Customer Needs – How Do Businesses Identify Them? 

 

  • Most small to medium sized businesses will have to rely on secondary market research to gain a better understanding of their target customer. Then, in order to assess the customer needs, they analyze the information they have gathered to determine the following:
  • Customer demographic:
      • gender
      • age
      • marital status
      • disposable income
      • occupation
  • Inferences can then be made about what compels them to buy. How do they make the purchase decision?
      • Family pressure
      • Social needs
      • Budgeting pressures
  • Trends can be identified in data gathered to make an assessment on how the customer prefers to buy:
      • Online shopping
      • Phone shopping
      • Physical shopping
      • Are decisions impulsive or are they considered?

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  • Using the demographic information gathered, business can determine what customers are likely to spend their money on.  For example, considering their age, gender, occupation and disposable income, altogether might indicate a need for luxury goods. If nothing else, small businesses can ask their existing customers what it is that the need.
  • Once customer needs are established, this information can be used in all parts of the business to increase profitability. Specifically:
  • Marketing
      • Getting the product mix right
      • Refining the sales channel
      • Setting the right price point
      • Determining the best way to communicate the marketing message
      • Setting an appropriate marketing budget
  • Procurement
      • Knowing what products will sell
      • Planning your range of products
      • knowing how much stock will sell, and therefore how much you need to pre-order or hold
  • Merchandising
      • Visibly displaying your product for maximum sales
  • The key to keeping up to date with customer needs is to make a regular habit of communicating with existing customers to find out how you can satisfy their needs and if that may have changed. Additionally, business should set up recording systems for this information and ways to interpret the feedback. Business should also regularly refer to this information when making decisions about marketing, procurement, merchandising and selling.
  • Determining customer needs is a critical step in building a successful business. Taking the time to do this will go a long way to ensuring business growth. Customer needs change over time so we recommend that businesses revisit their analysis on a semi regular basis. It’s important not to be afraid to change things should the research indicate this may be required. Small changes here and there may be all that is required to ensure that customer needs continue to be met.