Customer Needs Analysis | 4 mins read

5 Steps of the Customer Needs Analysis

5 steps of the customer needs analysis
Chloe Henderson

By Chloe Henderson

As short-lived trends come and go, customer preferences change with time, making it difficult for retailers to meet the demand continuously. However, by generating feedback from shoppers, businesses can define the newest consumer needs.

Customer needs analysis evaluates consumer feedback to detect common pain points, concerns, and suggestions so companies can adjust their services accordingly.

What is Customer Needs Analysis?

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Customer needs analysis, also known as a customer needs assessment, defines consumers' preferences, expectations, and motivations. Understanding these features enables retailers to adapt their various processes to increase sales, including-

  • Marketing campaigns
  • Product development
  • Inventory management
  • Customer reach

Businesses use various data collection methods to access these insights, such as surveys, reviews, engagement tracking, and social media. This allows companies to determine if they are meeting customers' needs adequately and how they can improve their services.

Without a customer needs analysis, retailers may remain unaware that their shoppers want something they can only find elsewhere. This can lead to decreased satisfaction, advocacy, and loyalty.

By generating customer feedback, companies can improve the shopper experience by developing new product features, resolving general concerns, and enhancing convenience. Taking the time to check in with consumers makes them feel appreciated while shedding light on changing demand.

Different Types of Customer Needs

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Ultimately, a customer's needs are what determine their purchasing behaviors. Therefore, understanding these needs allows retailers to manipulate the shopping journey to encourage more sales.

The most common customer needs include-

Price

Naturally, customers desire products that fall within their price range, and they expect the price to match the item's quality. However, an item's value depends on several factors, such as the brand, popularity, and how it contributes to the customer experience.

Functionality

A product should be able to solve a problem or fulfill a need based on its features and functionality. For example, shoppers purchasing a new television are typically looking for better visual and sound quality than their older model.

Usability

Usability refers to a product's design and the experience it provides customers. The majority of customers prefer items that are easy to use and help complete a task.

Reliability

A reliable product is able to function consistently over an extended period of time. Reliability is also referred to as quality over time, for items must maintain their value throughout their lifecycle.

Support

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Whether on their shopping journey or after the final purchase, consumers want good customer service. This could include helping shoppers navigate the online store or answering product questions.

Security

Online shoppers want to feel safe and confident that their information is secure during checkout.

Effectiveness

Shoppers expect to receive what they saw in advertisements. Businesses that run false advertising are often met with angry customers.

5 Steps of the Customer Needs Analysis

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In order to perform a customer needs analysis, retailers must generate shopper feedback and identify common challenges by-

1. Gathering Customer Data

Companies should engage their shoppers and ask for honest feedback on their product range, customer experience, and additional suggestions. Depending on the business type, managers can send surveys via-

  • Email
  • Phone
  • Website pop-up
  • Text message
  • Checkout

While businesses can use multiple choice and numerical rating questions, open-ended prompts allow customers to go into more detail.

Managers can also gather unsolicited feedback from online review sites and social media by searching who mentioned their brand.

2. Sorting Information by Customer Needs

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Now it is time to organize the free text data into structured groups based on the customer's need. Any physical paperwork should be converted to digital copies, so all information is kept in a centralized database.

Businesses can either manually tag each piece of information or implement a data management software with machine learning technology to automatically sort the inputs. With software, companies can program custom models that classify information based on their criteria.

For example, the solution can search each input for keywords, such as price, reliability, and security, to create data silos.

3. Analyzing Data

Once the data is organized, management can analyze each need at a time. Depending on the business, information can be analyzed using-

  • Sentiment Analysis - This method summarizes feedback as positive, negative, or neutral to gauge the overall view of the consumer.
  • Keyword extraction - This technique detects specific keywords in feedback when customers talk about products so businesses can improve their features and quality.

4. Visualizing Data

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Sometimes data is overwhelming and hard to understand. By using visualization aids, such as charts and graphs, managers can break down complicated concepts to executives.

For example, a line graph shows how customers' views on a product have changed over a long time as the business began making improvements. On the other hand, a bar graph can show consumers' opinions on various items at one point in time.

5. Aligning Goods and Services with Customer Needs

After the relevant insights are extracted, companies have the information necessary to make the needed improvements. While some businesses may need to add new features to products, others may need to focus on enhancing their customer support.

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