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 -- their customers.
Yes, customers are the ones with the ability to determine 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.
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.
So to steer you in the right direction, here's a beginner's guide that defines the types of customer needs to look for, unpacks common barriers that prevent companies from fulfilling their customers' needs, and discloses solutions to start improving customer service.
Below are the most common types of customer needs -- most of which work in tandem with one another to drive a purchasing decision.
16 Most Common Types of Customer Needs
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.
Your product or service needs to be a convenient solution to the function your customers are trying to meet.
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.
The product or service needs to reliably function as advertised every time the customer wants to use it.
The product or service needs to perform correctly so the customer can achieve their goals.
The product or service needs to be efficient for the customer by streamlining an otherwise time-consuming process.
The product or service needs to be compatible with other products your customer is already using.
When your customers get in touch with customer service, they want empathy and understanding from the people assisting them.
From pricing to terms of service to contract length, customers expect fairness from a company.
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.
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.
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.
Customers need information, from the moment they start interacting with your brand to days and months after making a purchase. Business 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.
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.
If companies can begin to make changes before their customers' needs aren't fulfilled, this can ultimately lead to growth, innovation, and retention. However, with some many types of customer needs, how do you understand which ones apply to your customers specifically?
How to Identify Customer Needs
The first step to identifying customer needs is with a customer needs analysis that takes all of the following into account: product-market fit, customer feedback, input from your service team, and any customer service data you can gather. From there, you'll be able to identify customer needs as well as any friction that exists in your process.
"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.
If you design your process with these things in mind, you'll be able to uncover their needs at any stage of their lifecycle. But this understanding must come from somewhere, and that's where a customer needs analysis comes in.
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 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
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 with 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 towards 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 customer need.
To get everyone on the same page, organize sales and customer service meetings, send out new product emails, provide robust new employee onboarding, require quarterly trainings and seminars, or staff host 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 event 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 times 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 is 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 their lifespan is in danger.
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 alike all 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.
Types of Customer Service
- Social Media
- In Person
- 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 the phone because reps have less time to formulate an answer.
The most common flaw with phone support is the wait time. 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 than 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 an assist, 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.
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. When used together, each medium compliments the other and optimizes your overall performance. This creates an omni-channel experience for your customers which will keep them coming back for more.
However, it's important to note that customer service is reactive. 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 customer needs and continue improving on the experience.
Editor's note: This post was originally published in September 2020 and has been updated for comprehensiveness.
Originally published Feb 23, 2021 9:15:00 AM, updated February 23 2021