You often hear people in product development talk about how important it is to satisfy customers’ needs and wants. And while that sounds great, it’s actually quite difficult to figure out what your customers want from your product.
It is your product team’s responsibility to figure out what your customers want, even if they themselves are not sure. If you are successful, your new product or feature will do well when it is released.
This post covers different ways to determine customer wants and needs before and during product development if you’re having trouble discovering what customers desire from your company.
We need to understand the difference between a want and a need in order to develop the best product. A want is something that would be nice to have, but it’s not essential.
A need is something that is essential. For example, you might want a new car, but you need a way to get to work. In order to develop the best product, we need to understand the difference between a want and a need.
Customer wants vs. Customer needs
Customer Needs
Why are you creating a product? To address a pain or problem that consumers are motivated to solve.
Since needs are imperative to customer success, they tend to be easier to identify than wants.
If a customer is unhappy with a purchase, they may express their dissatisfaction by writing a negative review or requesting a refund.
Customer Wants
The things that customers want from your product but aren’t necessarily deal-breakers can be thought of as the cherry (or hot fudge for some) on top of a sundae.
There may be things that make you different from the competition and help you win customers who are undecided.
Even though they are not as important to the customer’s goals, it can be great to disrupt your competition by fulfilling the customer’s expectations.
A balance of customer needs and wants is important for the ideal product. Meeting customer needs should be the priority when making decisions because it is necessary for customer success.
In order to please your customers, give them what they want.
Finding Out What People Want And Need in A Product
First Party Data
First-party data refers to data that your company has collected directly from your audience. This data is specific to your business and can highlight interesting patterns and trends occurring with your existing customers.
You can use this data to identify customer needs and wants that are specific to the people who are already interacting with your business. Some first-party data reports that we recommend are:
Customer Behavior Analysis
A customer behavior analysis is a report that describes the buying habits for different target audience segments. It uses the customer journey map to highlight how certain personas will react to different touchpoints during their journey.
This report can help you find similarities between different customer groups, and then identify specific needs at different points in the customer’s journey.
Product Usage Reports
Reports on how customers use a product or service can provide helpful insights.
The analytics provided by the company are very detailed and highlight which aspects of your offering are being used the most, as well as which areas are being underutilized or abandoned.
The features that customers use the most are the ones that they need from your product in order to achieve their goal. Look closely at those products and identify what the customer’s goal is.
RFM Analysis
An RFM analysis is used to identify a company’s most valuable customers by looking at their buying history. The factors that are looked at are how recently they made a purchase, how often they make purchases, and how much they spend.
This information helps product personnel predict when a customer is likely to make their next purchase, and allows them to plan their release dates accordingly.
Qualitative Data
Qualitative data that describes the customer’s perspective is useful for understanding needs and wants. This data captures things that influence people, but can’t be measured numerically.
Some qualitative reports that you can analyze are:
Customer Feedback
When customers aren’t happy, this provides an opportunity for businesses to learn. Each day, customer support provides businesses with valuable information about users. However, it can sometimes be difficult to sort through all of this information.
Customers who are angry or frustrated are trying to communicate their needs to your business, while customers who are making suggestions are expressing their wants.
Even though customer reviews might be the same old thing, it’s still important to go through them to stay current on what users think.
Buyer Personas
For many marketing departments, developing buyer personas is the first step to understanding their target audience. This is because personas examine the influences on customer behaviors that go beyond just their buying decisions.
Product personnel can use these personas to segment the target audience by their wants and needs. Developers can then use this categorization to create features that are desirable to specific personas.
Customer Interviews
You can find out what customers think about your company by holding focus groups or customer interviews. You can ask them about individual aspects of your product and get immediate feedback from their responses.
This allows you to take a specific observed situation and get an explanation for why it happened. Information like this helps product managers guide their work when overseeing a new project.
Product Testing
Product testing should occur at various stages throughout the development process to ensure the success of new products or features with the target audience.
The following are some recommended testing methods to use during product development.
First-Click Testing
First click tests are useful for website and product designers as they can help determine customer wants. In a first click test, a participant is given a specific task to complete on a website or software, and the amount of time it takes for them to complete the task is measured. This information can be used to help make decisions about design changes.
These tests help you understand what customers want to do in a given situation and identify any obstacles in your design that prevent them from doing so.
You can create a user-friendly interface that meets customer needs and wants by running first-click tests during development.
Usability Testing
Usability testing is a method of evaluating a product or website’s user experience.
Developers use surveys to find out how easy it is for customers to use their product. They ask customers to rate their experience on a scale from one to ten.
Management then uses this information to improve their product to match the needs and wants of their users.
Sequential Monadic Testing
If your product team is having difficulty deciding between different features or designs, you can use sequential monadic testing to determine which option the customer prefers.
This testing method involves showing participants one concept then asking them to compare its value to your alternatives. You can repeat this process for as many features as you need to assess.
You can see what your customers think about your ideas by creating minor details prior to them.
Marketplace Data
While it’s not the be-all and end-all, marketplace data is another source of information that can be helpful in understanding your customer’s expectations. These data streams from second and third-party sources can give you a sense of broader trends affecting an entire industry.
