a purchasing decision, ranging from tangible attributes like price and product quality to more abstract factors. For example, if a customer is in alignment with a brand’s vocalized vision or a particular set of values, the brand’s products might fulfill the customer’s needs.

Customer needs can be very complex. They can also vary a lot, even between target groups in the same business. Additionally, many customers don’t explicitly state their needs upfront. That’s why research is often needed to determine why a customer connects with a certain product or solution, or what would help build that connection.

• Types of customer needs

There are several categories of customer needs, including functional, emotional, and social. While your analysis might reveal more needs in one category than another, it will likely show many customers have needs in every area.

Functional needs

Your product or service will need several basic functional uses to establish value for your customers.

Functionality is one of the most important types of customer needs. If your customer can’t figure out how to use your product, it won’t solve any of their needs.

Usability, such as an intuitive, user-friendly design, is another important factor, along with product performance and efficiency.

Price is another functional need you should consider. Your product or service might not be accessible to the target group you are trying to reach if it’s too expensive.

Social needs

When a customer interacts with your business on any level, they will come away with an impression of how you can bring value to their lives.

Often, their needs in this category revolve around your customer service department’s accessibility and friendliness. Most customers want to be able to get in touch with a business easily, without lengthy wait times or complicated email chains.

Transparency is another type of customer service need, with many customers wanting businesses to offer honest explanations for topics like pricing and product availability.

Emotional needs

Every customer has certain emotional needs that have to be met to build and maintain a strong relationship with a business. Customers need to feel empowered when they make contact with your company, whether they are speaking to a member of the customer service team or the sales department.

Information should be easily accessible on your website, and customer service teams should be trained in how to interact with anyone who reaches out, whether by phone or email.

Friendliness is another important customer need that you should always prioritize. A friendly attitude helps ensure good brand recognition and fosters better relationships with the customers you serve.

• Conducting a customer needs analysis in six steps

Performing a customer needs analysis can give you insight into all of the areas above, informing your business decisions and directly impacting your bottom line.

Here’s how to conduct a thorough customer needs analysis in six steps:

1. Identify the customer journey

Before you start collecting data, break down every step of the customer journey and examine each one. By understanding each step of the customer journey and the various ways that clients interact with your business, you will be better prepared to address individual pain points and identify needs that you haven’t yet thought of.

2. Collect data through user segmentation

Once you have defined your target audience, it’s time to segment your customers. This allows you to get a more granular view of customer needs and improve the overall experience of various customer segments .

If you’re unsure about which determining factor to use when segmenting data, consider creating one group of users who haven’t yet engaged with a core feature and another with those who are further along in their journey with your company.

3. Conduct primary research

There are several ways to conduct primary research , but some common methods include:

Customer need surveys (online, postal, or in-person)

Interviews (telephone or in-person)

Focus groups

User needs assessments

Ethnographic studies

3. Curate in-app customer feedback

Many businesses make the mistake of only collecting data once or twice a year, through focus groups or specific surveys. However, collecting customer feedback throughout the year via embedded app tools allows you to collect a goldmine of expressed customer needs.

You can do this by implementing small surveys at different stages of the customer journey, with two or more questions that can reveal your customers’ primary goals.

4. Examine data using appropriate tools

Visualizing your data through a powerful web tool can help you spot trends and better analyze specific customer needs.

Work with your product and development teams to find and implement a report or interface that works for your needs. Then, curate your customer data accordingly. Ideally, look for a solution that enables you to view the usage of a specific feature and gives an overall view of appropriate customer journeys by the target group.

5. Analyze your findings to determine customer expectations

If your customer needs analysis questions were created thoughtfully, combing through the collected data should reveal lots of helpful information about your customers’ needs and wants.

You can see what’s working well in your organization as well as what changes might be needed to better serve your customers and fulfill their unique needs.

If you need some assistance analyzing and interpreting the data you collect, consider partnering with a business that offers custom analysis and deep data insights. This will enable you to uncover patterns and spend more time getting to the core of your customers’ needs. 

6. Align your processes with customer needs

After collecting and analyzing the data, it’s time to act on the new information you’ve gleaned from your customers. Work with your product and service teams to interpret the data to better understand customers’ specific needs and start making a plan for actioning changes.

Don’t overcorrect at this stage. It’s best to make small, actionable changes instead of large ones to understand what’s actually working and how you can address customer needs more appropriately.

Done correctly, a customer needs analysis should demonstrate your business’s strengths while revealing the areas where it can improve.

