How to Define Customer Needs

Do you know what your customers need? That is a critical question for any business, a fact recognized by lean principles. The entire foundation of lean is delivering value to the customer – and the customer defines value.

            On this topic, I was intrigued by a presentation I heard recently at the Customer Needs Discovery & Innovation Congress, a conference sponsored by the Management Roundtable.

            The talk, by Tony Ulwick, was about defining customer needs. In other words, once you understand the issues facing your customer, how do you translate that into clear statements of need – which are the basis for design of the products or services you provide.

            It may sound like a semantic issue, but it’s a lot more than that. A poorly defined need may lead you to deliver less than the customer wants – or miss the point completely.

            Ulwick is CEO of consulting firm Strategyn and author of the book What Customers Want. He argues that there is no agreement on what a customer need is, which means companies cannot figure out what customers want.

            Ulwick addresses the issue with the observation that customers buy products and services to help them get functional and emotional “jobs” done. Needs, he says, should be defined in terms of those jobs – not in terms of products or services.

            Further, Ulwick says there are key principles to be followed in defining needs. A customer need, he contends, must:

• Be based on a system of value measurement that is universally accepted by customers
  
• Be relevant now and in the future
  
• Not be left open to interpretation
  
• Not confound the way it or other need statements are prioritized

            As an example, Ulwick discussed the “job” of farming corn. To do that job, the farmer must select the seed, control the insects, control the weeds, prepare the soil, plant the seed, grow the corn, protect the crop, harvest the crop, dry the harvest, market the crop and assess the yield.

            Ulwick and his firm (I believe they were working for a company that makes seeds for growing corn) identified a total of 156 needs associated with the steps in farming corn. A few of them are:

• Minimize the time it takes for seeds to germinate.
  
• Increase the percent of needed nutrients that are absorbed by the plant.
  
• Minimize the likelihood of corn rotting during storage.

            Notice the phrasing of those needs. Using the first one as an example, it begins with “minimize,” which indicates the direction of the desired improvement. Then, “the time it takes” indicates the unit of measurement. Finally, “for seeds to germinate” is a statement of what must be improved.

            A seed company can use this information to improve the seeds so they produce the results farmers want.

            Marketers or product designers sometimes complain that customers do not clearly articulate needs. Ulwick contends that when the job is the unit of analysis, there are no latent or unarticulated needs. “Customers may not be able to articulate a solution, but they can certainly articulate what outcomes they want to achieve,” he says.

            Ulwick’s firm works with clients to, first, identify the needs of their customers. They then conduct an analysis to determine whether, in the current marketplace, those needs are being under-served, over-served or served appropriately. That helps determines the client’s strategy for coming up with new products and services.

            One example he described was how the Bosch company used this data to design a new circular saw. The analysis determined that customers had needs to minimize problems related to problems with the cord. (It would get cut accidentally, snag on the material, etc.) Bosch eliminated the cord, so the extension cord that is almost always used plugs directly into the saw, but in a way designed to improve safety.

            Also identified were needs to minimize the amount of debris thrown up into the user’s face, and to minimize the likelihood of moving off the cut line because it is obscured by debris. The new saw takes the wind created by the saw and directs it forward, blowing sawdust off the cut line and away from the user’s face.

            Do you know what your customer’s needs are? Do you have confidence that you are truly delivering value to the customer? Defining your customer’s needs is something you can never stop doing.