Defining Customer Needs

To truly understand customer needs, organizations must identify the three dimensions of need for each target persona

B2B organizations are often confused about what constitutes a customer need, which causes breakdowns when the organization attempts to leverage customer needs for innovation and go-to-market purposes. In this issue of SiriusPerspectives, we define a customer need, describe the components of an actionable need statement and explain three needs dimensions.

Clarity on the definition of a need is important to ensure that research intended to uncover needs is based on proper data collection. Innovation and go-to-market strategies must be focused on issues faced by existing customers or buyers. Lack of a clear definition of a need can cause organizations to identify “needs” that are not true needs (including product functionality and solutions to problems in disguise – e.g. “users need to sort search results by date”), needs that are too high-level and vague to be actionable (e.g. “managers need to reduce costs”) and needs that are not pinpointed to specific individuals or personas (e.g. “companies need to improve the effectiveness of their marketing programs”).

SiriusDecisions defines a need as a desired outcome that has business value to the persona. This definition ensures a focus on the business relevance and impact of the need, independent of the context of a specific offering. The following three key components of a need reflect what is required to truly understand it:

• Persona (who has the need) A persona is an aggregate representation of individuals with similar characteristics related to their job role. Defining the need at this level of granularity is crucial, as the needs of companies, industries or buying centers manifest themselves in individuals, and personas’ needs vary by job role and perspective. For example, a CIO and CFO both may be concerned with protecting their company from information breaches. However, the CIO may be more concerned about the technical effort required, whereas the CFO may care more about the cost of those protections and the potential financial impact if sensitive information is accessed. Centering each need on the persona enables organizations to devise marketing, sales and product strategies that are directed at people instead of business entities.

• Business value (why the need is important). Business value is the purpose associated with the outcome. Customer needs should ultimately tie back to a benefit that the buyer organization receives. A common error is to provide generic descriptions (e.g. “increase revenue,” “improve efficiency”). Instead, consider the persona context in terms of job role and how the persona can contribute to business value. To continue with the HR example, ways that an HR leader can impact business value may include “improving time to hire” or “creating a competitive edge when he or she can attract the best talent.” The business value is often missing from needs descriptions, particularly when organizations describe customer needs using a common format for agile user stories: “As a [persona], I want [goal] so that [reason].” Although this format may work well for defining specific product development elements, it is usually inappropriate for documenting fundamental customer needs, as product teams may wind up with a “goal” that is an achievement at a task or activity level – not a desired outcome – and a “reason” that is not connected to business value.

• Who needs to see monitoring results? Marketing operations or marketing analytics teams who generate reporting deliverables are the primary and regular users of monitoring information, as they need to take action in response to the results of monitoring. Marketing leadership also may be interested in understanding general trends surrounding the adoption of measurement, because this can indicate progress toward a cultural change regarding measurement.

Needs Dimensions

Sometimes product managers and portfolio marketers struggle with defining needs because they only focus on one aspect of a persona’s need. In B2B situations, personas are influenced by the priorities, challenges and focus of the organization and based on multiple perspectives: those of the department, team or buying center they represent, and the motivations specific to their job role. Failing to understand all of these perspectives leads to an incomplete understanding of the need, thus hampering efforts to address it completely. To truly understand a need, organizations must understand the following dimensions for each persona:

• Organizational need. The organizational need is the industry or company requirement to address a problem or opportunity. Sometimes called a “business issue,” it relates to the goals, capabilities or improvements necessary to drive organizational strategy or growth. An example of an organizational need for an HR leader is hiring the best talent to give the company a competitive edge. However, each persona has multiple organizational needs – for example, the HR leader needs to increase employee engagement to improve retention – so it is critical to capture all appropriate needs that relate to the business area of focus.

• Functional need. The functional need is defined at a department or team level and relates to an operational process or task. Different personas could share the same organizational need, though their functional and individual needs may vary based on their job role. For example, the CEO persona could have the same organizational need as the HR leader – hire the best talent – but the CEO’s functional need would be vastly different. A functional need for an HR leader could be to fill positions faster to meet company hiring goals. Keep in mind that multiple functional needs might relate to different organizational needs – or the same organizational need. For example, an additional functional need for the HR leader might be to increase candidate referrals or to ensure a quality interview experience. In the functional need dimension, specific nuances of personas often become apparent. For example, an HR leader would not have the same functional need as an IT leader, because their job roles and areas of focus differ.

• Individual need. Individual needs are derived from nuances based on the persona’s job role, such as the persona’s personal or professional goals, motivation, decision drivers, emotions or self-esteem. An individual need for an HR leader might be to build his or her reputation as a career-maker and help position the company as an enticing place to work. Often overlooked, the individual need is critical for understanding the persona’s behaviors and decisions.

The Sirius Decision

Getting alignment between product management and portfolio marketing – and more broadly across sales, marketing and product – on the definition and dimensions of needs enables organizations to better synthesize information about customer needs and respond to them. Each of the three need dimensions is a key input into the downstream innovation and go-to-market process. Organizational and functional needs drive product team decisions on product requirements, design and development. Individual needs, coupled with organizational needs, are critical for messaging and sales enablement strategies. Fully identifying customer needs can start with any of these dimensions, but ultimately all three must be understood to truly appreciate and act on the complete need.