Customer Needs Need Nuance

We use the term “customer needs” like we all know what it means. But it is actually a phrase that has a whole set of meanings beneath its surface.

There are various types of need that a client can have, each with its own significance in terms of the actions it will trigger when satisfied. I have found there are four distinct flavours of need a customer can exhibit.

I am not interested in the psychology of the needs, just what they mean in terms of moving a sale forward. There are lots of great psychological models for needs, like Maslow or Herzberg but they have limited use in enterprise selling. Let’s stick to what focuses us on generating revenue.

The Needs Framework

1. Basic needs - these are the requirements of any solution that will take the customer’s pain away. It doesn’t do anything other than solve the problem in its most obvious presentation.

The customer knows these needs before you turn up. They often make up the contents of tenders and requested for quotations. An example is a statement of the average number of orders to be processed per day by a system.

2. Specific needs - these are the needs that go beyond basic and are particular to the customer. They are found as the result of a discovery task you do, anything from a meeting to a full blown consultancy exercise.

An example is when you find that customer service processes are stuck on a model that sales has long ago stopped offering (such as free delivery or minimum order sizes).

When you find an "unconsidered" need, your customer will look like this

3. Unconsidered needs - these are needs the client did not even know they had until you found them. They often come to light as part of discovery but also they are particular to you as a seller, due to your insight and experience.

An example is when you can reduce a client’s product delivery time. It will also reduce the time between buying stock and getting paid for it, which improves cash flow.

4. Exciting needs - your customer desperately wants these but they seem frivolous or less important that the others. They go beyond utility and fulfil requirements of brand, image, perceived values like stability or gravitas.

They surface in enterprise sales mostly as the status needs of the CEO and project owner in particular. An example is the desire to produce a case study for joint advertising of a new service. It's why people buy Ferraris when an SUV would do.

I have an unnatural affinity for the 2 by 2 matrix

The matrix shows how the four need type relate to each other within a framework.

The "Valency" idea is about the strength of a need, whether it is fundamental or a "nice to have".

The "Visibility" axis is concerned with whether a need is already in a customer's mind or whether you had to put it there.

So, how do these definitions of needs tie into the actions we want the customer to take?

Connecting Needs To Sales Actions

Let’s define some key actions and then we can make the connection. Here are five levels of customer satisfaction:

1. No chance - the customer hates you and you will never sell them anything at the present level of relationship and their perception of your offer. It sounds bad because it is, but at least you don’t have to waste time with people who act this way.

2. Win on price - they like you but you are not differentiated in their view, so they will choose based on price. You could get their business but it is going to cost you profit and market position.

3. Win on value - they like you and can see your differentiated offer as you do. They are choosing based on how your product fits their particular set of needs and wants. You will still get a negotiation involving price because that is life, but you will have a defence against discounting.

4. Win and recommend - they love what you do and want an ongoing relationship with you. They will work with you to deepen collaboration and are a safe account. Happy to provide testimonials and case studies.

5. Win and fan - They consider you an integral part of their business and a resource that adds value. They are evangelists for your brand and will recommend without prompting. It doesn’t get better than this.

Customer satisfaction is pretty intuitive to grasp

How It All Fits Together

There are various stages of meeting a customer’s needs that we can estimate in round percentages. At one end you meet 0% of their needs and are irrelevant and at the other you meet 100% of their needs and they want to move into your spare room.

The interesting bit is in the middle. It is not until you are meeting around 66% (two out of three) of their basic needs that anyone will seriously consider buying from you, in my experience. Before that you are stuck in “No chance” mode on the satisfaction scale.

But once you meet this threshold of their basic needs, you can start playing in the other types of need to get them up the satisfaction scale.

Customers who get their "exciting" needs met say things like, "You da man, gangsta..." but don't let it put you off

All except the “exciting needs” these don’t tend to kick in until you are meeting 80% of the customer’s other needs, in total.

That can be lower depending on how “exciting” the factors are. For example, a friend of mine was looking for a new car to use for commuting.

She made a long list of needs, but then found a reasonably priced used Ferrari and the list disappeared in favour of an “exciting” need to have a red sports car.

Let's Draw Some Graphs To Explain

It is easiest to explain with reference to an illustrative graph. It shows customer satisfaction on the vertical axis. This is split into the five levels discussed above. When the lines cross these levels the relevant decision gets made.

The horizontal axis shows the notional amount of needs you must have satisfied in order to drive the level of satisfaction. The numbered points are what make the diagram interesting.

As you can see the satisfaction of close to 100% of a customer’s basic needs will get you the contract, having competed on price (point “1” on the chart). If, however, you add in some specific needs to the offer then the total amount of boxes you need to tick reduces, to where the green lines crosses the “win on price” line.

There *will* be more than five things in their needs evaluation scheme.

If you further add in some needs that the customer did not even know they had, then you can reduce the overall compliance to the basic specification. The “specific” and “unconsidered” needs have much more power (valency) to satisfy the customer than “basic” needs.

Now, let’s add in the provision of “exciting” needs and see what happens to the outcomes of the deal. The new graph shows that these “exciting” needs only really get considered at all once you have met 80% plus of the clients other needs (point “3” on the diagram).

The more "exciting" stuff you add in , the less they notice what is missing

In the real world this means that before a CEO can start to get excited about the fact this project will make him look like a hero in Forbes, he has to be sure it will actually work and deliver its headline objectives.

But once you can start including this type of benefit to a deal it massively improves your chances. Point “4” on the chart shows that you will win on the basis of value at a much lower score for total requirement compliance.

This is because you will have the CEO or similar senior figure actively supporting your bid. They will know when they are on to a good thing.

Yes, the project had a few issues, but our personal shares are worth millions now!

The last points about this is that if you ever want a customer to be a strong referral source and even to become a fan of your business, then you must include “exciting” needs satisfaction.

This is because referrals and fandom are down to people talking to people. They are not really things organisations do, they are things individuals do for their friends.

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