Even though the data is not specific to your business, your product teams can use this information to identify emerging customer needs and wants.
Competitor Products
First, take a look at your competitors and compare your product to other successful ones in your field. If customers are buying your competitors’ products more than yours, then there’s something your team is doing wrong.
If you want to improve your product, compare it to the best ones in your market.
Trends and Legislature
It is important for product management to stay aware of social and political developments in their industry, as these changes can affect customer buying needs.
If there’s a new social trend or legislative measure, it’s an opportunity for products owners to create solutions.
Testing and Validate Your Product Idea With Customers
1. Ask Yourself These 3 Questions
Now that you have your business idea (really, your guess, right?), you’re ready to answer three critical questions:
- What problem do my potential customers have?
- What’s the solution to that problem?
- Why would people pay money for my product?
You need to be able to explain your idea to other people so that they understand it, and you need to check if your idea is valuable to potential customers.
These are the first steps in demand validation.
I promise that if you do this exercise for any business, it will be beneficial. It may be difficult and you may be inclined to procrastinate, but don’t give up. This step is important and will eventually save you time.
2. Create A Value Statement
Almost all businesses have aValue Proposition of some sort, but many value propositions are weak. A strong value proposition is clear, harnesses emotion and speaks to the specific needs of your target market.
Now that you have the answers to your questions, you can create a value statement. This is often referred to as a value proposition or a unique selling proposition, but it does not matter what you call it. Most businesses have a Value Proposition of some kind, but many value propositions are ineffective.
A strong value proposition is clear, relatable, and speaks to the specific needs of your target market.
You can call it whatever you want, but the exercise is still the same.
Value statement template
The goal is not to make it perfect, just to make it work. The purpose of this step is to turn your three answers from the previous step into a sentence. You may need to do some minor adjustments to make everything work together, but that is acceptable. The goal is not to make it perfect, but to make it work.
The bottom line is that the message should remain the same.
It’s not always as easy as it seems, but it’s worth taking the time to get it right. You’ll use this value statement a lot as you go through the next steps of the demand validation process.
Email software value statement example
Here’s the value statement for the team email product we’re working on:
If you find it difficult to manage emails sent to info@ and sales@ using a single email account, and customers sometimes receive incorrect or no responses, you should try using a collaborative email management tool like Outpost. This will allow everyone on your team to work from the same inbox, preventing overlap and ensuring that customers receive the best possible support.
Bike shop value statement example
Here’s the bike shop example:
If you think it is difficult to purchase a good bicycle in this town without being an expert cyclist, you should visit Garrett’s Bike Shop. At this store, regular people can obtain great gear and professional advice. This way, you can obtain high-quality bicycle gear for your family and commuting needs at reasonable prices without the negative attitude.
Restaurant value statement example
If you think that the Italian restaurants in this neighborhood are pricey and not authentic, then you should try Beppe’s on the West Side. Beppe’s offers affordable, northern-Italian flavors that will give you a great meal.
3. Evaluate Search Volume
After coming up with three answers to the previous questions, you can start testing whether your potential customers actually have the problem you think they have and if they would be interested in your solution.
What are people searching Google for?
You can use tools like Google’s Keyword Planner and Moz’s Keyword Explorer to see how many people search for specific words and phrases.
You should brainstorm a list of words and phrases related to both the problem you are trying to solve and your specific solution. This will give you an idea of what people might search for when looking for a solution to the problem.
For example, for our team email product, we might look at these terms related to the problem we’re solving:
- Manage email
- Respond to customer email
- Inbox management
- Email overload
And, we’d look at the solutions that people might search for:
- Team email
- Email collaboration
- Team inbox
- Share email
- Collaborative email
- Email for teams
If you have potential competitors, you should look at their brand names to see how popular their solutions are.
If your research is effective, you should be able to see that people are already searching for your problem and solution.
If you have not been successful so far, you will need to start again, improve your idea, and try once more.
4. Join The Conversation
1. Research online forums and other services that your potential customers might use to discuss problems and solutions related to your industry. 2. Use this research to better understand the needs and wants of your potential customers, and how you can better address them.
If you are starting a restaurant, it is a good idea to look at Yelp and other review sites to see what people are saying. You can also look for Facebook groups for foodies in your area to see what they are talking about.
If people are not happy with the current options, they might be looking for something specific.
This level of research will help you move from guessing about the problem you’re trying to solve to knowing actual facts about it.
You will need to do some research to find people who have the problem you think they have and what kinds of solutions they might be interested in. This will help you determine the demand for your solution.
Conducting this type of research will give you a better understanding of how large your potential audience is.
The data is an estimate of your potential market, it will tell you if there are hundreds or thousands of potential customers out there.
5. Engage With Your Potential Customers
make sure to actually talk to some of the people that you observed from a 30,000-foot view in the previous step.
You need to know more than just how many people search Google for the problem you’re solving. You need to know more about these people.
Do they intend on purchasing your product? If so, to what extent? Are they attempting to resolve their dilemma at this moment? What is their exact opinion of your innovation?
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