Defining Customer Needs: The Root of the Problem

Despite the available needs-gathering methods, companies nearly always fail to uncover all or even most of the customer’s needs.

How is this possible?

While nearly every manager agrees that the goal of innovation is to devise solutions that address unmet customer needs, a common language for communicating a need does not exist.

In research we conducted, we found that 95 percent of managers say there is internal disagreement on what a need is and how a need should be defined. Marketing and development teams in particular have strongly opposing views on what constitutes an actionable need statement. Consequently, while many employees may have customer knowledge, companies rarely have a complete list of agreed upon customer needs. Is there anyone in your organization that knows all the customer’s needs? Is there agreement across the organization on what the customer’s needs are? Is there agreement on which needs are unmet? If not, then how can there be agreement on what products and services to produce?

The sad reality is that despite all the talk about satisfying customer needs, there is very little understanding of what characteristics a customer need statement should possess and what the structure, content, and syntax of a need statement should be.

Abbie Griffith and John Hauser loosely defined “customer need” in their 1991 article “Voice of the Customer” as “a description, in the customer’s own words, of the benefit that he, she or they want fulfilled by the product or service.” [Abbie Griffin and John Hauser, “Voice of the Customer,” Marketing Science 12, no. 1 (Winter 1993), 4.]

Today we know that obtaining inputs in the customer’s own words will more often than not result in the wrong inputs. Most managers, consultants, and academics agree that companies must look beyond the customer’s own words to extract the kind of input that is needed, but they cannot seem to agree on whether or not a need is a description of customer benefit, a measure of customer value, a statement of a problem, or something else entirely.

We also find that managers cannot agree on how the statement should look, what information it should contain, how it should be grammatically structured, or what types of words and phrases should be used or avoided to ensure variability is not introduced into the statement—variability that can adversely affect later prioritization of unmet needs. Managers find themselves in a position that is analogous to that of a chef who knows that certain ingredients are required to produce a certain taste but is unable to figure out precisely what combination to use. And once forced into that position, getting it right becomes a process of trial and error.

Many academics, consultants, and supplier firms end up regarding the collection of these customer inputs as an art. In fact, some of the most popular approaches today utilize anthropologists to “seek out epiphanies through a sense of Vuja De,” as IDEO general manager Tom Kelley says in The Ten Faces of Innovation. [Tom Kelley makes that statement on page 17 of The Ten Faces of Innovation (New York: Doubleday, 2005). He goes on to say that anthropologists have a half a dozen distinguishing characteristics that include, for example, practicing the Zen principle of “beginner’s mind,” embracing human behavior with all its surprises, and drawing inferences by listening to their intuition. Our opinion is that while this approach works for IDEO, it makes innovation more of an art than a science.

Others do not discriminate one type of input from another. For example, Gerry Katz, the vice president of Applied Marketing Science, Inc., writes, “[In distinguishing between needs and solutions] Ulwick adds the term desired outcomes… a useful description to be sure, just as Christensen has popularized the term jobs. But neither of these is conceptually any different from the other terms that have been in use since at least the mid-1980’s: wants, needs, requirements, benefits, problem, tasks that the customer is trying to accomplish, and jobs which the customer is trying to get done.”

All these terms are not conceptually the same. The nuanced differences between these terms, as revealed through Jobs-to-be-Done Theory, represent a breakthrough in innovation—one that can easily be overlooked when viewed through a traditional VoC lens.

To make matters worse, there is also a widely held assumption amongst company managers that customers have latent needs, or needs that customers are unable to articulate.

For 20 years, this belief has been supported and perpetuated by many well-respected individuals and organizations. In their 1991 best seller, Competing for the Future, Gary Hamel and C. K. Prahalad warn companies of the risk they run if they cannot get a view of the needs customers can’t articulate.

The Product Development Management Association (PDMA) states that “customer needs, either expressed or yet-to-be-articulated, provide new product development opportunities for the firm.” [From the definition of “customer needs” in The PDMA Glossary for New Product Development (Mount Laurel, NJ: PDMA, 2006), http://www.pdma.org/npd_glossary.cfm.]

Peter Sharzynski and Rowan Gibson explain in Innovation to the Core that “radical innovators are deeply empathetic; they understand—and feel—the unvoiced need of customers.” [Peter Skarzynski and Rowan Gibson, Innovation to the Core, 69.]

Even the process-oriented P&G CEO, A. G. Lafley, says in The Game-Changer that “great innovations come from understanding the customer’s unmet needs and desires, both articulated and unarticulated—that is, not only what they say, but, more important, what they cannot articulate or do not want to say.” [A. G. Lafley and Ram Charan, The Game-Changer (New York: Crown Business, 2008), 45.]

As a result of this belief, many companies assume that it is impossible to capture a complete set of customer need statements and that they have no choice but to execute the innovation process without knowing all of them. But this conclusion is far from the truth.

As amazing as it sounds, the truth is companies routinely try to satisfy customers’ needs without a clear definition of what a need even is. It is like trying to solve a word puzzle without knowing what a “word” is. So let’s not assume customers have latent needs.

Why does it matter? Take a look at your organization. Everything it does is based on what unmet needs the company decides to target. The marketing team must know the customer’s needs in order to define the company’s value proposition, segment markets, position products and services, and create marketing communications. The development team must know the customer’s needs so it can understand the strengths and weaknesses of the company’s products, decide what new features to add to existing products and what new products to create. The R&D department makes technology investments based on its understanding of customer needs. Finally, the sales team’s success depends on its ability to show customers that the company’s products meet their needs.

How to get a handle on customer needs is an unsolved mystery—and that mystery is killing innovation. Before a company can succeed at innovation, managers must agree on what a need is—and the types of needs that customers have.

The key to solving this mystery lies in Jobs-to-be-Done Theory.

Learn more >>

ulwickjtbdbook

JOBS TO BE DONE: Theory to Practice
by Anthony Ulwick
IDEA BITE PRESS October 25, 2016

25years

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