What are customer needs?
The success of every company is dependent on its ability to create products and services that address unmet customer needs. Despite this fact, in over 95 percent of all companies, marketing and development managers don’t agree on what a customer “need” even is. More specifically, they do not agree on what characteristics a customer need statement should possess, what information it should contain, its purpose, and how it should be structured. The first step in becoming a customer-centric organization is agreeing on a customer needs definition.
Over the past two decades, we have worked to overcome this fundamental problem by inventing the “perfect” customer need statement. Our work is grounded in the fundamental belief that people buy products and services to get a “job” done. Looking at markets through a jobs-to-be-done lens, we’ve discovered that a customer need is best defined as a statement that describes how a customer measures success and value when getting a job done. We call these statements “desired outcomes”. A desired outcome statement is uniquely structured to detail how customers define value and how a company can help create it. These statements, often totaling more than 100 for a given job, describe the precise dimensions along which customers potentially seek to get the job done better.
Take the job of listening to music, for example. Consumers tell us that they seek to (1) minimize the time it takes to find desired songs, (2) minimize the likelihood of choosing unwanted versions of a song, and (3) minimize the time it takes to change the order in which songs are heard. These customer needs examples show they are measures of customer value, actionable and controllable through product design, predictive of success, independent of a solution or technology, and stable over time. These are characteristics that “perfect” customer need statements should possess, as they enable an organization to align itself around the creation of customer value.
These unique customer inputs form the foundation for our innovation process, Outcome-Driven Innovation (ODI). Learn more about customer desired outcomes in the MIT Sloan article authored by Tony Ulwick, Giving Customers a Fair Hearing.
Myths that mislead
Managers and employees in nearly every company hold some of these mistaken beliefs about identifying customer needs. These beliefs are a key reason why companies struggle to innovate. These myths have survived for decades because companies commonly confuse customer needs with solutions. The key point to remember is that a customer need is not a solution, product feature, or idea. The truth is customers don’t know what solutions will help them get their job done best, nor should they. Customers are not engineers, scientists and materials experts. It’s up to the company to come up with the best solutions once the customer’s needs, or desired outcomes, are known.
If you still believe that any one of these myths are indeed true, it is because you are falsely assuming a need can be a solution. This product-centric mindset is why traditional methods for identifying customer needs don’t work; and these myths seemingly offer an explanation as to why.
Understanding customer needs before developing solutions
Steve Jobs said, “You’ve got to start with the customer experience and work backwards to the technology. You cannot start with the technology and try to figure out where you are going to sell it.” Our outcome-driven approach to innovation enables companies to do exactly that. Understanding customer needs before developing solutions is the hallmark of the ODI process.
ODI has its roots in six-sigma thinking where manufacturing engineers measure and control specific metrics to ensure a predictable process output. When applying this thinking to innovation, the goal is to understand the metrics customers use to measure success when getting a job done and to create products and services that help them get the job done faster, more predictably and with higher efficiency or throughput.
With a complete set of desired outcomes in hand, a company is able to evaluate a proposed solution to determine just how much better it will address the metrics and get the job done. Using this approach, companies can quantify the potential value of a proposed solution, thus making it possible to predict in advance of the development process what ideas will succeed in the marketplace.
Capturing customer needs is not easy
Customers do not naturally share the metrics they use to measure success when getting a job done. Consequently, customers must be engaged in a conversation that is designed to extract these desired outcome statements from them. The process begins by defining the job-to-be-done and the job map. The approach we use to gain these insights is the subject of one of Harvard Business Review’s most popular articles on innovation, The Customer-Centered Innovation Map, authored by Strategyn’s founder Tony Ulwick.
Trained interviewers can extract desired outcome statements from customers in nearly any customer setting including personal interviews, group interviews, and using ethnographic or anthropological research. In a typical one-hour interview, it is possible to capture between twenty and thirty desired outcomes from a single customer. The captured outcomes (totaling between 50 and 150 statements) collectively represent the set of performance measures that define the successful execution of a specific job.
Knowing the customer’s needs drives company growth
Having a full set of customer needs defined around the job-to-be-done impacts all aspects of innovation, including the way opportunities are defined, the way markets are segmented and sized, the way product and pricing strategies are formulated, and the way ideas are constructed, tested and positioned. Desired outcomes statements guide and drive the entire innovation process.