How to Understand Your Customers’ Needs (And Build a Better Business)

Photo by The 77 Human Needs System on Unsplash

What makes people patronise your business? It’s not your brand colors or the superiority of your product. It’s not even your marketing. It’s their own needs.

If you want to build a business that people buy from and even return to, you need to understand your customers’ needs better than anyone else or at least have a solid grasp of them. Armed with a good understanding of your customers’ needs you can grow your business exponentially.

What are customer needs?

Customer needs are the desires or motivations that drive people to look for a product or service. It is that gap between where your ideal customers are right now and where they want to be. Your business or product exists to help them bridge that gap.

Customer needs vs Customer wants

A need is something that is necessary for a person to survive or reach a desired state. Things like food, water, shelter, health, belonging, and more are common needs of the average human. In business, a need is a pain point that a customer wants to solve, which drives them to look for a solution.

A want, on the other hand, is something you desire but is not essential for survival or basic functioning. You would like to have it, but it’s not something you must have. In business, a want is often how people choose to satisfy their needs. People’s wants are often shaped by their personal taste, culture, or marketing, while needs stem from basic human requirements.

It’s important to understand that there is a difference between what your customer needs and what your customer wants. When you build around what customers say they want instead of what they truly need, you end up solving symptoms instead of problems.

And that usually causes two big issues:

• You build features nobody truly cares about (even after saying they want it) and end up wasting time, resources, and development effort on things that don’t improve satisfaction or sales.

• Your marketing misses the emotional core. Because if your marketing doesn’t speak to the real need, customers won’t feel understood. They’ll scroll past your ad of content, or worse, choose a competitor who does speak to their pain points or needs.

But when you build around needs, you can adapt your product or marketing without losing direction, just like how Google keeps evolving its products but still serves the same core need: helping people find information easily and efficiently.

However, this doesn’t mean you can’t do the two concurrently. You can address both customers’ needs and wants, but remember never to sacrifice needs for wants. Needs rarely change, but wants change constantly. So anchor your business on the need, not the want.

The different types of customer needs

According to Harvard Business School, customer needs can be divided into 3 main categories:

1. Functional needs

These are what the product does, that is, the job it performs. Customers want a product or service that works and solves their problem. They need something that gets them from point A to B. This is the most important type of need to address. It’s very often the core of your whole business.

2. Emotional needs

These are about how the product makes the customer feel. People often look for and buy things to experience emotions like confidence, pride, security, joy, peace of mind, etc. If you understand this need, it will improve your ability to market your product or service.

3. Social needs

These needs are about how others see the customer because of what they use or buy. People buy to express themselves and belong to some groups. They find identity in what they buy, and you can key into this.

Why is it important to understand customer needs?

Understanding customer needs is the foundation of every successful business. 85% percent of consumers say they want brands to understand their needs and expectations and 63% already expect that companies do. Understanding your customer needs will come in handly when building your product, attracting customers and marketing to them.

1. Understanding customer needs helps you build products that actually solve problems

When you build around needs, your product becomes useful, not just pretty. Doing the opposite is the reason why many businesses fail. They create perfect solutions no one needs. So make an effort to deeply understand customer needs. That way, you’ll ensure you’re solving real problems, not just interesting ones. For example, Canva succeeded because it solved the need for simple design, not the want for fancy tools.

2. It makes customers satisfied and loyal

When customers feel understood, they trust you and stick with your product. People don’t stay loyal to products “just because”, they stay loyal to brands because those brands “get” them, even if they don’t explicitly state this. Understanding needs and building on them also helps you create that emotional connection that builds communities around a brand.

3. It makes marketing easier and more effective

When you understand your customer’s needs, your marketing becomes more effective because you’ll understand how to speak their language. You’ll know what to say in your marketing materials, where to say it, what to emphasize, and how to position your message for impact. You can bypass all the guessing and speak directly to the particular emotions and motivations that drive the buying decisions of your customer, leading to a better return on any investment you make in marketing.

Ways to understand what your customer really needs

Customer needs aren’t always point-blank obvious. Most of the time, customers can’t even clearly explain what they need; instead, they turn to describing their frustrations or preferences. But this doesn’t mean that these needs are impossible to discover. It just means that to understand your customers’ needs, it will take a generous sprinkle of empathy and beyond-the-surface research.

These are some of the methods you can use to uncover customer needs:

1. Talk to real people (interviews & conversations)

This is the most direct and insightful method of understanding what your customer needs. With this, you go directly to the source and have face-to-face conversations. You talk to real or potential customers of your business to understand the motivations and desires behind why they patronize your business, in their own words.

You’re not trying to pitch or sell here. You’re trying to lean back and listen to them talk about their frustration, why they use certain tools instead of others, what they want to achieve by using the service or product, what problems or issues they are having, their language, their tone, where they light up in the conversation, where they struggle to express their thoughts, and every other insight you can find. When you speak to your target audience and you spend more time listening than talking, they will often reveal their real needs unconsciously, between the lines.

2. Run surveys

Surveys help you gather insights at scale and validate what you heard in interviews. When conducting a survey, you send structured questions to a large group of your potential or current customers and sift through their answers to spot patterns that indicate their needs and preferences. A good survey for this purpose will include both quantitative questions (rating scales, aka, the 1-10s) and qualitative questions (open-ended, fill-in-the-blanks, etc) to get both context and emotion.

3. Watch what people actually do (Observation)

People often say one thing but do another, so observing reveals the truth that people won’t admit to themselves. When asked, someone might tell you they love your website and it’s easy to use, but upon observing them, you realize that they actually abandon their cart halfway through checkout. That’s why observation is powerful, it tells you things that people won’t.

To understand what your customer truly needs, watch how they interact with your product (you can do this through usability tests, recordings, analytics, etc). See where they hesitate or get frustrated. Note where they visit more often than the rest and what features they mainly use. This will tell you what they need or don’t.

4. Social listening

People constantly talk about their problems online, on Twitter/X, Reddit, Facebook groups, and other forums. If you take your time to listen to those conversations, you can understand what your target audience complains about or desires, even if they’ve never heard of your brand or spoken to you.

The internet is a goldmine of unfiltered customer opinions. Take advantage of its rawness and gather as much insight as you can from the hubbub online. Listen to discussions about your issues relating to your brand and competitors or ongoing trends that relate to your business.

5. Competitor research

If your competitors are successful, it means they’re already meeting certain needs that your customers have…and possibly missing others.

Your competitors, especially the big brands, have already tested the waters. They’ve discovered some customer needs and are already maximizing it. It’s what they emphasize in their messaging, their imagery, their features, their content. Most times it’s everywhere and even in their reviews.

They can serve as pointers for you. But don’t copy them blindly or use this method as your only way of discovering what your customer needs because who knows, your competitors may just be in the dark as much as you are…just with a bigger ad budget. They might also meet certain needs but miss others so this can be an opportunity to learn from their blind spots.

6. Industry and market research

Customer needs can be revealed by looking at the bigger picture. Poring through industry reports and market research gives you that wide-angle view of your customers’ collective needs. When you use this method, you’ll know what your customer feels today and even spot trends and emerging patterns that show what thousands of customers might start wanting next.

So, once in a while, it’s a good practice to look into reports and trend analyses from your niche. zWhile interviews, surveys, and observation help you understand today’s needs, industry research enables you to prepare for tomorrow’s.

Finally…

Understanding customer needs is only the beginning; what matters most is what you do with that knowledge. Once you know what your customers need (which is what really makes them buy), align everything you create with those needs. Let what you’ve learned shape your product features, messaging, marketing, every aspect of your business. And make this a continuous process because customer needs evolve.