In modern marketing, the customer should be at the centre of everything the company does. In other words, one should always start with the customer or consumer – a concept called customer centrality. For this, we must understand the different generic customer needs. In the following, we will investigate these needs to know what to look for when analysing customer needs.
According to the concept of customer centrality, the customer’s needs, wants and predispositions must be the starting point for all decision-making within the organisation. Customer centrality is a matter of finding needs and filling them, rather than making products and selling them. The reason is that unless we create value for customers, they will not offer value in return. So, analysing customer needs should be the very first thing to do.
Analysing customer needs
Understanding and analysing customer needs is, unfortunately, not as easy as it seems. In New Product Development, for instance, sophisticated techniques exist to uncover customer needs before customers are aware of these needs themselves. What we want to concentrate on now are the different natures of needs customers can have, which is the first step in analysing customer needs.
Customers can be seen to have five different types of needs that are relevant for marketers. Of course, many different ways exist to distinguish needs, such as Maslow’s hierarchy of needs or McClelland’s Human Motivation Theory. However, for analysing customer needs from a marketer’s point of view, five needs are of particular relevance. These five needs are generic to all customers, whether they are commercial customers, consumers, people buying on behalf of family or friends, or even organisational buyers.
The 5 generic Customer Needs
Current product needs
All customers for a given product have needs based on the product features and benefits. They may also have similar needs in terms of the quantity of product they buy, and any problems they might face in using the product (for example, complex equipment such as GPS units may need specialised instruction manuals).
Predicting future needs of existing customers is a key element in customer orientation. Typically, this is a function of marketing research (see for instance NPD), but part of the customer centrality concept is that we should not tire out our customers by constantly asking them questions – some people resent being asked about their future needs, even though the firm might only be trying to be helpful.
Desired pricing levels
Customers naturally want to buy products at the lowest possible prices, but pricing is far from straightforward for marketers. Customers will only pay what they think is reasonable for a product, and obviously firms can only supply products at a profit (at least in the long term). Customers will only pay what they perceive as a ‘fair’ price (based on what they believe to be the benefits of owning the product), but equally, price is a signal of quality: people naturally assume that a higher-priced product represents better quality. Thus, cutting prices might be counter-productive, since it signals that the product is of lower quality.
Customers need to know about a product, and about the implications of owning it. This includes the drawbacks as well as the advantages. In most cases, companies are unlikely to reveal the drawbacks (except regarding unsafe use of the product) but customers will still seek out this information, perhaps from other purchasers and users of the product. Information therefore needs to be presented in an appropriate place and format, and should be accurate.
Products need to be available in the right place at the right time. This means that the firm needs to recruit the appropriate intermediaries (wholesalers, retailers, agents and so forth) to ensure that the product can be found in the place the customer expects to find it.
Understanding these five generic customer needs provides a proper basis for analysing customer needs.