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Customer needs analysis: Definition & Research methods

10 min read
Customer needs analysis is the process of identifying a customer’s requirements for a product or service. It’s used in all kinds of product and brand management contexts, including concept development, product development, value analysis, and more.


The goal of a customer needs analysis survey is to understand the customers’ needs and their position in the overall market.

What do we mean by customer needs?

Customer needs are the attributes of a product, brand or service that motivates someone to buy. The term covers basic must-haves, such as good-enough quality and affordable price, and also extends to more abstract and complex purchase drivers such as an aspirational brand image or a sense of alignment between a customer’s personal opinions and a brand’s ethics.

Customer needs vary a lot – between individual customers across your target audience, and from product to product and brand to brand. To identify customer needs effectively, you need an ongoing program of analysis that captures and analyzes customer feedback. Surveys can be an important part of that process.

Because customer needs can be complex and deep-seated, you may need to go beyond what customers explicitly tell you in order to uncover the full picture. That’s where customer needs analysis methods come in.

How does understanding customer needs help?

A good understanding of customer needs helps your business in a few ways.

Firstly, it helps with product development and product packaging decisions. If you know your customers want a range of color and size options in a given product, you can make sure you provide them. If they want a range of colors and sizes but it matters more to them to get your product at the right price, then you know how to prioritize your resources to balance those needs correctly. You can also use customer needs assessments around existing products and services to enhance and develop your product offering in the future.

Secondly, it helps you to market the products you already have in the most effective way possible. You can make sure that your marketing messages reflect a customer’s desires and objectives and highlight the features and benefits that matter the most. For example, if you’re selling outdoor gear, as well as mentioning that it’s durable and waterproof, you could highlight the fact that your sustainable manufacturing methods result in a zero-carbon outcome for every garment. Thanks to your customer needs analysis, you’ll know if that’s something your nature-loving customers really value.

Types of customer needs

Here are just a few examples of customer needs that your analysis might turn up.

  • Price
    The item is affordable and appropriately priced for the quality
  • Convenience
    Saves time and effort
  • Image and status (as in an item of clothing or technology)
    Looks good, impresses others, makes the customer feel good about themselves
  • Durability and lifespan
    Built to last, dependable, and won’t break
  • Packaging type
    Resealable, refillable, recyclable, or all of the above
  • Support and aftercare
    Customer knows they can get questions answered and problems solved
  • Effectiveness
    Gets the job done
  • Formulation
    Free from unwanted ingredients or materials, containing desirable elements (for example gluten-free, or containing active friendly bacteria)

A means-end approach to customer needs analysis

Customer needs analysis is a means-end approach, meaning that customers make purchase decisions based on product features that get them to a value-based goal or state. For example, one consumer might buy a watch because he likes to be timely, and another might buy it because it looks cool. They’re both buying the same feature (time-tracking), but using it for different means (timeliness vs. status).

This principle is the basis of a powerful research technique which has been used to place U.S. presidents into office, successfully re-image industries, achieve competitive advantage over the competition through target advertising messages, and design innovative and successful new products.

Means-end analysis identifies linkages between three areas of product and customer interaction.

  • Product features and attributes
  • Benefits (real and perceived) a customer gains from the use of the product
  • The unique values or traits of a customer that enable them to experience the product benefits, such as a person’s functional, physical, financial, social, and psychological characteristics.

With the right tools, it’s possible to quantify all these elements with respect to a specific product and audience. A Qualtrics study for the development of a new bank credit card found that nine attributes were critical to consumers considering a new card: no annual fee, status, low-interest rate, added value features, acceptance, credit limit, ability to carry a balance, location of the sponsoring bank, and availability.

These attributes were found to be linked to 12 benefits (consequences) that were perceived as part of card usage: not feeling cheated, independence, convenience, dependability, and saving money.

Brand attitudes – and how to discover them

Brand attitude tells us what consumers think of a brand or product and if it solves a particular need. When developing customer analysis surveys, it’s important to determine the consumer’s brand attitude. Here are a few of the elements a good customer needs analysis survey should cover:

Top-of-mind imaging

Positive and negative associations for the brand or product category are elicited, along with reasons why the characteristic is viewed that way. Top-of-mind studies are used to uncover the attributes and consequences that distinguish the characteristic.

Brand category analysis

Identifies similar and dissimilar brand groupings within a product category and the reasons for this perceived similarity or dissimilarity. The primary reasons, most important attributes, and most representative brands are identified, and attributes and consequences are laddered.

Contextual environment scan

The usage context for a brand or product is critical in marketing. Physical occasions (place, time, people), or need state occasions (relaxing, rejuvenating, building relationships, feeling powerful, reducing stress, and getting organized) may exist. A brand or product is associated with a usage context that is critical in effective positioning and advertising.

Preference-usage/similarity-dissimilarity analysis

Comparing brands based on personal preference or usage is a common distinguishing point for brands. Groupings by similarity and dissimilarity also provide a direct method of distinguishing between brands. Success critical attributes and consequences are identified that lead to higher market performance.

Purchase and consumption timing

Issues are often related to product or brand choice and usage. For example, a respondent might be asked to identify products used for relief of a stuffy nose across several stages like onset, full-blown, and on-the-mend, or daytime and nighttime. Brand preference is identified for each time-related stage.

Usage trends

Past and expected future usage of a brand is instrumental in identifying attributes and consequences that lead to different usage patterns. For example, respondents may be asked, “Will this brand be used more often, less often, or about the same as you have used it in the past?” Then, reasons for increased, decreased, or unchanged usage are determined. The follow-up analysis of reasons for trends produces a vivid insight into market drivers and potential areas of market growth.

Product or brand substitution analysis

Product and brand substitution methods elicit the degree of similarity of perceived attributes and consequences associated with usage. When questions are asked about the degree of substitutability, attributes and consequences are discovered that inhibit or promote substitution (attributes or consequences that need to be added or removed for substitution or trial to occur). For an unfamiliar brand, the respondent first can sample or be given a description of the brand, followed by a question like, “How likely would you be to substitute (name of the new brand) for your current brand for this occasion—why is that?”

Alternative usage occasions

Alternative uses are presented to the respondent to determine if and why the brand is present or absent from the choice set. Questions might be phrased to ask, “Why would you consider using Brand A for this occasion?”, or “What is keeping you from using Brand A for this occasion now?” Both positive reasons why a brand fits a new occasion and negative reasons why it does not fit can be elicited. Alternative usage occasion analysis identifies market segments and details how to approach them.

How to better meet your customers’ needs

Customer needs assessment needn’t be a one-time event or even a per-product one. You can help make sure you’re continually meeting customer needs by maintaining an overall high standard of knowledge about how your customers think and feel. This will pay dividends not only in designing and marketing your products more effectively, but also in making customers feel known, understood, and valued when they interact with you.

Becoming more customer-centric is a choice that more and more businesses are making, focusing less on operational data and more on experience-based insights that reflect how customers think and feel about the experiences you provide.

With the Qualtrics experience management platform, you can build surveys and dive deep into what matters most to your customers and your business.

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