What do my customers need? The answer to this question can make or break a business. Most users not only expect a company to know what they want but to also provide a shopping experience personalized to meet their unique needs.
For companies that succeed in this endeavour, rewards are immense. Satisfied customers are more likely to make a purchase and are willing to pay a higher price. As a result, customer-centric companies are 60% more profitable than their less customer-focused counterparts.
Customer dissatisfaction, on the other hand, leads to poor conversion and significant monetary losses. One study showed that a single negative experience can cause 32% of otherwise happy and loyal customers to abandon a business. In the worst case scenario, not knowing what customers want can drive a business into the ground. In fact, 40% of start-up failures happen because there is no demand for the product the company offers.
Luckily, there are many strategies that can help you identify your customers’ needs. In the following lines, we will look at the five most common ones.
Conduct Surveys to Learn About Your Customers’ Needs
No matter whether you are a new company or an established one, contacting customers directly is vital to understanding their needs and ultimately, ensuring that those needs are successfully met.
One of the easiest ways to obtain useful information from customers is through surveys. Inexpensive, easy-to-analyze, and quick to fill-out, they can provide large amounts of user data in a short amount of time. You can use tools like SurveyMonkey and Google Forms to create attractive questionnaires and even get assistance with simple data analysis.
As useful as they are, surveys have one significant limitation. They tend to produce shallow responses to questions that are broad and more open-ended. “How was your experience with purchasing this product?” If you ask this question in a standard feedback survey, you will likely get many brief, vague responses such as “Good” or “Not great.” Even though these statements would give you a general idea of customer attitudes, they reveal little about the exact user needs you failed to address and the improvements you need to initiate.
To avoid issues with vague responses, use surveys with mostly concrete, measurable questions. For instance, to decide what functionality to include in your product, ask the following questions for each potential feature of interest:
- If you had (feature), how do you feel?
- If you didn’t have (feature), how do you feel?
For each of the questions, provide these five possible response options.
- I like it
- I expect it
- I’m neutral
- I can tolerate it
- I dislike it
This question setup, proposed by the Kano Model of Customer Needs, is ideal for surveys as it leaves little room for making an incorrect assumption or interpretation.
Gather Further Detail by Talking to Your Customers Directly
Surveys have many benefits but they are rarely enough to build a full picture of your customers’ wants and needs.
Oftentimes, concrete, measurable questions don’t provide all the answers and you need to go broader and more general. You might want to ask clarifying questions, encourage ideation or brainstorming, or ask open-ended questions about the problems and everyday experiences of your customers. In those cases, it’s best to talk to your customers directly in the form of interviews or focus groups. In contrast to surveys, these methods allow you to gather in-depth data that is more resistant to misinterpretation. If anything is unclear, you have direct access to your participant, so you can immediately ask for clarification.
More recently, there has been a new, more informal method of direct communication with customers – social media conversations. Nowadays customers are happy to share their product needs, expectations or frustrations via social media and many successful businesses have taken advantage of this trend to gain immediate access to user opinions.
Take Advantage of Web Analytics
Web data is a valuable source of information about your customers and their needs. Web analytics tools like Google Analytics or Hotjar can help you identify various customer characteristics such as age, gender, location, keywords history, and even personal interests. Once you know the types of customers that visit your website, you can come up with more informed inferences about their needs and expectations.
Demographic information becomes even more valuable when paired with data on the actual customer experience. Luckily, web analytics tools are not limited to general customer background. They can provide information about how users interact with your website – what elements they tend to click, what sections they spend the most time reading, which pages they open and how they leave them. Every action, from clicking a menu to closing a window, provides a glimpse into your customers’ needs and whether those needs are successfully met. For example, users may repeatedly click an underlined piece of text erroneously expecting that it’s a link, or they might get lost during the checkout process and fail to complete a purchase. By gathering insights into your customers’ web behaviors, you can identify opportunities for optimizing the user experience and reducing causes of user frustration.
Web analytics, however, do not provide all the answers. For example, you may notice that most users miss your call-to-action button but simply observing this behaviour does not necessarily tell you the cause of the issue or how you can fix it. Therefore, it is important to supplement web analytics with other research tools such as interviews. These allow you to directly communicate with your users so you can better understand their needs and expectations.
Alternatively, you can refer to established usability principles to make assumptions about the possible causes of customer frustration, confusion, or lack of engagement. For some useful tips, check out our previous article on improving the usability of your website.
Align Your Business Strategy with Customer Personas
The more information you gather about your customers, the harder it becomes to organize and keep track of it. This is where customer personas come in.
Personas are fictional characters that represent your main customer types. Good personas feel like full-fleshed, real humans you can empathize with. They have a name, age, occupation and a range of distinct likes, dislikes, problems, goals, and needs.
Personas are an excellent tool for summarizing all your research into something practical that can assist you on an everyday basis. Wondering if a new feature will be useful to your customers? Rather than guessing, you just put yourself in the shoes of your persona and try to think like them. Will this new feature meet your persona’s needs? Will it fit with their lifestyle and provide solutions to an everyday problem of theirs? If the answer is no, well, you just saved yourself a ton of money and time.
When building personas, make sure you create one for each major customer type. This is important as often, different customer types have different needs, and you may want to ensure that each of those groups is greeted with a thoughtfully personalized approach.
Ideally, every design decision, every product, every service, or feature, must be carefully aligned with the needs of one or more of your personas. Otherwise, there is simply no market demand for it; and as history shows, businesses that don’t consider market demand are unlikely to succeed.
Find Your Niche
Once you have a good idea of who your customers are and what they need, the next logical step is to understand how well their needs have been met by the current market.
Start by identifying your most representative competitors. Then, look at how well they are meeting your customer needs. Some questions you can ask yourself include:
- What do customers like or dislike about the competition?
- How well are these competitors meeting my customers’ needs?
- Are there any customer needs that have not been met yet?
- Are there any customer groups that the competition is forgetting to serve?
- What can I offer to customers so they choose my business over the competition?
By analyzing other businesses in your niche you can see how well they are serving your customers and where you and your product can fit in. Perhaps there is a customer need that hasn’t been met? An underserved customer group? An opportunity for providing a better user experience? For more tips and tricks on performing a competitive analysis, check out our recent article on the topic.
Understanding customer needs is the backbone of a successful business strategy. It increases both profit and customer satisfaction; and ensures there is truly a market demand for your company’s service or product.
We hope that the techniques explained in this article can assist you in making your business more customer-centric. If you need any help in the process, don’t hesitate to contact us!
Gabriela Kostova is a UX Designer and Front-End Developer at DodoWeb. She has a background in Cognitive Psychology, Information Design, and Usability.