• Examples of customer needs analysis questions

As you prepare for your customer needs analysis, consider including questions for both passive and active customers. Segmentation allows you to obtain feedback from both groups. 

Here are some example questions to include in your research for active customers:

How easy or difficult is it to use the product?

How well did our product meet your needs?

What is one thing you would improve about our product?

For passive customers, consider including the following:

What made you stop using our products?

What first encouraged you to become our customer?

What can we do to improve your experience?

Put time and thought into these questions, as they form the core of the customer needs analysis. It’s a good idea to run them by the appropriate team members. Ask if they have any suggested changes or want to make any additions.

What is the purpose of a customer needs analysis?

The purpose of a customer needs analysis is to understand the needs and wants of a business’s target customer group. It can serve to increase revenue, improve customer retention, and enhance customer service efforts.

How do you determine a customer’s need for a product or service?

To determine a customer’s need for a specific product or service, you should conduct research through survey questions, feedback forms, in-depth interviews, or focus groups. A customer needs analysis can reveal whether your target customer might be interested in purchasing your product or service.

Should you be using a customer insights hub?

Do you want to discover previous customer research faster?

Do you share your customer research findings with others?

Do you analyze customer research data?

Start for free today, add your research, and get to key insights faster

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What are Customer Needs and The Strategy to Meet Them

Salesforce Staff

Share article.

What are customer needs? Answering that question may not always be easy – but it’s crucial for business success. After all, knowing what the customer wants is the starting point for creating winning products and services. Just as importantly, it’s the basis for forming long-lasting relationships.

The State of the Connected Customer report reveals that 62% of customers expect businesses to anticipate their needs, and 73% expect companies to understand their unique needs and expectations. If your business isn’t proactively working towards understanding its customer and addressing their concerns, it risks falling behind competitors that are.

Let’s take a look at how you can determine the needs of your customer – then go about satisfying them.

Find out what CRM can do for you in the Salesforce CRM Superpowers ebook

Get to grips with CRM and learn how it can help you cut costs and improve efficiency in your SME business.

What are customer needs?

Put simply, customer needs are the factors that influence the purchasing decisions of consumers and B2B buyers. By anticipating and meeting customer needs, brands can create offerings that better connect with the consumer and buyer, while increasing profitability and driving long-term loyalty.

Main categories of customer needs

There are many factors that might influence purchasing behaviour, from the simple and common to the complex and highly personal, but most fall into one of three types.

Practical. Customer needs are most often driven by practical considerations. These can include everything from price and availability to ease-of-use and functionality. If you’re offering a high-quality, low-cost product or service that’s easy to obtain or access, you’re catering towards practical customer needs. Customers driven by practical needs are likely to choose an offering that will simply help them perform a function or achieve a goal. This was once particularly true of B2B buyers, whose longer buying journey includes input from multiple stakeholders. But in a world where products and services often share similar price points, availability and functionality, B2B buyers are increasingly being influenced by emotional and social factors — whether they know it or not.

Emotional. What a customer wants can often be just as powerful a driver of purchases as what a customer needs. In other words, they may be driven by how an offering makes them feel. For example, they may choose a product that evokes pleasant memories from childhood. Or they may look for a product that makes them feel more confident or powerful. While a practical customer may choose a fuel-efficient compact car, an emotional one may splurge on a motorcycle. Consumers have always been influenced by emotional and social factors, but these factors are increasingly influencing B2B buyers as well. Harvard Business School professor Gerard Zaltman posits that 95% of cognitive decision-making happens subconsciously . This means that even buyers who think they’re being pragmatic are often responding to factors outside the rational. And this means that B2B organisations should focus on creating emotional bonds with buyers – not just winning over the procurement team.

Social. Some customers make purchases that are socially driven. For example, they may choose sustainable or ethical brands that reflect their lifestyle. Or they may opt for luxury products that are in-line with their social circle to keep up with the Joneses’. Socially driven needs are often considered to be the hardest to predict, but entire businesses have sprung up around tracking new trainer drops or tech releases. B2B buyers are also paying attention to socio-political factors in their purchasing decisions, as they need to justify partnerships to stakeholders. As such, they’re looking at their vendors’ CSR (corporate social responsibility), treatment of employees, environmental impact and community involvement in ways they never did before.

Decoding consumer needs: Unpacking product desires

Once you understand what your target customers need, you can start creating products that fulfil those needs and then marketing them effectively. However, those three categories of customer needs are very broad. It’s much easier to begin building products that fulfil those needs, if you can apply them to all the various aspects of product design and development.

