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December 2013

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Looking for Love in All the Wrong Places: How to Uncover Unmet Customer Needs

Written by , Posted in Business Insights, Market Reseach, Optimizing Insight

Most research briefs that come our way these days have somewhere in the stated objectives, “uncover unmet needs,” either as the focal point of the research or an add-on to other central objectives.  For decades, entrepreneurs, marketers, and philanthropists have followed this one piece of advice for achieving success:  find a need and fill it.  Startup companies often emerge from an entrepreneur’s struggle to solve a specific problem.  When the solution is found, a company is born to bring that solution to others with the same problem.

More than one product nearing the end of its natural life cycle has been rejuvenated by finding a new problem for that product to solve.  Believe it or not, Arm & Hammer Baking Soda used to be something you cooked with, not something you put in your fridge to absorb odors.

Many companies go about looking for unmet needs in the wrong places.  Most often, they start with their existing successful (that is, “mainstream”) products and ask customers how they could be improved.  This approach leads to often trivial changes in the products and can be counterproductive—adding features or performance may require higher prices that decrease demand overall.  In The Innovator’s Dilemma, a book that changed the way many of us think about innovation, Clay Christensen points out that successful mainstream products got there because they do a good job of satisfying or meeting the needs of a large number of customers.  In fact, over time these products improve incrementally to the point where they over satisfy.  Unmet needs, as a consequence, tend to arise among small “niche” segments of customers who have a unique or slightly different problem that is not solved by the existing mainstream products.

Here are some ways that you can improve your chances of finding new opportunities in unmet customer needs.

Think like a designer.  At KJT Group we’ve embraced “design thinking” principles to guide us to better insights for our clients.  Design thinking is, first and foremost, “customer-centered.”  Some of the tools that design thinkers use to get inside the customer’s head include several variations on ethnography—shadowing, customer journey maps, contextual interviews and mobile ethnography.  These techniques facilitate the “emergence” of unmet needs through observing customers as they encounter and attempt to solve problems.

Engage with customers who are at the extreme.  In Crossing the Chasm, Geoffrey Moore observes that technological innovation must establish a foothold among visionary and leading edge customers before moving into more mainstream markets.  So, look to the customers who have the biggest challenges in their markets to find unmet and emerging needs.

Look for duct tape and baling wire.  Just because the market does not offer a good solution for a particular need does not mean that customers are not trying to solve that problem.  Many an innovative product has come out of observing the solutions that customers have improvised from materials at hand (like duct tape and baling wire).

Follow the evolutionary trajectory.  Clay Christensen also describes the characteristic evolution of competitive dynamics that defines the trajectory of new technologies, and it is important to understand where your product or service falls on that pathway.  Early on, products or services compete on the ability to solve the basic problem to the minimally satisfactory level (“table stakes”).  As the technology develops the basis of competition shifts to ensuring reliability and quality.  Once high reliability and quality are achieved in a category, the basis of competition shifts again; to factors such as convenience or ease of use, speed, and cost.  It’s important to know where your product falls so that you can hone in on the relevant dimensions of unmet need.

There’s no doubt that companies must continue the quest for emerging and unmet customer needs in order to achieve sustained growth and competitive success.  These suggestions will help you identify the best opportunities among those needs.

– David Bakken, PhD, Chief Insight Officer

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