What does good look like in terms of understanding customer needs?


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This is one of a series of blogs from Paul Weston, the architect of The Customer Framework’s SCHEMA® toolset. In each blog he reveals the thinking behind the individual capabilities and practices that make up one part of the SCHEMA® Capability Assessment, which is becoming the World’s leading customer management benchmarking tool. There are 110 capabilities in the assessment, containing almost 400 individual practices that together provide a comprehensive definition of what ‘Good’ looks like in today’s “Customer World”. It is this definition against which organisations can be assessed and benchmarked.

In the “BRAND & PROPOSITION” area of the assessment we have a specific capability called “Understanding Customer and Market Needs” and this is what we look for:

Regular qualitative research of customer needs

Deep, qualitative needs research is carried out, typically by professional researchers who are able to probe interviewees or groups for inputs that may otherwise not emerge. It explores customer ‘wants’ as well as ‘real’ needs without making judgements about which is which at this early stage. The research uses approaches that do not prompt for wants and needs that the organisation wants to emerge and does not even provide stimulus to possible needs until all unprompted inputs have been explored. The research is done regularly enough to quickly identify changes in patterns of needs or response to new products or providers in the market.

Quantitative research to scale the relative importance of needs

Quantitative research is used to scale and prioritise the wants and needs identified in qualitative investigations. This is done separately from the organisation’s customer satisfaction research using different but comparable samples to avoid respondents getting into mind sets that influence their inputs. The focus is completely on what the respondents want from providers in the market and how (relatively) important each factor is to them, rather than on their view of what the organisation currently provides. The research is carried out on a large enough scale, with appropriate sampling, to ensure that understanding of the relative importance of needs between different segments / values / types of customer is robust.

Extension of needs research to non-customers

Needs research in both its qualitative and quantitative forms is extended beyond the current base of customers to ensure that a ‘market’ view is achieved. It covers currently active prospects, previous ‘failed sales’, ex-customers and other parts of the potential customer universe, focussing particularly on target areas of the market. The research to non-customers is designed to be substantially the same as for customers but with a degree of further exploration of areas that will be covered in other ‘early experience’ research for customers such as purchase decision processes and criteria.

Comparison of depth of needs to market enablers and barriers

Both the qualitative and quantitative research is designed to test the depth of feeling that respondents have for their wants and needs relative to market factors that actively enable or prevent their purchases. This is aimed at judging which factors impact which needs, to what extent, possibly to the extent of even preventing sales. Key factors explored in the research include Price Comparison, Location, Local presence of Competition. In addition, analysis is carried out of the relationship between local market characteristics and purchase behaviours of customers from the research with differing natures of stated needs. This extended the factors considered to include: local economic conditions; competitor’s advertising spend; traffic congestion statistics.

Differentiation of hygiene factors, preference and loyalty

The quantitative research is designed to test the impact that each need area has on the depth of the respondents’ commitment to the organisation. It does this by asking respondents about the degree to which they could ‘forgive’ failures against each need and the degree to which excellent delivery against each need would guarantee their future business and potentially even warrant a price premium. This is supplemented by analysis of the purchase, service and complaint behaviour of customers known to have expressed differing core needs.

For a great video that gets across the basic messages from above have a look at the link below and don’t be put off by the suggestion that the target audience is small businesses. We at TCF have seen a number of major corporations who are convinced that their customers are mainly interested in their muffins!!

Republished with author's permission from original post.

Paul Weston
Paul Weston is a Director of The Customer Framework. Paul has been consulting for more than 20 years after a marketing and product management career in the telecoms and motor industries. He has worked with multinational clients in banking, insurance, telecoms, motor and hospitality. He has developed many tools to help clients address challenges as diverse as Contact Centre resourcing, business case construction and risk assessment. Paul leads the development and management of The Customer Framework's core SCHEMA Toolset.


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