In the shifting landscape of consumer needs, it’s crucial to understand the various factors that play a role in driving product selection and influencing purchasing decisions. So, let’s take a look at how nine aspects of product design relate to the three categories of customer needs.

Functionality: Bridging the gap between expectations and utility

When designing the functionality of a product, it’s vital to consider how it addresses the practical, emotional, and social needs of your target customers.

For practical needs, the product’s functionality needs to either resolve a specific problem or simplify a process for the user. Here you’re looking at your product’s core utility and what you’re going to promise your customers about what your product can do for them. When designing the functionality of a product to meet the practical needs of your audience, it’s a good idea to focus on usability, ensuring it’s intuitive.

Addressing emotional needs involves creating a user experience that consumers will enjoy. It doesn’t matter how well your product meets your customer’s practical needs, if they don’t enjoy using it they simply won’t use it and therefore they won’t recommend it to their friends. So, when designing your product’s functionality, it’s also a good idea to aim to evoke positive emotions like comfort, delight, or a sense of achievement.

Social needs are fulfilled when a product either helps people interact with others or elevates their social status. Some of the best products do both. When designing your product’s functionality to meet your customers’ social needs, think about how it could enable sharing or collaboration, helping users feel connected. Or, if that’s not possible, try to incorporate something that will help your product become a status symbol once it becomes popular. Anything you can do to help your users feel a sense of pride or belonging within their social circle when using your product is going to help make your product popular.

So, when it comes to designing the functionality of your product, you’ll get the best results if you can ensure it:

• Solves a problem or simplifies a process
• Is easy and intuitive to use
• Is comfortable to wear or use
• Delights your audience
• Helps users collaborate, share, or connect with friends, family, work colleagues etc.
• Gives people a sense of pride to own and use or helps them feel like they belong within their social circle

The price conundrum: Balancing affordability and value

In the same way that product functionality needs to meet the practical, emotional, and social needs of the intended users, so too does product pricing need to meet all three categories of customer needs.

When it comes to practical needs, the price must align with the perceived functionality and utility of the product. Customers need to feel they’re getting their money’s worth, and the cost of the product should correspond with its ability to solve a problem or enhance a process. Price also plays a practical role in the customer’s budgeting, so providing a range of options or payment plans can be beneficial.

Addressing emotional needs involves the psychological aspects of pricing. The price can evoke emotions of satisfaction or discontent, based on perceived fairness and value for money. If a product is priced too high, it may deter potential customers; if too low, it might create doubt about its quality. Therefore, a pricing strategy should strive to create a positive emotional response, where the customer feels they’re making a worthwhile investment.

Social needs pertain to the status symbol a product’s price can represent. For some consumers, purchasing premium or expensive items is a way to express their identity and status. Conversely, other consumers may derive pride from finding the best deals and saving money. It’s therefore essential you understand these dynamics within your target audience, and develop pricing strategies that respect and cater to these social needs.

Therefore, a well-crafted pricing strategy should aim to:

• Align with the product’s utility and the customer’s budget constraints
• Evoke positive emotions by providing perceived value for money
• Cater to the social needs of the target audience, whether they be prestige-seeking or bargain-loving.

Convenience: The silent influencer in consumer preferences

Designing a product for convenience is yet another balancing act that must address the practical, emotional, and social needs of customers.

For practical needs, ensure your product simplifies tasks and is easy to use. A product that seamlessly fits into the customer’s daily routine and requires minimal effort to operate ticks the boxes for practical convenience.

Emotionally, a convenient product brings peace of mind and reduces stress, making the customer’s interaction with the product enjoyable. The more effortless the experience, the more positive the emotional response.

Social needs are met when the product aligns with the customer’s lifestyle and collaborating with it, or sharing it, is effortless.

In short, when optimising your product for convenience:

• Make your product user-friendly and time-efficient
• Aim for a stress-free, enjoyable customer experience
• Ensure collaborating with or sharing you product is easy

Design matters: The aesthetic appeal in product selection

Sensing a pattern? Yep, you guessed it — design plays a significant role in addressing practical, emotional, and social customer needs too.

Practically, a well-designed product is easy to use and enhances the user’s efficiency. This involves thoughtful placement of elements, appropriate use of color and contrast for visibility, and a design that supports the product’s overall functionality.

Emotionally, the aesthetic of a product can evoke feelings of attraction, pleasure, and even joy. A visually appealing product not only enhances the user experience but also makes the product more desirable. It’s the emotional appeal of the design that often turns a one-time user into a loyal customer.

Socially, product design can influence how a product is perceived by others, often serving as a status symbol. A well-designed product can reflect good taste, sophistication, or a specific lifestyle, thus contributing to the user’s social identity.

A thoughtful product design should:

• Enhance usability and efficiency
• Create an emotional connection through visual appeal
• Cater to the social desires of the target audience

Reliability: Building trust through consistency

Reliability addresses the practical, emotional, and social needs of customers all in one go. From a practical perspective, a reliable product consistently performs as expected. Emotionally, reliability builds trust and reduces anxiety. Socially, the dependability of a product can enhance a user’s reputation.

Performance: Quality at the forefront

Similarly, performance addresses practical, emotional, and social customer needs all in one go. Practically, a product’s quality and operational excellence ensures it effectively delivers on its intended function. The key here is that the level of quality needs to match the customer’s expectation and your pricing strategy. E.g. There’s no point making a super endurable, disposable product as the cost would likely be too high for customers to stomach. Emotionally, a high-performing product can instill pride and satisfaction in the user. Socially, products known for their superior performance can elevate a user’s status among peers.

Efficiency: The quest for productivity

Product efficiency is fundamental in catering to the practical, emotional, and social needs of your customers.

Practically, an efficient product can simplify tasks, conserve resources, and save time for the user. It enhances the user’s productivity, proving its worth in their everyday routine. Here’s a great example of a product improving efficiency for a customer.

Emotionally, an efficient product can induce feelings of satisfaction and accomplishment. It can reduce stress by making tasks easier, and provide more time for enjoyment or relaxation, enhancing the user’s overall well-being.

Socially, an efficient product can serve as a status symbol, portraying the user as a conscious and responsible individual. In our increasingly eco-conscious society, products that promote efficiency are often viewed as desirable, elevating the user’s standing within their social circle.

An efficient product addressed the three categories of customer needs by:

• Simplifying tasks and saving time
• Inducing feelings of satisfaction and accomplishment
• Reflecting a responsible and eco-conscious image

Compatibility: The role of integration in consumer choice

The compatibility of your product with other products owned by your users is crucial in addressing practical, emotional, and social customer needs.

Practically, a compatible product that seamlessly integrates with existing systems or devices, can increase productivity for customers, reduce the learning curve for your product, and ensure your users don’t have to buy extra products to use what you’re offering.

Emotionally, a product that integrates easily can provide a sense of relief and satisfaction. It simplifies the user’s life, reducing potential stress and frustration that may come from incompatible devices or systems.

Socially, compatibility can enhance the user’s status in their circle. Having a product that works harmoniously within an ecosystem of devices demonstrates a user’s savvy tech awareness and can be a source of pride.

When designing your products, it’s a great idea to consider how compatibility could provide a better experience for your users. Compatible products:

• Seamlessly integrate with existing systems or devices
• Provide emotional satisfaction by simplifying the user’s life
• Enhance the user’s social standing by demonstrating tech-savviness

The experience quotient: More than just interaction

Customer experience is the culmination of every other part of the product design process. Products deliver a good customer experience if they: 

• Are intuitive, or at least have great instructions that make them easy to use
• Perform well and reliably
• Easily integrate with existing workflows and products
• Generate positive feelings such as joy, satisfaction, or excitement
• Make it easy for users to share their experience or feel like they belong when using the product
• Make users look good within their society

If you’re looking for ways to improve your customer experience, here are six ways to improve CX with data and measurement.

Navigating the terrain of service needs

Just as key facets of product design can fulfil all categories of customer needs, so too can the critical elements of service design meet all three categories of client needs. When designing new service for your clients, you’ll get the best results if you consider each aspect of the service from the following angles.

Empathy: The key to service satisfaction

Empathy is one of the most important customer service skills you can employ and building empathy into your services themselves also plays a vital role in meeting the practical, emotional, and social needs of your clients.

Practically, empathetic customer service provides solutions that truly fit the customer’s needs, thereby enhancing the overall value of the service. 

Emotionally, empathy can evoke feelings of being understood and valued, fostering a deeper connection between the customer and the service provider. 

Socially, customers who experience empathetic service are more likely to share their positive experiences, enhancing their status within their circles. 

When developing your services, see if you can incorporate empathy into your design process by:

• Really understanding what your clients need, so you can design the best solution
• Ensuring your clients feel understood and valued
• Making is socially desirable for your clients to share their experience with you

Fairness: The foundation of trust

Fairness is also crucial in addressing the practical, emotional, and social needs of your clients.

Practically, fair service policies ensure everyone is treated equally and without bias, enhancing the overall reliability of the service.

Emotionally, fairness can instill feelings of trust and respect, strengthening the customer-provider relationship. A good example of an unfair practice that really annoys clients is when service providers offer discounts for new clients without rewarding loyal clients.

Fairness is perhaps most relevant, however, to the social needs of your target audience. If they’re driven by the need to be ethical, they’ll want to know your services are fair to all clients, without any kind of social bias. Alternatively, for some target audiences, social responsibility might be a bigger driver, and they may be more likely to buy from a service provider that provides discounts for not-for-profits or contributes to worthy causes.

Fairness means different things to different audiences, so when designing your services, you might consider:

• Ensuring equal and unbiased treatment of all clients
• Balancing attraction tactics with loyalty strategies
• Giving back to underserved communities or those in need

Transparency: The service game-changer

There are practical, emotional, and social aspects to transparency too.

Practically, transparent service operations enable customers to make informed decisions, increasing the service’s utility.

Emotionally, transparency can induce feelings of trust and loyalty, making the service more desirable.

Socially, transparency enhances a customer’s social standing as they can confidently vouch for the service to their circle. It also gives clients the confidence that a service provider is honest and ethical.

Many businesses get nervous about sharing their inner workings, worrying that competitors might copy them. However, there are several benefits to transparency:

• Clients like that they can make informed decisions
• It fosters trust and loyalty
• Clients are more likely to recommend transparent services from honest, ethical businesses

Control: A new era in customisation

Control is another aspect of service design that can enable you to address the practical, emotional, and social needs of your clients.

Practically, giving customers control by allowing them to customise their services enables them to choose a service that exactly meets their needs, enhancing their overall experience and satisfaction.

Emotionally, control can incite feelings of empowerment and freedom, making the service more enjoyable.

Socially, having control enables customers to tailor the service to their social context, making it more shareable and recommendable.

The benefits of giving control to your clients can be highly rewarding:

• Enhanced customer experience and satisfaction, which leads to increased conversions along with greater loyalty and advocacy 
• Feelings of empowerment and freedom, which also leads to increased loyalty

Options: Choice is power

Options are an important way you can give your clients more control over their services and therefore options are a key way of meeting the practical, emotional, and social needs of your clients.

Information: The fuel of knowledgeable decisions

You might think giving your prospective clients information only fulfils their practical needs, but, with the right strategy, it fulfils emotional and social needs too.

Providing sufficient information empowers customers to make informed decisions, which is critical if they’re to choose a service that meets their practical needs by solving a problem for them. This includes the decision to buy as well as making informed choices about any options you offer.

Emotionally, information can evoke feelings of confidence and trust, making the service more appealing.

Socially, informed customers are more likely to share their knowledge, enhancing their social interactions and status, and effectively giving you free advertising and even free customer support. Apple’s support community is probably one of the most well known examples of this.

In short, providing information can:

• Foster confidence and trust
• Ensure your clients get what they need from your service, reducing churn and increasing referrals
• Enable you to create a community around your service and reduce your advertising and customer support costs

Accessibility: Anywhere, anytime service

Accessibility is perhaps the element of service design where it’s most obvious how to meet the practical, emotional, and social needs of clients.

An accessible service gives clients what they need, when they need it. That includes allowing clients with disabilities to benefit from your services. Accessibility therefore addresses the practical needs of clients in several ways.

A client who can’t access the services they need when travelling, will get really frustrated. Whereas a client who can start a project on their desktop in the office, continue it in the car on the way home by dictating to their mobile, and then continue on their home computer at the end of their journey, is likely to be pretty chuffed. These examples illustrate just how much of an impact accessibility has on whether a service meets the emotional needs of clients.

A client who wants to share their service with friends when traveling, or use it to collaborate with their blind assistant on the other side of the world, is far more likely to choose a service provider that enables them to easily share their fully accessible service with others.

To summarise, an accessible service:

• Can be used in any location at any time
• Has online and offline capabilities and can be used on any device (if it’s a digital service)
• Can be used by people with disabilities
• Enables sharing

Eight ways for identifying the needs of your customers

When it comes to addressing customer needs, a one-size-fits-all approach won’t work. For instance, you’ll want to tailor your messaging to prioritise the distinct concerns of different audiences.

But how can you gain key insights into your customers, so that you can not only meet their needs, but exceed their expectations? Here are 8 strategies for getting started.

• Follow your data. We’re living in the age of the digital imperative. You likely already have a wealth of information about your customers at your disposal, especially if you’re centralising your data in a CRM . Take a deep dive into your business’s data and see what’s connecting with customers, what can be improved, and what new opportunities can be identified from it.
• Talk to your customers. The best way to know what your customers want is to simply ask them. Deploying post-purchase surveys will help you evaluate your customer experience. You can also reach out to loyal customers for opinions on products and services. They may have some great ideas for improvements and new offerings.
• Raise your social media game. Try to engage with your customers in the places where they spend their most time. For many, that’s social media. Listen in on what people are saying about your business. Are you seeing recurring concerns? Can you use this information to drive improvements? Are you using your brand’s social media presence to showcase your voice and build more personal relationships?
• Gather feedback from your teams. Your sales and service teams speak to your customers frequently. Gather your reps and discuss what they’ve been hearing from customers. Do your teams have suggestions for new products or services? Do they have ideas for how you can improve the customer experience?
• Form a focus group. Forming a focus group isn’t for every business. After all, it can be costly. Moreover, these groups will not have the same in-depth knowledge of your offerings as your customer base will. But if you’re looking to move into new markets, a focus group can put you on the right path.
• See what people are searching for. One of the most cost-effective ways to see what customers need is to see what they’re searching for. You can use tools like Google Keyword Planner to gain insights into customer behaviour. You can see how many times phrases and keywords have been searched each month, so you can see what’s trending up. Or you could use Google Trends to see more specific data, with searches being further segmented.
• Learn from your competitors. Your competitors are helping to define your marketplace, so it’s important to keep up with any new products or services they’re offering. Look for ways you can use this market intelligence to improve your offerings or create new ones.  You’ll also want to pay attention to their messaging. How are they positioning themselves? After all, they’re trying to reach the same customers you are.
• Use Artificial Intelligence. Artificial intelligence is one of the most customer-centric technologies that SMES can use. Not only can AI tools analyse data to identify unique needs and preferences; they can help SMEs create tailored customer journeys. AI can also increase efficiency, improve service and create more customer-centric marketing campaigns.

You understand the needs of your customer – what’s next?

Now that you know the needs of your customers, you can build a blueprint for meeting them.

Some of the steps towards building a customer-centric strategy include:

• Get regular feedback from your customers. Talking to your customers isn’t a one-time thing – it should be done regularly. Establish a feedback loop where you can constantly evaluate the products and services you’re offering, and the market’s response to them. This regular monitoring of consumer needs will help you respond quickly to market shifts and emerging customer concerns.
• Perfect your brand’s messaging. You’ll want to create different messaging for different audience segments, considering their specific needs and the channels through which they shop. Make sure that your marketing is aligned with customer needs and that your communications highlight the most relevant benefits of your products and services.
• Brainstorm new products and services. Knowing what your customers value and prioritise when making a purchase will help you create innovative offerings that not only address their needs, but stand out from the crowd. Look at the results from your focus research. Is there a gap between what customers need and what’s available?
• Create the need. Some businesses have an ‘if you build it, they will come’ approach. Instead of researching and responding to the existing needs of their customers, they create a new need in their customers. For example, it’s unlikely that socially conscious Millennials are wishing there was a credit card made just for them, but if you offer a card that donates to charities, provides rewards based on purchases from sustainable businesses, and sponsors community building, you may create that customer need.
• Level up your loyalty programme. Look at your business’s loyalty programme . Is it centred around the needs of your customers? Is it offering value at the right places? Loyalty programmes are a powerful tool for building relationships, so ensure that your programme is working as hard as it could be.
• Re-evaluate your customer service KPIs. Quick and convenient should always be the priority when it comes to customer service. But once that frictionless service is in place, can you add further value to the customer experience ? Look at your service KPIs (Key Performance Indicators) and see if they can be supplemented to not only measure successful resolutions, but how well you’re meeting the ongoing needs of your customers. In other words, turn your service into a relationship-building machine.

Ready to follow customer needs to exciting new places?

By following the needs of your customer, you can ensure that you’re always putting them first. And by designing your business around offering solutions, you’ll be well on your way to winning trust and increasing customer retention.

See how customer-centricity can help build relationships and how digital tools can help

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